Skillsoft reported Q3 FY2025 revenue of $137.2 million, down 1% year over year, as the company continues to execute a multi-quarter transformation aimed at stabilizing and reaccelarating growth. Talent Development Solutions (TDS) grew 2% YoY to $103 million, while Global Knowledge (GK) declined ~10% YoY to $34 million, consistent with the ongoing GK restructuring and regional go-to-market refresh. Despite a softer top line, the company delivered positive free cash flow of $4 million in the quarter and expanded gross margins to roughly 75%, with adjusted EBITDA of $32 million (about 23% of revenue), marking margin resilience amid a leaner cost base. Management tightened FY2025 guidance to revenue of $520â$530 million and reaffirmed adjusted EBITDA guidance of $105â$110 million, guiding toward breakeven or modestly positive free cash flow for the full year. The quarter featured meaningful transformation milestones, including the new two-GM organization, AI-enabled product enhancements (AI Coaching Assistant, AI learning assistants for Percipio and Codecademy), and GK regionalization that yielded stabilizing revenue signals and go-to-market improvements.
Management emphasized the two-pronged transformation framework: fix the basics to improve execution and invest to grow to achieve above-market growth in the coming years. The quarter also highlighted two proof points: positive free cash flow and GK go-to-market progress, supporting a constructive ramp toward 2026 profitability and cash generation. Risks remain around GK volatility, coaching/compliance headwinds, and elevated leverage, but the company outlined concrete actions to address these headwinds, including a shift to subscription-based coaching, a new integrated compliance platform, and disciplined working-capital optimization. Given the mix of revenue growth potential from AI-enabled learning and the ongoing restructuring cadence, Skillsoft presents a selectively constructive long-term growth thesis with near-term profitability and cash-flow stabilization being the principal near-term catalysts.