Total Revenue Grows 20.7% Year-over-Year to
$155.5 Million
GAAP Net Loss Margin Decreases 440 Basis
Points Year-over-Year to (13.6)%
Adjusted EBITDA Margin Expands 430 Basis
Points Year-over-Year to 41.8%
SALT
LAKE CITY, May 8, 2024 /PRNewswire/ -- Instructure
Holdings, Inc. (Instructure) (NYSE: INST) today announced financial
results for the first quarter ended March
31, 2024.
"Our first quarter results exceeded all guided metrics and
demonstrate the durability, operational scale, and breadth of the
Instructure platform," said Steve
Daly, Instructure CEO. "I couldn't be more pleased with how
our team is working to deliver a best-in-class experience to
educators, students, and partners as we build momentum bringing
Parchment into the Instructure ecosystem."
First Quarter 2024 Financial Highlights:
(All
results compared to prior-year period unless otherwise noted).
Given the recent completion of the acquisition of Parchment,
Instructure is introducing new non-GAAP financial measures. See
"Non-GAAP Financial Measures" for more information.
- Revenue of $155.5 million, an
increase of 20.7%, and Organic Constant Currency Revenue Growth* of
6.8%
- Subscription and Support Revenue of $144.7 million, an increase of 22.1%, and Organic
Constant Currency Subscription and Support Revenue Growth* of
7.6%
- Net loss of $21.1 million, an
increase of $9.3 million, and Net
Loss Margin of (13.6%), primarily driven by higher interest expense
from the acquisition of Parchment
- Adjusted EBITDA* of $64.9
million, an increase of $16.6
million, and Adjusted EBITDA Margin* of 41.8%
- Cash flow from operations of negative $92.6 million and Adjusted Unlevered Free Cash
Flow* of negative $65.3 million
Updated Second Quarter and Full Year 2024 Guidance:
- Second quarter 2024 guidance ranges for Revenue of $166.5 million to $167.5
million, Non-GAAP Operating Income* of $66.0 million to $67.0
million, Adjusted EBITDA* of $67.5
million to $68.5 million, and
Non-GAAP Net Income* of $28.0 million
to $29.0 million
- Full year 2024 guidance ranges for Revenue of $656.5 million to $666.5
million, Non-GAAP Operating Income* of $265.0 million to $268.0
million, Adjusted EBITDA* of $271.0
million to $274.0 million,
Non-GAAP Net Income* of $123.0
million to $127.0 million, and
Adjusted Unlevered Free Cash Flow* of $262.0
million to $265.0 million
*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 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 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.
Key Financials:
(Dollars in millions)
|
|
Three months ended
March 31,
|
|
|
|
|
|
|
2024
|
|
|
2023
|
|
|
Year-over-Year (% or bps)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
155.5
|
|
|
$
|
128.8
|
|
|
20.7
|
%
|
Loss from
Operations
|
|
$
|
(6.1)
|
|
|
$
|
(5.9)
|
|
|
2.8
|
%
|
Non-GAAP Operating
Income*
|
|
$
|
63.5
|
|
|
$
|
47.2
|
|
|
34.6
|
%
|
GAAP Net
Loss
|
|
$
|
(21.1)
|
|
|
$
|
(11.9)
|
|
|
78.2
|
%
|
GAAP Net Loss
Margin
|
|
|
(13.6)
|
%
|
|
|
(9.2)
|
%
|
|
-440 bps
|
|
Adjusted
EBITDA*
|
|
$
|
64.9
|
|
|
$
|
48.3
|
|
|
34.6
|
%
|
Adjusted EBITDA
Margin*
|
|
|
41.8
|
%
|
|
|
37.5
|
%
|
|
430 bps
|
|
Cash Flow from
Operations
|
|
$
|
(92.6)
|
|
|
$
|
(80.9)
|
|
|
(14.4)
|
%
|
Adjusted Unlevered Free
Cash Flow*
|
|
$
|
(65.3)
|
|
|
$
|
(63.4)
|
|
|
(3.0)
|
%
|
Remaining Performance
Obligations ("RPO")
|
|
$
|
820.4
|
|
|
$
|
703.7
|
|
|
16.6
|
%
|
|
*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.
|
Balance Sheet and Cash Flow
As of March 31,
2024, cash, cash equivalents, restricted cash, and funds
held on behalf of customers were $89.3
million and total debt was $1,173.3
million; compared to cash, cash equivalents, and restricted
cash of $344.2 million and total debt
of $491.3 million as of December 31, 2023. The decrease in cash, cash
equivalents, restricted cash, and funds held on behalf of customers
and increase in debt since December 31,
2023, is primarily driven by cash spend and debt incurred in
connection with the Parchment acquisition. As of March 31, 2024, Instructure's total leverage
ratio is 5.1x (which represents Total Debt to trailing twelve month
Adjusted EBITDA) and net leverage ratio is 4.7x (which represents
Net Debt to trailing twelve month Adjusted EBITDA). This
calculation includes twelve months of historical Instructure
Adjusted EBITDA and two months of Parchment contribution to
Adjusted EBITDA. We are on track for a year-end net leverage ratio
of 3.4x. As of March 31, 2024,
available borrowings under Instructure's revolving credit facility
were $125.0 million. Net cash used in
operating activities was $92.6
million for the three months ended March 31, 2024, compared to $80.9 million used in the prior year period.
Adjusted Unlevered Free Cash Flow was negative $65.3 million for the three months ended
March 31, 2024, compared to negative
$63.4 million in the prior year
period.
Second Quarter and Full Year 2024
Guidance
The following tables summarize second quarter and
full year 2024 guidance.
|
|
Second Quarter 2024 Guidance
|
(dollars in
millions)
|
|
Amount
|
|
Year-over-Year
change
|
Revenue
|
|
$166.5 -
$167.5
|
|
27.0% -
27.8%
|
Non-GAAP operating
income*
|
|
$66.0 -
$67.0
|
|
31.6% -
33.6%
|
Adjusted
EBITDA*
|
|
$67.5 -
$68.5
|
|
31.7% -
33.6%
|
Non-GAAP net
income*
|
|
$28.0 -
$29.0
|
|
0.1% -
3.7%
|
|
|
|
|
|
|
|
Full Year 2024 Guidance
|
(dollars in
millions)
|
|
Amount
|
|
Year-over-Year
change
|
Revenue
|
|
$656.5 -
$666.5
|
|
23.8% -
25.7%
|
Non-GAAP operating
income*
|
|
$265.0-
$268.0
|
|
26.3% -
27.8%
|
Adjusted
EBITDA*
|
|
$271.0 -
$274.0
|
|
26.5% -
27.9%
|
Non-GAAP net
income*
|
|
$123.0 -
$127.0
|
|
(1.5)% -
1.7%
|
Adjusted Unlevered Free
Cash Flow*
|
|
$262.0 -
$265.0
|
|
16.2% -
17.5%
|
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.
*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 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 first
quarter 2024 financial results today, May 8,
2024, at 3:00 PM Mountain Time
(5:00 PM Eastern Time).
Participants may access the conference call by dialing
1-888-596-4144 (U.S. and Canada)
or 1-646-968-2525 (International) and using conference code 6925245
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 1-609-800-9909 (International) and
using conference code 6925245. The telephone replay will be
available through Wednesday, May 15,
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.
Given the recent acquisition of Parchment, Instructure is
introducing Organic Constant Currency Revenue Growth and Organic
Constant Currency Subscription and Support Revenue Growth, which
are non-GAAP financial measures that Instructure believes will
assist investors comparing growth from period to period without the
impact of past acquisitions or the impact of foreign currency
exchange rates. Instructure is also introducing Subscription and
Support non-GAAP Gross Profit and Subscription and Support non-GAAP
Gross Margin to show the impacts of certain non-recurring items on
subscription and support revenue. In addition, Instructure is
updating the grouping of the presentation of the adjustments to
Non-GAAP Operating Income, Adjusted EBITDA, Non-GAAP Net Income,
Adjusted Unlevered Free Cash Flow, Non-GAAP Cost of Revenue,
Non-GAAP Operating Expenses, and Non-GAAP Gross Profit to more
closely conform to the Company's strategies and initiatives. These
measures are not being recasted.
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.
Non-GAAP Operating Income; Non-GAAP Operating Income
Margin. We define non-GAAP operating income as loss from
operations excluding the impact of stock-based compensation,
transaction costs, globalization costs, restructuring costs,
technology modernization costs, other non-recurring costs, and
amortization of acquisition-related intangibles. 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 operating
income margin is defined as non-GAAP operating income divided by
revenue.
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, globalization costs, restructuring
costs, technology modernization costs, other non-recurring costs,
effects of foreign currency transaction (gains) and losses, and
amortization of acquisition-related intangibles. 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 revenue.
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, transaction costs,
globalization costs, restructuring costs, technology modernization
costs, other non-recurring costs, effects of foreign currency
transaction (gains) and losses that we do not believe are
reflective of our ongoing operations, and loss on extinguishment of
debt. 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 is computed by dividing non-GAAP net income
by the weighted-average number of common shares outstanding for the
period. Diluted non-GAAP net income per common share is computed by
giving effect to all potentially dilutive common stock equivalents
outstanding for the period.
Free Cash Flow, Unlevered Free Cash Flow and Adjusted
Unlevered Free Cash Flow. We define free cash flow as net cash
used in 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, globalization costs, restructuring costs,
technology modernization costs, 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, globalization costs, restructuring costs, technology
modernization 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, globalization
costs, restructuring costs, technology modernization costs, and
amortization of acquisition-related intangibles. Non-GAAP Gross
Profit Margin is defined as Non-GAAP gross profit divided by
revenue.
Subscription and Support Non-GAAP Gross Profit; Subscription
and Support Non-GAAP Gross Profit Margin. We define
subscription and support Non-GAAP gross profit as subscription and
support gross profit excluding the impact of stock-based
compensation, transaction costs, globalization costs, restructuring
costs, technology modernization costs, and amortization of
acquisition-related intangibles. Subscription and support non-GAAP
gross profit margin is defined as subscription and support non-GAAP
gross profit divided by subscription and support revenue.
Net Debt; Net Leverage Ratio.
We define net debt as total outstanding term debt, less cash,
cash equivalents, restricted cash, and funds held on behalf of
customers. Management uses this supplemental non-GAAP measure to
evaluate the Company's leverage. Net leverage ratio is computed by
dividing net debt by adjusted EBITDA.
Organic Constant Currency Revenue Growth. We define
organic constant currency revenue growth as revenue growth
excluding the impact of revenue from the acquisitions completed
within each respective period and the impacts of foreign currency
exchange rates by converting the current period's revenue in local
currency to U.S. dollars using foreign currency exchange rates for
the same period of the prior year.
Organic Constant Currency Subscription and Support Revenue
Growth. We define organic constant currency subscription and
support revenue growth as subscription and support revenue growth
excluding the impact of subscription and support revenue from the
acquisitions completed within each respective period and the
impacts of foreign currency exchange rates by converting the
current period's revenue in local currency to U.S. dollars using
foreign currency exchange rates for the same period of the prior
year.
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
second 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, statements about artificial intelligence 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)
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
Assets
|
|
(unaudited)
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
83,015
|
|
|
$
|
341,047
|
|
|
Funds held on behalf
of customers
|
|
|
5,286
|
|
|
|
—
|
|
|
Accounts
receivable—net
|
|
|
52,273
|
|
|
|
67,193
|
|
|
Prepaid
expenses
|
|
|
68,592
|
|
|
|
12,082
|
|
|
Deferred
commissions
|
|
|
12,764
|
|
|
|
13,705
|
|
|
Other current
assets
|
|
|
4,207
|
|
|
|
4,797
|
|
|
Total current
assets
|
|
|
226,137
|
|
|
|
438,824
|
|
|
Property and equipment,
net
|
|
|
14,084
|
|
|
|
13,479
|
|
|
Right-of-use
assets
|
|
|
10,021
|
|
|
|
9,002
|
|
|
Goodwill
|
|
|
1,858,136
|
|
|
|
1,265,316
|
|
|
Intangible assets,
net
|
|
|
654,686
|
|
|
|
399,712
|
|
|
Noncurrent prepaid
expenses
|
|
|
3,241
|
|
|
|
4,182
|
|
|
Deferred commissions,
net of current portion
|
|
|
12,865
|
|
|
|
13,816
|
|
|
Deferred tax
assets
|
|
|
6,842
|
|
|
|
6,739
|
|
|
Other assets
|
|
|
5,467
|
|
|
|
6,908
|
|
|
Total assets
|
|
$
|
2,791,479
|
|
|
$
|
2,157,978
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
12,773
|
|
|
$
|
23,589
|
|
|
Customer fund
deposits
|
|
|
5,286
|
|
|
|
—
|
|
|
Accrued
liabilities
|
|
|
33,576
|
|
|
|
23,760
|
|
|
Lease
liabilities
|
|
|
6,837
|
|
|
|
7,513
|
|
|
Long-term debt,
current
|
|
|
6,615
|
|
|
|
4,013
|
|
|
Deferred
revenue
|
|
|
223,175
|
|
|
|
291,784
|
|
|
Total current
liabilities
|
|
|
288,262
|
|
|
|
350,659
|
|
|
Long-term debt, net of
current portion
|
|
|
1,142,090
|
|
|
|
482,387
|
|
|
Deferred revenue, net
of current portion
|
|
|
11,825
|
|
|
|
10,876
|
|
|
Lease liabilities, net
of current portion
|
|
|
11,795
|
|
|
|
9,246
|
|
|
Deferred tax
liabilities
|
|
|
53,246
|
|
|
|
14,420
|
|
|
Other long-term
liabilities
|
|
|
5,686
|
|
|
|
4,898
|
|
|
Total liabilities
|
|
|
1,512,904
|
|
|
|
872,486
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1,459
|
|
|
|
1,452
|
|
|
Additional paid-in
capital
|
|
|
1,633,221
|
|
|
|
1,619,020
|
|
|
Accumulated
deficit
|
|
|
(356,105)
|
|
|
|
(334,980)
|
|
|
Total stockholders'
equity
|
|
|
1,278,575
|
|
|
|
1,285,492
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
2,791,479
|
|
|
$
|
2,157,978
|
|
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
|
|
(in thousands, except per share
data)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Revenue:
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
144,657
|
|
|
$
|
118,480
|
|
Professional services
and other
|
|
|
10,798
|
|
|
|
10,363
|
|
Total
revenue
|
|
|
155,455
|
|
|
|
128,843
|
|
Cost of
revenue:
|
|
|
|
|
|
|
Subscription and
support
|
|
|
46,312
|
|
|
|
38,810
|
|
Professional services
and other
|
|
|
8,041
|
|
|
|
7,022
|
|
Total cost of
revenue
|
|
|
54,353
|
|
|
|
45,832
|
|
Gross profit
|
|
|
101,102
|
|
|
|
83,011
|
|
Operating
expenses:
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
59,256
|
|
|
|
50,850
|
|
Research and
development
|
|
|
27,536
|
|
|
|
23,702
|
|
General and
administrative
|
|
|
20,390
|
|
|
|
14,373
|
|
Total operating
expenses
|
|
|
107,182
|
|
|
|
88,925
|
|
Loss from
operations
|
|
|
(6,080)
|
|
|
|
(5,914)
|
|
Other income
(expense):
|
|
|
|
|
|
|
Interest
income
|
|
|
2,508
|
|
|
|
1,341
|
|
Interest
expense
|
|
|
(22,596)
|
|
|
|
(9,485)
|
|
Other income
(expense)
|
|
|
(1,835)
|
|
|
|
76
|
|
Loss on extinguishment
of debt
|
|
|
(189)
|
|
|
|
—
|
|
Total other income
(expense), net
|
|
|
(22,112)
|
|
|
|
(8,068)
|
|
Loss before income tax
benefit
|
|
|
(28,192)
|
|
|
|
(13,982)
|
|
Income tax
benefit
|
|
|
7,067
|
|
|
|
2,125
|
|
Net loss and
comprehensive loss
|
|
$
|
(21,125)
|
|
|
$
|
(11,857)
|
|
Net loss per common
share, basic and diluted
|
|
$
|
(0.15)
|
|
|
$
|
(0.08)
|
|
Weighted-average common
shares used in computing basic and diluted net loss per common
share
|
|
|
145,455
|
|
|
|
143,112
|
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
(in thousands)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Operating Activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(21,125)
|
|
|
$
|
(11,857)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
Depreciation of
property and equipment
|
|
|
1,343
|
|
|
|
1,203
|
|
Amortization of
intangible assets
|
|
|
43,326
|
|
|
|
35,749
|
|
Amortization of
deferred financing costs
|
|
|
1,026
|
|
|
|
294
|
|
Stock-based
compensation
|
|
|
12,445
|
|
|
|
9,635
|
|
Deferred income
taxes
|
|
|
(7,851)
|
|
|
|
(3,059)
|
|
Right-of-use
assets
|
|
|
(644)
|
|
|
|
991
|
|
Other
|
|
|
1,307
|
|
|
|
181
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
24,349
|
|
|
|
7,629
|
|
Prepaid expenses and
other assets
|
|
|
(52,461)
|
|
|
|
(39,557)
|
|
Deferred
commissions
|
|
|
1,892
|
|
|
|
944
|
|
Accounts payable and
accrued liabilities
|
|
|
(10,446)
|
|
|
|
(7,177)
|
|
Deferred
revenue
|
|
|
(85,138)
|
|
|
|
(73,658)
|
|
Lease
liabilities
|
|
|
1,443
|
|
|
|
(1,912)
|
|
Other
liabilities
|
|
|
(2,019)
|
|
|
|
(324)
|
|
Net cash used in
operating activities
|
|
|
(92,553)
|
|
|
|
(80,918)
|
|
Investing Activities:
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,881)
|
|
|
|
(1,327)
|
|
Proceeds from sale of
property and equipment
|
|
|
8
|
|
|
|
6
|
|
Business acquisitions,
net of cash acquired
|
|
|
(821,739)
|
|
|
|
—
|
|
Net cash used in
investing activities
|
|
|
(823,612)
|
|
|
|
(1,321)
|
|
Financing Activities:
|
|
|
|
|
|
|
Proceeds from issuance
of common stock from employee equity plans
|
|
|
3,228
|
|
|
|
3,295
|
|
Shares repurchased for
tax withholdings on vesting of restricted stock units
|
|
|
(1,568)
|
|
|
|
(1,279)
|
|
Proceeds from issuance
of term debt, net of discount
|
|
|
664,319
|
|
|
|
—
|
|
Repayments of
long-term debt
|
|
|
(2,993)
|
|
|
|
(1,250)
|
|
Changes in customer
fund deposits
|
|
|
(795)
|
|
|
|
—
|
|
Net cash provided by
financing activities
|
|
|
662,191
|
|
|
|
766
|
|
Foreign currency
impacts on cash, cash equivalents, restricted cash, and funds held
on behalf of
customers
|
|
|
(979)
|
|
|
|
301
|
|
Net decrease in cash,
cash equivalents, restricted cash, and funds held on behalf of
customers
|
|
|
(254,953)
|
|
|
|
(81,172)
|
|
Cash, cash equivalents,
restricted cash, and funds held on behalf of customers, beginning
of period
|
|
|
344,208
|
|
|
|
190,266
|
|
Cash, cash equivalents,
restricted cash, and funds held on behalf of customers, end of
period
|
|
$
|
89,255
|
|
|
$
|
109,094
|
|
Supplemental cash flow
disclosure:
|
|
|
|
|
|
|
Cash paid for
taxes
|
|
$
|
1,015
|
|
|
$
|
181
|
|
Interest
paid
|
|
$
|
15,446
|
|
|
$
|
8,096
|
|
Non-cash investing and financing
activities:
|
|
|
|
|
|
|
Capital expenditures
incurred but not yet paid
|
|
$
|
231
|
|
|
$
|
186
|
|
The following provides a reconciliation of cash, cash
equivalents, restricted cash, and funds held on behalf of customers
to the amounts reported on the consolidated balance sheets.
Restricted cash has been disclosed in Other assets as it is
associated with letters of credit obtained to secure office space
from our various lease agreements and other contractual cash
collateral arrangements.
INSTRUCTURE HOLDINGS, INC.
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
As of March 31,
|
|
|
|
2024
|
|
|
2023
|
|
Cash and cash
equivalents
|
|
$
|
83,015
|
|
|
$
|
104,758
|
|
Restricted
cash
|
|
|
954
|
|
|
|
4,336
|
|
Funds held on behalf of
customers
|
|
|
5,286
|
|
|
|
—
|
|
Total cash, cash
equivalents, restricted cash, and funds held on behalf of customers
|
|
$
|
89,255
|
|
|
$
|
109,094
|
|
|
|
|
|
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP
MEASURES
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP OPERATING
INCOME
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
Loss from
operations
|
|
$
|
(6,080)
|
|
|
$
|
(5,914)
|
|
Stock-based
compensation
|
|
|
12,445
|
|
|
|
10,010
|
|
Transaction
costs(1)
|
|
|
5,615
|
|
|
|
3,836
|
|
Globalization
costs(2)
|
|
|
890
|
|
|
|
9
|
|
Restructuring
costs(3)
|
|
|
4,930
|
|
|
|
3,227
|
|
Technology
modernization costs(4)
|
|
|
2,266
|
|
|
|
215
|
|
Other non-recurring
costs(5)
|
|
|
102
|
|
|
|
56
|
|
Amortization of
acquisition-related intangibles
|
|
|
43,326
|
|
|
|
35,748
|
|
Non-GAAP operating
income
|
|
$
|
63,494
|
|
|
$
|
47,187
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
|
(3.9)
|
%
|
|
|
(4.6)
|
%
|
Non-GAAP operating
margin
|
|
|
40.8
|
%
|
|
|
36.6
|
%
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP ADJUSTED
EBITDA
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
Net loss
|
|
$
|
(21,125)
|
|
|
$
|
(11,857)
|
|
Interest on outstanding
debt and loss on debt extinguishment
|
|
|
22,785
|
|
|
|
9,485
|
|
Income tax
benefit
|
|
|
(7,067)
|
|
|
|
(2,125)
|
|
Depreciation
|
|
|
1,343
|
|
|
|
1,203
|
|
Amortization
|
|
|
—
|
|
|
|
2
|
|
Stock-based
compensation
|
|
|
12,445
|
|
|
|
10,010
|
|
Transaction
costs(1)
|
|
|
5,615
|
|
|
|
3,836
|
|
Globalization
costs(2)
|
|
|
890
|
|
|
|
9
|
|
Restructuring
costs(3)
|
|
|
4,930
|
|
|
|
3,328
|
|
Technology
modernization costs(4)
|
|
|
2,266
|
|
|
|
215
|
|
Other non-recurring
costs(5)
|
|
|
102
|
|
|
|
56
|
|
Effects of foreign
currency transaction (gains) and losses
|
|
|
1,832
|
|
|
|
(351)
|
|
Amortization of
acquisition-related intangibles
|
|
|
43,326
|
|
|
|
35,748
|
|
Interest
income
|
|
|
(2,398)
|
|
|
|
(1,301)
|
|
Adjusted
EBITDA
|
|
$
|
64,944
|
|
|
$
|
48,258
|
|
|
|
|
|
|
|
|
Net loss
margin
|
|
|
(13.6)
|
%
|
|
|
(9.2)
|
%
|
Adjusted EBITDA
margin
|
|
|
41.8
|
%
|
|
|
37.5
|
%
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP NET
INCOME
|
|
(in thousands, except per share
data)
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
Net loss
|
|
$
|
(21,125)
|
|
|
$
|
(11,857)
|
|
Stock-based
compensation
|
|
|
12,445
|
|
|
|
10,010
|
|
Amortization of
acquisition-related intangibles
|
|
|
43,326
|
|
|
|
35,748
|
|
Loss on extinguishment
of debt
|
|
|
189
|
|
|
|
—
|
|
Transaction
costs(1)
|
|
|
5,615
|
|
|
|
3,836
|
|
Globalization
costs(2)
|
|
|
890
|
|
|
|
9
|
|
Restructuring
costs(3)
|
|
|
4,930
|
|
|
|
3,328
|
|
Technology
modernization costs(4)
|
|
|
2,266
|
|
|
|
215
|
|
Other non-recurring
costs(5)
|
|
|
102
|
|
|
|
56
|
|
Effects of foreign
currency transaction (gains) and losses
|
|
|
1,832
|
|
|
|
(351)
|
|
Tax effects of
adjustments(6)
|
|
|
(17,794)
|
|
|
|
(13,118)
|
|
Non-GAAP net
income
|
|
$
|
32,676
|
|
|
$
|
27,876
|
|
Non-GAAP net income per
common share, basic
|
|
$
|
0.22
|
|
|
$
|
0.19
|
|
Non-GAAP net income per
common share, diluted
|
|
$
|
0.22
|
|
|
$
|
0.19
|
|
Weighted average common
shares used in computing basic Non-GAAP net income per
common
share
|
|
|
145,455
|
|
|
|
143,112
|
|
Weighted average common
shares used in computing diluted Non-GAAP net income per
common share
|
|
|
146,173
|
|
|
|
144,765
|
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP GROSS
PROFIT
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
Gross profit
|
|
$
|
101,102
|
|
|
$
|
83,011
|
|
Stock-based
compensation
|
|
|
1,209
|
|
|
|
793
|
|
Transaction
costs(1)
|
|
|
172
|
|
|
|
180
|
|
Globalization
costs(2)
|
|
|
240
|
|
|
|
—
|
|
Restructuring
costs(3)
|
|
|
918
|
|
|
|
224
|
|
Technology
modernization costs(4)
|
|
|
1,254
|
|
|
|
115
|
|
Amortization of
acquisition-related intangibles
|
|
|
17,838
|
|
|
|
16,073
|
|
Non-GAAP gross
profit
|
|
$
|
122,733
|
|
|
$
|
100,396
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
|
65.0
|
%
|
|
|
64.4
|
%
|
Non-GAAP gross
margin
|
|
|
79.0
|
%
|
|
|
77.9
|
%
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP SUBSCRIPTION AND SUPPORT
GROSS PROFIT
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
Subscription and
support gross profit
|
|
$
|
98,345
|
|
|
$
|
79,670
|
|
Stock-based
compensation
|
|
|
565
|
|
|
|
379
|
|
Transaction
costs(1)
|
|
|
128
|
|
|
|
160
|
|
Restructuring
costs(3)
|
|
|
534
|
|
|
|
19
|
|
Technology
modernization costs(4)
|
|
|
1,178
|
|
|
|
115
|
|
Amortization of
acquisition-related intangibles
|
|
|
17,838
|
|
|
|
16,073
|
|
Non-GAAP subscription
and support gross profit
|
|
$
|
118,588
|
|
|
$
|
96,416
|
|
|
|
|
|
|
|
|
GAAP subscription and
support gross margin
|
|
|
68.0
|
%
|
|
|
67.2
|
%
|
Non-GAAP subscription
and support gross margin
|
|
|
82.0
|
%
|
|
|
81.4
|
%
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF FREE CASH FLOW, UNLEVERED FREE CASH
FLOW & ADJUSTED UNLEVERED FREE CASH FLOW
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
$
|
(92,553)
|
|
|
$
|
(80,918)
|
|
Purchases of property
and equipment
|
|
|
(1,881)
|
|
|
|
(1,327)
|
|
Proceeds from disposals
of property and equipment
|
|
|
8
|
|
|
|
6
|
|
Free cash
flow
|
|
$
|
(94,426)
|
|
|
$
|
(82,239)
|
|
Cash paid for interest
on outstanding debt
|
|
|
15,446
|
|
|
|
8,096
|
|
Cash settled
stock-based compensation
|
|
|
—
|
|
|
|
374
|
|
Unlevered free cash
flow
|
|
$
|
(78,980)
|
|
|
$
|
(73,769)
|
|
Transaction
costs(7)
|
|
|
7,215
|
|
|
|
6,759
|
|
Globalization
costs(7)
|
|
|
1,526
|
|
|
|
9
|
|
Restructuring
costs(7)
|
|
|
2,852
|
|
|
|
3,309
|
|
Technology
modernization costs(7)
|
|
|
1,985
|
|
|
|
185
|
|
Other non-recurring
costs(7)
|
|
|
85
|
|
|
|
63
|
|
Adjusted unlevered free
cash flow
|
|
$
|
(65,317)
|
|
|
$
|
(63,444)
|
|
|
|
|
|
|
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NET DEBT
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
December 31,
2024 E
|
|
Long-term principal,
current
|
|
$
|
11,972
|
|
|
$
|
5,000
|
|
|
$
|
11,972
|
|
Long-term principal,
net of current portion
|
|
|
1,161,285
|
|
|
|
486,250
|
|
|
|
1,152,306
|
|
Cash, cash equivalents,
restricted cash, and funds held on behalf of customers
|
|
|
(89,255)
|
|
|
|
(344,208)
|
|
|
|
(245,814)
|
|
Net debt
|
|
$
|
1,084,002
|
|
|
$
|
147,042
|
|
|
$
|
918,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross leverage
ratio
|
|
|
5.1
|
|
|
|
2.3
|
|
|
|
4.3
|
|
Net leverage
ratio
|
|
|
4.7
|
|
|
|
0.7
|
|
|
|
3.4
|
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF TRAILING TWELVE MONTHS NON-GAAP
ADJUSTED EBITDA
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
Three months ended
December 31
|
|
|
Three months ended
September 30,
|
|
|
Three months ended
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2023
|
|
|
2023
|
|
Net loss
|
|
$
|
(21,125)
|
|
|
$
|
(5,767)
|
|
|
$
|
(5,481)
|
|
|
$
|
(10,973)
|
|
Interest on outstanding
debt and loss on debt extinguishment
|
|
|
22,785
|
|
|
|
11,382
|
|
|
|
10,868
|
|
|
|
10,287
|
|
Income tax (benefit)
expense
|
|
|
(7,067)
|
|
|
|
459
|
|
|
|
(1,920)
|
|
|
|
(672)
|
|
Depreciation
|
|
|
1,343
|
|
|
|
1,305
|
|
|
|
1,186
|
|
|
|
1,092
|
|
Stock-based
compensation
|
|
|
12,445
|
|
|
|
10,575
|
|
|
|
11,755
|
|
|
|
11,856
|
|
Transaction
costs(1)
|
|
|
5,615
|
|
|
|
5,857
|
|
|
|
3,502
|
|
|
|
2,317
|
|
Globalization
costs(2)
|
|
|
890
|
|
|
|
54
|
|
|
|
381
|
|
|
|
83
|
|
Restructuring
costs(3)
|
|
|
4,930
|
|
|
|
2,085
|
|
|
|
541
|
|
|
|
1,520
|
|
Technology
modernization costs(4)
|
|
|
2,266
|
|
|
|
817
|
|
|
|
543
|
|
|
|
695
|
|
Other non-recurring
costs(5)
|
|
|
102
|
|
|
|
34
|
|
|
|
31
|
|
|
|
24
|
|
Effects of foreign
currency transaction (gains) and losses
|
|
|
1,832
|
|
|
|
(3,343)
|
|
|
|
2,420
|
|
|
|
(397)
|
|
Amortization of
acquisition-related intangibles
|
|
|
43,326
|
|
|
|
35,731
|
|
|
|
35,744
|
|
|
|
35,744
|
|
Interest
income
|
|
|
(2,398)
|
|
|
|
(2,716)
|
|
|
|
(1,346)
|
|
|
|
(316)
|
|
Adjusted
EBITDA
|
|
$
|
64,944
|
|
|
$
|
56,473
|
|
|
$
|
58,224
|
|
|
$
|
51,260
|
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
ORGANIC CONSTANT CURRENCY SUBSCRIPTION AND SUPPORT
REVENUE GROWTH
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
Reported subscription
and support revenue growth
|
|
|
22.1
|
%
|
|
|
14.5
|
%
|
Inorganic subscription
and support revenue growth(8)
|
|
|
(14.6)
|
%
|
|
|
(3.5)
|
%
|
Organic subscription
and support revenue growth
|
|
|
7.5
|
%
|
|
|
11.0
|
%
|
Impact from foreign
currency exchange(9)
|
|
|
0.1
|
%
|
|
|
0.7
|
%
|
Organic constant
currency subscription and support revenue growth
|
|
|
7.6
|
%
|
|
|
11.7
|
%
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
ORGANIC CONSTANT CURRENCY REVENUE
GROWTH
|
|
(unaudited)
|
|
|
|
Three months ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
Reported revenue
growth
|
|
|
20.7
|
%
|
|
|
13.6
|
%
|
Inorganic revenue
growth(8)
|
|
|
(14.0)
|
%
|
|
|
(3.6)
|
%
|
Organic revenue
growth
|
|
|
6.7
|
%
|
|
|
10.0
|
%
|
Impact from foreign
currency exchange(9)
|
|
|
0.1
|
%
|
|
|
0.7
|
%
|
Organic constant
currency revenue growth
|
|
|
6.8
|
%
|
|
|
10.7
|
%
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP COST OF
REVENUE
|
|
Three Months Ended March 31,
2024
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Globalization
costs
|
|
|
Restructuring
costs
|
|
|
Technology
Modernization
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
46,312
|
|
|
$
|
(565)
|
|
|
$
|
(128)
|
|
|
$
|
—
|
|
|
$
|
(534)
|
|
|
$
|
(1,178)
|
|
|
$
|
(17,838)
|
|
|
$
|
26,069
|
|
Professional services
and other
|
|
|
8,041
|
|
|
|
(644)
|
|
|
|
(44)
|
|
|
|
(240)
|
|
|
|
(384)
|
|
|
|
(76)
|
|
|
|
—
|
|
|
|
6,653
|
|
Total cost of
revenue
|
|
$
|
54,353
|
|
|
$
|
(1,209)
|
|
|
$
|
(172)
|
|
|
$
|
(240)
|
|
|
$
|
(918)
|
|
|
$
|
(1,254)
|
|
|
$
|
(17,838)
|
|
|
$
|
32,722
|
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP COST OF
REVENUE
|
|
Three Months Ended March 31,
2023
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based compensation
expense
|
|
|
Transaction Costs
|
|
|
Globalization costs
|
|
|
Restructuring costs
|
|
|
Technology Modernization costs
|
|
|
Amortization of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
38,810
|
|
|
$
|
(379)
|
|
|
$
|
(160)
|
|
|
$
|
—
|
|
|
$
|
(19)
|
|
|
$
|
(115)
|
|
|
$
|
(16,073)
|
|
|
$
|
22,064
|
|
Professional services
and other
|
|
|
7,022
|
|
|
|
(414)
|
|
|
|
(20)
|
|
|
|
—
|
|
|
|
(205)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,383
|
|
Total cost of
revenue
|
|
$
|
45,832
|
|
|
$
|
(793)
|
|
|
$
|
(180)
|
|
|
$
|
—
|
|
|
$
|
(224)
|
|
|
$
|
(115)
|
|
|
$
|
(16,073)
|
|
|
$
|
28,447
|
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP OPERATING
EXPENSES
|
|
Three Months Ended March 31,
2024
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based compensation
expense
|
|
|
Transaction costs
|
|
|
Globalization costs
|
|
|
Restructuring costs
|
|
|
Technology Modernization costs
|
|
|
Other non-recurring costs
|
|
|
Amortization of acquired
intangibles
|
|
|
Non-GAAP
|
|
|
GAAP % of revenue
|
|
|
Non-GAAP % of Revenue
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
59,256
|
|
|
$
|
(3,114)
|
|
|
$
|
(741)
|
|
|
$
|
(190)
|
|
|
$
|
(1,333)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(25,483)
|
|
|
$
|
28,395
|
|
|
|
38.1
|
%
|
|
|
18.3
|
%
|
Research and
development
|
|
|
27,536
|
|
|
|
(3,840)
|
|
|
|
(1,149)
|
|
|
|
(143)
|
|
|
|
(1,079)
|
|
|
|
(675)
|
|
|
|
—
|
|
|
|
(4)
|
|
|
|
20,646
|
|
|
|
17.7
|
%
|
|
|
13.3
|
%
|
General and
administrative
|
|
|
20,390
|
|
|
|
(4,282)
|
|
|
|
(3,553)
|
|
|
|
(317)
|
|
|
|
(1,600)
|
|
|
|
(337)
|
|
|
|
(102)
|
|
|
|
—
|
|
|
|
10,199
|
|
|
|
13.1
|
%
|
|
|
6.6
|
%
|
Total operating
expenses
|
|
$
|
107,182
|
|
|
$
|
(11,236)
|
|
|
$
|
(5,443)
|
|
|
$
|
(650)
|
|
|
$
|
(4,012)
|
|
|
$
|
(1,012)
|
|
|
$
|
(102)
|
|
|
$
|
(25,487)
|
|
|
$
|
59,240
|
|
|
|
68.9
|
%
|
|
|
38.2
|
%
|
|
|
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP OPERATING
EXPENSES
|
|
Three Months Ended March 31,
2023
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
GAAP
|
|
|
Stock-based compensation
expense
|
|
|
Transaction costs
|
|
|
Globalization costs
|
|
|
Restructuring costs
|
|
|
Technology Modernization costs
|
|
|
Other non-recurring costs
|
|
|
Amortization of acquired
intangibles
|
|
|
Non-GAAP
|
|
|
GAAP % of revenue
|
|
|
Non-GAAP % of Revenue
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
50,850
|
|
|
$
|
(2,528)
|
|
|
$
|
(628)
|
|
|
$
|
—
|
|
|
$
|
(1,131)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19,670)
|
|
|
$
|
26,893
|
|
|
|
39.5
|
%
|
|
|
20.9
|
%
|
Research and
development
|
|
|
23,702
|
|
|
|
(3,174)
|
|
|
|
(2,241)
|
|
|
|
(9)
|
|
|
|
(1,289)
|
|
|
|
(31)
|
|
|
|
2
|
|
|
|
(5)
|
|
|
|
16,955
|
|
|
|
18.4
|
%
|
|
|
13.2
|
%
|
General and
administrative
|
|
|
14,373
|
|
|
|
(3,515)
|
|
|
|
(787)
|
|
|
|
—
|
|
|
|
(583)
|
|
|
|
(69)
|
|
|
|
(58)
|
|
|
|
—
|
|
|
|
9,361
|
|
|
|
11.2
|
%
|
|
|
7.3
|
%
|
Total operating
expenses
|
|
$
|
88,925
|
|
|
$
|
(9,217)
|
|
|
$
|
(3,656)
|
|
|
$
|
(9)
|
|
|
$
|
(3,003)
|
|
|
$
|
(100)
|
|
|
$
|
(56)
|
|
|
$
|
(19,675)
|
|
|
$
|
53,209
|
|
|
|
69.1
|
%
|
|
|
41.4
|
%
|
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 one-time
expenses incurred in the Company's recent efforts to develop and
mobilize a global workforce to better support its broadening
customer base and expanding international operations.
|
(3)
|
Consists of
restructuring-related costs, including executive recruiting,
severance charges, and other workforce realignment costs. In
addition to lease termination costs and disposal of fixed asset
charges related to its real estate consolidation efforts. The
Company continues to execute a remote-first strategy, closing
offices, inclusive of those acquired in merger and acquisition
efforts, and reducing office space globally. Beginning in 2023, the
Company began restructuring its executive team.
|
(4)
|
Includes costs that are
one-time in nature related to technology modernization to allow the
Company's customers and users to have a more cohesive experience on
its learning platform as a result of the various technologies
acquired from historical acquisitions.
|
(5)
|
Represents expenses
incurred for services provided by Thoma Bravo and their
affiliates.
|
(6)
|
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)
|
Represents the cash
impacts of transaction costs, globalization costs, restructuring
costs, technology modernization costs, and other non-recurring
costs, as previously defined above.
|
(8)
|
Represents revenue
growth from newly acquired businesses in the relevant
period.
|
(9)
|
Represents the impact
to revenue from foreign currency exchange rates.
|
For More Information:
Media Relations:
Brian
Watkins
Corporate Communications
Instructure
(801) 610-9722
brian.watkins@instructure.com
Investor Relations:
Matthew
Wells
SVP of Investor Relations
Instructure
investors@instructure.com
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SOURCE Instructure Holdings, Inc.