Skillsoft (NYSE:SKIL) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/.
View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=pJJTnRCt
Summary
Skillsoft Corporation reported a 5% year-over-year decline in revenue for Q1 FY2027, primarily due to expected declines in government and consumer business.
The company saw a significant 67% increase in new platform customer agreements and a dollar retention rate of 105%, indicating strong customer retention and strategic progress.
Skillsoft is refocusing its efforts by divesting its Global Knowledge segment, simplifying operations, and aiming to enhance its AI-driven skills management platform.
Management’s future priorities include completing the Global Knowledge transaction, refinancing debt, and continuing to drive enterprise growth through product innovation.
The company maintained its full-year guidance, expecting revenue between $388 million and $406 million and adjusted EBITDA of $108 million to $116 million.
Full Transcript
OPERATOR
Thank you for standing by and welcome to Skillsoft’s first quarter fiscal 2027 results conference call. At this time all participants are in a listen only mode. After the speakers present, there will be a question and answer session. Please note that today’s call is being recorded and a replay of the call and webcast will be available shortly after the call concludes for a period of 12 months. I would now like to hand the conference over to your first speaker today, Nick Thorne, Investor Relations.
Thank you. Please go ahead.
Nick Thorne, Investor Relations
Thank you Operator. Good day and thank you for joining us to discuss our results for the first quarter ended April 30, 2026. Before we jump in, I want to remind you that today’s call will contain forward looking statements about the Company’s business outlook and our expectations that constitute forward looking statements within the meaning of the U.S. private Securities Litigation Reform act of 1995, including statements concerning financial and business trends, our expected future business and financial performance, financial condition and market outlook.
These forward looking statements and all statements that are not historical facts reflect management’s current beliefs, expectations and assumptions and therefore are subject to risks and uncertainties that could cause actual results to differ materially from the conclusions, forecasts, estimates or projections in the forward looking statements made today. For a discussion of the material risks and other important factors that could affect our actual results, we refer you to our Most recent Form 10K, the Form 10Q filed today, and other documents that we file with the securities and Exchange Commission.
We assume no obligation to update any forward looking statements or information which speak as of their respective dates during the call. Unless otherwise noted. All financial metrics we discuss are other than revenue will be non GAAP financial measures which are not prepared in accordance with Generally Accepted Accounting principles. For example, listeners should be cautioned that references to phrases such as adjusted EBITDA and free cash flow denote non GAAP financial measures.
Non GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures. Presentation of the most directly comparable financial measures determined in accordance with gaap, as well as the definitions, uses and reconciliations of non GAAP financial measures included in today’s commentary to the most directly comparable GAAP financial measures are included in our Earnings Press Release which has been furnished to the SEC on Form 8K and is available at www.sec.gov and is also available on our website at www.skillsoft.com. note that we do not provide reconciliations for forward looking non GAAP financial measures as we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. In addition, as of April 30, 2026, Skillsoft’s GK segment was classified as discontinued operations, making the TDS segment the only remaining segment. Prior period results have been recast to conform to the current presentation.
Adjusted EBITDA from Continuing Operations is our current segment measure of profit. Reconciliation of this measure to net income loss from continuing Operations is included in our earnings press release for the fiscal quarter ended April 30, 2026 as described above, as well as Note 13 to the unaudited condensed consolidated financial statements included in Skillsoft’s most recent Form 10Q following today’s prepared remarks, Ron Hovsepian, Skillsoft’s Executive Chair and Chief Executive Officer Ron Kisling, Skillsoft’s Chief Financial Officer, will be available for Q and A. With that, it’s my pleasure to turn the call over to Ron Hovsepian.
Ron Hovsepian
Thanks Nick and good afternoon. Thank you to everyone for joining us today. I want to welcome Ron Kisling, Chief Financial Officer to skillsoft as our new Chief Financial Officer. Ron brings more than 40 years of finance experience including 15 years as CFO at high growth technology companies. His work at Fastly and Fitbit gives him a strong foundation for what we are building here. I am confident his discipline and judgment will be valuable as we enter the next phase of the company’s transformation.
I also want to thank John Frederick for his contributions and partnership as we advanced our transformation over the past year. For our first quarter results, revenue declined approximately 5% on a year over year basis. Two expected factors drove bookings, softness in our government business in the first half of last year and anticipated declines in our consumer business. We expected a portion of these declines to be offset by labor based offerings with more immediate revenue recognition such as professional services and coaching.
However, those opportunities shifted to periods later in this fiscal year. The underlying business is performing in line with our plan and the strategic progress is visible in the numbers. New platform customer agreements grew 67% quarter over quarter from 15 to 25 and our dollar retention in the first quarter reached 105%. These results reflect early returns from our redesigned go to market model and platform innovation strategy. In Q1 we saw higher year over year bookings, strong top of funnel engagement, expanding pipeline and increasing average deal size.
Today I want to focus my remarks on four themes. First, the expected closing of the announced agreement for the divestiture of global knowledge will sharpen our focus and further simplify the company. Second, our transformation efforts to accelerate our path to enterprise growth through product innovation and go to market improvements. Third, AI is increasing the urgency and strategic value of what we deliver. Fourth, once the GK transaction closes, refinancing our debt will be a top management priority.
We believe that combined these themes reflect a more focused company with clearer operating model and a more direct path to durable growth. Let me start with Global Knowledge. As we announced in May, we entered into a definitive agreement to sell the GK business to an affiliate of Enduring Ventures with an expected fiscal Q2 closing. With that expected close of the transaction, we are simplifying how we refer to our remaining business. What had been reported as the TDS segment will simply be referred to as skillsoft.
We believe this is the right direction for skillsoft. GK served an important purpose, but post close we will concentrate fully on our AI native skills management platform where we see the greatest opportunity to help organizations build workforce readiness, improve the impact of skills on business outcomes. This is where we have the biggest opportunity to accelerate growth with the strongest right to win. Upon successful completion of the transaction, we believe overall the financial impact will be near neutral while maintaining a strategic partnership for our customers.
We expect the transaction to be accretive to growth rates and earnings. It strengthens our recurring revenue profile, improves free cash flow visibility and puts us in a better position to address our capital structure once the deal closes. That brings me to the second theme. Over the past several quarters we have significantly redesigned our go to market model, aligned sales resources more tightly to enterprise opportunities and continue to refine our product experience in ways that matter to our customers.
Our skillsoft platform is increasing differentiation by bringing together content skills, intelligence assessment and AI enabled experiences in one system. As organizations look for partners who can connect learning activity to workforce capability and business outcomes, we believe that approach is resonating more clearly. As we closely watch the markets evolve, we see customers who are transforming their organizations and preparing to to lead in an AI world.
A Fortune 500 global energy company left a competing vendor and returned to skillsoft. They made our platform their enterprise wide learning and development front door to their HRIS system. They are using skillsoft to address their three CEO level workforce priorities, closing critical engineering succession gaps, executing a company wide AI upskilling program and building the next generation of leadership pipelines. This is not a content vendor relationship.
This is a strategic partnership at the highest level of business decision making. A leading US government contractor with over 8,000 professionals whose technical certifications directly determine billing rates for replace their existing vendor with Skillsoft. The result was a 7x return on investment, $2.7 million in business value and 82% of learners improving skill proficiency across 426 benchmarks. They credit Skillsoft with transforming their learning function from a compliance cost to to a driver of revenue and retention.
By eliminating the drag from GK on continuing operations, the underlying progress we have made becomes easier to see. We have more work to do, but we are realistic about the pace. But improvements in retention, growth of platform adoption and strong customer engagement support our view that the business is moving forward toward a more sustainable growth trajectory. Now let me turn to AI. Why we believe it is increasing the urgency and strategic value of what we do AI is widening the skills gap faster than most organizations can close it and that is driving demand for solutions that can translate AI into execution and measurable outcomes.
Tomorrow we are releasing our Skillsoft Workforce Readiness Report which found that only one in four employees feel AI ready. Their report surveyed 2,000 employees, managers and executives globally. It uncovered a 53 point gap between how leaders and employees rate AI readiness and found that only 11% of the employees are assessed using formal skills benchmarks. These findings represent more than learning gaps. They are business execution risks and they underscore why platforms that can measure skills validate readiness connect Learning to outcomes are becoming more important.
This quarter we released the AI Powered Skills Visibility Dashboard that gives managers real time intelligence into team capabilities, skilling progress and readiness gaps. That is a direct response to what the enterprise buyers are telling us. They need better visibility into whether their workforce is actually ready. We have spent the last 20 years delivering curated learning to enterprise workforces across many industries. That work has taught us which skills matter for which roles, how skills build on each other and how skill development connects to business performance.
We have codified all of that into our skillsoft platform. We call this our skills ontology and is not something that can be built quickly. It is the foundation that makes our platform accurate, trusted and governed in ways that matter to enterprise buyers. Offerings like KC and LX Design Studio build on that foundation, helping customers move beyond passive consumption of learning content toward practice simulation and custom content creation at scale.
Customers are looking for trusted partners who can help them securely and responsibly apply AI in ways that drive measurable business outcomes. Our combination of curated and blended learning journeys, skills intelligence assessments, AI powered simulation and the ability to prove impact is designed to do exactly that. Once the GK divestiture is complete, addressing our upcoming debt maturities will be management’s top financial priority. We recognize this is important to all of our stakeholders.
We will evaluate all alternatives with discipline and urgency. The actions we are taking to simplify the company, improve leverage and strengthen free cash flow visibility are all designed to give us maximum flexibility as we approach that work. To summarize, we have made meaningful strategic and operational progress. We have a simpler portfolio, a more focused operating model and a platform that enterprise customers are using to transform their businesses.
The customers I described today are treating skillsoft as a strategic partner and that reflects the market is moving in our direction. Demand for platforms that can deliver these skills, visibility, validate capability and business aligned outcomes is growing. We believe skillsoft is increasingly well positioned to translate that into durable value creation over time. There is still work ahead and we remain realistic about the environment and the tasks in front of us, but the direction is clear.
We are building a stronger company with a clearer strategy and a more compelling long term profile. With that, let me turn the call over to Ron Kisling, Chief Financial Officer to cover our financial results in more detail. Ron
Ron Kisling, Chief Financial Officer
thank you Ron and good afternoon everyone. Before I move into the financials, I want to start by saying how excited I am to be joining skillsoft at such an important time for the company. I was drawn to the clarity of the mission, the strength of the leadership team and the opportunity to help advance a business that enables organizations to build the workforce capabilities they need to compete in an AI driven world. I’m looking forward to partnering with Ron and the skillsoft team to build on the progress already underway. As a reminder and as noted at the beginning of the call, consistent with prior quarters, our discussion will focus on non GAAP measures unless otherwise stated additionally. As noted in today’s earnings release and as Ron discussed earlier on our call, our Global Knowledge business is now classified as Discontinued Operations.
As a result, unless stated otherwise, the financials discussed today relate to our continuing operations which are comprised of our Talent Development Solutions business which as Ron discussed earlier, will simply be referred to as Skillsoft. Now turning to the results for the first quarter, total revenue was $94.5 million, down 4.7% over Q1.26 and our DRR was 105% in the first quarter, up significantly from 91% in Q1.26. Our LTM dollar retention rate or DRR as of the first quarter was 98% compared to 99% in the prior year quarter. Overall revenue and LTM DRR were impacted by softness in government bookings in the first half of the fiscal year 26. Revenue was also impacted by anticipated decline in our consumer business. I’ll now turn to our expenses which continue to see year over year improvements.
Cost of revenue was $15.7 million in the first quarter or 16.7% of revenue, down 3.3% year over year, largely reflecting the variable nature of our delivery model and lower revenue volume in the quarter, partially offset by sales mix and increased technology related investments. Overall, adjusted total operating expenses were $67.9 million in the first quarter or 71.8% of revenue, down $4.5 million or 6.2% year over year. Turning to the functional areas, content and software Development expenses were $12.7 million in the quarter, up approximately 4.8% year over year at 13.4% of revenue.
Our selling and marketing expenses were $26.3 million in the first quarter, down approximately 8.4% year over year or 27.8% of revenue, reflecting the benefit of lower spending due to the go to market redesign and general and Administrative expenses were $13.2 million in the first quarter, down approximately 13.7% year over year or 13.9% of revenue. Our adjusted EBITDA from continuing operations of $26.6 million was essentially flat compared to $26.8 million in the prior year’s comparable quarter, with adjusted EBITDA margin as a percentage of revenue for the quarter improving to 28.2% from 27.1% in the prior year. Our GAAP net loss from continuing operations was $18.7 million in the first quarter compared to a GAAP net loss from continuing operations of $29.6 million in the prior year period.
GAAP net loss per share from continuing operations was $2.12 compared to a $3.56 loss per share in the prior period. Our adjusted net income was $10.2 million, or $1.16 per share in the first quarter compared to an adjusted net income of $9.5 million or $1.15 per share in the prior year. Now moving to Cash Flow and Balance sheet highlights GAAP cash, cash equivalents and restricted cash were $118.4 million equal quarter end and our consolidated free cash flow for the first quarter was $25.4 million compared to $26.2 million in the prior year period.
Total gross debt on a GAAP basis, which includes borrowings on our term loan and accounts receivable facility was $576 million at the end of Q1, down slightly from approximately 580 million at the end of the prior year period. Total net debt, which includes borrowings on our term loan and accounts receivable facility net of cash, cash equivalents and restricted cash was approximately $457 million, down from approximately $481 million at the end of the prior year period. And lastly, our full year, fiscal 2027 guidance remains unchanged.
We expect revenue of between 388 million and $406 million and adjusted EBITDA from continuing operations of between 108 and $116 million, or approximately 28% of revenue. We expect free cash flow for our continuing business operations in the range of $14 million to $22 million. While we are encouraged by the strong cash collections in the first quarter, similar to last year and in line with normal seasonality, we expect to consume cash in our continuing operations in the second and third quarters.
We then expect to generate free cash flow in the fourth quarter of the year, all of which is reflected in the guidance range we have provided While I’m still only a few weeks into my role at skillsoft, I’m very excited that we are in the final stages of the process to complete the sale of Global Knowledge. We believe this transaction has tremendous strategic value for our shareholders and customers, allowing us to focus on our key mission and capabilities.
The Global Knowledge business has been in decline for many years. Our transformation efforts and specifically our repositioning towards large strategic account is having an impact and starting to show in our results. With a revenue decline that slowed to 2% in the most recent quarter, we continue to be excited to work with Global Knowledge in the future as a key strategic partner that will allow both companies to grow and meet the evolving needs of our customers.
As a reminder, in recent quarters we have not provided guidance for the Global Knowledge business and our free cash flow guidance provided last quarter for fiscal year 27 also excluded the impact of Global Knowledge. While there are still uncertainties with respect to the timing and ultimate close of the planned sale as well as the level of post closing support that will be required under the Transition Services Agreement, we want to share the estimated impact of the Global Knowledge business and transaction on our free cash flow and liquidity.
Consistent with recent experience, we expect Global Knowledge to continue to incur adjusted EBITDA losses of between 10 and 15 million dollars on an annualized basis which closely mirrors Global Knowledge’s free cash flow. Assuming the Global Knowledge transaction closes in the second quarter as expected, once the divestiture of Global Knowledge and the related transitions are complete, we anticipate this negative impact on our profitability and cash flow will be eliminated and will have a favorable impact beginning in fiscal year 28 from a total company liquidity standpoint as previously disclosed, we expect proceeds net of cash divested and excluding anticipated transaction costs of between 5 million and $8 million over a period of two years following the closing of the Global Knowledge transaction.
Currently, we expect transaction related costs to be approximately $8 million to $10 million, and as a result, we expect the overall transaction impact on long term liquidity to be neutral to slightly below neutral due to the deferred nature of the payments we anticipate receiving under the sale. The impact of Global Knowledge on total liquidity differs in upcoming periods. When considering the combined impact of free cash flow, transaction related costs and transaction proceeds for the quarter ended July 31, 2026, assuming the sale closes, we expect a reduction in liquidity of as much as 25 million attributable to global Knowledge and the related sale, driven by a requirement to leave a minimum of 8 million of cash with the business upon sale.
The payment of approximately $8 million to $10 million in one time transaction related expenses and ongoing operating losses for the fiscal year into January 31, 2027, which includes the first payment due from the buyer, we expect a total reduction in liquidity of between $15 million and $20 million attributable to global Knowledge. Under the terms of the agreement, we expect to receive an additional $4 million in proceeds from in each of fiscal years 2028 and 2029, which is reflected in our estimate of net proceeds from the transaction. Before I turn the call back over for questions, I’d like to remind stockholders that our annual meeting of stockholders will be held on June 25th.
Stockholders of record are encouraged to vote their shares in a timely manner in accordance with our annual meeting procedures. Operator. Please open the line for questions.
OPERATOR
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. As a reminder, it is Star one to ask questions. Thank you. Our first question comes from the line of Nancy Liu with Oppenheimer. Please proceed. Great. Thanks for taking my questions and apologies for any background noise here. Just on the GK scale.
Post the divestiture, can you talk about where you plan to focus the extra bandwidth and if you could provide any additional color on the Partnership dynamics or the financial impact with the separation. That would be great.
Ron Hovsepian
Yes. Hey Nance, how are you? Thank you for the question. If I heard you correctly, it was where do we expect to put the extra management bandwidth and to a little more information on where the partnership is and where that’s going? I think is what I heard correct. Is that correct, Nancy? Yep, that’s correct. Great. On your first part of the question, it’s going to go into two pieces. One, the continued transformation acceleration around growth is where we’ll deploy more management focus. That’s already begun as part of it and as we reflected in our comments, we were able to see some of that growth in the bookings in the first quarter that we referenced and solid pipeline. Two, the second area we’ll go to from a financial perspective is really focusing on the debt refinancing.
Those are the two key priorities of where I would deploy the management energy and focus for the company is what Ron and I have discussed and prioritized in terms of the partnership. We’ve had a very good working relationship with the Global Knowledge team. And as I look at the pipeline and what we shared with the investors on the call, we did one thing very importantly. We focused on strategic accounts and winning a number of big deals. Those big deals have landed.
We’ve landed a very nice pipeline of some 60 plus million as part of that journey. And what’s very exciting, there is just more coming through the pipeline and that had a positive impact on their revenue, slowing their decline a lot time wise. It just didn’t fit our time horizon. So what’s exciting about the relationship right now is I know of three deals right now that I’ve been associated with in the team that are tied to that partnership agreement, which is where we’re combining a blended learning experience and bringing that blended learning experience to life life at the customer.
And there’s several bids out there that add up to roughly 8 to 10 million dollars. And I know that we’re looking at just on those three alone that we’re focused on. So I’m very excited about what that could bring for revenue jointly. And then we’re going to continue to talk about the partnership in other ways. There’s content from our side that they can use as well that we’ve begun to migrate and give them access to quote unquote license and that’s turned into new products for Global Knowledge coming off of our base.
So we see the relationship continuing and I’m excited to continue to be a good distribution partner to them and for them to use and leverage our content because that’s what the customers want. They do want that piece of it. It just didn’t fit our time horizon and business model.
Nancy Liu (Equity Analyst)
Got it. That makes sense. And were there any strategic actions for the remaining core that required the completion of the GK file to kind of move forward on?
Ron Hovsepian
Not that I can think of. There’s nothing here that’s hitting me on your question, Nancy. We’re just going to stay very focused on getting that transaction closed and then moving right towards the debt refinancing. I think strategically everything’s in place around that execution effort. And from the company perspective, us continuing to push on two dimensions. One where we’re going with the product and all the AI work we’ve done to date and what we’ve delivered, we delivered in Q1, the first version of the LX Studio, the content creation part of the platform. We also are delivering the skills intelligence piece of it. So those two pieces of the platform that are built on Foundational labs type componentry off of that same model are well underway as we work on it.
So I think our other strategic initiatives that relate to the company are really well focused and underway as part of it. I don’t see anything significant at this point that Ron or I would call out to all of you to pay attention to. It’s now just staying more focused on what we’re doing and continuing to see what we saw in the backlog in the pipeline that I referenced in my comments.
Nancy Liu (Equity Analyst)
Understood, appreciate that. And then on the quarter, were there any particular dynamics to pull out from 1Q around the TDS decline? How much of that was consumer softness and the earlier government booking softness offsetting the better pipeline and deal price dynamics you called out or maybe perhaps was there any distraction from the GTL GTL across the broader sales world?
Ron Kisling, Chief Financial Officer
Yeah, it’s a good question. I think when you look at the decline, you know, it was really driven by, you know, the softness we saw in government contracts in the first half of last year as well as, you know, the continued decline on our consumer business, which was down 21% year over year, that drove that impact, particularly in the quarter. The other dynamics that Ron spoke about and I mentioned is that the leading indicators that we are seeing in the quarter that convert into revenue in future quarters looked very healthy and strong. We saw DRR of 105% in the quarter and higher bookings on a year over year basis that I think reflect the strengthening business.
And I think it’s fair to say we did not See any distraction in the, in the TDS business from the activities that were taking place on the GK transaction?
Ron Hovsepian
Yeah, Nancy and I, I would just add, I would just add a little smidge to that on what Ron said. This additional color when Ron referred to the declines that happened last year in the bookings on the lost contracts. As you know, it’s a 12 month to 15 month cycle as we go through it. So we’re just finishing feeling that first half impact from the government contract losses and a little bit of the consumer. As Ron said. We had expected to make some of that back up with our labor based businesses. As Ron mentioned in his prepared comments and I did in mine as well, I believe those, those pieces just got deferred on the calendar a little bit. So we still see those pieces coming as part of it. And that’s why Ron maintained the guidance as he went through some of those numbers here. So other than that, I feel very comfortable where we are.
We’re right in the range that we said we would be with just that one piece that we overcome. The good news is those bookings that Ron referred to. So obviously we get, we get the benefit of that happening throughout the full year. So again, maintaining our guidance is, is the right way to look at the business at this early stage.
Nancy Liu (Equity Analyst)
Got it. I appreciate that. And then as you mentioned, it’s nice to see the 105 in the DRR this quarter. And I know you mentioned there’s a little bit of that lag effect. I was wondering, how should we think about the timeline towards the upwards trajectory after some of those headwinds impacting the first half of 2016?
Ron Kisling, Chief Financial Officer
You’re talking about the revenue trajectory, The DRR trajectory. Yeah, the drr. Drr, which is linked to. Yeah, it’s all linked. Yeah. I think when we, when we look at DRR, we want it to be, you know, 100% or even better than that, we start to see a return and over time we’d like to see consistent, you know, DRR, you know, 105, 107% of. So I think from a trajectory perspective, we’re seeing progress toward where we ultimately want to be and the focus is going to be on maintaining and growing that DRR over time.
On the quarterly drr, you’re going to see some fluctuation from quarter to quarter with the ultimate trend should be flat to up from what we saw in Q1.
Ron Hovsepian
Yeah. And the programmatic pieces that build on what Ron’s saying is we put in place a couple of big changes. We Redefined our model in Q3 last year and rolled that out. That has brought a very clear go to market model for us with our customers behind that. The programs that we put in place are around improving churn rate while improving the overall growth trajectory. Those are things that are in place in play right now and we saw some good performance come out of that in the quarter, which is great.
Right. As part of the overall journey. So if we can keep that kind of work going throughout the full year, that’ll put us in line with the plan that we laid out.
Nancy Liu (Equity Analyst)
Got it. Perfect. And you mentioned some of those churn initiatives just on the guide. Could you talk a little bit more about some of those business dynamics you’re baking in kind of at the low end, at the top end and what the progression through the year could look like and just kind of gives you that confidence to maintain outlook with the ones who just sell?
Ron Kisling, Chief Financial Officer
Yeah. So I think we talked a little bit about the dynamics in Q1, particularly some of the leading indicators which gave us confidence that the guidance outlook on the revenue 388 to 406 that the company had set at the end of February on the Q4 call is the right way to call, I think. A couple comments I’d make relative to that guidance is that guidance does take into account some reflection of some level of variability and risk in the macro economy.
I don’t know if you want to call that conservatism or basically just looking at what the environment is. So it does reflect that in the business. And so that’s really kind of the thinking that went into maintaining it. I think we’re still focused on the AI leverage, both on the revenue, you know, and the cost side. But from given this the leading indicators that we see, we feel that we’re very on track to the plans we had at the beginning of the year.
Nancy Liu (Equity Analyst)
Understood. And then shifting to the new Percipio platform. Could you speak more about the pace of adoption relative to your internal expectations and how the upgrade rates are trending across the expanded group system? 67% growth.
Ron Hovsepian
Yes, happy to. We set an internal target for the year and we’re running ahead of that target for the year. I’ve actually increased the target. So obviously we’re excited about that. And as I shared with you on this call, we’re now up to 25 new platform contracts that have been signed with current customers primarily, which is great because we want to make sure we protect that that base of business and that’s helping drive that DRR in a nice way. So the reaction in the market has been very positive to the skills management story or the skills supply chain story.
And we’re fine tuning how we deliver that distinct need and what that means to the market as it relates to business outcomes for the customer and as it relates to the technology they need to do that. So we’re very pleased with what we’re getting for feedback from our customers on the products as well as what we’re seeing in the market and the reaction to it. So I would tell you the numbers and the reaction has been really, really good and we’ll keep you posted on that as the year unfolds here.
Nancy Liu (Equity Analyst)
Great. Super helpful. And then with the CFO transition, congrats John, on the upcoming retirement and welcome, Ron. Wondering what the transition brings in terms of any potential changes to focus priorities or investment philosophy in the upcoming year.
Ron Hovsepian
Yeah, I’ll let Ron speak to if he sees anything at the early, this early stage. In fairness to him, but everything he and I have spoken about to date aligns with the plans that we had mapped out. We’re going to maintain our focus to go get that debt refinance upon closure of this and really focus the business on growth. And I’m appreciative of what John did to help us get to this stage. It was a natural break here as part of it towards his retirement and then moving forward really on that core plan that we had laid out here as really pieces of it. I’m sure Ron will make his adjustments as we get into the game further as he sees things things. But this next big lift is around the debt refinancing and really helping the company get to the next level of operationalization in this simplified model, if I could say it that way.
There’s a lot of work to be done there that hasn’t been identified or I shouldn’t say it that way. It has been identified but the plans aren’t all in place for all of it. The work we have to do and we spent time as a leadership team just last week on that as a group.
Ron Kisling, Chief Financial Officer
Yeah. The only thing I’d add we talked extensively through ahead of time and I think from the priorities I think we’re very much aligned. Completing the GK transaction sets us up, I think for a lot of opportunities to simplify the business and want to really focus and take advantage of that simplification both in terms of the focus in our business, the focus that we’re able to drive across go to market and our product organizations, but also across, you know, the EFFICIENCIES we can make with a more simplified business.
And using that to leverage, you know, the transformation that we’re doing is we’re driving toward improving, you know, the revenue growth and very much focused on, you know, adjusted EBITDA and cash flow.
Ron Hovsepian
Yeah. When Ron talked about that last week at the off site also, the other thing that, you know, struck both of us was the importance of that in the refinancing as well. Yeah. Putting that part of the work that’s being done there to highlight that as part of it. Nancy, to your question, but at the very top of the waves, steady as she goes, I should say steady. Faster, faster, faster, faster is my constant request from the teams. And Ron’s up for that challenge and excited and I’m really excited to have him here with all the background and experience that he brings to the company, to the team and in each one of these areas because he’s very engaged and we all saw that last week with the leadership team.
Ron Kisling, Chief Financial Officer
Yeah, I understand. I think it’s a very well thought out transition or timing of completing gk sets us up for the conversations in terms of getting the debt. And I think with those two things addressed really allows the focus on the transformation, dealing with a simplified business to really drive business outcomes.
Nancy Liu (Equity Analyst)
That’s it. Awesome. Appreciate the color and the thoughtful responses here that get from me. Thanks, guys.
Ron Kisling, Chief Financial Officer
Thank you, Nancy. Thank you, Nancy.
OPERATOR
Thank you. There are no further questions at this time. I’d like to pass the call back over to management for any closing remarks.
Ron Hovsepian
Yeah, this is Ron Hovsepian again. Very nice. Welcome to Ron for being here with us. Excited about what he’ll bring in his leadership and what he can do there. As I look at the quarter in the business overall, I would tell you that I am pleased with the leading indicators and what they were pointing to. I would have liked to have made up that expected revenue that slid a little bit on the labor based parts of our business, the professional services and the coaching aspect of it.
But it didn’t slide out of the plan and where the pipeline is right now. Also, as I spoke to that was very different than how it’s been here in years past in terms of the coverage and where we are. So those pieces to me give me a lot of enthusiasm for where we’re going. And then getting the GK transaction signed was a gigantic step forward in the simplification of the business and started to really position us well for the next step of getting the debt refinancing done and then really letting that growth start.
To shine through here as part of our overall journey. So stay tuned. I look forward to our next update. And thank you for all the help. And talk to everybody soon. Thank you.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
Recent Comments