Skillsoft Corp. (SKIL-WT) Q2 2026 Earnings Report

Skillsoft reported Q2 2026 revenue of $128.822 million, with a gross margin of 74.47% ($95.933 million) but an operating loss of $11.830 million and a net loss of $23.788 million. Earnings per share were negative at $-2.78, driven by elevated operating expenses and interest costs that more than offset the healthy gross profit. YoY revenue declined 2.6% while QoQ revenue rose 3.7%, and EBITDA remained negative at approximately $-11.8 million. These dynamics underscore a business with strong product economics on a gross basis but a cost structure that is currently impeding profitability and cash flow conversion.

On the balance sheet, Skillsoft carries a substantial intangibles and goodwill load (goodwill around $317.1 million and intangible assets about $374.7 million) and a meaningful debt burden, with long-term debt of $571.2 million and total debt of $577.6 million. The company held cash and equivalents of about $100.5 million, leaving net debt around $477.1 million. Working capital signals stress, as current liabilities exceed current assets when excluding the effect of large deferred revenue, which sits at $215.3 million. Free cash flow was negative at approximately $-0.906 million for the period, underscoring the challenge of translating revenue into cash, despite a robust gross margin.

Without a formal near-term guidance in the provided data, the trajectory hinges on two levers: (1) cost discipline and operating leverage, and (2) acceleration of revenue growth through cross-sell/upsell within the existing enterprise base and expansion of the product ecosystem. The near-term risk is elevated due to the debt load and potential impairment considerations related to the sizable intangible assets. The longer-term opportunity lies in converting deferred revenue into realized cash flows and expanding ARR through additional modules and geographies, contingent on macro IT spend and client retention.