Instructure Announces Fourth Quarter and Fiscal Year 2021 Financial Results
Instructure Holdings (NYSE: INST) reported strong Q4 and fiscal year 2021 results, with GAAP revenue of $110.6 million, a 26% year-over-year increase. The company added over 800 new customers, achieving 109% net revenue retention. Despite a GAAP net loss of $20.7 million, Adjusted EBITDA reached $41.7 million. For 2022, Instructure projected revenue between $455.8 million and $459.8 million, alongside significant growth in ACR and non-GAAP metrics, signaling continued momentum in the ed tech market.
- GAAP revenue of $405.4 million for FY 2021, a 34% increase year-over-year.
- Added over 800 new customers, representing a 14% increase.
- 109% net revenue retention for the year.
- Projected 2022 revenue of $455.8 million to $459.8 million.
- GAAP net loss of $20.7 million for Q4 and $88.7 million for FY 2021.
- Operating loss of $46.9 million for FY 2021, or negative 11.6% of revenue.
SALT LAKE CITY, Feb. 17, 2022 /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, 2021.
"Instructure's strong fourth quarter performance capped off a truly outstanding year for our company," said Steve Daly, Instructure CEO. "During the year, we added over 800 new customers, a
Fourth Quarter Financial Highlights:
- GAAP Revenue of
$110.6 million , an increase of26% year over year - Allocated Combined Receipts*, or ACR, of
$111.4 million , an increase of23% year over year - Operating loss of
$5.4 million , or negative4.9% of revenue, and Non-GAAP operating income* of$40.7 million , or36.5% of ACR - GAAP net loss of
$20.7 million and Adjusted EBITDA* of$41.7 million , or37.4% of ACR - Cash flow from operations of negative
$3.7 million and Adjusted Unlevered Free Cash Flow* of$4.0 million
Full Year 2021 Financial Highlights:
- GAAP Revenue of
$405.4 million , an increase of34% year over year - ACR* of
$414.7 million , an increase of28% year over year - Operating loss of
$46.9 million , or negative11.6% of revenue, and Non-GAAP operating income* of$143.7 million , or34.7% of ACR - GAAP net loss of
$88.7 million and Adjusted EBITDA* of$146.7 million , or35.4% of ACR - Cash flow from operations of
$105.1 million and Adjusted Unlevered Free Cash Flow* of$168.7 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 October, Newport News public schools in Virginia, a Canvas client, added MasteryConnect as their student assessment management system. The relationship builds on our statewide Virtual Virginia contract. By directly addressing learning loss and providing accurate data about students' academic progress, MasteryConnect will empower Newport News public schools to make more informed decisions on how to best address learning needs and differentiate instruction.
- In November, Australian Catholic University (ACU) selected Canvas to replace their Moodle system. After a comprehensive competitive tender process, ACU selected Canvas and Impact as the foundation for their next-generation digital ecosystem to underpin ACU Online, the university's recently launched fully online education portfolio.
- In November, we announced the acquisition of Kimono (Elevate Data Sync), our secure data syncing solution. Adding Elevate Data Sync to the Instructure Learning Platform accelerates our plans to provide broad support and deeper integration points to the platform for thousands of ed tech providers globally, further empowering schools and higher education institutions to craft the digital learning environment that meets the unique needs of their students.
- In December, Walden University selected Canvas for its 40,000 student population because of its superior user experience and flexibility at scale, while providing data access and a robust API. The deal also included Impact to help accelerate Walden's transition from Blackboard to Canvas while providing continuity with previous functionality.
- In January 2022, we announced the launch of a new channel partner program, which we expect will allow Instructure to expand rapidly to new international markets and address the complex educational needs of higher education and K-12 institutions worldwide by providing them access to its Instructure Learning Platform. The program is specifically tailored to assist partners in emerging markets and key countries where educational institutions are looking for more robust, flexible solutions to the unique learning challenges facing students today.
Business Outlook
Based on information as of today, February 17, 2022, the Company is issuing the following financial guidance.
First Quarter Fiscal 2022:
- Revenue is expected to be in the range of
$108.6 million to$109.6 million - ACR* is expected to be in the range of
$109.1 million to$110.1 million - Non-GAAP operating income* is expected to be in the range of
$36.8 million to$37.8 million - Adjusted EBITDA* is expected to be in the range of
$37.9 million to$38.9 million - Non-GAAP net income* is expected to be
$33.0 million to$34.0 million
Full Year 2022:
- Revenue is expected to be in the range of
$455.8 million to$459.8 million - ACR* is expected to be in the range of
$456.7 million to$460.7 million - Non-GAAP operating income* is expected to be in the range of
$157.5 million to$161.5 million - Adjusted EBITDA* is expected to be in the range of
$162.1 million to$166.1 million - Non-GAAP net income* is expected to be
$140.9 million to$144.9 million - Adjusted unlevered free cash flow* is expected to be in the range of
$183.0 million to$187.0 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, non-GAAP net income and 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 fourth quarter and fiscal year ended December 31, 2021 financial results today, February 17, 2022 at 5:00 p.m. ET. The conference call can be accessed by dialing (833) 921-1674 from the United States and Canada or (236) 389-2674 internationally with conference ID 7093477. 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 is an education technology company dedicated to helping everyone learn together. We amplify the power of teaching and elevate the learning process, leading to improved student outcomes. Today, Instructure supports more than 30 million educators and learners at nearly 7,000 organizations around the world.
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.
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. 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. EBITDA is defined as earnings before debt-related costs, including interest and loss on debt extinguishment, provision (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.
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 and adjusted unlevered free cash flow facilitate period-to-period comparisons of liquidity. We consider 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.
Non-GAAP Gross Profit. 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.
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 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 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 effects of the current 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; 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 initial public offering prospectus filed with the Securities and Exchange Commission (the "SEC") on July 23, 2021, most recent Annual Report on Form 10-K and other documents filed with the SEC 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, 2021 | December 31, 2020 | |||||||
Assets | (unaudited) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 164,928 | $ | 146,212 | ||||
Accounts receivable—net | 51,607 | 47,315 | ||||||
Prepaid expenses | 15,475 | 12,733 | ||||||
Deferred commissions | 11,418 | 6,663 | ||||||
Assets held for sale | — | 57,334 | ||||||
Other current assets | 3,384 | 3,083 | ||||||
Total current assets | 246,812 | 273,340 | ||||||
Property and equipment, net | 10,792 | 11,289 | ||||||
Right-of-use assets | 18,175 | 26,904 | ||||||
Goodwill | 1,194,221 | 1,172,395 | ||||||
Intangible assets, net | 629,746 | 755,349 | ||||||
Noncurrent prepaid expenses | 1,553 | 6,269 | ||||||
Deferred commissions, net of current portion | 20,105 | 16,434 | ||||||
Deferred tax assets | 6,477 | — | ||||||
Other assets | 5,901 | 6,651 | ||||||
Total assets | $ | 2,133,782 | $ | 2,268,631 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 18,324 | $ | 13,302 | ||||
Accrued liabilities | 28,408 | 23,638 | ||||||
Lease liabilities | 6,666 | 6,037 | ||||||
Long-term debt, current | 2,763 | 6,118 | ||||||
Liabilities held for sale | — | 11,834 | ||||||
Deferred revenue | 240,936 | 192,864 | ||||||
Total current liabilities | 297,097 | 253,793 | ||||||
Long-term debt, net of current portion | 490,500 | 820,925 | ||||||
Deferred revenue, net of current portion | 14,740 | 12,015 | ||||||
Lease liabilities, net of current portion | 23,678 | 30,670 | ||||||
Deferred tax liabilities | 29,851 | 58,601 | ||||||
Other long-term liabilities | 3,531 | 4,643 | ||||||
Total liabilities | 859,397 | 1,180,647 | ||||||
Stockholders' equity: | ||||||||
Common stock, par value | 1,407 | 1,262 | ||||||
Additional paid-in capital | 1,539,638 | 1,264,703 | ||||||
Accumulated deficit | (266,660) | (177,981) | ||||||
Total stockholders' equity | 1,274,385 | 1,087,984 | ||||||
Total liabilities and stockholders' equity | $ | 2,133,782 | $ | 2,268,631 | ||||
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three months ended December 31, | Three months ended December 31, | Year ended December 31, | Period from | Period from | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
Revenue: | |||||||||||||||||||||
Subscription and support | $ | 101,007 | $ | 79,688 | $ | 367,781 | $ | 209,148 | $ | 65,968 | |||||||||||
Professional services and other | 9,586 | 7,843 | 37,580 | 21,525 | 5,421 | ||||||||||||||||
Total revenue | 110,593 | 87,531 | 405,361 | 230,673 | 71,389 | ||||||||||||||||
Cost of revenue: | |||||||||||||||||||||
Subscription and support | 36,348 | 38,628 | 148,923 | 108,603 | 19,699 | ||||||||||||||||
Professional services and other | 5,442 | 4,955 | 20,942 | 15,547 | 4,699 | ||||||||||||||||
Total cost of revenue | 41,790 | 43,583 | 169,865 | 124,150 | 24,398 | ||||||||||||||||
Gross profit | 68,803 | 43,948 | 235,496 | 106,523 | 46,991 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Sales and marketing | 41,686 | 41,616 | 162,544 | 125,650 | 27,010 | ||||||||||||||||
Research and development | 16,580 | 14,330 | 63,771 | 51,066 | 19,273 | ||||||||||||||||
General and administrative | 15,968 | 15,039 | 54,911 | 62,572 | 17,295 | ||||||||||||||||
Impairment on held-for-sale goodwill | — | — | — | 29,612 | — | ||||||||||||||||
Impairment on disposal group | — | 6,777 | 1,218 | 10,166 | — | ||||||||||||||||
Total operating expenses | 74,234 | 77,762 | 282,444 | 279,066 | 63,578 | ||||||||||||||||
Loss from operations | (5,431) | (33,814) | (46,948) | (172,543) | (16,587) | ||||||||||||||||
Other income (expense): | |||||||||||||||||||||
Interest income | 16 | 9 | 29 | 49 | 313 | ||||||||||||||||
Interest expense | (6,182) | (16,472) | (50,360) | (50,921) | (8) | ||||||||||||||||
Other income (expense), net | (330) | 907 | (2,695) | 1,510 | (5,738) | ||||||||||||||||
Loss on extinguishment of debt | (22,424) | — | (22,424) | — | — | ||||||||||||||||
Total other income (expense), net | (28,920) | (15,556) | (75,450) | (49,362) | (5,433) | ||||||||||||||||
Loss before income tax benefit (expense) | (34,351) | (49,370) | (122,398) | (221,905) | (22,020) | ||||||||||||||||
Income tax benefit (expense) | 13,697 | 8,136 | 33,719 | 43,924 | (183) | ||||||||||||||||
Net loss and comprehensive loss | $ | (20,654) | $ | (41,234) | $ | (88,679) | $ | (177,981) | $ | (22,203) | |||||||||||
Net loss per common share, basic and diluted | $ | (0.15) | $ | (0.33) | $ | (0.67) | $ | (1.41) | $ | (0.58) | |||||||||||
Weighted-average common shares used in computing basic and diluted net loss per common share attributable to common stockholders | 140,531 | 126,235 | 132,387 | 126,235 | 38,369 | ||||||||||||||||
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three months ended December 31, | Three months ended December 31, | Year ended December 31, | Period from | Period from January 1 to March 31, | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||
Operating Activities: | |||||||||||||||||||||
Net loss | $ | (20,654) | $ | (41,234) | $ | (88,679) | $ | (177,981) | $ | (22,203) | |||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||||||||||||
Depreciation of property and equipment | 985 | 1,203 | 3,713 | 3,630 | 2,982 | ||||||||||||||||
Amortization of intangible assets | 33,684 | 29,713 | 134,003 | 95,315 | 2,620 | ||||||||||||||||
Amortization of deferred financing costs | 477 | 490 | 2,435 | 1,508 | — | ||||||||||||||||
Impairment on disposal group | — | 6,777 | 1,218 | 10,166 | — | ||||||||||||||||
Impairment on held-for-sale goodwill | — | — | — | 29,612 | — | ||||||||||||||||
Loss on extinguishment of debt | 22,424 | — | 22,424 | — | — | ||||||||||||||||
Stock-based compensation | 6,540 | 5,569 | 18,072 | 8,685 | 7,109 | ||||||||||||||||
Deferred income taxes | (16,231) | (7,862) | (36,485) | (43,924) | — | ||||||||||||||||
Other | 120 | 260 | 1,685 | 1,641 | 1,959 | ||||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||||
Accounts receivable, net | 3,386 | 3,232 | (4,314) | (19,947) | 11,903 | ||||||||||||||||
Prepaid expenses and other assets | 2,014 | 5,565 | 2,094 | 26,948 | (25,121) | ||||||||||||||||
Deferred commissions | (2,762) | (5,527) | (8,358) | (24,537) | 1,469 | ||||||||||||||||
Right-of-use assets | 1,177 | 2,695 | 8,729 | 7,989 | 4,509 | ||||||||||||||||
Accounts payable and accrued liabilities | (596) | 7,297 | 8,038 | (4,499) | 2,187 | ||||||||||||||||
Deferred revenue | (31,927) | (9,698) | 48,543 | 122,157 | (36,983) | ||||||||||||||||
Lease liabilities | (1,617) | (2,498) | (6,363) | (2,836) | (7,489) | ||||||||||||||||
Other liabilities | (693) | (1,058) | (1,612) | 2,957 | — | ||||||||||||||||
Net cash provided by (used in) operating activities | (3,673) | (5,076) | 105,143 | 36,884 | (57,058) | ||||||||||||||||
Investing Activities: | |||||||||||||||||||||
Purchases of property and equipment | (1,459) | (776) | (4,259) | (1,634) | (732) | ||||||||||||||||
Proceeds from sale of property and equipment | 13 | 14 | 53 | 81 | 19 | ||||||||||||||||
Proceeds from sale of Bridge | — | — | 46,018 | — | — | ||||||||||||||||
Business acquisitions, net of cash received | (9,698) | (121,173) | (26,584) | (2,025,237) | — | ||||||||||||||||
Maturities of marketable securities | — | — | — | — | 15,584 | ||||||||||||||||
Net cash provided by (used in) investing activities | (11,144) | (121,935) | 15,228 | (2,026,790) | 14,871 | ||||||||||||||||
Financing Activities: | |||||||||||||||||||||
IPO proceeds, net of offering costs paid of | (350) | — | 259,254 | — | — | ||||||||||||||||
Proceeds from issuance of common stock from employee equity plans | — | — | — | — | 1,067 | ||||||||||||||||
Shares repurchased for tax withholdings on vesting of restricted stock units | (250) | — | (1,568) | — | (1,413) | ||||||||||||||||
Proceeds from issuance of term debt, net of discount | 493,090 | 67,453 | 493,090 | 830,729 | — | ||||||||||||||||
Proceeds from contributions from stockholders | — | (87) | — | 1,257,240 | — | ||||||||||||||||
Distributions to stockholders | — | — | (930) | — | — | ||||||||||||||||
Repayments of long-term debt | (531,305) | (1,938) | (839,187) | (5,813) | — | ||||||||||||||||
Term Loan prepayment premium | (8,066) | — | (11,893) | — | — | ||||||||||||||||
Payments of financing costs | (937) | — | (937) | — | — | ||||||||||||||||
Net cash provided by (used in) financing activities | (47,818) | 65,428 | (102,171) | 2,082,156 | (346) | ||||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (62,635) | (61,583) | 18,200 | 92,250 | (42,533) | ||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 231,788 | 212,536 | 150,953 | 58,703 | 101,236 | ||||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 169,153 | $ | 150,953 | $ | 169,153 | $ | 150,953 | $ | 58,703 | |||||||||||
Supplemental cash flow disclosure: | |||||||||||||||||||||
Cash paid for taxes | $ | 90 | $ | 39 | $ | 646 | $ | 296 | $ | 32 | |||||||||||
Interest paid | $ | 5,756 | $ | 15,969 | $ | 48,058 | $ | 49,227 | $ | — | |||||||||||
Non-cash investing and financing activities: | |||||||||||||||||||||
Capital expenditures incurred but not yet paid | $ | 83 | $ | — | $ | 83 | $ | — | $ | 79 | |||||||||||
RECONCILIATIONS OF NON-GAAP MEASURES TO GAAP MEASURES
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||
RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three months ended December 31, | Three months ended December 31, | Year ended December 31, | Period from | Period from | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||
Revenue | $ | 110,593 | $ | 87,531 | $ | 405,361 | $ | 230,673 | $ | 71,389 | |||||||||||
Fair value adjustments to deferred revenue in connection | 851 | 3,163 | 9,322 | 22,751 | — | ||||||||||||||||
Allocated combined receipts | $ | 111,444 | $ | 90,694 | $ | 414,683 | $ | 253,424 | $ | 71,389 | |||||||||||
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING INCOME | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three months ended December 31, | Three months ended December 31, | Year ended December 31, | Period from | Period from | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||
Loss from operations | $ | (5,431) | $ | (33,814) | $ | (46,948) | $ | (172,543) | $ | (16,587) | |||||||||||
Stock-based compensation | 8,063 | 9,612 | 25,785 | 50,162 | 7,109 | ||||||||||||||||
Restructuring, transaction and sponsor related costs | 3,522 | 16,641 | 21,564 | 66,959 | 8,360 | ||||||||||||||||
Amortization of acquisition-related intangibles | 33,682 | 29,713 | 133,994 | 95,310 | 2,586 | ||||||||||||||||
Fair value adjustments to deferred revenue in connection with purchase accounting | 851 | 3,163 | 9,322 | 22,751 | — | ||||||||||||||||
Non-GAAP operating income | $ | 40,687 | $ | 25,315 | $ | 143,717 | $ | 62,639 | $ | 1,468 | |||||||||||
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three months ended December 31, | Three months ended December 31, | Year ended December 31, | Period from | Period from | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||
Net loss | $ | (20,654) | $ | (41,234) | $ | (88,679) | $ | (177,981) | $ | (22,203) | |||||||||||
Interest on outstanding debt and loss on debt extinguishment | 28,605 | 16,472 | 72,775 | 50,921 | — | ||||||||||||||||
Provision (benefit) for taxes | (13,697) | (8,136) | (33,719) | (43,924) | 183 | ||||||||||||||||
Depreciation | 985 | 1,204 | 3,713 | 3,630 | 2,982 | ||||||||||||||||
Amortization | 2 | 2 | 7 | 7 | 35 | ||||||||||||||||
Stock-based compensation | 8,063 | 9,612 | 25,785 | 50,162 | 7,109 | ||||||||||||||||
Restructuring, transaction and sponsor related costs | 3,828 | 15,750 | 23,480 | 65,449 | 14,117 | ||||||||||||||||
Amortization of acquisition-related intangibles | 33,682 | 29,713 | 133,994 | 95,310 | 2,586 | ||||||||||||||||
Fair value adjustments to deferred revenue in connection with purchase accounting | 851 | 3,163 | 9,322 | 22,751 | — | ||||||||||||||||
Adjusted EBITDA | $ | 41,665 | $ | 26,546 | $ | 146,678 | $ | 66,325 | $ | 4,809 | |||||||||||
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||
RECONCILIATION OF FREE CASH FLOW, UNLEVERED FREE CASH FLOW & ADJUSTED UNLEVERED FREE CASH FLOW | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three months ended December 31, | Three months ended December 31, | Year ended December 31, | Period from | Period from | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||
Net cash provided by (used in) operating activities | $ | (3,673) | $ | (5,076) | $ | 105,143 | $ | 36,884 | $ | (57,058) | |||||||||||
Purchases of property and equipment | (1,459) | (776) | (4,259) | (1,634) | (732) | ||||||||||||||||
Proceeds from disposals of property and equipment | 13 | 14 | 53 | 81 | 19 | ||||||||||||||||
Free cash flow | $ | (5,119) | $ | (5,838) | $ | 100,937 | $ | 35,331 | $ | (57,771) | |||||||||||
Cash paid for interest on outstanding debt | 5,756 | 16,472 | 48,058 | 50,921 | — | ||||||||||||||||
Cash settled stock-based compensation | 1,522 | 4,003 | 7,616 | 41,437 | — | ||||||||||||||||
Unlevered free cash flow | $ | 2,159 | $ | 14,637 | $ | 156,611 | $ | 127,689 | $ | (57,771) | |||||||||||
Restructuring, transaction and sponsor related costs paid in cash | 1,884 | 6,306 | 12,085 | 21,744 | 8,058 | ||||||||||||||||
Adjusted unlevered free cash flow | $ | 4,043 | $ | 20,943 | $ | 168,696 | $ | 149,433 | $ | (49,713) | |||||||||||
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||
RECONCILIATION OF NON-GAAP NET INCOME | |||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three months ended December 31, | Three months ended December 31, | Year ended December 31, | Period from | Period from | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||
Net loss | $ | (20,654) | $ | (41,234) | $ | (88,679) | $ | (177,981) | $ | (22,203) | |||||||||||
Stock-based compensation | 8,063 | 9,612 | 25,785 | 50,162 | 7,109 | ||||||||||||||||
Amortization of acquisition-related intangibles | 33,682 | 29,713 | 133,994 | 95,310 | 2,586 | ||||||||||||||||
Fair value adjustments to deferred revenue in connection with purchase accounting | 851 | 3,163 | 9,322 | 22,751 | — | ||||||||||||||||
Loss on extinguishment of debt | 22,424 | — | 22,424 | — | — | ||||||||||||||||
Restructuring, transaction and sponsor related costs | 3,828 | 15,750 | 23,480 | 65,449 | 14,117 | ||||||||||||||||
Non-GAAP net income | $ | 48,194 | $ | 17,004 | $ | 126,326 | $ | 55,691 | $ | 1,609 | |||||||||||
Non-GAAP net income per common share, basic | $ | 0.34 | $ | 0.13 | $ | 0.95 | $ | 0.44 | $ | 0.04 | |||||||||||
Non-GAAP net income per common share, diluted | $ | 0.34 | $ | 0.13 | $ | 0.95 | $ | 0.44 | $ | 0.04 | |||||||||||
Weighted average common shares used in computing basic Non-GAAP net income per common share | 140,531 | 126,235 | 132,387 | 126,235 | 38,369 | ||||||||||||||||
Weighted average common shares used in computing diluted Non-GAAP net income per common share | 142,870 | 126,235 | 133,487 | 126,235 | 38,369 | ||||||||||||||||
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||
RECONCILIATION OF NON-GAAP GROSS PROFIT | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three months ended December 31, | Three months ended December 31, | Year ended December 31, | Period from | Period from | |||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||||
Gross profit | $ | 68,803 | $ | 43,948 | $ | 235,496 | $ | 106,523 | $ | 46,991 | |||||||||||
Stock-based compensation | 596 | 590 | 1,858 | 1,707 | 586 | ||||||||||||||||
Restructuring, transaction and sponsor related costs | 54 | 224 | 3,045 | 3,137 | 66 | ||||||||||||||||
Amortization of acquisition-related intangibles | 15,648 | 14,000 | 62,060 | 44,167 | 1,293 | ||||||||||||||||
Fair value adjustments to deferred revenue in connection with purchase accounting | 851 | 3,163 | 9,322 | 22,751 | — | ||||||||||||||||
Non-GAAP gross profit | $ | 85,952 | $ | 61,925 | $ | 311,781 | $ | 178,285 | $ | 48,936 | |||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP COST OF REVENUE | ||||||||||||||||||||
Three Months Ended December 31, 2021 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | 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, 2021 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Subscription and support | $ | 148,923 | (899) | (2,132) | (62,060) | $ | 83,832 | |||||||||||||
Professional services and other | 20,942 | (959) | (913) | — | 19,070 | |||||||||||||||
Total cost of revenue | $ | 169,865 | (1,858) | (3,045) | (62,060) | $ | 102,902 | |||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP COST OF REVENUE | ||||||||||||||||||||
Three Months Ended December 31, 2020 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Subscription and support | $ | 38,628 | (366) | (178) | (14,000) | $ | 24,084 | |||||||||||||
Professional services and other | 4,955 | (224) | (46) | — | 4,685 | |||||||||||||||
Total cost of revenue | $ | 43,583 | (590) | (224) | (14,000) | $ | 28,769 | |||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP COST OF REVENUE | ||||||||||||||||||||
Period from April 1 to December 31, 2020 (Successor) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Subscription and support | $ | 108,603 | (1,020) | (2,235) | (44,167) | $ | 61,181 | |||||||||||||
Professional services and other | 15,547 | (687) | (902) | — | 13,958 | |||||||||||||||
Total cost of revenue | $ | 124,150 | (1,707) | (3,137) | (44,167) | $ | 75,139 | |||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP COST OF REVENUE | ||||||||||||||||||||
Period from January 1 to March 31, 2020 (Predecessor) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Subscription and support | $ | 19,699 | (301) | — | (1,293) | $ | 18,105 | |||||||||||||
Professional services and other | 4,699 | (285) | (66) | — | 4,348 | |||||||||||||||
Total cost of revenue | $ | 24,398 | (586) | (66) | (1,293) | $ | 22,453 | |||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Three Months Ended December 31, 2021 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 41,686 | (2,122) | (120) | (18,034) | $ | 21,410 | |||||||||||||
Research and development | 16,580 | (2,047) | (1,137) | — | 13,396 | |||||||||||||||
General and administrative | 15,968 | (3,298) | (2,211) | — | 10,459 | |||||||||||||||
Total operating expenses | $ | 74,234 | (7,467) | (3,468) | (18,034) | $ | 45,265 | |||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Year Ended December 31, 2021 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 162,544 | (6,936) | (2,671) | (71,934) | $ | 81,003 | |||||||||||||
Research and development | 63,771 | (6,943) | (4,041) | — | 52,787 | |||||||||||||||
General and administrative | 54,911 | (10,048) | (10,589) | — | 34,274 | |||||||||||||||
Impairment on disposal group | 1,218 | — | (1,218) | — | — | |||||||||||||||
Total operating expenses | $ | 282,444 | (23,927) | (18,519) | (71,934) | $ | 168,064 | |||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Three Months Ended December 31, 2020 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 41,616 | (2,144) | (3,690) | (15,713) | $ | 20,069 | |||||||||||||
Research and development | 14,330 | (2,710) | (1,179) | — | 10,441 | |||||||||||||||
General and administrative | 15,039 | (4,168) | (4,772) | — | 6,099 | |||||||||||||||
Impairment on disposal group | 6,777 | — | (6,777) | — | — | |||||||||||||||
Total operating expenses | $ | 77,762 | $ | (9,022) | $ | (16,418) | $ | (15,713) | $ | 36,609 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Period from April 1 to December 31, 2020 (Successor) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 125,650 | (7,580) | (7,395) | (51,143) | $ | 59,532 | |||||||||||||
Research and development | 51,066 | (9,903) | (4,760) | — | 36,403 | |||||||||||||||
General and administrative | 62,572 | (30,972) | (11,889) | — | 19,711 | |||||||||||||||
Impairment on held-for-sale goodwill | 29,612 | — | (29,612) | — | — | |||||||||||||||
Impairment on disposal group | 10,166 | — | (10,166) | — | — | |||||||||||||||
Total operating expenses | $ | 279,066 | $ | (48,455) | $ | (63,822) | $ | (51,143) | $ | 115,646 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Period from January 1 to March 31, 2020 (Predecessor) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 27,010 | (1,977) | (556) | (1,293) | $ | 23,184 | |||||||||||||
Research and development | 19,273 | (1,874) | (1,273) | — | 16,126 | |||||||||||||||
General and administrative | 17,295 | (2,672) | (6,465) | — | 8,158 | |||||||||||||||
Total operating expenses | $ | 63,578 | (6,523) | (8,294) | (1,293) | $ | 47,468 | |||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS GUIDANCE | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ending March 31, | Full Year Ending December 31, | |||||||||||||||
2022 | 2022 | 2022 | 2022 | |||||||||||||
LOW | HIGH | LOW | HIGH | |||||||||||||
Revenue | $ | 108,600 | $ | 109,600 | $ | 455,800 | $ | 459,800 | ||||||||
Fair value adjustments to deferred revenue in connection with purchase | 500 | 500 | 900 | 900 | ||||||||||||
Allocated combined receipts | $ | 109,100 | $ | 110,100 | $ | 456,700 | $ | 460,700 | ||||||||
For More Information:
Media Relations:
Cory Edwards
Vice President, Corporate Communications
Instructure
(801) 869-5258
cory@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.
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