A：The forward-looking statements mentioned in the speech pertain to the company's business outlook, expected future business, financial performance, financial condition, and market outlook. These statements reflect management's current beliefs, expectations, and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially.

A：Non-GAAP financial measures are important as they are not prepared in accordance with generally accepted accounting principles (GAAP) and include, for example, adjusted EBITDA and free cash flow. They should not be considered in isolation or as a substitute for GAAP financial measures. The company presents these measures for non-GAAP financial analysis and includes the most directly comparable GAAP financial measures, definitions, and reconciliations in their earnings press release and on their website.

A：Ron Kisling is the new Chief Financial Officer for Skillsoft. He brings over 40 years of finance experience, including 15 years as CFO at high growth technology companies. His background, particularly his work at Fastly and Fitbit, provides a strong foundation for his role at Skillsoft. His appointment is seen as valuable for the next phase of the company's transformation.

A：For the first quarter, revenue declined approximately 5% year over year. Factors like softness in the government business and anticipated declines in the consumer business led to this decline. However, the underlying business performed in line with the plan, with strategic progress visible. New platform customer agreements grew 67% quarter over quarter, and the dollar retention rate reached 105%. The results reflect the early returns from the redesigned Go to Market model and the platform innovation strategy.

A：The four themes that guide the company's current strategy are: 1) the expected closing of the divestiture of Global Knowledge, 2) transformation efforts to accelerate the path to enterprise growth through product innovation and go-to-market improvements, 3) the increasing urgency and strategic value of AI, and 4) refinancing the debt once the Global Knowledge transaction closes.

A：The divestiture of Global Knowledge is expected to sharpen the focus and simplify Skillsoft's business. Post-close, the company will concentrate fully on its AI native skills management platform. This divestiture is seen as the right direction for Skillsoft, as it allows the company to fully leverage the platform for workforce readiness and the impact of skills on business outcomes, which is anticipated to accelerate growth.

A：The market is reacting positively to Skillsoft's AI native skills management platform, as evidenced by strategic partnerships and customer engagements. One such example is a Fortune 500 global energy company that chose to return to Skillsoft for an enterprise-wide learning and development solution. This partnership is crucial for the company's CEO-level workforce priorities, such as closing engineering succession gaps and building leadership pipelines, signifying a shift from content vendor relationship to strategic partnership.

A：Replacing an existing vendor with Skillsoft resulted in a 7x return on investment, $2.7 million in business value, and 82% of learners improving their skill proficiency across 426 benchmarks. It transformed the learning function from a compliance cost to a driver of revenue and retention.

A：The report found that only one in four employees feel AI ready and uncovered a 53 point gap between how leaders and employees rate AI readiness. Only 11% of employees are assessed using formal skills benchmarks, representing significant learning gaps and business execution risks.

A：The Skills Ontology is a foundation that makes the platform accurate, trusted, and governed, important to enterprise buyers. It is beneficial as it has been built over 20 years and includes curated learning to enterprise workforces across many industries, knowledge of which skills matter for which roles, how skills build on each other, and how skill development connects to business performance.

A：Once the divestiture is complete, addressing upcoming debt maturities will be management's top financial priority.

A：The company's strategic and operational progress includes a simpler portfolio, a more focused operating model, and a platform that enterprise customers are using to transform their businesses. This reflects the market moving in the company's direction, with growing demand for platforms that deliver skills visibility, validate capability, and align with business outcomes.

A：Ron is covering the company's financial results in more detail. He is excited to join Skillsoft, attracted by the mission, leadership team, and the opportunity to help advance the business that enables organizations to build workforce capabilities for an AI-driven world.

A：The financial results for the first quarter were impacted by softness in government bookings and anticipated declines in the consumer business. Total revenue was down 4.7%, DRR was up significantly at 105%, and LTM dollar retention rate was 98%.

A：Year-over-year improvements in expenses include cost of revenue at $15.7 million, down 3.3%, and adjusted total operating expenses at $67.9 million, down $4.5 million. Selling and marketing expenses were $26.3 million, down 8.4%, and general and administrative expenses were $13.2 million, down 13.7%.

A：The adjusted EBITDA from continuing operations was essentially flat at $26.6 million compared to $26.8 million in the prior year's quarter, with a margin improvement to 28.2% from 27.1%. The GAAP net loss from continuing operations was $18.7 million compared to $29.6 million in the prior year, with per share losses of 2 dollars 12 cents versus 3 dollars 56 cents.

A：The company expects revenue between $388 million and $406 million, with an estimated adjusted EBITDA from continuing operations between $108 and $116 million or approximately 28% of revenue. The anticipated free cash flow for the continuing business operations is in the range of $14 million to $22 million.

A：Global Knowledge is expected to continue incurring adjusted EBITDA losses of between $10 and $15 million annually. However, after the divestiture and transition completion, this negative impact on profitability and cash flow is anticipated to be eliminated, with a favorable impact on total company liquidity starting in fiscal year 28. The company currently expects net proceeds from the Global Knowledge transaction to be between $5 million and $8 million, with transaction-related costs of approximately $8 million to $10 million. Consequently, the overall transaction impact on long-term liquidity is expected to be neutral to slightly below neutral.

A：Post-divestiture, the company plans to focus the extra management bandwidth on two key priorities: the continued transformation acceleration around growth and debt refinancing. The company is also prioritizing a strong partnership with Global Knowledge, which has shown positive results in winning big deals and expanding the revenue pipeline.

A：The partnership with Global Knowledge is focused on strategic accounts and has led to winning several big deals valued at over 60 million, contributing to a positive impact on revenue and growth. There are also several bids out there that could add up to roughly 8 to $10 million. The company is migrating content to provide Global Knowledge with access to new products, which is beneficial for both companies and customers. This partnership is expected to continue and bring joint revenue opportunities.

A：The company is focusing on closing transactions and moving towards debt refinancing. On the product side, they are pushing forward with the development of the AI work they have done, including the first version of the L.X. studio and the skills intelligence component of the platform.

A：The revenue decline in the quarter was primarily driven by softness in government contracts from the first half of the previous year and a 21% year-over-year decline in the consumer business. However, the leading indicators that convert into future revenue look very healthy, with a DRR of 105% and higher year-over-year bookings.

A：The recent AI developments are expected to contribute to revenue growth, as the company anticipates recovering some of the lost bookings from the government contract losses and consumer business decline with the help of their labor-based businesses.

A：The focus is on maintaining and growing the DRR over time, aiming for a consistent DRR of 100% or better. The trajectory is progressing toward the ultimate goal of DRR consistently being above 100%, and the company is working on ensuring flat cohort-to-cohort DRR growth.

A：The company has redefined its model in Q3 last year and rolled out a go-to-market model with improved churn rate and overall growth trajectory as the focus. The changes have started showing good performance, which is crucial for the company's journey.

A：The company's confidence in maintaining the outlook comes from the leading indicators which show revenue growth, as well as the company's focus on AI leverage for revenue and cost growth. The guidance does account for macroeconomic variability, and the company is still on track with the plan laid out at the beginning of the year.

A：The new per ACO platform adoption is ahead of the internal target for the year, and as a result, the target has been increased. The company has signed 25 new platform contracts with current customers to protect the base business, which is positively impacting DRR.

A：The market's reaction to the company's skills management and supply chain offerings has been very positive. The company is fine-tuning the delivery of these services and receiving good feedback from customers on the products, which is resulting in very good numbers and market reception.

A：There are no potential changes to focused priorities or investment philosophy as everything discussed aligns with the plans already mapped out.

A：The immediate priorities post-CFO transition are to finalize the debt refinancing and focus on growing the business.

A：The goals related to the debt refinancing are to take the company to the next level of operationalization in the simplified model and address the work and plans not yet identified or completed.

A：The debt refinancing and simplification contribute to business transformation by driving towards improving revenue growth, adjusted EBITDA, and cash flow through business simplification and efficiencies.

A：Completing the G.K. transaction and addressing the debt refinancing set the stage for further business discussions and focus on transformation and driving business outcomes.

A：The sentiment about the business performance was positive with leading indicators showing a good direction. Although there was a slight slip in expected revenue due to labor-based professional services and coaching, the current pipeline suggests a positive outlook for the future. The signing of the G.K. transaction was seen as a significant step towards business simplification and positioning for the next steps, including debt refinancing and growth. Everyone was excited about the upcoming contributions of Ron and the team's engagement during the meeting.