Instructure
08/17/2021

Instructure Announces Financial Results for Second Quarter Fiscal Year 2021

SALT LAKE CITY--(BUSINESS WIRE)-- 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, 2021.

“Instructure delivered strong performance across the board in Q2,” said Steve Daly, Instructure CEO. “We have incredible momentum in the business as the Instructure Learning Platform continues to bring together educators, students, administrators, parents, and partners – connecting them all through a foundational educational platform used for in-person, online, or hybrid models of learning.”

“We have an extraordinary opportunity ahead of us, as we believe the need for a learning platform has never been greater. As institutions navigate a highly complex learning landscape and reimagine the way they educate, we provide the right technologies, tools, and insights to make them successful. As a result, we’re poised to continue delivering a unique combination of revenue growth at scale and best-in-class margins.”

Financial Highlights:

  • GAAP Revenue of $93.6 million, an increase of 52% year-over-year
  • Allocated Combined Receipts*, or ACR, of $95.9 million, an increase of 28% year-over-year
  • Operating loss of $12.0 million, or negative 12.8% of revenue, and Non-GAAP operating income* of $30.4 million, or 31.7% of Allocated Combined Receipts
  • GAAP net loss of $21.7 million and Adjusted EBITDA* of $31.2 million, or 32.5% of Allocated Combined Receipts
  • Cash flow from operations of $6.4 million and Unlevered Free Cash Flow of $21.8 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.

Initial Public Offering:

  • Instructure completed its initial public offering on July 21, 2021, for net proceeds of $233.1 million, after deducting underwriters’ discounts and commissions. In connection with the Company's IPO, the Company made a principal payment in August 2021 of $224.3 million on its outstanding Term Loan.

Business and Operating Highlights:

  • In April, we announced the release of MasteryView Assessments, a collection of formative assessments for schools developed by curriculum experts to measure and address learning loss, including gaps caused by the COVID-19 pandemic. These short, pre-built evaluations are aligned to key state learning standards that schools can utilize through MasteryConnect, our assessment management system.
  • In June, we released the research findings of our State of K-12 study in partnership with Hanover Research. The industry research explores trends for how the pandemic has impacted K-12 education and identifies the needs and opportunities moving forward for schools. The data underscores challenges in areas like equity, with low-income households more than twice as likely to report difficulty in helping their children remain engaged.
  • In June we also launched the Canvas for Elementary user experience, a combination of features that make our Canvas Learning Management System more user-friendly for elementary students. The new features were developed using feedback collected during the pandemic and thoughtfully designed to more closely mimic an elementary school classroom, supporting both in-person and hybrid learning environments.
  • As the quarter concluded, we announced an agreement to acquire EesySoft, a technology adoption vendor that empowers educators and students to more effectively use EdTech products like Canvas. We rebranded EesySoft as “Impact by Instructure,” with solutions designed to help institutions improve adoption of education technologies, seamlessly navigate new platforms, and evaluate the impact they have on student engagement and outcomes.

Business Outlook

Based on information as of today, August 17, 2021, the Company is issuing the following financial guidance.

Third Quarter Fiscal 2021:

  • Revenue is expected to be in the range of $100.4 million to $101.4 million
  • Allocated Combined Receipts is expected to be in the range of $101.3 million to $102.3 million
  • Non-GAAP operating income* is expected to be in the range of $31.1 million to $32.1 million
  • Adjusted EBITDA* is expected to be in the range of $32.0 million to $33.0 million
  • Non-GAAP net income* is expected to be $21.2 million to $22.2 million

Full Year 2021:

  • Revenue is expected to be in the range of $392.1 million to $394.1 million
  • Allocated Combined Receipts is expected to be in the range of $400.4 million to $402.4 million
  • Non-GAAP operating income* is expected to be in the range of $127.3 million to $129.3 million
  • Adjusted EBITDA* is expected to be in the range of $130.3 million to $132.3 million
  • Non-GAAP net income* is expected to be $87.2 million to $89.2 million

*Non-GAAP operating income, Adjusted EBITDA, and non-GAAP net income are non-GAAP measures. 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, 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, 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 17, 2021, at 5:00 p.m. Eastern Time. The conference call can be accessed by dialing (833) 921-1674 from the United States and Canada or (236) 389-2674 internationally with conference ID 8896213. A live webcast and replay of the conference call can be accessed from the investor relations page of Instructure’s website at ir.instructure.com. An archived replay of the webcast will be available following the conclusion of the call.

About Instructure

Instructure is an education technology company dedicated to helping everyone learn together. We amplify the power of teaching and elevate the learning process, leading to improved student outcomes. Today, Instructure supports more than 30 million educators and learners at more than 6,000 organizations around the world.

Non-GAAP Financial Measures

Instructure has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). In addition to Instructure’s results determined in accordance with GAAP, Instructure believes the following non-GAAP measures are useful in evaluating its operating performance and liquidity. Instructure believes that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

A reconciliation of Instructure’s historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Allocated Combined Receipts. We define Allocated Combined Receipts as the combined receipts of our Company and companies that we have acquired allocated to the period of service delivery. We calculate Allocated Combined Receipts 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”) acquisition that we do not believe 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 Certica acquisition that we do not believe are reflective of our ongoing operations. We believe non-GAAP operating income is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance.

Non-GAAP Net Income. We define non-GAAP net income as net loss excluding the impact of stock-based compensation, amortization of acquisition-related intangibles, the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and Certica acquisition, and restructuring, transaction and sponsor related costs that we do not believe are reflective of our ongoing operations.

Adjusted EBITDA. EBITDA is defined as earnings before debt-related costs, including interest and loss on debt extinguishment, provision (benefit) for taxes, depreciation, and amortization. We further adjust EBITDA to exclude certain items of a significant or unusual nature, including stock-based compensation, restructuring, transaction and sponsor related costs, amortization of acquisition-related intangibles, and the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and Certica acquisition. 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. We define free cash flow as net cash provided by operating activities less purchases of property and equipment and intangible assets, net of proceeds from disposals of property and equipment. We believe free cash flow facilitates period-to-period comparisons of liquidity. We consider free cash flow to be an important measure because it measures the amount of cash we generate and reflects changes in working capital.

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 2021 and for the full year ending December 31, 2021 the company's growth, customer demand and application adoption, the company's research and development efforts and future application releases, and the company's expectations regarding future revenue, expenses, cash flows and net income or loss.

These statements are not guarantees of future performance, but are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: risks associated with future stimulus packages approved by the U.S. federal government; failure to continue our recent growth rates; our ability to acquire new customers and successfully retain existing customers; the effects of increased usage of, or interruptions or performance problems associated with, our learning platform; the impact on our business and prospects from the effects of the current COVID-19 pandemic; our history of losses and expectation that we will not be profitable for the foreseeable future; the impact of adverse general and industry-specific economic and market conditions; and changes in the spending policies or budget priorities for government funding of Higher Education and K-12 institutions.

These and other important risk factors are described more fully in the Company’s initial public offering prospectus filed with the Securities and Exchange Commission (the "SEC") on July 23, 2021, and other documents filed with the SEC and could cause actual results to vary from expectations. All information provided in this press release and in the conference call is as of the date hereof and Instructure undertakes no duty to update this information except as required by law.

INSTRUCTURE HOLDINGS, INC.

 

CONSOLIDATED BALANCE SHEETS

 

(in thousands, except per share amounts)

 

 

 

 

June 30,
2021

 

 

December 31,
2020

 

Assets

 

 

(unaudited)

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$

70,200

 

 

$

146,212

 

Accounts receivable—net

 

 

 

144,103

 

 

 

47,315

 

Prepaid expenses

 

 

 

22,069

 

 

 

12,733

 

Deferred commissions

 

 

 

8,141

 

 

 

6,663

 

Assets held for sale

 

 

 

 

 

 

57,334

 

Other current assets

 

 

 

3,513

 

 

 

3,083

 

Total current assets

 

 

 

248,026

 

 

 

273,340

 

Property and equipment, net

 

 

 

9,953

 

 

 

11,289

 

Right-of-use assets

 

 

 

20,524

 

 

 

26,904

 

Goodwill

 

 

 

1,185,820

 

 

 

1,172,395

 

Intangible assets, net

 

 

 

693,621

 

 

 

755,349

 

Noncurrent prepaid expenses

 

 

 

3,964

 

 

 

6,269

 

Deferred commissions, net of current portion

 

 

 

17,399

 

 

 

16,434

 

Other assets

 

 

 

5,528

 

 

 

6,651

 

Total assets

 

 

$

2,184,835

 

 

$

2,268,631

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

 

$

15,008

 

 

$

13,302

 

Accrued liabilities

 

 

 

22,960

 

 

 

23,638

 

Lease liabilities

 

 

 

6,339

 

 

 

6,037

 

Long-term debt, current

 

 

 

5,639

 

 

 

6,118

 

Liabilities held for sale

 

 

 

 

 

 

11,834

 

Deferred revenue

 

 

 

237,343

 

 

 

192,864

 

Total current liabilities

 

 

 

287,289

 

 

 

253,793

 

Long-term debt, net of current portion

 

 

 

771,029

 

 

 

820,925

 

Deferred revenue, net of current portion

 

 

 

13,333

 

 

 

12,015

 

Lease liabilities, net of current portion

 

 

 

27,318

 

 

 

30,670

 

Deferred tax liabilities

 

 

 

43,293

 

 

 

58,601

 

Other long-term liabilities

 

 

 

5,375

 

 

 

4,643

 

Total liabilities

 

 

 

1,147,637

 

 

 

1,180,647

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock, par value $0.01 per share; 252,480 shares authorized as of June 30, 2021
(unaudited) and December 31, 2020; 126,001 issued and outstanding as of June 30, 2021
(unaudited) and 126,219 issued and outstanding as of December 31, 2020.

 

 

 

1,260

 

 

 

1,262

 

Additional paid-in capital

 

 

 

1,268,683

 

 

 

1,264,703

 

Accumulated deficit

 

 

 

(232,745

)

 

 

(177,981

)

Total stockholders’ equity

 

 

 

1,037,198

 

 

 

1,087,984

 

Total liabilities and stockholders’ equity

 

 

$

2,184,835

 

 

$

2,268,631

 

INSTRUCTURE HOLDINGS, INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

(in thousands, except per share amounts)

 

 

               

 

Successor

 

 

 

Predecessor

 

 

               

 

Three months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

Six months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

 

Three months
ended
March 31,

 

 

               

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

2020

 

 

               

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

 

(unaudited)

 

Revenue:

               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and support

               

 

$

84,257

 

 

$

56,147

 

 

$

170,611

 

 

$

56,147

 

 

 

$

65,968

 

Professional services and other

               

 

 

9,310

 

 

 

5,223

 

 

 

16,936

 

 

 

5,223

 

 

 

 

5,421

 

Total revenue

               

 

 

93,567

 

 

 

61,370

 

 

 

187,547

 

 

 

61,370

 

 

 

 

71,389

 

Cost of revenue:

               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and support

               

 

 

36,163

 

 

 

33,979

 

 

 

76,047

 

 

 

33,979

 

 

 

 

19,699

 

Professional services and other

               

 

 

4,811

 

 

 

5,558

 

 

 

10,561

 

 

 

5,558

 

 

 

 

4,699

 

Total cost of revenue

               

 

 

40,974

 

 

 

39,537

 

 

 

86,608

 

 

 

39,537

 

 

 

 

24,398

 

Gross profit

               

 

 

52,593

 

 

 

21,833

 

 

 

100,939

 

 

 

21,833

 

 

 

 

46,991

 

Operating expenses:

               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

               

 

 

39,083

 

 

 

43,934

 

 

 

80,305

 

 

 

43,934

 

 

 

 

27,010

 

Research and development

               

 

 

14,279

 

 

 

22,117

 

 

 

31,368

 

 

 

22,117

 

 

 

 

19,273

 

General and administrative

               

 

 

11,196

 

 

 

34,441

 

 

 

24,547

 

 

 

34,441

 

 

 

 

17,295

 

Impairment on disposal group

               

 

 

 

 

 

 

 

 

1,218

 

 

 

 

 

 

 

 

Total operating expenses

               

 

 

64,558

 

 

 

100,492

 

 

 

137,438

 

 

 

100,492

 

 

 

 

63,578

 

Loss from operations

               

 

 

(11,965

)

 

 

(78,659

)

 

 

(36,499

)

 

 

(78,659

)

 

 

 

(16,587

)

Other income (expense):

               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

               

 

 

 

 

 

35

 

 

 

16

 

 

 

35

 

 

 

 

313

 

Interest expense

               

 

 

(15,670

)

 

 

(18,092

)

 

 

(32,930

)

 

 

(18,092

)

 

 

 

(8

)

Other income (expense)

               

 

 

(108

)

 

 

416

 

 

 

(742

)

 

 

416

 

 

 

 

(5,738

)

Total other income (expense), net

               

 

 

(15,778

)

 

 

(17,641

)

 

 

(33,656

)

 

 

(17,641

)

 

 

 

(5,433

)

Loss before income taxes

               

 

 

(27,743

)

 

 

(96,300

)

 

 

(70,155

)

 

 

(96,300

)

 

 

 

(22,020

)

Income tax benefit (expense)

               

 

 

6,050

 

 

 

19,726

 

 

 

15,391

 

 

 

19,726

 

 

 

 

(183

)

Net loss and comprehensive loss

               

 

$

(21,693

)

 

$

(76,574

)

 

$

(54,764

)

 

$

(76,574

)

 

 

$

(22,203

)

Net loss per common share, basic and diluted

               

 

$

(0.17

)

 

$

(0.61

)

 

$

(0.43

)

 

$

(0.61

)

 

 

$

(0.58

)

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

               

 

 

126,049

 

 

 

126,240

 

 

 

126,083

 

 

 

126,240

 

 

 

 

38,369

 

INSTRUCTURE HOLDINGS, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

 

 

 

Successor

 

 

Successor

 

 

 

Predecessor

 

 

 

Three months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

Six months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

 

Three months
ended
March 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(21,693

)

 

$

(76,574

)

 

$

(54,764

)

 

$

(76,574

)

 

 

$

(22,203

)

Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation of property and equipment

 

 

879

 

 

 

1,098

 

 

 

1,818

 

 

 

1,098

 

 

 

 

2,982

 

Amortization of intangible assets

 

 

33,363

 

 

 

32,983

 

 

 

66,728

 

 

 

32,983

 

 

 

 

2,620

 

Amortization of deferred financing costs

 

 

609

 

 

 

531

 

 

 

1,218

 

 

 

531

 

 

 

 

 

Loss on disposition

 

 

 

 

 

 

 

 

1,218

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

2,190

 

 

 

500

 

 

 

4,823

 

 

 

500

 

 

 

 

7,109

 

Deferred income taxes

 

 

(6,022

)

 

 

(19,903

)

 

 

(15,402

)

 

 

(19,903

)

 

 

 

 

Other

 

 

84

 

 

 

727

 

 

 

1,405

 

 

 

727

 

 

 

 

1,959

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(113,819

)

 

 

(96,593

)

 

 

(96,913

)

 

 

(96,593

)

 

 

 

11,903

 

Prepaid expenses and other assets

 

 

11,951

 

 

 

9,835

 

 

 

(6,970

)

 

 

9,835

 

 

 

 

(25,121

)

Deferred commissions

 

 

(2,323

)

 

 

(7,792

)

 

 

(2,375

)

 

 

(7,792

)

 

 

 

1,469

 

Right-of-use assets

 

 

1,138

 

 

 

3,694

 

 

 

6,380

 

 

 

3,694

 

 

 

 

4,509

 

Accounts payable and accrued liabilities

 

 

8,438

 

 

 

(3,821

)

 

 

(195

)

 

 

(3,821

)

 

 

 

2,187

 

Deferred revenue

 

 

94,544

 

 

 

92,161

 

 

 

44,058

 

 

 

92,161

 

 

 

 

(36,983

)

Lease liabilities

 

 

(1,407

)

 

 

907

 

 

 

(3,050

)

 

 

907

 

 

 

 

(7,489

)

Other liabilities

 

 

(1,567

)

 

 

3,922

 

 

 

(346

)

 

 

3,922

 

 

 

 

 

Net cash provided by (used in) operating activities

 

 

6,365

 

 

 

(58,325

)

 

 

(52,367

)

 

 

(58,325

)

 

 

 

(57,058

)

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,196

)

 

 

(51

)

 

 

(1,607

)

 

 

(51

)

 

 

 

(732

)

Proceeds from sale of property and equipment

 

 

15

 

 

 

29

 

 

 

24

 

 

 

29

 

 

 

 

19

 

Proceeds from sale of Bridge

 

 

 

 

 

 

 

 

46,018

 

 

 

 

 

 

 

 

Business acquisitions, net of cash received

 

 

(16,030

)

 

 

(1,904,064

)

 

 

(16,030

)

 

 

(1,904,064

)

 

 

 

 

Maturities of marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,584

 

Net cash provided by (used in) investing activities

 

 

(17,211

)

 

 

(1,904,086

)

 

 

28,405

 

 

 

(1,904,086

)

 

 

 

14,871

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock from employee equity plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,067

 

Shares repurchased for tax withholdings on vesting of restricted stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,413

)

Proceeds from issuance of term debt, net of discount

 

 

 

 

 

763,276

 

 

 

 

 

 

763,276

 

 

 

 

 

Proceeds from contributions from stockholders

 

 

 

 

 

1,248,145

 

 

 

 

 

 

1,248,145

 

 

 

 

 

Distributions to stockholders

 

 

(360

)

 

 

 

 

 

(923

)

 

 

 

 

 

 

 

Repayments of long-term debt

 

 

(1,992

)

 

 

(1,938

)

 

 

(51,534

)

 

 

(1,938

)

 

 

 

 

Net cash provided (used in) by financing activities

 

 

(2,352

)

 

 

2,009,483

 

 

 

(52,457

)

 

 

2,009,483

 

 

 

 

(346

)

Net increase (decrease) in cash and cash equivalents

 

 

(13,198

)

 

 

47,072

 

 

 

(76,419

)

 

 

47,072

 

 

 

 

(42,533

)

Cash, cash equivalents, and restricted cash, beginning of period

 

 

87,732

 

 

 

58,703

 

 

 

150,953

 

 

 

58,703

 

 

 

 

101,236

 

Cash, cash equivalents, and restricted cash, end of period

 

$

74,534

 

 

$

105,775

 

 

$

74,534

 

 

$

105,775

 

 

 

$

58,703

 

Supplemental cash flow disclosure:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for taxes

 

$

326

 

 

$

148

 

 

$

403

 

 

$

148

 

 

 

$

32

 

Interest paid

 

$

15,077

 

 

$

17,389

 

 

$

31,749

 

 

$

17,389

 

 

 

$

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures incurred but not yet paid

 

$

48

 

 

$

73

 

 

$

65

 

 

$

73

 

 

 

$

79

 

RECONCILIATIONS OF NON-GAAP MEASURES TO GAAP MEASURES

 
   

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS

 

(in thousands)

 

(unaudited)

 

 

       

 

Successor

 

 

 

Predecessor

 

 

       

 

Three months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

Six months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

 

Three months
ended
March 31,

 

 

       

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

2020

 

Revenue

       

 

$

93,567

 

 

$

61,370

 

 

$

187,547

 

 

$

61,370

 

 

 

$

71,389

 

Fair value adjustments to deferred revenue in connection
with purchase accounting

       

 

 

2,334

 

 

 

13,439

 

 

 

7,092

 

 

 

13,439

 

 

 

 

 

Allocated Combined Receipts

       

 

$

95,901

 

 

$

74,809

 

 

$

194,639

 

 

$

74,809

 

 

 

$

71,389

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP OPERATING INCOME

 

(in thousands)

 

(unaudited)

 

 

   

 

Successor

 

 

 

Predecessor

 

 

   

 

Three months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

Six months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

 

Three months
ended
March 31,

 

 

   

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

2020

 

Loss from operations

   

 

$

(11,965

)

 

$

(78,659

)

 

$

(36,499

)

 

$

(78,659

)

 

 

$

(16,587

)

Stock-based compensation

   

 

 

3,758

 

 

 

33,828

 

 

 

9,343

 

 

 

33,828

 

 

 

 

7,109

 

Restructuring, transaction and sponsor related costs

   

 

 

2,954

 

 

 

10,253

 

 

 

16,011

 

 

 

10,253

 

 

 

 

8,360

 

Amortization of acquisition-related intangibles

   

 

 

33,361

 

 

 

32,980

 

 

 

66,722

 

 

 

32,980

 

 

 

 

2,586

 

Fair value adjustments to deferred revenue in connection
with purchase accounting

   

 

 

2,334

 

 

 

13,439

 

 

 

7,092

 

 

 

13,439

 

 

 

 

 

Non-GAAP operating income

   

 

$

30,442

 

 

$

11,841

 

 

$

62,669

 

 

$

11,841

 

 

 

$

1,468

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP ADJUSTED EBITDA

 

(in thousands)

 

(unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Three months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

Six months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

 

Three months
ended
March 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

2020

 

Net Loss

 

$

(21,693

)

 

$

(76,574

)

 

$

(54,764

)

 

$

(76,574

)

 

 

$

(22,203

)

Interest on outstanding debt and loss on debt extinguishment

 

 

15,653

 

 

 

18,092

 

 

 

32,923

 

 

 

18,092

 

 

 

 

 

Provision (benefit) for taxes

 

 

(6,050

)

 

 

(19,726

)

 

 

(15,391

)

 

 

(19,726

)

 

 

 

183

 

Depreciation

 

 

879

 

 

 

1,098

 

 

 

1,818

 

 

 

1,098

 

 

 

 

2,982

 

Amortization

 

 

2

 

 

 

3

 

 

 

4

 

 

 

3

 

 

 

 

35

 

Stock-based compensation

 

 

3,758

 

 

 

33,828

 

 

 

9,343

 

 

 

33,828

 

 

 

 

7,109

 

Restructuring, transaction and sponsor related costs

 

 

2,954

 

 

 

10,253

 

 

 

16,011

 

 

 

10,253

 

 

 

 

14,117

 

Amortization of acquisition-related intangibles

 

 

33,361

 

 

 

32,980

 

 

 

66,722

 

 

 

32,980

 

 

 

 

2,586

 

Fair value adjustments to deferred revenue in connection
with purchase accounting

 

 

2,334

 

 

 

13,439

 

 

 

7,092

 

 

 

13,439

 

 

 

 

 

Adjusted EBITDA

 

$

31,198

 

 

$

13,393

 

 

$

63,758

 

 

$

13,393

 

 

 

$

4,809

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF FREE CASH FLOW & UNLEVERED FREE CASH FLOW

 

(in thousands)

 

(unaudited)

 

 

                         

 

Successor

 

 

 

Predecessor

 

 

                         

 

Three months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

Six months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

 

Three months
ended
March 31,

 

 

                         

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

2020

 

 

                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

                         

 

$

6,365

 

 

$

(58,325

)

 

$

(52,367

)

 

$

(58,325

)

 

 

$

(57,058

)

Purchases of property and equipment

                         

 

 

(1,196

)

 

 

(51

)

 

 

(1,607

)

 

 

(51

)

 

 

 

(732

)

Proceeds from disposals of property and equipment

                         

 

 

15

 

 

 

29

 

 

 

24

 

 

 

29

 

 

 

 

19

 

Free cash flow

                         

 

$

5,184

 

 

$

(58,347

)

 

$

(53,950

)

 

$

(58,347

)

 

 

$

(57,771

)

Cash paid for interest on outstanding debt

                         

 

 

15,077

 

 

 

17,389

 

 

 

31,749

 

 

 

17,389

 

 

 

 

 

Cash settled stock-based compensation

                         

 

 

1,524

 

 

 

33,328

 

 

 

4,443

 

 

 

33,328

 

 

 

 

 

Unlevered free cash flow

                         

 

$

21,785

 

 

$

(7,630

)

 

$

(17,758

)

 

$

(7,630

)

 

 

$

(57,771

)

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP NET INCOME

 

(in thousands, except per share amounts)

 

(unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Three months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

Six months
ended
June 30,

 

 

Three months
ended
June 30,

 

 

 

Three months
ended
March 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

2020

 

Net loss

 

$

(21,693

)

 

$

(76,574

)

 

$

(54,764

)

 

$

(76,574

)

 

 

$

(22,203

)

Stock-based compensation

 

 

3,758

 

 

 

33,828

 

 

 

9,343

 

 

 

33,828

 

 

 

 

7,109

 

Amortization of acquisition related intangibles

 

 

33,361

 

 

 

32,980

 

 

 

66,722

 

 

 

32,980

 

 

 

 

2,586

 

Fair value adjustments to deferred revenue in connection
with purchase accounting

 

 

2,334

 

 

 

13,439

 

 

 

7,092

 

 

 

13,439

 

 

 

 

 

Restructuring, transaction and sponsor related costs

 

 

2,954

 

 

 

10,253

 

 

 

16,011

 

 

 

10,253

 

 

 

 

14,117

 

Non-GAAP net income

 

$

20,714

 

 

$

13,926

 

 

$

44,404

 

 

$

13,926

 

 

 

$

1,609

 

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

 

$

0.16

 

 

$

0.11

 

 

$

0.35

 

 

$

0.11

 

 

 

$

0.04

 

Weighted average common shares used in computing basic
and diluted Non-GAAP net income per common share

 

 

126,049

 

 

 

126,240

 

 

 

126,083

 

 

 

126,240

 

 

 

 

38,369

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP COST OF REVENUE

 

Three Months Ended June 30, 2021

 

(in thousands)

 

(unaudited)

 

 

 

GAAP

 

 

Stock-based
compensation
expense

 

 

Restructuring,
transaction and
sponsor related
costs

 

 

Amortization of
acquired
intangibles

 

 

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, 2021

 

(in thousands)

 

(unaudited)

 

 

 

GAAP

 

 

Stock-based
compensation
expense

 

 

Restructuring,
transaction and
sponsor related
costs

 

 

Amortization of
acquired
intangibles

 

 

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 COST OF REVENUE

 

Three Months Ended June 30, 2020 (Successor)

 

(in thousands)

 

(unaudited)

 

 

 

GAAP

 

 

Stock-based
compensation
expense

 

 

Restructuring,
transaction and
sponsor related
costs

 

 

Amortization of
acquired
intangibles

 

 

Non-GAAP

 

Cost of Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and support

 

$

33,979

 

 

 

(320

)

 

 

(2,056

)

 

 

(15,167

)

 

$

16,436

 

Professional services and other

 

 

5,558

 

 

 

(241

)

 

 

(786

)

 

 

 

 

 

4,531

 

Total cost of revenue

 

$

39,537

 

 

 

(561

)

 

 

(2,842

)

 

 

(15,167

)

 

$

20,967

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP COST OF REVENUE

 

Three Months Ended March 31, 2020 (Predecessor)

 

(in thousands)

 

(unaudited)

 

 

 

GAAP

 

 

Stock-based
compensation
expense

 

 

Restructuring,
transaction and
sponsor related
costs

 

 

Amortization of
acquired
intangibles

 

 

Non-GAAP

 

Cost of Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and support

 

$

19,699

 

 

 

(301

)

 

 

 

 

 

(1,293

)

 

$

18,105

 

Professional services and other

 

 

4,699

 

 

 

(285

)

 

 

(66

)

 

 

 

 

 

4,348

 

Total cost of revenue

 

$

24,398

 

 

 

(586

)

 

 

(66

)

 

 

(1,293

)

 

$

22,453

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Three Months Ended June 30, 2021

 

(in thousands)

 

(unaudited)

 

 

           

 

GAAP

 

 

Stock-based
compensation
expense

 

 

Restructuring,
transaction and
sponsor related
costs

 

 

Amortization of
acquired
intangibles

 

 

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, 2021

 

(in thousands)

 

(unaudited)

 

 

 

 

GAAP

 

 

Stock-based
compensation
expense

 

 

Restructuring,
transaction and
sponsor related
costs

 

 

Amortization of
acquired
intangibles

 

 

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 OPERATING EXPENSES

 

Three Months Ended June 30, 2020 (Successor)

 

(in thousands)

 

(unaudited)

 

 

     

 

GAAP

 

 

Stock-based
compensation
expense

 

 

Restructuring,
transaction and
sponsor related
costs

 

 

Amortization of
acquired
intangibles

 

 

Non-GAAP

 

Operating expenses:

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

     

 

$

43,934

 

 

 

(3,592

)

 

 

(2,286

)

 

 

(17,813

)

 

$

20,243

 

Research and development

     

 

 

22,117

 

 

 

(5,044

)

 

 

(2,564

)

 

 

 

 

 

14,509

 

General and administrative

     

 

 

34,441

 

 

 

(24,631

)

 

 

(2,561

)

 

 

 

 

 

7,249

 

Total operating expenses

     

 

$

100,492

 

 

 

(33,267

)

 

 

(7,411

)

 

 

(17,813

)

 

$

42,001

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Three Months Ended March 31, 2020 (Predecessor)

 

(in thousands)

 

(unaudited)

 

 

       

 

GAAP

 

 

Stock-based
compensation
expense

 

 

Restructuring,
transaction and
sponsor related
costs

 

 

Amortization of
acquired
intangibles

 

 

Non-GAAP

 

Operating expenses:

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

       

 

$

27,010

 

 

 

(1,977

)

 

 

(556

)

 

 

(1,293

)

 

$

23,184

 

Research and development

       

 

 

19,273

 

 

 

(1,874

)

 

 

(1,273

)

 

 

 

 

 

16,126

 

General and administrative

       

 

 

17,295

 

 

 

(2,672

)

 

 

(6,465

)

 

 

 

 

 

8,158

 

Total operating expenses

       

 

$

63,578

 

 

 

(6,523

)

 

 

(8,294

)

 

 

(1,293

)

 

$

47,468

 

INSTRUCTURE, INC.

 

RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS GUIDANCE

 

(in thousands)

 

(unaudited)

 

 

       

 

Three Months Ending
September 30,

 

 

Full Year Ending
December 31,

 

 

       

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

       

 

LOW

 

 

HIGH

 

 

LOW

 

 

HIGH

 

Revenue

       

 

$

100,357

 

 

$

101,357

 

 

$

392,062

 

 

$

394,062

 

Fair value adjustments to deferred revenue in connection with
purchase accounting

       

 

 

902

 

 

 

902

 

 

 

8,301

 

 

 

8,301

 

Allocated Combined Receipts

       

 

$

101,259

 

 

$

102,259

 

 

$

400,363

 

 

$

402,363

 

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 more than 30 million educators and learners around the world. Learn more at www.instructure.com.

Contact

Cory Edwards
Vice President, Corporate Communications

Instructure

Investor Relations

April Scee
Managing Director
ICR, Inc.

Share