Instructure Reports Fourth Quarter and Full Year 2015 Financial Results

SALT LAKE CITY, Feb. 9, 2016 /PRNewswire/ -- Instructure, Inc. (NYSE: INST), a leading software-as-a-service (SaaS) technology company that makes software that makes people smarter, today announced its financial results for the fourth quarter and full year ended December 31, 2015.

Instructure official logo

"Instructure had an excellent year in 2015, driven by continued adoption of our learning management platform in all markets we serve - higher education, K-12, international and corporate," said Josh Coates, CEO at Instructure.

"We also delivered strong year-over-year revenue growth of 59% and 65% for the fourth quarter and full year 2015, respectively," continued Coates. "We remain focused on our path to profitability as demonstrated by the year-over-year gross margin improvements for both the fourth quarter and the full year and over 900 bps of year-over-year improvements in Non-GAAP gross margin for the full year of 2015."

Fourth Quarter and Full Year Financial Summary

(in thousands, except per share data)

 
   

Three Months

Ended December 31,

   

Year Ended

Ended December 31,

 
   

2015

   

2014

   

2015

   

2014

 

Revenue

 

$

21,797

   

$

13,736

   

$

73,193

   

$

44,352

 

Gross Margin

                               

GAAP

   

68.6

%

   

65.0

%

   

67.1

%

   

65.9

%

Non-GAAP(1)

   

69.3

%

   

67.1

%

   

67.6

%

   

66.7

%

Operating Loss

                               

GAAP

   

(11,912)

     

(17,606)

     

(51,972)

     

(38,709)

 

Non-GAAP(1)

   

(10,373)

     

(9,037)

     

(41,400)

     

(29,280)

 

Net Loss

                               

GAAP

   

(12,122)

     

(18,044)

     

(52,978)

     

(41,427)

 

Non-GAAP(1)

   

(10,466)

     

(9,176)

     

(41,753)

     

(29,480)

 

EPS

                               

GAAP(2)

 

$

(0.74)

   

$

(2.98)

   

$

(6.07)

   

$

(7.50)

 

Non-GAAP(1)(2)

 

$

(0.43)

   

$

(0.44)

   

$

(1.90)

   

$

(1.46)

 
   

(1)

Non-GAAP financial measures exclude stock-based compensation, payroll taxes related to equity transactions, amortization of acquisition related intangibles, and change in fair value of the warrant liability.

(2)

Q4 and FY 2015 GAAP share count was 16.4M and 8.8M, respectively, due to the conversion of redeemable convertible preferred shares into common stock, which occurred on the closing of Instructure's IPO on November 18, 2015.  Non-GAAP share count assumes the conversion of the redeemable convertible preferred shares to common stock occurred at the beginning of the annual period.

 

Fourth Quarter 2015 Business Highlights

  • Instructure completed its initial public offering and began trading on NYSE on November 13, 2015.  Net proceeds from the IPO were approximately $71 million, after underwriting discounts and estimated offering expenses.
  • Instructure announced the beta launch of Arc, the next generation video platform for interactive learning and intuitive collaboration. As one of the first and only platforms to combine both delivery and interactivity into video content, Arc is designed to disrupt the often passive experience of video learning and create an active and collaborative learning experience.
  • Instructure continued to grow its customer base in the fourth quarter. A few highlights include:
    • Higher Education – Canvas was selected by Houston Community College as the primary platform for course management to be used by the university's student body of 50,000.
    • K-12 Schools - Canvas was selected by Perry Township in Indiana as the learning management system for its 16,000 students across 17 schools.
    • International– Canvas was selected by Singapore's only private university, SIM University, to provide their 7,500 students with its learning management system.
    • Corporate – Bridge was selected by Jamberry, a network marketing company, for their 55,000 internal employees and contractors; and William Pitt Sotheby's International Realty for their independent agents.

Business Outlook

Today, Instructure issued financial guidance for the first quarter and full year 2016.

For the first quarter ending March 31, 2016, Instructure expects revenue of approximately $22.0 million to $22.6 million, a non-GAAP net loss of $(13.2) million to $(12.8) million, and non-GAAP net loss per share of $(0.49) to $(0.47) per common share.

For the full year ending December 31, 2016, Instructure expects revenue of approximately $106 million to $109 million, a non-GAAP net loss of $(54) million to $(52) million, and non-GAAP net loss per share of $(1.96) to $(1.88) per common share.

Conference Call Details:

Instructure will discuss its fourth quarter and full year 2015 results today, February 9, 2016, via teleconference at 3:00 p.m. Mountain Time / 5:00 p.m. Eastern Time. The call may be accessed at (719) 325-4785 or (877) 741-4239, passcode 8750042.  A live webcast, as well as replay, of the conference call will be accessible at Instructure's investor relations website, http://ir.instructure.com.

Non-GAAP Financial Measures

In this release, Instructure's non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, and 12-month billings are not presented in accordance with GAAP and are not intended to be used in lieu of GAAP presentations of results of operations.

Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.  Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics.

These non-GAAP measures exclude stock-based compensation, payroll taxes related to equity transactions, amortization of acquisition related intangibles, and change in fair value of the warrant liability. We believe investors may want to exclude the effects of these items in order to compare our financial performance between time periods:

  • Stock-based compensation - Although stock-based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude stock-based compensation in order to better understand the long-term performance of our core business. Unlike cash compensation, the value of stock options is determined using a complex formula that incorporates factors, such as market volatility and forfeiture rates that are beyond our control. Stock-based compensation from the employee sale of securities to investors prior to our IPO at a price above the current fair market value was dependent on our fair value assumptions and other factors that were beyond our control.
  • Payroll taxes related to equity transactions - Operating expenses included employer payroll tax-related items on employee sales of securities to investors prior to our IPO. The amount of employer payroll tax-related items on these transactions was dependent on the fair market value of our stock.
  • Amortization of acquisition related intangibles - Expense for the amortization of acquisition related intangibles is a non-cash item, and we believe that the exclusion of this expense provides for a useful comparison of our operating results to prior periods.
  • Change in fair value of the warrant liability - Under GAAP, prior to our IPO, we were required to record a mark-to-market adjustment for the change in fair value of the liability for warrants issued in connection with term debt and our credit facility. This expense was excluded from management's assessment of our operating performance because management believes that these non-cash expenses were not indicative of ongoing operating performance. Following our IPO, we are not required to record any further mark-to-market adjustments.

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 2016 and full year 2016, 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 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 anticipated growth in Instructure's addressable market; competitive factors, including changes in the competitive environment, pricing changes, sales cycle time and increased competition; Instructure's ability to build and expand its sales efforts; general economic and industry conditions; new application introductions and Instructure's ability to develop and deliver innovative applications and features; Instructure's ability to provide high-quality service and support offerings; risks associated with international operations; and macroeconomic conditions.  These and other important risk factors are described more fully in the final prospectus for our initial public offering, which was filed with the Securities and Exchange Commission (the "SEC") on November 13, 2015 and other documents filed with the SEC and could cause actual results to vary from expectations. All information provided in this 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.

About Instructure

Instructure, Inc. is a leading software-as-a-service (SaaS) technology company that makes software that makes people smarter. With a vision to help maximize the potential of people through technology, Instructure created Canvas and Bridge to enable organizations everywhere to easily develop, deliver and manage engaging face-to-face and online learning experiences. To date, Instructure has connected millions of teachers and learners at more than 1,800 educational institutions and corporations throughout the world. Learn more about Canvas for higher ed and K-12, and Bridge for the corporate market at www.Instructure.com.

Contacts:

Lisa Laukkanen
The Blueshirt Group
(415) 217-4967
[email protected]

Heather Erickson
VP, Global Communications
Instructure
(801) 658-7524
[email protected]

 

INSTRUCTURE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

 
   

December 31,

2015

   

December 31,

2014

 

Assets

               

Current assets:

               

Cash and cash equivalents

 

$

90,471

   

$

43,915

 

Short term marketable securities

   

325

     

501

 

Accounts receivable—net of allowances of $225 and $135 at December 31, 2015 and 2014, respectively

   

9,523

     

8,182

 

Prepaid current assets

   

5,010

     

2,979

 

Other current assets

   

614

     

617

 

Total current assets

   

105,943

     

56,194

 

Property and equipment, net

   

11,732

     

7,761

 

Goodwill

   

989

     

989

 

Intangible assets, net

   

444

     

753

 

Noncurrent prepaid assets

   

749

     

652

 

Other assets

   

1,203

     

677

 

Total assets

 

$

121,060

   

$

67,026

 

Liabilities, redeemable convertible preferred stock and stockholders' equity deficit

               

Current liabilities:

               

Accounts payable

 

$

3,912

   

$

2,546

 

Accrued liabilities

   

8,852

     

5,605

 

Deferred Rent

   

541

     

380

 

Deferred revenue

   

49,384

     

29,380

 

Capital lease obligation

   

     

223

 

Total current liabilities

   

62,689

     

38,134

 

Deferred revenue, net of current portion

   

2,941

     

2,574

 

Deferred rent, net of current portion

   

9,078

     

8,520

 

Warrant Liability

   

331

     

3,577

 

Other long term liabilities

   

402

     

763

 

Total liabilities

   

75,441

     

53,568

 

Commitments and contingencies

               

Redeemable convertible preferred stock:

               

Redeemable convertible preferred stock

   

     

88,989

 

Stockholders' equity (deficit):

               

Common Stock, par value of $0.0001

   

4

     

1

 

Treasury stock, 1,128 common shares, at cost

   

(1)

     

(1)

 

Additional paid-in capital

   

188,517

     

14,392

 

Accumulated other comprehensive income

   

     

 

Accumulated deficit

   

(142,901)

     

(89,923)

 

Total stockholders' equity (deficit)

   

45,619

     

(75,531)

 

Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)

 

$

121,060

   

$

67,026

 

 

INSTRUCTURE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 
   

Three Months

Ended December 31,

   

Year Ended

Ended December 31,

 
   

2015

   

2014

   

2015

   

2014

 
   

(unaudited)

   

(unaudited)

                 

Revenue:

                               

Subscription and support

 

$

18,906

   

$

11,765

   

$

62,463

   

$

38,093

 

Professional services and other

   

2,891

     

1,971

     

10,730

     

6,259

 

Total revenue

   

21,797

     

13,736

     

73,193

     

44,352

 

Cost of Revenue:

                               

Subscription and support

   

5,162

     

3,800

     

17,682

     

12,131

 

Professional services and other

   

1,674

     

1,003

     

6,391

     

2,982

 

Total cost of revenue

   

6,836

     

4,803

     

24,073

     

15,113

 

Gross profit

   

14,961

     

8,933

     

49,120

     

29,239

 

Operating expenses:

                               

Sales and marketing

   

15,156

     

13,055

     

53,459

     

35,390

 

Research and development

   

6,710

     

9,106

     

24,151

     

21,290

 

General and administrative

   

5,007

     

4,378

     

23,482

     

11,268

 

Total operating expenses

   

26,873

     

26,539

     

101,092

     

67,948

 

Loss from operations

   

(11,912)

     

(17,606)

     

(51,972)

     

(38,709)

 

Other income (expense):

                               

Interest income

   

26

     

2

     

39

     

32

 

Interest expense

   

(2)

     

(40)

     

(74)

     

(136)

 

Change in fair value of warrant liability

   

(117)

     

(299)

     

(653)

     

(2,518)

 

Other income (expense), net

   

(40)

     

(51)

     

(201)

     

(39)

 

Total other income (expense)

   

(133)

     

(388)

     

(889)

     

(2,661)

 

Loss before income taxes

   

(12,045)

     

(17,994)

     

(52,861)

     

(41,370)

 

Income tax expense

   

(77)

     

(50)

     

(117)

     

(57)

 

Net loss

   

(12,122)

     

(18,044)

     

(52,978)

     

(41,427)

 

Deemed dividends to investors

   

     

     

(632)

     

 

Net Loss attributable to common stockholders

 

$

(12,122)

   

$

(18,044)

   

$

(53,610)

   

$

(41,427)

 

Net loss per common share attributable to common stockholders, basic and diluted

 

$

(0.74)

   

$

(2.98)

   

$

(6.07)

   

$

(7.50)

 

Weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted(1)

   

16,359

     

6,050

     

8,838

     

5,525

 
   

(1)

Weighted average shares used to computer net loss per share attributable to common stockholders weights the redeemable convertible preferred shares that converted to common shares upon the closing of Instructure's IPO using the number of days outstanding during the period since the IPO.

 

INSTRUCTURE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 
   

Three Months

Ended December 31,

   

Year Ended

December 31,

 
   

2015

   

2014

   

2015

   

2014

 
   

(unaudited)

   

(unaudited)

                 

Operating Activities:

                               

Net loss

 

$

(12,122)

   

$

(18,044)

   

$

(52,978)

   

$

(41,427)

 

Adjustments to reconcile net loss to net cash used in operating activities:

                               

Depreciation of property and equipment

   

799

     

497

     

2,672

     

1,760

 

Amortization of intangible assets

   

77

     

81

     

309

     

306

 

Amortization of deferred financing costs

   

0

     

23

     

54

     

61

 

Change in fair value of warrant liability

   

117

     

356

     

653

     

2,575

 

Excess tax benefit for stock-based compensation

   

     

(872)

     

     

(872)

 

Stock-based compensation

   

1,537

     

7,342

     

9,236

     

8,198

 

Other

   

28

     

84

     

193

     

200

 

Changes in assets and liabilities:

                               

Accounts receivable, net

   

1,697

     

(10)

     

(1,532)

     

(4,335)

 

Prepaid expenses and other assets

   

348

     

(1,703)

     

(2,673)

     

(2,296)

 

Accounts payable and accrued liabilities

   

442

     

2,388

     

3,938

     

2,542

 

Deferred revenue

   

(5,425)

     

(3,966)

     

20,371

     

12,488

 

Deferred rent

   

215

     

(76)

     

719

     

515

 

Other liabilities

   

(28)

     

(27)

     

(313)

     

(110)

 

Net cash used in operating activities

   

(12,315)

     

(13,927)

     

(19,351)

     

(20,395)

 

Investing Activities:

                               

Purchases of property and equipment

   

(2,233)

     

(612)

     

(6,696)

     

(2,440)

 

Purchases of intangible assets

   

     

     

     

(6)

 

Proceeds from disposal of property and equipment

   

11

     

22

     

64

     

37

 

Purchases of marketable securities

   

     

     

(1,456)

     

(1,155)

 

Sale of marketable securities

   

     

     

     

10,402

 

Maturities of marketable securities

   

1,119

     

     

1,619

     

3,415

 

Acquisition of 12 Spokes

   

     

     

     

(250)

 

Net cash provided by (used in) investing activities

   

(1,103)

     

(590)

     

(6,469)

     

10,003

 

Financing Activities:

                               

IPO proceeds, net of offering costs paid of $3,261

   

72,032

     

     

72,032

         

Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs of $103

   

     

39,897

     

     

39,897

 

Proceeds from exercise of redeemable convertible preferred stock warrants

   

     

     

250

     

 

Proceeds from exercise of stock options

   

103

     

186

     

349

     

751

 

Payments of line of credit financing costs

   

     

(62)

     

(32)

     

(80)

 

Repayment of capital lease obligations

   

(16)

     

(68)

     

(223)

     

(271)

 

Excess tax benefit for stock-based compensation

   

     

872

     

     

872

 

Net cash provided by financing activities

   

72,119

     

40,825

     

72,376

     

41,169

 

Net increase (decrease) in cash

   

58,701

     

26,308

     

46,556

     

30,777

 

Cash, beginning of period

   

31,770

     

17,607

     

43,915

     

13,138

 

Cash, end of period

 

$

90,471

   

$

43,915

   

$

90,471

   

$

43,915

 

 

INSTRUCTURE, INC.

RECONCILIATION OF NON-GAAP GROSS MARGIN

(in thousands, except percentages)

 
   

Three Months Ended

December 31,

   

Year Ended

December 31,

 
   

2015

   

2014

   

2015

   

2014

 
   

(unaudited)

   

(unaudited)

                 

GAAP gross profit

 

$

14,961

   

$

8,933

   

$

49,120

   

$

29,239

 

Stock-based compensation

   

134

     

249

     

343

     

297

 

Payroll taxes related to equity transaction

   

     

30

     

     

30

 

Non-GAAP gross margin

 

$

15,095

   

$

9,212

   

$

49,463

   

$

29,566

 
                                 

GAAP gross margin %

   

68.6

%

   

65.0

%

   

67.1

%

   

65.9

%

Non-GAAP gross margin %

   

69.3

%

   

67.1

%

   

67.6

%

   

66.7

%

 

INSTRUCTURE, INC.

RECONCILIATION OF NON-GAAP OPERATING LOSS

(in thousands)

 
   

Three Months Ended

December 31,

   

Year Ended

December 31,

 
   

2015

   

2014

   

2015

   

2014

 
   

(unaudited)

   

(unaudited)

                 

GAAP loss from operations

 

$

(11,912)

   

$

(17,606)

   

$

(51,972)

   

$

(38,709)

 

Stock-based compensation

   

1,537

     

7,342

     

9,236

     

8,198

 

Payroll taxes related to equity transaction

   

     

1,225

     

1,327

     

1,225

 

Amortization of acquisition related intangibles

   

2

     

2

     

9

     

6

 

Non-GAAP operating loss

 

$

(10,373)

   

$

(9,037)

   

$

(41,400)

   

$

(29,280)

 

 

INSTRUCTURE, INC.

RECONCILIATION OF NON-GAAP NET LOSS

(in thousands)

 
   

Three Months Ended

December 31,

   

Year Ended

December 31,

 
   

2015

   

2014

   

2015

   

2014

 
   

(unaudited)

   

(unaudited)

                 

GAAP net loss

 

$

(12,122)

   

$

(18,044)

   

$

(52,978)

   

$

(41,427)

 

Stock-based compensation

   

1,537

     

7,342

     

9,236

     

8,198

 

Payroll taxes related to equity transactions

   

     

1,225

     

1,327

     

1,225

 

Amortization of acquisition related intangibles

   

2

     

2

     

9

     

6

 

Change in fair value of warrant liability

   

117

     

299

     

653

     

2,518

 

Non-GAAP net loss

 

$

(10,466)

   

$

(9,176)

   

$

(41,753)

   

$

(29,480)

 

Non-GAAP net loss per common share, basic and diluted

 

$

(0.43)

   

$

(0.44)

   

$

(1.90)

   

$

(1.46)

 

Non-GAAP weighted average common shares used in computing basic and diluted net loss per common share(1)

   

24,173

     

20,654

     

22,009

     

20,129

 
   

(1)

Non-GAAP weighted average common shares used in computing basic and diluted net loss per common share on a non-GAAP basis assumes that the redeemable convertible preferred shares that converted to common shares upon execution of our IPO were outstanding for the full year.

 

INSTRUCTURE, INC.

RECONCILIATION OF NON-GAAP WEIGHTED AVERAGE SHARES OUTSTANDING

 
   

Three Months Ended

December 31,

   

Year Ended

December 31,

 
   

2015

   

2014

   

2015

   

2014

 
   

(unaudited)

   

(unaudited)

                 

GAAP weighted average common shares, basic and diluted

   

16,359

     

6,050

     

8,838

     

5,525

 

Effect of redeemable convertible preferred stock conversion (assuming converted shares were outstanding for the full year)

   

7,814

     

14,604

     

13,171

     

14,604

 

Non-GAAP weighted average common shares used in computing basic and diluted non-GAAP net loss per common share

   

24,173

     

20,654

     

22,009

     

20,129

 

 

INSTRUCTURE, INC.

RECONCILIATION OF 12-MONTH BILLINGS

 
   

Year Ended

December 31,

 
   

2015

   

2014

 

GAAP total revenue

 

$

73,193

   

$

44,352

 
                 

Current deferred revenue

               

Beginning balance

   

29,380

     

16,780

 

Ending balance

   

49,384

     

29,380

 

Net change in current deferred revenue

   

20,004

     

12,600

 
                 

Long term deferred revenue

               

Beginning balance

   

2,574

     

2,686

 

Ending balance

   

2,941

     

2,574

 

Net change in long term deferred revenue

   

367

     

(112)

 
                 

Total 12-month billings

 

$

93,564

   

$

56,840

 

 

INSTRUCTURE, INC.

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

Three Months Ended December 31, 2015 (unaudited)

(in thousands)

 
   

GAAP

   

Stock-based Compensation Expense

   

Payroll Tax Associated with Equity Transactions

   

Amortization of acquired intangibles

   

NON-GAAP

 

Operating expenses:

                                       

Sales and marketing

 

$

15,156

     

(460)

     

     

   

$

14,696

 

Research and development

   

6,710

     

(532)

     

     

(2)

     

6,176

 

General and administrative

   

5,007

     

(411)

     

     

     

4,596

 

Total operating expenses

 

$

26,873

     

(1,403)

     

     

(2)

   

$

25,468

 

 

INSTRUCTURE, INC.

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

Three Months Ended December 31, 2014 (unaudited)

(in thousands)

 
   

GAAP

   

Stock-based Compensation Expense

   

Payroll Tax Associated with Equity Transactions

   

Amortization of acquired intangibles

   

NON-GAAP

 

Operating expenses:

                                       

Sales and marketing

 

$

13,055

     

(2,703)

     

(461)

     

   

$

9,891

 

Research and development

   

9,106

     

(3,664)

     

(653)

     

(2)

     

4,787

 

General and administrative

   

4,378

     

(726)

     

(81)

     

     

3,571

 

Total operating expenses

 

$

26,539

     

(7,093)

     

(1,195)

     

(2)

   

$

18,249

 

 

INSTRUCTURE, INC.

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

Year Ended December 31, 2015

(in thousands)

 
   

GAAP

   

Stock-based Compensation Expense

   

Payroll Tax Associated with Equity Transactions

   

Amortization of acquired intangibles

   

NON-GAAP

 

Operating expenses:

                                       

Sales and marketing

 

$

53,459

     

(1,228)

     

     

   

$

52,231

 

Research and development

   

24,151

     

(1,403)

     

     

(9)

     

22,739

 

General and administrative

   

23,482

     

(6,262)

     

(1,327)

     

     

15,893

 

Total operating expenses

 

$

101,092

     

(8,893)

     

(1,327)

     

(9)

   

$

90,863

 

 

INSTRUCTURE, INC.

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

Year Ended December 31, 2014

(in thousands)

 
   

GAAP

   

Stock-based Compensation Expense

   

Payroll Tax Associated with Equity Transactions

   

Amortization of acquired intangibles

   

NON-GAAP

 

Operating expenses:

                                       

Sales and marketing

 

$

35,390

     

(2,877)

     

(461)

     

   

$

32,052

 

Research and development

   

21,290

     

(3,971)

     

(653)

     

(6)

     

16,660

 

General and administrative

   

11,268

     

(1,053)

     

(81)

     

     

10,134

 

Total operating expenses

 

$

67,948

     

(7,901)

     

(1,195)

     

(6)

   

$

58,846

 

 

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SOURCE Instructure