Third Quarter GAAP Revenue of $134.9 Million Grows 10.2% Year Over Year
SALT
LAKE CITY, Oct. 30, 2023 /PRNewswire/ -- Instructure
Holdings, Inc. (Instructure) (NYSE: INST), the makers of the Canvas
Learning Management System, today announced financial results for
the third quarter ended September 30,
2023.
"Our third quarter results once again demonstrated the growth
and leverage of our business, including best-in-class margin
performance and record cash flow and free cash flow," said
Steve Daly, Instructure CEO.
"The power of Instructure is in its people and their dedication to
delivering powerful solutions for our customers that drive the type
of financial results our investors expect."
Financial Highlights:
- GAAP Revenue of $134.9 million,
an increase of 10.2% year over year
- Operating income of $4.6 million,
or 3.4% of revenue, compared with a loss of $2.4 million in the third quarter of 2022
- Non-GAAP operating income* of $57.0
million, or 42.3% of revenue, up 23.5% compared with the
third quarter of 2022
- GAAP net loss of $5.5 million, or
negative 4.1% of revenue, an improvement of $4.6 million compared with a net loss of
$10.1 million in the third quarter of
2022
- Adjusted EBITDA* of $58.2 million
for the quarter, or 43.2% of revenue, an increase of $10.6 million, or 22.3% compared with the third
quarter of 2022
- Cash flow from operations of $182.6
million and Adjusted Unlevered Free Cash Flow* of
$200.1 million, up $2.8 million and $12.4
million, respectively compared with the third quarter of
2022
- Remaining Performance Obligations (RPOs) were $862.9 million, 75% of which is expected to be
realized in the next 24 months
*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.
Business and Operating Highlights:
- Announced the departure of Chief Financial Officer,
Dale Bowen, who will end his tenure
at Instructure on November 12, 2023.
Succeeding Bowen is Peter Walker,
currently Chief Financial Officer of Sterling Check Corp., who has
more than 15 years of executive experience, including more than 10
years as a Chief Financial Officer. He will begin his role with
Instructure on November 13, 2023.
- The Montana University System (MUS)
consolidated all of its 16 higher education and one K-12 school onto Canvas, choosing to migrate
10 of its campuses away from two competitors' products. MUS was
looking to drive ease of use, better content sharing with Canvas
Commons, and provide a consistent experience for students across
its different campuses.
- The Pasadena Independent School District took advantage of
Instructure's growing suite of K-12 solutions, choosing Canvas,
Studio, MasteryConnect, Mastery Item Bank, and Training Portal.
With nearly 50,000 students, the Southern
California-based district signed a 10-year contract whereby
Instructure will replace its current classroom solutions because
district leaders recognized Canvas as the "go-to system" for large
districts like theirs.
- CFRE, a private and independent educational company based in
Germany, selected Canvas and
Credentials to aid in its focus on non-traditional students across
vocational, higher education, and further education. With 18 brands
and more than 30,000 students in Germany, CFRE selected our platform based on
quality of delivery and user experience, with the opportunity for
diversity around branding and administrative capabilities.
Business Outlook
Based on information as of today, October
30, 2023, the Company is issuing the following financial
guidance.
Fourth Quarter Fiscal 2023:
- Revenue is expected to be in the range of $133.3 million to $135.3
million
- Non-GAAP operating income* is expected to be in the range of
$51.5 million to $53.5 million
- Adjusted EBITDA* is expected to be in the range of $53.0 million to $55.0
million
- Non-GAAP net income* is expected to be in the range of
$32.5 million to $34.5 million
Full Year 2023:
- Revenue is expected to be in the range of $528.0 million to $530.0
million
- Non-GAAP operating income* is expected to be in the range of
$206.5 million to $208.5 million
- Adjusted EBITDA* is expected to be in the range of $211.0 million to $213.0
million
- Non-GAAP net income* is expected to be in the range of
$124.0 million to $126.0 million
- Adjusted Unlevered Free Cash Flow* is expected to be in the
range of $207.0 million to
$211.0 million
*Non-GAAP operating income, Adjusted EBITDA, non-GAAP net income
and Adjusted Unlevered Free Cash Flow are non-GAAP measures.
Instructure is unable to provide guidance, or a reconciliation, for
operating income/(loss) and net loss, the most closely comparable
GAAP measures with respect to non-GAAP operating income, Adjusted
EBITDA and non-GAAP net income, and net cash provided by operating
activities, the most closely comparable measure with respect to
Adjusted Unlevered Free Cash Flow, 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.
Effective January 1, 2022,
Instructure adopted 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, Instructure will no longer
present guidance for ACR because GAAP revenue and ACR have now
converged.
Conference Call Information
Instructure's management team will hold a conference call to
discuss our third quarter ended September
30, 2023 results today, October 30,
2023 at 5:00 p.m. ET. The
conference call can be accessed by dialing (888) 330-2384 from
the United States and Canada or (240) 789-2701 internationally with
conference ID 1348899. A live webcast and replay of the conference
call can be accessed from the investor relations page of
Instructure's website at ir.instructure.com. An archived replay of
the webcast will be available following the conclusion of the
call.
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.
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
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 debt, net of
debt discounts, 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
fourth quarter of 2023 and for the full year ending December 31, 2023, 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: the ability of the parties to
consummate the proposed Parchment transaction and the possibility
that various closing conditions for the proposed transaction may
not be satisfied or waived, and the ability to realize the benefits
expected from the proposed transactions; the impact of the
announcement and potential closing of the Parchment transaction on
our and Parchment's business, employees and suppliers, and on our
investors and common stock; risks associated with the continued
economic uncertainty, including high inflation, labor shortages,
high interest rates, foreign currency exchange volatility, and
reduced spending by customers; failure to continue our recent
growth rates; the impact of the Israel-Hamas war on the
macroeconomic and geopolitical environment and on our business;
risks associated with future stimulus packages approved by the U.S.
federal government; our ability to acquire new customers and
successfully retain existing customers; the effects of increased
usage of, or interruptions or performance problems associated with,
our learning platform; the impact on our business and prospects
from pandemics; our history of losses and expectation that we will
not be profitable for the foreseeable future; the impact of adverse
general and industry-specific economic and market conditions;
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 Report 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)
|
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
|
Assets
|
|
(unaudited)
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
304,858
|
|
|
$
|
185,954
|
|
|
Accounts
receivable—net
|
|
|
92,708
|
|
|
|
71,428
|
|
|
Prepaid
expenses
|
|
|
18,244
|
|
|
|
11,120
|
|
|
Deferred
commissions
|
|
|
14,363
|
|
|
|
13,390
|
|
|
Other current
assets
|
|
|
4,125
|
|
|
|
3,144
|
|
|
Total current
assets
|
|
|
434,298
|
|
|
|
285,036
|
|
|
Property and equipment,
net
|
|
|
13,656
|
|
|
|
12,380
|
|
|
Right-of-use
assets
|
|
|
10,227
|
|
|
|
13,575
|
|
|
Goodwill
|
|
|
1,265,316
|
|
|
|
1,266,402
|
|
|
Intangible assets,
net
|
|
|
435,442
|
|
|
|
542,679
|
|
|
Noncurrent prepaid
expenses
|
|
|
5,253
|
|
|
|
871
|
|
|
Deferred commissions,
net of current portion
|
|
|
14,912
|
|
|
|
18,781
|
|
|
Deferred tax
assets
|
|
|
8,389
|
|
|
|
8,143
|
|
|
Other assets
|
|
|
7,710
|
|
|
|
5,622
|
|
|
Total
assets
|
|
$
|
2,195,203
|
|
|
$
|
2,153,489
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
18,539
|
|
|
$
|
18,792
|
|
|
Accrued
liabilities
|
|
|
21,162
|
|
|
|
28,483
|
|
|
Lease
liabilities
|
|
|
7,355
|
|
|
|
7,205
|
|
|
Long-term debt,
current
|
|
|
4,013
|
|
|
|
4,013
|
|
|
Deferred
revenue
|
|
|
334,404
|
|
|
|
275,564
|
|
|
Total current
liabilities
|
|
|
385,473
|
|
|
|
334,057
|
|
|
Long-term debt, net of
current portion
|
|
|
483,385
|
|
|
|
486,471
|
|
|
Deferred revenue, net
of current portion
|
|
|
12,700
|
|
|
|
13,816
|
|
|
Lease liabilities, net
of current portion
|
|
|
11,090
|
|
|
|
16,610
|
|
|
Deferred tax
liabilities
|
|
|
16,069
|
|
|
|
24,702
|
|
|
Other long-term
liabilities
|
|
|
4,226
|
|
|
|
1,706
|
|
|
Total
liabilities
|
|
|
912,943
|
|
|
|
877,362
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1,447
|
|
|
|
1,429
|
|
|
Additional paid-in
capital
|
|
|
1,610,026
|
|
|
|
1,575,600
|
|
|
Accumulated
deficit
|
|
|
(329,213)
|
|
|
|
(300,902)
|
|
|
Total stockholders'
equity
|
|
|
1,282,260
|
|
|
|
1,276,127
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
2,195,203
|
|
|
$
|
2,153,489
|
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
|
(in thousands,
except per share data)
|
|
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
123,110
|
|
|
$
|
109,727
|
|
|
$
|
360,159
|
|
|
$
|
316,124
|
|
Professional services
and other
|
|
|
11,811
|
|
|
|
12,702
|
|
|
|
34,675
|
|
|
|
34,344
|
|
Total
revenue
|
|
|
134,921
|
|
|
|
122,429
|
|
|
|
394,834
|
|
|
|
350,468
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
|
40,345
|
|
|
|
37,005
|
|
|
|
117,532
|
|
|
|
108,419
|
|
Professional services
and other
|
|
|
7,082
|
|
|
|
7,068
|
|
|
|
21,016
|
|
|
|
19,063
|
|
Total cost of
revenue
|
|
|
47,427
|
|
|
|
44,073
|
|
|
|
138,548
|
|
|
|
127,482
|
|
Gross profit
|
|
|
87,494
|
|
|
|
78,356
|
|
|
|
256,286
|
|
|
|
222,986
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
46,734
|
|
|
|
45,737
|
|
|
|
149,743
|
|
|
|
134,943
|
|
Research and
development
|
|
|
20,688
|
|
|
|
20,596
|
|
|
|
65,872
|
|
|
|
56,466
|
|
General and
administrative
|
|
|
15,522
|
|
|
|
14,408
|
|
|
|
44,113
|
|
|
|
44,277
|
|
Total operating
expenses
|
|
|
82,944
|
|
|
|
80,741
|
|
|
|
259,728
|
|
|
|
235,686
|
|
Income (loss) from
operations
|
|
|
4,550
|
|
|
|
(2,385)
|
|
|
|
(3,442)
|
|
|
|
(12,700)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1,360
|
|
|
|
303
|
|
|
|
3,021
|
|
|
|
366
|
|
Interest
expense
|
|
|
(10,868)
|
|
|
|
(7,173)
|
|
|
|
(30,642)
|
|
|
|
(16,337)
|
|
Other income
(expense)
|
|
|
(2,443)
|
|
|
|
(3,856)
|
|
|
|
(1,965)
|
|
|
|
(6,967)
|
|
Total other income
(expense), net
|
|
|
(11,951)
|
|
|
|
(10,726)
|
|
|
|
(29,586)
|
|
|
|
(22,938)
|
|
Loss before income
taxes
|
|
|
(7,401)
|
|
|
|
(13,111)
|
|
|
|
(33,028)
|
|
|
|
(35,638)
|
|
Income tax
benefit
|
|
|
1,920
|
|
|
|
3,056
|
|
|
|
4,717
|
|
|
|
7,119
|
|
Net loss and
comprehensive loss
|
|
$
|
(5,481)
|
|
|
$
|
(10,055)
|
|
|
$
|
(28,311)
|
|
|
$
|
(28,519)
|
|
Net loss per common
share, basic and diluted
|
|
$
|
(0.04)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.20)
|
|
|
$
|
(0.20)
|
|
Weighted-average common
shares used in computing basic and diluted net
loss per common share
|
|
|
144,222
|
|
|
|
142,108
|
|
|
|
143,665
|
|
|
|
141,536
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(in
thousands)
|
|
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(5,481)
|
|
|
$
|
(10,055)
|
|
|
$
|
(28,311)
|
|
|
$
|
(28,519)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property and equipment
|
|
|
1,186
|
|
|
|
1,088
|
|
|
|
3,481
|
|
|
|
3,145
|
|
Amortization of
intangible assets
|
|
|
35,744
|
|
|
|
34,261
|
|
|
|
107,237
|
|
|
|
102,195
|
|
Amortization of
deferred financing costs
|
|
|
300
|
|
|
|
294
|
|
|
|
889
|
|
|
|
881
|
|
Stock-based
compensation
|
|
|
11,675
|
|
|
|
8,699
|
|
|
|
32,986
|
|
|
|
24,670
|
|
Deferred income
taxes
|
|
|
(3,387)
|
|
|
|
(4,642)
|
|
|
|
(7,793)
|
|
|
|
(10,064)
|
|
Other
|
|
|
2,489
|
|
|
|
3,176
|
|
|
|
2,853
|
|
|
|
4,917
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
114,737
|
|
|
|
94,959
|
|
|
|
(22,597)
|
|
|
|
(20,357)
|
|
Prepaid expenses and
other assets
|
|
|
11,430
|
|
|
|
10,235
|
|
|
|
(15,250)
|
|
|
|
(10,941)
|
|
Deferred
commissions
|
|
|
1,074
|
|
|
|
(1,529)
|
|
|
|
2,896
|
|
|
|
(1,333)
|
|
Right-of-use
assets
|
|
|
1,045
|
|
|
|
1,228
|
|
|
|
3,348
|
|
|
|
3,638
|
|
Accounts payable and
accrued liabilities
|
|
|
(5,847)
|
|
|
|
6,736
|
|
|
|
(7,565)
|
|
|
|
(2,395)
|
|
Deferred
revenue
|
|
|
16,366
|
|
|
|
37,541
|
|
|
|
57,724
|
|
|
|
62,621
|
|
Lease
liabilities
|
|
|
(1,619)
|
|
|
|
(1,856)
|
|
|
|
(5,370)
|
|
|
|
(5,343)
|
|
Other
liabilities
|
|
|
2,916
|
|
|
|
(263)
|
|
|
|
2,520
|
|
|
|
(1,641)
|
|
Net cash provided by
operating activities
|
|
|
182,628
|
|
|
|
179,872
|
|
|
|
127,048
|
|
|
|
121,474
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,808)
|
|
|
|
(1,564)
|
|
|
|
(4,708)
|
|
|
|
(4,979)
|
|
Proceeds from sale of
property and equipment
|
|
|
7
|
|
|
|
5
|
|
|
|
42
|
|
|
|
41
|
|
Business acquisitions,
net of cash acquired
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(19,484)
|
|
Net cash used in
investing activities
|
|
|
(1,801)
|
|
|
|
(1,559)
|
|
|
|
(4,666)
|
|
|
|
(24,422)
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of common stock from employee equity plans
|
|
|
2,723
|
|
|
|
3,251
|
|
|
|
6,018
|
|
|
|
7,327
|
|
Shares repurchased for
tax withholdings on vesting of restricted stock units
|
|
|
(1,961)
|
|
|
|
(1,645)
|
|
|
|
(4,949)
|
|
|
|
(3,333)
|
|
Repayments of
long-term debt
|
|
|
(1,250)
|
|
|
|
(1,250)
|
|
|
|
(3,750)
|
|
|
|
(2,500)
|
|
Payments of financing
costs
|
|
|
—
|
|
|
|
—
|
|
|
|
(84)
|
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
|
|
(488)
|
|
|
|
356
|
|
|
|
(2,765)
|
|
|
|
1,494
|
|
Foreign currency
impacts on cash, cash equivalents and restricted cash
|
|
|
(1,523)
|
|
|
|
(2,823)
|
|
|
|
(1,246)
|
|
|
|
(4,256)
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
178,816
|
|
|
|
175,846
|
|
|
|
118,371
|
|
|
|
94,290
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
129,821
|
|
|
|
87,596
|
|
|
|
190,266
|
|
|
|
169,152
|
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
|
308,637
|
|
|
$
|
263,442
|
|
|
$
|
308,637
|
|
|
$
|
263,442
|
|
Supplemental cash
flow disclosure:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
taxes
|
|
$
|
838
|
|
|
$
|
259
|
|
|
$
|
2,657
|
|
|
$
|
3,034
|
|
Interest
paid
|
|
$
|
13,781
|
|
|
$
|
4,184
|
|
|
$
|
31,455
|
|
|
$
|
9,950
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
incurred but not yet paid
|
|
$
|
75
|
|
|
$
|
20
|
|
|
$
|
75
|
|
|
$
|
20
|
|
RECONCILIATIONS OF
GAAP MEASURES TO NON-GAAP MEASURES
|
|
|
|
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP ALLOCATED COMBINED RECEIPTS
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Revenue
|
|
$
|
134,921
|
|
|
$
|
122,429
|
|
|
$
|
394,834
|
|
|
$
|
350,468
|
|
Fair value adjustments
to deferred revenue in connection with
purchase accounting
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
|
855
|
|
Allocated combined
receipts
|
|
$
|
134,921
|
|
|
$
|
122,454
|
|
|
$
|
394,834
|
|
|
$
|
351,323
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING INCOME
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Income (loss) from
operations
|
|
$
|
4,550
|
|
|
$
|
(2,385)
|
|
|
$
|
(3,442)
|
|
|
$
|
(12,700)
|
|
Stock-based
compensation
|
|
|
11,755
|
|
|
|
10,060
|
|
|
|
33,621
|
|
|
|
28,923
|
|
Transaction
costs(1)
|
|
|
3,502
|
|
|
|
2,565
|
|
|
|
9,655
|
|
|
|
4,916
|
|
Sponsor
costs(2)
|
|
|
31
|
|
|
|
148
|
|
|
|
113
|
|
|
|
451
|
|
Other non-recurring
costs(3)
|
|
|
1,465
|
|
|
|
1,531
|
|
|
|
7,206
|
|
|
|
2,735
|
|
Amortization of
acquisition-related intangibles
|
|
|
35,744
|
|
|
|
34,260
|
|
|
|
107,236
|
|
|
|
102,190
|
|
Fair value adjustments
to deferred revenue in connection with
purchase accounting
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
|
855
|
|
Non-GAAP operating
income
|
|
$
|
57,047
|
|
|
$
|
46,204
|
|
|
$
|
154,389
|
|
|
$
|
127,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
|
3.4
|
%
|
|
|
(1.9)
|
%
|
|
|
(0.9)
|
%
|
|
|
(3.6)
|
%
|
Non-GAAP operating
margin
|
|
|
42.3
|
%
|
|
|
37.7
|
%
|
|
|
39.1
|
%
|
|
|
36.3
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP ADJUSTED EBITDA
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net loss
|
|
$
|
(5,481)
|
|
|
$
|
(10,055)
|
|
|
$
|
(28,311)
|
|
|
$
|
(28,519)
|
|
Interest on outstanding
debt
|
|
|
10,868
|
|
|
|
7,173
|
|
|
|
30,640
|
|
|
|
16,334
|
|
Benefit for
taxes
|
|
|
(1,920)
|
|
|
|
(3,056)
|
|
|
|
(4,717)
|
|
|
|
(7,119)
|
|
Depreciation
|
|
|
1,186
|
|
|
|
1,087
|
|
|
|
3,481
|
|
|
|
3,145
|
|
Amortization
|
|
|
—
|
|
|
|
2
|
|
|
|
2
|
|
|
|
5
|
|
Stock-based
compensation
|
|
|
11,755
|
|
|
|
10,060
|
|
|
|
33,621
|
|
|
|
28,923
|
|
Transaction
costs(1)
|
|
|
3,502
|
|
|
|
2,565
|
|
|
|
9,655
|
|
|
|
4,916
|
|
Sponsor
costs(2)
|
|
|
31
|
|
|
|
148
|
|
|
|
113
|
|
|
|
451
|
|
Other non-recurring
costs(4)
|
|
|
1,465
|
|
|
|
1,531
|
|
|
|
7,313
|
|
|
|
2,735
|
|
Effects of foreign
currency transaction losses
|
|
|
2,420
|
|
|
|
3,865
|
|
|
|
1,672
|
|
|
|
7,050
|
|
Amortization of
acquisition-related intangibles
|
|
|
35,744
|
|
|
|
34,260
|
|
|
|
107,236
|
|
|
|
102,190
|
|
Interest
income
|
|
|
(1,346)
|
|
|
|
—
|
|
|
|
(2,963)
|
|
|
|
—
|
|
Fair value adjustments
to deferred revenue in connection with
purchase accounting
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
|
855
|
|
Adjusted
EBITDA
|
|
$
|
58,224
|
|
|
$
|
47,605
|
|
|
$
|
157,742
|
|
|
$
|
130,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
margin
|
|
|
(4.1)
|
%
|
|
|
(8.2)
|
%
|
|
|
(7.2)
|
%
|
|
|
(8.1)
|
%
|
Adjusted EBITDA
margin
|
|
|
43.2
|
%
|
|
|
38.9
|
%
|
|
|
40.0
|
%
|
|
|
37.3
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
FREE CASH FLOW, UNLEVERED FREE CASH FLOW & ADJUSTED UNLEVERED
FREE CASH FLOW
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
182,628
|
|
|
$
|
179,872
|
|
|
$
|
127,048
|
|
|
$
|
121,474
|
|
Purchases of property
and equipment
|
|
|
(1,808)
|
|
|
|
(1,564)
|
|
|
|
(4,708)
|
|
|
|
(4,979)
|
|
Proceeds from disposals
of property and equipment
|
|
|
7
|
|
|
|
5
|
|
|
|
42
|
|
|
|
41
|
|
Free cash
flow
|
|
$
|
180,827
|
|
|
$
|
178,313
|
|
|
$
|
122,382
|
|
|
$
|
116,536
|
|
Cash paid for interest
on outstanding debt
|
|
|
13,781
|
|
|
|
4,184
|
|
|
|
31,455
|
|
|
|
9,950
|
|
Cash settled
stock-based compensation
|
|
|
81
|
|
|
|
1,360
|
|
|
|
638
|
|
|
|
4,253
|
|
Unlevered free cash
flow
|
|
$
|
194,689
|
|
|
$
|
183,857
|
|
|
$
|
154,475
|
|
|
$
|
130,739
|
|
Transaction
costs(1)
|
|
|
1,509
|
|
|
|
2,018
|
|
|
|
9,874
|
|
|
|
7,260
|
|
Sponsor
costs(2)
|
|
|
46
|
|
|
|
103
|
|
|
|
135
|
|
|
|
344
|
|
Impaired
leases
|
|
|
263
|
|
|
|
495
|
|
|
|
1,096
|
|
|
|
1,465
|
|
Other non-recurring
costs(5)
|
|
|
3,553
|
|
|
|
1,140
|
|
|
|
8,363
|
|
|
|
2,598
|
|
Adjusted unlevered free
cash flow
|
|
$
|
200,060
|
|
|
$
|
187,613
|
|
|
$
|
173,943
|
|
|
$
|
142,406
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP NET INCOME
|
|
(in thousands,
except per share data)
|
|
(unaudited)
|
|
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net loss
|
|
$
|
(5,481)
|
|
|
$
|
(10,055)
|
|
|
$
|
(28,311)
|
|
|
$
|
(28,519)
|
|
Stock-based
compensation
|
|
|
11,755
|
|
|
|
10,060
|
|
|
|
33,621
|
|
|
|
28,923
|
|
Amortization of
acquisition-related intangibles
|
|
|
35,744
|
|
|
|
34,260
|
|
|
|
107,236
|
|
|
|
102,190
|
|
Fair value adjustments
to deferred revenue in connection with
purchase accounting
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
|
855
|
|
Transaction
costs(1)
|
|
|
3,502
|
|
|
|
2,565
|
|
|
|
9,655
|
|
|
|
4,916
|
|
Sponsor
costs(2)
|
|
|
31
|
|
|
|
148
|
|
|
|
113
|
|
|
|
451
|
|
Other non-recurring
costs(4)
|
|
|
1,465
|
|
|
|
1,531
|
|
|
|
7,313
|
|
|
|
2,735
|
|
Effects of foreign
currency transaction losses
|
|
|
2,420
|
|
|
|
3,865
|
|
|
|
1,672
|
|
|
|
7,050
|
|
Tax effects of
adjustments(6)
|
|
|
(13,680)
|
|
|
|
(12,909)
|
|
|
|
(39,693)
|
|
|
|
(36,368)
|
|
Non-GAAP net
income
|
|
$
|
35,756
|
|
|
$
|
29,490
|
|
|
$
|
91,606
|
|
|
$
|
82,233
|
|
Non-GAAP net income per
common share, basic
|
|
$
|
0.25
|
|
|
$
|
0.21
|
|
|
$
|
0.64
|
|
|
$
|
0.58
|
|
Non-GAAP net income per
common share, diluted
|
|
$
|
0.25
|
|
|
$
|
0.21
|
|
|
$
|
0.63
|
|
|
$
|
0.57
|
|
Weighted average common
shares used in computing basic Non-
GAAP net income per common share
|
|
|
144,222
|
|
|
|
142,108
|
|
|
|
143,665
|
|
|
|
141,536
|
|
Weighted average common
shares used in computing diluted Non-
GAAP net income per common share
|
|
|
145,638
|
|
|
|
143,781
|
|
|
|
145,190
|
|
|
|
143,067
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP GROSS PROFIT
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Gross profit
|
|
$
|
87,494
|
|
|
$
|
78,356
|
|
|
$
|
256,286
|
|
|
$
|
222,986
|
|
Stock-based
compensation
|
|
|
1,062
|
|
|
|
809
|
|
|
|
2,951
|
|
|
|
2,257
|
|
Transaction
costs(1)
|
|
|
336
|
|
|
|
150
|
|
|
|
1,011
|
|
|
|
229
|
|
Other non-recurring
costs
|
|
|
427
|
|
|
|
25
|
|
|
|
1,274
|
|
|
|
59
|
|
Amortization of
acquisition-related intangibles
|
|
|
16,265
|
|
|
|
15,885
|
|
|
|
48,603
|
|
|
|
47,434
|
|
Fair value adjustments
to deferred revenue in connection with
purchase accounting
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
|
855
|
|
Non-GAAP gross
profit
|
|
$
|
105,584
|
|
|
$
|
95,250
|
|
|
$
|
310,125
|
|
|
$
|
273,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
|
64.8
|
%
|
|
|
64.0
|
%
|
|
|
64.9
|
%
|
|
|
63.6
|
%
|
Non-GAAP gross
margin
|
|
|
78.3
|
%
|
|
|
77.8
|
%
|
|
|
78.5
|
%
|
|
|
77.9
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NET DEBT
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
Long-term debt,
current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,013
|
|
|
$
|
4,013
|
|
Long-term debt, net of
current portion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
483,385
|
|
|
|
486,471
|
|
Cash, cash equivalents
and restricted cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(308,637)
|
|
|
|
(190,266)
|
|
Net debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
178,761
|
|
|
$
|
300,218
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
TRAILING TWELVE MONTHS NON-GAAP ADJUSTED EBITDA
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended
September 30,
|
|
|
Three months
ended
June 30,
|
|
|
Three months
ended
March 31,
|
|
|
Three months
ended
December 31,
|
|
|
|
2023
|
|
|
2023
|
|
|
2023
|
|
|
2022
|
|
Net loss
|
|
$
|
(5,481)
|
|
|
$
|
(10,973)
|
|
|
$
|
(11,857)
|
|
|
$
|
(5,723)
|
|
Interest on outstanding
debt
|
|
|
10,868
|
|
|
|
10,287
|
|
|
|
9,485
|
|
|
|
8,257
|
|
Benefit for
taxes
|
|
|
(1,920)
|
|
|
|
(672)
|
|
|
|
(2,125)
|
|
|
|
(1,013)
|
|
Depreciation
|
|
|
1,186
|
|
|
|
1,092
|
|
|
|
1,203
|
|
|
|
1,346
|
|
Amortization
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
2
|
|
Stock-based
compensation
|
|
|
11,755
|
|
|
|
11,856
|
|
|
|
10,010
|
|
|
|
10,856
|
|
Transaction
costs(1)
|
|
|
3,502
|
|
|
|
2,317
|
|
|
|
3,836
|
|
|
|
4,206
|
|
Sponsor
costs(2)
|
|
|
31
|
|
|
|
24
|
|
|
|
58
|
|
|
|
66
|
|
Other non-recurring
costs(7)
|
|
|
1,465
|
|
|
|
2,298
|
|
|
|
3,550
|
|
|
|
630
|
|
Effects of foreign
currency transaction (gains) and losses
|
|
|
2,420
|
|
|
|
(397)
|
|
|
|
(351)
|
|
|
|
(4,536)
|
|
Amortization of
acquisition-related intangibles
|
|
|
35,744
|
|
|
|
35,744
|
|
|
|
35,748
|
|
|
|
34,520
|
|
Interest
income
|
|
|
(1,346)
|
|
|
|
(316)
|
|
|
|
(1,301)
|
|
|
|
—
|
|
Fair value adjustments
to deferred revenue in connection with
purchase accounting
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13
|
|
Adjusted
EBITDA
|
|
$
|
58,224
|
|
|
$
|
51,260
|
|
|
$
|
48,258
|
|
|
$
|
48,624
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Three Months Ended
September 30, 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
|
|
$
|
40,345
|
|
|
$
|
(459)
|
|
|
$
|
(337)
|
|
|
$
|
(430)
|
|
|
$
|
(16,265)
|
|
|
$
|
22,854
|
|
Professional services
and other
|
|
|
7,082
|
|
|
|
(603)
|
|
|
|
1
|
|
|
|
3
|
|
|
|
—
|
|
|
|
6,483
|
|
Total cost of
revenue
|
|
$
|
47,427
|
|
|
$
|
(1,062)
|
|
|
$
|
(336)
|
|
|
$
|
(427)
|
|
|
$
|
(16,265)
|
|
|
$
|
29,337
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Three Months Ended
September 30, 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
|
|
$
|
37,005
|
|
|
$
|
(358)
|
|
|
$
|
(135)
|
|
|
$
|
(6)
|
|
|
$
|
(15,885)
|
|
|
$
|
20,621
|
|
Professional services
and other
|
|
|
7,068
|
|
|
|
(451)
|
|
|
|
(15)
|
|
|
|
(19)
|
|
|
|
—
|
|
|
|
6,583
|
|
Total cost of
revenue
|
|
$
|
44,073
|
|
|
$
|
(809)
|
|
|
$
|
(150)
|
|
|
$
|
(25)
|
|
|
$
|
(15,885)
|
|
|
$
|
27,204
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Nine Months Ended
September 30, 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
|
|
$
|
117,532
|
|
|
$
|
(1,312)
|
|
|
$
|
(984)
|
|
|
$
|
(1,066)
|
|
|
$
|
(48,603)
|
|
|
$
|
65,567
|
|
Professional services
and other
|
|
|
21,016
|
|
|
|
(1,639)
|
|
|
|
(27)
|
|
|
|
(208)
|
|
|
|
—
|
|
|
|
19,142
|
|
Total cost of
revenue
|
|
$
|
138,548
|
|
|
$
|
(2,951)
|
|
|
$
|
(1,011)
|
|
|
$
|
(1,274)
|
|
|
$
|
(48,603)
|
|
|
$
|
84,709
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Nine Months Ended
September 30, 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
|
|
$
|
108,419
|
|
|
$
|
(965)
|
|
|
$
|
(135)
|
|
|
$
|
(24)
|
|
|
$
|
(47,434)
|
|
|
$
|
59,861
|
|
Professional services
and other
|
|
|
19,063
|
|
|
|
(1,292)
|
|
|
|
(94)
|
|
|
|
(35)
|
|
|
|
—
|
|
|
|
17,642
|
|
Total cost of
revenue
|
|
$
|
127,482
|
|
|
$
|
(2,257)
|
|
|
$
|
(229)
|
|
|
$
|
(59)
|
|
|
$
|
(47,434)
|
|
|
$
|
77,503
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Three Months Ended
September 30, 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
|
|
$
|
46,734
|
|
|
$
|
(3,145)
|
|
|
$
|
(183)
|
|
|
$
|
—
|
|
|
$
|
(208)
|
|
|
$
|
(19,475)
|
|
|
$
|
23,723
|
|
|
|
34.6
|
%
|
|
|
17.6
|
%
|
Research and
development
|
|
|
20,688
|
|
|
|
(3,792)
|
|
|
|
(1,216)
|
|
|
|
—
|
|
|
|
(529)
|
|
|
|
(4)
|
|
|
|
15,147
|
|
|
|
15.3
|
%
|
|
|
11.2
|
%
|
General and
administrative
|
|
|
15,522
|
|
|
|
(3,756)
|
|
|
|
(1,767)
|
|
|
|
(31)
|
|
|
|
(301)
|
|
|
|
—
|
|
|
|
9,667
|
|
|
|
11.5
|
%
|
|
|
7.2
|
%
|
Total operating
expenses
|
|
$
|
82,944
|
|
|
$
|
(10,693)
|
|
|
$
|
(3,166)
|
|
|
$
|
(31)
|
|
|
$
|
(1,038)
|
|
|
$
|
(19,479)
|
|
|
$
|
48,537
|
|
|
|
61.4
|
%
|
|
|
36.0
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Three Months Ended
September 30, 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
|
|
$
|
45,737
|
|
|
$
|
(2,813)
|
|
|
$
|
(146)
|
|
|
$
|
—
|
|
|
$
|
(266)
|
|
|
$
|
(18,375)
|
|
|
$
|
24,137
|
|
|
|
37.4
|
%
|
|
|
19.7
|
%
|
Research and
development
|
|
|
20,596
|
|
|
|
(3,035)
|
|
|
|
(1,322)
|
|
|
|
—
|
|
|
|
(662)
|
|
|
|
—
|
|
|
|
15,577
|
|
|
|
16.8
|
%
|
|
|
12.7
|
%
|
General and
administrative
|
|
|
14,408
|
|
|
|
(3,403)
|
|
|
|
(947)
|
|
|
|
(148)
|
|
|
|
(578)
|
|
|
|
—
|
|
|
|
9,332
|
|
|
|
11.8
|
%
|
|
|
7.6
|
%
|
Total operating
expenses
|
|
$
|
80,741
|
|
|
$
|
(9,251)
|
|
|
$
|
(2,415)
|
|
|
$
|
(148)
|
|
|
$
|
(1,506)
|
|
|
$
|
(18,375)
|
|
|
$
|
49,046
|
|
|
|
66.0
|
%
|
|
|
40.0
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Nine Months Ended
September 30, 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
|
|
$
|
149,743
|
|
|
$
|
(9,142)
|
|
|
$
|
(1,949)
|
|
|
$
|
—
|
|
|
$
|
(1,811)
|
|
|
$
|
(58,620)
|
|
|
$
|
78,221
|
|
|
|
37.9
|
%
|
|
|
19.8
|
%
|
Research and
development
|
|
|
65,872
|
|
|
|
(10,446)
|
|
|
|
(4,009)
|
|
|
|
—
|
|
|
|
(2,718)
|
|
|
|
(13)
|
|
|
|
48,686
|
|
|
|
16.7
|
%
|
|
|
12.3
|
%
|
General and
administrative
|
|
|
44,113
|
|
|
|
(11,082)
|
|
|
|
(2,686)
|
|
|
|
(113)
|
|
|
|
(1,403)
|
|
|
|
—
|
|
|
|
28,829
|
|
|
|
11.2
|
%
|
|
|
7.3
|
%
|
Total operating
expenses
|
|
$
|
259,728
|
|
|
$
|
(30,670)
|
|
|
$
|
(8,644)
|
|
|
$
|
(113)
|
|
|
$
|
(5,932)
|
|
|
$
|
(58,633)
|
|
|
$
|
155,736
|
|
|
|
65.8
|
%
|
|
|
39.4
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Nine Months Ended
September 30, 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
|
|
$
|
134,943
|
|
|
$
|
(8,162)
|
|
|
$
|
(173)
|
|
|
$
|
—
|
|
|
$
|
(629)
|
|
|
$
|
(54,756)
|
|
|
$
|
71,223
|
|
|
|
38.5
|
%
|
|
|
20.3
|
%
|
Research and
development
|
|
|
56,466
|
|
|
|
(8,261)
|
|
|
|
(1,856)
|
|
|
|
—
|
|
|
|
(920)
|
|
|
|
—
|
|
|
|
45,429
|
|
|
|
16.1
|
%
|
|
|
13.0
|
%
|
General and
administrative
|
|
|
44,277
|
|
|
|
(10,243)
|
|
|
|
(2,658)
|
|
|
|
(451)
|
|
|
|
(1,127)
|
|
|
|
—
|
|
|
|
29,798
|
|
|
|
12.6
|
%
|
|
|
8.5
|
%
|
Total operating
expenses
|
|
$
|
235,686
|
|
|
$
|
(26,666)
|
|
|
$
|
(4,687)
|
|
|
$
|
(451)
|
|
|
$
|
(2,676)
|
|
|
$
|
(54,756)
|
|
|
$
|
146,450
|
|
|
|
67.2
|
%
|
|
|
41.8
|
%
|
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 September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract modification
fees
|
|
|
422
|
|
|
|
—
|
|
|
|
1,028
|
|
|
|
230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
severance
|
|
|
203
|
|
|
|
219
|
|
|
|
2,588
|
|
|
|
549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workforce realignment
costs
|
|
|
385
|
|
|
|
767
|
|
|
|
2,170
|
|
|
|
1,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other insignificant
non-recurring costs
|
|
|
455
|
|
|
|
545
|
|
|
|
1,420
|
|
|
|
726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
non-recurring costs
|
|
$
|
1,465
|
|
|
$
|
1,531
|
|
|
$
|
7,206
|
|
|
$
|
2,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Includes
other non-recurring costs as follows (in thousands):
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on exit of leased
properties
|
|
|
—
|
|
|
|
—
|
|
|
|
107
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract modification
fees
|
|
|
422
|
|
|
|
—
|
|
|
|
1,028
|
|
|
|
230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
severance
|
|
|
203
|
|
|
|
219
|
|
|
|
2,588
|
|
|
|
549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workforce realignment
costs
|
|
|
385
|
|
|
|
767
|
|
|
|
2,170
|
|
|
|
1,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other insignificant
non-recurring costs
|
|
|
455
|
|
|
|
545
|
|
|
|
1,420
|
|
|
|
726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
non-recurring costs
|
|
$
|
1,465
|
|
|
$
|
1,531
|
|
|
$
|
7,313
|
|
|
$
|
2,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Includes
other non-recurring costs paid in cash as follows (in
thousands):
|
|
Three months
ended September 30,
|
|
|
Nine months
ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
severance
|
|
$
|
243
|
|
|
$
|
192
|
|
|
$
|
2,418
|
|
|
$
|
511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workforce realignment
costs
|
|
|
308
|
|
|
|
420
|
|
|
|
2,093
|
|
|
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract modification
fees
|
|
|
2,613
|
|
|
|
186
|
|
|
|
2,613
|
|
|
|
186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other insignificant
non-recurring costs
|
|
|
389
|
|
|
|
342
|
|
|
|
1,239
|
|
|
|
1,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
non-recurring costs paid in cash
|
|
$
|
3,553
|
|
|
$
|
1,140
|
|
|
$
|
8,363
|
|
|
$
|
2,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
September 30,
|
|
|
Three months
ended
June 30,
|
|
|
Three months
ended
March 31,
|
|
|
Three months
ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
2023
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on exit of leased
properties
|
|
|
—
|
|
|
|
6
|
|
|
|
101
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract modification
fees
|
|
|
422
|
|
|
|
491
|
|
|
|
115
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
severance
|
|
|
203
|
|
|
|
526
|
|
|
|
1,859
|
|
|
|
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workforce realignment
costs
|
|
|
385
|
|
|
|
725
|
|
|
|
1,060
|
|
|
|
267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other insignificant
non-recurring costs
|
|
|
455
|
|
|
|
550
|
|
|
|
415
|
|
|
|
168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other
non-recurring costs
|
|
$
|
1,465
|
|
|
$
|
2,298
|
|
|
$
|
3,550
|
|
|
$
|
630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For More Information:
Media Relations:
Brian
Watkins
Corporate Communications
Instructure
(801) 610-9722
brian.watkins@instructure.com
Investor Relations:
David
Banks
Investor Relations
Instructure
(262) 825-8388
david.banks@instructure.com
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SOURCE Instructure Holdings, Inc.