Skillsoft Corp (NYSE:SKIL) Q3 Revenue Misses, Announces Strategic Review for Global Knowledge

Skillsoft Q3 Results Miss Revenue Estimates, Announces Strategic Review for Global Knowledge

Skillsoft Corp (NYSE:SKIL) reported financial results for its third quarter of fiscal 2026, ending October 31, 2025. The enterprise learning company posted a mixed quarter, with revenue falling short of analyst expectations while adjusted earnings per share exceeded estimates. The market reaction was sharply negative, with shares declining significantly in after-hours trading.

Earnings and Revenue Versus Estimates

The company’s performance relative to Wall Street expectations presents a clear dichotomy between its top and bottom-line results.

• Revenue: Skillsoft reported total revenue of $129.0 million for the quarter, a 6% decline compared to the prior year period. This figure came in below the analyst consensus estimate of approximately $134.2 million.
• Earnings Per Share (Non-GAAP): The company reported a non-GAAP net loss per share of $4.74. However, its adjusted earnings per share, a non-GAAP metric that excludes various one-time and non-cash items, was $1.65. This surpassed the analyst estimate of $1.29 per share.

The significant discrepancy between the GAAP net loss and the adjusted EPS profit is primarily driven by substantial non-cash charges, including a $20.8 million impairment of goodwill and $32.1 million in amortization of intangible assets recorded in the quarter.

Market Reaction and Segment Performance

The immediate market reaction was decidedly negative, with the stock price dropping over 16% in after-hours trading following the earnings release. This sell-off appears to be driven by the revenue miss and broader concerns highlighted in the report, overshadowing the better-than-expected adjusted profitability.

A deeper look at the results reveals a stark divergence between the company’s two operating segments, which management explicitly addressed.

• Talent Development Solutions (TDS): This core segment, which includes the company’s AI-native Percipio learning platform, reported revenue of $101 million, down 2% year-over-year. Management noted signs of stabilization in the enterprise business and highlighted a 99% dollar retention rate.
• Global Knowledge (GK): The instructor-led training segment was a significant drag, with revenue falling 18% to $28 million. The company stated that GK’s performance "masked TDS enterprise stabilization" and had a "considerable negative impact on revenue, earnings, and cash flow."

Strategic Shift and Financial Outlook

The most consequential news from the report was the announcement of a strategic review for the underperforming Global Knowledge segment. Executive Chair and CEO Ron Hovsepian stated the company concluded "that a partnership-driven model is more appropriate than continued ownership," signaling a potential divestiture.

Due to this ongoing review, Skillsoft withdrew its consolidated financial guidance for the remainder of the fiscal year. However, it provided an outlook solely for its core TDS business, which remains unchanged from prior projections:

• TDS Full-Year Fiscal 2026 Guidance:
  • Revenue: $400 million to $410 million
  • Adjusted EBITDA: $112 million to $116 million

This TDS revenue guidance implies a year-over-year decline. When compared to the analyst consensus estimate for full-year 2026 consolidated sales of approximately $526.3 million, the company’s implied outlook—even before removing GK—suggests a more challenging growth trajectory than the market had anticipated. For the upcoming fourth quarter, analysts had been estimating revenue of about $134.0 million.

Press Release Highlights

Beyond the financials, management emphasized several operational developments:

• The launch of the next-generation Skillsoft Percipio Platform, described as an "AI-native skills intelligence platform."
• The integration of AI into more than half of the company’s learning content design, curation, and production work.
• Continued cost reduction efforts which helped maintain adjusted EBITDA margins at 22% of revenue, only slightly down from 23% a year ago.
• A recovery in the TDS federal government business, which achieved a 104% dollar retention rate for the quarter.

Conclusion

Skillsoft’s third-quarter results underscore a company in transition, grappling with a clear division between a stabilizing core platform business and a legacy segment that is now deemed non-core. While cost controls led to adjusted profitability above expectations, the market focused on the revenue shortfall and the strategic uncertainty introduced by the planned exit from the Global Knowledge business. The maintained guidance for TDS, while unchanged, appears conservative against previous market expectations for the whole company. Investors will be watching closely for the outcome of the GK strategic review and for clearer signs of growth reacceleration in the TDS segment.

For a detailed look at Skillsoft’s historical earnings and future analyst estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, investment recommendation, or an offer to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.