Skillsoft Corp Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Ron, so you guys are my first earnings post the tariff news. So this is probably a little unfair to you guys, but we'd love a sense of what you're either directly or indirectly seeing, hearing from your customer base. Any context in terms of verticals or regionally that you might be able to call out or help us with in terms of if you're seeing any impact on your business.

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : That helps a lot and way more detail than I was expecting. Really appreciate that, Ron. And Rich, I guess the flip side of the coin, I guess, it sounds like you guys are approaching business as usual. So as I think about the growth in '26, I'm assuming nothing baked in as far as any potential impact. Or please correct me if I'm wrong, if you guys have at least thought through how that could cause some slippage or elongation or any potential headwinds.

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Perfectly fair. And then as we think about the other half of guidance, EBITDA guidance, like a nice step-up dollar-wise, decent growth. You guys clearly made progress through the year. I guess when we map it out, it looks like not -- we're not seeing any margin improvement, no margin expansion. Any -- just help us think through some of the moving pieces there in terms of why not see some progress there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 14, 2025 / 9:00PM, SKIL.N - Q4 2025 Skillsoft Corp Earnings Call

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Got it. Okay. Perfect. Go ahead.

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Got it. So it sounds like with that reinvestment happening second half, first half, again, not -- I don't want to put words in your mouth, and I realize we're not guiding to kind of quarters. But it does sound like from a profitability perspective, the exit rate should be more attractive than what we see in the first half. Would that be a fair characterization?

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Got it. Ron, I wanted to circle back to the go-to-market transformation. Clearly, it looks like you're making some progress here with the big deal activity. Would love a sense of kind of where we are as far as any incremental sales force ramp. Is the headcount where you want it to be? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 14, 2025 / 9:00PM, SKIL.N - Q4 2025 Skillsoft Corp Earnings Call And then second, again, back to the larger deals. Any color on what you're seeing across your enterprise skills champions? Is that activity -- is that effort progressing as planned?

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Perfect. And maybe kind of shifting gears a little. You talked about the 100 CAISY test customers there. What type of engagement are you seeing with that little cohort? Is -- in terms of virtual versus -- or I guess AI-driven versus maybe your more kind of traditional use cases with your customers, like what kind of balance are you seeing? And then second, as you looked at the engagement of this cohort, what confidence level do you have that this could be a truly monetizable event, whether it's improving cross-sell or upsell? How should we think about how that flows through based on what you're seeing in this current group?

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : And when you say the hiring of the pro-serve group, is that for training? Is it for potential rollout of these capabilities across the organization more broadly? How should we interpret -- what are the specific needs the customers before --

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Okay. Perfect. Rich --

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Makes sense. No, no problem at all. And Rich, back to the big build dynamics. You guys gave some pretty good color in terms of contribution from top 10 customers. Any way to provide some context as to how that might have looked year over year? Would just love a sense of how dramatic the improvement might have been as far as your kind of your large deal, large customer engagement.

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Okay. Understand. And then one thing we noticed is the Global Knowledge margin contribution margin declined year over year. Just wanted a little context there. How should we think about that margin profile trending forward as well?

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Understood. And as someone that historically maybe dinged you guys on the DRR number, you guys made pretty drastic improvements there. So we definitely want to call that out. How durable is that? Or was that maybe just a 4Q dynamic where the team really executed? As we look ahead, is that a number that seems that we can stay within that ballpark?

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : That's great. Really appreciate the color there. And then last question for me. I realize, again, you guys don't give kind of quarterly specifics and really appreciate all the color around Q4 or Q1. As we think about the seasonality of your business, any reason to think that, that has shifted much as we compare this year to last year given the macro uncertainty, the improvement in your go-to-market? Anything that we should be aware of as we kind of try to model going forward in '26 and beyond or specifically '26?

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Got it. One last question just based on that response. And I got to -- won't obviously hold you guys to this, but I'm sure a lot of folks are trying to figure out if there is some elongation, if there is some headwind. Clearly, you guys have made progress towards returning to growth. Would there REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 14, 2025 / 9:00PM, SKIL.N - Q4 2025 Skillsoft Corp Earnings Call be a priority to defend EBITDA cash flow, or would the intention be to kind of continue to lean in, move forward on trying to maintain that ['26] growth number?

Question: Ken Wong - Oppenheimer & Co., Inc. - Analyst : Okay. I think that's about as fair as we can approach it. I appreciate you guys taking a stab at that question. That's it on my end.