Skillsoft Corp (NYSE:SKIL) stock fell 3.49% (As on June 10, 1:45:23 AM UTC-4, Source: Google Finance) after the company posted mixed results for the Talent Development Solutions segment posted revenue of $99.1 million in Q1 FY2026, representing a 1% increase year-over-year and marking the third consecutive quarter of growth. In contrast, the Global Knowledge segment recorded $25.1 million in revenue, a 16% decline compared to the same period last year. Geographically, Skillsoft maintains a strong presence in the United States, which accounts for 66% of total revenue, while EMEA contributes 25% and the rest of the world makes up the remaining 9%. This geographic diversification provides some buffer against regional economic fluctuations, though the company remains heavily dependent on the U.S. market. Free cash flow showed even more dramatic improvement, reaching $26.2 million for the quarter, up $15.7 million compared to Q1 FY2025. This substantial increase reflects the company’s focus on operational efficiency and cost management. Non-GAAP operating expenses decreased by 6% year-over-year to $102.1 million, contributing to the improved profitability metrics. The company ended the quarter with a strong liquidity position of $131 million in cash, cash equivalents, and restricted cash.

SKIL in the first quarter of FY26 has reported the adjusted earnings per share of $4.57, missing the analysts’ estimates for the adjusted loss per share of $2.65. The company had reported the adjusted revenue decline of 2.8 percent to $124.20 million in the first quarter of FY26, beating the analysts’ estimates for revenue of $123.50 million. Adjusted EBITDA reached $22.1 million, representing an increase of $3 million or 17% compared to the prior year. The adjusted EBITDA margin expanded by 300 basis points to 18% of revenue.

Meanwhile, the company has already achieved $45 million in annualized expense reductions in FY25 and expects to reallocate approximately 20% of total company non-GAAP expenses, including reinvesting 40-50% of the FY25 cost savings toward strategic growth priorities.

The management has reaffirmed the company’s fiscal 2026 outlook. Based on the previous earnings call, this outlook includes revenue between $530 million and $545 million and adjusted EBITDA between $112 million and $118 million for the full fiscal year. The company expects to generate positive free cash flow of $13 million to $18 million for FY2026, continuing the positive momentum seen in Q1. However, management cautioned about cash consumption in Q2 due to normal seasonality factors.