Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Segment Information

v3.24.3
Note 12 - Segment Information
 9 Months Ended
Oct. 31, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

(12)    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: Talent Development Solutions (formerly known as Content & Platform) and Global Knowledge (formerly known as Instructor-Led Training). Both 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 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 Talent Development Solutions 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, Talent Development Solutions offers Percipio, an artificial intelligence (“AI”)-driven online learning platform that delivers an immersive learning experience through 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 Global Knowledge business offers training solutions covering information technology and business skills for corporations and their employees. Global Knowledge 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. Global Knowledge offers a wide breadth of training topics and delivery modalities both on a transactional and subscription basis.

 

The following presents summary results for each of the segments for the three and nine months ended October 31, 2024 and October 31, 2023 (in thousands):

 

   

Three Months Ended October 31,

    

Nine Months Ended October 31,

  
   

2024

    

2023

    

2024

    

2023

  

Talent Development Solutions

                                

Revenues

   $ 102,998     $ 101,132     $ 302,725     $ 302,893  

Operating expenses

     112,344       122,036       353,493       373,637  

Operating income (loss)

     (9,346 )     (20,904 )     (50,768 )     (70,744 )

Global Knowledge

                                

Revenues

     34,227       37,824       94,516       112,804  

Operating expenses

     34,058       36,791       96,085       122,611  

Operating income (loss)

     169       1,033       (1,569 )     (9,807 )

Consolidated

                                

Revenues

     137,225       138,956       397,241       415,697  

Operating expenses

     146,402       158,827       449,578       496,248  

Operating income (loss)

     (9,177 )     (19,871 )     (52,337 )     (80,551 )

Other income (expense), net

     (538 )     19       1,261       (1,290 )

Interest expense, net

     (14,921 )     (15,432 )     (45,641 )     (46,107 )

Fair value adjustment of warrants

     —       1,105       —       4,750  

Fair value adjustment of interest rate swaps

     (822 )     3,981       418       11,186  

Income (loss) before provision for (benefit from) income taxes

     (25,458 )     (30,198 )     (96,299 )     (112,012 )

Provision for (benefit from) income taxes

     (1,859 )     (2,462 )     (5,498 )     (8,735 )

Net income (loss) from continuing operations

     (23,599 )     (27,736 )     (90,801 )     (103,277 )

Gain (loss) on sale of business

     —       —       —       (682 )

Net income (loss)

   $ (23,599 )   $ (27,736 )   $ (90,801 )   $ (103,959 )

 

Talent Development Solutions’ segment depreciation for the three and nine months ended October 31, 2024 was $0.7 million and $1.7 million, respectively. Talent Development Solutions’ segment depreciation for the three and nine months ended October 31, 2023 was $0.7 million and $2.1 million, respectively.

 

Global Knowledge’s segment depreciation for the three and nine months ended October 31, 2024 was $0.3 million and $0.7 million, respectively. Global Knowledge’s segment depreciation for the three and nine months ended October 31, 2023 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  October 31, 2024 and January 31, 2024 (in thousands):

 

   

October 31, 2024

    

January 31, 2024

  

Talent Development Solutions

   $ 955,347     $ 1,168,671  

Global Knowledge

     98,184       104,963  

Total assets

   $ 1,053,531     $ 1,273,634  

 

The following sets forth the Company’s long-lived tangible assets by geographic region as of  October 31, 2024 and January 31, 2024 (in thousands):

 

   

October 31, 2024

    

January 31, 2024

  

United States

   $ 1,271     $ 3,311  

Rest of world

     2,272       3,328  

Total long-lived tangible assets

   $ 3,543     $ 6,639