Skillsoft reports strong financial results for the fourth quarter and fiscal year of 2022
Boston--(business wire)--skillsoft corp. (nyse: skil) (“skillsoft” or the “company”), a global leader in corporate digital learning, today announced its financial results for the fourth quarter and full year of fiscal 2022 ended january 31, 2022. the company also provided fiscal 2023 guidance. “we had a great finish to a monumental year for the new skillsoft, helping us deliver full year bookings growth of 7%, exceeding guidance and putting the company on a solid growth trajectory,” said jeffrey r. tarr, skillsoft’s chief executive officer. “we exited the year with strong momentum, which we believe positions us well to deliver solid bookings, accelerated revenue growth, and industry-leading profitability in fiscal 2023.” mr. tarr added, “since returning skillsoft to the public market in june, we moved extremely fast in setting the company up for success as we recapitalized our balance sheet, assembled a world-class management team and board of directors, closed three acquisitions, made foundational growth investments, and delivered strong fiscal 2022 results. i want to thank our entire team for their tireless efforts during a period of tremendous change as we formed the new skillsoft and positioned the company to extend our lead in corporate digital learning.” fiscal 2022 fourth quarter financial highlights1 grew bookings 5%; delivered gaap revenue of $166 million and gaap net income of $8 million; grew adjusted revenue 2% to $176 million with adjusted ebitda of $36 million, up 24% compared to the prior year;2 and delivered combined percipio and dual deployment dollar retention rate of 103%. fiscal 2022 full year financial highlights1 grew bookings 7%; delivered gaap revenue of $665 million and gaap net loss of $113 million; returned to adjusted revenue growth of 1% to $698 million with adjusted ebitda of $167 million, up 2% compared to the prior year;2 and delivered combined percipio and dual deployment dollar retention rate of 104%. outlook bookings $790 million to $825 million adjusted revenue $765 million to $790 million adjusted ebitda approximately $167 million we expect fiscal 2024 adjusted ebitda growth of at least low double digits. key operational metrics and non-gaap financial measures bookings the following table sets forth unaudited bookings for the three and twelve months ended january 31, 2022 and 2021 as if pre-combination skillsoft and global knowledge had been combined and their fiscal quarters had been aligned to end on january 31: 2022 2021 $ % 2022 2021 $ % $55,802 $32,207 $23,595 73% $106,078 $63,852 $42,226 66% 89,207 97,897 (8,690) -9% 184,563 173,654 10,909 6% 14,957 26,764 (11,807) -44% 39,275 80,719 (41,444) -51% $159,966 $156,868 $3,098 2% $329,916 $318,225 $11,691 4% 7,871 6,859 1,012 15% 18,779 16,189 2,590 16% $167,837 $163,727 4,110 3% $348,695 $334,414 14,280 4% 59,533 53,090 6,443 12% 250,020 214,316 35,704 17% $227,370 $216,817 $10,553 5% $598,715 $548,730 $49,984 9% $33,317 $32,765 $552 2% $97,869 $101,051 ($3,182) -3% 7,590 6,822 768 11% 24,814 22,698 2,116 9% $40,907 $39,587 $1,320 3% $122,683 $123,749 ($1,066) -1% $268,277 $256,404 $11,873 5% $721,398 $672,479 $48,918 7% dollar retention rate the following table sets forth dollar retention rates (“drr”) for the last twelve month (“ltm”) period ended january 31, 2022 and for the three month periods ended january 31, 2022 and 2021 as if skillsoft and global knowledge had been combined and their fiscal quarters had been aligned to end on january 31: 2022 2021 99% 99% 102% 106% 105% 100% 104% 103% 101% 67% 66% 74% 97% 98% 94% 99% 102% 93% capital structure the following table sets forth skillsoft’s cash and cash equivalents and long-term debt as of january 31, 2022: $154,672 $466,985 weighted average shares outstanding during the period from october 31, 2021 to january 31, 2022 were 133.2 million. 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. annual meeting date the board of directors of skillsoft has established thursday, june 23, 2022 as the date of the company’s 2022 annual meeting of stockholders. the 2022 annual meeting will be held virtually by means of remote communication. the details of the virtual annual meeting, including how stockholders can log into the virtual meeting, vote and submit questions, will be disclosed in the company’s definitive proxy statement for the 2022 annual meeting to be filed with the securities and exchange commission. any stockholder seeking to bring business before the 2022 annual meeting or to nominate a director must provide timely notice, as set forth in the company’s amended and restated bylaws. specifically, written notice of any proposed business or nomination must be delivered to the company’s secretary no later than the close of business on april 16th which is the tenth day following this public announcement of the date of the 2022 annual meeting). any notice of proposed business or nomination must comply with the specific requirements set forth in the amended and restated bylaws. 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 (including bookings, adjusted revenue, and adjusted ebitda), 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, and other recent transactions, including our acquisitions of pluma and codecademy; the impact of u.s. and worldwide economic trends, financial market conditions, geopolitical events, natural disasters, climate change, public health crises, the ongoing covid-19 pandemic (including any variant), political crises, or other catastrophic events on our business, liquidity, financial condition and results of operations; our ability to attract and retain key employees and qualified technical and sales personnel; our reliance on third parties to provide us with learning content, subject matter expertise, and content productions and the impact on our business if our relationships with these third parties are terminated; 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, including in relation to the migration of our key platforms from our systems to cloud storage; future regulatory, judicial, and legislative changes in our industry; our ability to comply with laws and regulations applicable to our business; a failure to achieve and maintain effective internal control over financial reporting; 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 meet future liquidity requirements and comply with restrictive covenants related to long-term indebtedness; our ability to successfully defend ourselves in legal proceedings; 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 the company’s s-1 amendment filed on july 29, 2021 and subsequent filings with the sec including our form 10-k to be filed with the sec for the fiscal year ended january 31, 2022. 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. [1] growth calculated compared to the prior year as if pre-combination skillsoft and global knowledge had been combined and their fiscal quarters had been aligned to end on january 31, 2021. [2] signifies non-gaap measures. see “non-gaap financial measures and key performance metrics” in this release. [3] see “non-gaap financial measures and key performance metrics.” the company is unable to reconcile forward-looking non-gaap measures without unreasonable efforts. 154,672 71,479 14,251 2,964 212,463 179,784 45,837 30,326 427,223 284,553 18,084 13,780 871,504 495,004 869,487 728,633 19,925 15,131 976 — 15,725 8,636 2,222,924 1,545,737 4,800 5,200 74,629 17,022 25,661 7,425 51,115 36,375 51,017 23,125 6,895 4,740 331,605 257,549 545,722 351,436 462,185 510,236 28,199 900 100,887 81,008 13,355 13,155 1,248 3,035 11,430 5,998 617,304 614,332 — — — 40 11 — 1,306,146 674,333 (247,229) (93,722) 970 (682) 1,059,898 579,969 2,222,924 1,545,737 166,182 71,795 49,517 25,016 20,366 19,109 43,939 37,092 26,810 11,561 38,836 23,934 6,512 7,703 2,602 4,261 188,582 128,676 (22,400) (56,881) (542) (165) 37,164 — 64 15 (7,001) (12,041) 7,285 (69,072) (617) (14,064) 7,902 (55,008) (13.75) 0.06 4,000 133,216 427,754 139,636 108,768 273,851 514,021 126,414 35,881 40,898 52,160 96,044 46,682 24,084 30,028 38,986 67,951 106,110 41,940 55,285 75,028 140,785 72,004 17,217 21,636 37,455 57,356 95,922 50,902 39,824 34,378 96,359 — — — 332,376 440,598 20,194 6,938 15,928 32,099 16,244 3,696 (703) 4,341 1,179 1,900 471,022 176,259 207,940 603,661 917,237 (43,268) (36,623) (99,172) (329,810) (403,216) (1,850) (493) 552 1,268 (5,120) 17,441 900 2,900 — — 94 64 24 105 306 (24,366) (16,820) (19,960) (168,341) (429,963) — — — 3,329,245 — (51,949) (52,972) (115,656) 2,832,467 (837,993) (5,143) (3,708) (21,934) 68,455 11,212 (46,806) (49,264) (93,722) 2,764,012 (849,205) (47,293) (89,973) — (5,900) (47,293) (95,873) (1,971) (3,749) — 5,900 (1,971) 2,151 27,612.51 (8,483.57) (12.32) (24.97) (12.32) 13.44 (0.35) 100.1 100.1 3,840 3,840 160 160 133,143 (46,806) (49,264) (93,722) 2,764,012 (849,205) 14,664 — — — 83 6,556 3,572 3,604 5,864 9,716 95,922 50,902 39,824 34,378 96,359 (912) (174) 294 24 (42) 14,378 (5,886) (23,140) 66,234 5,759 817 487 671 2,407 5,687 — — — 332,376 440,598 (17,441) (900) (2,900) — — 6,159 748 2,690 1,594 — — — — — 5,367 — — — — 4,062 — — — (3,353,326) — (85,397) 88,622 (103,385) 116,478 23,678 (18,497) 1,828 (6,394) 66 (2,547) 4,245 (4,866) (31) (7,909) (6,581) 785 (18,592) 21,327 145,816 250,798 (7,736) (1,301) (3,272) (2,332) — 61,487 (31,365) 172,614 (101,765) (21,145) 28,224 33,811 8,180 3,917 (37,413) (6,286) (641) (2,326) (3,105) (10,353) (3,712) (2,350) (2,126) (3,819) (7,047) (156,926) — — — — (386,035) — — — — (18,646) — — — — (571,605) (2,991) (4,452) (6,924) (17,400) — — — 19,500 55,400 — — — 60,000 — — — — 50,000 — — — — (19,524) — (1,417) — — — — 530,000 — — — — 467,399 — — — — (994) (370) (414) (532) (756) 40,352 16,577 (32,049) (35,787) 9,798 (1,200) — — — — (608,700) (1,300) — — (6,641) 425,440 14,907 (32,463) 73,657 57,801 (1,619) 203 863 (2,139) 348 (119,560) 45,930 (27,872) 68,511 3,336 288,483 74,443 102,315 33,804 30,468 168,923 120,373 74,443 102,315 33,804 154,672 117,299 71,479 92,009 18,799 14,251 3,074 2,964 10,306 15,005 168,923 120,373 74,443 102,315 33,804 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 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. 2022 2021 $ % 2022 2021 $ % $55,802 $32,207 $23,595 73% $106,078 $63,852 $42,226 66% 89,207 97,897 (8,690) -9% 184,563 173,654 10,909 6% 14,957 26,764 (11,807) -44% 39,275 80,719 (41,444) -51% $159,966 $156,868 $3,098 2% $329,916 $318,225 $11,691 4% 7,871 6,859 1,012 15% 18,779 16,189 2,590 16% $167,837 $163,727 4,110 3% $348,695 $334,414 14,280 4% 59,533 53,090 6,443 12% 250,020 214,316 35,704 17% $227,370 $216,817 $10,553 5% $598,715 $548,730 $49,984 9% $33,317 $32,765 $552 2% $97,869 $101,051 ($3,182) -3% 7,590 6,822 768 11% 24,814 22,698 2,116 9% $40,907 $39,587 $1,320 3% $122,683 $123,749 ($1,066) -1% $268,277 $256,404 $11,873 5% $721,398 $672,479 $48,918 7% 2022 2021 $ 109,169 $ 75,802 176,787 161,327 34,869 80,245 320,825 317,374 13,027 10,504 333,852 327,878 97,476 99,148 $ 431,328 $ 427,026 2022 2021 99% 99% 102% 106% 105% 100% 104% 103% 101% 67% 66% 74% 97% 98% 94% 99% 102% 93% 2022 2021 2022 2021 $ 104,837 $ 107,369 $ 416,652 $ 430,423 11,437 11,721 43,962 43,881 60,219 54,576 237,484 216,631 176,493 173,666 698,098 690,935 81,607 82,896 323,700 329,471 4,708 5,031 17,369 16,650 86,315 87,928 341,069 346,121 47,229 41,556 193,508 150,674 12,990 13,021 43,975 65,957 60,219 54,576 237,484 216,631 23,230 24,472 92,952 100,951 6,729 6,690 26,593 27,232 $ 29,959 $ 31,162 $ 119,545 $ 128,183 $ 166,182 $ 10,311 $ 176,493 49,517 10,311 59,828 20,366 20,366 43,939 43,939 26,810 26,810 38,836 38,836 6,512 6,512 2,602 2,602 188,582 10,311 198,893 $ (22,400 ) $ - $ (22,400 ) (542 ) (542 ) 37,164 37,164 64 64 (7,001 ) (7,001 ) 7,285 - 7,285 (617 ) (617 ) $ 7,902 $ - $ 7,902 $ 6,937 $ 6,937 (617 ) (617 ) 41,082 41,082 55,304 - 55,304 2,004 2,004 6,512 6,512 2,602 2,602 680 680 (35,799 ) (35,799 ) 5,630 5,630 (735 ) (735 ) $ 36,198 $ - $ 36,198 $ 71,795 $ 47,248 $ 54,623 $ 173,666 25,016 23,980 7,329 56,325 19,109 606 19,715 37,092 10,901 47,993 11,561 9,952 21,513 23,934 1,803 25,737 7,703 - 7,703 4,261 1,537 5,798 128,676 48,779 7,329 184,784 $ (56,881 ) $ (1,531 ) $ 47,294 $ (11,118 ) (165 ) (1,699 ) (1,864 ) 15 - 15 (12,041 ) (11,685 ) (23,726 ) (69,072 ) (14,915 ) 47,294 (36,693 ) (14,064 ) 919 (13,145 ) $ (55,008 ) $ (15,834 ) $ 47,294 $ (23,548 ) $ 12,026 $ 11,685 $ 23,711 (14,064 ) 919 (13,145 ) 26,029 3,017 29,046 (31,017 ) (213 ) 47,294 16,064 (943 ) 91 (852 ) 7,703 719 8,422 4,261 1,064 5,325 (1,941 ) 383 (1,558 ) 57 676 733 44,637 - (47,294 ) (2,657 ) - - - 2,338 1,369 3,707 $ 25,095 $ 4,089 $ - $ 29,184 $ 71,932 $ 139,636 $ 427,754 $ 58,776 $ 698,098 34,698 35,881 126,414 32,967 229,960 492 24,084 46,682 71,258 16,404 41,940 106,110 164,454 19,765 17,217 72,004 108,986 2,646 50,902 95,922 149,470 - 6,938 20,194 27,132 2,764 (703 ) 3,696 5,757 76,769 176,259 471,022 32,967 757,017 $ (4,837 ) $ (36,623 ) $ (43,268 ) $ 25,809 $ (58,919 ) 624 407 (1,850 ) (819 ) - - 17,441 17,441 - 64 94 158 (11,970 ) (16,820 ) (24,366 ) (53,156 ) - - - - (16,183 ) (52,972 ) (51,949 ) 25,809 (95,295 ) 359 (3,708 ) (5,143 ) (8,492 ) $ (16,542 ) $ (49,264 ) $ (46,806 ) $ 25,809 $ (86,803 ) $ 11,970 $ 16,756 $ 24,272 $ 52,998 359 (3,708 ) (5,143 ) (8,492 ) 4,119 54,474 102,478 161,071 (94 ) 18,258 74,801 25,809 118,774 28 1,153 5,911 7,092 8,862 6,938 20,194 35,994 2,884 (703 ) 3,696 5,877 - 1,160 2,063 3,223 377 134 (15,085 ) (14,574 ) - 23,395 - (25,809 ) (2,414 ) - - 14,664 14,664 (1,119 ) (300 ) (538 ) (1,957 ) $ 10,938 $ 50,035 $ 105,706 $ - $ 166,679 $ 189,440 $ 273,851 $ 108,768 $ 118,876 $ 690,935 102,507 52,160 40,898 28,991 224,556 2,357 38,986 30,028 200 71,571 41,797 75,028 55,285 700 172,810 34,138 37,455 21,636 93,229 15,052 34,378 39,824 89,254 59,553 332,376 - 391,929 - 32,099 15,928 48,027 7,910 1,179 4,341 13,430 263,314 603,661 207,940 29,891 1,104,806 $ (73,874) $ (329,810) $ (99,172) $ 88,985 $ (413,871) (1,855) 1,268 3,452 2,865 105 24 129 (32,678) (168,341) (19,960) (220,979) - 3,329,245 - 3,329,245 (108,407) 2,832,467 (115,656) 88,985 2,697,389 186 68,455 (21,934) - 46,707 $ (108,593) $ 2,764,012 $ (93,722) $ 88,985 $ 2,650,682 $ 32,678 $ 168,236 $ 19,936 $ 220,850 186 68,455 (21,934) 46,707 21,097 41,751 41,919 104,767 59,553 332,376 - 391,929 4,921 3,374,830 (53,801) 88,985 3,414,935 2,122 11,034 2,089 15,245 4,094 31,363 16,664 52,121 5,400 1,181 4,339 10,920 391 3,379 (976) 2,794 647 (1,119) (3,099) (3,571) - (3,329,245) 86,079 (88,986) (3,332,152) - - - - 1,540 (33) 2,028 3,535 $ 19,115 $ 91,390 $ 53,323 $ (1) $ 163,827
