Results Exceed Expectations with Bookings1 Up 18%
Percipio Bookings Up 47%, Highlighting New Product Momentum and Successful Platform Migration
Acquired Pluma for $22 Million, Adding Valuable Digital Coaching and Professional Development Solution for Emerging Leaders
Recruited Experienced Leadership Team to Oversee Execution of Strategic Priorities, Accelerate Growth and Drive Value Creation
Skillsoft Corp. (NYSE: SKIL) (“Skillsoft” or the “Company”), a global leader in corporate digital learning, today announced its financial results for the second quarter of fiscal 2022 ended July 31, 2021. The Company’s results exceeded its expectations, and Skillsoft raised its bookings and adjusted revenue guidance for the full year.
“We are pleased with Skillsoft’s strong performance during our initial quarter as a public company,” said Jeffrey R. Tarr, Skillsoft’s Chief Executive Officer. “We delivered double-digit bookings growth, won multiple new blue-chip customers, and acquired fast-growing digital coaching platform Pluma, enabling us to offer an on-demand, executive-quality leadership development solution to our customers, which include approximately 70% of the Fortune 1000.”
Mr. Tarr added, “We see substantial opportunity to extend our leadership in the rapidly expanding and highly fragmented corporate learning industry as we innovate and invest in growth. Our new leadership team is executing well against our strategic priorities, and we are well-positioned to create significant value for our customers, shareholders and other stakeholders.”
Fiscal 2022 Second Quarter Financial Highlights2
- Strong bookings growth across all three business segments, with Content up 9%, Global Knowledge up 30% and SumTotal up 15%; bookings in Content and Global Knowledge combined were up 19%, and total bookings were up 18%;
- GAAP3 revenue for the reported period was $106 million and GAAP net loss was $49 million;
- Adjusted revenue of $176 million grew 5% and adjusted EBITDA of $43 million grew 2%;
- Combined Percipio and dual deployment dollar retention rate of 103% compared to 102%; and
- Refinanced long-term debt, reducing annual cash interest expense by approximately $25 million.
Updated Full Year Fiscal 2022 Outlook
|
Updated Outlook |
Previous Outlook |
Bookings |
$690 million to $710 million |
$660 million to $690 million |
Adjusted Revenue |
$670 million to $690 million |
$645 million to $675 million |
Adjusted EBITDA |
Unchanged |
$155 million to $175 million |
|
|
|
1 Bookings is identical to what the Company previously referred to as “order intake” and includes (i) subscription renewals, upgrades, churn, and downgrades to existing customers, (ii) non-subscription services, and (iii) sales to new customers. Bookings generally represents a customer’s annual obligation (versus the life of the contract), and, for the subscription business, revenue is recognized for such bookings over the following 12 months.
2 Growth calculated as if pre-combination Skillsoft and Global Knowledge had been combined and their fiscal quarters had been aligned to end on July 31, 2021.
3 GAAP results include the periods from May 1, 2021 to June 11, 2021 (predecessor) and June 12, 2021 to July 31, 2021 (successor) and reflect the impact of business combination accounting on revenue.
Skillsoft increased its bookings and adjusted revenue outlook for full year fiscal 2022 primarily to reflect better than expected performance in the first half of the year.
The unchanged adjusted EBITDA outlook reflects the Company’s growth investments in content, platform and go-to-market capabilities. Additionally, the Company experienced a delay in realizing business combination synergies due to the timing of transaction close and higher than anticipated D&O insurance costs.
Key Operational Metrics and Non-GAAP Financial Measures
Bookings (previously Order Intake)
The following table sets forth unaudited bookings for the three and six months ended July 31, 2021 and 2020 as if pre-combination Skillsoft and Global Knowledge had been combined and their fiscal quarters had been aligned to end on July 31:
Bookings (previously Order Intake) | ||||||||||||
Three Months | Six Months | |||||||||||
$000s | Ended July 31, | Change | Ended July 31, | Change | ||||||||
|
|
2021 |
2020 |
|
$ |
% |
|
2021 |
2020 |
|
$ |
% |
Content and Global Knowledge | ||||||||||||
Percipio | $15,423 |
$10,465 |
$4,958 |
47% |
$32,534 |
$20,582 |
$11,952 |
58% |
||||
Dual Deployment | 31,827 |
26,734 |
5,093 |
19% |
41,696 |
39,409 |
2,287 |
6% |
||||
Skillport | 12,730 |
18,160 |
(5,430) |
-30% |
22,048 |
32,072 |
(10,024) |
-31% |
||||
Total Subscription | $59,980 |
$55,359 |
$4,621 |
8% |
$96,278 |
$92,063 |
$4,215 |
5% |
||||
Services and One-Time Orders | 3,716 |
3,206 |
510 |
16% |
6,288 |
5,011 |
1,276 |
25% |
||||
Total Content | $63,696 |
$58,565 |
5,131 |
9% |
$102,565 |
$97,075 |
5,490 |
6% |
||||
Global Knowledge | 63,541 |
48,769 |
14,772 |
30% |
128,798 |
105,806 |
22,992 |
22% |
||||
Total Content + Global Knowledge | $127,237 |
$107,334 |
$19,903 |
19% |
$231,363 |
$202,881 |
$28,482 |
14% |
||||
SumTotal | ||||||||||||
Subscription | $21,308 |
$19,606 |
$1,702 |
9% |
$42,081 |
$46,457 |
($4,376) |
-9% |
||||
Services and One-Time Orders | 6,150 |
4,313 |
1,837 |
43% |
10,801 |
9,614 |
1,187 |
12% |
||||
Total SumTotal | $27,458 |
$23,919 |
$3,539 |
15% |
$52,882 |
$56,071 |
($3,189) |
-6% |
||||
Total | $154,695 |
$131,253 |
$23,442 |
18% |
$284,245 |
$258,952 |
$25,293 |
10% |
Dollar Retention Rate
The following table sets forth dollar retention rates (“DRR”) for the last twelve month (“LTM”) period ended July 31, 2021 and for the three month periods ended July 31, 2021 and 2020 as if Skillsoft and Global Knowledge had been combined and their fiscal quarters had been aligned to end on July 31:
|
|
July 31 |
||
|
|
LTM |
2021 |
2020 |
|
|
|
|
|
Percipio |
|
99% |
99% |
102% |
Dual Deployment |
|
102% |
104% |
102% |
Percipio + Dual Deployment |
|
101% |
103% |
102% |
Skillport |
|
78% |
88% |
68% |
Total Content Business |
|
95% |
99% |
88% |
SumTotal Business |
|
96% |
99% |
79% |
Capital Structure
The following table sets forth Skillsoft’s cash and cash equivalents and long-term debt as of July 31, 2021:
|
|
|
$000s |
|
July 31, |
|
|
2021 |
Assets |
|
|
Cash and Equivalents |
|
$90,772 |
|
|
|
Liabilities |
|
|
Long-Term Debt |
|
$467,399 |
(including current portion) |
|
|
Weighted average shares outstanding during the period from June 12, 2021 to July 31, 2021 were 133,059,021.
Webcast and Conference Call Information
Skillsoft will host a conference call and webcast today at 5:00 p.m. Eastern Time to discuss its financial results. To access the call, dial (877) 413-9278 from the United States and Canada or (215) 268-9914 from international locations. The live event can be accessed from the Investor Relations section of Skillsoft’s website at investor.skillsoft.com. A replay will be available for six months.
About Skillsoft
Skillsoft (NYSE: SKIL) is a global leader in corporate digital learning, focused on transforming today’s workforce for tomorrow’s economy. The Company provides enterprise learning solutions designed to prepare organizations for the future of work, overcome critical skill gaps, drive demonstrable behavior-change, and unlock the potential in their people. Skillsoft offers a comprehensive suite of premium, original, and authorized partner content, including one of the broadest and deepest libraries of leadership & business skills, technology & developer, and compliance curricula. With access to a broad spectrum of learning options (including video, audio, books, bootcamps, live events, and practice labs), organizations can meaningfully increase learner engagement and retention. Skillsoft’s offerings are delivered through Percipio, its award-winning, AI-driven, immersive learning platform purpose built to make learning easier, more accessible, and more effective. Learn more at www.skillsoft.com.
NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE METRICS
We track several non-GAAP financial measures and key performance metrics that we believe are key financial measures of our success. Non-GAAP measures and key performance metrics are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to us, many of which present non-GAAP measures and key performance metrics when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of U.S. GAAP financial disclosures. For example, a company with higher U.S. GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, excluding the effects of interest income and expense moderates the impact of a company’s capital structure on its performance. However, non-GAAP measures and key performance metrics have limitations as analytical tools. Because not all companies use identical calculations, our presentation of non-GAAP financial measures and key performance metrics may not be comparable to other similarly titled measures of other companies. They are not presentations made in accordance with U.S. GAAP, are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with U.S. GAAP or operating cash flows determined in accordance with U.S. GAAP. As a result, these performance measures should not be considered in isolation from, or as a substitute analysis for, results of operations as determined in accordance with U.S. GAAP.
We do not reconcile our forward-looking non-GAAP financial measures to the corresponding U.S. GAAP measures, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible; and because not all of the information necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure is available to us without unreasonable efforts. For the same reasons, we are unable to address the probable significance of the unavailable information. We provide non-GAAP financial measures that we believe will be achieved, however we cannot accurately predict all of the components of the adjusted calculations and the U.S. GAAP measures may be materially different than the non-GAAP measures.
Forward Looking Statements
This document includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook, our product development and planning, our pipeline, future capital expenditures, financial results, the impact of regulatory changes, existing and evolving business strategies and acquisitions and dispositions, demand for our services and competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, our ability to successfully implement our plans, strategies, objectives, expectations and intentions are forward-looking statements. Also, when we use words such as “may,” “will,” “would,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “projects,” “forecasts,” “seeks,” “outlook,” “target,” goals,” “probably,” or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of Skillsoft’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.
There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including:
- our ability to realize the benefits expected from the business combination between Skillsoft, Churchill Capital Corp. II and Global Knowledge;
- the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, demographic trends and employee availability;
- the impact of the ongoing COVID-19 pandemic on our business, operating results and financial condition;
- fluctuations in our future operating results;
- our ability to successfully identify, consummate and achieve strategic objectives in connection with our acquisition opportunities and realize the benefits expected from the acquisition;
- the demand for, and acceptance of, our products and for cloud-based technology learning solutions in general;
- our ability to compete successfully in competitive markets and changes in the competitive environment in our industry and the markets in which we operate;
- our ability to market existing products and develop new products;
- a failure of our information technology infrastructure or any significant breach of security;
- the effects of pending and future legislation;
- future regulatory, judicial and legislative changes in our industry;
- our ability to comply with laws and regulations applicable to our business;
- the impact of natural disasters, public health crises, political crises, or other catastrophic events;
- our ability to attract and retain key employees and qualified technical and sales personnel;
- fluctuations in foreign currency exchange rates;
- our ability to protect or obtain intellectual property rights;
- our ability to raise additional capital;
- the impact of our indebtedness on our financial position and operating flexibility;
- our ability to successfully defend ourselves in legal proceedings;
- our ability to remediate any material weaknesses or maintain effective internal controls over financial reporting; and
- our ability to continue to meet applicable listing standards.
The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see the risk factors included in Churchill Capital Corp. II’s Annual Report on Form 10-K/A for the year ended December 31, 2020 in Part I, Item 1A and in the registration statement on Form S-4 filed by Churchill Capital Corp. II and declared effective by the Securities and Exchange Commission (the “SEC”) on May 27, 2021, and subsequent filings with the SEC.
Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Additionally, statements as to market share, industry data and our market position are based on the most currently available data available to us and our estimates regarding market position or other industry data included in this document or otherwise discussed by us involve risks and uncertainties and are subject to change based on various factors, including as set forth above.
Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless required by applicable law. With regard to these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.
SKILLSOFT CORP. | |||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(IN THOUSANDS, EXCEPT NUMBER OF SHARES) | |||||
Successor | Predecessor (SLH) | ||||
July 31, 2021 | January 31, 2021 | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 90,772 |
$ | 71,479 |
|
Restricted cash | 14,742 |
2,964 |
|||
Accounts receivable, less reserves of approximately $2,662 and $294 as of July 31, 2021 and January 31, 2021, respectively | 120,980 |
179,784 |
|||
Prepaid expenses and other current assets | 48,584 |
30,326 |
|||
Total current assets | 275,078 |
284,553 |
|||
Property and equipment, net | 15,055 |
13,780 |
|||
Goodwill | 761,177 |
495,004 |
|||
Intangible assets, net | 946,731 |
728,633 |
|||
Right of use assets | 24,578 |
15,131 |
|||
Deferred tax asset | 3,710 |
-- |
|||
Other assets | 8,092 |
8,636 |
|||
Total assets | $ | 2,034,421 |
$ | 1,545,737 |
|
LIABILITIES AND SHAREHOLDER'S EQUITY | |||||
Current liabilities: | |||||
Current maturities of long-term debt | $ | 3,600 |
$ | 5,200 |
|
Borrowings under accounts receivable facility | 24,822 |
17,022 |
|||
Accounts payable | 34,514 |
7,425 |
|||
Accrued compensation | 41,097 |
36,375 |
|||
Accrued expenses and other current liabilities | 62,473 |
23,125 |
|||
Lease liabilities | 9,662 |
4,740 |
|||
Deferred revenue | 165,900 |
257,549 |
|||
Total current liabilities | 342,068 |
351,436 |
|||
Long-term debt | 463,799 |
510,236 |
|||
Warrant liabilities | 28,525 |
900 |
|||
Deferred tax liabilities | 116,462 |
81,008 |
|||
Long term lease liabilities | 16,098 |
13,155 |
|||
Deferred revenue - non-current | 1,749 |
3,035 |
|||
Other long-term liabilities | 5,045 |
5,998 |
|||
Total long-term liabilities | 631,678 |
614,332 |
|||
Commitments and contingencies | - |
- |
|||
Shareholders’ equity : | |||||
(Predecessor SLH) Shareholders’ common stock- Class A and Class B common shares, $0.01 par value: 1,000,000,000 shares authorized (800,000,000 Class A, 200,000,000 Class B) at January 31, 2021; 4,000,000 shares issued and outstanding (3,840,000 Class A, 160,000 Class B) at January 31, 2021 | - |
40 |
|||
(Successor) Shareholders’ common stock- Class A common shares, $0.0001 par value: 375,000,000 shares authorized and 133,059,021 shares issued and outstanding at July 31, 2021 | 11 |
- |
|||
Additional paid-in capital | 1,297,716 |
674,333 |
|||
Accumulated deficit | (237,958) |
(93,722) |
|||
Accumulated other comprehensive income (loss) | 906 |
(682) |
|||
Total shareholders’ equity | 1,060,675 |
579,969 |
|||
Total liabilities and shareholders’ equity | $ | 2,034,421 |
$ | 1,545,737 |
SKILLSOFT CORP. | ||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||||||||||||||||
Successor | Predecessor (SLH) | Predecessor (PL) | ||||||||||||||||||
From | From | From | ||||||||||||||||||
June 12, 2021 to July 31, 2021 |
May 1, 2021 to June 11, 2021 |
February 1, 2021 to June 11, 2021 |
Three months ended July 31, 2020 |
Six months ended July 31, 2020 |
||||||||||||||||
Revenues: | ||||||||||||||||||||
Total revenues | $ | 57,912 |
|
47,935 |
|
139,636 |
|
116,835 |
|
235,164 |
|
|||||||||
Operating expenses: | ||||||||||||||||||||
Cost of revenues | 28,006 |
|
11,360 |
|
35,881 |
|
21,618 |
|
45,831 |
|
||||||||||
Content and software development | 9,878 |
|
7,477 |
|
24,084 |
|
16,835 |
|
33,778 |
|
||||||||||
Selling and marketing | 22,234 |
|
13,438 |
|
41,940 |
|
34,033 |
|
66,769 |
|
||||||||||
General and administrative | 17,073 |
|
4,855 |
|
17,217 |
|
15,324 |
|
32,015 |
|
||||||||||
Amortization of intangible assets | 20,023 |
|
15,959 |
|
50,902 |
|
12,779 |
|
30,148 |
|
||||||||||
Impairment of goodwill and intangible assets | - |
|
- |
|
- |
|
- |
|
332,376 |
|
||||||||||
Recapitalization and transaction-related costs | 9,995 |
|
5,006 |
|
6,938 |
|
16,659 |
|
32,035 |
|
||||||||||
Restructuring | 316 |
|
(1,240 |
) |
(703 |
) |
771 |
|
1,141 |
|
||||||||||
Total operating expenses | 107,525 |
|
56,855 |
|
176,259 |
|
118,019 |
|
574,093 |
|
||||||||||
Operating loss | (49,613 |
) |
(8,920 |
) |
(36,623 |
) |
(1,184 |
) |
(338,929 |
) |
||||||||||
Other (expense) income, net | (697 |
) |
(41 |
) |
(493 |
) |
898 |
|
1,809 |
|
||||||||||
Fair value adjustment of warrants | 17,115 |
|
800 |
|
900 |
|
- |
|
- |
|
||||||||||
Interest income | 12 |
|
54 |
|
64 |
|
65 |
|
84 |
|
||||||||||
Interest expense, net | (9,856 |
) |
(5,371 |
) |
(16,820 |
) |
(61,076 |
) |
(167,054 |
) |
||||||||||
Reorganization items, net | - |
|
- |
|
- |
|
(10,593 |
) |
(10,593 |
) |
||||||||||
Loss before benefit from income taxes | (43,039 |
) |
(13,478 |
) |
(52,972 |
) |
(71,890 |
) |
(514,683 |
) |
||||||||||
Benefit from income taxes | (5,504 |
) |
(1,619 |
) |
(3,708 |
) |
(909 |
) |
(9,800 |
) |
||||||||||
Net loss | $ | (37,535 |
) |
(11,859 |
) |
(49,264 |
) |
(70,981 |
) |
(504,883 |
) |
|||||||||
Loss per share: | ||||||||||||||||||||
Ordinary – Basic and Diluted (Predecessor (PL)) | * | * | * | $ | (709.10 |
) |
$ | (5,043.79 |
) |
|||||||||||
Class A and B – Basic and Diluted (Predecessor (SLH)) | * | $ | (2.96 |
) |
$ | (12.32 |
) |
* | * | |||||||||||
Ordinary – Basic and Diluted (Successor) | $ | (0.28 |
) |
* | * | * | * | |||||||||||||
Weighted average common share outstanding: | ||||||||||||||||||||
Ordinary – Basic and Diluted (Predecessor (PL)) | * | * | * | 100.1 |
|
100.1 |
|
|||||||||||||
Class A and B – Basic and Diluted (Predecessor (SLH)) | * | 4,000 |
|
4,000 |
|
* | * | |||||||||||||
Ordinary – Basic and Diluted (Successor) | 133,059 |
|
* | * | * | * | ||||||||||||||
*Not applicable | ||||||||||||||||||||
SKILLSOFT CORP. | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(IN THOUSANDS) | ||||||||
Successor | Predecessor (SLH) | Predecessor (PL) | ||||||
From | From | |||||||
June 12, 2021 to July 31, 2021 |
February 1, 2021 to June 11, 2021 |
Six months ended July 31, 2020 |
||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (37,535) |
$ | (49,264) |
$ | (504,883) |
||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Share-based compensation | 4,817 |
- |
- |
|||||
Depreciation | 1,705 |
3,572 |
5,120 |
|||||
Amortization of intangible assets | 20,023 |
50,902 |
30,148 |
|||||
Change in bad debt reserve | (170) |
(174) |
19 |
|||||
Provision for (benefit from) income taxes – non-cash | (6,180) |
(5,886) |
(11,478) |
|||||
Non-cash interest expense | 434 |
487 |
2,829 |
|||||
Impairment of goodwill and intangible assets | - |
- |
332,376 |
|||||
Right-of-use assets amortizations | 1,445 |
748 |
1,435 |
|||||
Fair value adjustment to warrants | (17,115) |
(900) |
- |
|||||
Non-cash reorganization items, net | - |
- |
4,818 |
|||||
Changes in current assets and liabilities, net of effects from acquisitions: | ||||||||
Accounts receivable | 6,963 |
88,622 |
93,124 |
|||||
Prepaid expenses and other assets | (13,065) |
3,379 |
(9,265) |
|||||
Accounts payable | 5,175 |
(6,417) |
(5,520) |
|||||
Accrued expenses and non-current liabilities | 18,026 |
(18,592) |
159,565 |
|||||
Lease liability | (1,690) |
(1,301) |
(1,942) |
|||||
Deferred revenue | 17,905 |
(31,365) |
(84,773) |
|||||
Net cash provided by operating activities | 738 |
33,811 |
11,573 |
|||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (75) |
(641) |
(2,985) |
|||||
Internal use software development costs | (881) |
(2,350) |
(3,401) |
|||||
Acquisition of Skillsoft, net of cash received | (386,035) |
- |
- |
|||||
Acquisition of Global Knowledge, net of cash received | (156,926) |
- |
- |
|||||
Acquisition of Pluma, net of cash received | (18,646) |
- |
- |
|||||
Net cash used in investing activities | (562,563) |
(2,991) |
(6,386) |
|||||
Cash flows from financing activities: | ||||||||
Borrowings under revolving line of credit, net of repayments | - |
- |
19,500 |
|||||
Borrowings under DIP Facility | - |
- |
60,000 |
|||||
Proceeds from issuance of Term Loan, net of fees | 464,290 |
- |
- |
|||||
Proceeds from equity investment (PIPE) | 530,000 |
- |
- |
|||||
Principal repayments of capital lease obligations | (137) |
(370) |
(430) |
|||||
Repayments of accounts receivable facility, net of borrowings | (9,456) |
16,577 |
(19,270) |
|||||
Repayments of First and Second Out loans | (605,591) |
(1,300) |
- |
|||||
Net cash provided by financing activities | 379,106 |
14,907 |
59,800 |
|||||
Effect of exchange rate changes on cash and cash equivalents | (250) |
203 |
(2,264) |
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (182,969) |
45,930 |
62,723 |
|||||
Cash, cash equivalents and restricted cash, beginning of period | 288,483 |
74,443 |
33,804 |
|||||
Cash, cash equivalents and restricted cash, end of period | $ | 105,514 |
$ | 120,373 |
$ | 96,527 |
Key Performance Metrics
We use key performance metrics to help us evaluate our performance and make strategic decisions. Additionally, we believe these metrics are useful as a supplement to investors in evaluating the Company’s ongoing operational performance and trends. These key performance metrics are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled metrics presented by other companies.
Annualized Recurring Revenue (“ARR”)
ARR represents the annualized recurring value of all active subscription contracts at the end of a reporting period. We believe ARR is useful for assessing the performance of our recurring subscription revenue base and identifying trends affecting our business.
Dollar Retention Rate (“DRR”)
For existing customers at the beginning of a given period, DRR represents subscription renewals, upgrades, churn, and downgrades in such period divided by the beginning total renewable base for such customers for such period. Renewals reflect customers who renew their subscription, inclusive of auto-renewals for multi-year contracts, while churn reflects customers who choose to not renew their subscription. Upgrades include orders from customers that purchase additional licenses or content (e.g., a new Leadership and Business module), while downgrades reflect customers electing to decrease the number of licenses or reduce the size of their content package. Upgrades and downgrades also reflect changes in pricing. We use our DRR to measure the long-term value of customer contracts as well as our ability to retain and expand the revenue generated from our existing customers.
Bookings
Bookings (previously referred to as order intake) in any particular period represents orders received during that period and reflects (i) subscription renewals, upgrades, churn, and downgrades to existing customers, (ii) non- subscription services, and (iii) sales to new customers. Bookings generally represents a customer’s annual obligation (versus the life of the contract), and, for the subscription business, revenue is recognized for such bookings over the following 12 months. We use bookings to measure and monitor current period business activity with respect to our ability to sell subscriptions and services to our platform
SKILLSOFT CORP
KEY OPERATING METRICS
Bookings | ||||||
Three Months | Six Months | |||||
(in thousands) | Ended July 31, | Ended July 31, | ||||
2021 |
2020 |
2021 |
2020 |
|||
Content and Global Knowledge | ||||||
Percipio | $15,423 |
$10,465 |
$32,534 |
$20,582 |
||
Dual Deployment | 31,827 |
26,734 |
41,696 |
39,409 |
||
Skillport | 12,730 |
18,160 |
22,048 |
32,072 |
||
Total Subscription | $59,980 |
$55,359 |
$96,278 |
$92,063 |
||
Services and One-Time Orders | 3,716 |
3,206 |
6,288 |
5,011 |
||
Total Content | $63,696 |
$58,565 |
$102,565 |
$97,075 |
||
Global Knowledge | 63,541 |
48,769 |
128,798 |
105,806 |
||
Total Content and Global Knowledge | $127,237 |
$107,334 |
$231,363 |
$202,881 |
||
SumTotal Business | ||||||
Subscription | $21,308 |
$19,606 |
$42,081 |
$46,457 |
||
Services and One-Time Orders | 6,150 |
4,313 |
10,801 |
9,614 |
||
Total SumTotal | $27,458 |
$23,919 |
$52,882 |
$56,071 |
||
Total Bookings | $154,695 |
$131,253 |
$284,245 |
$258,952 |
||
Annualized Recurring Revenue | ||||
(in thousands) | July 31, | January 31, | ||
2021 |
2021 |
|||
Content and Global Knowledge | ||||
Percipio | $84,185 |
$75,802 |
||
Dual Deployment | 173,256 |
161,327 |
||
Skillport | 60,282 |
80,245 |
||
Total Content | $317,723 |
$317,374 |
||
Global Knowledge | 15,273 |
10,504 |
||
Total Content and Global Knowledge | $332,996 |
$327,878 |
||
SumTotal | 96,020 |
99,148 |
||
Total Annualized Recurring Revenue | $429,016 |
$427,026 |
Dollar Retention Rate | ||||
July 31 | ||||
LTM | 2021 |
2020 |
||
Percipio | 99% |
99% |
102% |
|
Dual Deployment | 102% |
104% |
102% |
|
Percipio + Dual Deployment | 101% |
103% |
102% |
|
Skillport | 78% |
88% |
68% |
|
Total Content Business | 95% |
99% |
88% |
|
SumTotal Business | 96% |
99% |
79% |
|
Non-GAAP Financial Measures – Adjusted Revenue
SKILLSOFT CORP RECONCILIATION OF NON-GAAP FINANICAL MEASURES (in thousands) (Unaudited)
|
|||||||||||||
Skillsoft and Global Knowledge Combined | |||||||||||||
Three Months Ended July 31, |
Six Months Ended July 31, |
||||||||||||
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|||
Consolidated | |||||||||||||
Adjusted subscription revenue | $ |
104,628 |
$ |
107,874 |
$ |
205,976 |
$ |
215,162 |
|||||
Adjusted non-subscription revenue |
|
10,883 |
|
10,561 |
|
21,011 |
|
21,611 |
|||||
Adjusted Global Knowledge revenue |
|
60,976 |
|
49,811 |
|
115,742 |
|
111,216 |
|||||
Total Consolidated adjusted revenue |
|
176,487 |
|
168,246 |
|
342,729 |
|
347,989 |
|||||
Content Business | |||||||||||||
Adjusted subscription revenue |
|
80,428 |
|
81,860 |
|
157,950 |
|
162,287 |
|||||
Adjusted non-subscription revenue |
|
4,015 |
|
3,827 |
|
8,178 |
|
7,727 |
|||||
Total Content Business adjusted revenue |
|
84,443 |
|
85,687 |
|
166,128 |
|
170,014 |
|||||
Global Knowledge Business | |||||||||||||
Virtual and on-demand |
|
50,836 |
|
40,447 |
|
97,563 |
|
72,400 |
|||||
Classroom and all other |
|
10,140 |
|
9,364 |
|
18,179 |
|
38,816 |
|||||
Total Global Knowledge adjusted revenue |
|
60,976 |
|
49,811 |
|
115,742 |
|
111,216 |
|||||
SumTotal Business | |||||||||||||
Adjusted subscription revenue |
|
24,200 |
|
26,014 |
|
48,026 |
|
52,875 |
|||||
Adjusted non-subscription revenue |
|
6,868 |
|
6,734 |
|
12,833 |
|
13,884 |
|||||
Total SumTotal adjusted revenue | $ |
31,068 |
$ |
32,748 |
$ |
60,859 |
$ |
66,759 |
For the Three Months Ended July 31, 2021 | ||||||||||
For the Period from 5/1/21 to 6/11/21 |
For the Period from 5/1/21 to 6/11/21 |
For the Period from 6/12/21 to 7/31/21 |
Non-GAAP Revenue Adjustments (1) | |||||||
Global Knowledge | Skillsoft | Skillsoft (2) | Combined | |||||||
Revenues: | ||||||||||
Total revenues | $ 25,255 |
$ 47,935 |
$ 57,912 |
$ 45,385 |
$ 176,487 |
|||||
Operating expenses | ||||||||||
Cost of revenues | 11,836 |
11,360 |
28,006 |
6,468 |
57,670 |
|||||
Content and software development | 258 |
7,477 |
9,878 |
- |
17,613 |
|||||
Selling and marketing | 5,398 |
13,438 |
22,234 |
- |
41,070 |
|||||
General and administrative | 10,765 |
4,855 |
17,073 |
- |
32,693 |
|||||
Amortization of intangible assets | 1,063 |
15,959 |
20,023 |
- |
37,045 |
|||||
Recapitalization and transaction-related costs | 5,006 |
9,995 |
- |
15,001 |
||||||
Restructuring | 146 |
(1,240) |
316 |
- |
(778) |
|||||
Total operating expenses | 29,466 |
56,855 |
107,525 |
6,468 |
200,314 |
|||||
Operating loss: | $ (4,212) |
$ (8,920) |
$ (49,613) |
$ 38,917 |
$ (23,828) |
|||||
Other income (expense), net | (852) |
759 |
16,418 |
- |
16,325 |
|||||
Interest income | 54 |
12 |
- |
66 |
||||||
Interest expense | (1,901) |
(5,371) |
(9,856) |
- |
(17,128) |
|||||
Reorganization items, net | - |
- |
- |
|||||||
Loss before provision for (benefit from) income taxes | (6,965) |
(13,478) |
(43,039) |
38,917 |
(24,565) |
|||||
Provision for (benefit from) income taxes | 481 |
(1,619) |
(5,504) |
- |
(6,642) |
|||||
Net loss | $ (7,446) |
$ (11,859) |
$ (37,535) |
$ 38,917 |
$ (17,923) |
|||||
EBITDA Computation | ||||||||||
Interest expense, net | $ 1,901 |
$ 5,317 |
$ 9,844 |
$ - |
$ 17,062 |
|||||
Provision for (benefit from) income taxes | 481 |
(1,619) |
(5,504) |
- |
(6,642) |
|||||
Depreciation and amortization | 1,530 |
17,112 |
21,728 |
- |
40,370 |
|||||
Impairment of goodwill and intangible assets | - |
- |
- |
- |
||||||
EBITDA | (3,534) |
8,951 |
(11,467) |
38,917 |
32,867 |
|||||
Adjusted EBITDA Computation | ||||||||||
Plus: Non-recurring retention and consulting costs | 28 |
446 |
15 |
- |
489 |
|||||
Plus: Recapitalization and transaction-related costs | 7,469 |
5,006 |
9,995 |
- |
22,470 |
|||||
Plus: Restructuring and contract terminations | 266 |
(1,240) |
316 |
- |
(658) |
|||||
Plus: Integration and migration related | - |
381 |
500 |
- |
881 |
|||||
Plus: Foreign currency and other non-cash expense | 632 |
(37) |
(16,677) |
- |
(16,082) |
|||||
Plus: Impact of fresh-start and purchase accounting | - |
5,374 |
32,485 |
(38,917) |
(1,058) |
|||||
Plus: Stock-based compensation expense | - |
4,817 |
- |
4,817 |
||||||
Plus: Other add backs | 49 |
(722) |
259 |
- |
(414) |
|||||
Adjusted EBITDA | $ 4,910 |
$ 18,159 |
$ 20,243 |
$ - |
$ 43,312 |
(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferred revenue fair value adjustments and (ii) reseller fees, which are presented on a net basis in GAAP revenue. |
(2) GAAP results of Skillsoft include Global Knowledge subsequent to June 11, 2021. |
For the Six Months Ended July 31, 2021 | ||||||||||
For the Period from 2/1/21 to 6/11/21 |
For the Period from 2/1/21 to 6/11/21 |
For the Period from 6/12/21 to 7/31/21 |
Non-GAAP Revenue Adjustments (1) | |||||||
Global Knowledge | Skillsoft | Skillsoft (2) | Combined | |||||||
Revenues: | ||||||||||
Total revenues | $ 71,932 |
$ 139,636 |
$ 57,912 |
$ 73,249 |
$ 342,729 |
|||||
Operating expenses | ||||||||||
Cost of revenues | 34,698 |
35,881 |
28,006 |
14,557 |
113,142 |
|||||
Content and software development | 492 |
24,084 |
9,878 |
- |
34,454 |
|||||
Selling and marketing | 16,404 |
41,940 |
22,234 |
- |
80,578 |
|||||
General and administrative | 19,765 |
17,217 |
17,073 |
- |
54,055 |
|||||
Amortization of intangible assets | 2,646 |
50,902 |
20,023 |
- |
73,571 |
|||||
Recapitalization and transaction-related costs | - |
6,938 |
9,995 |
- |
16,933 |
|||||
Restructuring | 2,764 |
(703) |
316 |
- |
2,377 |
|||||
Total operating expenses | 76,770 |
176,259 |
107,525 |
14,557 |
375,111 |
|||||
Operating loss: | $ (4,838) |
$ (36,623) |
$ (49,613) |
$ 58,692 |
$ (32,382) |
|||||
Other income, net | 624 |
407 |
16,418 |
- |
17,449 |
|||||
Interest income | - |
64 |
12 |
- |
76 |
|||||
Interest expense | (11,970) |
(16,820) |
(9,856) |
- |
(38,646) |
|||||
Reorganization items, net | - |
- |
- |
- |
||||||
Loss before benefit from income taxes | (16,184) |
(52,972) |
(43,039) |
58,692 |
(53,503) |
|||||
Benefit from income taxes | (359) |
(3,708) |
(5,504) |
- |
(9,571) |
|||||
Net loss | $ (15,826) |
$ (49,264) |
$ (37,535) |
$ 58,692 |
$ (43,933) |
|||||
EBITDA Computation | ||||||||||
Interest expense, net | $ 11,970 |
$ 16,756 |
$ 9,844 |
$ - |
$ 38,570 |
|||||
Benefit from income taxes | (359) |
(3,708) |
(5,504) |
- |
(9,571) |
|||||
Depreciation and amortization | 4,119 |
54,474 |
21,728 |
- |
80,321 |
|||||
Impairment of goodwill and intangible assets | - |
- |
- |
- |
- |
|||||
EBITDA | (95) |
18,258 |
(11,467) |
58,692 |
65,388 |
|||||
Adjusted EBITDA Computation | ||||||||||
Plus: Non-recurring retention and consulting costs | 28 |
1,153 |
15 |
- |
1,196 |
|||||
Plus: Recapitalization and transaction-related costs | 8,862 |
6,938 |
9,995 |
- |
25,795 |
|||||
Plus: Restructuring and contract terminations | 2,884 |
(703) |
316 |
- |
2,497 |
|||||
Plus: Integration and migration related | - |
1,160 |
500 |
- |
1,660 |
|||||
Plus: Foreign currency and other non-cash expense | 377 |
134 |
(16,677) |
- |
(16,166) |
|||||
Plus: Impact of fresh-start and purchase accounting | - |
23,395 |
32,485 |
(58,692) |
(2,812) |
|||||
Plus: Stock-based compensation expense | - |
- |
4,817 |
- |
4,817 |
|||||
Plus: Other add backs | (1,119) |
(300) |
259 |
- |
(1,160) |
|||||
Adjusted EBITDA | $ 10,938 |
$ 50,035 |
$ 20,243 |
$ - |
$ 81,216 |
(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferred revenue fair value adjustments and (ii) reseller fees, which are presented on a net basis in GAAP revenue. |
(2) GAAP results of Skillsoft include Global Knowledge subsequent to June 11, 2021. |
For the Three Months Ended July 31, 2020 | ||||||||
Non-GAAP Revenue Adjustments (1) |
||||||||
Global Knowledge | Skillsoft | |||||||
Combined | ||||||||
Revenues: | ||||||||
Total revenues | $ 44,522 |
$ 116,835 |
$ 6,889 |
$ 168,246 |
||||
Operating expenses | ||||||||
Cost of revenues | 23,339 |
21,618 |
6,889 |
51,846 |
||||
Content and software development | 721 |
16,835 |
- |
17,556 |
||||
Selling and marketing | 9,302 |
34,033 |
- |
43,335 |
||||
General and administrative | 7,934 |
15,324 |
- |
23,258 |
||||
Amortization of intangible assets | 1,862 |
12,779 |
- |
14,641 |
||||
Recapitalization and transaction-related costs | - |
16,659 |
- |
16,659 |
||||
Restructuring | 2,275 |
771 |
- |
3,046 |
||||
Total operating expenses | 45,434 |
118,019 |
6,889 |
170,342 |
||||
Operating loss: | $ (912) |
$ (1,184) |
$ - |
$ (2,096) |
||||
Other income, net | 622 |
898 |
- |
1,520 |
||||
Interest income | 65 |
- |
65 |
|||||
Interest expense | (7,507) |
(61,076) |
- |
(68,583) |
||||
Reorganization items, net | - |
(10,593) |
(10,593) |
|||||
Loss before provision for (benefit from) income taxes | (7,797) |
(71,890) |
- |
(79,687) |
||||
Provision for (benefit from) income taxes | 96 |
(909) |
- |
(813) |
||||
Net loss | $ (7,893) |
$ (70,981) |
$ - |
$ (78,874) |
||||
EBITDA Computation | ||||||||
Interest expense, net | $ 7,507 |
$ 61,011 |
$ - |
$ 68,518 |
||||
Provision for (benefit from) income taxes | 96 |
(909) |
- |
(813) |
||||
Depreciation and amortization | 3,640 |
15,267 |
- |
18,907 |
||||
Impairment of goodwill and intangible assets | - |
- |
- |
- |
||||
EBITDA | 3,350 |
4,388 |
- |
7,738 |
||||
Adjusted EBITDA Computation | ||||||||
Plus: Non-recurring retention and consulting costs | 673 |
3,607 |
- |
4,280 |
||||
Plus: Recapitalization and transaction-related costs | 455 |
16,659 |
- |
17,114 |
||||
Plus: Restructuring and contract terminations | 1,603 |
771 |
- |
2,374 |
||||
Plus: Integration and migration related | - |
609 |
- |
609 |
||||
Plus: Foreign currency and other non-cash expense | (868) |
(36) |
- |
(904) |
||||
Plus: Impact of fresh-start and purchase accounting | - |
10,593 |
- |
10,593 |
||||
Plus: Stock-based compensation expense | - |
- |
- |
|||||
Plus: Other add backs | 291 |
156 |
- |
447 |
||||
Adjusted EBITDA | $ 5,504 |
$ 36,747 |
$ - |
$ 42,251 |
(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferred revenue fair value adjustments and (ii) reseller fees, which are presented on a net basis in GAAP revenue. |
For the Six Months Ended July 31, 2020 | ||||||||
Non-GAAP Revenue Adjustments (1) |
||||||||
Global Knowledge | Skillsoft | |||||||
Combined | ||||||||
Revenues: | ||||||||
Total revenues | $ 98,502 |
$ 235,164 |
$ 14,323 |
$ 347,989 |
||||
Operating expenses | ||||||||
Cost of revenues | 54,057 |
45,831 |
14,323 |
114,211 |
||||
Content and software development | 1,520 |
33,778 |
- |
35,298 |
||||
Selling and marketing | 19,918 |
66,769 |
- |
86,687 |
||||
General and administrative | 16,086 |
32,015 |
- |
48,101 |
||||
Amortization of intangible assets | 3,723 |
362,524 |
- |
366,247 |
||||
Recapitalization and transaction-related costs | - |
32,035 |
- |
32,035 |
||||
Restructuring | 4,307 |
1,141 |
- |
5,448 |
||||
Total operating expenses | 99,612 |
574,093 |
14,323 |
688,028 |
||||
Operating loss: | $ (1,110) |
$ (338,929) |
$ - |
$ (340,039) |
||||
Other income (expense), net | (781) |
1,809 |
- |
1,028 |
||||
Interest income | - |
84 |
- |
84 |
||||
Interest expense | (14,562) |
(167,054) |
- |
(181,616) |
||||
Reorganization items, net | - |
(10,593) |
(10,593) |
|||||
Loss before benefit from income taxes | (16,453) |
(514,683) |
- |
(531,136) |
||||
Benefit from income taxes | (211) |
(9,800) |
- |
(10,011) |
||||
Net loss | $ (16,242) |
$ (504,883) |
$ - |
$ (521,125) |
||||
EBITDA Computation | ||||||||
Interest expense, net | $ 14,562 |
$ 166,970 |
$ - |
$ 181,532 |
||||
Benefit from income taxes | (211) |
(9,800) |
- |
(10,011) |
||||
Depreciation and amortization | 7,625 |
35,268 |
- |
42,893 |
||||
Impairment of goodwill and intangible assets | - |
332,376 |
- |
332,376 |
||||
EBITDA | 5,734 |
19,931 |
- |
25,665 |
||||
Adjusted EBITDA Computation | ||||||||
Plus: Non-recurring retention and consulting costs | 1,362 |
9,485 |
- |
10,847 |
||||
Plus: Recapitalization and transaction-related costs | 704 |
32,035 |
- |
32,739 |
||||
Plus: Restructuring and contract terminations | 2,939 |
1,141 |
- |
4,080 |
||||
Plus: Integration and migration related | 8 |
1,167 |
- |
1,175 |
||||
Plus: Foreign currency and other non-cash expense | 953 |
(890) |
- |
63 |
||||
Plus: Impact of fresh-start and purchase accounting | - |
10,593 |
- |
10,593 |
||||
Plus: Stock-based compensation expense | - |
- |
- |
- |
||||
Plus: Other add backs | (16) |
214 |
- |
198 |
||||
Adjusted EBITDA | $ 11,684 |
$ 73,676 |
$ - |
$ 85,360 |
(1) Non-GAAP revenue adjustments include the add back of (i) non-cash deferred revenue fair value adjustments and (ii) reseller fees, which are presented on a net basis in GAAP revenue. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210914006156/en/
Contacts
Investors
James Gruskin
james.gruskin@skillsoft.com
Media
Caitlin Leddy
caitlin.leddy@skillsoft.com