Reports Record Full Year Revenues, Adjusted
EBITDA, and Adjusted Unlevered Free Cash Flow
Expands
Scale and Reach of the Instructure Platform by Acquiring Parchment,
the World's Leading Credentialing Platform
SALT
LAKE CITY, Feb. 20, 2024 /PRNewswire/ -- Instructure
Holdings, Inc. (Instructure) (NYSE: INST) today announced financial
results for the fourth quarter and full year ended December 31, 2023.
Full Year 2023 Highlights:
(All results compared to
prior-year period unless otherwise noted)
- Record Revenues of $530.2
million, an increase of 11.6%
- Net loss of $34.1 million, a
slight improvement over prior year
- Record Adjusted EBITDA* of $214.2
million, an increase of 19.3%, and Adjusted EBITDA Margin*
of 40.4%
- Cash flow from operations of $164.0
million, an increase of 16.9% and Adjusted Unlevered Free
Cash Flow* of $225.5 million, an
increase of 29.9%
Fourth Quarter 2023 Highlights:
(All results
compared to prior-year period unless otherwise noted)
- Revenues of $135.4 million, an
increase of 8.5%
- Net loss of $5.8 million,
comparable to prior year
- Adjusted EBITDA* of $56.5
million, an increase of 16.1%, and Adjusted EBITDA Margin*
of 41.7%
- Cash flow from operations of $36.7
million, an increase of over 100%, and Adjusted Unlevered
Free Cash Flow* of $51.3 million, an
increase of 74.8%
2024 Full Year Guidance:
- Full year 2024 guidance ranges for Revenue of $655.0 million to $665.0
million, Non-GAAP Operating Income* of $260.5 million to $265.5
million, Adjusted EBITDA* of $266.5
million to $271.5 million,
Non-GAAP Net Income* of $105.5
million to $110.5 million and
Adjusted Unlevered Free Cash Flow* of $259.5
million to $264.5 million
*Non-GAAP Operating Income, Adjusted EBITDA, Non-GAAP Net
Income and Adjusted Unlevered Free Cash Flow are non-GAAP measures.
See "Non-GAAP Financial Measures" in the press release for
information regarding the Company's use of non-GAAP financial
measures as well as reconciliations to the most closely comparable
GAAP measures for historical periods. Instructure is unable to
provide guidance or a reconciliation for forward-looking non-GAAP
measures because Instructure cannot provide a meaningful or
accurate calculation or estimation of certain items without
unreasonable effort. This is due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliation, including stock-based compensation and
amortization of acquisition-related intangibles. Thus, Instructure
is unable to present a quantitative reconciliation of non-GAAP
guidance to GAAP guidance because such information is not
available.
Key Financials:
(Dollars in millions)
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
YoY
Percentage
|
|
|
2023
|
|
|
2022
|
|
|
YoY
Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
135.4
|
|
|
$
|
124.7
|
|
|
|
8.5
|
%
|
|
$
|
530.2
|
|
|
$
|
475.2
|
|
|
|
11.6
|
%
|
Income (loss) from
Operations
|
|
$
|
0.2
|
|
|
$
|
(3.8)
|
|
|
|
105.9
|
%
|
|
$
|
(3.2)
|
|
|
$
|
(16.5)
|
|
|
|
80.5
|
%
|
Non-GAAP Operating
Income*
|
|
$
|
55.4
|
|
|
$
|
46.5
|
|
|
|
19.1
|
%
|
|
$
|
209.8
|
|
|
$
|
173.9
|
|
|
|
20.6
|
%
|
GAAP Net
Loss
|
|
$
|
(5.8)
|
|
|
$
|
(5.7)
|
|
|
|
(0.8)
|
%
|
|
$
|
(34.1)
|
|
|
$
|
(34.2)
|
|
|
|
0.5
|
%
|
GAAP Net Loss
Margin
|
|
|
(4.3)
|
%
|
|
|
(4.6)
|
%
|
|
30 bps
|
|
|
|
(6.4)
|
%
|
|
|
(7.2)
|
%
|
|
80 bps
|
|
Adjusted
EBITDA*
|
|
$
|
56.5
|
|
|
$
|
48.6
|
|
|
|
16.1
|
%
|
|
$
|
214.2
|
|
|
$
|
179.6
|
|
|
|
19.3
|
%
|
Adjusted EBITDA
Margin*
|
|
|
41.7
|
%
|
|
|
39.0
|
%
|
|
270 bps
|
|
|
|
40.4
|
%
|
|
|
37.7
|
%
|
|
270 bps
|
|
Cash Flow from
Operations
|
|
$
|
36.7
|
|
|
$
|
17.0
|
|
|
|
115.9
|
%
|
|
$
|
164.0
|
|
|
$
|
140.3
|
|
|
|
16.9
|
%
|
Adjusted Unlevered Free
Cash Flow*
|
|
$
|
51.3
|
|
|
$
|
29.3
|
|
|
|
74.8
|
%
|
|
$
|
225.5
|
|
|
$
|
173.5
|
|
|
|
29.9
|
%
|
Remaining Performance
Obligations ("RPO")
|
|
$
|
833.5
|
|
|
$
|
760.1
|
|
|
|
9.7
|
%
|
|
$
|
833.5
|
|
|
$
|
760.1
|
|
|
|
9.7
|
%
|
|
*See "Non-GAAP
Financial Measures" for information regarding the Company's use of
non-GAAP financial measures as well as reconciliations to the most
closely comparable GAAP measures in this press
release.
|
Steve Daly, Instructure CEO,
said, "During the fourth quarter, we exceeded the high end of our
guidance range for Revenue, Adjusted EBITDA and
Adjusted Unlevered Free Cash Flow, reflecting our unrelenting
focus and the strength of our model. These exceptional results were
driven by our increasing competitive advantage, strong execution,
and the formidable cash flow we generate and reinvest behind
high-growth initiatives. We head into 2024 with meaningfully
enhanced scale, a broader portfolio, and access to new buyers due
to the Parchment acquisition. We have never been more excited about
our ability to elevate teaching and learning and drive results for
our shareholders."
Balance Sheet and Cash Flow
As of December 31, 2023, cash,
cash equivalents and restricted cash were $344.2 million and total debt was $491.3 million compared to cash, cash equivalents
and restricted cash of $190.3 million
and total debt of $496.3 million as
of December 31, 2022. The increase in
cash, cash equivalents and restricted cash since December 31, 2022 was driven by strong business
performance and the fact that 2022 included the purchase of
LearnPlatform. Instructure ended 2023 with a net leverage ratio of
0.7x Net Debt to Adjusted EBITDA. As of December 31, 2023, available borrowings under
Instructure's revolving credit facility, net of letters of credit
outstanding, were $121.8 million. The
Company generated cash flow from operations of $164.0 million for the twelve months ended
December 31, 2023 compared to
$140.3 million in the prior year
period, an increase of 16.9% year-over-year. Adjusted Unlevered
Free Cash Flow was $225.5 million for
the twelve months ended December 31,
2023 compared to $173.5
million in the prior year period, an increase of 29.9%
year-over-year.
First Quarter and Full Year 2024 Guidance
The following tables summarize first quarter and full year 2024
guidance.
|
|
First Quarter 2024
Guidance
|
(dollars in
millions)
|
|
Amount
|
|
Quarter-over-quarter
change
|
Revenue
|
|
$153.8 -
$154.8
|
|
19.4% -
20.1%
|
Non-GAAP operating
income*
|
|
$55.9 -
$56.9
|
|
17.8% -
19.9%
|
Adjusted
EBITDA*
|
|
$57.3 -
$58.3
|
|
18.1% -
20.2%
|
Non-GAAP net
income*
|
|
$20.0 -
$21.0
|
|
(28.3)% -
(24.7)%
|
|
|
|
|
|
|
|
Full Year 2024
Guidance
|
(dollars in
millions)
|
|
Amount
|
|
Year-over-year
change
|
Revenue
|
|
$655.0 -
$665.0
|
|
23.5% -
25.4%
|
Non-GAAP operating
income*
|
|
$260.5 -
$265.5
|
|
24.2% -
26.6%
|
Adjusted
EBITDA*
|
|
$266.5 -
$271.5
|
|
24.4% -
26.7%
|
Non-GAAP net
income*
|
|
$105.5 -
$110.5
|
|
(15.5)% -
(11.5)%
|
Adjusted Unlevered Free
Cash Flow*
|
|
$259.5 -
$264.5
|
|
15.1% -
17.3%
|
The Company's guidance ranges reflect expectations that existing
macroeconomic conditions and the current foreign currency
environment continue through 2024. These forward-looking statements
reflect the Company's expectations as of today's date. Actual
results may differ materially.
*Instructure is unable to provide guidance or a
reconciliation for forward-looking non-GAAP measures because
Instructure cannot provide a meaningful or accurate calculation or
estimation of certain reconciling items without unreasonable
effort. This is due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliation, including stock-based compensation and amortization
of acquisition-related intangibles. Thus, Instructure is unable to
present a quantitative reconciliation of non-GAAP guidance to GAAP
guidance because such information is not available.
Conference Call Information
The Company will hold a conference call to discuss the fourth
quarter and full year 2023 financial results today, February 20, 2024 at 3:00
PM Mountain Time (5:00 PM Eastern
Time).
Participants may access the conference call by dialing
1-888-330-2384 (U.S. and Canada)
or 1-240-789-2701 (International) and using conference code 1348899
approximately ten minutes before the start of the call. A live
audio webcast of the conference call will also be available on
Instructure's investor relations website at
https://ir.instructure.com under "Events & Presentations".
A replay will be available after the conclusion of the call on
Instructure's investor relations website under "Events &
Presentations" or by dialing 1-800-770-2030 (U.S. and Canada) or 1-647-362-9199 (International) and
using conference code 1348899. The telephone replay will be
available through Tuesday, February 27,
2024.
About Instructure
Instructure (NYSE: INST) is an education technology company
dedicated to elevating student success, amplifying the power of
teaching, and inspiring everyone to learn together. Today the
Instructure Learning Platform supports tens of millions of
educators and learners around the world. Learn more at
www.instructure.com.
Non-GAAP Financial Measures
Instructure has provided in this press release financial
information that has not been prepared in accordance with generally
accepted accounting principles in the
United States ("GAAP"). In addition to Instructure's results
determined in accordance with GAAP, Instructure believes the
following non-GAAP measures are useful in evaluating its operating
performance and liquidity. Instructure believes that non-GAAP
financial information, when taken collectively, may be helpful to
investors because it provides consistency and comparability with
past financial performance and assists in comparisons with other
companies, some of which use similar non-GAAP financial information
to supplement their GAAP results. The non-GAAP financial
information is presented for supplemental informational purposes
only, and should not be considered a substitute for financial
information presented in accordance with GAAP, and may be different
from similarly-titled non-GAAP measures used by other
companies.
A reconciliation of Instructure's historical non-GAAP financial
measures to the most directly comparable GAAP measures has been
provided in the financial statement tables included in this press
release, and investors are encouraged to review the
reconciliation.
ACR. We define ACR as the combined receipts of our
Company and companies that we have acquired allocated to the period
of service delivery. We calculate ACR as the sum of (i) revenue and
(ii) the impact of fair value adjustments to acquired unearned
revenue related to Thoma Bravo's
acquisition of Instructure (the "Take-Private Transaction") and the
Certica Holdings, LLC ("Certica"), Eesysoft Software International
B.V. (which was rebranded to "Impact by Instructure" or "Impact"
subsequent to acquisition), and Kimono LLC (which was rebranded to
"Elevate Data Sync" subsequent to acquisition) acquisitions where
we do not believe such adjustments are reflective of our ongoing
operations. Management uses this measure to evaluate the organic
growth of the business period over period, as if the Company had
operated as a single entity and excluding the impact of
acquisitions or adjustments due to purchase accounting. Effective
January 1, 2022, Instructure adopted
Accounting Standard Update ("ASU") No. 2021-08, Business
Combinations (Topic 805), which requires that an entity (acquirer)
recognize and measure contract assets and contract liabilities
acquired in a business combination in accordance with Revenue from
Contracts with Customers (Topic 606). As a result, GAAP revenue and
ACR have converged.
Non-GAAP Operating Income. We define non-GAAP operating
income as income/(loss) from operations excluding the impact of
stock-based compensation, transaction costs, sponsor costs, other
non-recurring costs, amortization of acquisition-related
intangibles, and the impact of fair value adjustments to acquired
unearned revenue relating to the Take-Private Transaction and the
Certica, Impact, and Elevate Data Sync acquisitions that we do not
believe are reflective of our ongoing operations. We believe
non-GAAP operating income is useful in evaluating our operating
performance compared to that of other companies in our industry, as
this metric generally eliminates the effects of certain items that
may vary for different companies for reasons unrelated to overall
operating performance. Although we exclude the amortization of
acquisition-related intangibles from the non-GAAP measure,
management believes it is important for investors to understand
that such intangible assets were recorded as part of purchase
accounting and contribute to revenue generation.
Non-GAAP Net Income. We define non-GAAP net income
as net loss excluding the impact of stock-based compensation,
amortization of acquisition-related intangibles, the impact of fair
value adjustments to acquired unearned revenue relating to the
Take-Private Transaction and the Certica, Impact, and Elevate Data
Sync acquisitions, transaction costs, sponsor costs, other
non-recurring costs, and effects of foreign currency transaction
(gains) and losses that we do not believe are reflective of our
ongoing operations. The tax effects of the adjustments are
calculated using the statutory tax rate, taking into consideration
the nature of the item and the relevant taxing jurisdiction. We
believe Non-GAAP net income is useful in evaluating our operating
performance compared to that of other companies in our industry, as
this metric generally eliminates the effects of certain items that
may vary for different companies for reasons unrelated to overall
operating performance. Although we exclude the amortization of
acquisition-related intangibles from the non-GAAP measure,
management believes it is important for investors to understand
that such intangible assets were recorded as part of purchase
accounting and contribute to revenue generation. Basic non-GAAP net
income per common share attributable to common stockholders is
computed by dividing non-GAAP net income attributable to common
stockholders by the weighted-average number of common shares
outstanding for the period. Diluted non-GAAP net income per common
share attributable to common stockholders is computed by giving
effect to all potentially dilutive common stock equivalents
outstanding for the period.
Adjusted EBITDA; Adjusted EBITDA Margin. EBITDA is
defined as earnings before debt-related costs, including interest
and loss on debt extinguishment, benefit for taxes, depreciation,
and amortization. We further adjust EBITDA to exclude certain items
of a significant or unusual nature, including stock-based
compensation, transaction costs, sponsor costs, other non-recurring
costs, effects of foreign currency transaction (gains) and losses,
amortization of acquisition-related intangibles, and the impact of
fair value adjustments to acquired unearned revenue relating to the
Take-Private Transaction and the Certica, Impact, and Elevate Data
Sync acquisitions. Although we exclude the amortization of
acquisition-related intangibles from this non-GAAP measure,
management believes that it is important for investors to
understand that such intangible assets were recorded as part of
purchase accounting and contribute to revenue generation. Adjusted
EBITDA Margin is defined as Adjusted EBITDA divided by ACR.
Free Cash Flow, Unlevered Free Cash Flow and Adjusted
Unlevered Free Cash Flow. We define free cash flow as net
cash provided by operating activities less purchases of property
and equipment and intangible assets, net of proceeds from disposals
of property and equipment. We define unlevered free cash flow as
free cash flow adjusted for cash paid for interest on outstanding
debt and cash settled stock-based compensation. We define adjusted
unlevered free cash flow as unlevered free cash flow adjusted for
transaction costs, sponsor costs, impaired leases, and other
non-recurring costs paid in cash. We believe free cash flow,
unlevered free cash flow and adjusted unlevered free cash flow
facilitate period-to-period comparisons of liquidity. We consider
free cash flow, unlevered free cash flow and adjusted unlevered
free cash flow to be important measures because they measure the
amount of cash we generate and reflect changes in working
capital.
Non-GAAP Cost of Revenue and Non-GAAP Operating Expenses.
We define non-GAAP cost of revenue and non-GAAP operating expenses
as GAAP cost of revenue and GAAP operating expenses, respectively,
excluding the impact of stock-based compensation, transaction
costs, sponsor costs, other non-recurring costs, and amortization
of acquisition-related intangibles that we do not believe are
reflective of our ongoing operations. Although we exclude the
amortization of acquisition-related intangibles from the non-GAAP
measures, management believes it is important for investors to
understand that such intangible assets were recorded as part of
purchase accounting and contribute to revenue generation.
Non-GAAP Gross Profit; Non-GAAP Gross Profit Margin. We
define non-GAAP gross profit as gross profit excluding the impact
of stock-based compensation, transaction costs, other non-recurring
costs, amortization of acquisition-related intangibles, and fair
value adjustments to deferred revenue in connection with purchase
accounting that we do not believe are reflective of our ongoing
operations. Although we exclude the amortization of
acquisition-related intangibles from the non-GAAP measure,
management believes it is important for investors to understand
that such intangible assets were recorded as part of purchase
accounting and contribute to revenue generation. Non-GAAP Gross
Profit Margin is defined as Non-GAAP gross profit divided by
ACR.
Net Debt. We define net debt as total outstanding
term debt, less cash, cash equivalents and restricted cash.
Management uses this supplemental non-GAAP measure to evaluate the
Company's leverage.
Forward-Looking Statements
This press release contains, and statements made during the
above referenced conference call will contain, "forward-looking"
statements, which are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, including
statements regarding the Company's financial guidance for the first
quarter of 2024 and for the full year ending December 31, 2024, the Company's growth, customer
demand and application adoption, the Company's research and
development efforts and future application releases, the Company's
business strategy and the Company's expectations regarding future
revenue, expenses, cash flows and net income or loss.
These statements are not guarantees of future performance, but
are based on management's expectations as of the date of this press
release and assumptions that are inherently subject to
uncertainties, risks and changes in circumstances that are
difficult to predict. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially
different from any future results, performance or achievements.
Important factors that could cause actual results to differ
materially from those expressed or implied by these forward-looking
statements include the following: risks associated with the
continued economic uncertainty, including persistent inflation,
labor shortages, high interest rates, foreign currency exchange
volatility, concerns of economic slowdown or recession, reduced
spending by customers and geopolitical instability; failure to
continue our recent growth rates; the effects of increased usage
of, or interruptions or performance problems associated with, our
learning platform; the impact on our business and prospects from
health pandemics and epidemics; our history of losses and
expectation that we will not be profitable for the foreseeable
future; or ability to acquire new customers and successfully retain
existing customers; failure of the markets for our applications to
develop at anticipated rates; failure to manage our growth
effectively; and changes in the spending policies or budget
priorities for government funding of Higher Education and K-12
institutions.
These and other important risk factors are described more fully
in the Company's most recent Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q and other documents filed
with the Securities and Exchange Commission and could cause actual
results to vary from expectations. All information provided in this
press release and in the conference call is as of the date hereof
and Instructure undertakes no duty to update this information
except as required by law.
INSTRUCTURE
HOLDINGS, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(in thousands,
except per share data)
|
|
|
December 31,
2023
|
|
|
December 31,
2022
|
|
|
Assets
|
|
(unaudited)
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
341,047
|
|
|
$
|
185,954
|
|
|
Accounts
receivable—net
|
|
|
67,193
|
|
|
|
71,428
|
|
|
Prepaid
expenses
|
|
|
12,082
|
|
|
|
11,120
|
|
|
Deferred
commissions
|
|
|
13,705
|
|
|
|
13,390
|
|
|
Other current
assets
|
|
|
4,797
|
|
|
|
3,144
|
|
|
Total current
assets
|
|
|
438,824
|
|
|
|
285,036
|
|
|
Property and equipment,
net
|
|
|
13,479
|
|
|
|
12,380
|
|
|
Right-of-use
assets
|
|
|
9,002
|
|
|
|
13,575
|
|
|
Goodwill
|
|
|
1,265,316
|
|
|
|
1,266,402
|
|
|
Intangible assets,
net
|
|
|
399,712
|
|
|
|
542,679
|
|
|
Noncurrent prepaid
expenses
|
|
|
4,182
|
|
|
|
871
|
|
|
Deferred commissions,
net of current portion
|
|
|
13,816
|
|
|
|
18,781
|
|
|
Deferred tax
assets
|
|
|
6,739
|
|
|
|
8,143
|
|
|
Other assets
|
|
|
6,908
|
|
|
|
5,622
|
|
|
Total
assets
|
|
$
|
2,157,978
|
|
|
$
|
2,153,489
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
23,589
|
|
|
$
|
18,792
|
|
|
Accrued
liabilities
|
|
|
23,760
|
|
|
|
28,483
|
|
|
Lease
liabilities
|
|
|
7,513
|
|
|
|
7,205
|
|
|
Long-term debt,
current
|
|
|
4,013
|
|
|
|
4,013
|
|
|
Deferred
revenue
|
|
|
291,784
|
|
|
|
275,564
|
|
|
Total current
liabilities
|
|
|
350,659
|
|
|
|
334,057
|
|
|
Long-term debt, net of
current portion
|
|
|
482,387
|
|
|
|
486,471
|
|
|
Deferred revenue, net
of current portion
|
|
|
10,876
|
|
|
|
13,816
|
|
|
Lease liabilities, net
of current portion
|
|
|
9,246
|
|
|
|
16,610
|
|
|
Deferred tax
liabilities
|
|
|
14,420
|
|
|
|
24,702
|
|
|
Other long-term
liabilities
|
|
|
4,898
|
|
|
|
1,706
|
|
|
Total
liabilities
|
|
|
872,486
|
|
|
|
877,362
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1,452
|
|
|
|
1,429
|
|
|
Additional paid-in
capital
|
|
|
1,619,020
|
|
|
|
1,575,600
|
|
|
Accumulated
deficit
|
|
|
(334,980)
|
|
|
|
(300,902)
|
|
|
Total stockholders'
equity
|
|
|
1,285,492
|
|
|
|
1,276,127
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
2,157,978
|
|
|
$
|
2,153,489
|
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
|
(in thousands,
except per share data)
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
125,357
|
|
|
$
|
114,537
|
|
|
$
|
485,516
|
|
|
$
|
430,661
|
|
Professional services
and other
|
|
|
10,019
|
|
|
|
10,189
|
|
|
|
44,694
|
|
|
|
44,533
|
|
Total
revenue
|
|
|
135,376
|
|
|
|
124,726
|
|
|
|
530,210
|
|
|
|
475,194
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
|
41,167
|
|
|
|
38,127
|
|
|
|
158,699
|
|
|
|
146,546
|
|
Professional services
and other
|
|
|
6,600
|
|
|
|
6,685
|
|
|
|
27,616
|
|
|
|
25,748
|
|
Total cost of
revenue
|
|
|
47,767
|
|
|
|
44,812
|
|
|
|
186,315
|
|
|
|
172,294
|
|
Gross profit
|
|
|
87,609
|
|
|
|
79,914
|
|
|
|
343,895
|
|
|
|
302,900
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
47,947
|
|
|
|
46,801
|
|
|
|
197,690
|
|
|
|
181,744
|
|
Research and
development
|
|
|
22,290
|
|
|
|
20,723
|
|
|
|
88,162
|
|
|
|
77,189
|
|
General and
administrative
|
|
|
17,148
|
|
|
|
16,170
|
|
|
|
61,261
|
|
|
|
60,447
|
|
Total operating
expenses
|
|
|
87,385
|
|
|
|
83,694
|
|
|
|
347,113
|
|
|
|
319,380
|
|
Income (loss) from
operations
|
|
|
224
|
|
|
|
(3,780)
|
|
|
|
(3,218)
|
|
|
|
(16,480)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
2,717
|
|
|
|
1,313
|
|
|
|
5,738
|
|
|
|
1,679
|
|
Interest
expense
|
|
|
(11,382)
|
|
|
|
(8,258)
|
|
|
|
(42,024)
|
|
|
|
(24,595)
|
|
Other income
(expense)
|
|
|
3,133
|
|
|
|
3,989
|
|
|
|
1,168
|
|
|
|
(2,978)
|
|
Total other income
(expense), net
|
|
|
(5,532)
|
|
|
|
(2,956)
|
|
|
|
(35,118)
|
|
|
|
(25,894)
|
|
Loss before income tax
benefit (expense)
|
|
|
(5,308)
|
|
|
|
(6,736)
|
|
|
|
(38,336)
|
|
|
|
(42,374)
|
|
Income tax benefit
(expense)
|
|
|
(459)
|
|
|
|
1,013
|
|
|
|
4,258
|
|
|
|
8,132
|
|
Net loss and
comprehensive loss
|
|
$
|
(5,767)
|
|
|
$
|
(5,723)
|
|
|
$
|
(34,078)
|
|
|
$
|
(34,242)
|
|
Net loss per common
share, basic and diluted
|
|
$
|
(0.04)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.24)
|
|
|
$
|
(0.24)
|
|
Weighted-average common
shares used in computing basic and diluted net
loss per common share
|
|
|
144,868
|
|
|
|
142,643
|
|
|
|
143,968
|
|
|
|
141,815
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(in
thousands)
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(5,767)
|
|
|
$
|
(5,723)
|
|
|
$
|
(34,078)
|
|
|
$
|
(34,242)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property and equipment
|
|
|
1,305
|
|
|
|
1,346
|
|
|
|
4,786
|
|
|
|
4,491
|
|
Amortization of
intangible assets
|
|
|
35,730
|
|
|
|
34,522
|
|
|
|
142,967
|
|
|
|
136,717
|
|
Amortization of
deferred financing costs
|
|
|
298
|
|
|
|
297
|
|
|
|
1,187
|
|
|
|
1,178
|
|
Stock-based
compensation
|
|
|
10,551
|
|
|
|
8,915
|
|
|
|
43,537
|
|
|
|
33,585
|
|
Deferred income
taxes
|
|
|
1
|
|
|
|
(158)
|
|
|
|
(7,792)
|
|
|
|
(10,222)
|
|
Other
|
|
|
(2,448)
|
|
|
|
(3,042)
|
|
|
|
658
|
|
|
|
3,669
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
25,250
|
|
|
|
1,903
|
|
|
|
2,653
|
|
|
|
(18,454)
|
|
Prepaid expenses and
other assets
|
|
|
6,698
|
|
|
|
16,881
|
|
|
|
(8,552)
|
|
|
|
5,940
|
|
Deferred
commissions
|
|
|
1,754
|
|
|
|
685
|
|
|
|
4,650
|
|
|
|
(648)
|
|
Right-of-use
assets
|
|
|
1,225
|
|
|
|
1,250
|
|
|
|
4,573
|
|
|
|
4,888
|
|
Accounts payable and
accrued liabilities
|
|
|
7,576
|
|
|
|
168
|
|
|
|
11
|
|
|
|
(2,227)
|
|
Deferred
revenue
|
|
|
(44,444)
|
|
|
|
(38,383)
|
|
|
|
13,280
|
|
|
|
24,238
|
|
Lease
liabilities
|
|
|
(1,686)
|
|
|
|
(1,474)
|
|
|
|
(7,056)
|
|
|
|
(6,817)
|
|
Other
liabilities
|
|
|
672
|
|
|
|
(184)
|
|
|
|
3,192
|
|
|
|
(1,825)
|
|
Net cash provided by
operating activities
|
|
|
36,715
|
|
|
|
17,003
|
|
|
|
164,016
|
|
|
|
140,271
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,232)
|
|
|
|
(1,342)
|
|
|
|
(5,940)
|
|
|
|
(6,321)
|
|
Proceeds from sale of
property and equipment
|
|
|
8
|
|
|
|
2
|
|
|
|
50
|
|
|
|
43
|
|
Business acquisitions,
net of cash acquired
|
|
|
—
|
|
|
|
(89,529)
|
|
|
|
—
|
|
|
|
(109,013)
|
|
Net cash used in
investing activities
|
|
|
(1,224)
|
|
|
|
(90,869)
|
|
|
|
(5,890)
|
|
|
|
(115,291)
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of common stock from employee equity plans
|
|
|
—
|
|
|
|
—
|
|
|
|
6,017
|
|
|
|
7,327
|
|
Shares repurchased for
tax withholdings on vesting of restricted stock units
|
|
|
(1,682)
|
|
|
|
(1,939)
|
|
|
|
(6,630)
|
|
|
|
(5,272)
|
|
Repayments of
long-term debt
|
|
|
(1,250)
|
|
|
|
(1,250)
|
|
|
|
(5,000)
|
|
|
|
(3,750)
|
|
Payments of financing
costs
|
|
|
—
|
|
|
|
(19)
|
|
|
|
(84)
|
|
|
|
(19)
|
|
Net cash used in
financing activities
|
|
|
(2,932)
|
|
|
|
(3,208)
|
|
|
|
(5,697)
|
|
|
|
(1,714)
|
|
Foreign currency
impacts on cash, cash equivalents and restricted cash
|
|
|
3,012
|
|
|
|
3,897
|
|
|
|
1,513
|
|
|
|
(2,153)
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
|
35,571
|
|
|
|
(73,177)
|
|
|
|
153,942
|
|
|
|
21,113
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
308,637
|
|
|
|
263,443
|
|
|
|
190,266
|
|
|
|
169,153
|
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
|
344,208
|
|
|
$
|
190,266
|
|
|
$
|
344,208
|
|
|
$
|
190,266
|
|
Supplemental cash
flow disclosure:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
taxes
|
|
$
|
98
|
|
|
$
|
68
|
|
|
$
|
2,755
|
|
|
$
|
3,102
|
|
Interest
paid
|
|
$
|
10,975
|
|
|
$
|
8,123
|
|
|
$
|
42,430
|
|
|
$
|
18,073
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
incurred but not yet paid
|
|
$
|
2
|
|
|
$
|
67
|
|
|
$
|
2
|
|
|
$
|
67
|
|
RECONCILIATIONS OF
GAAP MEASURES TO NON-GAAP MEASURES
|
|
|
|
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP ALLOCATED COMBINED RECEIPTS
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Revenue
|
|
|
|
|
|
|
$
|
135,376
|
|
|
$
|
124,726
|
|
|
$
|
530,210
|
|
|
$
|
475,194
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
|
|
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
|
868
|
|
Allocated combined
receipts
|
|
|
|
|
|
|
$
|
135,376
|
|
|
$
|
124,739
|
|
|
$
|
530,210
|
|
|
$
|
476,062
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING INCOME
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Income (loss) from
operations
|
|
$
|
224
|
|
|
$
|
(3,780)
|
|
|
$
|
(3,218)
|
|
|
$
|
(16,480)
|
|
Stock-based
compensation
|
|
|
10,575
|
|
|
|
10,856
|
|
|
|
44,196
|
|
|
|
39,779
|
|
Transaction
costs(1)
|
|
|
5,857
|
|
|
|
4,206
|
|
|
|
15,512
|
|
|
|
9,123
|
|
Sponsor
costs(2)
|
|
|
34
|
|
|
|
66
|
|
|
|
147
|
|
|
|
517
|
|
Other non-recurring
costs(3)
|
|
|
2,956
|
|
|
|
630
|
|
|
|
10,162
|
|
|
|
3,365
|
|
Amortization of
acquisition-related intangibles
|
|
|
35,731
|
|
|
|
34,520
|
|
|
|
142,965
|
|
|
|
136,710
|
|
Fair value adjustments
to deferred revenue in connection with
purchase accounting
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
|
868
|
|
Non-GAAP operating
income
|
|
$
|
55,377
|
|
|
$
|
46,511
|
|
|
$
|
209,764
|
|
|
$
|
173,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
|
0.2
|
%
|
|
|
(3.0)
|
%
|
|
|
(0.6)
|
%
|
|
|
(3.5)
|
%
|
Non-GAAP operating
margin
|
|
|
40.9
|
%
|
|
|
37.3
|
%
|
|
|
39.6
|
%
|
|
|
36.5
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP ADJUSTED EBITDA
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net loss
|
|
$
|
(5,767)
|
|
|
$
|
(5,723)
|
|
|
$
|
(34,078)
|
|
|
$
|
(34,242)
|
|
Interest on outstanding
debt
|
|
|
11,382
|
|
|
|
8,257
|
|
|
|
42,022
|
|
|
|
24,591
|
|
Income tax (benefit)
expense
|
|
|
459
|
|
|
|
(1,013)
|
|
|
|
(4,258)
|
|
|
|
(8,132)
|
|
Depreciation
|
|
|
1,305
|
|
|
|
1,346
|
|
|
|
4,786
|
|
|
|
4,491
|
|
Amortization
|
|
|
—
|
|
|
|
2
|
|
|
|
2
|
|
|
|
7
|
|
Stock-based
compensation
|
|
|
10,575
|
|
|
|
10,856
|
|
|
|
44,196
|
|
|
|
39,779
|
|
Transaction
costs(1)
|
|
|
5,857
|
|
|
|
4,206
|
|
|
|
15,512
|
|
|
|
9,123
|
|
Sponsor
costs(2)
|
|
|
34
|
|
|
|
66
|
|
|
|
147
|
|
|
|
517
|
|
Other non-recurring
costs(4)
|
|
|
2,956
|
|
|
|
630
|
|
|
|
10,269
|
|
|
|
3,365
|
|
Effects of foreign
currency transaction (gains) and losses
|
|
|
(3,343)
|
|
|
|
(4,536)
|
|
|
|
(1,671)
|
|
|
|
2,514
|
|
Amortization of
acquisition-related intangibles
|
|
|
35,731
|
|
|
|
34,520
|
|
|
|
142,965
|
|
|
|
136,710
|
|
Interest
income
|
|
|
(2,716)
|
|
|
|
—
|
|
|
|
(5,679)
|
|
|
|
—
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
|
868
|
|
Adjusted
EBITDA
|
|
$
|
56,473
|
|
|
$
|
48,624
|
|
|
$
|
214,213
|
|
|
$
|
179,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
margin
|
|
|
(4.3)
|
%
|
|
|
(4.6)
|
%
|
|
|
(6.4)
|
%
|
|
|
(7.2)
|
%
|
Adjusted EBITDA
margin
|
|
|
41.7
|
%
|
|
|
39.0
|
%
|
|
|
40.4
|
%
|
|
|
37.7
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
FREE CASH FLOW, UNLEVERED FREE CASH FLOW & ADJUSTED UNLEVERED
FREE CASH FLOW
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
36,715
|
|
|
$
|
17,003
|
|
|
$
|
164,016
|
|
|
$
|
140,271
|
|
Purchases of property
and equipment
|
|
|
(1,232)
|
|
|
|
(1,342)
|
|
|
|
(5,940)
|
|
|
|
(6,321)
|
|
Proceeds from disposals
of property and equipment
|
|
|
8
|
|
|
|
2
|
|
|
|
50
|
|
|
|
43
|
|
Free cash
flow
|
|
$
|
35,491
|
|
|
$
|
15,663
|
|
|
$
|
158,126
|
|
|
$
|
133,993
|
|
Cash paid for interest
on outstanding debt
|
|
|
10,975
|
|
|
|
8,123
|
|
|
|
42,430
|
|
|
|
18,073
|
|
Cash settled
stock-based compensation
|
|
|
24
|
|
|
|
1,941
|
|
|
|
662
|
|
|
|
6,194
|
|
Unlevered free cash
flow
|
|
$
|
46,490
|
|
|
$
|
25,727
|
|
|
$
|
201,218
|
|
|
$
|
158,260
|
|
Transaction
costs(1)
|
|
|
2,300
|
|
|
|
2,215
|
|
|
|
12,174
|
|
|
|
9,474
|
|
Sponsor
costs(2)
|
|
|
34
|
|
|
|
33
|
|
|
|
169
|
|
|
|
378
|
|
Impaired
leases
|
|
|
390
|
|
|
|
609
|
|
|
|
1,486
|
|
|
|
2,074
|
|
Other non-recurring
costs(5)
|
|
|
2,079
|
|
|
|
761
|
|
|
|
10,442
|
|
|
|
3,359
|
|
Adjusted unlevered free
cash flow
|
|
$
|
51,293
|
|
|
$
|
29,345
|
|
|
$
|
225,489
|
|
|
$
|
173,545
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP NET INCOME
|
|
(in thousands,
except per share data)
|
|
(unaudited)
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net loss
|
|
$
|
(5,767)
|
|
|
$
|
(5,723)
|
|
|
$
|
(34,078)
|
|
|
$
|
(34,242)
|
|
Stock-based
compensation
|
|
|
10,575
|
|
|
|
10,856
|
|
|
|
44,196
|
|
|
|
39,779
|
|
Amortization of
acquisition-related intangibles
|
|
|
35,731
|
|
|
|
34,520
|
|
|
|
142,965
|
|
|
|
136,710
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
|
868
|
|
Transaction
costs(1)
|
|
|
5,857
|
|
|
|
4,206
|
|
|
|
15,512
|
|
|
|
9,123
|
|
Sponsor
costs(2)
|
|
|
34
|
|
|
|
66
|
|
|
|
147
|
|
|
|
517
|
|
Other non-recurring
costs(4)
|
|
|
2,956
|
|
|
|
630
|
|
|
|
10,269
|
|
|
|
3,365
|
|
Effects of foreign
currency transaction (gains) and losses
|
|
|
(3,343)
|
|
|
|
(4,536)
|
|
|
|
(1,671)
|
|
|
|
2,514
|
|
Tax effects of
adjustments(6)
|
|
|
(12,811)
|
|
|
|
(11,652)
|
|
|
|
(52,504)
|
|
|
|
(47,989)
|
|
Non-GAAP net
income
|
|
$
|
33,232
|
|
|
$
|
28,380
|
|
|
$
|
124,836
|
|
|
$
|
110,645
|
|
Non-GAAP net income per
common share, basic
|
|
$
|
0.23
|
|
|
$
|
0.20
|
|
|
$
|
0.87
|
|
|
$
|
0.78
|
|
Non-GAAP net income per
common share, diluted
|
|
$
|
0.23
|
|
|
$
|
0.20
|
|
|
$
|
0.86
|
|
|
$
|
0.77
|
|
Weighted average common
shares used in computing basic Non-GAAP
net income per common share
|
|
|
144,868
|
|
|
|
142,643
|
|
|
|
143,968
|
|
|
|
141,815
|
|
Weighted average common
shares used in computing diluted Non-
GAAP net income per common share
|
|
|
146,176
|
|
|
|
144,261
|
|
|
|
145,616
|
|
|
|
143,440
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP GROSS PROFIT
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Gross profit
|
|
$
|
87,609
|
|
|
$
|
79,914
|
|
|
$
|
343,895
|
|
|
$
|
302,900
|
|
Stock-based
compensation
|
|
|
1,042
|
|
|
|
833
|
|
|
|
3,993
|
|
|
|
3,090
|
|
Transaction
costs(1)
|
|
|
132
|
|
|
|
—
|
|
|
|
1,143
|
|
|
|
226
|
|
Other non-recurring
costs(7)
|
|
|
635
|
|
|
|
5
|
|
|
|
1,909
|
|
|
|
69
|
|
Amortization of
acquisition-related intangibles
|
|
|
16,265
|
|
|
|
15,952
|
|
|
|
64,868
|
|
|
|
63,386
|
|
Fair value adjustments
to deferred revenue in connection with
purchase accounting
|
|
|
—
|
|
|
|
13
|
|
|
|
—
|
|
|
|
868
|
|
Non-GAAP gross
profit
|
|
$
|
105,683
|
|
|
$
|
96,717
|
|
|
$
|
415,808
|
|
|
$
|
370,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
|
64.7
|
%
|
|
|
64.1
|
%
|
|
|
64.9
|
%
|
|
|
63.7
|
%
|
Non-GAAP gross
margin
|
|
|
78.1
|
%
|
|
|
77.5
|
%
|
|
|
78.4
|
%
|
|
|
77.8
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NET DEBT
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2023
|
|
|
December 31,
2022
|
|
Long-term principal,
current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
Long-term principal,
net of current portion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
486,250
|
|
|
|
491,250
|
|
Cash, cash equivalents
and restricted cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(344,208)
|
|
|
|
(190,266)
|
|
Net debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
147,042
|
|
|
$
|
305,984
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Three Months Ended
December 31, 2023
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Other non-
recurring costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
41,167
|
|
|
$
|
(463)
|
|
|
$
|
(132)
|
|
|
$
|
(497)
|
|
|
$
|
(16,265)
|
|
|
$
|
23,810
|
|
Professional services
and other
|
|
|
6,600
|
|
|
|
(579)
|
|
|
|
—
|
|
|
|
(138)
|
|
|
|
—
|
|
|
|
5,883
|
|
Total cost of
revenue
|
|
$
|
47,767
|
|
|
$
|
(1,042)
|
|
|
$
|
(132)
|
|
|
$
|
(635)
|
|
|
$
|
(16,265)
|
|
|
$
|
29,693
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Three Months Ended
December 31, 2022
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Other non-
recurring costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
38,127
|
|
|
$
|
(383)
|
|
|
$
|
—
|
|
|
$
|
(5)
|
|
|
$
|
(15,952)
|
|
|
$
|
21,787
|
|
Professional services
and other
|
|
|
6,685
|
|
|
|
(450)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,235
|
|
Total cost of
revenue
|
|
$
|
44,812
|
|
|
$
|
(833)
|
|
|
$
|
—
|
|
|
$
|
(5)
|
|
|
$
|
(15,952)
|
|
|
$
|
28,022
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Year Ended December
31, 2023
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Other non-
recurring costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
158,699
|
|
|
$
|
(1,775)
|
|
|
$
|
(1,116)
|
|
|
$
|
(1,563)
|
|
|
$
|
(64,868)
|
|
|
$
|
89,377
|
|
Professional services
and other
|
|
|
27,616
|
|
|
|
(2,218)
|
|
|
|
(27)
|
|
|
|
(346)
|
|
|
|
—
|
|
|
|
25,025
|
|
Total cost of
revenue
|
|
$
|
186,315
|
|
|
$
|
(3,993)
|
|
|
$
|
(1,143)
|
|
|
$
|
(1,909)
|
|
|
$
|
(64,868)
|
|
|
$
|
114,402
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Year Ended December
31, 2022
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Other non-
recurring costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
146,546
|
|
|
$
|
(1,348)
|
|
|
$
|
(135)
|
|
|
$
|
(33)
|
|
|
$
|
(63,386)
|
|
|
$
|
81,644
|
|
Professional services
and other
|
|
|
25,748
|
|
|
|
(1,742)
|
|
|
|
(91)
|
|
|
|
(36)
|
|
|
|
—
|
|
|
|
23,879
|
|
Total cost of
revenue
|
|
$
|
172,294
|
|
|
$
|
(3,090)
|
|
|
$
|
(226)
|
|
|
$
|
(69)
|
|
|
$
|
(63,386)
|
|
|
$
|
105,523
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Three Months Ended
December 31, 2023
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
costs
|
|
|
Sponsor
costs
|
|
|
Other
non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-
GAAP
|
|
|
GAAP %
of
revenue
|
|
|
Non-
GAAP %
of
Revenue
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
47,947
|
|
|
$
|
(2,829)
|
|
|
$
|
(170)
|
|
|
$
|
—
|
|
|
$
|
(835)
|
|
|
$
|
(19,462)
|
|
|
$
|
24,651
|
|
|
|
35.4
|
%
|
|
|
18.2
|
%
|
Research and
development
|
|
|
22,290
|
|
|
|
(3,887)
|
|
|
|
(1,502)
|
|
|
|
—
|
|
|
|
(268)
|
|
|
|
(4)
|
|
|
|
16,629
|
|
|
|
16.5
|
%
|
|
|
12.3
|
%
|
General and
administrative
|
|
|
17,148
|
|
|
|
(2,817)
|
|
|
|
(4,053)
|
|
|
|
(34)
|
|
|
|
(1,218)
|
|
|
|
—
|
|
|
|
9,026
|
|
|
|
12.7
|
%
|
|
|
6.7
|
%
|
Total operating
expenses
|
|
$
|
87,385
|
|
|
$
|
(9,533)
|
|
|
$
|
(5,725)
|
|
|
$
|
(34)
|
|
|
$
|
(2,321)
|
|
|
$
|
(19,466)
|
|
|
$
|
50,306
|
|
|
|
64.6
|
%
|
|
|
37.2
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Three Months Ended
December 31, 2022
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
costs
|
|
|
Sponsor
costs
|
|
|
Other
non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-
GAAP
|
|
|
GAAP %
of
revenue
|
|
|
Non-
GAAP %
of
Revenue
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
46,801
|
|
|
$
|
(2,888)
|
|
|
$
|
(1,129)
|
|
|
$
|
—
|
|
|
$
|
(76)
|
|
|
$
|
(18,568)
|
|
|
$
|
24,140
|
|
|
|
37.5
|
%
|
|
|
19.4
|
%
|
Research and
development
|
|
|
20,723
|
|
|
|
(3,206)
|
|
|
|
(1,170)
|
|
|
|
—
|
|
|
|
(9)
|
|
|
|
—
|
|
|
|
16,338
|
|
|
|
16.6
|
%
|
|
|
13.1
|
%
|
General and
administrative
|
|
|
16,170
|
|
|
|
(3,929)
|
|
|
|
(1,911)
|
|
|
|
(66)
|
|
|
|
(536)
|
|
|
|
—
|
|
|
|
9,728
|
|
|
|
13.0
|
%
|
|
|
7.8
|
%
|
Total operating
expenses
|
|
$
|
83,694
|
|
|
$
|
(10,023)
|
|
|
$
|
(4,210)
|
|
|
$
|
(66)
|
|
|
$
|
(621)
|
|
|
$
|
(18,568)
|
|
|
$
|
50,206
|
|
|
|
67.1
|
%
|
|
|
40.3
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Year Ended December,
2023
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
costs
|
|
|
Sponsor
costs
|
|
|
Other
non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-
GAAP
|
|
|
GAAP %
of
revenue
|
|
|
Non-
GAAP %
of
Revenue
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
197,690
|
|
|
$
|
(11,971)
|
|
|
$
|
(2,119)
|
|
|
$
|
—
|
|
|
$
|
(2,646)
|
|
|
$
|
(78,080)
|
|
|
$
|
102,874
|
|
|
|
37.3
|
%
|
|
|
19.4
|
%
|
Research and
development
|
|
|
88,162
|
|
|
|
(14,333)
|
|
|
|
(5,511)
|
|
|
|
—
|
|
|
|
(2,986)
|
|
|
|
(17)
|
|
|
|
65,315
|
|
|
|
16.6
|
%
|
|
|
12.3
|
%
|
General and
administrative
|
|
|
61,261
|
|
|
|
(13,899)
|
|
|
|
(6,739)
|
|
|
|
(147)
|
|
|
|
(2,621)
|
|
|
|
—
|
|
|
|
37,855
|
|
|
|
11.6
|
%
|
|
|
7.1
|
%
|
Total operating
expenses
|
|
$
|
347,113
|
|
|
$
|
(40,203)
|
|
|
$
|
(14,369)
|
|
|
$
|
(147)
|
|
|
$
|
(8,253)
|
|
|
$
|
(78,097)
|
|
|
$
|
206,044
|
|
|
|
65.5
|
%
|
|
|
38.8
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Year Ended December,
2022
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
costs
|
|
|
Sponsor
costs
|
|
|
Other
non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-
GAAP
|
|
|
GAAP %
of
revenue
|
|
|
Non-
GAAP %
of
Revenue
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
181,744
|
|
|
$
|
(11,050)
|
|
|
$
|
(1,302)
|
|
|
$
|
—
|
|
|
$
|
(705)
|
|
|
$
|
(73,324)
|
|
|
$
|
95,363
|
|
|
|
38.2
|
%
|
|
|
20.0
|
%
|
Research and
development
|
|
|
77,189
|
|
|
|
(11,467)
|
|
|
|
(3,025)
|
|
|
|
—
|
|
|
|
(929)
|
|
|
|
—
|
|
|
|
61,768
|
|
|
|
16.2
|
%
|
|
|
13.0
|
%
|
General and
administrative
|
|
|
60,447
|
|
|
|
(14,172)
|
|
|
|
(4,568)
|
|
|
|
(518)
|
|
|
|
(1,663)
|
|
|
|
—
|
|
|
|
39,526
|
|
|
|
12.7
|
%
|
|
|
8.3
|
%
|
Total operating
expenses
|
|
$
|
319,380
|
|
|
$
|
(36,689)
|
|
|
$
|
(8,895)
|
|
|
$
|
(518)
|
|
|
$
|
(3,297)
|
|
|
$
|
(73,324)
|
|
|
$
|
196,657
|
|
|
|
67.1
|
%
|
|
|
41.3
|
%
|
FOOTNOTES
|
|
(1) Represents expenses incurred with
third parties as part of the Company's merger and acquisition
activity, including due diligence, closing and post-closing
integration activities.
|
|
(2) Represents expenses incurred for
services provided by Thoma Bravo and their affiliates.
|
|
(3) Includes
other non-recurring costs as follows (in thousands):
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Contract modification
fees
|
|
|
479
|
|
|
|
—
|
|
|
|
1,507
|
|
|
|
230
|
|
Employee
severance
|
|
|
881
|
|
|
|
195
|
|
|
|
3,469
|
|
|
|
744
|
|
Workforce realignment
costs
|
|
|
1,351
|
|
|
|
267
|
|
|
|
3,521
|
|
|
|
1,388
|
|
Other insignificant
non-recurring costs
|
|
|
245
|
|
|
|
168
|
|
|
|
1,665
|
|
|
|
1,003
|
|
Total other
non-recurring costs
|
|
$
|
2,956
|
|
|
$
|
630
|
|
|
$
|
10,162
|
|
|
$
|
3,365
|
|
|
|
(4) Includes
other non-recurring costs as follows (in thousands):
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Loss on exit of leased
properties
|
|
|
—
|
|
|
|
—
|
|
|
|
107
|
|
|
|
—
|
|
Contract modification
fees
|
|
|
479
|
|
|
|
—
|
|
|
|
1,507
|
|
|
|
230
|
|
Employee
severance
|
|
|
881
|
|
|
|
195
|
|
|
|
3,469
|
|
|
|
744
|
|
Workforce realignment
costs
|
|
|
1,351
|
|
|
|
267
|
|
|
|
3,521
|
|
|
|
1,388
|
|
Other insignificant
non-recurring costs
|
|
|
245
|
|
|
|
168
|
|
|
|
1,665
|
|
|
|
1,003
|
|
Total other
non-recurring costs
|
|
$
|
2,956
|
|
|
$
|
630
|
|
|
$
|
10,269
|
|
|
$
|
3,365
|
|
|
|
(5) Includes
other non-recurring costs paid in cash as follows (in
thousands):
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Employee
severance
|
|
$
|
626
|
|
|
$
|
234
|
|
|
$
|
3,044
|
|
|
$
|
744
|
|
Workforce realignment
costs
|
|
|
1,152
|
|
|
|
344
|
|
|
|
3,245
|
|
|
|
980
|
|
Contract modification
fees
|
|
|
—
|
|
|
|
—
|
|
|
|
2,613
|
|
|
|
186
|
|
Other insignificant
non-recurring costs
|
|
|
301
|
|
|
|
183
|
|
|
|
1,540
|
|
|
|
1,449
|
|
Total other
non-recurring costs paid in cash
|
|
$
|
2,079
|
|
|
$
|
761
|
|
|
$
|
10,442
|
|
|
$
|
3,359
|
|
|
|
(6) During
the fourth quarter of 2022, we revised the methodology for
calculating Non-GAAP Net Income. The table above includes the tax
effects of the adjustments calculated by using the statutory tax
rate, taking into consideration the nature of the item and the
relevant taxing jurisdiction.
|
|
|
|
(7) Includes
other non-recurring costs as follows (in thousands):
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Contract modification
fees
|
|
|
480
|
|
|
|
—
|
|
|
|
1,508
|
|
|
|
—
|
|
Employee
severance
|
|
|
27
|
|
|
|
5
|
|
|
|
261
|
|
|
|
65
|
|
Workforce realignment
costs
|
|
|
19
|
|
|
|
—
|
|
|
|
31
|
|
|
|
—
|
|
Other insignificant
non-recurring costs
|
|
|
109
|
|
|
|
—
|
|
|
|
109
|
|
|
|
4
|
|
Total other
non-recurring costs
|
|
$
|
635
|
|
|
$
|
5
|
|
|
$
|
1,909
|
|
|
$
|
69
|
|
For More Information:
Media Relations:
Brian
Watkins
Corporate Communications
Instructure
(801) 610-9722
brian.watkins@instructure.com
Investor Relations:
April
Scee
Managing Director
ICR, Inc.
(917) 497-8992
april.scee@icrinc.com
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SOURCE Instructure Holdings, Inc.