Skillsoft Corp.

(1)** Description of Business and Basis of Presentation**

Description of Business

Skillsoft Corp. (together with its consolidated subsidiaries, “Skillsoft”, “we”, “us”, or “our”) empowers organizations and learners to unlock their full potential by delivering personalized, interactive learning experiences and enterprise-ready solutions. Our Class A Common Stock, par value $0.0001 per share (“common stock”), has been listed on the New York Stock Exchange under the ticker symbol “SKIL” since* June 14, 2021.We havetwo operating and reportable segments: Talent Development Solutions (“TDS”) and Global Knowledge (“GK”). As previously disclosed, changes were made to the determination of TDS segment (formerly known as the Content & Platform segment) results in thefourth* quarter of the fiscal year ended* January 31, 2025to increase transparency and improve segment comparability to peers. All prior period comparatives have been recast to conform to the current presentation. Information about our segments is described in Note12* “Segment Information”.

References in the accompanying footnotes to Skillsoft’s fiscal year refer to the fiscal year ended* January**31* of that year (e.g., fiscal2025 is the fiscal year ended* January 31, 2025*).

Principles of Consolidation and Basis of Financial Statement Preparation

The accompanying unaudited condensed consolidated financial statements (the "Interim Financial Statements") include the accounts of Skillsoft Corp. and its subsidiaries, all of which are wholly owned. Any subsidiaries that are formed or acquired during the year are consolidated from their respective dates of formation or acquisition. We prepared the Interim Financial Statements in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim reporting, and the instructions to Form10-Q and Article10 of Regulation S-X. Certain information or footnote disclosures, normally included in annual financial statements prepared in accordance with GAAP, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, they donot include all of the information and footnotes required by GAAP for complete financial statements. The Interim Financial Statements, in the opinion of management, reflect all normal and recurring adjustments necessary to fairly present our financial position, operating results and cash flows for the periods presented. All material intercompany transactions and balances have been eliminated in consolidation.

Interim results arenot necessarily indicative of results expected for any other interim period or a full fiscal year. The Interim Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes thereto (“2025 AFS”) included in our Annual Report on Form10-K for fiscal2025 (“2025 Form10-K”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures with respect to contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. We base our judgments, estimates and assumptions on current facts, historical experience and various other factors that we believe are reasonable under the circumstances. The economic environment also impacts certain estimates and discount rates necessary to prepare our consolidated financial statements, including significant estimates and discount rates applicable to the determination of the fair values used in the impairment testing of our nonfinancial assets. Our assessment of these factors forms the basis for our judgments on the carrying values of our assets and liabilities, and the accrual of our costs and expenses. Actual results could differ materially from our estimates. We review our estimates and underlying assumptions on an ongoing basis and make revisions as determined necessary by management. Revisions are recognized in the period in which the estimates are revised and* may*also impact subsequent periods.

(2)** Summary of Significant Accounting Policies**

The Interim Financial Statements have been prepared on a basis consistent with the accounting policies described in Note2 “Summary of Significant Accounting Policies” to the2025 AFS and should be read in connection therewith.

Recently Adopted Accounting Guidance

In* November 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-09, Improvements to Income Tax Disclosures,which requires additional information in the rate reconciliation table and additional disclosures about income taxes paid. We adopted this guidance effective February 1, 2025.The impact of our adoption of this guidance will be reflected in our fiscal2026 Form10*-K. We donot expect the adoption to have a material impact to our consolidated financial statements, but it will result in the presentation of more detailed income tax disclosures.

Recently Issued Accounting Guidance

In* November 2024,the FASB issued ASU2024*-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220*-40), which requires disclosure of specified information about certain costs and expenses, including employee compensation, depreciation and intangible asset amortization. ASU2024*-03 is effective for annual periods beginning after* December 15, 2026,with early adoption permitted. We will adopt this guidance effective February 1, 2027.*The disclosures required under the guidance can be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all periods presented in the financial statements. We are evaluating the impact that this ASU will have on our consolidated financial statements.

In* September 2025,the FASB issued ASU2025*-06*, Intangibles - Goodwill and Other*–* Internal-Use Software (Topic350-40): Targeted Improvements to the Accounting for Internal-Use Software.This ASU removes all references to prescriptive and sequential software development stages (referred to as “project stages”) and requires capitalization of software costs when both of the following occur: (i) management has authorized and committed to funding the software project; and (ii) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). ASU2025*-06 is effective for fiscal years beginning after* December 15, 2027,with early adoption permitted. We expect to adopt this guidance effective February 1, 2028.We may*apply the guidance prospectively, retrospectively, or via a modified prospective transition method. We are evaluating the impact that this ASU will have on our consolidated financial statements.

We believe that other recently issued accounting standards will eithernot have a material impact on our consolidated financial statements or willnot apply to our operations.

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(3)** Intangible Assets**

Intangible assets consisted of the following (in thousands, except for remaining life):

Amortization expense related to our existing finite-lived intangible assets is expected to be as follows (in thousands) for the fiscal years ended* January 31:*

Amortization expense related to intangible assets in the aggregate was $32.1 million and $95.1 million for thethree andnine months ended* October 31, 2025*, respectively, and $31.8 million and $95.2 million for thethree andnine months ended* October 31, 2024*, respectively.

Our goodwill as of the dates indicated is as follows (in thousands):

Intangible Asset Impairment Review Requirements and Assumption Uncertainty

Skillsoft monitors adverse events, conditions or changes in circumstances that indicate impairment of the definite-lived (amortizable) intangible assets of each of our reporting units. When such events, conditions or changes in circumstances occur, we assess the recoverability of the assets by comparing the undiscounted future cash flows attributable to the intangible assets to their carrying amount. If the undiscounted future cash flows are less than the carrying amount, an impairment charge based on the excess of the carrying amount over the fair value of the assets, is recorded. Fair value is estimated using income- and market-based valuation techniques that require significant judgment regarding future cash flows, discount rates, and market participant assumptions. Because these estimates are inherently uncertain, actual results* may*differ from the assumptions used in the analysis, which could materially affect the determination of fair value in future periods.

Skillsoft evaluates impairment for indefinite-lived intangible assets, including goodwill, on an annual impairment test date (* January 1)or more frequently if there are indicators of impairment. In connection with the goodwill and indefinite-lived intangible assets impairment evaluation, Skillsoft may**first* consider qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely thannot (i.e., a likelihood of more than50%) that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount. If Skillsoft determines that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount, or elects to bypass this qualitative assessment, a comparison of the carrying value of the reporting unit or indefinite-lived intangible asset to its fair value is completed. If the carrying value exceeds the fair value, an impairment loss equal to the difference (for goodwill,not to exceed the amount of goodwill allocated to the reporting unit) is recorded.

The fair value of our reporting units is determined using a weighted average valuation model using the income approach (discounted cash flow approach) and the market approach. The income approach requires management to make certain assumptions based upon information available at the time the valuations are performed. Actual results could differ materially from these assumptions. Management endeavors to use assumptions that are reflective of what a market participant would have used in calculating fair value considering the current economic conditions. This process was followed during our annual impairment test of intangible assets as of* January 1, 2025and during thethird* quarter of fiscal2026 for the GK reporting unit as discussed below.

The fair value of our indefinite-lived trademark intangible (our only indefinite-lived intangible asset other than goodwill) is determined using an income approach referred to as the relief-from-royalty method. The relief-from-royalty method requires management to estimate the portion of our earnings attributable to this trademark based on a royalty rate we would have paid for the use of the asset if we didnot own it. The determination of fair value involves significant estimates and assumptions, including projected revenue growth rates, the royalty savings rate, and the discount rate applied to future cash flows, which are forward-looking and could be affected by future economic and market conditions. This process was followed during our annual impairment test as of* January 1, 2025.*

In determining reporting units, Skillsoftfirst identifies its operating segments and then assesses whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results.

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Impairment for Third Quarter of Fiscal2026

During thethird quarter of fiscal2026, we identified triggering events requiring the testing for impairment of our GK reporting unit primarily attributable to the impact of industry macroeconomic uncertainty, the industry shift to integrated learning experience, as well as a continued decline in public sector business that contributed to lower enrollment. As a result of the foregoing, we lowered our expectations for the GK reporting unit’s revenue and estimated future cash flows. As of* October 1, 2025,the estimated undiscounted future cash flows attributable to the amortizable intangibles of the GK reporting unit were determined to be greater than the carrying values, therefore management concluded that there wasno* impairment of identifiable intangibles during thethird quarter of fiscal2026.

Management next estimated the fair value of the GK reporting unit as of* October 1, 2025,using the income approach discussed in Intangible Asset Impairment Review Requirements and Assumption Uncertainty above. Management didnot use the market approach in the weighting of the fair value of the GK reporting unit given its low profitability. For the reasons described above, the estimated future cash flows of this reporting unit declined, and when applied to the impairment analysis resulted in a lower fair value of the GK reporting unit. As a result, management determined to record a $20.8 million non-cash goodwill impairment for the GK reporting unit for thethree* months ended* October 31, 2025.*This impairment charge is included under "impairment of goodwill" on the unaudited condensed consolidated statements of operations. After the impairment charge, $8.7 million goodwill associated with the GK reporting unit remains. The key assumptions used in the discounted cash flow analysis included projected revenue growth, expected market share at maturity, long-term operating margin levels, and the discount rate.

We didnot identify any interim triggering events during thethird quarter of fiscal2026 in connection with either the TDS reporting unit or our indefinite-lived trademark intangible.

(4)** Taxes**

For thethree andnine months ended* October 31, 2025*, we recorded a tax benefit of $8.8 million and $10.0 million, respectively, on a pretax loss of $50.1 million and $113.1 million, respectively. For thethree andnine months ended* October 31, 2024*, we recorded a tax benefit of $1.9 million and $5.5 million, respectively, on a pretax loss of $25.5 million and $96.3 million, respectively. For each period, the tax benefit reflects the effect of non-deductible items, foreign rate differentials, changes in unremitted earnings, changes in uncertain tax positions, and changes in the valuation allowance on our deferred tax assets.

On* July**4,* 2025, the President signed into law significant federal tax legislation,H.R.1 (the “Tax Reform Act of2025” commonly referred to as the One Big Beautiful Bill Act (“OBBBA”)). The legislation includes numerous changes to U.S. corporate income tax law, including butnot limited to the following: permanent100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section162(m).

Skillsoft has reflected the impact of the OBBBA's elective tax items in its Interim Financial Statements. We will continue to monitor guidance issued by the U.S. Department of the Treasury, the Internal Revenue Service, and other regulatory bodies and will incorporate any updates into our estimates as appropriate.

(5)** Restructuring**

In connection with strategic initiatives implemented during fiscal2025, Skillsoft’s management approved and initiated plans to reduce its cost structure and better align operating expenses with existing economic conditions and our operating model. These strategic initiatives included the comprehensive resource reallocation plan announced on* July 11, 2024.*

The following is a summary of restructuring charges by segment for the periods presented (in thousands):

These restructuring charges are presented separately in the accompanying unaudited condensed consolidated statements of operations. Our restructuring charges recognized during thethree andnine months ended* October 31, 2025* were primarily associated with thecosts of terminated employees. Our restructuring charges recognized during thethree andnine months ended* October 31, 2024* were primarily associated with thecosts of terminated employees, as well as lease terminations and lease impairment charges.

The restructuring charge liability activity consisted of the following for the period presented (in thousands):

Management has completed the majority of planned restructuring actions as of* October 31, 2025*; however, we will continue to evaluate our cost structure and operating model to align operating expenses with existing economic conditions, which could result in further restructuring actions.

(6)** Commitments and Contingencies**

Litigation

Skillsoft is, from time to time, party to general legal proceedings and claims, which arise in the ordinary course of business including those relating to commercial and contractual disputes, employment matters, intellectual property, and other business matters. When appropriate, management consults with legal counsel and other appropriate experts to assess claims. If, in management’s opinion, we have incurred a probable loss as determined in accordance with GAAP, an estimate is made of the loss, and the appropriate accrual is reflected in our consolidated financial statements. Currently, there areno material amounts accrued. While it isnot possible to quantify the financial impact or predict the outcome of these pending claims and litigation, management doesnot anticipate that the outcome of any such current proceedings or known claims, either individually or in aggregate, will materially affect Skillsoft’s financial position, results of operations or cash flows.

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There areno material proceedings to which any director, officer or affiliate of Skillsoft, any owner of record or beneficially of more thanfive percent of our common stock, or any associate of any of the foregoing is a party adverse to Skillsoft or any of its subsidiaries or has a material interest adverse to Skillsoft or any of its subsidiaries.

Warranties and Indemnities

Skillsoft’s software license arrangements and hosting services are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and substantially in accordance with our product documentation under normal use and circumstances. Our arrangements also include certain provisions for indemnifying customers against liabilities if our products or services infringe athird party’s intellectual property rights. We have entered into service level agreements with some of our hosted application customers warrantying certain levels of uptime reliability and such agreements permit those customers to receive credits against monthly hosting fees or terminate their agreements in the event that Skillsoft fails to meet those levels for an agreed upon period of time.

To date, Skillsoft hasnot incurred any material costs as a result of such indemnifications or commitments and hasnot accrued any liabilities related to such obligations in the Interim Financial Statements.

(7)** Long-Term Debt**

Debt consisted of the following (in thousands):

On* July 16, 2021,a Skillsoft subsidiary, Skillsoft Finance II, Inc. (“Skillsoft Finance II”), entered into a Credit Agreement (the “Credit Agreement”), by and among Skillsoft Finance II, as borrower, another subsidiary - Skillsoft Finance I, Inc. (“Holdings”), the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent, pursuant to which the lenders provided a term loan in the original principal amount of $480 million. In connection with the closing of our Codecademy acquisition, Skillsoft Finance II entered into AmendmentNo.* 1 to the Credit Agreement, dated as of* April 4, 2022 (*the “First Amendment”), among Skillsoft Finance II, Holdings, certain subsidiaries of Skillsoft Finance II, as guarantors, Citibank N.A., as administrative agent, and the financial institutions party thereto as Term B-1 Lenders, which amended the Credit Agreement (as amended by the First Amendment, the “Amended Credit Agreement”), which provided additional Term B-1 Loans in the original principal amount of $160 million.

Our debt outstanding under the Amended Credit Agreement as of* October 31, 2025* matures as shown below (in thousands):

We also have access to up to $75.0 million of borrowings under our accounts receivable credit agreement (the “A/R Agreement”) with First Citizens Bank and Trust Company, pursuant to which certain of our accounts receivable are pledged as security for loans made by participating lenders.

The interest rate on borrowings outstanding under the A/R Agreement was 6.75% on* October 31, 2025*. As of* October 31, 2025*, $1.0 million was drawn under the A/R agreement and is classified as “borrowings under accounts receivable facility” on the unaudited condensed consolidated balance sheet.

Refer to Note13 “Long-Term Debt” to the2025 AFS for additional information regarding the Amended Credit Facility and the A/R Agreement.

(8)** Shareholders**’** Equity**

Common Stock

As of* October 31, 2025*, Skillsoft’s authorized share capital consisted of 18,750,000 shares of common stock and 10,000,000 shares of preferred stock, with a par value $0.0001 each. As of such date,9,051,822 shares of common stock were issued, including treasury shares,8,752,045 shares of common stock were outstanding, andno shares of preferred stock were outstanding.

Subject to applicable law, Skillsoft* may*declare dividends to be paid ratably to holders of common stock out of our assets that are legally available to be distributed as dividends in the discretion of Skillsoft’s Board of Directors (“Board”).

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Warrants

Refer to Note16 “Warrants” to the2025 AFS for information related to our equity and liability-classified warrants.

Share Repurchase Authorization

On* July 10, 2024,Skillsoft’s Board authorized Skillsoft to repurchase up to $10 million of its common stock. The share repurchase authorization will terminate on July 11, 2028and doesnot* obligate Skillsoft to purchase any minimum number of shares of common stock, and the authorization* maybe suspended, modified, or discontinued at any time without prior notice. As of October 31, 2025*, no common stock had been repurchased under the share repurchase authorization.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) associated with foreign currency translation adjustments consisted of the following (in thousands):

(9)** Stock-Based Compensation**

Equity Incentive Plans

In* June2021,* Skillsoft adopted the2020 Omnibus Incentive Plan, which was amended on* June 6, 2024 (as so amended, the“2020* Plan”). The2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, other equity-based awards, and cash-based incentive awards to employees, directors, and consultants of Skillsoft. Under the2020 Plan,655,295 shares were initially made available for issuance, increased by amendment to 2,908,333 shares. The2020 Plan also includes an annual increase on* January1* each year, in an amount equal to 5.0% of the total number of shares of common stock outstanding on* December31* of the preceding calendar year. Our Talent and Compensation Committee* mayact prior to January1* of a given year to provide that there will beno * January**1* increase for such year or that the increase for such year will be a lesser number of shares of common stock than provided for in the2020 Plan. As of* October 31, 2025*, a total of 496,019 shares of common stock remain available for issuance under the2020 Plan.

In* May 2024,Skillsoft adopted the Skillsoft Corp.2024 Employment Inducement Incentive Award Plan, amended as of June 5, 2025,to increase the number of shares authorized for issuance thereunder to a total of 400,000 (as so amended the “Inducement Plan”). The Inducement Plan provides for inducement grants of nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other equity-based awards, and cash-based incentive awards to new hires, or individuals being rehired following a bona fide period of non-employment with us, in compliance with Section303A.08* of the New York Stock Exchange Listed Company Manual. As of* October 31, 2025*, a total of 206,250 shares of common stock remain available for issuance under the Inducement Plan.

Stock Options

Under the2020 Plan, all employees are eligible to receive incentive share options, and all employees, directors and consultants are eligible to receive non-statutory share options. The options generally vest over four years and have a term often years. Vested options under the plan generally expirenot later than 90 days following termination of employment or service ortwelve months following an optionee’s death or disability. The fair value of stock options is determined on the grant date and amortized over the vesting period on a straight-line basis.

The following summarizes stock option activity for thenine months ended* October 31, 2025*:

The stock option expense was fully recognized during the fiscal quarter ended* July 31, 2025.*

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Time-Based Restricted Stock Units

Restricted stock units (“RSUs”) represent a right to receiveone share of Skillsoft’s common stock that is both non-transferable and forfeitable unless and until certain conditions are satisfied. Other than RSUs currently granted to our non-employee directors, which vest upon the earlier of thefirst anniversary of the grant date and Skillsoft’s next annual meeting of stockholders, time-based RSUs generally vest ratably over athree orfour-year period, subject to continued employment through each anniversary. The fair value of RSUs is determined on the grant date and is amortized over the vesting period on a straight-line basis.

The following summarizes time-based RSU activity for thenine months ended* October 31, 2025*:

(1) Includes 80,724 vested RSUs, where the shares due on settlement have been irrevocably deferred at the election of the recipients.

The total unrecognized stock-based compensation costs related to time-based RSUs was $19.1 million as of* October 31, 2025*, which is expected to be recognized over a weighted-average period of 2.7 years.

Market-Based Restricted Stock Units

Market-based RSUs (“MBRSUs”) vest over athree-year orfour-year performance period, subject to continued employment through each anniversary and achievement of market conditions (specified targets related to Skillsoft’s stock price and objective relative total shareholder return). The fair value of MBRSUs is estimated using the Monte Carlo valuation method. Compensation cost for these awards is recognized based on the grant date fair value which is recognized over the vesting period using the accelerated attribution method.

The following summarizes MBRSU activity for thenine months ended* October 31, 2025*:

The total unrecognized stock-based compensation costs related to MBRSUs was $0.1 million as of* October 31, 2025*, which is expected to be recognized over a weighted-average period of 0.7 years.

Performance-Based Restricted Stock Units

Performance-based RSUs (“PBRSUs”) vest over atwo-year period, subject to continued employment through each grant date anniversary and achievement of specified corporate goals during a less thanone-year performance-period. The expense and shares vested for our PBRSU awards depend on the achievement of specified results; the ultimate expense and number of shares vested can range from 0% to 200% of the target amount granted.

The following summarizes PBRSU activity for thenine months ended* October 31, 2025*:

(1) Reflects the number of shares that would vest based on achieving the “Target” level of performance.

The total unrecognized stock-based compensation costs related to PBRSUs was $4.9 million as of* October 31, 2025*, which is expected to be recognized over a weighted-average period of 2.3 years.

Liability-Classified Market-Based Awards

In thethird quarter of fiscal2025, we granted market-based awards to Ronald W. Hovsepian, initially intended to be settled in cash upon vesting, unless determined by the Board or a committee thereof to be settled in shares. These awards are eligible to be earned based on the volume-weighted average of our daily trading prices over a30-consecutive trading day period (“30-day VWAP”) prior to specified dates. During thesecond quarter of fiscal2026, the Board of Directors certified the achievement of thefirst 30-day VWAP hurdle for a total award corresponding to such hurdle of $6 million. Payment of this award is divided into two, equal50% tranches, each valued at $3.0 million. Thefirst 50% of the award was settled in shares during thesecond quarter of fiscal2026. Thesecond 50% of the award will be settled after the required service period. The unvested awards are classified as liabilities and remeasured at fair value using a Monte Carlo simulation at each reporting date and included in the caption “accrued compensation” on the unaudited condensed consolidated balance sheets. Expense is recognized using an accelerated attribution method over the requisite service period. The market-based awards potentially vest overtwo-year tofour-year service periods, subject to continued employment and a specified appreciation of Skillsoft’s share price.

The following summarizes the liability-classified market-based performance award balances as of* October 31, 2025* (in thousands):

(1) Included in the caption “accrued compensation” on the unaudited condensed consolidated balance sheets.

(2) Expected to be recognized over a weighted-average period of 1.7 years.

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Stock-Based Compensation Expense

The following summarizes the classification of stock-based compensation expense in the unaudited condensed consolidated statements of operations (in thousands):

(1) When comparing thethree andnine months ended* October 31, 2025to the corresponding periods in2024,* the decreases were primarily the result of higher forfeitures in the current fiscal year periods.

(2) When comparing thethree andnine months ended* October 31, 2025to the corresponding periods in2024,* the increases were primarily the result of higher forfeitures of share-based payments in the fiscal2024 periods, including unvested equity-based awards associated with our former Chief Executive Officer, whose employment with Skillsoft ended on* May 9, 2024.*

(10)** Revenue**

Revenue Components and Performance Obligations

Subscription Services

Skillsoft offers subscriptions that provide customers access to a broad spectrum of learning options including access to cloud-based Software as a Service (“SaaS”) learning content and individualized coaching. Our cloud-based subscription solutions normally donot provide customers with the right to take possession of the software supporting the platform or to download course content without continuing to incur fees for hosting services and, as a result, are accounted for as service arrangements. Access to the platform and course content represents a series of distinct services as we continually provide access to, and fulfill our obligation to, the customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is usually recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. Our subscription contracts typically vary fromone year tothree years. Our cloud-based solutions arrangements are mostly non-cancellable, non-refundable, and are invoiced in advance of the subscription services being provided. Revenue from individualized coaching for time-based access to unlimited sessions is recognized on a straight-line basis over the period these services are available to the customers.

Virtual, On-Demand and Classroom

Revenue from classroom training is recognized in the period in which the services are rendered. Revenue from virtual and on-demand training for time-based access to unlimited sessions is recognized on a straight-line basis over the period these services are available to the customers. Billing is in advance of the services being provided or immediately after the services have been provided.

Professional Services

Skillsoft also sells professional services related to its cloud solutions which are typically considered distinct performance obligations and are recognized over time as services are performed. For fixed-price contracts, revenue is recognized based on the actual service provided at the end of the reporting period as a proportion of the total services to be provided (proportional performance method). These services usually consist of implementation, integration, and general consulting. Skillsoft’s professional service engagements are mostly short in duration. Billing is commonly in advance of the services being provided.

Disaggregated Revenue and Geography Information

The following is a summary of revenues by segment and type for the periods presented (in thousands):

Generally, SaaS and subscription services revenues are recognized over the service period, while virtual, on demand, classroom and professional services revenues are recognized at the point they are delivered.

The following sets forth our revenues by geographic region for the periods presented (in thousands):

Other than the United States, no single country accounted for more than10% of revenue for all periods presented.

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Deferred Revenue

Deferred revenue activity for thenine months ended* October 31, 2025* was as follows (in thousands):

Deferred revenue performance obligations relate predominantly to time-based SaaS and subscription services that are billed in advance of services being rendered.

Deferred Contract Acquisition Costs

Deferred contract acquisition cost activity for thenine months ended* October 31, 2025* was as follows (in thousands):

(11)** Fair Value Measurements**

ASC Topic820, Fair Value Measurements and Disclosures (“ASC820”) establishes a fair value hierarchy that prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are information that reflect the assumptions that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are variables that reflect our assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Thethree levels of the fair value hierarchy established by ASC820 in order of priority are as follows:

The following summarizes our assets (liabilities) that are measured at fair value on a recurring basis as of* October 31, 2025* and are categorized using the fair value hierarchy (in thousands):

Cash, Cash Equivalents and Restricted Cash

The cost of our cash, cash equivalents and restricted cash was consistent with their estimated fair values as of* October 31, 2025*. Refer to Note2 “Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash” to the2025 AFS for additional detail.

Interest Rate Swaps

On* June 17, 2022,Skillsoft entered intotwo fixed-rate interest rate swap agreements to change the Secured Overnight Financing Rate (“SOFR”)-based component of the interest rate on a portion of our variable rate debt to a fixed rate (the “Interest Rate Swaps”). The Interest Rate Swaps have a combined notional amount of $300.0 million and a maturity date of June 5, 2027.The objective of the Interest Rate Swaps is to eliminate the variability of cash flows in interest payments on $300.0 million of variable rate debt attributable to changes in benchmarkone*-month SOFR interest rates. The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark SOFR interest rates over the interest rate swap term. The changes in cash flow of the Interest Rate Swaps are expected to offset changes in cash flow of the variable rate debt. The Interest Rate Swaps arenot designated as a cash flow hedge and changes in the fair value of the Interest Rate Swaps are recorded in earnings each period. For thethree andnine months ended* October 31, 2025*, we recognized a non-cash gain (loss) of ($1.5) million and ($3.6) million attributable to the Interest Rate Swaps, respectively. For thethree andnine months ended* October 31, 2024*, we recognized a non-cash gain (loss) of ($0.8) million and $0.4 million attributable to the Interest Rate Swaps, respectively.

The inputs for determining fair value of the Interest Rate Swaps are classified as Level2 inputs. Level2 fair value is based on estimates using standard pricing models. These standard pricing models use inputs which are derived from or corroborated by observable market data such as interest rate yield curves, index forward curves, discount curves, and volatility surfaces. The counterparties to these derivative contracts are highly-rated financial institutions which we believe carry only a minimal risk of nonperformance.

Depending on whether the Interest Rate Swaps are in an asset or liability position at the end of the reporting period, they are included in either the captions “other assets” or “other long-term liabilities” on our unaudited condensed consolidated balance sheets.

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Liability-Classified Market-Based Awards

The fair value of the liability-classified market-based awards are determined using a Monte Carlo simulation, weighted for the service period completed, at each reporting date. The most significant inputs for determining the fair value either originate from the grant agreement (e.g., stock price hurdles, vesting amounts, and service dates) or are derived from or corroborated by observable market data (e.g., interest rates, stock prices, equity risk, market betas, size premiums, average stock volatility); therefore we have classified the fair value measurement as Level2. Refer to Note9 “Stock-Based Compensation” above for additional information related to the liability-classified market-based awards.

Other Fair Value Instruments

Skillsoft currently invests available cash balances primarily in money market funds invested in United States Treasury securities and United States Treasury securities repurchase agreements, as well as cash deposits held at major banks. The carrying amounts of cash and cash equivalents, trade receivables, trade payables and accrued liabilities, as reported on the unaudited condensed consolidated balance sheet as of* October 31, 2025*, approximate their fair value because of the short maturity of those instruments.

Our long-term debt is a financial instrument, and the fair value of Skillsoft’s outstanding principal amounts as of* October 31, 2025* was $511.2 million. This fair value is determined based on inputs that are classified as Level2 within the fair value hierarchy.

(12)** Segment Information**

ASC280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise that earn revenue and incur expenses, for which discrete financial information is available, and whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) in determining how to allocate resources and to assess performance. Skillsoft’s CODM is its Chief Executive Officer.No operating segments have been aggregated to determine our reportable segments.

Our CODM organizes Skillsoft's business, manages resource allocation and measures performance throughtwo operating and reportable segments: Talent Development Solutions (“TDS” formerly known as Content & Platform) and Global Knowledge (“GK” formerly known as Instructor-Led Training). Thesetwo businesses, described below, are highly complementary and give Skillsoft a differentiated value proposition. The CODM uses segment revenues, segment (“business unit”) contribution profit and business unit contribution margin (business unit contribution profit as a percentage of business unit revenue) to evaluate segment performance and allocate resources. There areno intercompany revenue transactions reported between our reportable segments. When our segments enter into transactions to provide products and services tothird parties, revenue is generally allocated to our segments based on relative value.

Business unit contribution profit is determined by subtracting the following from segment revenue: business unit costs of revenues, business unit content and software development expenses, and with respect to our TDS segment, business unit product research and management expenses, which are defined as the costs of revenues, content and software development expenses, and product research and management expenses attributable to each segment, respectively (as described below), but excluding in each case the following items, as our CODM doesnot consider them in measuring segment performance:

In determining business unit costs of revenues, business unit content and software development expenses, and business unit product research and management expenses, identifiable costs and expenses are allocated directly to the applicable segment while other costs and expenses, including indirect costs and certain corporate charges, are allocated to our segments based on an analysis of the relative usage or benefit derived therefrom by each segment.

Business unit contribution profit excludes the following, as these items are managed and reviewed by the CODM at the company level: selling and marketing expenses; general and administrative expenses; amortization of intangible assets; impairment of goodwill; acquisition and integration-related costs; restructuring expenses; net other income (expense); interest rate swap fair value adjustments; interest income; and interest expense. Although business unit contribution profit and business unit contribution margin are used to evaluate the performance of our segments, we* mayincur operating costs inone* segment that* mayalso benefit the other segment. Operating segment performance isnot* evaluated based on segment asset or liability information. Our accounting policies for segment reporting are the same as those applied to Skillsoft as a whole.

The TDS segment is comprised of a strong foundation of products and customers, with its enterprise-grade solution serving customers and employees worldwide. TDS Learner is a world-renowned consumer scale and experience learner platform that serves learners worldwide. We deliver AI-led, interactive, and multi-modal experiences, a premium technology learning brand, outcome-based learning through benchmarks, enterprise grade security and integrations, and extensive coverage of topics across business, technology, and compliance skills.

The GK segment is centered around instructor-led training, or live learning, with face-to-face delivery by experienced trainers, both in-person and virtually. GK is a live learning partner for corporations with a large, but focused, schedule of vendor-authored and certified courses utilizing certified instructors. The quality and consistency of trainers, the access to quality content and interactive labs from the world’s largest vendors, and a market-leading blended proposition with TDS, define GK's uniqueness in the market. Our GK segment has strong partnerships with the world’s leading technology companies and certification authorities.

As previously disclosed, in thefourth quarter of fiscal2025, our CODM made changes to the components used to determine segment results to increase transparency and improve segment comparability to peers. We believe that business unit contribution profit as currently defined is a key financial indicator of the performance of our segments. The changes didnot impact our consolidated financial statements.

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The following reconciles business unit contribution profit to GAAP net income (loss), recast for the prior-year periods to reflect our segments under the new structure, for the periods presented (in thousands):

Our segment assets primarily consist of cash and cash equivalents, accounts receivable, prepaid expenses, deferred taxes, property and equipment, goodwill and intangible assets. The following sets forth our segment assets as of the periods presented (in thousands):

(13)** Net Income (Loss) Per Share**

Basic earnings (loss) per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding restricted stock-based awards, and stock options using the treasury stock method.

The following sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except for the number of shares and per share data):

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During thethree andnine months ended* October 31, 2025and October 31, 2024,*we incurred net losses and, therefore, the effect of our potentially dilutive securities wasnot included in the calculation of diluted loss per share as the effect would be anti-dilutive. The following contains share/unit totals with a potentially dilutive impact, which excludes the effect of the treasury stock method (in thousands):

(14)** Related Party Transactions**

Agreement with Largest Shareholder

In* January 2025,Skillsoft entered into an agreement to provide off-the-shelf Skillsoft products to companies affiliated with Prosus N.V. and Naspers Ltd. (collectively known as “Prosus Companies”) for an aggregate of $0.8 million over three years (the "Prosus Commercial Agreement"). In June 2025,the parties updated the Prosus Commercial Agreement to consolidate and reallocate the services previously included in the parties' approximately $84,000 * March 2024agreement. In* April 2025,the parties also entered into an additionalone*-year off-the-shelf product agreement for specific training products for approximately $69,000.

(15)** Subsequent Events**

We have completed an evaluation of all subsequent events after the balance sheet date of* October 31, 2025* through the date this Form10-Q was filed with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in Interim Financial Statements, and events which occurred subsequently but werenot recognized in the Interim Financial Statements. We have concluded thatno subsequent events have occurred that require disclosure, except as disclosed within the Interim Financial Statements.