PowerSchool Holdings, Inc. (NYSE: PWSC), a leading provider of cloud-based software for K-12 education in North America, has released its financial results for the second quarter ending June 30, 2024. Hardeep Gulati, CEO of PowerSchool, expressed satisfaction with the company’s performance, highlighting its leadership in K-12 software and continued innovation with new products like MyPowerHub and expanded modules of the AI-powered PowerBuddy platform. Gulati also noted excitement about the company’s growth prospects with its partnership with Bain Capital.
Second Quarter 2024 Financial Highlights
- Revenue: Total revenue for the quarter was $191.6 million, reflecting a 10% increase year-over-year.
- Subscriptions and Support Revenue: This segment saw a 16% rise to $170.1 million year-over-year.
- Gross Profit: GAAP gross profit was $111.8 million (58% of total revenue), while Adjusted Gross Profit was $133.6 million (70% of total revenue).
- Net Income/Loss: GAAP net loss was $25.7 million (13% of total revenue), compared to a Non-GAAP Net Income of $48.1 million (25% of total revenue).
- Adjusted EBITDA: Reached $66.6 million, up 9% from the previous year, representing 35% of total revenue.
- Earnings/Loss Per Share: GAAP net loss per diluted share was $0.12, based on 203.7 million shares outstanding. Non-GAAP net income per diluted share was $0.23, based on 205.0 million shares outstanding.
- Cash Flow: Net cash used in operating activities was $47.4 million, or 25% of total revenue.
Recent Business Highlights
- Customer Success: Secured significant deals, including a data-as-a-service contract with the Arkansas State Department of Education and additional cross-sells to multiple school districts.
- New Product Launch: Introduced MyPowerHub, a comprehensive communications platform that integrates student information and enhances school-community communication, promising cost savings for districts.
- 2024 Education Focus Report: Released a report detailing challenges and innovations in U.S. education, based on a survey of 1,620 educators. Key insights include the importance of personalized learning, AI in education, bold leadership, and strong school-home connections.
- AI Enhancements: Launched PowerBuddy for Learning Student Assistant and PowerBuddy for Data Analysis, which use AI to improve the learning experience and streamline data analysis.
- International Expansion: Released Arabic-translated and localized products for the Middle East, featuring right-to-left interface support and other regional adaptations.
Eric Shander, President and CFO, praised the company’s performance and reiterated confidence in its software products’ ability to enhance school operations and deliver long-term value.
In light of the proposed transaction with Bain Capital announced on June 7, 2024, PowerSchool will not hold an earnings conference call and is suspending financial guidance. The company anticipates closing the transaction in the second half of 2024.
