Third Quarter GAAP Revenue of $122.4 Million Grows 14.2% year over year

Third Quarter Loss from Operations of $2.4 Million and Adjusted EBITDA* of $47.6 Million

SALT LAKE CITY, Nov. 1, 2022 /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, 2022.

Instructure official logo (PRNewsFoto/Instructure)

"Instructure delivered a solid performance in the third quarter, with continued strong top line growth and industry-leading profitability," said Steve Daly, Instructure CEO. "We remain the platform of choice for teaching and learning and will continue to make disciplined investments that position us to win a disproportionate share of the opportunities across international, higher education, K12 and non-traditional learning while maintaining best-in-class profitability."

Financial Highlights:

  • GAAP Revenue of $122.4 million, an increase of 14.2% year over year
  • Allocated Combined Receipts*, or ACR, of $122.5 million, an increase of 12.8% year over year
  • Operating loss of $2.4 million, or negative 1.9% of revenue, and Non-GAAP operating income* of $46.2 million, or 37.7% of ACR
  • GAAP net loss of $10.1 million, or negative 8.2% of revenue, and Adjusted EBITDA* of $47.6 million, or 38.9% of ACR
  • Cash flow from operations of $179.9 million and Adjusted Unlevered Free Cash Flow* of $187.6 million
  • For the twelve months ended September 30, 2022, cash flow from operations of $118.9 million and Adjusted Unlevered Free Cash Flow* of $147.5 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.

Business and Operating Highlights:

  • Market research firm ListEdTech reported last month that 33% of all K12 districts are now using Canvas, displacing Google Classroom as the share leader in this segment of the market.
      
  • Wichita Public Schools converted from a 600-student pilot program during the quarter to implement Canvas across the entire school district with a plan already in place to expand the Instructure Learning Platform further once Canvas is live.
      
  • University of Texas-San Antonio (UT-SA) selected Canvas as its LMS. UT-SA was already using Instructure's Impact product and after a long evaluation process, decided to migrate to Canvas due to the engaging learning platform and the power of combining Canvas, Studio, Catalog, and Impact.
      
  • The University of Galway selected the Instructure Learning Platform after a lengthy evaluation process due to its world-class user experience and unrivaled interoperability.

Business Outlook

Based on information as of today, November 1, 2022, the Company is issuing the following financial guidance.

Fourth Quarter Fiscal 2022:

  • Revenue and ACR* are expected to be in the range of $120.7 million to $121.7 million
  • Non-GAAP operating income* is expected to be in the range of $42.5 million to $43.5 million
  • Adjusted EBITDA* is expected to be in the range of $43.8 million to $44.8 million
  • Non-GAAP net income* is expected to be in the range of $36.6 million to $37.6 million

Full Year 2022:

  • Revenue is expected to be in the range of $471.2 million to $472.2 million
  • ACR* is expected to be in the range of $472.1 million to $473.1 million
  • Non-GAAP operating income* is expected to be in the range of $169.9 million to $170.9 million
  • Adjusted EBITDA* is expected to be in the range of $174.8 million to $175.8 million
  • Non-GAAP net income* is expected to be in the range of $155.2 million to $156.2 million
  • Adjusted unlevered free cash flow* is expected to be in the range of $181.5 million to $182.5 million

*ACR, 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" for a reconciliation of ACR to the most closely comparable GAAP measure. Instructure is unable to provide guidance, or a reconciliation, for operating 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.

Conference Call Information

Instructure's management team will hold a conference call to discuss our third quarter results today, November 1, 2022 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 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 loss from operations excluding the impact of stock-based compensation, restructuring, transaction and sponsor related 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, and restructuring, transaction and sponsor related costs that we do not believe are reflective of our ongoing operations. 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 potential 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, restructuring, transaction and sponsor related 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. 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 restructuring, transaction and sponsor related 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, restructuring, transaction and sponsor related 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, restructuring, transaction and sponsor related 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.

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 2022 and for the full year ending December 31, 2022, the Company's growth, customer demand and application adoption, the Company's research and development efforts and future application releases, 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 general global political, macroeconomic, social, health and market conditions, including rising inflation, political instability, terrorist activities or military conflicts, including Russia's invasion of Ukraine; delay in contract decision-making by our customers and prospective customers; risks associated with future stimulus packages approved by the U.S. federal government; failure to continue our recent growth rates; 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 the ongoing effects of the COVID-19 pandemic, including learning loss; 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; 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,
2022


December 31,
2021

Assets

































(unaudited)



Current assets:




































Cash and cash equivalents

































$

259,161


$

164,928

Accounts receivable—net


































72,332



51,607

Prepaid expenses


































27,624



15,475

Deferred commissions


































14,222



11,418

Other current assets


































3,015



3,384

Total current assets


































376,354



246,812

Property and equipment, net


































12,915



10,792

Right-of-use assets


































14,537



18,175

Goodwill


































1,203,979



1,194,221

Intangible assets, net


































540,551



629,746

Noncurrent prepaid expenses


































993



1,553

Deferred commissions, net of current portion


































18,634



20,105

Deferred tax assets


































9,304



6,477

Other assets


































5,649



5,901

Total assets

































$

2,182,916


$

2,133,782

Liabilities and stockholders' equity




































Current liabilities:




































Accounts payable

































$

19,674


$

18,324

Accrued liabilities


































26,563



28,408

Lease liabilities


































6,956



6,666

Long-term debt, current


































4,013



2,763

Deferred revenue


































308,231



240,936

Total current liabilities


































365,437



297,097

Long-term debt, net of current portion


































487,490



490,500

Deferred revenue, net of current portion


































12,632



14,740

Lease liabilities, net of current portion


































18,045



23,678

Deferred tax liabilities


































22,614



29,851

Other long-term liabilities


































1,890



3,531

Total liabilities


































908,108



859,397

Stockholders' equity:




































Accumulated deficit


































1,425



1,407

Additional paid-in capital


































1,568,562



1,539,638

Accumulated deficit


































(295,179)



(266,660)

Total stockholders' equity


































1,274,808



1,274,385

Total liabilities and stockholders' equity

































$

2,182,916


$

2,133,782

 

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,



2022


2021


2022


2021



(unaudited)

Revenue:









Subscription and support


$

109,727


$

96,163


$

316,124


$

266,774

Professional services and other



12,702



11,058



34,344



27,994

Total revenue



122,429



107,221



350,468



294,768

Cost of revenue:









Subscription and support



37,005



36,528



108,419



112,575

Professional services and other



7,068



4,939



19,063



15,500

Total cost of revenue



44,073



41,467



127,482



128,075

Gross profit



78,356



65,754



222,986



166,693

Operating expenses:









Sales and marketing



45,737



40,553



134,943



120,858

Research and development



20,596



15,823



56,466



47,191

General and administrative



14,408



14,396



44,277



38,943

Impairment on disposal group









1,218

Total operating expenses



80,741



70,772



235,686



208,210

Loss from operations



(2,385)



(5,018)



(12,700)



(41,517)

Other income (expense):









Interest income



303





366



13

Interest expense



(7,173)



(11,251)



(16,337)



(44,178)

Other expense



(3,856)



(1,623)



(6,967)



(2,365)

Total other income (expense), net



(10,726)



(12,874)



(22,938)



(46,530)

Loss before income taxes



(13,111)



(17,892)



(35,638)



(88,047)

Income tax benefit



3,056



4,631



7,119



20,022

Net loss and comprehensive loss


$

(10,055)


$

(13,261)


$

(28,519)


$

(68,025)

Net loss per common share, basic and diluted


$

(0.07)


$

(0.10)


$

(0.20)


$

(0.52)

Weighted-average common shares used in computing basic and diluted
net loss per common share



142,108



136,647



141,536



129,643

 

INSTRUCTURE HOLDINGS, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)




Three months
ended September 30,



Nine months
ended September 30,




2022



2021



2022



2021




(unaudited)


Operating Activities:













Net loss


$

(10,055)



$

(13,261)



$

(28,519)



$

(68,025)


Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:













Depreciation of property and equipment



1,088




910




3,145




2,728


Amortization of intangible assets



34,261




33,591




102,195




100,319


Amortization of deferred financing costs



294




740




881




1,958


Impairment on disposal group












1,218


Stock-based compensation



8,699




6,709




24,670




11,532


Deferred income taxes



(4,642)




(4,852)




(10,064)




(20,254)


Other



3,176




160




4,917




1,565


Changes in assets and liabilities:













Accounts receivable, net



94,959




89,213




(20,357)




(7,700)


Prepaid expenses and other assets



10,235




7,050




(10,941)




80


Deferred commissions



(1,529)




(3,221)




(1,333)




(5,596)


Right-of-use assets



1,228




1,172




3,638




7,552


Accounts payable and accrued liabilities



6,736




8,829




(2,395)




8,634


Deferred revenue



37,541




36,412




62,621




80,470


Lease liabilities



(1,856)




(1,696)




(5,343)




(4,746)


Other liabilities



(263)




(573)




(1,641)




(919)


Net cash provided by operating activities



179,872




161,183




121,474




108,816


Investing Activities:













Purchases of property and equipment



(1,564)




(1,193)




(4,979)




(2,800)


Proceeds from sale of property and equipment



5




16




41




40


Proceeds from sale of Bridge












46,018


Business acquisitions, net of cash received






(856)




(19,484)




(16,886)


Net cash provided by (used in) investing activities



(1,559)




(2,033)




(24,422)




26,372


Financing Activities:













IPO proceeds, net of offering costs paid of $5,719






259,604







259,604


Proceeds from issuance of common stock from employee equity plans



3,251







7,327





Shares repurchased for tax withholdings on vesting of restricted stock units



(1,645)




(1,318)




(3,333)




(1,318)


Distributions to stockholders






(7)







(930)


Repayments of long-term debt



(1,250)




(256,348)




(2,500)




(307,882)


Term Loan prepayment premium






(3,827)







(3,827)


Net cash provided by (used in) financing activities



356




(1,896)




1,494




(54,353)


Effect of exchange rate changes on cash, cash equivalents and restricted cash



(2,823)







(4,256)





Net increase in cash, cash equivalents and restricted cash



175,846




157,254




94,290




80,835


Cash, cash equivalents and restricted cash, beginning of period



87,596




74,534




169,152




150,953


Cash, cash equivalents and restricted cash, end of period


$

263,442



$

231,788



$

263,442



$

231,788


Supplemental cash flow disclosure:













Cash paid for taxes


$

259



$

153



$

3,034



$

556


Interest paid


$

4,184



$

10,553



$

9,950



$

42,302


Non-cash investing and financing activities:













Capital expenditures incurred but not yet paid


$

20



$

62



$

20



$

62


 

RECONCILIATIONS OF NON-GAAP MEASURES TO 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,







2022



2021



2022



2021


Revenue





$

122,429



$

107,221



$

350,468



$

294,768


Fair value adjustments to deferred revenue in connection with
purchase accounting






25




1,379




855




8,471


Allocated combined receipts





$

122,454



$

108,600



$

351,323



$

303,239


 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP OPERATING INCOME


(in thousands)


(unaudited)




Three months
ended September 30,



Nine months
ended September 30,




2022



2021



2022



2021


Loss from operations


$

(2,385)



$

(5,018)



$

(12,700)



$

(41,517)


Stock-based compensation



10,060




8,379




28,923




17,722


Restructuring, transaction and sponsor related costs



4,244




2,031




8,102




18,042


Amortization of acquisition-related intangibles



34,260




33,590




102,190




100,312


Fair value adjustments to deferred revenue in connection with
purchase accounting



25




1,379




855




8,471


Non-GAAP operating income


$

46,204



$

40,361



$

127,370



$

103,030


 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP ADJUSTED EBITDA


(in thousands)


(unaudited)




Three months
ended September 30,



Nine months
ended September 30,




2022



2021



2022



2021


Net loss


$

(10,055)



$

(13,261)



$

(28,519)



$

(68,025)


Interest on outstanding debt and loss on debt extinguishment



7,173




11,247




16,334




44,170


Benefit for taxes



(3,056)




(4,631)




(7,119)




(20,022)


Depreciation



1,087




911




3,145




2,728


Amortization



2




2




5




5


Stock-based compensation



10,060




8,379




28,923




17,722


Restructuring, transaction and sponsor related costs



8,109




3,641




15,152




19,652


Amortization of acquisition-related intangibles



34,260




33,590




102,190




100,312


Fair value adjustments to deferred revenue in connection with
purchase accounting



25




1,379




855




8,471


Adjusted EBITDA


$

47,605



$

41,257



$

130,966



$

105,013



















Adjusted EBITDA margin



38.9

%



38.0

%



37.3

%



34.6

%

 

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,




2022



2021



2022



2021















Net cash provided by operating activities


$

179,872



$

161,183



$

121,474



$

108,816


Purchases of property and equipment



(1,564)




(1,193)




(4,979)




(2,800)


Proceeds from disposals of property and equipment



5




16




41




40


Free cash flow


$

178,313



$

160,006



$

116,536



$

106,056


Cash paid for interest on outstanding debt



4,184




10,553




9,950




42,302


Cash settled stock-based compensation



1,360




1,651




4,253




6,094


Unlevered free cash flow


$

183,857



$

172,210



$

130,739



$

154,452


Restructuring, transaction and sponsor related costs paid in cash



3,756




2,115




11,667




10,201


Adjusted unlevered free cash flow


$

187,613



$

174,325



$

142,406



$

164,653


 

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,




2022



2021



2022



2021


Net loss


$

(10,055)



$

(13,261)



$

(28,519)



$

(68,025)


Stock-based compensation



10,060




8,379




28,923




17,722


Amortization of acquisition-related intangibles



34,260




33,590




102,190




100,312


Fair value adjustments to deferred revenue in connection with
purchase accounting



25




1,379




855




8,471


Restructuring, transaction and sponsor related costs



8,109




3,641




15,152




19,652


Non-GAAP net income


$

42,399



$

33,728



$

118,601



$

78,132


Non-GAAP net income per common share, basic


$

0.30



$

0.25



$

0.84



$

0.60


Non-GAAP net income per common share, diluted


$

0.29



$

0.24



$

0.83



$

0.60


Weighted average common shares used in computing basic Non-
GAAP net income per common share



142,108




136,647




141,536




129,643


Weighted average common shares used in computing diluted Non-
GAAP net income per common share



143,781




138,182




143,067




130,166


 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP GROSS PROFIT


(in thousands)


(unaudited)




Three months
ended September 30,



Nine months
ended September 30,




2022



2021



2022



2021


Gross profit


$

78,356



$

65,754



$

222,986



$

166,693


Stock-based compensation



809




580




2,257




1,262


Restructuring, transaction and sponsor related costs



175




187




288




2,991


Amortization of acquisition-related intangibles



15,885




15,582




47,434




46,412


Fair value adjustments to deferred revenue in connection with
purchase accounting



25




1,379




855




8,471


Non-GAAP gross profit


$

95,250



$

83,482



$

273,820



$

225,829















GAAP gross margin



64.0

%



61.3

%



63.6

%



56.6

%

Non-GAAP gross margin



77.8

%



76.9

%



77.9

%



74.5

%

 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF ACR NORMALIZED FOR BRIDGE DIVESTITURE


(in thousands)


(unaudited)




Three months
ended September 30,



Nine months
ended September 30,




2022



2021



2022



2021


Revenue


$

122,429



$

107,221



$

350,468



$

294,768


Bridge revenue - Subscription and support












(3,332)


Bridge revenue - Professional services and other












(330)


Revenue normalized for Bridge divestiture


$

122,429



$

107,221



$

350,468



$

291,106


Fair value adjustments to deferred revenue in connection with
purchase accounting



25




1,379




855




8,471


Fair value adjustments to Bridge deferred revenue in connection
with purchase accounting - Subscription and support












(206)


Fair value adjustments to Bridge deferred revenue in connection
with purchase accounting - Professional services and other












(20)


Allocated combined receipts normalized for Bridge divestiture


$

122,454



$

108,600



$

351,323



$

299,351


 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP COST OF REVENUE


Three Months Ended September 30, 2022


(in thousands)


(unaudited)




GAAP



Stock-based
compensation
expense



Restructuring,
transaction and
sponsor related
costs



Amortization of
acquired
intangibles



Non-GAAP


Cost of Revenue:
















Subscription and support


$

37,005



$

(358)



$

(141)



$

(15,885)



$

20,621


Professional services and other



7,068




(451)




(34)







6,583


Total cost of revenue


$

44,073



$

(809)



$

(175)



$

(15,885)



$

27,204


 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP COST OF REVENUE


Three Months Ended September 30, 2021


(in thousands)


(unaudited)




GAAP



Stock-based
compensation
expense



Restructuring,
transaction and
sponsor related
costs



Amortization of
acquired
intangibles



Non-GAAP


Cost of Revenue:
















Subscription and support


$

36,528



$

(257)



$

(159)



$

(15,582)



$

20,530


Professional services and other



4,939




(323)




(28)







4,588


Total cost of revenue


$

41,467



$

(580)



$

(187)



$

(15,582)



$

25,118


 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP COST OF REVENUE


Nine Months Ended September 30, 2022


(in thousands)


(unaudited)




GAAP



Stock-based
compensation
expense



Restructuring,
transaction and
sponsor related
costs



Amortization of
acquired
intangibles



Non-GAAP


Cost of Revenue:
















Subscription and support


$

108,419



$

(965)



$

(159)



$

(47,434)



$

59,861


Professional services and other



19,063




(1,292)




(129)







17,642


Total cost of revenue


$

127,482



$

(2,257)



$

(288)



$

(47,434)



$

77,503


 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP COST OF REVENUE


Nine Months Ended September 30, 2021


(in thousands)


(unaudited)




GAAP



Stock-based
compensation
expense



Restructuring,
transaction and
sponsor related
costs



Amortization of
acquired
intangibles



Non-GAAP


Cost of Revenue:
















Subscription and support


$

112,575



$

(652)



$

(2,108)



$

(46,412)



$

63,403


Professional services and other



15,500




(610)




(883)







14,007


Total cost of revenue


$

128,075



$

(1,262)



$

(2,991)



$

(46,412)



$

77,410


 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP OPERATING EXPENSES


Three Months Ended September 30, 2022


(in thousands)


(unaudited)




GAAP



Stock-based
compensation
expense



Restructuring,
transaction and
sponsor related
costs



Amortization of
acquired
intangibles



Non-GAAP


GAAP % of
revenue


Non-GAAP %
of ACR


Operating expenses:




















Sales and marketing


$

45,737



$

(2,813)



$

(412)



$

(18,375)



$

24,137


37.4

%

19.7

%

Research and development



20,596




(3,035)




(1,984)







15,577


16.8

%

12.7

%

General and administrative



14,408




(3,403)




(1,673)







9,332


11.8

%

7.6

%

Total operating expenses


$

80,741



$

(9,251)



$

(4,069)



$

(18,375)



$

49,046


66.0

%

40.0

%

 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP OPERATING EXPENSES


Three Months Ended September 30, 2021


(in thousands)


(unaudited)




GAAP



Stock-based
compensation
expense



Restructuring,
transaction and
sponsor related
costs



Amortization of
acquired
intangibles



Non-GAAP


GAAP % of
revenue


Non-GAAP %
of ACR


Operating expenses:




















Sales and marketing


$

40,553



$

(2,139)



$

(99)



$

(18,008)



$

20,307


37.8

%

18.7

%

Research and development



15,823




(2,292)




(226)







13,305


14.8

%

12.3

%

General and administrative



14,396




(3,368)




(1,519)







9,509


13.4

%

8.8

%

Total operating expenses


$

70,772



$

(7,799)



$

(1,844)



$

(18,008)



$

43,121


66.0

%

39.8

%

 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP OPERATING EXPENSES


Nine Months Ended September 30, 2022


(in thousands)


(unaudited)




GAAP



Stock-based
compensation
expense



Restructuring,
transaction and
sponsor related
costs



Amortization of
acquired
intangibles



Non-GAAP


GAAP % of
revenue


Non-GAAP %
of ACR


Operating expenses:




















Sales and marketing


$

134,943



$

(8,162)



$

(802)



$

(54,756)



$

71,223


38.5

%

20.3

%

Research and development



56,466




(8,261)




(2,776)







45,429


16.1

%

12.9

%

General and administrative



44,277




(10,243)




(4,236)







29,798


12.6

%

8.5

%

Total operating expenses


$

235,686



$

(26,666)



$

(7,814)



$

(54,756)



$

146,450


67.2

%

41.7

%

 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP OPERATING EXPENSES


Nine Months Ended September 30, 2021


(in thousands)


(unaudited)




GAAP



Stock-based
compensation
expense



Restructuring,
transaction
and sponsor related
costs



Amortization of
acquired
intangibles



Non-GAAP


GAAP % of
revenue


Non-GAAP %
of ACR


Operating expenses:




















Sales and marketing


$

120,858



$

(4,814)



$

(2,551)



$

(53,900)



$

59,593


41.0

%

19.7

%

Research and development



47,191




(4,896)




(2,904)







39,391


16.0

%

13.0

%

General and administrative



38,943




(6,750)




(8,378)







23,815


13.2

%

7.9

%

Impairment on disposal group



1,218







(1,218)








0.4

%

%

Total operating expenses


$

208,210



$

(16,460)



$

(15,051)



$

(53,900)



$

122,799


70.6

%

40.6

%

 

INSTRUCTURE HOLDINGS, INC.


RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS GUIDANCE


(in thousands)


(unaudited)




Three Months
Ending December 31, 2022



Full Year
Ending December 31, 2022




LOW



HIGH



LOW



HIGH


Revenue


$

120,700



$

121,700



$

471,200



$

472,200


Fair value adjustments to deferred revenue in connection with purchase
accounting









900




900


Allocated combined receipts


$

120,700



$

121,700



$

472,100



$

473,100


 

For More Information:

Media Relations:
Brian Watkins
Corporate Communications
Instructure
(801) 610-9722
brian.watkins@instructure.com

Investor Relations:
April Scee
Managing Director
ICR, Inc.
(917) 497-8992
april.scee@icrinc.com

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/instructure-announces-third-quarter-2022-financial-results-301665297.html

SOURCE Instructure Holdings, Inc.

Copyright 2022 PR Newswire

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