Skillsoft Corp To Host Investor Day Transcript

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

Question: Ken Wong - Oppenheimer & Co Inc - Analyst : Maybe to start off, maybe it's either for Ron or Rich, but we really respect that the team have laid out areas of improvement. That always -- very difficult setting aside ego. But when you talk about things like updating content, shoring up your LMS, evolve, go to market, I guess my thought would have been that it requires more investments and potentially impacting margins near term. How should we get comfortable with the fact without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 11, 2024 / 1:00PM, SKIL.N - Skillsoft Corp To Host Investor Day that you are able to continue to deliver on the EBITDA targets this year and expansion going forward without potentially impacting growth areas as you take some money out?

Question: Ken Wong - Oppenheimer & Co Inc - Analyst : Got it. Okay. Really appreciate the color there. And this one maybe for Matt. With an emphasis on talent champions, any way that you can help us think through what percent of this Fortune -- 50% of the Fortune 1000 you have you might characterize as a talent champion? What's the headroom to convert more of that base to talent champion? Or should we only think about the incremental talent champion wins as going after the remaining 40% of the Fortune 1000 that you don't have?

Question: Ken Wong - Oppenheimer & Co Inc - Analyst : That's great. Fantastic.

Question: Ken Wong - Oppenheimer & Co Inc - Analyst : Okay, perfect. I'll jump back in the queue and pass the mic to one of my peers.

Question: Sheldon McMeans - Barclays Capital Inc - Analyst : First one for Ron. In your remarks, you talked about how scale is one of the largest players in the space with over $0.5 billion in a $300 billion market. The customer market share metrics are solid particularly around the 60% of the Fortune 1000, but this does seem fragmented. Ron, you certainly had experience with multiple businesses and technology. So in your first few months here, what are you seeing in terms of industry pricing power or maybe relative to some of your other experience, and how should we think about the possibility to drive stronger pricing power in the context of structural factors of industry, macro factors that we haven't talked about too much, and then still soft execution on what they can control?

Question: Sheldon McMeans - Barclays Capital Inc - Analyst : And then I want to ask on global knowledge, I believe you mentioned revenue from the top 10 partners at 70%. I could be wrong there. And you've talked a lot about watching proprietary forces to kind of reduce this dependency. Can you speak more to the steps that you're taking there to improve the partner relationships and perhaps the need to reduce the risk of any future reductions in subsidies there?

Question: Sheldon McMeans - Barclays Capital Inc - Analyst : Yeah.

Question: Tom Singlehurst - Citigroup Inc - Analyst : My first question actually -- I guess, this is probably for Ron. I know you're coming on to be incredibly committed with the business anyway. I'm just interested as you went through your first 90 days, whether you've got any missing cases within the portfolio. I suppose if I'm leading anywhere without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JULY 11, 2024 / 1:00PM, SKIL.N - Skillsoft Corp To Host Investor Day with this, I'm sort of interested in whether in particular, your B2B, your -- one of your biggest strategic shareholders, whether they scout for more third-party partnerships, just to further increase your offering to your customers. Any thoughts on the mixed gaps in the portfolio would be great [appreciate to hear about]

Question: Tom Singlehurst - Citigroup Inc - Analyst : That was absolutely bang on, much better than I did.

Question: Tom Singlehurst - Citigroup Inc - Analyst : Yeah, next question if it's okay. This one's for Rich. I think I could work out exactly what you're saying with the $45 million of gross cost savings, that 10% cost efficiency, and then obviously there's a degree of reinvestment. I didn't catch whether we should expect the majority of that to be reinvested or around 50%. I was wondering if you can more precisely quantify that. And then I suppose the actual question behind that is in '26 and in '27, presumably we should be expecting absolute positive adjusted EBITDA progression?

Question: Tom Singlehurst - Citigroup Inc - Analyst : And one final one. The investment in proprietary courses within GK makes a lot of sense. Is that capital investment or is that just a P&L reinvestment that we're talking about in the previous question?

Question: Tom Singlehurst - Citigroup Inc - Analyst : Absolutely. Perfect.

Question: Sheldon McMeans - Barclays Capital Inc - Analyst : So I wanted to ask if we could get more color on the assumptions around the opportunity within skills existing Fortune 1000 customer base. So there you noted there's 29 million employees in about a $28 billion opportunity. This would imply about $1,000 per year per employee. I understand that this is for all training-related expenses more than just software and content. But looking at Skillsoft's LTM revenue and the 100 million learners, you're getting about $5.50 per user per year. What share do you think you can get of this $1,000 per year pie, or put differently, what are your thoughts on how high you can drive per revenue per employee, I guess, if that makes sense?

Question: Sheldon McMeans - Barclays Capital Inc - Analyst : Great. And last one for me, can you speak broadly to how the market is evolving in terms of the content and learning experience providers and the learning management systems? And when you divested some tools, it seemed like part of the thesis there is that you're no longer competing with the learning management providers like Workday, for example, that you could use that have a really good install base that you could potentially sell into. So could you speak to how that market's evolving and kind of that the opportunity to partnership? I know you had that integration with Workday that I believe came online last year, how that ecosystem and opportunity is developing?