- Second quarter total revenue increased 10% year-over-year to
$191.6 million, meeting outlook
- Second quarter GAAP net loss was $25.7 million, representing
13% of total revenue, and Adjusted EBITDA* increased 9%
year-over-year to $66.6 million, meeting outlook and representing
35% of total revenue
PowerSchool Holdings, Inc. (NYSE: PWSC) ("PowerSchool" or the
“Company”), the leading provider of cloud-based software for K-12
education in North America, today announced financial results for
its second quarter ended June 30, 2024.
“I'm pleased with our second quarter performance, which
highlights our market leadership in K-12 software and the continued
demand for our comprehensive platform of mission-critical products.
We demonstrated continued innovation momentum with the launch of
new and exciting products such as MyPowerHub and two additional
modules of our AI-powered PowerBuddy platform," said Hardeep
Gulati, PowerSchool CEO. "We look forward to the next chapter in
PowerSchool's growth story with our partnership with Bain
Capital."
Second Quarter 2024 Financial Highlights
- Revenue: Total revenue was $191.6 million for the three
months ended June 30, 2024, up 10% year-over-year.
- S&S Revenue: Subscriptions and support revenue was
$170.1 million, up 16% year-over-year.
- Gross Profit: GAAP gross profit was $111.8 million,
representing 58% of total revenue, and Adjusted Gross Profit* was
$133.6 million, representing 70% of total revenue.
- Net Income/Loss: GAAP net loss was $25.7 million,
representing 13% of total revenue, and Non-GAAP Net Income* was
$48.1 million, representing 25% of total revenue.
- Adjusted EBITDA: Adjusted EBITDA* was $66.6 million, up
9% year-over-year and representing 35% of total revenue.
- Earnings/Loss Per Share: GAAP net loss per diluted share
was $0.12 on 203.7 million shares outstanding. Non-GAAP net income
per diluted share* was $0.23 on 205.0 million shares
outstanding.
- Cash Flow: Net cash used in operating activities was
$47.4 million, representing 25% of total revenue.
* Definitions of the key business metrics and the non-GAAP
financial measures used in this press release and reconciliations
of such measures to the most closely comparable GAAP measures are
included below under the headings “Definitions of Certain Key
Business Metrics” and “Use and Reconciliation of Non-GAAP Financial
Measures.”
Recent Business Highlights
- Customer Momentum: Won several notable deals in the
quarter, including a data-as-a-service (DaaS) cross-sell win with
the Arkansas State Department of Education and cross-sells to
Springfield School District 186, Idea Public Schools, Hawthorne
School District, and Orleans Parish School District.
- New Product Launch: Announced the launch of MyPowerHub,
a next-generation communications platform designed to transform how
schools communicate with parents, students, and staff. MyPowerHub
offers a suite of features including student information such as
grades, assignments, attendance, and schedules, as well as
personalized notifications, event calendars, and secure messaging
through a single, seamless interface, enhancing communication and
collaboration within K-12 communities while generating significant
cost savings for school districts by eliminating the need for
multiple other software programs.
- 2024 Education Focus Report: Released the PowerSchool
2024 Education Focus Report for the 2024-2025 school year, offering
an in-depth analysis of key challenges and innovations shaping the
U.S. education landscape. Drawing from a national survey of 1,620
educators, the report provides critical insights into the evolving
needs and priorities of the education community. Key findings
include: 1) personalized learning drives student success, 2)
growing importance of AI in education, 3) bold leadership and data
utilization are key priorities, 4) evolving education workforce,
and 5) strengthening school-home connections.
- Delivering AI: Announced general availability of two
additional AI-powered solutions, PowerBuddy for Learning Student
Assistant and PowerBuddy for Data Analysis, which enhance the
educational experience and streamline data analysis:
- PowerBuddy for Learning Student Assistant: Integrated
into the popular PowerSchool Schoology Learning Management System,
PowerBuddy for Learning is a secure AI assistant designed to offer
personalized guidance and enhance the learning experience for
students. By leveraging conversational AI, PowerBuddy delivers
contextually relevant prompts that are customized to each student’s
grade level, lesson content, and assignments. This encourages
deeper exploration of topics and ensures students receive the
necessary guidance and resources aligned with district and state
standards, all tailored to their individual learning styles.
- PowerBuddy for Data Analysis: Acts as a co-pilot,
revolutionizing data analysis by allowing users to access data
seamlessly through natural language conversations. This
cutting-edge AI assistant significantly reduces response times for
data requests by removing the need for query writing, automating
data visualizations, and generating comprehensive data analyses.
These features enable educators and administrators to make
well-informed decisions with unprecedented speed and ease.
- International Product Enhancements: Launched translated
and localized products for the Middle East, which will allow
educators in the region to accomplish critical administrative,
classroom, and communication workflows by leveraging newly embedded
Arabic translations, right-to-left interface display, Hijri
calendar overlay, and more. By providing an Arabic interface,
PowerSchool aims to empower educational institutions and facilitate
learning for diverse communities.
Commenting on the Company’s results, Eric Shander, PowerSchool
President and CFO, added, “We delivered another strong quarter
consistent with our philosophy of double-digit top line growth and
margin expansion. I am confident our comprehensive suite of
mission-critical software products will continue to meaningfully
improve school district operations and drive significant long-term
value for the entire K-12 ecosystem."
In light of the proposed transaction with Bain Capital, which
was announced on June 7, 2024, PowerSchool will not host an
earnings conference call and is suspending its practice of
providing financial guidance. PowerSchool currently expects to
close the transaction in the second half of 2024.
Important disclosures in this earnings release about and
reconciliations of historical non-GAAP financial measures to the
most closely comparable GAAP measures are provided below under “Use
and Reconciliation of Non-GAAP Financial Measures.”
About PowerSchool
PowerSchool (NYSE: PWSC) is the leading provider of cloud-based
software for K-12 education in North America. Its mission is to
power the education ecosystem with unified technology that helps
educators and students realize their full potential, in their way.
PowerSchool connects students, teachers, administrators, and
parents, with the shared goal of improving student outcomes. From
the office to the classroom to the home, it helps schools and
districts efficiently manage state reporting and related
compliance, special education, finance, human resources, talent,
registration, attendance, funding, learning, instruction, grading,
assessments, and analytics in one unified platform. PowerSchool
supports over 60 million students globally and more than 18,000
customers, including over 90 of the 100 largest districts by
student enrollment in the United States, and sells solutions in
over 90 countries globally. Visit www.powerschool.com to learn
more.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the safe harder provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Any statements made in
this press release that are not statements of historical fact,
including statements about our beliefs and expectations, are
forward-looking statements and should be evaluated as such.
Forward-looking statements are not assurances of future performance
and may include information concerning possible or assumed future
results of operations, including our financial outlook and
descriptions of our business plan and strategies. Forward-looking
statements are based on PowerSchool management’s beliefs, as well
as assumptions made by, and information currently available to,
them. You can identify forward-looking statements by the fact that
they do not relate strictly to historical or current facts. These
statements may include words such as “anticipate,” “estimate,”
“expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,”
“should,” “can have,” “likely,” and other words and terms of
similar meaning in connection with any discussion of the timing or
nature of future operating or financial performance or other
events. Because such statements are based on expectations as to
future financial and operating results and are not statements of
fact, actual results may differ materially from those projected.
Factors which may cause actual results to differ materially from
current expectations include, but are not limited to: our history
of cumulative losses; competition; our ability to attract new
customers on a cost-effective basis and the extent to which
existing customers renew and upgrade their subscriptions; our
ability to sustain and expand revenues, maintain profitability, and
to effectively manage our anticipated growth; our ability to
retain, hire, and integrate skilled personnel including our senior
management team; our ability to identify acquisition targets and to
successfully integrate and operate acquired businesses; our ability
to maintain and expand our strategic relationships with third
parties, including with state and local government entities; the
seasonality of our sales and customer growth; our reliance on
third-party software and intellectual property licenses; our
ability to obtain, maintain, protect, and enforce intellectual
property protection for our current and future solutions; the
impact of potential information technology or data security
breaches or other cyber-attacks or other disruptions; and the other
factors described under the heading “Risk Factors” in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2023
(the "Annual Report"), filed with the Securities Exchange
Commission (“SEC”). Copies of the Annual Report may be obtained
from the Company or the SEC.
We caution you that the factors referenced above may not contain
all of the factors that are important to you. In addition, we
cannot assure you that we will realize the results or developments
we expect or anticipate or, even if substantially realized, that
they will result in the consequences or affect us or our operations
in the way we expect. All forward-looking statements reflect our
beliefs and assumptions only as of the date of this press release.
We undertake no obligation to publicly update forward-looking
statements, whether written or oral, to reflect future events,
future developments or circumstances, or new information.
Use and Reconciliation of Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP,
we believe the following non-GAAP measures are useful in evaluating
our operating performance. We believe 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 analytical and supplemental
informational purposes only, and should not be considered in
isolation or as 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 is
provided below for each non-GAAP financial measure to the most
directly comparable financial measure stated in accordance with
GAAP. Investors are encouraged to review the related GAAP financial
measures and the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial
measures.
Adjusted Gross Profit: Adjusted Gross Profit is a
supplemental measure of operating performance that is not made
under GAAP and that does not represent, and should not be
considered as, an alternative to gross profit, as determined in
accordance with GAAP. We define Adjusted Gross Profit as gross
profit, adjusted for depreciation, share-based compensation expense
and the related employer payroll tax, restructuring and
acquisition-related expenses, and amortization of acquired
intangible assets and capitalized product development costs. We use
Adjusted Gross Profit to understand and evaluate our core operating
performance and trends, to prepare and approve our annual budget,
and to develop short-term and long-term operating plans. We believe
that Adjusted Gross Profit is a useful measure to us and to our
investors because it provides consistency and comparability with
our past financial performance and between fiscal periods, as the
metric generally eliminates the effects of the variability of
depreciation, share-based compensation, restructuring expense,
acquisition-related expenses, and amortization of acquired
intangibles and capitalized product development costs from period
to period, which may fluctuate for reasons unrelated to overall
operating performance. We believe that the use of this measure
enables us to more effectively evaluate our performance
period-over-period and relative to our competitors.
Non-GAAP Net Income (Loss), Non-GAAP Cost of Revenue and
Operating Expenses, and Adjusted EBITDA: Non-GAAP Net
Income (Loss), Non-GAAP Cost of Revenue, Non-GAAP Operating
Expenses, and Adjusted EBITDA are supplemental measures of
operating performance that are not made under GAAP and that do not
represent, and should not be considered as, an alternative to net
income (loss), GAAP cost of revenue, and GAAP operating expenses,
as applicable. We define Non-GAAP Net Income (Loss) as net income
(loss) adjusted for depreciation and amortization, share-based
compensation expense and the related employer payroll tax,
management fees, restructuring expense, and acquisition-related
expenses. We define Non-GAAP Cost of Revenue and Operating Expenses
as their respective GAAP measures adjusted for share-based
compensation expense and the related employer payroll tax,
management fees, restructuring expense, and acquisition-related
expense. We define Adjusted EBITDA as net income (loss) adjusted
for all of the above items, net interest expense, nonrecurring
litigation expense, provision for (benefit from) income tax, and
other one-time costs. We use Non-GAAP Net Income, Non-GAAP Cost of
Revenue, Non-GAAP Operating Expenses, and Adjusted EBITDA to
understand and evaluate our core operating performance and trends
and to develop short-term and long-term operating plans. We believe
that Non-GAAP Net Income and Adjusted EBITDA facilitate comparison
of our operating performance on a consistent basis between periods
and, when viewed in combination with our results prepared in
accordance with GAAP, help provide a broader picture of factors and
trends affecting our results of operations.
Free Cash Flow and Unlevered Free Cash Flow: Free
Cash Flow and Unlevered Free Cash Flow are supplemental measures of
liquidity that are not made under GAAP and that do not represent,
and should not be considered as, an alternative to cash flow from
operations, as determined by GAAP. We define Free Cash Flow as net
cash provided by operating activities less cash used for purchases
of property and equipment and capitalized product development costs
plus proceeds from the sale of property and equipment. We define
Unlevered Free Cash Flow as Free Cash Flow plus cash paid for
interest on outstanding debt. We believe that Free Cash Flow and
Unlevered Free Cash Flow are useful indicators of liquidity that
provide information to management and investors about the amount of
cash generated by our operations inclusive of that used for
investments in property and equipment and capitalized product
development costs as well as cash paid for interest on outstanding
debt.
These non-GAAP financial measures have their limitations as an
analytical tool, and you should not consider them in isolation, or
as a substitute for analysis of our results as reported under GAAP.
Because of these limitations, these non-GAAP financial measures
should not be considered as a replacement for their respective
comparable financial measures, as determined by GAAP, or as a
measure of our profitability or liquidity. We compensate for these
limitations by relying primarily on our GAAP results and using
non-GAAP measures only for supplemental purposes.
For a reconciliation of these non-GAAP financial measures to the
most directly comparable GAAP financial measure, please see
“Reconciliation of GAAP to Non-GAAP Financial Measures” below.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands except per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Revenue:
Subscriptions and support
$
170,129
$
146,503
$
337,056
$
287,576
Service
19,321
20,197
36,007
36,429
License and other
2,142
7,197
3,496
9,345
Total revenue
191,592
173,897
376,559
333,350
Cost of revenue:
Subscriptions and support
47,768
36,781
94,095
74,975
Service
12,210
15,123
25,593
29,446
License and other
1,148
1,017
2,219
1,968
Depreciation and amortization
18,705
16,108
37,785
32,129
Total cost of revenue
79,831
69,029
159,692
138,518
Gross profit
111,761
104,868
216,867
194,832
Operating expenses:
Research and development
30,616
25,862
62,267
51,283
Selling, general, and administrative
71,621
53,129
124,052
102,687
Acquisition costs
276
—
1,029
—
Depreciation and amortization
17,344
15,764
34,693
31,535
Total operating expenses
119,857
94,755
222,041
185,505
Income (loss) from operations
(8,096
)
10,113
(5,174
)
9,327
Interest expense—net
23,193
16,101
44,189
30,130
Other (income) expenses—net
(853
)
31
(950
)
74
Loss before income taxes
(30,436
)
(6,019
)
(48,413
)
(20,877
)
Income tax expense (benefit)
(4,732
)
(1,724
)
139
(1,769
)
Net loss
$
(25,704
)
$
(4,295
)
$
(48,552
)
$
(19,108
)
Less: Net loss attributable to
non-controlling interest
(5,693
)
(1,100
)
(8,983
)
(4,060
)
Net loss attributable to PowerSchool
Holdings, Inc.
(20,011
)
(3,195
)
(39,569
)
(15,048
)
Net loss attributable to PowerSchool
Holdings, Inc. Class A common stock:
Basic
(20,011
)
(3,195
)
(39,569
)
(15,048
)
Diluted
(24,916
)
(4,080
)
(49,047
)
(15,048
)
Net loss attributable to PowerSchool
Holdings, Inc. per share of Class A common stock, basic
$
(0.12
)
$
(0.02
)
$
(0.24
)
$
(0.09
)
Net loss attributable to PowerSchool
Holdings, Inc. per share of Class A common stock, diluted
$
(0.12
)
$
(0.02
)
$
(0.24
)
$
(0.09
)
Weighted average shares of Class A common
stock:
Basic
166,040,370
163,067,859
165,538,730
161,794,290
Diluted
203,694,429
200,721,918
203,192,789
161,794,290
Other comprehensive income (loss), net of
taxes:
Foreign currency translation
(304
)
21
(1,038
)
108
Change in unrealized loss on
investments
—
—
—
3
Total other comprehensive income
(loss)
(304
)
21
(1,038
)
111
Less: Other comprehensive income (loss)
attributable to non-controlling interest
$
(56
)
$
4
$
(192
)
$
21
Comprehensive loss attributable to
PowerSchool Holdings, Inc.
$
(20,259
)
$
(3,178
)
$
(40,415
)
$
(14,958
)
CONSOLIDATED BALANCE
SHEETS
(unaudited)
(in thousands)
June 30, 2024
December 31, 2023
Assets
Current Assets:
Cash and cash equivalents
$
20,678
$
39,054
Accounts receivable—net of allowance of
$7,143 and $7,930 respectively
89,393
76,618
Prepaid expenses and other current
assets
45,797
40,449
Total current assets
155,868
156,121
Property and equipment - net
7,773
5,003
Operating lease right-of-use assets
12,892
15,998
Capitalized product development costs -
net
113,661
112,089
Goodwill
2,768,966
2,740,725
Intangible assets - net
666,591
710,635
Other assets
35,491
36,311
Total assets
$
3,761,242
$
3,776,882
Liabilities and Stockholders’
Equity
Current Liabilities:
Accounts payable
$
14,200
$
13,629
Accrued expenses
128,094
116,271
Operating lease liabilities, current
3,398
4,958
Deferred revenue, current
206,482
373,672
Revolving credit facility
187,000
—
Current portion of long-term debt
8,379
8,379
Total current liabilities
547,553
516,909
Noncurrent Liabilities:
Other liabilities
1,142
2,178
Operating lease liabilities—net of
current
12,784
13,359
Deferred taxes
268,953
275,316
Tax Receivable Agreement liability
375,647
396,397
Deferred revenue—net of current
6,875
6,111
Long-term debt, net
809,669
811,325
Total liabilities
2,022,623
2,021,595
Stockholders' Equity:
Class A common stock, $0.0001 par value
per share, 500,000,000 shares authorized, 166,471,395 and
164,796,626 shares issued and outstanding as of June 30, 2024 and
December 31, 2023, respectively.
16
16
Class B common stock, $0.0001 par value
per share, 300,000,000 shares authorized, 37,654,059 and 37,654,059
shares issued and outstanding as of June 30, 2024 and December 31,
2023, respectively.
4
4
Additional paid-in capital
1,550,637
1,520,288
Accumulated other comprehensive loss
(3,132
)
(2,094
)
Accumulated deficit
(257,956
)
(218,387
)
Total stockholders' equity attributable to
PowerSchool Holdings, Inc.
1,289,569
1,299,827
Non-controlling interest
449,050
455,460
Total stockholders' equity
1,738,619
1,755,287
Total liabilities and stockholders'
equity
$
3,761,242
$
3,776,882
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)
2024
2023
2024
2023
Cash flows from operating
activities:
Net loss
$
(25,704
)
$
(4,295
)
$
(48,552
)
$
(19,108
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
36,049
31,873
72,477
63,664
Share-based compensation
19,013
17,494
33,168
32,043
Amortization of operating lease
right-of-use assets
600
811
1,451
1,599
Change in fair value of contingent
consideration
(119
)
(185
)
(99
)
(635
)
Amortization of debt issuance costs
1,487
885
2,975
1,761
(Benefit from) provision for allowance for
doubtful accounts
318
995
(953
)
1,364
Loss (gain) on lease modification
2,329
1
2,291
53
Loss (gain) on sale/disposal of property
and equipment
315
(7
)
(501
)
41
Changes in operating assets and
liabilities — net of effects of acquisitions:
Accounts receivables
(28,589
)
(33,510
)
(10,841
)
(25,151
)
Prepaid expenses and other current
assets
4,968
4,448
(4,954
)
(2,687
)
Other assets
185
(994
)
376
(3,277
)
Accounts payable
1,992
(433
)
1,346
(183
)
Accrued expenses
16,756
4,305
(8,615
)
(12,207
)
Other liabilities
(1,796
)
(1,855
)
(3,449
)
(3,607
)
Deferred taxes
(5,482
)
(2,339
)
(948
)
(2,834
)
Tax Receivable Agreement liability
623
370
945
385
Deferred revenue
(70,300
)
(50,275
)
(173,156
)
(123,962
)
Net cash used in operating activities
(47,355
)
(32,711
)
(137,039
)
(92,741
)
Cash flows from investing
activities:
Purchases of property and equipment
(1,064
)
(582
)
(4,951
)
(938
)
Proceeds from sale of property and
equipment
839
—
839
—
Investment in capitalized product
development costs
(9,114
)
(10,272
)
(18,070
)
(19,948
)
Acquisitions—net of cash acquired
—
—
(36,062
)
—
Payment of acquisition-related deferred
consideration
—
—
(5,800
)
—
Net cash used in investing activities
(9,339
)
(10,854
)
(64,044
)
(20,886
)
Cash flows from financing
activities:
Taxes paid related to the net share
settlement of equity awards
(52
)
(141
)
(117
)
(1,425
)
Proceeds from Revolving Credit
Agreement
210,000
10,000
350,000
10,000
Repayment of Revolving Credit
Agreement
(148,000
)
—
(163,000
)
—
Repayment of First Lien Debt
(2,095
)
(1,938
)
(4,190
)
(3,875
)
Payment of contingent consideration
—
—
(245
)
—
Net cash (used in) provided by financing
activities
59,853
7,921
182,448
4,700
Effect of foreign exchange rate changes on
cash
$
94
$
(235
)
$
259
$
(161
)
Net increase in cash, cash equivalents,
and restricted cash
3,253
(35,879
)
(18,376
)
(109,088
)
Cash, cash equivalents, and restricted
cash—Beginning of period
17,925
64,773
39,554
137,982
Cash, cash equivalents, and restricted
cash—End of period
$
21,178
$
28,894
$
21,178
$
28,894
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(unaudited)
Reconciliation of gross profit to
Adjusted Gross Profit
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2024
2023
2024
2023
Gross profit
$
111,761
$
104,868
$
216,867
$
194,832
Depreciation
61
163
212
415
Share-based compensation (1)
3,015
2,654
5,288
5,112
Restructuring (2)
(62
)
524
1,216
537
Acquisition-related expense (3)
158
47
334
134
Amortization
18,644
15,945
37,573
31,715
Adjusted Gross Profit
$
133,577
$
124,201
$
261,490
$
232,745
Gross Profit Margin (4)
58.3
%
60.3
%
57.6
%
58.4
%
Adjusted Gross Profit Margin (5)
69.7
%
71.4
%
69.4
%
69.8
%
(1)
Refers to expenses in cost of revenue
associated with share-based compensation.
(2)
Refers to expenses in cost of revenue
related to migration of customers from legacy to core products, and
severance expense related to offshoring activities and executive
departures.
(3)
Refers to expenses in cost of revenue
incurred to execute and integrate acquisitions, including retention
awards, and severance for acquired employees.
(4)
Represents gross profit as a percentage of
revenue.
(5)
Represents Adjusted Gross Profit as a
percentage of revenue.
Reconciliation of net loss to Adjusted
EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2024
2023
2024
2023
Net loss
$
(25,704
)
$
(4,295
)
$
(48,552
)
$
(19,108
)
Add:
Amortization
35,162
31,050
70,654
61,924
Depreciation
887
822
1,824
1,741
Interest expense - net (1)
23,193
16,101
44,189
30,130
Income tax benefit
(4,732
)
(1,724
)
139
(1,769
)
Share-based compensation
20,014
17,910
34,699
33,391
Management fees (2)
81
95
161
158
Restructuring (3)
17,228
917
21,086
2,283
Acquisition-related expense (4)
1,226
314
4,428
1,848
Change in tax reserves (5)
(798
)
—
(798
)
—
Adjusted EBITDA
$
66,557
$
61,190
$
127,830
$
110,598
Net loss margin(6)
(13.4
)%
(2.5
)%
(12.9
)%
(5.7
)%
Adjusted EBITDA Margin (7)
34.7
%
35.2
%
33.9
%
33.2
%
(1)
Interest expense, net of interest
income.
(2)
Refers to expense associated with
collaboration with our principal stockholders and their internal
consulting groups.
(3)
Refers to costs incurred related to
migration of customers from legacy to core products, remaining
lease obligations for abandoned facilities, severance expense
related to offshoring activities, facility closures, loss on
modification of debt, nonrecurring litigation expense, executive
departures, and costs related to the Bain transaction.
(4)
Refers to direct transaction and
debt-related fees reflected in our acquisition costs line item of
our income statement and incremental acquisition-related costs that
are incurred to perform diligence, execute and integrate
acquisitions, including retention awards and severance for acquired
employees, and other transaction and integration expenses. Also,
refers to the fair value adjustments recorded to the contingent
consideration liability related to the acquisitions of Kinvolved,
Chalk, and SchoolMessenger. These incremental costs are embedded in
our research and development, selling, general and administrative,
and cost of revenue line items.
(5)
Refers to income recognized due to the
change in tax reserves.
(6)
Represents net loss as a percentage of
revenue.
(7)
Represents Adjusted EBITDA as a percentage
of revenue.
Reconciliation of net loss to Non-GAAP
Net Income
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands, except per share data)
2024
2023
2024
2023
Net loss
$
(25,704
)
$
(4,295
)
$
(48,552
)
$
(19,108
)
Add:
Amortization
35,162
31,050
70,654
61,924
Depreciation
887
822
1,824
1,741
Share-based compensation
20,014
17,910
34,699
33,391
Management fees (1)
81
95
161
158
Restructuring (2)
17,228
917
21,086
2,283
Acquisition-related expense (3)
1,226
314
4,428
1,848
Change in tax reserves (4)
(798
)
—
(798
)
—
Non-GAAP Net Income
$
48,096
$
46,813
$
83,502
$
82,237
Weighted-average Class A common stock used
in computing GAAP net loss per share, basic
166,040,370
163,067,859
165,538,730
161,794,290
Weighted-average Class A common stock used
in computing GAAP net loss per share, diluted
203,694,429
200,721,918
203,192,789
161,794,290
Weighted-average shares Class A common
stock used in computing Non-GAAP net income, basic
166,040,370
163,067,859
165,538,730
161,794,290
Dilutive impact of LLC Units
37,654,059
37,654,059
37,654,059
37,654,059
Dilutive impact of Restricted Shares and
RSUs
410,051
708,939
485,059
832,748
Dilutive impact of Market-share units
941,558
462,342
725,936
244,184
Weighted-average shares Class A common
stock used in computing Non-GAAP net income per share - diluted
205,046,038
201,893,199
204,403,784
200,525,281
GAAP net loss attributable to the
PowerSchool Holdings, Inc. per share of Class A common stock -
basic
$
(0.12
)
$
(0.02
)
$
(0.24
)
$
(0.09
)
Non-GAAP net income attributable to the
PowerSchool Holdings, Inc. per share of Class A common stock -
basic
$
0.29
$
0.29
$
0.50
$
0.51
GAAP net loss attributable to the
PowerSchool Holdings, Inc. per share of Class A common stock -
diluted
$
(0.12
)
$
(0.02
)
$
(0.24
)
$
(0.09
)
Non-GAAP net income attributable to the
PowerSchool Holdings, Inc. per share of Class A common stock -
diluted
$
0.23
$
0.23
$
0.41
$
0.41
(1)
Refers to expense associated with
collaboration with our principal stockholders and their internal
consulting groups.
(2)
Refers to costs incurred related to
migration of customers from legacy to core products, remaining
lease obligations for abandoned facilities, severance expense
related to offshoring activities, facility closures, executive
departures, loss on modification of debt, nonrecurring litigation
expense, and costs related to the Bain transaction.
(3)
Refers to direct transaction and
debt-related fees reflected in our acquisition costs line item of
our income statement and incremental acquisition-related costs that
are incurred to perform diligence, execute and integrate
acquisitions, including retention awards and severance for acquired
employees, and other transaction and integration expenses. Also,
refers to the fair value adjustments recorded to the contingent
consideration liability related to the acquisitions of Kinvolved,
Chalk, and SchoolMessenger. These incremental costs are embedded in
our research and development, selling, general and administrative,
and cost of revenue line items.
(4)
Refers to income recognized due to the
change in tax reserves.
Reconciliation of GAAP to Non-GAAP Cost
of Revenue and Operating Expenses
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2024
2023
2024
2023
GAAP Cost of Revenue - Subscription and
Support
$
47,768
$
36,781
$
94,095
$
74,975
Less:
Share-based compensation
2,147
1,700
3,696
3,256
Restructuring
(62
)
523
959
523
Acquisition-related expense
121
38
257
61
Non-GAAP Cost of Revenue - Subscription
and Support
$
45,562
$
34,520
$
89,183
$
71,135
GAAP Cost of Revenue - Services
$
12,210
$
15,123
$
25,593
$
29,446
Less:
Share-based compensation
868
954
1,591
1,856
Restructuring
—
1
257
14
Acquisition-related expense
37
8
78
73
Non-GAAP Cost of Revenue - Services
$
11,305
$
14,160
$
23,667
$
27,503
GAAP Research & Development
$
30,616
$
25,862
$
62,267
$
51,283
Less:
Share-based compensation
5,138
4,675
8,774
8,747
Restructuring
(103
)
9
2,293
113
Acquisition-related expense
549
145
1,042
1,522
Non-GAAP Research & Development
$
25,032
$
21,033
$
50,158
$
40,901
GAAP Selling, General and
Administrative
$
71,621
$
53,129
$
124,052
$
102,687
Less:
Share-based compensation
11,861
10,580
20,638
19,532
Management fees
81
95
161
158
Restructuring
17,393
385
17,576
1,633
Acquisition-related expense
243
122
2,023
193
Non-GAAP Selling, General and
Administrative
$
42,043
$
41,947
$
83,655
$
81,171
Reconciliation of Net Cash Provided by
Operating Activities to Free Cash Flow and Unlevered Free Cash
Flow
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2024
2023
2024
2023
Net cash used in operating activities
$
(47,355
)
$
(32,711
)
$
(137,039
)
$
(92,741
)
Proceeds from the sale of property and
equipment
839
—
839
—
Purchases of property and equipment
(1,064
)
(582
)
(4,951
)
(938
)
Capitalized product development costs
(9,114
)
(10,272
)
(18,070
)
(19,948
)
Free Cash Flow
$
(56,694
)
$
(43,565
)
$
(159,220
)
$
(113,627
)
Add:
Cash paid for interest on outstanding
debt
20,641
13,973
39,770
27,669
Unlevered Free Cash Flow
$
(36,053
)
$
(29,592
)
$
(119,450
)
$
(85,958
)
© PowerSchool. PowerSchool, and other PowerSchool marks are
trademarks of PowerSchool Holdings, Inc., or its subsidiaries.
Other names and brands may be claimed as the property of
others.
PWSC-F
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808373822/en/
Investor Contact: Shane Harrison
investor.relations@powerschool.com 855-707-5100
Media Contact: Beth Keebler
publicrelations@powerschool.com 503-702-4230
PowerSchool (NYSE:PWSC)
Gráfica de Acción Histórica
De Jul 2024 a Ago 2024
PowerSchool (NYSE:PWSC)
Gráfica de Acción Histórica
De Ago 2023 a Ago 2024
