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Note 3 - Intangible Assets | 9 Months Ended
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Oct. 31, 2025
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] | (3) Intangible Assets Intangible assets consisted of the following (in thousands, except for remaining life):
|  | October 31, 2025 |  |  | January 31, 2025 |
|  | Weighted Average Remaining Life (in years) |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |  |  | Weighted Average Remaining Life (in years) |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Developed software/courseware |  |  | 1.8 |  |  | $ | 378,142 |  |  | $ | 295,529 |  |  | $ | 82,613 |  |  |  | 2.0 |  |  | $ | 365,108 |  |  | $ | 238,941 |  |  | $ | 126,167 |
Customer contracts/relationships |  |  | 8.0 |  |  |  | 269,066 |  |  |  | 125,950 |  |  |  | 143,116 |  |  |  | 8.6 |  |  |  | 267,286 |  |  |  | 96,777 |  |  |  | 170,509 |
Trademarks and trade names |  |  | 10.8 |  |  |  | 52,868 |  |  |  | 13,586 |  |  |  | 39,282 |  |  |  | 11.5 |  |  |  | 52,378 |  |  |  | 10,161 |  |  |  | 42,217 |
Publishing rights |  |  | 0.6 |  |  |  | 41,100 |  |  |  | 36,054 |  |  |  | 5,046 |  |  |  | 1.4 |  |  |  | 41,100 |  |  |  | 29,889 |  |  |  | 11,211 |
Backlog |  |  | 0.2 |  |  |  | 49,700 |  |  |  | 49,557 |  |  |  | 143 |  |  |  | 0.9 |  |  |  | 49,700 |  |  |  | 49,128 |  |  |  | 572 |
Skillsoft trademark |  |  | Indefinite |  |  |  | 76,545 |  |  |  | — |  |  |  | 76,545 |  |  |  | Indefinite |  |  |  | 76,545 |  |  |  | — |  |  |  | 76,545 |
Total intangible assets |  |  |  |  |  | $ | 867,421 |  |  | $ | 520,676 |  |  | $ | 346,745 |  |  |  |  |  |  | $ | 852,117 |  |  | $ | 424,896 |  |  | $ | 427,221 |
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 |
2026 (three months remaining) |  | $ | 32,134 |
2027 |  |  | 83,496 |
2028 |  |  | 42,748 |
2029 |  |  | 31,084 |
2030 |  |  | 23,952 |
Thereafter |  |  | 56,786 |
Total future amortization |  | $ | 270,200 |
Amortization expense related to intangible assets in the aggregate was $32.1 million and $95.1 million for the three and nine months ended October 31, 2025, respectively, and $31.8 million and $95.2 million for the three and nine months ended October 31, 2024, respectively. Our goodwill as of the dates indicated is as follows (in thousands):
|  |  |  |  |  |  |  |  |  |  |  |  |  | Impairment |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  | For the Nine |  |  |  |  |  |  |  |  |  |  |  |  |
|  | As of October 31, 2025 |  |  | Months Ended |  |  | As of January 31, 2025 |
|  | Gross |  |  | Accumulated |  |  | Net |  |  | October 31, |  |  | Gross |  |  | Accumulated |  |  | Net |
|  | Goodwill |  |  | Impairment |  |  | Goodwill |  |  | 2025 |  |  | Goodwill |  |  | Impairment |  |  | Goodwill |
TDS |  | $ | 986,055 |  |  | $ | (698,405 | ) |  | $ | 287,650 |  |  | $ | — |  |  | $ | 986,055 |  |  | $ | (698,405 | ) |  | $ | 287,650 |
GK |  |  | 114,115 |  |  |  | (105,465 | ) |  |  | 8,650 |  |  |  | (20,771 | ) |  |  | 114,115 |  |  |  | (84,694 | ) |  |  | 29,421 |
Total |  | $ | 1,100,170 |  |  | $ | (803,870 | ) |  | $ | 296,300 |  |  | $ | (20,771 | ) |  | $ | 1,100,170 |  |  | $ | (783,099 | ) |  | $ | 317,071 |
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 than not (i.e., a likelihood of more than 50%) 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, 2025 and during the third quarter of fiscal 2026 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 did not 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, Skillsoft first 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. Impairment for Third Quarter of Fiscal 2026 During the third quarter of fiscal 2026, 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 was no impairment of identifiable intangibles during the third quarter of fiscal 2026. 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 did not 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 the three 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 did not identify any interim triggering events during the third quarter of fiscal 2026 in connection with either the TDS reporting unit or our indefinite-lived trademark intangible.

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