Skillsoft Corp. (SKIL) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended April 30, 2026. Skillsoft Corp. operates as a single reportable segment, Talent Development Solutions (TDS), following the classification of its Global Knowledge (GK) business as discontinued operations and assets held for sale on April 30, 2026. The company is currently out of compliance with NYSE market capitalization standards but has submitted a plan to regain compliance.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $94.5 million | $99.1 million |
| Operating Loss | $(8.3) million | $(11.3) million |
| Net Loss (Continuing Ops) | $(18.7) million | $(29.6) million |
| Net Loss (Including Discontinued Ops) | $(43.1) million | $(38.0) million |
| Adjusted EBITDA | $26.6 million | $26.8 million |
| Cash and Cash Equivalents | $115.6 million | $121.9 million |
| Long-Term Debt | $568.2 million | $570.8 million |
| Operating Cash Flow | $28.9 million | $31.3 million |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 4.7% year-over-year, driven by macroeconomic uncertainty, elongated enterprise purchasing cycles, and a 21.0% decline in consumer revenue.
- Discontinued Operations: The GK segment generated a net loss of $24.4 million in Q1 2026, compared to $8.4 million in Q1 2025. This includes a $15.6 million non-cash impairment charge on goodwill and intangible assets related to the disposal group.
- Cost Reductions: Operating expenses decreased 6.9% year-over-year. Selling and marketing expenses dropped 9.4%, and General and Administrative expenses fell 16.6%, reflecting restructuring initiatives and reduced stock-based compensation.
- Interest Rate Swaps: The company recognized a $1.2 million gain on fair value adjustments of interest rate swaps in Q1 2026, compared to a $4.3 million loss in the prior year.
Guidance, Outlook, and Risks
- GK Sale: On May 20, 2026, Skillsoft entered a definitive agreement to sell the GK business to an affiliate of Enduring Ventures. The transaction is expected to close in the quarter ending July 31, 2026, subject to regulatory approvals. Expected net proceeds are estimated between $5 million and $8 million.
- Liquidity: Management anticipates sufficient liquidity for the next 12 months through operating cash flows and an available $35 million under its accounts receivable facility. Cash balances are expected to decline in Q2 2027 due to seasonality and transaction costs associated with the GK sale.
- NYSE Compliance: The company received notice of non-compliance with the NYSE Market Cap Standard in March 2026. While average market cap has recently exceeded the threshold, there is no assurance of sustained compliance.
- Restructuring: Ongoing restructuring charges of $1.3 million were incurred in Q1 2026, primarily for professional fees related to the GK sale and employee termination costs.
Investor Verification Checklist
- Verify the closing status and regulatory approval timeline for the Global Knowledge (GK) sale to Enduring Ventures.
- Monitor the company's progress in regaining compliance with NYSE market capitalization listing standards.
- Review the impact of the discontinued operations on future cash flows, specifically the transfer of cash balances held by the disposal group.
- Assess the sustainability of Adjusted EBITDA margins given the decline in consumer revenue and enterprise purchasing delays.
- Confirm the status of the $580.2 million term loan maturity in July 2028 and refinancing capabilities.