Skillsoft Corp.

Greetings and welcome to Skillsoft Corp First Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chad Line, Head of Investor Relations. Thank you. You may begin.

Thank you, Operator. Good afternoon and thank you for joining us today for Skillsoft's earnings call to discuss our first quarter financial results for the quarter ended April 30th, 2023. Participating on today's call are Jeff Tarr, Skillsoft's Chief Executive Officer, and Rich Walker, Skillsoft's Chief Financial Officer. Today after market close, Skillsoft issued a press release announcing its financial results. As a reminder, today's earnings release is available on Skillsoft's investor relations website. Before I hand the call over to Jeff, I want to remind you that today's call will contain forward-looking statements about the company's business outlook and expectations, including statements concerning financial and business trends, our expected future business and financial performance, financial condition and outlook. These forward-looking statements, and all statements that are not historical facts, reflect management's current beliefs and expectations as of today, and therefore are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks described in the Safe Harbor discussion found in the company's SEC filings. During the call, we will also discuss certain non gap financial measures which are not prepared in accordance with generally accepted accounting principles. References on this call to pro forma results refer to our results that have been prepared and presented to reflect historical periods, as if Codecademy had merged on February 1, 2022. Unless noted otherwise, all comparisons on this call to prior year results are being made on a pro forma constant currency basis, which represents first quarter 2024 local currency amounts translated at prior year foreign exchange rates for the comparable period. We also want to note that we have updated our naming convention for two reportable segments. Our previous Skillsoft content segment is now called Content and Platform to better reflect our differentiated model of owning and delivering content through our SaaS-based, AI-driven learning experience platform. This segment includes Skillsoft, Codecademy, and our coaching offering. Our previous Global Knowledge segment is now called Instructor-Led Training to better reflect our delivery of technical skills training through virtual and in-classroom training. With this naming convention update, there's been no change in our disaggregation of revenue or expenses compared to how we've reported segment financial performance in the past. A reconciliation of the non-GAAP financial measures included in today's commentary to the most directly comparable GAAP financial measures, as well as how we define these metrics and other metrics, is included in our earnings press release, which has been furnished to the SEC and is also available on our website at www.skillsoft.com. After our prepared remarks, Jeff Tarr and Rich Walker will be available to take questions. With that, it's my pleasure to turn the call over to Jeff.

Thanks, Chad. Good afternoon, and thank you for joining us. We had a strong start to the year, building on the momentum that we shared on our fiscal 2023 fourth quarter call. I'm pleased to report that in Q1, we delivered near double-digit bookings growth in our content and platform segments. generated record high dollar retention rates, and expanded pro forma adjusted EBITDA margins while continuing to fund important growth investments in content, platform, and go-to-market. On today's call, I'll discuss a number of important market trends and strategic priorities intended to extend our lead in enterprise learning. I'll also share a few operational highlights that are driving our improved performance before turning the call over to Rich to cover our financial results. I'm excited and encouraged by what I believe are important long-term structural tailwinds. Historically low unemployment has been a constant, and businesses remain focused on getting more from their existing employees. Further, the pace of technological change has been relentless, exacerbating technical skills gaps. This in turn continues to elevate talent development as a C-suite issue, with surveys highlighting re-skilling as a top priority for CEOs and their senior teams. This is driving a shift away from a more price-sensitive, check-the-box approach to online learning, towards customers taking a more strategic, enterprise-wide approach to skills development. Now more than ever, organizations and leaders are championing skills development for their employees, embracing the strategic imperative of workforce transformation that can be unlocked through the enterprise learning solutions that Skillsoft offers. Our entire business has been built to deliver transformative learning experiences through an end-to-end enterprise-grade solution that ensures re-skilling objectives are measurable and outcomes-based throughout the learner journey. We've been evolving our offerings to better serve this growing and more demanding customer segment for some time. And we're encouraged by both recent wins and the longer term opportunity we see in front of us. The other big market shift is, of course, the sudden rise of generative AI. While new technologies are often wrapped in hyperbole, we believe generative AI will profoundly transform jobs and the workforce at an unprecedented pace and scale. Knowledge workers are worried that their jobs will be at risk from generative AI or from the employee who knows how to use it more effectively, while business leaders are concerned about how their companies will remain relevant and competitive. This is creating a new imperative for reskilling and workforce transformation that is touching nearly every organization and knowledge worker. Given this profound shift, we believe there is a tremendous opportunity for Skillsoft. As we shared on our last earnings call, we have a deep legacy in AI and have been a pioneer for many years in leveraging its power within our AI driven Skillsoft Percipio platform. More recently on the content side, our Codecademy team launched an eight module introduction to ChatGPT that was our most successful course launch ever. We've also seen a more than six-fold increase in completions for our artificial intelligence and machine learning courses. We have a rapidly expanding suite of offerings to help individuals, teams, and leaders develop critical skills for leveraging generative AI across the enterprise. Our training solutions span tech and dev, leadership and business skills, and compliance, with a recognition that generative AI is about more than just the technology. thus contributing to Skillsoft's unique competitive advantage in addressing enterprise-wide generative AI learning needs. We are also using generative AI to create new ways to learn, such as our powerful AI coaching simulator, which is generating a lot of excitement. It is currently in alpha with more than two dozen large enterprise customers and will move into beta later this month. We are also using generative AI to accelerate the localization of our content, we're uncovering new ways to improve productivity across our organization ultimately we are confident in our opportunity to use generative ai to deliver on our purpose of helping organizations and their people grow together through transformative learning experiences in summary we believe powerful market forces are creating new demand for our offerings going forward Expect us to continue to focus on three important interrelated growth drivers. One, leading in workforce transformation. Two, leading in tech and dev skilling. And three, leading in preparing organizations and their people to succeed in a world of generative AI. Turning now to our operational highlights. Since our return to public markets, we've assembled a breadth of assets that we believe is unparalleled in the industry. Our go-to-market investments in people, processes, and systems are enabling us to better position this comprehensive portfolio into a holistic, integrated solution for large and complex enterprise workforce transformations. The changes in our go-to-market strategy and execution are reflected in our Q1 results. We grew our content and platform segment bookings 9% and 3% on an LTM basis. We demonstrated the value of our solutions with existing customers and were more effective at expanding our relationships at renewal. Our team's ability to articulate and demonstrate the value across our solution suite drove cross-sell and up-sell activity that contributed to record high dollar retention rates of 108% and 101% on an LTM basis. Beyond the headline metrics for content and platforms bookings growth and retention, we also executed well on the customer acquisition front. We earned business with more than 150 new customers in the quarter, including larger six-figure deals with a leading European aerospace and defense contractor, one of the largest US-based last mile logistics and distribution real estate companies, and a leading provider of retirement and investment products and services. A highlight for the quarter was signing a four-year agreement with Kindrel, the world's largest IT infrastructure services provider, with nearly 90,000 employees serving thousands of customers in more than 60 countries. Kindrel has built a purpose-driven organization and a values-centric culture focused on putting the skills and careers of its people at the heart of its business. As the company works to advance its distinct culture and support the professional growth of Kindrels globally, it sought an enterprise partner that could deliver measurable outcomes with an end-to-end learning solution. Skillsoft provides all Kindrels with the opportunity to continuously develop and grow their skill sets. Skillsoft was able to demonstrate a compelling value proposition for Kindrel that leveraged all of our capabilities, including our best-of-breed Skillsoft Percipio learning experience platform, our extensive and immersive content portfolio spanning thousands of topics and learning paths, and our full continuum of learning modalities. all supported with extensive program management and learning administration services. It's a tremendous win for our teams and a testament to our strategy. In summary, I'm pleased with our progress and the results our team generated. Our year is off to a good start, and while we expect there to be areas of variability quarter to quarter, we believe we are positioned for what will add up to a solid year. With that, I'll now turn the call over to our CFO, Rich Walker, to cover our financial results. Rich?