Skillsoft’s AI Pivot Gains Visibility After GK Divestiture—Q2 FY2027 Signals a Reboot

Executive snapshot

Skillsoft Corp. (NYSE: SKIL) reported a second quarter that reads like a corporate reboot: revenue of $98.2 million, a 3% year-over-year dip, and a net loss of $15.0 million, or $1.67 per share. Against that red ink, the company locks in a more constructive line on margins: adjusted EBITDA of $33 million, a 34% margin on revenue, up from 31% in the prior year. Free cash flow stood at negative $20.5 million, slightly better than the prior-year deficit of $22.6 million.

Crucially, Skillsoft has completed its divestiture of Global Knowledge (GK) and now operates as a single, enterprise-focused platform business centered on its AI-native capabilities. The GK disposal, finalized in July 2026, is the hinge on which today’s numbers turn toward a more streamlined portfolio, with continuing operations becoming the sole frame for performance metrics.

Financial highlights and structure

• Revenue: $98.2 million, down 3% versus the prior year.
• Net loss / EPS: net loss of $15.0 million and EPS of $1.67 (negative), reflecting ongoing operating challenges but an improved earnings cadence versus last year.
• Adjusted EBITDA: $33 million, equating to a 34% margin of revenue, signaling improved operating leverage as the company clears non-core assets.
• Free Cash Flow: negative $20.5 million, an improvement relative to the prior year’s deficit of $22.6 million.
• Segment structure: GK discloser completed; as of the sale, Skillsoft reports as a single operating and reportable segment for continuing operations.

Management commentary and strategic context

In the release, leadership frames the quarter as a meaningful milestone in Skillsoft’s transformation. With GK behind it, the company positions itself around its core AI-enabled enterprise platform, emphasizing customer engagement, early platform adoption, and pipeline expansion. The market-facing line on LX Design Studio is highlighted as a tangible example of differentiating, AI‑driven capabilities being brought to customers.

The press materials reiterate that the historical GK results are now presented as discontinued operations, with continuing operations carrying the portfolio forward. That structural clarity matters for anyone trying to estimate earnings power under an AI-first strategy rather than a diversified, knowledge-based services mix.

Outlook and implied trajectory

The company notes that it updated its fiscal 2027 revenue forecast while maintaining its Adjusted EBITDA and Free Cash Flow guidance. In other words, investors get a clearer sense that Skillsoft is prioritizing sustained profitability and cash generation on the path to scale, even as top-line growth in the near term remains modest. The absence of a stated beat versus a public consensus in the release leaves some room for interpretation, but the omission is economically telling: the story hinges less on a one-quarter surprise and more on the trajectory of a leaner, AI-powered platform business.

What this portends for Skillsoft and peers

If you squint at the numbers, the Q2 results resemble a pivot done with precision: higher gross margin through efficiency, a strategic exit from GK, and a renewed focus on an AI-native platform that could improve retention and platform monetization over time. The margin expansion—34% adjusted EBITDA margin on revenue—suggests that Skillsoft’s cost structure is responding to the new, tighter business model more quickly than its top line.

For sector peers, the signal is twofold. First, the AI-native, skills-oriented software thesis continues to attract attention as a capital-light growth story that can deliver margin upside even when revenue growth is moderate. Second, the GK‑style divestitures underline the ongoing industry tendency to separate platform-enabled software franchises from legacy services lines, potentially unlocking more favorable multiple treatment for the remaining business. Market observers will want to watch for whether Skillsoft’s platform adoption accelerates into the back half of fiscal 2027 and whether any revenue forecast raises reflect improving monetization of LX Design Studio and related capabilities.

Risks and caveats

With negative free cash flow persisting, the company remains encumbered by near-term cash burn while it rebuilds growth. The absence of a disclosed EPS consensus in the release means investors must weigh expectations against other signals, including product adoption metrics, customer expansion, and the pace at which operating leverage converts revenue into cash. As always, external factors—macroeconomic demand for enterprise software, competitive dynamics in AI-enabled platforms, and the health of enterprise IT budgets—will shape the durability of Skillsoft’s pivot.