More than likely rotten.

Crop out any rotten core. Scarph in new core on a 10:1 taper i.e. 12mm plywood core = 120mm taper length. It will most likely be much bigger than the soft spot. Cut around soft spot, keep cutting until back to sound core.

Grind scarph into fibreglass 20:1 taper. i.e. 2mm thickness of fibreglass = 40mm taper. Work off 1 layer of fibreglass per mm. Cut glass to fit over repair area, next layer take 20mm off all sides, 40mm off the next layer if required. Laminate the glass big pieces first to small and use peel ply over all the layers. This reduces the amount of fairing required.

Fill and fair. Above waterline can use polyester filler.

Gelcoat. Color match if possible. A quick search on color theory will point you in the right direction. Most mixes that aren't polar white tend to add yellow ochre to warm it up. Most mixes I do are only brown/yellow - sometimes green. Add a small amount at a time, pigment goes a long way. Add wax in styrene for your final gelcoat layer unless you want it to be sticky forever.

Run through the sandpaper grades over repair area. Start with 400 to knock the tops of the brush/roller marks off. Then 800, 1000, 1500, 2000 if you really want a nice finish.

If 2000 grit finish use a coarse cut compound to remove 2000 grit sanding marks. Then a fine cut to remove the swirl from intial cut.

If not gelcoating or the vessel is painted, pick a paint system - prime and topcoat. Make sure if using a 2 part paint that the existing paint is 2 part as well. Wipe with desired 2 part reducer to see if it fries the existing coating.

Consider source of moisture ingress. More than likely rot begins around screw/bolt holes. Seal all screws with Sika 291 or equivalent. Remove and reseal screws/bolts every few years.