Instructure Announces Second Quarter 2022 Financial Results
Instructure reported a Q2 2022 GAAP revenue of $114.6 million, representing a 22% year-over-year growth, despite an operating loss of $6.6 million. Adjusted EBITDA stood at $39.8 million. The company highlighted ongoing success in its Learning Platform strategy, with significant partnerships and client acquisition including Northern Arizona University and DeKalb County Schools. Looking forward, revenue guidance for Q3 is projected between $118.5 million and $119.5 million, while annual revenue is expected to reach $464.9 million to $468.9 million.
- 22% year-over-year growth in Q2 revenue.
- Strong Adjusted EBITDA of $39.8 million.
- Acquisition of notable clients such as Northern Arizona University and Southern University.
- Positive revenue guidance for Q3 2022 projected between $118.5 million to $119.5 million.
- Operating loss of $6.6 million.
- Net loss of $12.9 million reported.
Second Quarter GAAP Revenue of
Second Quarter Loss from Operations of
SALT LAKE CITY, Aug. 1, 2022 /PRNewswire/ -- Instructure Holdings, Inc. (Instructure) (NYSE: INST), the makers of the Canvas Learning Management System, today announced financial results for the second quarter ended June 30, 2022.
"In an uncertain macroeconomic environment, Instructure delivered strong, double-digit top line growth and year-over-year margin expansion during the second quarter," said Steve Daly, Instructure CEO. "Our Instructure Learning Platform strategy continued to gain momentum during the quarter with growth across our Canvas learning management solutions, Mastery assessment tools and content, Elevate data and analytics products, and Impact solutions for edtech adoption and engagement. We were thrilled to welcome over 12,000 registrants and many of our 600+ Instructure EdTech Collective partners to InstructureCon 2022 North America in July, where we highlighted product improvements that make the Instructure Learning Platform even more powerful in 2022. We look forward to the opportunity to bring more value to our clients, partners and shareholders in the months and years ahead."
Financial Highlights:
- GAAP Revenue of
$114.6 million , an increase of22% year over year - Allocated Combined Receipts*, or ACR, of
$114.9 million , an increase of20% year over year - Operating loss of
$6.6 million , or negative5.8% of revenue, and Non-GAAP operating income* of$38.7 million , or33.7% of ACR - GAAP net loss of
$12.9 million , or negative11.3% of revenue, and Adjusted EBITDA* of$39.8 million , or34.6% of ACR - Cash flow from operations of
$8.6 million and Adjusted Unlevered Free Cash Flow* of$16.2 million - For the twelve months ended June 30, 2022, cash flow from operations of
$100.2 million and Adjusted Unlevered Free Cash Flow* of$134.2 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:
- Northern Arizona University (NAU) selected Canvas to replace its incumbent LMS provider after a rigorous, 10-month evaluation process. The results of NAU's review and selection process, which are available on the university's website, demonstrate a clear preference among NAU's students and instructors for Canvas over competing solutions. NAU's purchase included three Instructure Learning Platform products: Canvas LMS, Studio, and Catalog.
- Southern University and A&M College System, the only historically black university system in the United States, selected Canvas to help empower student success and create global leadership opportunities for a diverse student population. The Canvas implementation will support the university system's four campuses and more than 11,000 students with a fully mobile and accessible solution through reliable, open and inclusive educational technology.
- Neenah Joint School District, which serves over 6,700 students across 14 schools in Wisconsin, chose Instructure to replace its existing LMS vendor. Our unique ability to bundle our leading MasteryConnect assessment management system with Canvas LMS, as well as the superiority of our support organization, were key factors in the district's decision to switch to Instructure.
- DeKalb County Schools, an existing Canvas LMS customer, purchased Studio, Impact, and Services to improve the adoption of technology in the classroom and advance digital learning across its 94,000-student district. DeKalb County Schools was able to utilize Elementary and Secondary School Emergency Relief, or ESSER, stimulus funds to help finance their investment.
- The Brazilian College of Radiology and Diagnostic Imaging, or CBR, chose Instructure to replace its legacy LMS solution. CBR selected Instructure because of our ability to offer them a tightly integrated solution which included Canvas LMS, Studio, and Catalog.
- We continued to build out the channel partner program we announced earlier this year, including an expansion of our partnership with Tech Data to the Indian market. As a leading global IT distributor, Tech Data is committed to ensuring that Instructure partners in India will receive the highest levels of support and assistance on the ground.
Business Outlook
Based on information as of today, August 1, 2022, the Company is issuing the following financial guidance.
Third Quarter Fiscal 2022:
- Revenue is expected to be in the range of
$118.5 million to$119.5 million - ACR* is expected to be in the range of
$118.5 million to$119.5 million - Non-GAAP operating income* is expected to be in the range of
$40.9 million to$41.9 million - Adjusted EBITDA* is expected to be in the range of
$42.1 million to$43.1 million - Non-GAAP net income* is expected to be in the range of
$35.0 million to$36.0 million
Full Year 2022:
- Revenue is expected to be in the range of
$464.9 million to$468.9 million - ACR* is expected to be in the range of
$465.8 million to$469.8 million - Non-GAAP operating income* is expected to be in the range of
$162.8 million to$166.8 million - Adjusted EBITDA* is expected to be in the range of
$167.5 million to$171.5 million - Non-GAAP net income* is expected to be in the range of
$145.2 million to$149.2 million - Adjusted unlevered free cash flow* is expected to be in the range of
$185.5 million to$189.5 million
*ACR, Non-GAAP operating income, Adjusted EBITDA, non-GAAP net income and adjusted unlevered free cash flow are non-GAAP measures. See "Non-GAAP Financial Measures" for a reconciliation of ACR to the most closely comparable GAAP measure. Instructure is unable to provide guidance, or a reconciliation, for operating loss and net loss, the most closely comparable GAAP measures with respect to non-GAAP operating income, Adjusted EBITDA and non-GAAP net income, and net cash provided by (used in) operating activities, the most closely comparable measure with respect to adjusted unlevered free cash flow because Instructure cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. This is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including stock-based compensation and amortization of acquisition related intangibles. Thus, Instructure is unable to present a quantitative reconciliation of non-GAAP guidance to GAAP guidance because such information is not available.
Conference Call Information
Instructure's management team will hold a conference call to discuss our second quarter results today, August 1, 2022 at 5:00 p.m. ET. The conference call can be accessed by dialing (888) 330-2384 from the United States and Canada or (240) 789-2701 internationally with conference ID 1348899. A live webcast and replay of the conference call can be accessed from the investor relations page of Instructure's website at ir.instructure.com. An archived replay of the webcast will be available following the conclusion of the call.
About Instructure
Instructure (NYSE: INST) is an education technology company dedicated to elevating student success, amplifying the power of teaching, and inspiring everyone to learn together. Today the Instructure Learning Platform supports tens of millions of educators and learners around the world. Learn more at www.instructure.com.
Non-GAAP Financial Measures
Instructure has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). In addition to Instructure's results determined in accordance with GAAP, Instructure believes the following non-GAAP measures are useful in evaluating its operating performance and liquidity. Instructure believes that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
A reconciliation of Instructure's historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.
ACR. We define ACR as the combined receipts of our Company and companies that we have acquired allocated to the period of service delivery. We calculate ACR as the sum of (i) revenue and (ii) the impact of fair value adjustments to acquired unearned revenue related to Thoma Bravo's acquisition of Instructure (the "Take-Private Transaction") and the Certica Holdings, LLC ("Certica"), Eesysoft Software International B.V. (which was rebranded to "Impact by Instructure" or "Impact" subsequent to acquisition), and Kimono LLC (which was rebranded to "Elevate Data Sync" subsequent to acquisition) acquisitions where we do not believe such adjustments are reflective of our ongoing operations. Management uses this measure to evaluate organic growth of the business period over period, as if the Company had operated as a single entity and excluding the impact of acquisitions or adjustments due to purchase accounting.
Non-GAAP Operating Income. We define non-GAAP operating income as loss from operations excluding the impact of stock-based compensation, restructuring, transaction and sponsor related costs, amortization of acquisition-related intangibles, and the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and the Certica, Impact, and Elevate Data Sync acquisitions that we do not believe are reflective of our ongoing operations. We believe non-GAAP operating income is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. Although we exclude the amortization of acquisition-related intangibles from the non-GAAP measure, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.
Non-GAAP Net Income. We define non-GAAP net income as net loss excluding the impact of stock-based compensation, amortization of acquisition-related intangibles, the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and the Certica, Impact, and Elevate Data Sync acquisitions, restructuring, transaction and sponsor related costs that we do not believe are reflective of our ongoing operations. We believe Non-GAAP net income is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. Although we exclude the amortization of acquisition-related intangibles from the non-GAAP measure, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Basic non-GAAP net income per common share attributable to common stockholders is computed by dividing non-GAAP net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted non-GAAP net income per common share attributable to common stockholders is computed by giving effect to all potentially 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, 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 (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 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. 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. We define non-GAAP gross profit as gross profit excluding the impact of stock-based compensation, restructuring, transaction and sponsor related costs, amortization of acquisition-related intangibles, and fair value adjustments to deferred revenue in connection with purchase accounting that we do not believe are reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangibles from the non-GAAP measure, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.
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 third quarter of 2022 and for the full year ending December 31, 2022, the Company's growth, customer demand and application adoption, the Company's research and development efforts and future application releases, and the Company's expectations regarding future revenue, expenses, cash flows and net income or loss.
These statements are not guarantees of future performance, but are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: risks associated with general global political, macroeconomic, social, health and market conditions, including rising inflation, political instability, terrorist activities or military conflicts, including Russia's invasion of Ukraine; risks associated with future stimulus packages approved by the U.S. federal government; failure to continue our recent growth rates; our ability to acquire new customers and successfully retain existing customers; the effects of increased usage of, or interruptions or performance problems associated with, our learning platform; the impact on our business and prospects from the ongoing effects of the COVID-19 pandemic; our history of losses and expectation that we will not be profitable for the foreseeable future; the impact of adverse general and industry-specific economic and market conditions; and changes in the spending policies or budget priorities for government funding of Higher Education and K-12 institutions.
These and other important risk factors are described more fully in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Report on Form 10-Q and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. All information provided in this press release and in the conference call is as of the date hereof and Instructure undertakes no duty to update this information except as required by law.
INSTRUCTURE HOLDINGS, INC. | |||||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||
June 30, | December 31, | ||||||||||||||||||||||||||||||||||||||||||
Assets | (unaudited) | ||||||||||||||||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 83,234 | $ | 164,928 | |||||||||||||||||||||||||||||||||||||||
Accounts receivable—net | 167,646 | 51,607 | |||||||||||||||||||||||||||||||||||||||||
Prepaid expenses | 37,941 | 15,475 | |||||||||||||||||||||||||||||||||||||||||
Deferred commissions | 12,374 | 11,418 | |||||||||||||||||||||||||||||||||||||||||
Other current assets | 2,887 | 3,384 | |||||||||||||||||||||||||||||||||||||||||
Total current assets | 304,082 | 246,812 | |||||||||||||||||||||||||||||||||||||||||
Property and equipment, net | 12,203 | 10,792 | |||||||||||||||||||||||||||||||||||||||||
Right-of-use assets | 15,765 | 18,175 | |||||||||||||||||||||||||||||||||||||||||
Goodwill | 1,203,979 | 1,194,221 | |||||||||||||||||||||||||||||||||||||||||
Intangible assets, net | 574,812 | 629,746 | |||||||||||||||||||||||||||||||||||||||||
Noncurrent prepaid expenses | 1,127 | 1,553 | |||||||||||||||||||||||||||||||||||||||||
Deferred commissions, net of current portion | 18,953 | 20,105 | |||||||||||||||||||||||||||||||||||||||||
Deferred tax assets | 8,561 | 6,477 | |||||||||||||||||||||||||||||||||||||||||
Other assets | 5,689 | 5,901 | |||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,145,171 | $ | 2,133,782 | |||||||||||||||||||||||||||||||||||||||
Liabilities and stockholders' equity | |||||||||||||||||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||||||||||||||||
Accounts payable | $ | 16,128 | $ | 18,324 | |||||||||||||||||||||||||||||||||||||||
Accrued liabilities | 23,204 | 28,408 | |||||||||||||||||||||||||||||||||||||||||
Lease liabilities | 6,998 | 6,666 | |||||||||||||||||||||||||||||||||||||||||
Long-term debt, current | 4,013 | 2,763 | |||||||||||||||||||||||||||||||||||||||||
Deferred revenue | 269,655 | 240,936 | |||||||||||||||||||||||||||||||||||||||||
Total current liabilities | 319,998 | 297,097 | |||||||||||||||||||||||||||||||||||||||||
Long-term debt, net of current portion | 488,493 | 490,500 | |||||||||||||||||||||||||||||||||||||||||
Deferred revenue, net of current portion | 13,667 | 14,740 | |||||||||||||||||||||||||||||||||||||||||
Lease liabilities, net of current portion | 19,859 | 23,678 | |||||||||||||||||||||||||||||||||||||||||
Deferred tax liabilities | 26,513 | 29,851 | |||||||||||||||||||||||||||||||||||||||||
Other long-term liabilities | 2,153 | 3,531 | |||||||||||||||||||||||||||||||||||||||||
Total liabilities | 870,683 | 859,397 | |||||||||||||||||||||||||||||||||||||||||
Stockholders' equity: | |||||||||||||||||||||||||||||||||||||||||||
Accumulated deficit | 1,419 | 1,407 | |||||||||||||||||||||||||||||||||||||||||
Additional paid-in capital | 1,558,193 | 1,539,638 | |||||||||||||||||||||||||||||||||||||||||
Accumulated deficit | (285,124) | (266,660) | |||||||||||||||||||||||||||||||||||||||||
Total stockholders' equity | 1,274,488 | 1,274,385 | |||||||||||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 2,145,171 | $ | 2,133,782 | |||||||||||||||||||||||||||||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(unaudited) | ||||||||||||||||
Revenue: | ||||||||||||||||
Subscription and support | $ | 102,905 | $ | 84,257 | $ | 206,397 | $ | 170,611 | ||||||||
Professional services and other | 11,672 | 9,310 | 21,642 | 16,936 | ||||||||||||
Total revenue | 114,577 | 93,567 | 228,039 | 187,547 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Subscription and support | 35,868 | 36,163 | 71,414 | 76,047 | ||||||||||||
Professional services and other | 6,530 | 4,811 | 11,995 | 10,561 | ||||||||||||
Total cost of revenue | 42,398 | 40,974 | 83,409 | 86,608 | ||||||||||||
Gross profit | 72,179 | 52,593 | 144,630 | 100,939 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 45,885 | 39,083 | 89,206 | 80,305 | ||||||||||||
Research and development | 18,669 | 14,279 | 35,870 | 31,368 | ||||||||||||
General and administrative | 14,253 | 11,196 | 29,869 | 24,547 | ||||||||||||
Impairment on disposal group | — | — | — | 1,218 | ||||||||||||
Total operating expenses | 78,807 | 64,558 | 154,945 | 137,438 | ||||||||||||
Loss from operations | (6,628) | (11,965) | (10,315) | (36,499) | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income | 27 | — | 63 | 16 | ||||||||||||
Interest expense | (4,611) | (15,670) | (9,164) | (32,930) | ||||||||||||
Other expense | (3,417) | (108) | (3,111) | (742) | ||||||||||||
Total other income (expense), net | (8,001) | (15,778) | (12,212) | (33,656) | ||||||||||||
Loss before income taxes | (14,629) | (27,743) | (22,527) | (70,155) | ||||||||||||
Income tax benefit | 1,710 | 6,050 | 4,063 | 15,391 | ||||||||||||
Net loss and comprehensive loss | $ | (12,919) | $ | (21,693) | $ | (18,464) | $ | (54,764) | ||||||||
Net loss per common share, basic and diluted | $ | (0.09) | $ | (0.17) | $ | (0.13) | $ | (0.43) | ||||||||
Weighted-average common shares used in computing basic and diluted | 141,534 | 126,049 | 141,244 | 126,083 | ||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(unaudited) | ||||||||||||||||
Operating Activities: | ||||||||||||||||
Net loss | $ | (12,919) | $ | (21,693) | $ | (18,464) | $ | (54,764) | ||||||||
Adjustments to reconcile net loss to net cash provided by (used in) | ||||||||||||||||
Depreciation of property and equipment | 1,053 | 879 | 2,057 | 1,818 | ||||||||||||
Amortization of intangible assets | 34,193 | 33,363 | 67,934 | 66,728 | ||||||||||||
Amortization of deferred financing costs | 293 | 609 | 587 | 1,218 | ||||||||||||
Impairment on disposal group | — | — | — | 1,218 | ||||||||||||
Stock-based compensation | 8,158 | 2,190 | 15,971 | 4,823 | ||||||||||||
Deferred income taxes | (2,011) | (6,022) | (5,422) | (15,402) | ||||||||||||
Other | 3,173 | 84 | 2,599 | 1,405 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Accounts receivable, net | (130,095) | (113,819) | (115,316) | (96,913) | ||||||||||||
Prepaid expenses and other assets | 13,557 | 11,951 | (21,176) | (6,970) | ||||||||||||
Deferred commissions | (108) | (2,323) | 196 | (2,375) | ||||||||||||
Right-of-use assets | 1,213 | 1,138 | 2,410 | 6,380 | ||||||||||||
Accounts payable and accrued liabilities | 2,615 | 8,438 | (9,131) | (195) | ||||||||||||
Deferred revenue | 91,781 | 94,544 | 25,080 | 44,058 | ||||||||||||
Lease liabilities | (2,019) | (1,407) | (3,487) | (3,050) | ||||||||||||
Other liabilities | (265) | (1,567) | (1,378) | (346) | ||||||||||||
Net cash provided by (used in) operating activities | 8,619 | 6,365 | (57,540) | (52,367) | ||||||||||||
Investing Activities: | ||||||||||||||||
Purchases of property and equipment | (2,082) | (1,196) | (3,415) | (1,607) | ||||||||||||
Proceeds from sale of property and equipment | 14 | 15 | 36 | 24 | ||||||||||||
Proceeds from sale of Bridge | — | — | — | 46,018 | ||||||||||||
Business acquisitions, net of cash received | (19,484) | (16,030) | (19,484) | (16,030) | ||||||||||||
Net cash provided by (used in) investing activities | (21,552) | (17,211) | (22,863) | 28,405 | ||||||||||||
Financing Activities: | ||||||||||||||||
Proceeds from issuance of common stock from employee equity plans | — | — | 4,076 | — | ||||||||||||
Shares repurchased for tax withholdings on vesting of restricted stock units | (425) | — | (1,688) | — | ||||||||||||
Distributions to stockholders | — | (360) | — | (923) | ||||||||||||
Repayments of long-term debt | (1,250) | (1,992) | (1,250) | (51,534) | ||||||||||||
Net cash provided by (used in) financing activities | (1,675) | (2,352) | 1,138 | (52,457) | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,095) | — | (2,291) | — | ||||||||||||
Net decrease in cash, cash equivalents and restricted cash | (17,703) | (13,198) | (81,556) | (76,419) | ||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 105,299 | 87,732 | 169,152 | 150,953 | ||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 87,596 | $ | 74,534 | $ | 87,596 | $ | 74,534 | ||||||||
Supplemental cash flow disclosure: | ||||||||||||||||
Cash paid for taxes | $ | 2,706 | $ | 326 | $ | 2,775 | $ | 403 | ||||||||
Interest paid | $ | 4,342 | $ | 15,077 | $ | 5,766 | $ | 31,749 | ||||||||
Non-cash investing and financing activities: | ||||||||||||||||
Capital expenditures incurred but not yet paid | $ | 189 | $ | 48 | $ | 189 | $ | 65 | ||||||||
RECONCILIATIONS OF NON-GAAP MEASURES TO GAAP MEASURES | ||||||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | $ | 114,577 | $ | 93,567 | $ | 228,039 | $ | 187,547 | ||||||||
Fair value adjustments to deferred revenue in connection with | 331 | 2,334 | 830 | 7,092 | ||||||||||||
Allocated combined receipts | $ | 114,908 | $ | 95,901 | $ | 228,869 | $ | 194,639 | ||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING INCOME | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Loss from operations | $ | (6,628) | $ | (11,965) | $ | (10,315) | $ | (36,499) | ||||||||
Stock-based compensation | 9,387 | 3,758 | 18,863 | 9,343 | ||||||||||||
Restructuring, transaction and sponsor related costs | 1,388 | 2,954 | 3,858 | 16,011 | ||||||||||||
Amortization of acquisition-related intangibles | 34,191 | 33,361 | 67,930 | 66,722 | ||||||||||||
Fair value adjustments to deferred revenue in connection with | 331 | 2,334 | 830 | 7,092 | ||||||||||||
Non-GAAP operating income | $ | 38,669 | $ | 30,442 | $ | 81,166 | $ | 62,669 | ||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF NON-GAAP ADJUSTED EBITDA | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net loss | $ | (12,919) | $ | (21,693) | $ | (18,464) | $ | (54,764) | ||||||||
Interest on outstanding debt and loss on debt extinguishment | 4,608 | 15,653 | 9,161 | 32,923 | ||||||||||||
Benefit for taxes | (1,710) | (6,050) | (4,063) | (15,391) | ||||||||||||
Depreciation | 1,053 | 879 | 2,058 | 1,818 | ||||||||||||
Amortization | 2 | 2 | 4 | 4 | ||||||||||||
Stock-based compensation | 9,387 | 3,758 | 18,863 | 9,343 | ||||||||||||
Restructuring, transaction and sponsor related costs | 4,865 | 2,954 | 7,043 | 16,011 | ||||||||||||
Amortization of acquisition-related intangibles | 34,191 | 33,361 | 67,930 | 66,722 | ||||||||||||
Fair value adjustments to deferred revenue in connection with | 331 | 2,334 | 830 | 7,092 | ||||||||||||
Adjusted EBITDA | $ | 39,808 | $ | 31,198 | $ | 83,362 | $ | 63,758 | ||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF FREE CASH FLOW, UNLEVERED FREE CASH FLOW & ADJUSTED UNLEVERED FREE CASH FLOW | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net cash provided by (used in) operating activities | $ | 8,619 | $ | 6,365 | $ | (57,540) | $ | (52,367) | ||||||||
Purchases of property and equipment | (2,082) | (1,196) | (3,415) | (1,607) | ||||||||||||
Proceeds from disposals of property and equipment | 14 | 15 | 36 | 24 | ||||||||||||
Free cash flow | $ | 6,551 | $ | 5,184 | $ | (60,919) | $ | (53,950) | ||||||||
Cash paid for interest on outstanding debt | 4,342 | 15,077 | 5,766 | 31,749 | ||||||||||||
Cash settled stock-based compensation | 1,228 | 1,524 | 2,892 | 4,443 | ||||||||||||
Unlevered free cash flow | $ | 12,121 | $ | 21,785 | $ | (52,261) | $ | (17,758) | ||||||||
Restructuring, transaction and sponsor related costs paid in cash | 4,033 | 3,282 | 7,911 | 8,086 | ||||||||||||
Adjusted unlevered free cash flow | $ | 16,154 | $ | 25,067 | $ | (44,350) | $ | (9,672) | ||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF NON-GAAP NET INCOME | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net loss | $ | (12,919) | $ | (21,693) | $ | (18,464) | $ | (54,764) | ||||||||
Stock-based compensation | 9,387 | 3,758 | 18,863 | 9,343 | ||||||||||||
Amortization of acquisition-related intangibles | 34,191 | 33,361 | 67,930 | 66,722 | ||||||||||||
Fair value adjustments to deferred revenue in connection with | 331 | 2,334 | 830 | 7,092 | ||||||||||||
Restructuring, transaction and sponsor related costs | 4,865 | 2,954 | 7,043 | 16,011 | ||||||||||||
Non-GAAP net income | $ | 35,855 | $ | 20,714 | $ | 76,202 | $ | 44,404 | ||||||||
Non-GAAP net income per common share, basic | $ | 0.25 | $ | 0.16 | $ | 0.54 | $ | 0.35 | ||||||||
Non-GAAP net income per common share, diluted | $ | 0.25 | $ | 0.16 | $ | 0.53 | $ | 0.35 | ||||||||
Weighted average common shares used in computing basic Non- | 141,534 | 126,049 | 141,244 | 126,083 | ||||||||||||
Weighted average common shares used in computing diluted | 142,847 | 126,049 | 142,844 | 126,083 | ||||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF NON-GAAP GROSS PROFIT | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Gross profit | $ | 72,179 | $ | 52,593 | $ | 144,630 | $ | 100,939 | ||||||||
Stock-based compensation | 790 | 281 | 1,448 | 682 | ||||||||||||
Restructuring, transaction and sponsor related costs | 50 | 33 | 113 | 2,803 | ||||||||||||
Amortization of acquisition-related intangibles | 15,859 | 15,415 | 31,549 | 30,830 | ||||||||||||
Fair value adjustments to deferred revenue in connection with | 331 | 2,334 | 830 | 7,092 | ||||||||||||
Non-GAAP gross profit | $ | 89,209 | $ | 70,656 | $ | 178,570 | $ | 142,346 | ||||||||
GAAP gross margin | 63.0 | % | 56.2 | % | 63.4 | % | 53.8 | % | ||||||||
Non-GAAP gross margin | 77.6 | % | 73.7 | % | 78.0 | % | 73.1 | % | ||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF ACR NORMALIZED FOR BRIDGE DIVESTITURE | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months | Six months | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | $ | 114,577 | $ | 93,567 | $ | 228,039 | $ | 187,547 | ||||||||
Bridge revenue - Subscription and support | — | — | — | (3,332) | ||||||||||||
Bridge revenue - Professional services and other | — | — | — | (330) | ||||||||||||
Revenue normalized for Bridge divestiture | $ | 114,577 | $ | 93,567 | $ | 228,039 | $ | 183,885 | ||||||||
Fair value adjustments to deferred revenue in connection with | 331 | 2,334 | 830 | 7,092 | ||||||||||||
Fair value adjustments to Bridge deferred revenue in connection | — | — | — | (206) | ||||||||||||
Fair value adjustments to Bridge deferred revenue in connection | — | — | — | (20) | ||||||||||||
Allocated combined receipts normalized for Bridge divestiture | $ | 114,908 | $ | 95,901 | $ | 228,869 | $ | 190,751 | ||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP COST OF REVENUE | ||||||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Subscription and support | $ | 35,868 | $ | (325) | $ | (9) | $ | (15,859) | $ | 19,675 | ||||||||||
Professional services and other | 6,530 | (465) | (41) | — | 6,024 | |||||||||||||||
Total cost of revenue | $ | 42,398 | $ | (790) | $ | (50) | $ | (15,859) | $ | 25,699 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP COST OF REVENUE | ||||||||||||||||||||
Three Months Ended June 30, 2021 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Subscription and support | $ | 36,163 | $ | (171) | $ | (28) | $ | (15,415) | $ | 20,549 | ||||||||||
Professional services and other | 4,811 | (110) | (5) | — | 4,696 | |||||||||||||||
Total cost of revenue | $ | 40,974 | $ | (281) | $ | (33) | $ | (15,415) | $ | 25,245 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP COST OF REVENUE | ||||||||||||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Subscription and support | $ | 71,414 | $ | (607) | $ | (18) | $ | (31,549) | $ | 39,240 | ||||||||||
Professional services and other | 11,995 | (841) | (95) | — | 11,059 | |||||||||||||||
Total cost of revenue | $ | 83,409 | $ | (1,448) | $ | (113) | $ | (31,549) | $ | 50,299 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP COST OF REVENUE | ||||||||||||||||||||
Six Months Ended June 30, 2021 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Subscription and support | $ | 76,047 | $ | (395) | $ | (1,948) | $ | (30,830) | $ | 42,874 | ||||||||||
Professional services and other | 10,561 | (287) | (855) | — | 9,419 | |||||||||||||||
Total cost of revenue | $ | 86,608 | $ | (682) | $ | (2,803) | $ | (30,830) | $ | 52,293 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 45,885 | $ | (2,772) | $ | (110) | $ | (18,332) | $ | 24,671 | ||||||||||
Research and development | 18,669 | (2,686) | (502) | — | 15,481 | |||||||||||||||
General and administrative | 14,253 | (3,139) | (726) | — | 10,388 | |||||||||||||||
Total operating expenses | $ | 78,807 | $ | (8,597) | $ | (1,338) | $ | (18,332) | $ | 50,540 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Three Months Ended June 30, 2021 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 39,083 | $ | (1,093) | $ | (201) | $ | (17,946) | $ | 19,843 | ||||||||||
Research and development | 14,279 | (934) | (128) | — | 13,217 | |||||||||||||||
General and administrative | 11,196 | (1,450) | (2,592) | — | 7,154 | |||||||||||||||
Total operating expenses | $ | 64,558 | $ | (3,477) | $ | (2,921) | $ | (17,946) | $ | 40,214 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 89,206 | $ | (5,349) | $ | (390) | $ | (36,381) | $ | 47,086 | ||||||||||
Research and development | 35,870 | (5,226) | (792) | — | 29,852 | |||||||||||||||
General and administrative | 29,869 | (6,840) | (2,563) | — | 20,466 | |||||||||||||||
Total operating expenses | $ | 154,945 | $ | (17,415) | $ | (3,745) | $ | (36,381) | $ | 97,404 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||||||
RECONCILIATION OF NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
Six Months Ended June 30, 2021 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
GAAP | Stock-based | Restructuring, | Amortization of | Non-GAAP | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Sales and marketing | $ | 80,305 | $ | (2,675) | $ | (2,452) | $ | (35,892) | $ | 39,286 | ||||||||||
Research and development | 31,368 | (2,604) | (2,679) | — | 26,085 | |||||||||||||||
General and administrative | 24,547 | (3,382) | (6,859) | — | 14,306 | |||||||||||||||
Impairment on disposal group | 1,218 | — | (1,218) | — | — | |||||||||||||||
Total operating expenses | $ | 137,438 | $ | (8,661) | $ | (13,208) | $ | (35,892) | $ | 79,677 | ||||||||||
INSTRUCTURE HOLDINGS, INC. | ||||||||||||||||
RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS GUIDANCE | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months | Full Year | |||||||||||||||
LOW | HIGH | LOW | HIGH | |||||||||||||
Revenue | $ | 118,500 | $ | 119,500 | $ | 464,900 | $ | 468,900 | ||||||||
Fair value adjustments to deferred revenue in connection with | — | — | 900 | 900 | ||||||||||||
Allocated combined receipts | $ | 118,500 | $ | 119,500 | $ | 465,800 | $ | 469,800 | ||||||||
For More Information:
Media Relations:
Brian Watkins
Corporate Communications
Instructure
(801) 610-9722
brian.watkins@instructure.com
Investor Relations:
Denise Garcia
Alex Liloia
Hayflower Partners
(646) 918-4041
investors@instructure.com
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SOURCE Instructure Holdings, Inc.
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