Fourth Quarter GAAP Revenue of $124.7 Million Grows 12.8% year over year
Fiscal Year 2022 GAAP Revenue of $475.2 Million Grows 17.2% year over year
Fiscal Year 2022 Net Loss of $34.2 Million and Adjusted EBITDA* of
$179.6 Million
SALT
LAKE CITY, Feb. 13, 2023 /PRNewswire/ -- Instructure
Holdings, Inc. (Instructure) (NYSE: INST), the makers of the Canvas
Learning Management System, today announced financial results for
the fourth quarter and fiscal year ended December 31, 2022.
"Our strong fourth quarter revenue reflects the increasingly
central role we play in supporting educators, students, parents,
and leaders as they navigate unprecedented challenges," said
Steve Daly, Instructure CEO. "As we
move into 2023, we are committed to further expanding our impact on
the educational landscape, solving more of the unique challenges
educators face while continuing to deliver balanced growth and
profitability."
Fourth Quarter Financial Highlights:
- GAAP Revenue of $124.7 million,
an increase of 12.8% year over year
- Allocated Combined Receipts*, or ACR, of $124.7 million, an increase of 11.9% year over
year
- Operating loss of $3.8 million,
or negative 3.0% of revenue, and Non-GAAP operating income* of
$46.5 million, or 37.3% of ACR*
- GAAP net loss of $5.7 million, or
negative 4.6% of revenue, and Adjusted EBITDA* of $48.6 million, or 39.0% of ACR*
- Cash flow from operations of $17.0
million and Adjusted Unlevered Free Cash Flow* of
$29.3 million
Full Year 2022 Financial Highlights:
- GAAP Revenue of $475.2 million,
an increase of 17.2% year over year
- Allocated Combined Receipts*, or ACR, of $476.1 million, an increase of 14.8% year over
year
- Operating loss of $16.5 million,
or negative 3.5% of revenue, and Non-GAAP operating income* of
$173.9 million, or 36.5% of ACR*
- GAAP net loss of $34.2 million,
or negative 7.2% of revenue, and Adjusted EBITDA* of $179.6 million, or 37.7% of ACR*
- Cash flow from operations of $140.3
million and Adjusted Unlevered Free Cash Flow* of
$173.5 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:
- In December, we acquired LearnPlatform, the leading provider of
technology that enables educators and their institutions to
research, select and evaluate digital learning solutions.
- The University of Louisiana System
selected Canvas and Impact due to improved functionality,
consistency of user experience, alignment with the other state
university systems, and 24/7 technical support for end users.
- The Charles County Public School District selected Canvas due
to the power of its instructional materials, integrations and other
3rd party tools, superior scale and reliability, and best-in-class
service.
- The University of Santo Tomas in
the Philippines selected Canvas
LMS and Canvas Studio due to ease of use, role-specific mobile
experiences, broad support for outcomes, and the breadth of
integratable third party tools.
- The City and Guilds of London Institute chose Instructure as
its institutional learning technology partner for the future growth
of their organization with an initial plan to deploy Canvas and
plans to evaluate Credentials.
- Chris Ball was named
Instructure's new President and Chief Operating Officer and will
oversee the go-to-market strategy and customer lifecycle, including
marketing, revenue operations, sales and customer experience.
Business Outlook
Based on information as of today, February 13, 2023, the Company is issuing the
following financial guidance.
First Quarter Fiscal 2023:
- Revenue is expected to be in the range of $126.5 million to $127.5
million
- Non-GAAP operating income* is expected to be in the range of
$45.9 million to $46.9 million
- Adjusted EBITDA* is expected to be in the range of $47.0 million to $48.0
million
- Non-GAAP net income* is expected to be in the range of
$25.7 million to $26.7 million
Full Year 2023:
- Revenue is expected to be in the range of $519.4 million to $523.4
million
- Non-GAAP operating income* is expected to be in the range of
$193.4 million to $197.4 million
- Adjusted EBITDA* is expected to be in the range of $198.0 million to $202.0
million
- Non-GAAP net income* is expected to be in the range of
$109.2 million to $113.2 million
- Adjusted Unlevered Free Cash Flow* is expected to be in the
range of $200.0 million to
$204.0 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 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 will now
converge.
Conference Call Information
Instructure's management team will hold a conference call to
discuss our fourth quarter and fiscal year ended December 31, 2022 results today, February 13, 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 the 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, transaction costs, sponsor costs, impairment charges,
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, impairment
charges, other non-recurring costs, and effects of foreign currency
transaction (gains) and losses that we do not believe are
reflective of our ongoing operations. The tax effects of the
adjustments are calculated using the statutory tax rate, taking
into consideration the nature of the item and the relevant taxing
jurisdiction. We believe Non-GAAP net income is useful in
evaluating our operating performance compared to that of other
companies in our industry, as this metric generally eliminates the
effects of certain items that may vary for different companies for
reasons unrelated to overall operating performance. Although we
exclude the amortization of acquisition-related intangibles from
the non-GAAP measure, management believes it is important for
investors to understand that such intangible assets were recorded
as part of purchase accounting and contribute to revenue
generation. Basic non-GAAP net income per common share attributable
to common stockholders is computed by dividing non-GAAP net income
attributable to common stockholders by the weighted-average number
of common shares outstanding for the period. Diluted non-GAAP net
income per common share attributable to common stockholders is
computed by giving effect to all potentially dilutive common stock
equivalents outstanding for the period.
Adjusted EBITDA; Adjusted EBITDA Margin. EBITDA is
defined as earnings before debt-related costs, including interest
and loss on debt extinguishment, benefit for taxes, depreciation,
and amortization. We further adjust EBITDA to exclude certain items
of a significant or unusual nature, including stock-based
compensation, transaction costs, sponsor costs, impairment charges,
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 (used in) operating activities less purchases of
property and equipment and intangible assets, net of proceeds from
disposals of property and equipment. We define unlevered free cash
flow as free cash flow adjusted for cash paid for interest on
outstanding debt and cash settled stock-based compensation. We
define adjusted unlevered free cash flow as unlevered free cash
flow adjusted for transaction costs, 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, impairment charges, 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, impairment of
leased properties, 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.
Forward-Looking Statements
This press release contains, and statements made during the
above referenced conference call will contain, "forward-looking"
statements, which are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, including
statements regarding the Company's financial guidance for the first
quarter of 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, and the
Company's expectations regarding future revenue, expenses, cash
flows and net income or loss.
These statements are not guarantees of future performance, but
are based on management's expectations as of the date of this press
release and assumptions that are inherently subject to
uncertainties, risks and changes in circumstances that are
difficult to predict. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially
different from any future results, performance or achievements.
Important factors that could cause actual results to differ
materially from those expressed or implied by these forward-looking
statements include the following: risks associated with the
continued economic uncertainty, including record-high inflation,
supply chain challenges, labor shortages, high interest rates,
foreign currency exchange volatility, concerns of economic slowdown
or recession and reduced spending by customers; failure to continue
our recent growth rates; 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 and the ongoing effects of
the COVID-19 pandemic; 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2022
|
|
|
December 31,
2021
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
185,954
|
|
|
$
|
164,928
|
|
|
Accounts
receivable—net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,428
|
|
|
|
51,607
|
|
|
Prepaid
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,120
|
|
|
|
15,475
|
|
|
Deferred
commissions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,390
|
|
|
|
11,418
|
|
|
Other current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,144
|
|
|
|
3,384
|
|
|
Total current
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
285,036
|
|
|
|
246,812
|
|
|
Property and equipment,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,380
|
|
|
|
10,792
|
|
|
Right-of-use
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,575
|
|
|
|
18,175
|
|
|
Goodwill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,266,402
|
|
|
|
1,194,221
|
|
|
Intangible assets,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
542,679
|
|
|
|
629,746
|
|
|
Noncurrent prepaid
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
871
|
|
|
|
1,553
|
|
|
Deferred commissions,
net of current portion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,781
|
|
|
|
20,105
|
|
|
Deferred tax
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,143
|
|
|
|
6,477
|
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,622
|
|
|
|
5,901
|
|
|
Total
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,153,489
|
|
|
$
|
2,133,782
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18,792
|
|
|
$
|
18,324
|
|
|
Accrued
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,483
|
|
|
|
28,408
|
|
|
Lease
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,205
|
|
|
|
6,666
|
|
|
Long-term debt,
current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,013
|
|
|
|
2,763
|
|
|
Deferred
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
275,564
|
|
|
|
240,936
|
|
|
Total current
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
334,057
|
|
|
|
297,097
|
|
|
Long-term debt, net of
current portion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
486,471
|
|
|
|
490,500
|
|
|
Deferred revenue, net
of current portion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,816
|
|
|
|
14,740
|
|
|
Lease liabilities, net
of current portion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,610
|
|
|
|
23,678
|
|
|
Deferred tax
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,702
|
|
|
|
29,851
|
|
|
Other long-term
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,706
|
|
|
|
3,531
|
|
|
Total
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
877,362
|
|
|
|
859,397
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,429
|
|
|
|
1,407
|
|
|
Additional paid-in
capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,575,600
|
|
|
|
1,539,638
|
|
|
Accumulated
deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(300,902)
|
|
|
|
(266,660)
|
|
|
Total stockholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,276,127
|
|
|
|
1,274,385
|
|
|
Total liabilities
and stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,153,489
|
|
|
$
|
2,133,782
|
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
|
(in thousands,
except per share data)
|
|
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
114,537
|
|
|
$
|
101,007
|
|
|
$
|
430,661
|
|
|
$
|
367,781
|
|
Professional services
and other
|
|
|
10,189
|
|
|
|
9,586
|
|
|
|
44,533
|
|
|
|
37,580
|
|
Total
revenue
|
|
|
124,726
|
|
|
|
110,593
|
|
|
|
475,194
|
|
|
|
405,361
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
|
38,127
|
|
|
|
36,348
|
|
|
|
146,546
|
|
|
|
148,923
|
|
Professional services
and other
|
|
|
6,685
|
|
|
|
5,442
|
|
|
|
25,748
|
|
|
|
20,942
|
|
Total cost of
revenue
|
|
|
44,812
|
|
|
|
41,790
|
|
|
|
172,294
|
|
|
|
169,865
|
|
Gross profit
|
|
|
79,914
|
|
|
|
68,803
|
|
|
|
302,900
|
|
|
|
235,496
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
|
46,801
|
|
|
|
41,686
|
|
|
|
181,744
|
|
|
|
162,544
|
|
Research and
development
|
|
|
20,723
|
|
|
|
16,580
|
|
|
|
77,189
|
|
|
|
63,771
|
|
General and
administrative
|
|
|
16,170
|
|
|
|
15,968
|
|
|
|
60,447
|
|
|
|
54,911
|
|
Impairment on disposal
group
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,218
|
|
Total operating
expenses
|
|
|
83,694
|
|
|
|
74,234
|
|
|
|
319,380
|
|
|
|
282,444
|
|
Loss from
operations
|
|
|
(3,780)
|
|
|
|
(5,431)
|
|
|
|
(16,480)
|
|
|
|
(46,948)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1,313
|
|
|
|
16
|
|
|
|
1,679
|
|
|
|
29
|
|
Interest
expense
|
|
|
(8,258)
|
|
|
|
(6,182)
|
|
|
|
(24,595)
|
|
|
|
(50,360)
|
|
Other
expense
|
|
|
3,989
|
|
|
|
(330)
|
|
|
|
(2,978)
|
|
|
|
(2,695)
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
(22,424)
|
|
|
|
—
|
|
|
|
(22,424)
|
|
Total other income
(expense), net
|
|
|
(2,956)
|
|
|
|
(28,920)
|
|
|
|
(25,894)
|
|
|
|
(75,450)
|
|
Loss before income
taxes
|
|
|
(6,736)
|
|
|
|
(34,351)
|
|
|
|
(42,374)
|
|
|
|
(122,398)
|
|
Income tax
benefit
|
|
|
1,013
|
|
|
|
13,697
|
|
|
|
8,132
|
|
|
|
33,719
|
|
Net loss and
comprehensive loss
|
|
$
|
(5,723)
|
|
|
$
|
(20,654)
|
|
|
$
|
(34,242)
|
|
|
$
|
(88,679)
|
|
Net loss per common
share, basic and diluted
|
|
$
|
(0.04)
|
|
|
$
|
(0.15)
|
|
|
$
|
(0.24)
|
|
|
$
|
(0.67)
|
|
Weighted-average common shares used in computing basic and diluted
net
loss per common share
|
|
|
142,643
|
|
|
|
140,531
|
|
|
|
141,815
|
|
|
|
132,387
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(in
thousands)
|
|
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(5,723)
|
|
|
$
|
(20,654)
|
|
|
$
|
(34,242)
|
|
|
$
|
(88,679)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property and equipment
|
|
|
1,346
|
|
|
|
985
|
|
|
|
4,491
|
|
|
|
3,713
|
|
Amortization of
intangible assets
|
|
|
34,522
|
|
|
|
33,684
|
|
|
|
136,717
|
|
|
|
134,003
|
|
Amortization of
deferred financing costs
|
|
|
297
|
|
|
|
477
|
|
|
|
1,178
|
|
|
|
2,435
|
|
Impairment on disposal
group
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,218
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
22,424
|
|
|
|
—
|
|
|
|
22,424
|
|
Stock-based
compensation
|
|
|
8,915
|
|
|
|
6,540
|
|
|
|
33,585
|
|
|
|
18,072
|
|
Deferred income
taxes
|
|
|
(158)
|
|
|
|
(16,231)
|
|
|
|
(10,222)
|
|
|
|
(36,485)
|
|
Other
|
|
|
(3,042)
|
|
|
|
120
|
|
|
|
3,669
|
|
|
|
1,685
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
1,903
|
|
|
|
3,386
|
|
|
|
(18,454)
|
|
|
|
(4,314)
|
|
Prepaid expenses and
other assets
|
|
|
16,881
|
|
|
|
2,014
|
|
|
|
5,940
|
|
|
|
2,094
|
|
Deferred
commissions
|
|
|
685
|
|
|
|
(2,762)
|
|
|
|
(648)
|
|
|
|
(8,358)
|
|
Right-of-use
assets
|
|
|
1,250
|
|
|
|
1,177
|
|
|
|
4,888
|
|
|
|
8,729
|
|
Accounts payable and
accrued liabilities
|
|
|
168
|
|
|
|
(596)
|
|
|
|
(2,227)
|
|
|
|
8,038
|
|
Deferred
revenue
|
|
|
(38,383)
|
|
|
|
(31,927)
|
|
|
|
24,238
|
|
|
|
48,543
|
|
Lease
liabilities
|
|
|
(1,474)
|
|
|
|
(1,617)
|
|
|
|
(6,817)
|
|
|
|
(6,363)
|
|
Other
liabilities
|
|
|
(184)
|
|
|
|
(693)
|
|
|
|
(1,825)
|
|
|
|
(1,612)
|
|
Net cash provided by
(used in) operating activities
|
|
|
17,003
|
|
|
|
(3,673)
|
|
|
|
140,271
|
|
|
|
105,143
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,342)
|
|
|
|
(1,459)
|
|
|
|
(6,321)
|
|
|
|
(4,259)
|
|
Proceeds from sale of
property and equipment
|
|
|
2
|
|
|
|
13
|
|
|
|
43
|
|
|
|
53
|
|
Proceeds from sale of
Bridge
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
46,018
|
|
Business acquisitions,
net of cash acquired
|
|
|
(89,529)
|
|
|
|
(9,698)
|
|
|
|
(109,013)
|
|
|
|
(26,584)
|
|
Net cash provided by
(used in) investing activities
|
|
|
(90,869)
|
|
|
|
(11,144)
|
|
|
|
(115,291)
|
|
|
|
15,228
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
IPO proceeds, net of
offering costs paid of $5,719
|
|
|
—
|
|
|
|
(350)
|
|
|
|
—
|
|
|
|
259,254
|
|
Proceeds from issuance
of common stock from employee equity plans
|
|
|
—
|
|
|
|
—
|
|
|
|
7,327
|
|
|
|
—
|
|
Shares repurchased for
tax withholdings on vesting of restricted stock units
|
|
|
(1,939)
|
|
|
|
(250)
|
|
|
|
(5,272)
|
|
|
|
(1,568)
|
|
Proceeds from issuance
of term debt, net of discount
|
|
|
—
|
|
|
|
493,090
|
|
|
|
—
|
|
|
|
493,090
|
|
Distributions to
stockholders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(930)
|
|
Repayments of
long-term debt
|
|
|
(1,250)
|
|
|
|
(531,305)
|
|
|
|
(3,750)
|
|
|
|
(839,187)
|
|
Term Loan prepayment
premium
|
|
|
—
|
|
|
|
(8,066)
|
|
|
|
—
|
|
|
|
(11,893)
|
|
Payments of financing
costs
|
|
|
(19)
|
|
|
|
(937)
|
|
|
|
(19)
|
|
|
|
(937)
|
|
Net cash used in
financing activities
|
|
|
(3,208)
|
|
|
|
(47,818)
|
|
|
|
(1,714)
|
|
|
|
(102,171)
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
|
|
3,897
|
|
|
|
—
|
|
|
|
(2,153)
|
|
|
|
—
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
(73,177)
|
|
|
|
(62,635)
|
|
|
|
21,113
|
|
|
|
18,200
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
263,443
|
|
|
|
231,788
|
|
|
|
169,153
|
|
|
|
150,953
|
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
|
190,266
|
|
|
$
|
169,153
|
|
|
$
|
190,266
|
|
|
$
|
169,153
|
|
Supplemental cash
flow disclosure:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for
taxes
|
|
$
|
68
|
|
|
$
|
90
|
|
|
$
|
3,102
|
|
|
$
|
646
|
|
Interest
paid
|
|
$
|
8,123
|
|
|
$
|
5,756
|
|
|
$
|
18,073
|
|
|
$
|
48,058
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
incurred but not yet paid
|
|
$
|
67
|
|
|
$
|
83
|
|
|
$
|
67
|
|
|
$
|
83
|
|
RECONCILIATIONS OF
NON-GAAP MEASURES TO GAAP MEASURES
|
|
|
|
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP ALLOCATED COMBINED RECEIPTS
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Revenue
|
|
$
|
124,726
|
|
|
$
|
110,593
|
|
|
$
|
475,194
|
|
|
$
|
405,361
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
13
|
|
|
|
851
|
|
|
|
868
|
|
|
|
9,322
|
|
Allocated combined
receipts
|
|
$
|
124,739
|
|
|
$
|
111,444
|
|
|
$
|
476,062
|
|
|
$
|
414,683
|
|
INSTRUCTURE HOLDINGS, INC.
|
|
RECONCILIATION OF NON-GAAP SUBSCRIPTION AND SUPPORT
ALLOCATED COMBINED RECEIPTS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Subscription and
support revenue
|
|
$
|
114,537
|
|
|
$
|
101,007
|
|
|
$
|
430,661
|
|
|
$
|
367,781
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
13
|
|
|
|
849
|
|
|
|
867
|
|
|
|
9,095
|
|
Subscription and
support allocated combined receipts
|
|
$
|
114,550
|
|
|
$
|
101,856
|
|
|
$
|
431,528
|
|
|
$
|
376,876
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING INCOME
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Loss from
operations
|
|
$
|
(3,780)
|
|
|
$
|
(5,431)
|
|
|
$
|
(16,480)
|
|
|
$
|
(46,948)
|
|
Stock-based
compensation
|
|
|
10,856
|
|
|
|
8,063
|
|
|
|
39,779
|
|
|
|
25,785
|
|
Transaction
costs(1)
|
|
|
4,206
|
|
|
|
2,701
|
|
|
|
9,123
|
|
|
|
9,090
|
|
Sponsor
costs(2)
|
|
|
66
|
|
|
|
27
|
|
|
|
517
|
|
|
|
414
|
|
Impairment
charges(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,116
|
|
Other non-recurring
costs(4)
|
|
|
630
|
|
|
|
794
|
|
|
|
3,365
|
|
|
|
3,944
|
|
Amortization of
acquisition-related intangibles
|
|
|
34,520
|
|
|
|
33,682
|
|
|
|
136,710
|
|
|
|
133,994
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
13
|
|
|
|
851
|
|
|
|
868
|
|
|
|
9,322
|
|
Non-GAAP operating
income
|
|
$
|
46,511
|
|
|
$
|
40,687
|
|
|
$
|
173,882
|
|
|
$
|
143,717
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP ADJUSTED EBITDA
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net loss
|
|
$
|
(5,723)
|
|
|
$
|
(20,654)
|
|
|
$
|
(34,242)
|
|
|
$
|
(88,679)
|
|
Interest on outstanding
debt and loss on debt extinguishment
|
|
|
8,257
|
|
|
|
28,605
|
|
|
|
24,591
|
|
|
|
72,775
|
|
Benefit for
taxes
|
|
|
(1,013)
|
|
|
|
(13,697)
|
|
|
|
(8,132)
|
|
|
|
(33,719)
|
|
Depreciation
|
|
|
1,346
|
|
|
|
985
|
|
|
|
4,491
|
|
|
|
3,713
|
|
Amortization
|
|
|
2
|
|
|
|
2
|
|
|
|
7
|
|
|
|
7
|
|
Stock-based
compensation
|
|
|
10,856
|
|
|
|
8,063
|
|
|
|
39,779
|
|
|
|
25,785
|
|
Transaction
costs(1)
|
|
|
4,206
|
|
|
|
2,701
|
|
|
|
9,123
|
|
|
|
9,090
|
|
Sponsor
costs(2)
|
|
|
66
|
|
|
|
27
|
|
|
|
517
|
|
|
|
414
|
|
Impairment
charges(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,116
|
|
Other non-recurring
costs(4)
|
|
|
630
|
|
|
|
794
|
|
|
|
3,365
|
|
|
|
3,944
|
|
Effects of foreign
currency transaction (gains) and losses
|
|
|
(4,536)
|
|
|
|
306
|
|
|
|
2,514
|
|
|
|
1,916
|
|
Amortization of
acquisition-related intangibles
|
|
|
34,520
|
|
|
|
33,682
|
|
|
|
136,710
|
|
|
|
133,994
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
13
|
|
|
|
851
|
|
|
|
868
|
|
|
|
9,322
|
|
Adjusted
EBITDA
|
|
$
|
48,624
|
|
|
$
|
41,665
|
|
|
$
|
179,591
|
|
|
$
|
146,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
margin
|
|
|
(4.6)
|
%
|
|
|
(18.7)
|
%
|
|
|
(7.2)
|
%
|
|
|
(21.9)
|
%
|
Adjusted EBITDA
margin
|
|
|
39.0
|
%
|
|
|
37.4
|
%
|
|
|
37.7
|
%
|
|
|
35.4
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
FREE CASH FLOW, UNLEVERED FREE CASH FLOW & ADJUSTED UNLEVERED
FREE CASH FLOW
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
|
17,003
|
|
|
$
|
(3,673)
|
|
|
$
|
140,271
|
|
|
$
|
105,143
|
|
Purchases of property
and equipment
|
|
|
(1,342)
|
|
|
|
(1,459)
|
|
|
|
(6,321)
|
|
|
|
(4,259)
|
|
Proceeds from disposals
of property and equipment
|
|
|
2
|
|
|
|
13
|
|
|
|
43
|
|
|
|
53
|
|
Free cash
flow
|
|
$
|
15,663
|
|
|
$
|
(5,119)
|
|
|
$
|
133,993
|
|
|
$
|
100,937
|
|
Cash paid for interest
on outstanding debt
|
|
|
8,123
|
|
|
|
5,756
|
|
|
|
18,073
|
|
|
|
48,058
|
|
Cash settled
stock-based compensation
|
|
|
1,941
|
|
|
|
1,522
|
|
|
|
6,194
|
|
|
|
7,616
|
|
Unlevered free cash
flow
|
|
$
|
25,727
|
|
|
$
|
2,159
|
|
|
$
|
158,260
|
|
|
$
|
156,611
|
|
Transaction
costs(1)
|
|
|
2,215
|
|
|
|
1,003
|
|
|
|
9,474
|
|
|
|
7,444
|
|
Sponsor
costs(2)
|
|
|
33
|
|
|
|
42
|
|
|
|
378
|
|
|
|
335
|
|
Impaired
leases
|
|
|
609
|
|
|
|
—
|
|
|
|
2,074
|
|
|
|
7
|
|
Other non-recurring
costs(5)
|
|
|
761
|
|
|
|
839
|
|
|
|
3,359
|
|
|
|
4,299
|
|
Adjusted unlevered free
cash flow
|
|
$
|
29,345
|
|
|
$
|
4,043
|
|
|
$
|
173,545
|
|
|
$
|
168,696
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP NET INCOME
|
|
(in thousands,
except per share data)
|
|
(unaudited)
|
|
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net loss
|
|
$
|
(5,723)
|
|
|
$
|
(20,654)
|
|
|
$
|
(34,242)
|
|
|
$
|
(88,679)
|
|
Stock-based
compensation
|
|
|
10,856
|
|
|
|
8,063
|
|
|
|
39,779
|
|
|
|
25,785
|
|
Amortization of
acquisition-related intangibles
|
|
|
34,520
|
|
|
|
33,682
|
|
|
|
136,710
|
|
|
|
133,994
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
13
|
|
|
|
851
|
|
|
|
868
|
|
|
|
9,322
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
22,424
|
|
|
|
—
|
|
|
|
22,424
|
|
Transaction
costs(1)
|
|
|
4,206
|
|
|
|
2,701
|
|
|
|
9,123
|
|
|
|
9,090
|
|
Sponsor
costs(2)
|
|
|
66
|
|
|
|
27
|
|
|
|
517
|
|
|
|
414
|
|
Impairment
charges(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,116
|
|
Other non-recurring
costs(4)
|
|
|
630
|
|
|
|
794
|
|
|
|
3,365
|
|
|
|
3,944
|
|
Effects of foreign
currency transaction (gains) and losses
|
|
|
(4,536)
|
|
|
|
306
|
|
|
|
2,514
|
|
|
|
1,916
|
|
Tax effects of
adjustments(6)
|
|
|
(11,652)
|
|
|
|
(17,184)
|
|
|
|
(47,989)
|
|
|
|
(53,665)
|
|
Non-GAAP net
income
|
|
$
|
28,380
|
|
|
$
|
31,010
|
|
|
$
|
110,645
|
|
|
$
|
72,661
|
|
Non-GAAP net income per
common share, basic
|
|
$
|
0.20
|
|
|
$
|
0.22
|
|
|
$
|
0.78
|
|
|
$
|
0.55
|
|
Non-GAAP net income per
common share, diluted
|
|
$
|
0.20
|
|
|
$
|
0.22
|
|
|
$
|
0.77
|
|
|
$
|
0.54
|
|
Weighted average common
shares used in computing basic Non-GAAP net income per common
share
|
|
|
142,643
|
|
|
|
140,531
|
|
|
|
141,815
|
|
|
|
132,387
|
|
Weighted average common
shares used in computing diluted Non-GAAP net income per common
share
|
|
|
144,261
|
|
|
|
142,870
|
|
|
|
143,440
|
|
|
|
133,487
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP GROSS PROFIT
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Gross profit
|
|
$
|
79,914
|
|
|
$
|
68,803
|
|
|
$
|
302,900
|
|
|
$
|
235,496
|
|
Stock-based
compensation
|
|
|
833
|
|
|
|
596
|
|
|
|
3,090
|
|
|
|
1,858
|
|
Transaction
costs(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
226
|
|
|
|
—
|
|
Impairment of leased
properties
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,768
|
|
Other non-recurring
costs
|
|
|
5
|
|
|
|
54
|
|
|
|
69
|
|
|
|
277
|
|
Amortization of
acquisition-related intangibles
|
|
|
15,952
|
|
|
|
15,648
|
|
|
|
63,386
|
|
|
|
62,060
|
|
Fair value adjustments
to deferred revenue in connection with purchase
accounting
|
|
|
13
|
|
|
|
851
|
|
|
|
868
|
|
|
|
9,322
|
|
Non-GAAP gross
profit
|
|
$
|
96,717
|
|
|
$
|
85,952
|
|
|
$
|
370,539
|
|
|
$
|
311,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
|
64.1
|
%
|
|
|
62.2
|
%
|
|
|
63.7
|
%
|
|
|
58.1
|
%
|
Non-GAAP gross
margin
|
|
|
77.5
|
%
|
|
|
77.1
|
%
|
|
|
77.8
|
%
|
|
|
75.2
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Three Months Ended
December 31, 2022
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Impairment
charges
|
|
|
Other non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
38,127
|
|
|
$
|
(383)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5)
|
|
|
$
|
(15,952)
|
|
|
$
|
21,787
|
|
Professional services
and other
|
|
|
6,685
|
|
|
|
(450)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,235
|
|
Total cost of
revenue
|
|
$
|
44,812
|
|
|
$
|
(833)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5)
|
|
|
$
|
(15,952)
|
|
|
$
|
28,022
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Three Months Ended
December 31, 2021
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Impairment
charges
|
|
|
Other non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
36,348
|
|
|
$
|
(247)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(24)
|
|
|
$
|
(15,648)
|
|
|
$
|
20,429
|
|
Professional services
and other
|
|
|
5,442
|
|
|
|
(349)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(30)
|
|
|
|
—
|
|
|
|
5,063
|
|
Total cost of
revenue
|
|
$
|
41,790
|
|
|
$
|
(596)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(54)
|
|
|
$
|
(15,648)
|
|
|
$
|
25,492
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Year Ended December
31, 2022
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Impairment
charges
|
|
|
Other non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
146,546
|
|
|
$
|
(1,348)
|
|
|
$
|
(135)
|
|
|
$
|
—
|
|
|
$
|
(33)
|
|
|
$
|
(63,386)
|
|
|
$
|
81,644
|
|
Professional services
and other
|
|
|
25,748
|
|
|
|
(1,742)
|
|
|
|
(91)
|
|
|
|
—
|
|
|
|
(36)
|
|
|
|
—
|
|
|
|
23,879
|
|
Total cost of
revenue
|
|
$
|
172,294
|
|
|
$
|
(3,090)
|
|
|
$
|
(226)
|
|
|
$
|
—
|
|
|
$
|
(69)
|
|
|
$
|
(63,386)
|
|
|
$
|
105,523
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP COST OF REVENUE
|
|
Year Ended December
31, 2021
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
Costs
|
|
|
Impairment
charges
|
|
|
Other non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-GAAP
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
|
$
|
148,923
|
|
|
$
|
(899)
|
|
|
$
|
—
|
|
|
$
|
(1,918)
|
|
|
$
|
(214)
|
|
|
$
|
(62,060)
|
|
|
$
|
83,832
|
|
Professional services
and other
|
|
|
20,942
|
|
|
|
(959)
|
|
|
|
—
|
|
|
|
(850)
|
|
|
|
(63)
|
|
|
|
—
|
|
|
|
19,070
|
|
Total cost of
revenue
|
|
$
|
169,865
|
|
|
$
|
(1,858)
|
|
|
$
|
—
|
|
|
$
|
(2,768)
|
|
|
$
|
(277)
|
|
|
$
|
(62,060)
|
|
|
$
|
102,902
|
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Three Months Ended
December 31, 2022
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
costs
|
|
|
Sponsor
costs
|
|
|
Impairment
charges
|
|
|
Other
non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-
GAAP
|
|
|
GAAP %
of
revenue
|
|
|
Non-
GAAP %
of ACR
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
46,801
|
|
|
$
|
(2,888)
|
|
|
$
|
(1,129)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(76)
|
|
|
$
|
(18,568)
|
|
|
$
|
24,140
|
|
|
|
37.5
|
%
|
|
|
19.4
|
%
|
Research and
development
|
|
|
20,723
|
|
|
|
(3,206)
|
|
|
|
(1,170)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(9)
|
|
|
|
—
|
|
|
|
16,338
|
|
|
|
16.6
|
%
|
|
|
13.1
|
%
|
General and
administrative
|
|
|
16,170
|
|
|
|
(3,929)
|
|
|
|
(1,911)
|
|
|
|
(66)
|
|
|
|
—
|
|
|
|
(536)
|
|
|
|
—
|
|
|
|
9,728
|
|
|
|
13.0
|
%
|
|
|
7.8
|
%
|
Total operating
expenses
|
|
$
|
83,694
|
|
|
$
|
(10,023)
|
|
|
$
|
(4,210)
|
|
|
$
|
(66)
|
|
|
$
|
—
|
|
|
$
|
(621)
|
|
|
$
|
(18,568)
|
|
|
$
|
50,206
|
|
|
|
67.1
|
%
|
|
|
40.3
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Three Months Ended
December 31, 2021
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
costs
|
|
|
Sponsor
costs
|
|
|
Impairment
charges
|
|
|
Other
non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-
GAAP
|
|
|
GAAP %
of
revenue
|
|
|
Non-
GAAP %
of ACR
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
41,686
|
|
|
$
|
(2,122)
|
|
|
$
|
(38)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(82)
|
|
|
$
|
(18,034)
|
|
|
$
|
21,410
|
|
|
|
37.7
|
%
|
|
|
19.2
|
%
|
Research and
development
|
|
|
16,580
|
|
|
|
(2,047)
|
|
|
|
(702)
|
|
|
|
(18)
|
|
|
|
—
|
|
|
|
(417)
|
|
|
|
—
|
|
|
|
13,396
|
|
|
|
15.0
|
%
|
|
|
12.0
|
%
|
General and
administrative
|
|
|
15,968
|
|
|
|
(3,298)
|
|
|
|
(1,961)
|
|
|
|
(9)
|
|
|
|
—
|
|
|
|
(241)
|
|
|
|
—
|
|
|
|
10,459
|
|
|
|
14.4
|
%
|
|
|
9.4
|
%
|
Total operating
expenses
|
|
$
|
74,234
|
|
|
$
|
(7,467)
|
|
|
$
|
(2,701)
|
|
|
$
|
(27)
|
|
|
$
|
—
|
|
|
$
|
(740)
|
|
|
$
|
(18,034)
|
|
|
$
|
45,265
|
|
|
|
67.1
|
%
|
|
|
40.6
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Year Ended December
31, 2022
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
costs
|
|
|
Sponsor
costs
|
|
|
Impairment
charges
|
|
|
Other
non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-
GAAP
|
|
|
GAAP %
of
revenue
|
|
|
Non-
GAAP %
of ACR
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
181,744
|
|
|
$
|
(11,050)
|
|
|
$
|
(1,302)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(705)
|
|
|
$
|
(73,324)
|
|
|
$
|
95,363
|
|
|
|
38.2
|
%
|
|
|
20.0
|
%
|
Research and
development
|
|
|
77,189
|
|
|
|
(11,467)
|
|
|
|
(3,025)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(929)
|
|
|
|
—
|
|
|
|
61,768
|
|
|
|
16.2
|
%
|
|
|
13.0
|
%
|
General and
administrative
|
|
|
60,447
|
|
|
|
(14,172)
|
|
|
|
(4,568)
|
|
|
|
(518)
|
|
|
|
—
|
|
|
|
(1,663)
|
|
|
|
—
|
|
|
|
39,526
|
|
|
|
12.7
|
%
|
|
|
8.3
|
%
|
Total operating
expenses
|
|
$
|
319,380
|
|
|
$
|
(36,689)
|
|
|
$
|
(8,895)
|
|
|
$
|
(518)
|
|
|
$
|
—
|
|
|
$
|
(3,297)
|
|
|
$
|
(73,324)
|
|
|
$
|
196,657
|
|
|
|
67.1
|
%
|
|
|
41.3
|
%
|
INSTRUCTURE
HOLDINGS, INC.
|
|
RECONCILIATION OF
NON-GAAP OPERATING EXPENSES
|
|
Year Ended December
31, 2021
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
GAAP
|
|
|
Stock-based
compensation
expense
|
|
|
Transaction
costs
|
|
|
Sponsor
costs
|
|
|
Impairment
charges
|
|
|
Other
non-
recurring
costs
|
|
|
Amortization
of acquired
intangibles
|
|
|
Non-
GAAP
|
|
|
GAAP %
of
revenue
|
|
|
Non-
GAAP %
of ACR
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
162,544
|
|
|
$
|
(6,936)
|
|
|
$
|
(237)
|
|
|
$
|
—
|
|
|
$
|
(2,042)
|
|
|
$
|
(392)
|
|
|
$
|
(71,934)
|
|
|
$
|
81,003
|
|
|
|
40.1
|
%
|
|
|
19.5
|
%
|
Research and
development
|
|
|
63,771
|
|
|
|
(6,943)
|
|
|
|
(1,675)
|
|
|
|
(66)
|
|
|
|
(1,355)
|
|
|
|
(945)
|
|
|
|
—
|
|
|
|
52,787
|
|
|
|
15.7
|
%
|
|
|
12.7
|
%
|
General and
administrative
|
|
|
54,911
|
|
|
|
(10,048)
|
|
|
|
(7,178)
|
|
|
|
(348)
|
|
|
|
(733)
|
|
|
|
(2,330)
|
|
|
|
—
|
|
|
|
34,274
|
|
|
|
13.5
|
%
|
|
|
8.3
|
%
|
Impairment on disposal
group
|
|
|
1,218
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,218)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
%
|
|
|
—
|
|
Total operating
expenses
|
|
$
|
282,444
|
|
|
$
|
(23,927)
|
|
|
$
|
(9,090)
|
|
|
$
|
(414)
|
|
|
$
|
(5,348)
|
|
|
$
|
(3,667)
|
|
|
$
|
(71,934)
|
|
|
$
|
168,064
|
|
|
|
69.6
|
%
|
|
|
40.5
|
%
|
FOOTNOTES
|
|
|
|
(1) Represents expenses incurred with
third parties as part of the Company's merger and acquisition
activity, including due diligence, closing and post-close
integration activities.
|
|
|
|
(2) Represents expenses incurred for
services provided by Thoma Bravo and their affiliates.
|
|
|
|
(3) Includes
impairment charges as follows (in thousands):
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Impairment on Bridge
disposal group
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,218
|
|
Impairment of leased
properties
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,898
|
|
Total impairment
charges
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,116
|
|
|
|
|
|
(4) Includes
other non-recurring costs as follows (in thousands):
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Professional services
related to sale of Bridge
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,185
|
|
Loss on exit of leased
properties
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
66
|
|
Contract modification
fees
|
|
|
—
|
|
|
|
—
|
|
|
|
230
|
|
|
|
9
|
|
Employee
severance
|
|
|
195
|
|
|
|
574
|
|
|
|
744
|
|
|
|
1,761
|
|
Workforce realignment
costs
|
|
|
267
|
|
|
|
—
|
|
|
|
1,388
|
|
|
|
—
|
|
Other insignificant
non-recurring costs
|
|
|
168
|
|
|
|
220
|
|
|
|
1,003
|
|
|
|
923
|
|
Total other
non-recurring costs
|
|
$
|
630
|
|
|
$
|
794
|
|
|
$
|
3,365
|
|
|
$
|
3,944
|
|
|
|
|
|
(5) Includes
other non-recurring costs paid in cash as follows (in
thousands):
|
|
Three months
ended December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Employee
severance
|
|
$
|
234
|
|
|
$
|
569
|
|
|
$
|
744
|
|
|
$
|
1,941
|
|
Workforce realignment
costs
|
|
|
344
|
|
|
|
—
|
|
|
|
980
|
|
|
|
153
|
|
Contract modification
fees
|
|
|
—
|
|
|
|
—
|
|
|
|
186
|
|
|
|
—
|
|
Professional services
related to sale of Bridge
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,208
|
|
Other insignificant
non-recurring costs
|
|
|
183
|
|
|
|
270
|
|
|
|
1,449
|
|
|
|
997
|
|
Total other
non-recurring costs paid in cash
|
|
$
|
761
|
|
|
$
|
839
|
|
|
$
|
3,359
|
|
|
$
|
4,299
|
|
|
(6) During
the fourth quarter of 2022, we revised the methodology for
calculating Non-GAAP Net Income (see Non-GAAP Financial Measures
above for details). 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.
|
For More Information:
Media Relations:
Brian
Watkins
Corporate Communications
Instructure
(801) 610-9722
brian.watkins@instructure.com
Investor Relations:
April
Scee
Managing Director
ICR, Inc.
(917) 497-8992
april.scee@icrinc.com
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SOURCE Instructure Holdings, Inc.