Instructure Reports Fourth Quarter and Full Year 2016 Financial Results

SALT LAKE CITY, Feb. 6, 2017 /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, 2016.

"We ended 2016 with a solid Q4 performance. Revenue grew 45% for the quarter and 51% for the year, on a year-over-year basis.  At the same time, we continued to realize substantial improvements to our operating margin," said Josh Coates, CEO at Instructure. "Our success in 2016 gives us confidence in our growth strategy. Given our progress in expanding our customer base and continued product innovation, we are excited for our prospects for 2017 and beyond."  

Instructure also announced today that SVP of Product and Customer Experience, Mitch Macfarlane, has been promoted to Chief Operating Officer, a newly created role at Instructure.

Effective immediately, Macfarlane will assume responsibility for engineering and marketing in addition to his current responsibilities of overseeing product and customer experience. 

"This is a natural next step as we scale the organization to handle the operational challenges of our continued fast growth across multiple markets," said Josh Coates, Instructure CEO.  "Mitch has proven to be an integral leader and our high customer satisfaction rating and net promoter score are a direct result of his focus on creating best in class operational teams across our organization."

 

Fourth Quarter and Full Year Financial Summary

 

(in thousands, except per share data)

 
   
   

Three Months
Ended December 31,

   

Year Ended
December 31,

 
   

2016

   

2015

   

2016

   

2015

 
   

(unaudited)

   

(unaudited)

   

(unaudited)

         

Revenue

 

$

31,546

   

$

21,797

   

$

110,880

   

$

73,193

 

Gross Margin

                               

GAAP

   

71.1

%

   

68.6

%

   

70.5

%

   

67.1

%

Non-GAAP(1)

   

71.8

%

   

69.3

%

   

71.3

%

   

67.6

%

Operating Loss

                               

GAAP

   

(12,838)

     

(11,912)

     

(53,375)

     

(51,972)

 

Non-GAAP(1)

   

(9,862)

     

(10,373)

     

(42,909)

     

(41,400)

 

Net loss

                               

GAAP

   

(12,922)

     

(12,122)

     

(53,568)

     

(52,978)

 

Non-GAAP(1)

   

(9,956)

     

(10,466)

     

(43,164)

     

(41,753)

 

EPS

                               

GAAP(2)

 

$

(0.46)

   

$

(0.74)

   

$

(1.92)

   

$

(6.07)

 

Non-GAAP(1)(2)

 

$

(0.35)

   

$

(0.43)

   

$

(1.55)

   

$

(1.90)

 
                                 

(1)

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

(2)

Q4 2016 and Q4 2015 GAAP share count was 28.3M and 16.4M, 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 2016 Business Highlights

  • Instructure continued to expand its customer base in the fourth quarter. A few highlights include:
    • US Higher Education and K-12 Schools – Canvas was selected by AVID Center, which impacts nearly 1.5 million students annually, to support training and learning efforts for over 60,000 educators within their global network of educational institutions.  Canvas was also chosen by Cherokee County School District, in Georgia, as their learning management system solution for its 40,000 students across 41 different schools.  Within the U.S. higher education market, Canvas was chosen by Devry Education Group, with its 55,000 students, and Iowa Community Colleges Online Consortium, which serves seven community colleges and 17,000 students.
    • International – Canvas was chosen by the Department of Education Tasmania in Australia for their 50,000 students within K-12 and higher education schools and SOMOS Educação Group in Brazil, which is the country's largest primary education services company reaching thousands of schools and millions of students.
    • Corporate – Bridge was selected by a division of PwC, McKesson Canada, AccorHotels' Académie Accor, the world's first corporate hospitality learning network, Careerbuilder, and Swift Transportation.
    • Ivy Tech Community College, the largest singularly accredited statewide community college system serving over 150,000 students annually, entered into a bundled deal for both Canvas and Bridge to create a learning solution not only for their students but also a training solution for faculty and staff.
  • During the quarter, Instructure released several new features for both Canvas and Bridge.
    • In Canvas, the Company launched the Canvas Parent app, the first mobile app allowing parents to monitor their children's course work, homework and grades. Additionally, Instructure released MasteryPaths which allows course designers to create customized and differentiated learning experiences based on student course mastery. The Company also launched a seamless integration with Google tools providing a much simplified workflow for students, educators and administrators.
    • For Bridge, Instructure launched live training and an integration with Slack.

Business Outlook

Today, Instructure issued financial guidance for the first quarter and full year 2017. The financial guidance discussed below is on a non-GAAP basis, except for revenues, and excludes stock-based compensation expense, reversal of payroll tax expense on secondary stock purchase transactions, amortization of acquisition related intangibles, and the change in fair value of the warrant liability (see table below which reconciles these non-GAAP financial measures to the related GAAP measures).

For the first quarter ending March 31, 2017, Instructure expects revenue of approximately $32.6 million to $33.2 million, a non-GAAP net loss of ($11.2) million to ($10.6) million, and non-GAAP net loss per share of ($0.39) to ($0.37) per common share.

For the full year ending December 31, 2017, Instructure expects revenue of approximately $149.3 million to $150.8 million, a non-GAAP net loss of ($39.2) million to ($38.2) million, and non-GAAP net loss per share of ($1.35) to ($1.31) per common share.

Conference Call Details:

Instructure will discuss its fourth quarter and full year 2016 results today, February 6, 2017, via teleconference at 3:00 p.m. Mountain Time / 5:00 p.m. Eastern Time. The call may be accessed at (877) 548-7911 or (719) 325-4794, passcode 7870235.  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 press release, Instructure's non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP operating margin, 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 secondary stock purchase transactions or the reversal of such expense due to the retirement of the liability, amortization of acquisition related intangibles, and the 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 equity awards 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.
  • Accrual or reversal of payroll taxes related to secondary stock purchase transactions - In prior periods, 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. In the current period, operating expenses included the reversal of such payroll tax expense due to the reduction of the estimated liability.
  • 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, we are required to record mark-to-market adjustments for the change in fair value of the liability for warrants issued in connection with term debt and our credit facility. This expense or gain is excluded from management's assessment of our operating performance because management believes that these non-cash items are not indicative of ongoing operating performance.

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 2017 and for the full year ending December 31, 2017, 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 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 Quarterly Report for the quarter ended September 30, 2016, which was filed with the Securities and Exchange Commission (the "SEC") on November 2, 2016 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.

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 instructors and learners at more than 2,000 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:
Erin Kasenchak
Instructure
(866) 574-3127
[email protected]

Heather Erickson
Instructure
(866) 718-6488
[email protected]

 

INSTRUCTURE, INC.

 

CONSOLIDATED BALANCE SHEETS

 

(in thousands)

 
   

December 31,
2016

   

December 31,
2015

 
   

(unaudited)

         

Assets

               

Current assets:

               

Cash and cash equivalents

 

$

44,539

   

$

90,471

 

Short term marketable securities

   

23,895

     

325

 

Accounts receivable—net of allowances of $241 and $225 at December 31, 2016 and 2015, respectively

   

18,072

     

9,523

 

Prepaid expenses

   

5,434

     

5,010

 

Other current assets

   

936

     

614

 

Total current assets

   

92,876

     

105,943

 

Property and equipment, net

   

14,733

     

11,732

 

Goodwill

   

989

     

989

 

Intangible assets, net

   

760

     

444

 

Noncurrent prepaid expenses

   

984

     

749

 

Other assets

   

994

     

1,203

 

Total assets

 

$

111,336

   

$

121,060

 

Liabilities and stockholders' equity

               

Current liabilities:

               

Accounts payable

 

$

5,374

   

$

3,912

 

Accrued liabilities

   

10,905

     

8,852

 

Deferred rent

   

773

     

541

 

Deferred revenue

   

72,747

     

49,384

 

Total current liabilities

   

89,799

     

62,689

 

Deferred revenue, net of current portion

   

3,144

     

2,941

 

Deferred rent, net of current portion

   

8,372

     

9,078

 

Warrant liability

   

25

     

331

 

Other long term liabilities

   

32

     

402

 

Total liabilities

   

101,372

     

75,441

 

Commitments and contingencies

               

Stockholders' equity:

               

Common stock

   

3

     

4

 

Treasury stock

   

     

(1)

 

Additional paid-in capital

   

206,442

     

188,517

 

Accumulated other comprehensive income

   

(12)

     

 

Accumulated deficit

   

(196,469)

     

(142,901)

 

Total stockholders' equity

   

9,964

     

45,619

 

Total liabilities and stockholders' equity

 

$

111,336

   

$

121,060

 

 

INSTRUCTURE, INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

(in thousands, except per share data)

 
   
   

Three Months
Ended December 31,

   

Year Ended
December 31,

 
   

2016

   

2015

   

2016

   

2015

 
   

(unaudited)

   

(unaudited)

   

(unaudited)

         

Revenue:

                               

Subscription and support

 

$

28,308

   

$

18,906

   

$

97,115

   

$

62,463

 

Professional services and other

   

3,238

     

2,891

     

13,765

     

10,730

 

Total Net revenue

   

31,546

     

21,797

     

110,880

     

73,193

 

Cost of Revenue:

                               

Subscription and support

   

6,917

     

5,162

     

24,252

     

17,682

 

Professional services and other

   

2,210

     

1,674

     

8,497

     

6,391

 

Total cost of revenue

   

9,127

     

6,836

     

32,749

     

24,073

 

Gross profit

   

22,419

     

14,961

     

78,131

     

49,120

 

Operating expenses:

                               

Sales and marketing

   

18,002

     

15,156

     

69,991

     

53,459

 

Research and development

   

10,141

     

6,710

     

35,973

     

24,151

 

General and administrative

   

7,114

     

5,007

     

25,542

     

23,482

 

Total operating expenses

   

35,257

     

26,873

     

131,506

     

101,092

 

Loss from operations

   

(12,838)

     

(11,912)

     

(53,375)

     

(51,972)

 

Other income (expense):

                               

Interest income

   

116

     

26

     

352

     

39

 

Interest expense

   

(33)

     

(2)

     

(87)

     

(74)

 

Change in fair value of warrant liability

   

10

     

(117)

     

62

     

(653)

 

Other income (expense), net

   

(119)

     

(40)

     

(353)

     

(201)

 

Total other income (expense)

   

(26)

     

(133)

     

(26)

     

(889)

 

Loss before income taxes

   

(12,864)

     

(12,045)

     

(53,401)

     

(52,861)

 

Income tax expense

   

(58)

     

(77)

     

(167)

     

(117)

 

Net loss

 

$

(12,922)

   

$

(12,122)

   

$

(53,568)

   

$

(52,978)

 

Deemed dividend to investors

   

     

     

     

(632)

 

Net loss attributable to common stockholders

 

$

(12,922)

   

$

(12,122)

   

$

(53,568)

   

$

(53,610)

 

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

 

$

(0.46)

   

$

(0.74)

   

$

(1.92)

   

$

(6.07)

 

Weighted average shares used to compute net loss per share, basic and diluted

   

28,348

     

16,359

     

27,838

     

8,838

 

 

INSTRUCTURE, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

 
   
   

Three Months
Ended December 31,

   

Year Ended
December 31,

 
   

2016

   

2015

   

2016

   

2015

 
   

(unaudited)

   

(unaudited)

   

(unaudited)

         

Operating Activities:

                               

Net loss

 

$

(12,922)

   

$

(12,122)

   

$

(53,568)

   

$

(52,978)

 

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

                               

Depreciation of property and equipment

   

1,149

     

799

     

3,981

     

2,672

 

Amortization of intangible assets

   

121

     

77

     

405

     

309

 

Amortization of deferred financing costs

   

12

     

     

46

     

54

 

Change in fair value of warrant liability

   

(10)

     

117

     

(62)

     

653

 

Stock-based compensation

   

2,973

     

1,537

     

10,674

     

9,236

 

Other

   

(28)

     

28

     

92

     

193

 

Changes in assets and liabilities:

                               

Accounts receivable, net

   

5,050

     

1,697

     

(8,837)

     

(1,532)

 

Prepaid expenses and other assets

   

(1,667)

     

348

     

(818)

     

(2,673)

 

Accounts payable and accrued liabilities

   

(571)

     

442

     

3,732

     

3,938

 

Deferred revenue

   

(8,894)

     

(5,425)

     

23,566

     

20,371

 

Deferred rent

   

(95)

     

215

     

(474)

     

719

 

Other liabilities

   

16

     

(28)

     

(345)

     

(313)

 

Net cash used in operating activities

   

(14,866)

     

(12,315)

     

(21,608)

     

(19,351)

 

Investing Activities:

                               

Purchases of property and equipment

   

(2,099)

     

(2,233)

     

(7,021)

     

(6,696)

 

Purchases of intangible assets

   

(410)

     

     

(721)

     

 

Proceeds from disposal of property and equipment

   

40

     

11

     

63

     

64

 

Purchases of marketable securities

   

(4,389)

     

     

(28,752)

     

(1,456)

 

Maturities of marketable securities

   

4,800

     

1,119

     

5,125

     

1,619

 

Net cash used in investing activities

   

(2,058)

     

(1,103)

     

(31,306)

     

(6,469)

 

Financing Activities:

                               

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

   

     

72,032

     

     

72,032

 

Proceeds from exercise of redeemable convertible preferred stock warrants

   

     

     

     

250

 

Proceeds from issuance of common stock from employee equity plans

   

2,515

     

103

     

7,009

     

349

 

Shares repurchased for tax withholdings on vesting of restricted stock

   

(27)

     

     

(27)

     

 

Payments of line of credit financing costs

   

     

     

     

(32)

 

Repayment of capital lease obligations

   

     

(16)

     

     

(223)

 

Net cash provided by financing activities

   

2,488

     

72,119

     

6,982

     

72,376

 

Net increase (decrease) in cash

   

(14,436)

     

58,701

     

(45,932)

     

46,556

 

Cash, beginning of period

   

58,975

     

31,770

     

90,471

     

43,915

 

Cash, end of period

 

$

44,539

   

$

90,471

   

$

44,539

   

$

90,471

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP GROSS MARGIN

 

(in thousands, except percentages)

 

(unaudited)

 
   
   

Three Months Ended
December 31,

   

Year Ended
December 31,

 
   

2016

   

2015

   

2016

   

2015

 
   

(unaudited)

   

(unaudited)

                 

GAAP gross profit

 

$

22,419

   

$

14,961

   

$

78,131

   

$

49,120

 

Stock-based compensation

   

240

     

134

     

962

     

343

 

Non-GAAP gross margin

 

$

22,659

   

$

15,095

   

$

79,093

   

$

49,463

 
                                 

GAAP gross margin %

   

71.1

%

   

68.6

%

   

70.5

%

   

67.1

%

Non-GAAP gross margin %

   

71.8

%

   

69.3

%

   

71.3

%

   

67.6

%

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING LOSS

 

(in thousands)

 

(unaudited)

 
   
   

Three Months Ended
December 31,

   

Year Ended
December 31,

 
   

2016

   

2015

   

2016

   

2015

 
   

(unaudited)

   

(unaudited)

                 

Loss from operations

 

$

(12,838)

   

$

(11,912)

   

$

(53,375)

   

$

(51,972)

 

Stock-based compensation

   

2,973

     

1,537

     

10,674

     

9,236

 

Payroll tax expense on secondary stock purchase transactions

   

     

     

     

1,327

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

     

     

(217)

     

 

Amortization of acquisition related intangibles

   

3

     

2

     

9

     

9

 

Non-GAAP operating loss

 

$

(9,862)

   

$

(10,373)

   

$

(42,909)

   

$

(41,400)

 
                                 

GAAP operating margin

   

-41

%

   

-55

%

   

-48

%

   

-71

%

Non-GAAP operating margin

   

-31

%

   

-48

%

   

-39

%

   

-57

%

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP NET LOSS

 

(in thousands)

 

(unaudited)

 
   
   

Three Months Ended
December 31,

   

Year Ended
December 31,

 
   

2016

   

2015

   

2016

   

2015

 
   

(unaudited)

   

(unaudited)

                 

Net Loss

 

$

(12,922)

   

$

(12,122)

   

$

(53,568)

   

$

(52,978)

 

Stock-based compensation

   

2,973

     

1,537

     

10,674

     

9,236

 

Payroll tax expense on secondary stock purchase transactions

   

     

     

     

1,327

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

     

     

(217)

     

 

Amortization of acquisition related intangibles

   

3

     

2

     

9

     

9

 

Change in fair value of warrant liability

   

(10)

     

117

     

(62)

     

653

 

Non-GAAP net loss

 

$

(9,956)

   

$

(10,466)

   

$

(43,164)

   

$

(41,753)

 

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

 

$

(0.35)

   

$

(0.43)

   

$

(1.55)

   

$

(1.90)

 

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

   

28,348

     

24,173

     

27,838

     

22,009

 
   

(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

 

(in thousands)

 

(unaudited)

 
   
   

Three Months Ended
December 31,

   

Year Ended
December 31,

 
   

2016

   

2015

   

2016

   

2015

 
   

(unaudited)

   

(unaudited)

                 

GAAP weighted average common shares, basic and diluted

   

28,348

     

16,359

     

27,838

     

8,838

 

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

   

     

7,814

     

     

13,171

 

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

   

28,348

     

24,173

     

27,838

     

22,009

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF 12-MONTH BILLINGS

 

(in thousands)

 

(unaudited)

 
   
   

Trailing Twelve Months Ended
December 31,

 
   

2016

   

2015

 

Total net revenue

 

$

110,880

   

$

73,193

 
                 

Current deferred revenue

               

Beginning balance

   

49,384

     

29,380

 

Ending balance

   

72,747

     

49,384

 

Net change in current deferred revenue

   

23,363

     

20,004

 
                 

Long term deferred revenue

               

Beginning balance

   

2,941

     

2,574

 

Ending balance

   

3,144

     

2,941

 

Net change in long term deferred revenue

   

203

     

367

 
                 

Total 12-month billings

 

$

134,446

   

$

93,564

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Three Months Ended December 31, 2016

 

(in thousands)

 

(unaudited)

 
   
   

GAAP

   

Stock-based
Compensation
Expense

   

Payroll Tax
Associated
with Equity
Transactions

   

Amortization
of acquired
intangibles

   

NON-GAAP

 

Operating expenses:

                                       

Sales and marketing

 

$

18,002

     

(811)

     

     

   

$

17,191

 

Research and development

   

10,141

     

(1,120)

     

     

(3)

     

9,018

 

General and administrative

   

7,114

     

(802)

     

     

     

6,312

 

Total operating expenses

 

$

35,257

     

(2,733)

     

     

(3)

   

$

32,521

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Three Months Ended December 31, 2015

 

(in thousands)

 

(unaudited)

 
   
   

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

 

Year Ended December 31, 2016

 

(in thousands)

 

(unaudited)

 
   
   

GAAP

   

Stock-based
Compensation
Expense

   

Payroll Tax
Associated
with Equity
Transactions

   

Amortization
of acquired
intangibles

   

NON-GAAP

 

Operating expenses:

                                       

Sales and marketing

 

$

69,991

     

(3,030)

     

57

     

   

$

67,018

 

Research and development

   

35,973

     

(3,862)

     

57

     

(9)

     

32,159

 

General and administrative

   

25,542

     

(2,820)

     

103

     

     

22,825

 

Total operating expenses

 

$

131,506

     

(9,712)

     

217

     

(9)

   

$

122,002

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Year Ended December 31, 2015

 

(in thousands)

 

(unaudited)

 
   
   

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 NET LOSS GUIDANCE

 

(in thousands)

 

(unaudited)

 
   
   

Three Months Ending
March 31,

   

Full Year Ending
December 31,

 
   

2017

   

2017

   

2017

   

2017

 
   

LOW

   

HIGH

   

LOW

   

HIGH

 

Net loss

 

$

(14,710)

   

$

(14,110)

   

$

(54,680)

   

$

(53,680)

 

Stock-based compensation

   

3,500

     

3,500

     

16,000

     

16,000

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

-

     

-

     

(540)

     

(540)

 

Change in fair value of warrant liability

   

10

     

10

     

20

     

20

 

Non-GAAP net loss

 

$

(11,200)

   

$

(10,600)

   

$

(39,200)

   

$

(38,200)

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP NET LOSS PER COMMON SHARE GUIDANCE

 

(unaudited)

 
   
   

Three Months Ending
March 31,

   

Full Year Ending
December 31,

 
   

2017

   

2017

   

2017

   

2017

 
   

LOW

   

HIGH

   

LOW

   

HIGH

 

Net loss per common share

 

$

(0.51)

   

$

(0.49)

   

$

(1.88)

   

$

(1.84)

 

Stock-based compensation

   

0.12

     

0.12

     

0.55

     

0.55

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

-

     

-

     

(0.02)

     

(0.02)

 

Change in fair value of warrant liability

   

0.00

     

0.00

     

0.00

     

0.00

 

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

 

$

(0.39)

   

$

(0.37)

   

$

(1.35)

   

$

(1.31)

 

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

   

28,600

     

28,600

     

29,100

     

29,100

 

 

 

SOURCE Instructure, Inc.