Instructure Reports Third Quarter 2018 Financial Results

SALT LAKE CITY, Oct. 29, 2018 /PRNewswire/ -- Instructure, Inc. (NYSE: INST), a leading software-as-a-service (SaaS) technology company in education, learning and employee development, today announced its financial results for the third quarter ended September 30, 2018.

Instructure official logo (PRNewsFoto/Instructure)

"We delivered a solid third quarter with $55.2 million in revenue and realized meaningful year-over-year improvements to our operating margin," said Josh Coates, CEO at Instructure. "During the quarter, we had great success executing against our long-term strategy of providing a more robust suite of Bridge offerings as well as winning key deals in the extended enterprise space."

Third Quarter Financial Summary

 

(in thousands, except per share data)

 
   

Three Months

Ended September 30,

 
   

2018

   

2017

 
   

(unaudited)

   

(unaudited)

 

Revenue

 

$

55,239

   

$

43,203

 

Gross Margin

               

GAAP

   

70.8

%

   

71.0

%

Non-GAAP(1)

   

72.5

%

   

71.9

%

Operating Loss

               

GAAP

   

(11,956)

     

(11,628)

 

Non-GAAP(1)

   

(5,672)

     

(7,361)

 

Operating Margin

               

GAAP

   

-21.6

%

   

-26.9

%

Non-GAAP(1)

   

-10.3

%

   

-17.0

%

Net loss

               

GAAP

   

(11,472)

     

(11,471)

 

Non-GAAP(1)

   

(5,188)

     

(7,219)

 

EPS

               

GAAP

 

$

(0.33)

   

$

(0.39)

 

Non-GAAP(1)

 

$

(0.15)

   

$

(0.24)

 

___________

               
 

(1)  Non-GAAP financial measures exclude stock-based compensation, reversal of estimated accruals related to payroll taxes on secondary stock purchase transactions, amortization of acquisition related intangibles, the change in fair value of the warrant liability and the change in fair value of the contingent liability.

Third Quarter 2018 Business Highlights

  • Instructure continued to expand its customer base in the third quarter. A few highlights include:
    • U.S. Higher Education and K-12 Schools – In Texas, Frisco Independent School District and the University of Texas at Arlington chose Canvas for their 36,000 and 40,000 students, respectively. Oklahoma State, with close to 30,000 students and faculty, selected Canvas and Arc. Fresno State switched to Canvas for their 20,000 students. Additionally, Montgomery County Public Schools, the 17th largest school district in the U.S., selected Practice to train 28,000 faculty and staff.
    • International Education – Canvas was selected by the University College Cork in Ireland for their 17,000 students and Lund University in Sweden for their almost 27,000 students. The Faculdade das Américas (FAM) in Brazil with 20,000 students and the Pontifical Catholic University of Chile with 31,000 students also switched to Canvas. Additionally, De La Salle University, one of the top institutions in the Philippines, selected Canvas for their 16,000 students.
    • Corporate – Vivint, a provider of smart home technology, expanded their relationship to include the full Bridge suite of Learn, Perform, Practice and Arc for their entire workforce of 17,000 employees. MassMutual Life Insurance selected Bridge Learn for their 25,000 field agents. Divisions of StubHub, the largest ticket marketplace, and Fiserv, a leader in financial services technology, chose Bridge Learn and Arc because of their ease of use. And finally, a division of a global, multi-billion dollar consumer goods company in the United Kingdom selected Bridge Learn and Arc to train channel and distribution partners.

Business Outlook

Today, Instructure issued financial guidance for the fourth quarter and full year 2018. The financial guidance discussed below is on a non-GAAP basis, except for revenue, and excludes stock-based compensation expense, reversal of payroll tax expense on secondary stock purchase transactions, amortization of acquisition related intangibles, the change in fair value of the warrant liability, and the change in fair value of the contingent liability (see tables below that reconcile these non-GAAP financial measures to the related GAAP measures). On January 1, 2018, Instructure adopted Accounting Standards Codification (ASC) 606 "Revenue from Contracts with Customers" using the full retrospective transition method.

For the fourth quarter ending December 31, 2018, Instructure expects revenue of approximately $55.2 million to $56.2 million, a non-GAAP net loss of ($5.8) million to ($4.8) million, and non-GAAP net loss per common share of ($0.16) to ($0.14).

For the full year ending December 31, 2018, Instructure expects revenue of approximately $208.5 million to $209.5 million, as compared to previously stated guidance of $205.1 million to $209.5 million, non-GAAP net loss of ($26.2) million to ($25.2) million, up from ($31.8) million to ($29.8) million, and non-GAAP net loss per common share of ($0.76) to ($0.74), up from ($0.93) to ($0.87).

Conference Call Details

Instructure will discuss its third quarter 2018 results today, October 29, 2018, via teleconference at 3:00 p.m. Mountain Time / 5:00 p.m. Eastern Time. The call may be accessed at (800) 239-9838 or (323) 994-2093, passcode 1015715. 

The live webcast of the call can be accessed at the Instructure Investor Relations website at ir.instructure.com. A replay of the call will be available at the same web address approximately two hours following the conclusion of the live event. You may register for the live webcast at http://bit.ly/INST_Q32018EarningsCall.

Non-GAAP Financial Measures

In this press release and related conference call, Instructure's non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, non-GAAP free cash flow 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.

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, the change in fair value of the warrant liability, and the change in fair value of the contingent 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.
  • Reversal of estimated accruals related to payroll taxes on secondary stock purchase transactions – Prior to our IPO, operating expenses included employer payroll tax-related items on employee sales of securities to investors. The amount of employer payroll tax-related items on these transactions was dependent on the fair market value of our stock. Beginning in the second quarter of 2016, operating expenses included the reversal of such payroll tax expense due to the reduction of the estimated liability, which will continue to occur in the second quarter of each year.
  • 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.
  • Change in fair value of the contingent liability - Under GAAP, we are required to record mark-to-market adjustments for the change in the fair value of the liability for contingent consideration related to an acquisition. The expense or gain recognized 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 fourth quarter of 2018 and for the full year ending December 31, 2018, 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 on Form 10-Q for the quarter ended June 30, 2018, which was filed with the Securities and Exchange Commission (the "SEC") on August 1, 2018, 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 4,000 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:
Keaton Godfrey
Director, Investor Relations
Instructure
(866) 574-3127
[email protected]

Becky Frost
Sr. Director, Corporate Communications
Instructure
(801) 869-5017
[email protected]

INSTRUCTURE, INC.

 

CONSOLIDATED BALANCE SHEETS

 

(in thousands)

 
   

September 30,

2018

   

December 31,

2017

 
   

(unaudited)

   

(unaudited)

 

Assets

               

Current assets:

               

Cash and cash equivalents

 

$

111,031

   

$

35,693

 

Short term marketable securities

   

60,390

     

5,697

 

Accounts receivable—net of allowances of $730 and $318 at September 30, 2018 and December 31, 2017, respectively

   

47,510

     

34,312

 

Prepaid expenses

   

11,114

     

11,492

 

Deferred commissions

   

8,126

     

7,086

 

Other current assets

   

1,803

     

2,419

 

Total current assets

   

239,974

     

96,699

 

Property and equipment, net

   

27,024

     

23,926

 

Goodwill

   

12,354

     

12,354

 

Intangible assets, net

   

6,936

     

9,048

 

Noncurrent prepaid expenses

   

4,075

     

2,939

 

Deferred commissions, net of current portion

   

11,292

     

11,160

 

Other assets

   

526

     

497

 

Total assets

 

$

302,181

   

$

156,623

 

Liabilities and stockholders' equity

               

Current liabilities:

               

Accounts payable

 

$

11,458

   

$

2,892

 

Accrued liabilities

   

14,345

     

13,702

 

Deferred rent

   

1,303

     

936

 

Deferred revenue

   

136,179

     

99,773

 

Total current liabilities

   

163,285

     

117,303

 

Deferred revenue, net of current portion

   

2,494

     

1,889

 

Deferred rent, net of current portion

   

10,437

     

9,201

 

Other long term liabilities

   

20

     

1,286

 

Total liabilities

   

176,236

     

129,679

 

Commitments and contingencies

               

Stockholders' equity:

               

Common stock

   

3

     

3

 

Additional paid-in capital

   

385,789

     

250,899

 

Accumulated other comprehensive loss

   

(12)

     

(1)

 

Accumulated deficit

   

(259,835)

     

(223,957)

 

Total stockholders' equity

   

125,945

     

26,944

 

Total liabilities and stockholders' equity

 

$

302,181

   

$

156,623

 

 

 

 

INSTRUCTURE, INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

(in thousands, except per share data)

 
   

Three Months

Ended September 30,

   

Nine Months

Ended September 30,

 
   

2018

   

2017

   

2018

   

2017

 
   

(unaudited)

   

(unaudited)

   

(unaudited)

   

(unaudited)

 

Revenue:

                               

Subscription and support

 

$

49,235

   

$

38,290

   

$

137,539

   

$

103,557

 

Professional services and other

   

6,004

     

4,913

     

15,754

     

12,663

 

Total Net revenue

   

55,239

     

43,203

     

153,293

     

116,220

 

Cost of Revenue:

                               

Subscription and support

   

12,149

     

9,278

     

33,324

     

24,350

 

Professional services and other

   

3,989

     

3,245

     

11,397

     

8,908

 

Total cost of revenue

   

16,138

     

12,523

     

44,721

     

33,258

 

Gross profit

   

39,101

     

30,680

     

108,572

     

82,962

 

Operating expenses:

                               

Sales and marketing

   

25,641

     

21,397

     

73,670

     

58,596

 

Research and development

   

15,601

     

12,577

     

45,110

     

34,816

 

General and administrative

   

9,815

     

8,334

     

26,306

     

22,941

 

Total operating expenses

   

51,057

     

42,308

     

145,086

     

116,353

 

Loss from operations

   

(11,956)

     

(11,628)

     

(36,514)

     

(33,391)

 

Other income (expense):

                               

Interest income

   

761

     

84

     

1,528

     

199

 

Interest expense

   

(25)

     

     

(54)

     

(18)

 

Other income (expense), net

   

(177)

     

205

     

(531)

     

253

 

Total other income, net

   

559

     

289

     

943

     

434

 

Loss before income taxes

   

(11,397)

     

(11,339)

     

(35,571)

     

(32,957)

 

Income tax expense

   

(75)

     

(132)

     

(307)

     

(383)

 

Net loss

 

$

(11,472)

   

$

(11,471)

   

$

(35,878)

   

$

(33,340)

 

Net loss per common share, basic and diluted

 

$

(0.33)

   

$

(0.39)

   

$

(1.06)

   

$

(1.14)

 

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

   

34,895

     

29,535

     

33,934

     

29,120

 

 

INSTRUCTURE, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

 
   

Three Months

Ended September 30,

   

Nine Months

Ended September 30,

 
   

2018

   

2017

   

2018

   

2017

 
   

(unaudited)

   

(unaudited)

   

(unaudited)

   

(unaudited)

 

Operating Activities:

                               

Net loss

 

$

(11,473)

   

$

(11,471)

   

$

(35,878)

   

$

(33,340)

 

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

                               

Depreciation of property and equipment

   

2,320

     

1,629

     

6,438

     

4,322

 

Amortization of intangible assets

   

673

     

71

     

2,112

     

330

 

Amortization of deferred financing costs

   

5

     

8

     

15

     

24

 

Change in fair value of mark-to-market liabilities

   

     

15

     

(1,266)

     

98

 

Stock-based compensation

   

5,683

     

4,267

     

16,102

     

11,707

 

Other

   

142

     

24

     

(757)

     

(42)

 

Changes in assets and liabilities:

                               

Accounts receivable, net

   

45,993

     

37,219

     

(14,011)

     

(17,270)

 

Prepaid expenses and other assets

   

(1,550)

     

167

     

(168)

     

(1,868)

 

Accounts payable and accrued liabilities

   

7,231

     

5,999

     

10,241

     

8,197

 

Deferred revenue

   

6,147

     

6,053

     

37,011

     

35,692

 

Deferred rent

   

(233)

     

351

     

1,603

     

(63)

 

Deferred commissions

   

(240)

     

(732)

     

(1,172)

     

(3,833)

 

Other liabilities

   

     

(32)

     

     

(32)

 

Net cash provided by operating activities

   

54,698

     

43,568

     

20,270

     

3,922

 

Investing Activities:

                               

Purchases of property and equipment

   

(1,498)

     

(3,875)

     

(8,888)

     

(10,830)

 

Purchases of intangible assets

   

     

     

     

(301)

 

Proceeds from disposal of property and equipment

   

26

     

12

     

78

     

50

 

Purchases of marketable securities

   

(43,729)

     

(8,088)

     

(92,170)

     

(8,088)

 

Maturities of marketable securities

   

32,150

     

     

37,850

     

23,900

 

Net cash provided by (used in) investing activities

   

(13,051)

     

(11,951)

     

(63,130)

     

4,731

 

Financing Activities:

                               

Proceeds from common stock offerings, net of offering costs

   

     

     

109,789

     

 

Proceeds from issuance of common stock from employee equity plans

   

1,511

     

1,453

     

8,760

     

5,769

 

Shares repurchased for tax withholdings on vesting of restricted stock

   

(78)

     

(91)

     

(333)

     

(214)

 

Payments for financing costs

   

     

(7)

     

(18)

     

(31)

 

Net cash provided by financing activities

   

1,433

     

1,355

     

118,198

     

5,524

 

Net increase in cash

   

43,080

     

32,972

     

75,338

     

14,177

 

Cash, beginning of period

   

67,951

     

25,744

     

35,693

     

44,539

 

Cash, end of period

 

$

111,031

   

$

58,716

   

$

111,031

   

$

58,716

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP GROSS MARGIN

 

(in thousands, except percentages)

 

(unaudited)

 
   

Three Months

Ended September 30,

   

Nine Months

Ended September 30,

 
   

2018

   

2017

   

2018

   

2017

 

GAAP gross profit

 

$

39,101

   

$

30,680

   

$

108,572

   

$

82,962

 

Stock-based compensation

   

603

     

372

     

1,578

     

950

 

Amortization of acquisition related intangibles

   

332

     

     

1,007

     

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

     

     

(49)

     

 

Non-GAAP gross margin

 

$

40,036

   

$

31,052

   

$

111,108

   

$

83,912

 
                                 

GAAP gross margin %

   

70.8

%

   

71.0

%

   

70.8

%

   

71.4

%

Non-GAAP gross margin %

   

72.5

%

   

71.9

%

   

72.5

%

   

72.2

%

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING LOSS

 

(in thousands, except percentages)

 

(unaudited)

 
   

Three Months

Ended September 30,

   

Nine Months

Ended September 30,

 
   

2018

   

2017

   

2018

   

2017

 

Loss from operations

 

$

(11,956)

   

$

(11,628)

   

$

(36,514)

   

$

(33,391)

 

Stock-based compensation

   

5,683

     

4,267

     

16,102

     

11,707

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

     

     

(1,225)

     

(534)

 

Amortization of acquisition related intangibles

   

601

     

     

1,895

     

 

Change in fair value of contingent earn-out liability

   

     

     

(1,144)

     

 

Non-GAAP operating loss

 

$

(5,672)

   

$

(7,361)

   

$

(20,886)

   

$

(22,218)

 
                                 

GAAP operating margin

   

-21.6

%

   

-26.9

%

   

-23.8

%

   

-28.7

%

Non-GAAP operating margin

   

-10.3

%

   

-17.0

%

   

-13.6

%

   

-19.1

%

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP NET LOSS

 

(in thousands, except per share data)

 

(unaudited)

 
   

Three Months

Ended September 30,

   

Nine Months

Ended September 30,

 
   

2018

   

2017

   

2018

   

2017

 

Net loss

 

$

(11,472)

   

$

(11,471)

   

$

(35,878)

   

$

(33,340)

 

Stock-based compensation

   

5,683

     

4,267

     

16,102

     

11,707

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

     

     

(1,225)

     

(534)

 

Amortization of acquisition related intangibles

   

601

     

     

1,895

     

 

Change in fair value of warrant liability

   

     

(15)

     

(122)

     

(98)

 

Change in fair value of contingent earn-out liability

   

     

     

(1,144)

     

 

Non-GAAP net loss

 

$

(5,188)

   

$

(7,219)

   

$

(20,372)

   

$

(22,265)

 

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

 

$

(0.15)

   

$

(0.24)

   

$

(0.60)

   

$

(0.76)

 

Weighted average common shares used in computing basic and diluted net loss per common share

   

34,895

     

29,535

     

33,934

     

29,120

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF FREE CASH FLOW

 

(in thousands)

 

(unaudited)

 
   

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
   

2018

   

2017

   

2018

   

2017

 

Net cash provided by operating activities

 

$

54,698

   

$

43,568

   

$

20,270

   

$

3,922

 

Purchase of property and equipment and intangibles

   

(1,498)

     

(3,875)

     

(8,888)

     

(11,131)

 

Proceeds from disposals of property and equipment

   

26

     

12

     

78

     

50

 

Free cash flow

 

$

53,226

   

$

39,705

   

$

11,460

   

$

(7,159)

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF 12-MONTH BILLINGS

 

(in thousands)

 

(unaudited)

 
   

Trailing Twelve Months Ended

September 30,

 
   

2018

   

2017

 

Total net revenue

 

$

198,020

   

$

147,874

 
                 

Total deferred revenue

               

Beginning balance

   

110,328

     

83,581

 

Ending balance

   

138,673

     

110,328

 

Net change in current deferred revenue

   

28,345

     

26,747

 
                 

Total 12-month billings

 

$

226,365

   

$

174,621

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Three Months Ended September 30, 2018

 

(in thousands)

 

(unaudited)

 
   

GAAP

   

Stock-based Compensation Expense

   

Reversal of Payroll Tax Associated with Equity Transactions

   

Amortization of
acquired intangibles

   

Change in fair value of contingent earn-out liability

   

NON-GAAP

 

Operating expenses:

                                               

Sales and marketing

 

$

25,641

     

(1,385)

     

     

(269)

     

   

$

23,987

 

Research and development

   

15,601

     

(2,026)

     

     

     

     

13,575

 

General and administrative

   

9,815

     

(1,669)

     

     

     

     

8,146

 

Total operating expenses

 

$

51,057

     

(5,080)

     

     

(269)

     

   

$

45,708

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Three Months Ended September 30, 2017

 

(in thousands)

 

(unaudited)

 
   

GAAP

   

Stock-based Compensation Expense

   

Reversal of Payroll Tax Associated with Equity Transactions

   

Amortization of
acquired intangibles

   

Change in fair value of contingent earn-out liability

   

NON-GAAP

 

Operating expenses:

                                               

Sales and marketing

 

$

21,397

     

(1,255)

     

     

     

   

$

20,142

 

Research and development

   

12,577

     

(1,637)

     

     

     

     

10,940

 

General and administrative

   

8,334

     

(1,003)

     

     

     

     

7,331

 

Total operating expenses

 

$

42,308

     

(3,895)

     

     

     

   

$

38,413

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Nine Months Ended September 30, 2018

 

(in thousands)

 

(unaudited)

 
   

GAAP

   

Stock-based Compensation Expense

   

Reversal of Payroll Tax Associated with Equity Transactions

   

Amortization of
acquired intangibles

   

Change in fair value of contingent earn-out liability

   

NON-
GAAP

 

Operating expenses:

                                               

Sales and marketing

 

$

73,670

     

(4,404)

     

430

     

(888)

     

   

$

68,808

 

Research and development

   

45,110

     

(5,953)

     

616

     

     

     

39,773

 

General and administrative

   

26,306

     

(4,167)

     

130

     

     

1,144

     

23,413

 

Total operating expenses

 

$

145,086

     

(14,524)

     

1,176

     

(888)

     

1,144

   

$

131,994

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Nine Months Ended September 30, 2017

 

(in thousands)

 

(unaudited)

 
   

GAAP

   

Stock-based Compensation Expense

   

Reversal of Payroll Tax Associated with Equity Transactions

   

Amortization of
acquired intangibles

   

Change in fair value of contingent earn-out liability

   

NON-
GAAP

 

Operating expenses:

                                               

Sales and marketing

 

$

58,596

     

(3,405)

     

256

     

     

   

$

55,447

 

Research and development

   

34,816

     

(4,375)

     

256

     

     

     

30,697

 

General and administrative

   

22,941

     

(2,977)

     

22

     

     

     

19,986

 

Total operating expenses

 

$

116,353

     

(10,757)

     

534

     

     

   

$

106,130

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP NET LOSS GUIDANCE

 

(in thousands)

 

(unaudited)

 
   

Three Months Ending

December 31,

   

Full Year Ending

December 31,

 
   

2018

   

2018

   

2018

   

2018

 
   

LOW

   

HIGH

   

LOW

   

HIGH

 

Net loss

 

$

(12,490)

   

$

(11,490)

   

$

(48,370)

   

$

(47,370)

 

Stock-based compensation

   

6,100

     

6,100

     

22,200

     

22,200

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

     

     

(1,230)

     

(1,230)

 

Amortization of acquisition related intangibles

   

600

     

600

     

2,500

     

2,500

 

Change in fair value of warrant liability

   

     

     

(120)

     

(120)

 

Change in fair value of contingent liability

   

     

     

(1,140)

     

(1,140)

 

Non-GAAP net loss

 

$

(5,790)

   

$

(4,790)

   

$

(26,160)

   

$

(25,160)

 

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP NET LOSS PER COMMON SHARE GUIDANCE

 

(unaudited)

 
   

Three Months Ending

December 31,

   

Full Year Ending

December 31,

 
   

2018

   

2018

   

2018

   

2018

 
   

LOW

   

HIGH

   

LOW

   

HIGH

 

Net loss per common share

 

$

(0.35)

   

$

(0.33)

   

$

(1.41)

   

$

(1.39)

 

Stock-based compensation

   

0.17

     

0.17

     

0.65

     

0.65

 

Reversal of payroll tax expense on secondary stock purchase transactions

   

     

     

(0.04)

     

(0.04)

 

Amortization of acquisition related intangibles

   

0.02

     

0.02

     

0.07

     

0.07

 

Change in fair value of warrant liability

   

     

     

(0.00)

     

(0.00)

 

Change in fair value of contingent liability

   

     

     

(0.03)

     

(0.03)

 

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

 

$

(0.16)

   

$

(0.14)

   

$

(0.76)

   

$

(0.74)

 

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

   

35,200

     

35,200

     

34,200

     

34,200

 

 

 

SOURCE Instructure