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Skillsoft: Skillsoft's Q3 FY2026 Earnings: A Mixed Bag

Skillsoft's third-quarter fiscal 2026 revenue per TDS was $100.8 million, down 2.1% year over year, with enterprise solutions declining approximately 1% and Global Knowledge revenue down 17.6% to $28.2 million. The adjusted EBITDA margin was 21.7%, down from 23.3% last year, resulting in an adjusted EBITDA of $28 million, a 12% decline from $31.9 million in the prior year. The GAAP net loss was $41.3 million, compared to a net loss of $23.6 million in the prior year, largely due to a non-cash goodwill impairment loss of $20.8 million related to Global Knowledge. Earnings per share, however, beat estimates with an actual EPS of $1.65 relative to estimates of $1.26.

SKIL

USD 7.74

-10.93%

A-Score: 3.1/10

Publication date: December 10, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Platform-Driven DRR Growth: TDS LTM dollar retention rate reached 99% (up from 98 Y/Y), driven by higher customer upgrades amid Precipio's unified learning capabilities.
  • TDS Revenue Decline: Revenue fell 2.1% Y/Y to $100.8M, with 70% of the drop from B2C (9% of TDS revenue) and 1% from enterprise churn.
  • Adjusted EBITDA Margin Pressure: Declined to 21.7% ($28M) from 23.3% ($31.9M) Y/Y, impacted by higher labs/content costs and a $20.8M GAAP goodwill impairment loss.
  • Strategic Investment Shift: Withdrew consolidated guidance, now targeting TDS $410M revenue and 28% EBITDA margin in FY26, prioritizing TDS growth over Global Knowledge (GK).

Segment Performance

The decline in revenue was largely driven by the B2C learner product, which accounts for around 9% of TDS revenue, and Global Knowledge's revenue decline. The enterprise solutions, however, showed resilience with a relatively modest decline of 1%. The TDS LTM dollar retention rate improved year over year to 99% from 98%, reflecting higher customer upgrades.

Operational Highlights

Skillsoft's management highlighted the progress made in transforming the business, with a focus on the talent development market. The company has rebuilt its marketing team and invested in skilled subject matter experts to connect its differentiated capabilities to customer workforce needs. As Ronald Hovsepian noted, "We've reshaped our go-to-market approach to ensure we can capture the opportunity ahead." The company's next-generation Skillsoft Precipio platform is expected to drive growth by unifying content, blended learning, hands-on practice, and skills intelligence into one platform.

Guidance and Outlook

Skillsoft withdrew its previous consolidated revenue and adjusted EBITDA guidance due to the divestiture of Global Knowledge. For TDS, the company expects revenue for the full fiscal '26 year to be between $410 million and adjusted EBITDA of between $112 million and $116 million, or about 28% of revenue. Analysts estimate revenue growth to be -2.6% next year, indicating a continued challenging environment.

Valuation

Skillsoft's valuation metrics indicate a challenging environment, with a P/S Ratio of 0.13 and EV/EBITDA of 45.29. The company's ROE and ROIC are also negative, at -264.56% and -12.02%, respectively. The current valuation may be factoring in some of the challenges the company is facing, but the transformation efforts and the focus on the talent development market could potentially drive growth in the future.

Skillsoft's A-Score