Quarterly report pursuant to Section 13 or 15(d)

Note 15 - Segment Information

v3.23.1
Note 15 - Segment Information
 3 Months Ended
Apr. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

(15)    Segment Information

 

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), in determining how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s CODM evaluates results using the operating segment structure as the primary basis for which the allocation of resources and financial results are assessed.

 

The Company has organized its business into two segments: Content & Platform (formerly referred to as Skillsoft content) and Instructor-Led Training (also known as Global Knowledge). All of the Company’s segments market and sell their offerings globally to businesses of many sizes, government agencies, educational institutions and resellers with a worldwide sales force positioned to offer the combinations that best meet customer needs. The CODM primarily uses revenues and operating income as measures used to evaluate financial results and allocation of resources. The Company allocates certain operating expenses to the reportable segments, including general and administrative costs based on the usage and relative contribution provided to the segments. There are no intercompany revenue transactions reported between the Company’s reportable segments.

 

The Content & Platform business engages in the sale, marketing and delivery of its content learning solutions, in areas such as Leadership and Business, Technology and Developer and Compliance. This includes individualized coaching as well as technical skill areas assumed in the Codecademy acquisition. In addition, Content & Platform offers Percipio, an intelligent artificial intelligence ("AI")-driven online learning platform that delivers an immersive learning experience through software as a service ("SAAS") solutions. It leverages its highly engaging content, curated into nearly 700 learning paths (channels) that are continuously updated to ensure customers always have access to the latest information.

 

The Instructor-Led Training business offers training solutions covering information technology and business skills for corporations and their employees. Instructor-Led Training guides its customers throughout their lifelong technology learning journey by offering relevant and up-to-date skills training through instructor-led (in-person “classroom” or online “virtual”) and self-paced (“on-demand”), vendor certified, and other proprietary offerings. Instructor-Led Training offers a wide breadth of training topics and delivery modalities (classroom, virtual, on-demand) both on a transactional and subscription basis.

 

The following presents summary results for each of the businesses for the three months ended April 30, 2023 and 2022:

 

   

Three Months

    

Three Months

  
   

Ended

    

Ended

  
   

April 30, 2023

    

April 30, 2022

  

Content & Platform

                

Revenues

   $ 98,573     $ 89,785  

Operating expenses

     129,524       128,420  

Operating income (loss)

     (30,951 )     (38,635 )

Instructor-Led Training

                

Revenues

     36,981       45,053  

Operating expenses

     41,412       51,653  

Operating income (loss)

     (4,431 )     (6,600 )

Consolidated

                

Revenues

     135,554       134,838  

Operating expenses

     170,936       180,073  

Operating income (loss)

     (35,382 )     (45,235 )

Total non-operating income (loss)

     270       1,212  

Interest expense, net

     (15,936 )     (11,514 )

Fair value adjustment of warrants

     2,852       10,106  

Fair value adjustment of hedge

     270       —  

Provision for (benefit from) income taxes

     4,384       22,337  

Net income (loss) from continuing operations

     (43,542 )     (23,094 )

Gain (loss) on sale of business

     (682 )     —  

Income (loss) from discontinued operations

     —       1,451  

Net income (loss)

   $ (44,224 )   $ (21,643 )

 

Content & Platform segment depreciation for the three months ended April 30, 2023 and 2022 was $0.8 million and $0.9 million, respectively.

 

Instructor-Led Training segment depreciation for the three months ended  April 30, 2023 and 2022 was $0.4 million and $0.5 million, respectively.

 

The Company’s 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 the Company’s segment assets as of  April 30, 2023 and January 31, 2023 (in thousands):

 

   

April 30, 2023

    

January 31, 2023

  

Content & Platform

   $ 1,340,440     $ 1,434,920  

Instructor-Led Training

     199,921       207,767  

Total assets

   $ 1,540,361     $ 1,642,687  

 

The following sets forth the Company’s long-lived tangible assets by geographic region as of  April 30, 2023 and January 31, 2023 (in thousands):

 

   

April 30, 2023

    

January 31, 2023

  

United States

   $ 4,145     $ 7,117  

Rest of world

     2,775       3,033  

Total long-lived tangible assets

   $ 6,920     $ 10,150