Skillsoft Corp. reported third‑quarter fiscal 2026 revenue of $129 million, a 6% decline from $136 million a year earlier. The drop was driven by a 2% decline in the Talent Development Solutions (TDS) segment to $101 million and an 18% plunge in the Global Knowledge (GK) segment to $28 million, the latter reflecting the ongoing erosion of its instructor‑led training business.
Adjusted EBITDA remained flat at $28 million, a 22% margin that matches the prior year’s figure. The company’s adjusted earnings per share of $1.65 beat analyst consensus of $1.26 by $0.39, a 31% upside. The beat was largely a result of disciplined cost management that offset the revenue decline, while the mix shift toward higher‑margin TDS contracts helped preserve profitability.
Net loss widened to $41 million, up from a $24 million GAAP net loss a year earlier, and free‑cash‑flow swung to a negative $24 million from a positive $4 million in the prior year. The swing reflects the heavy investment in AI‑enabled content creation and the continued drag from the GK segment, which has incurred a goodwill impairment of $20.8 million.
Management announced a full‑year revenue guidance of $510 million to $530 million, down from the previous $530 million to $545 million range, and maintained adjusted EBITDA guidance of $112 million to $118 million. Consolidated free‑cash‑flow guidance was withdrawn due to uncertainty in the GK segment, with only TDS‑specific guidance provided. The guidance cut signals management’s concern about the GK segment’s trajectory while expressing confidence in the core TDS business.
Investor reaction was tempered by the revenue miss and the strategic review of the GK segment, which raised concerns about the company’s long‑term growth prospects. The EPS beat was offset by the negative free‑cash‑flow and the withdrawal of consolidated guidance, leading to a cautious market stance.
Ron Hovsepian, Executive Chair and CEO, said the company is “setting the table for growth” by focusing on AI, noting that AI is used in more than 50% of content design, curation, and production. He added that the strategic review of GK aims to transition to a partnership‑driven model rather than continued ownership, reflecting the need to reduce the segment’s drag on financials.
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