Skillsoft (SKIL) Q2 2027 earnings summary

Executive summary

• Completed the sale of Global Knowledge, simplifying operations and focusing on the core AI-native skills management platform for workforce readiness.

• Enterprise segment stabilized with strong customer retention, pipeline expansion, and early adoption of new AI capabilities, while consumer segment continued to decline due to AI's impact on coding-related learning.

• AI-driven product innovation, including LX Design Studio, AI Coach, and CAISY, gained traction with measurable improvements in content creation and learner engagement.

• Strategic focus on recurring revenue, margin expansion, operational simplification, and addressing debt structure.

• Profitability remains intact despite consumer weakness, with ongoing cost controls and operational efficiencies.

Financial highlights

• Q2 FY27 revenue was $98.2 million, down 2.9% year-over-year; adjusted EBITDA rose 7% to $33.4 million with margin improving to 34%.

• Net loss from continuing operations was $15 million for the quarter, improved from $18 million prior year; adjusted net income was $10.5 million (10.7% margin).

• Free cash flow for Q2 was negative $20.5 million, a slight improvement from the prior year.

• Gross debt at quarter-end was $575 million; net debt $481 million; cash and cash equivalents at quarter-end were $90.3 million.

• Operating expenses decreased year-over-year, supporting margin expansion despite lower revenue.

Outlook and guidance

• Fiscal 2027 revenue guidance lowered to $380–$390 million due to consumer segment weakness; adjusted EBITDA guidance maintained at $108–$116 million; free cash flow expected at $14–$22 million.

• Expectation to generate free cash flow in Q4; liquidity expected to be sufficient for at least the next twelve months.