Skillsoft reported QQ1 2026 revenue of $124.2 million, down 2.8% year over year, in the seasonally smallest quarter of the fiscal year. Talent Development Solutions (TDS) delivered modest growth of 1% YoY to $99.1 million, while Global Knowledge (GK) declined ~15.7% YoY to $25.1 million, reflecting softer discretionary live-learning demand in the public sector and a higher mix of reseller revenue. Despite a softer top-line start, Skillsoft posted a meaningful improvement in profitability metrics, with adjusted EBITDA of $22.1 million (8.7% of revenue? wait – the reported margin was 17.8% of revenue, consistent with the press commentary) and positive free cash flow of $26.2 million for the quarter, supported by disciplined cost controls and working-capital timing. GAAP net loss widened to $38.0 million, driven by non-operational items and transformations, while EPS remained negative at -$4.57. The company reaffirmed its full-year guidance, projecting revenue of $530–$545 million and adjusted EBITDA of $112–$118 million, and guiding for positive annual free cash flow between $13 and $18 million, albeit with anticipated Q2 cash use given seasonality and collections timing.
Management emphasized ongoing transformation investments in H1 2026 (go-to-market, product development, and international expansion) with expected back-half benefits as the organization scales growth initiatives. The pipeline remains robust in GK for large global public-sector deals, and the TDS franchise continues to exhibit resilience and recurring revenue attributes. The combination of a strong free-cash-flow profile, a clear path to margin expansion, and a focused product strategy (Percipio AI, CAISY coach in 40+ languages, certification dashboard, and coaching platform) supports a cautiously optimistic investment thesis, contingent on stabilization in macro discretionary spend and execution of the growth plan.
Overall, Skillsoft’s QQ1 performance underscores the company’s ability to generate positive cash flow and reduce cost structure during a challenged macro environment, while maintaining a clear strategic path toward topline growth and margin expansion as it completes its multi-quarter transformation.