Instructure
05/02/2022

Instructure Announces First Quarter 2022 Financial Results

Instructure Announces First Quarter 2022 Financial Results

First Quarter GAAP Revenue of $113.5 Million Grows 21% year over year

First Quarter Loss from Operations of $3.7 Million and Adjusted EBITDA of $43.6 Million

Salt Lake City, UT (May 2, 2022)—Instructure Holdings, Inc. (Instructure) (NYSE: INST), the makers of the Canvas Learning Management System, today announced financial results for the first quarter ended March 31, 2022.

“Instructure delivered a combination of strong, double-digit top line growth and record margins during the first quarter,” said Steve Daly, Instructure CEO. “Canvas continues to displace legacy LMS solutions worldwide and our Instructure Learning Platform strategy gained further traction during the quarter, with especially strong growth across our assessments portfolio. More recently, we welcomed the Concentric Sky team to Instructure as we work to help educational institutions better serve the non-traditional online market, an estimated $5 billion opportunity for Instructure. We look forward to the opportunity to bring more value to our clients, partners and shareholders in the months and years ahead."

Financial Highlights:

  • GAAP Revenue of $113.5 million, an increase of 21% year over year, or 26% year over year normalizing for the Bridge divestiture
  • Allocated Combined Receipts*, or ACR, of $114.0 million, an increase of 15% year over year, or 20%  year over year normalizing for the Bridge divestiture
  • Operating loss of $3.7 million, or negative 3.2% of revenue, and Non-GAAP operating income* of $42.5 million, or 37.3% of ACR
  • GAAP net loss of $5.5 million and Adjusted EBITDA* of $43.6 million, or 38.2% of ACR
  • Cash flow from operations of negative $65.9 million and Adjusted Unlevered Free Cash Flow* of negative $60.3 million
  • For the twelve months ended March 31, 2022, cash flow from operations of $97.9 million and Adjusted Unlevered Free Cash Flow* of $143.1 million

*See “Non-GAAP Financial Measures” for information regarding the Company’s use of non-GAAP financial measures as well as reconciliations to the most closely comparable GAAP measures in this press release.

Business and Operating Highlights:

  • Beginning in the first quarter, all 23 California State University (CSU) institutions, with a combined enrollment of over 485,000 students, had selected Instructure as their LMS provider. We now provide CSU universities with Canvas LMS as well as a number of additional Instructure Learning Platform solutions, including Studio, Impact, and Pathways.
  • Prince George’s Community College (PGCC) in Maryland selected Canvas to replace the legacy LMS incumbent. PGCC wanted to ensure a seamless transition for students first entering college, especially first-generation students. As the leading provider of K-12 and higher education solutions, Canvas was uniquely positioned to serve PGCC’s needs.
  • Spring Branch Independent School District in Houston chose Canvas to serve the 33,000 students enrolled across its 47-school district. For Spring Branch Independent School District, continuity with regional higher education institutions, as well as Canvas’s strong reputation in the wider Texas education community, were key factors in its decision to go with Canvas.
  • We signed an agreement with Universidade Presbiteriana Mackenzie for Canvas to replace their open source solution as their next-generation LMS. After 14 years with the incumbent, Universidade Presbiteriana Mackenzie chose Canvas because it met their need for a modern platform with an intuitive user experience across both desktop and mobile that would allow them to remain EdTech leaders in the Brazilian higher education market.
  • In April, we announced the acquisition of Concentric Sky, whose Badgr technology serves as the default micro-credentialing tool within Canvas LMS. Badgr’s stackable digital credentialing technology enables millions of non-traditional learners to demonstrate to potential employers the skills and achievements they have earned from over 25,000 organizations in 160 countries. We expect our rebranded Canvas Badges and Canvas Credentials offerings to advance our strategy to address the $5 billion non-traditional online market opportunity.

Business Outlook

Based on information as of today, May 2, 2022, the Company is issuing the following financial guidance.

Second Quarter Fiscal 2022:

  • Revenue is expected to be in the range of $110.2 million to $111.2 million   
  • ACR is expected to be in the range of $110.5 million to $111.5 million   
  • Non-GAAP operating income* is expected to be in the range of $35.8 million to $36.8 million
  • Adjusted EBITDA* is expected to be in the range of $37.0 million to $38.0 million
  • Non-GAAP net income* is expected to be in the range of $30.9 million to $31.9 million

Full Year 2022:

  • Revenue is expected to be in the range of $460.9 million to $464.9 million   
  • ACR is expected to be in the range of $461.8 million to $465.8 million
  • Non-GAAP operating income* is expected to be in the range of $160.1 million to $164.1 million
  • Adjusted EBITDA* is expected to be in the range of $164.8 million to $168.8 million
  • Non-GAAP net income* is expected to be in the range of $143.5 million to $147.5 million
  • Adjusted unlevered free cash flow* is expected to be in the range of $185.0 million to $189.0 million

*ACR, Non-GAAP operating income, Adjusted EBITDA, non-GAAP net income and adjusted unlevered free cash flow are non-GAAP measures. See "Non-GAAP Financial Measures" for a reconciliation of ACR to the most closely comparable GAAP measure. Instructure is unable to provide guidance, or a reconciliation, for operating loss and net loss, the most closely comparable GAAP measures with respect to non-GAAP operating income, Adjusted EBITDA, non-GAAP net income and adjusted unlevered free cash flow because Instructure cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. This is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including stock-based compensation and amortization of acquisition related intangibles. Thus, Instructure is unable to present a quantitative reconciliation of non-GAAP guidance to GAAP guidance because such information is not available.

Conference Call Information

Instructure’s management team will hold a conference call to discuss our first quarter results today, May 2, 2022 at 5:00 p.m. ET. The conference call can be accessed by dialing (888) 330-2384 from the United States and Canada or (240) 789-2701 internationally with conference ID 1348899. A live webcast and replay of the conference call can be accessed from the investor relations page of Instructure's website at ir.instructure.com. An archived replay of the webcast will be available following the conclusion of the call.

Non-GAAP Financial Measures

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

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

ACR. We define ACR as the combined receipts of our Company and companies that we have acquired allocated to the period of service delivery. We calculate ACR as the sum of (i) revenue and (ii) the impact of fair value adjustments to acquired unearned revenue related to Thoma Bravo’s acquisition of Instructure (the “Take-Private Transaction”) and the Certica Holdings, LLC (“Certica”), Eesysoft Software International B.V. (which was rebranded to “Impact by Instructure” or “Impact” subsequent to acquisition), and Kimono LLC (which was rebranded to “Elevate Data Sync” subsequent to acquisition) acquisitions where we do not believe such adjustments are reflective of our ongoing operations. Management uses this measure to evaluate organic growth of the business period over period, as if the Company had operated as a single entity and excluding the impact of acquisitions or adjustments due to purchase accounting.

Non-GAAP Operating Income.  We define non-GAAP operating income as loss from operations excluding the impact of stock-based compensation, restructuring, transaction and sponsor related costs, amortization of acquisition-related intangibles, and the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and the Certica, Impact and Elevate Data Sync acquisitions that we do not believe are reflective of our ongoing operations. We believe non-GAAP operating income is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance.

Non-GAAP Net Income. We define non-GAAP net income as net loss excluding the impact of stock-based compensation, amortization of acquisition-related intangibles, the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and the Certica, Impact and Elevate Data Sync acquisitions, restructuring, transaction and sponsor related costs that we do not believe are reflective of our ongoing operations. We believe Non-GAAP net income is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. Basic non-GAAP net income per common share attributable to common stockholders is computed by dividing non-GAAP net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted non-GAAP net income per common share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period.

Adjusted EBITDA. EBITDA is defined as earnings before debt-related costs, including interest and loss on debt extinguishment, benefit for taxes, depreciation, and amortization. We further adjust EBITDA to exclude certain items of a significant or unusual nature, including stock-based compensation, restructuring, transaction and sponsor related costs, amortization of acquisition-related intangibles, and the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and the Certica, Impact and Elevate Data Sync acquisitions. Although we exclude the amortization of acquisition-related intangibles from this non-GAAP measure, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

Free Cash Flow, Unlevered Free Cash Flow and Adjusted Unlevered Free Cash Flow. We define free cash flow as net cash used in operating activities less purchases of property and equipment and intangible assets, net of proceeds from disposals of property and equipment. We define unlevered free cash flow as free cash flow adjusted for cash paid for interest on outstanding debt and cash settled stock-based compensation. We define adjusted unlevered free cash flow as unlevered free cash flow adjusted for restructuring, transaction and sponsor related costs paid in cash. We believe free cash flow and adjusted unlevered free cash flow facilitate period-to-period comparisons of liquidity. We consider free cash flow and adjusted unlevered free cash flow to be important measures because they measure the amount of cash we generate and reflect changes in working capital.

Non-GAAP Cost of Revenue and Non-GAAP Operating Expenses. We define non-GAAP cost of revenue and non-GAAP operating expenses as GAAP cost of revenue and GAAP operating expenses, respectively, excluding the impact of stock-based compensation, restructuring, transaction and sponsor related costs, and amortization of acquisition-related intangibles, that we do not believe are reflective of our ongoing operations.

Non-GAAP Gross Profit. We define non-GAAP gross profit as gross profit excluding the impact of stock-based compensation, restructuring, transaction and sponsor related costs, amortization of acquisition-related intangibles, and fair value adjustments to deferred revenue in connection with purchase accounting, that we do not believe are reflective of our ongoing operations.

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 second quarter of 2022 and for the full year ending December 31, 2022, the Company's growth, customer demand and application adoption, the Company's research and development efforts and future application releases, and the Company's expectations regarding future revenue, expenses, cash flows and net income or loss.

These statements are not guarantees of future performance, but are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: risks associated with 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 most recent Annual Report on Form 10-K and subsequent Quarterly Report on Form 10-Q and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. All information provided in this press release and in the conference call is as of the date hereof and Instructure undertakes no duty to update this information except as required by law.

INSTRUCTURE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

   

March 31,
2022

   

December 31,
2021

   

Assets

 

(unaudited)

         

Current assets:

             

Cash and cash equivalents

 

$

100,854

   

$

164,928

   

Accounts receivable—net

   

36,606

     

51,607

   

Prepaid expenses

   

51,078

     

15,475

   

Deferred commissions

   

11,729

     

11,418

   

Other current assets

   

2,759

     

3,384

   

Total current assets

   

203,026

     

246,812

   

Property and equipment, net

   

11,115

     

10,792

   

Right-of-use assets

   

16,978

     

18,175

   

Goodwill

   

1,194,221

     

1,194,221

   

Intangible assets, net

   

596,005

     

629,746

   

Noncurrent prepaid expenses

   

1,404

     

1,553

   

Deferred commissions, net of current portion

   

19,490

     

20,105

   

Deferred tax assets

   

7,927

     

6,477

   

Other assets

   

5,979

     

5,901

   

Total assets

 

$

2,056,145

   

$

2,133,782

   

Liabilities and stockholders’ equity

             

Current liabilities:

             

Accounts payable

 

$

11,881

   

$

18,324

   

Accrued liabilities

   

23,069

     

28,408

   

Lease liabilities

   

6,880

     

6,666

   

Long-term debt, current

   

4,013

     

2,763

   

Deferred revenue

   

175,203

     

240,936

   

Total current liabilities

   

221,046

     

297,097

   

Long-term debt, net of current portion

   

489,497

     

490,500

   

Deferred revenue, net of current portion

   

13,772

     

14,740

   

Lease liabilities, net of current portion

   

21,996

     

23,678

   

Deferred tax liabilities

   

27,890

     

29,851

   

Other long-term liabilities

   

2,418

     

3,531

   

Total liabilities

   

776,619

     

859,397

   

Stockholders’ equity:

             

Accumulated deficit

   

1,413

     

1,407

   

Additional paid-in capital

   

1,550,318

     

1,539,638

   

Accumulated deficit

   

(272,205

)

   

(266,660

)

 

Total stockholders’ equity

   

1,279,526

     

1,274,385

   

Total liabilities and stockholders’ equity

 

$

2,056,145

   

$

2,133,782

   

INSTRUCTURE HOLDINGS, INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 

(in thousands, except per share data)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 
   

(unaudited)

 

Revenue:

           

Subscription and support

 

$

103,492

   

$

86,354

 

Professional services and other

   

9,970

     

7,626

 

Total revenue

   

113,462

     

93,980

 

Cost of revenue:

           

Subscription and support

   

35,546

     

39,884

 

Professional services and other

   

5,465

     

5,750

 

Total cost of revenue

   

41,011

     

45,634

 

Gross profit

   

72,451

     

48,346

 

Operating expenses:

           

Sales and marketing

   

43,321

     

41,222

 

Research and development

   

17,201

     

17,089

 

General and administrative

   

15,616

     

13,351

 

Impairment on disposal group

   

     

1,218

 

Total operating expenses

   

76,138

     

72,880

 

Loss from operations

   

(3,687

)

   

(24,534

)

Other income (expense):

           

Interest income

   

36

     

27

 

Interest expense

   

(4,553

)

   

(17,271

)

Other income (expense), net

   

306

     

(634

)

Total other income (expense), net

   

(4,211

)

   

(17,878

)

Loss before income taxes

   

(7,898

)

   

(42,412

)

Income tax benefit

   

2,353

     

9,341

 

Net loss and comprehensive loss

 

$

(5,545

)

 

$

(33,071

)

Net loss per common share, basic and diluted

 

$

(0.04

)

 

$

(0.26

)

Weighted-average common shares used in computing basic and diluted net loss per common share attributable to common stockholders

   

140,952

     

126,117

 

INSTRUCTURE HOLDINGS, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 
   

(unaudited)

 

Operating Activities:

           

Net loss

 

$

(5,545

)

 

$

(33,071

)

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

           

Depreciation of property and equipment

   

1,004

     

939

 

Amortization of intangible assets

   

33,741

     

33,365

 

Amortization of deferred financing costs

   

294

     

609

 

Impairment on disposal group

   

     

1,218

 

Stock-based compensation

   

7,813

     

2,633

 

Deferred income taxes

   

(3,411

)

   

(9,380

)

Other

   

(360

)

   

1,321

 

Changes in assets and liabilities:

           

Accounts receivable, net

   

14,779

     

16,906

 

Prepaid expenses and other assets

   

(34,733

)

   

(18,921

)

Deferred commissions

   

304

     

(52

)

Right-of-use assets

   

1,197

     

5,242

 

Accounts payable and accrued liabilities

   

(11,746

)

   

(8,633

)

Deferred revenue

   

(66,701

)

   

(50,486

)

Lease liabilities

   

(1,468

)

   

(1,643

)

Other liabilities

   

(1,113

)

   

1,221

 

Net cash used in operating activities

   

(65,945

)

   

(58,732

)

Investing Activities:

           

Purchases of property and equipment

   

(1,333

)

   

(411

)

Proceeds from sale of property and equipment

   

22

     

9

 

Proceeds from sale of Bridge

   

     

46,018

 

Net cash provided by (used in) investing activities

   

(1,311

)

   

45,616

 

Financing Activities:

           

Proceeds from issuance of common stock from employee equity plans

   

4,076

     

 

Shares repurchased for tax withholdings on vesting of restricted stock units

   

(1,263

)

   

 

Repurchase of TopCo units

   

     

(563

)

Repayments of long-term debt

   

     

(49,542

)

Net cash provided by (used in) financing activities

   

2,813

     

(50,105

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

   

590

     

 

Net decrease in cash, cash equivalents and restricted cash

   

(63,853

)

   

(63,221

)

Cash, cash equivalents and restricted cash, beginning of period

   

169,152

     

150,953

 

Cash, cash equivalents and restricted cash, end of period

 

$

105,299

   

$

87,732

 

Supplemental cash flow disclosure:

           

Cash paid for taxes

 

$

69

   

$

77

 

Interest paid

 

$

1,424

   

$

16,672

 

Non-cash investing and financing activities:

           

Capital expenditures incurred but not yet paid

 

$

119

   

$

17

 

RECONCILIATIONS OF NON-GAAP MEASURES TO GAAP MEASURES

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS

 

(in thousands)

 

(unaudited)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 

Revenue

 

$

113,462

   

$

93,980

 

Fair value adjustments to deferred revenue in connection with purchase accounting

   

499

     

4,758

 

Allocated combined receipts

 

$

113,961

   

$

98,738

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP OPERATING INCOME

 

(in thousands)

 

(unaudited)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 

Loss from operations

 

$

(3,687

)

 

$

(24,534

)

Stock-based compensation

   

9,476

     

5,585

 

Restructuring, transaction and sponsor related costs

   

2,470

     

13,057

 

Amortization of acquisition-related intangibles

   

33,739

     

33,361

 

Fair value adjustments to deferred revenue in connection with purchase accounting

   

499

     

4,758

 

Non-GAAP operating income

 

$

42,497

   

$

32,227

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP ADJUSTED EBITDA

 

(in thousands)

 

(unaudited)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 

Net loss

 

$

(5,545

)

 

$

(33,071

)

Interest on outstanding debt and loss on debt extinguishment

   

4,553

     

17,270

 

Benefit for taxes

   

(2,353

)

   

(9,341

)

Depreciation

   

1,004

     

939

 

Amortization

   

2

     

2

 

Stock-based compensation

   

9,476

     

5,585

 

Restructuring, transaction and sponsor related costs

   

2,178

     

13,057

 

Amortization of acquisition-related intangibles

   

33,739

     

33,361

 

Fair value adjustments to deferred revenue in connection with purchase accounting

   

499

     

4,758

 

Adjusted EBITDA

 

$

43,553

   

$

32,560

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF FREE CASH FLOW, UNLEVERED FREE CASH FLOW & ADJUSTED UNLEVERED FREE CASH FLOW

 

(in thousands)

 

(unaudited)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 
             

Net cash used in operating activities

 

$

(65,945

)

 

$

(58,732

)

Purchases of property and equipment

   

(1,333

)

   

(411

)

Proceeds from disposals of property and equipment

   

22

     

9

 

Free cash flow

 

$

(67,256

)

 

$

(59,134

)

Cash paid for interest on outstanding debt

   

1,424

     

16,672

 

Cash settled stock-based compensation

   

1,664

     

2,919

 

Unlevered free cash flow

 

$

(64,168

)

 

$

(39,543

)

Restructuring, transaction and sponsor related costs paid in cash

   

3,878

     

4,804

 

Adjusted unlevered free cash flow

 

$

(60,290

)

 

$

(34,739

)

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP NET INCOME

 

(in thousands, except per share data)

 

(unaudited)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 

Net loss

 

$

(5,545

)

 

$

(33,071

)

Stock-based compensation

   

9,476

     

5,585

 

Amortization of acquisition-related intangibles

   

33,739

     

33,361

 

Fair value adjustments to deferred revenue in connection with purchase accounting

   

499

     

4,758

 

Restructuring, transaction and sponsor related costs

   

2,178

     

13,057

 

Non-GAAP net income

 

$

40,347

   

$

23,690

 

Non-GAAP net income per common share, basic

 

$

0.29

   

$

0.19

 

Non-GAAP net income per common share, diluted

 

$

0.28

   

$

0.19

 

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

   

140,952

     

126,117

 

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

   

142,710

     

126,117

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP GROSS PROFIT

 

(in thousands)

 

(unaudited)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 

Gross profit

 

$

72,451

   

$

48,346

 

Stock-based compensation

   

658

     

401

 

Restructuring, transaction and sponsor related costs

   

63

     

2,770

 

Amortization of acquisition-related intangibles

   

15,690

     

15,415

 

Fair value adjustments to deferred revenue in connection with purchase accounting

   

499

     

4,758

 

Non-GAAP gross profit

 

$

89,361

   

$

71,690

 
             

GAAP gross margin

   

63.9

%

   

51.4

%

Non-GAAP gross margin

   

78.4

%

   

72.6

%

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF ACR NORMALIZED FOR BRIDGE DIVESTITURE

 

(in thousands)

 

(unaudited)

 
   

Three months
ended March 31,

 
   

2022

   

2021

 

Revenue

 

$

113,462

   

$

93,980

 

Bridge revenue - Subscription and support

   

   

$

(3,332

)

Bridge revenue - Professional services and other

   

     

(330

)

Revenue normalized for Bridge divestiture

 

$

113,462

   

$

90,318

 

Fair value adjustments to deferred revenue in connection with purchase accounting

   

499

     

4,758

 

Fair value adjustments to Bridge deferred revenue in connection with purchase accounting - Subscription and support

   

     

(206

)

Fair value adjustments to Bridge deferred revenue in connection with purchase accounting - Professional services and other

   

     

(20

)

Allocated combined receipts normalized for Bridge divestiture

 

$

113,961

   

$

94,850

 

INSTRUCTURE HOLDINGS, INC.

   

RECONCILIATION OF FREE CASH FLOW, UNLEVERED FREE CASH FLOW & ADJUSTED UNLEVERED FREE CASH FLOW

   

(in thousands)

   

(unaudited)

   
   

Successor

     

Predecessor

   
   

Three months
ended March 31,

   

Three months
ended December 31,

   

Three months
ended September 30,

   

Three months
ended June 30,

   

Three months
ended March 31,

   

Three months
ended December 31,

   

Three months
ended September 30,

   

Three months
ended June 30,

     

Three months
ended March 31,

 
   

2022

   

2021

   

2021

   

2021

   

2021

   

2020

   

2020

   

2020

     

2020

 
                                                         

Net cash used in operating activities

 

$

(65,945

)

 

$

(3,673

)

 

$

161,183

   

$

6,365

   

$

(58,732

)

 

$

(5,076

)

 

$

100,285

   

$

(58,325

)

   

$

(57,058

)

Purchases of property and equipment

   

(1,333

)

   

(1,459

)

   

(1,193

)

   

(1,196

)

   

(411

)

   

(776

)

   

(807

)

   

(51

)

     

(732

)

Proceeds from disposals of property and equipment

   

22

     

13

     

16

     

15

     

9

     

14

     

38

     

29

       

19

 

Free cash flow

 

$

(67,256

)

 

$

(5,119

)

 

$

160,006

   

$

5,184

   

$

(59,134

)

 

$

(5,838

)

 

$

99,516

   

$

(58,347

)

   

$

(57,771

)

Cash paid for interest on outstanding debt

   

1,424

     

5,756

     

10,553

     

15,077

     

16,672

     

16,472

     

17,060

     

17,389

       

-

 

Cash settled stock-based compensation

   

1,664

     

1,522

     

1,651

     

1,524

     

2,919

     

4,003

     

4,105

     

33,328

       

-

 

Unlevered free cash flow

 

$

(64,168

)

 

$

2,159

   

$

172,210

   

$

21,785

   

$

(39,543

)

 

$

14,637

   

$

120,681

   

$

(7,630

)

   

$

(57,771

)

Restructuring, transaction and sponsor related costs paid in cash

   

3,878

     

1,884

     

2,115

     

3,282

     

4,804

     

6,306

     

2,680

     

12,758

       

8,058

 

Adjusted unlevered free cash flow

 

$

(60,290

)

 

$

4,043

   

$

174,325

   

$

25,067

   

$

(34,739

)

 

$

20,943

   

$

123,361

   

$

5,128

     

$

(49,713

)

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP COST OF REVENUE

 

Three Months Ended March 31, 2022

 

(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

 

$

35,546

     

(282

)

   

(9

)

   

(15,690

)

 

$

19,565

 

Professional services and other

   

5,465

     

(376

)

   

(54

)

   

     

5,035

 

Total cost of revenue

 

$

41,011

     

(658

)

   

(63

)

   

(15,690

)

 

$

24,600

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP COST OF REVENUE

 

Three Months Ended March 31, 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

 

$

39,884

     

(224

)

   

(1,921

)

   

(15,415

)

 

$

22,324

 

Professional services and other

   

5,750

     

(177

)

   

(849

)

   

     

4,724

 

Total cost of revenue

 

$

45,634

     

(401

)

   

(2,770

)

   

(15,415

)

 

$

27,048

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Three Months Ended March 31, 2022

 

(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

 

$

43,321

     

(2,577

)

   

(280

)

   

(18,049

)

 

$

22,415

 

Research and development

   

17,201

     

(2,540

)

   

(290

)

   

     

14,371

 

General and administrative

   

15,616

     

(3,701

)

   

(1,837

)

   

     

10,078

 

Total operating expenses

 

$

76,138

     

(8,818

)

   

(2,407

)

   

(18,049

)

 

$

46,864

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

 

Three Months Ended March 31, 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

 

$

41,222

     

(1,582

)

   

(2,251

)

   

(17,946

)

 

$

19,443

 

Research and development

   

17,089

     

(1,670

)

   

(2,551

)

   

     

12,868

 

General and administrative

   

13,351

     

(1,932

)

   

(4,267

)

   

     

7,152

 

Impairment on disposal group

   

1,218

     

     

(1,218

)

   

     

 

Total operating expenses

 

$

72,880

   

$

(5,184

)

 

$

(10,287

)

 

$

(17,946

)

 

$

39,463

 

INSTRUCTURE HOLDINGS, INC.

 

RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS GUIDANCE

 

(in thousands)

 

(unaudited)

 
   

Three Months
Ending June 30, 2022

   

Full Year
Ending December 31, 2022

 
   

LOW

   

HIGH

   

LOW

   

HIGH

 

Revenue

 

$

110,200

   

$

111,200

   

$

460,900

   

$

464,900

 

Fair value adjustments to deferred revenue in connection with purchase accounting

   

300

     

300

     

900

     

900

 

Allocated combined receipts

 

$

110,500

   

$

111,500

   

$

461,800

   

$

465,800

 

For More Information:


Media Relations: 
Brian Watkins
Corporate Communications
Instructure
(801) 610-9722
[email protected]

Investor Relations: 
Denise Garcia
Alex Liloia
Hayflower Partners
(646) 918-4041
[email protected]

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

Brian Watkins
Corporate Communications

Instructure

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