We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Skillsoft's Prudent Expense Control: Means to Margin Resilience
Read MoreHide Full Article
Key Takeaways
SKIL posted a 6% YoY revenue decline in Q3 2026, yet delivered $28M in adjusted EBITDA.
Skillsoft cut operating expenses 4.1% YoY by reducing content, software, sales, marketing and G&A costs.
SKIL's GK segment posted negative EBITDA of $3.3M, while Talent Development Solutions remained profitable.
Skillsoft Corp. (SKIL - Free Report) registered a 6% year-over-year decline in its top line during the third quarter of 2026. This detriment was primarily caused by a 18% dip in Global Knowledge (GK) revenues. While revenues took a hit, the company managed to protect its margins by leveraging its operational discipline.
SKIL took extensive measures to ensure the decline in revenues could be compensated for with an overhead reduction. The company recorded $101 million in total operating expenses, which declined 4.1% year over year. This reduction was achieved by Skillsoft as it managed to strip down content and software expenses, selling and marketing expenses and general and administrative expenses.
Productivity gains from leveraging AI and a sharper focus led to a 2.4% year-over-year dip in content and software development expenses. SKIL was able to lower selling and marketing expenses by 7.1% year over year on the back of headcount reduction. Finally, lower headcount and vendor spending resulted in a 11.9% year over year dip in general and administrative expenses.
These massive cuts resulted in registering an adjusted EBITDA of $28 million. While the adjusted EBITDA margin dipped to 22% from the year-ago quarter’s 23.3%, we must acknowledge the margin resilience given the double-digit decline in the GK segment’s revenues.
On a segment-basis, we observe the Talent Development Solutions segment to remain profitable while GK took a hit of $3.3 million negative EBITDA. Therefore, it is important to consider that the decision to strip away the lower margin business and finding the alternative to GK will result in the company utilizing its high-margin SaaS platform to stabilize its long-term margin.
SKIL’s Price Performance, Valuation & Estimates
Skillsoft has plummeted 71.3% in a year against the industry’s 10.2% growth. Meanwhile, SKIL’s industry peer Nable (NABL - Free Report) has dipped 30.3%, and Agora (API - Free Report) lost 8.6%.
1-Year Share Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SKIL trades at a 12-month forward price-to-earnings ratio of 1.99X compared with the industry’s 25.21X. It trades cheaper than Nable’s and Agora’s 12.9X and 26.81X, respectively.
P/E - F12M
Image Source: Zacks Investment Research
Skillsoft has a Value Score of A. Nable and VerifyMe carry a Value Score of B and C, respectively.
The Zacks Consensus Estimate for EPS for 2025 is set at $4.17, which has been revised up 19.8% over the past 60 days. The consensus mark for EPS for 2026 is pinned at $4.54, which has been revised down 9.9% over the past 60 days.
Image: Bigstock
Skillsoft's Prudent Expense Control: Means to Margin Resilience
Key Takeaways
Skillsoft Corp. (SKIL - Free Report) registered a 6% year-over-year decline in its top line during the third quarter of 2026. This detriment was primarily caused by a 18% dip in Global Knowledge (GK) revenues. While revenues took a hit, the company managed to protect its margins by leveraging its operational discipline.
SKIL took extensive measures to ensure the decline in revenues could be compensated for with an overhead reduction. The company recorded $101 million in total operating expenses, which declined 4.1% year over year. This reduction was achieved by Skillsoft as it managed to strip down content and software expenses, selling and marketing expenses and general and administrative expenses.
Productivity gains from leveraging AI and a sharper focus led to a 2.4% year-over-year dip in content and software development expenses. SKIL was able to lower selling and marketing expenses by 7.1% year over year on the back of headcount reduction. Finally, lower headcount and vendor spending resulted in a 11.9% year over year dip in general and administrative expenses.
These massive cuts resulted in registering an adjusted EBITDA of $28 million. While the adjusted EBITDA margin dipped to 22% from the year-ago quarter’s 23.3%, we must acknowledge the margin resilience given the double-digit decline in the GK segment’s revenues.
On a segment-basis, we observe the Talent Development Solutions segment to remain profitable while GK took a hit of $3.3 million negative EBITDA. Therefore, it is important to consider that the decision to strip away the lower margin business and finding the alternative to GK will result in the company utilizing its high-margin SaaS platform to stabilize its long-term margin.
SKIL’s Price Performance, Valuation & Estimates
Skillsoft has plummeted 71.3% in a year against the industry’s 10.2% growth. Meanwhile, SKIL’s industry peer Nable (NABL - Free Report) has dipped 30.3%, and Agora (API - Free Report) lost 8.6%.
1-Year Share Price Performance
From a valuation standpoint, SKIL trades at a 12-month forward price-to-earnings ratio of 1.99X compared with the industry’s 25.21X. It trades cheaper than Nable’s and Agora’s 12.9X and 26.81X, respectively.
P/E - F12M
Skillsoft has a Value Score of A. Nable and VerifyMe carry a Value Score of B and C, respectively.
The Zacks Consensus Estimate for EPS for 2025 is set at $4.17, which has been revised up 19.8% over the past 60 days. The consensus mark for EPS for 2026 is pinned at $4.54, which has been revised down 9.9% over the past 60 days.
SKIL sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.