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