executive departures.
(4) Refers to direct transaction and debt-related fees reflected in our
acquisition costs line item of our income statement and incremental
acquisition-related costs that are incurred to perform diligence,
execute and integrate acquisitions, including retention awards and
severance for acquired employees, and other transaction and integration
expenses. Also, refers to the fair value adjustments recorded to the
contingent consideration liability related to the acquisitions of
Kinvolved, Inc. ("Kinvolved") and Chalk.com Education ULC ("Chalk").
These incremental costs are embedded in our research and development,
selling, general and administrative, and cost of revenue line items.
(5) Represents Adjusted EBITDA as a percentage of revenue.
Reconciliation of net loss to Non-GAAP Net Income
Three Months Ended March 31,
----------------------------------
(in thousands, except per share
data) 2024 2023
------------ -----------
Net loss $ (22,848) $ (14,813)
------------ -----------
Add:
Amortization 35,492 30,873
Depreciation 937 918
Share-based compensation 14,685 15,481
Management fees (1) 80 63
Restructuring (2) 3,858 1,366
Acquisition-related expense (3) 3,202 1,534
------------ -----------
Non-GAAP Net Income $ 35,407 $ 35,422
============ ===========
Weighted-average Class A common
stock used in computing GAAP net
loss per share, basic 165,037,089 160,506,571
------------ -----------
Weighted-average Class A common
stock used in computing GAAP net
loss per share, diluted 202,691,148 160,506,571
Weighted-average shares Class A
common stock used in computing
Non-GAAP net income, basic 165,037,089 160,506,571
Dilutive impact of LLC Units 37,654,059 37,654,059
Dilutive impact of Restricted
Shares and RSUs 926,215 1,262,790
Dilutive impact of Market-share
units 510,314 26,027
------------ -----------
Weighted-average shares Class A
common stock used in computing
Non-GAAP net income per share,
diluted 204,127,677 199,449,447
GAAP net loss attributable to the
PowerSchool Holdings, Inc. per
share of Class A common stock,
basic $ (0.12) $ (0.07)
------------ -----------
Non-GAAP net income attributable to
the PowerSchool Holdings, Inc. per
share of Class A common stock,
basic $ 0.21 $ 0.22
------------ -----------
GAAP net loss attributable to the
PowerSchool Holdings, Inc. per
share of Class A common stock,
diluted $ (0.12) $ (0.07)
------------ -----------
Non-GAAP net income attributable to
the PowerSchool Holdings, Inc. per
share of Class A common stock,
diluted $ 0.17 $ 0.18
______________
(1) Refers to expense associated with collaboration with our principal
stockholders and their internal consulting groups.
(2) Refers to costs incurred related to migration of customers from legacy
to core products, remaining lease obligations for abandoned facilities,
severance expense related to offshoring activities, facility closures,
executive departures, loss on modification of debt, and nonrecurring
litigation expense.
(3) Refers to direct transaction and debt-related fees reflected in our
acquisition costs line item of our income statement and incremental
acquisition-related costs that are incurred to perform diligence,
execute and integrate acquisitions, including retention awards and
severance for acquired employees, and other transaction and integration
expenses. Also, refers to the fair value adjustments recorded to the
contingent consideration liability related to the acquisitions of
Kinvolved and Chalk. These incremental costs are embedded in our
research and development, selling, general and administrative, and cost
of revenue line items.
Reconciliation of GAAP to Non-GAAP Cost of Revenue and Operating Expenses
Three Months Ended March 31,
--------------------------------
(in thousands) 2024 2023
------------------ ------------
GAAP Cost of Revenue - Subscriptions and
Support $ 46,327 $ 38,194
---- ------------ -----------
Less:
Share-based compensation 1,549 1,556
Restructuring 1,021 --
Acquisition-related expense 136 22
---- ------------ -----------
Non-GAAP Cost of Revenue - Subscription
and Support $ 43,621 $ 36,616
==== ============ ===========
GAAP Cost of Revenue - Service $ 13,383 $ 14,323
---- ------------ -----------
Less:
Share-based compensation 723 902
Restructuring 257 13
Acquisition-related expense 40 65
---- ------------ -----------
Non-GAAP Cost of Revenue - Service $ 12,363 $ 13,343
==== ============ ===========
GAAP Research & Development $ 31,651 $ 25,421
---- ------------ -----------
Less:
Share-based compensation 3,636 4,072
Restructuring 2,396 105
Acquisition-related expense 493 1,376
---- ------------ -----------
Non-GAAP Research & Development $ 25,126 $ 19,868
==== ============ ===========
GAAP Selling, General and Administrative $ 52,432 $ 49,558
---- ------------ -----------
Less:
Share-based compensation 8,777 8,951
Management fees 80 63
Restructuring 145 1,248
Acquisition-related expense 1,780 70
---- ------------ -----------
Non-GAAP Selling, General and
Administrative $ 41,650 $ 39,226
==== ============ ===========
Reconciliation of Net Cash Used in Operating Activities to Free Cash
Flow and Unlevered Free Cash Flow
Three Months Ended March 31,
----------------------------------
(in thousands) 2024 2023
--- ------------ ----------
Net cash used in operating
activities $ (89,685) $ (60,027)
Purchases of property and
equipment (3,887) (356)
Capitalized product
development costs (8,956) (9,676)
--- ------------ ----------
Free Cash Flow $ (102,527) $ (70,059)
Add:
Cash paid for interest on
outstanding debt 19,129 13,695
--- ------------ ----------
Unlevered Free Cash Flow $ (83,398) $ (56,364)
=== ============ ==========
(c) PowerSchool. PowerSchool and other PowerSchool marks are trademarks of PowerSchool Holdings, Inc., or its subsidiaries. Other names and brands may be claimed as the property of others.
PWSC-F
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507890237/en/
CONTACT: Investor Contact:
Shane Harrison
investor.relations@PowerSchool.com
855-707-5100
Media Contact:
Beth Keebler
public.relations@powerschool.com
503-702-4230
(END) Dow Jones Newswires
May 07, 2024 16:17 ET (20:17 GMT)
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