Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40684 | |
Entity Registrant Name | PowerSchool Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-4166024 | |
Entity Address, Address Line One | 150 Parkshore Drive | |
Entity Address, City or Town | Folsom | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95630 | |
City Area Code | 877 | |
Local Phone Number | 873-1550 | |
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | |
Trading Symbol | PWSC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Smaller Reporting Company | false | |
Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 201,190,136 | |
Entity Central Index Key | 0001835681 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 28,394 | $ 137,471 |
Accounts receivable - net of allowance of $5,283 and $4,712, respectively | 78,082 | 54,296 |
Prepaid expenses and other current assets | 39,563 | 36,886 |
Total current assets | 146,039 | 228,653 |
Property and equipment - net | 5,286 | 6,173 |
Operating lease right-of-use assets | 7,173 | 8,877 |
Capitalized Computer Software, Net | 107,930 | |
Goodwill | 2,487,235 | 2,487,007 |
Intangible assets - net | 674,843 | 722,147 |
Other assets | 32,657 | 29,677 |
Total assets | 3,461,163 | 3,583,395 |
Current Liabilities: | ||
Accounts payable | 5,652 | 5,878 |
Accrued expenses | 98,399 | 84,270 |
Operating lease liabilities, current | 4,503 | 5,263 |
Deferred revenue, current | 185,781 | 310,536 |
Revolving credit facility | 10,000 | 0 |
Current portion of long-term debt | 7,750 | 7,750 |
Total current liabilities | 312,085 | 413,697 |
Noncurrent Liabilities: | ||
Other liabilities | 2,121 | 2,099 |
Operating lease liabilities - net of current | 5,150 | 8,053 |
Deferred taxes | 270,799 | 281,314 |
Tax Receivable Agreement liability | 392,671 | 410,361 |
Deferred revenue - net of current | 6,096 | 5,303 |
Long-term debt, net | 726,211 | 728,624 |
Total liabilities | 1,715,133 | 1,849,451 |
Commitments and contingencies (Note 12) | ||
Stockholders' Equity: | ||
Additional paid-in capital | 1,493,586 | 1,438,019 |
Accumulated other comprehensive loss | (2,012) | (2,122) |
Accumulated deficit | (202,298) | (187,250) |
Total stockholders' equity attributable to PowerSchool Holdings, Inc. | 1,289,296 | 1,248,667 |
Non-controlling interest | 456,734 | 485,277 |
Total stockholders' equity | 1,746,030 | 1,733,944 |
Total liabilities and stockholders' equity | 3,461,163 | 3,583,395 |
Class A common stock | ||
Stockholders' Equity: | ||
Common stock | 16 | 16 |
Class B common stock | ||
Stockholders' Equity: | ||
Common stock | $ 4 | $ 4 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accounts receivable, allowance for credit losses | $ 5,283 | $ 4,712 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 163,456,861 | 159,596,001 |
Common stock, shares outstanding (in shares) | 163,456,861 | 159,596,001 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 37,654,059 | 39,928,472 |
Common stock, shares outstanding (in shares) | 37,654,059 | 39,928,472 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 173,897 | $ 157,591 | $ 333,350 | $ 307,184 |
Cost of revenue: | ||||
Depreciation and amortization | 16,108 | 14,271 | 32,129 | 28,230 |
Total cost of revenue | 69,029 | 67,985 | 138,518 | 135,961 |
Gross profit | 104,868 | 89,606 | 194,832 | 171,223 |
Operating expenses: | ||||
Research and development | 25,862 | 26,088 | 51,283 | 52,706 |
Selling, general, and administrative | 53,129 | 47,484 | 102,687 | 87,587 |
Acquisition costs | 0 | 1,043 | 0 | 2,618 |
Depreciation and amortization | 15,764 | 16,137 | 31,535 | 32,095 |
Total operating expenses | 94,755 | 90,752 | 185,505 | 175,006 |
Income (loss) from operations | 10,113 | (1,146) | 9,327 | (3,783) |
Interest expense - net | 16,101 | 8,743 | 30,130 | 15,765 |
Other expenses (income) - net | 31 | (498) | 74 | (576) |
Loss before income taxes | (6,019) | (9,391) | (20,877) | (18,972) |
Income tax (benefit) expense | (1,724) | (2,933) | (1,769) | 1,605 |
Net loss | (4,295) | (6,458) | (19,108) | (20,577) |
Less: Net loss attributable to non-controlling interest | (1,100) | (1,933) | (4,060) | (3,940) |
Net loss attributable to PowerSchool Holdings, Inc. | $ (3,195) | $ (4,525) | $ (15,048) | $ (16,637) |
Net loss attributable to the PowerSchool Holdings, Inc. per share of Class A common stock - basic (in dollars per share) | $ (0.02) | $ (0.03) | $ (0.09) | $ (0.11) |
Net loss attributable to the PowerSchool Holdings, Inc. per share of Class A common stock - diluted (in dollars per share) | $ (0.02) | $ (0.03) | $ (0.09) | $ (0.11) |
Weighted average shares of Class A common stock outstanding - basic (in shares) | 163,067,859 | 158,229,171 | 161,794,290 | 158,171,056 |
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 200,721,918 | 158,229,171 | 161,794,290 | 158,171,056 |
Change in unrealized gain on investments | $ 21 | $ 345 | $ 108 | $ (125) |
Total other comprehensive income (loss) | 21 | 345 | 111 | (125) |
Less: comprehensive income (loss) attributable to non-controlling interest | 4 | 70 | 21 | (25) |
Comprehensive loss attributable to PowerSchool Holdings, Inc. | (3,178) | (4,250) | (14,958) | (16,737) |
Unrealized Gain (Loss) on Investments | 0 | 0 | 3 | 0 |
Net Income (Loss) Available to Common Stockholders, Basic | (3,195) | (4,525) | (15,048) | (16,637) |
Net Income (Loss) Available to Common Stockholders, Diluted | (4,080) | (4,525) | (15,048) | (16,637) |
Subscriptions and support | ||||
Revenue: | ||||
Total revenue | 146,503 | 135,010 | 287,576 | 264,775 |
Cost of revenue: | ||||
Cost of revenue, excluding depreciation and amortization | 36,781 | 37,260 | 74,975 | 75,294 |
Service | ||||
Revenue: | ||||
Total revenue | 20,197 | 19,119 | 36,429 | 35,182 |
Cost of revenue: | ||||
Cost of revenue, excluding depreciation and amortization | 15,123 | 15,737 | 29,446 | 30,734 |
License and other | ||||
Revenue: | ||||
Total revenue | 7,197 | 3,462 | 9,345 | 7,227 |
Cost of revenue: | ||||
Cost of revenue, excluding depreciation and amortization | $ 1,017 | $ 717 | $ 1,968 | $ 1,703 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’/ MEMBERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Class A common stock | Class B common stock | Common stock Class A common stock | Common stock Class B common stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit | Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment | Non-controlling interest |
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2021 | 158,034 | 39,928 | |||||||||
Stockholders' equity, beginning balance at Dec. 31, 2021 | $ 1,722,958 | $ (1,437) | $ 16 | $ 4 | $ 1,399,967 | $ (216) | $ (165,026) | $ (1,437) | $ 488,213 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock upon vesting of Restricted Stock Awards (in shares) | 116 | ||||||||||
Management incentive unit and share-based compensation | 12,209 | 12,209 | |||||||||
Foreign currency translation | (469) | (469) | |||||||||
Allocation of equity to noncontrolling interests | (2,024) | 2,024 | |||||||||
Adjustments to deferred taxes and Tax Receivable Agreement liability related to secondary offering | 212 | 212 | |||||||||
Net loss | (14,120) | (12,113) | (2,007) | ||||||||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2022 | 158,150 | 39,928 | |||||||||
Stockholders' equity, ending balance at Mar. 31, 2022 | 1,719,058 | $ 16 | $ 4 | 1,410,069 | (685) | (178,576) | 488,230 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Exchange of Class B common stock for Class A common stock related to secondary offering | (295) | (295) | |||||||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2021 | 158,034 | 39,928 | |||||||||
Stockholders' equity, beginning balance at Dec. 31, 2021 | 1,722,958 | $ (1,437) | $ 16 | $ 4 | 1,399,967 | (216) | (165,026) | $ (1,437) | 488,213 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (20,577) | ||||||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2022 | 158,266 | 39,928 | |||||||||
Stockholders' equity, ending balance at Jun. 30, 2022 | 1,727,003 | $ 16 | $ 4 | 1,422,401 | (1,219) | (183,101) | 488,902 | ||||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2022 | 158,150 | 39,928 | |||||||||
Stockholders' equity, beginning balance at Mar. 31, 2022 | 1,719,058 | $ 16 | $ 4 | 1,410,069 | (685) | (178,576) | 488,230 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock upon vesting of Restricted Stock Awards (in shares) | 116 | ||||||||||
Management incentive unit and share-based compensation | 14,937 | 14,937 | |||||||||
Foreign currency translation | (534) | (534) | |||||||||
Allocation of equity to noncontrolling interests | (2,605) | 2,605 | |||||||||
Net loss | (6,458) | (4,525) | (1,933) | ||||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2022 | 158,266 | 39,928 | |||||||||
Stockholders' equity, ending balance at Jun. 30, 2022 | 1,727,003 | $ 16 | $ 4 | 1,422,401 | (1,219) | (183,101) | 488,902 | ||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 159,596 | 39,928 | |||||||||
Stockholders' equity, beginning balance at Dec. 31, 2022 | 1,733,944 | $ 16 | $ 4 | 1,438,019 | (2,122) | (187,250) | 485,277 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock upon vesting of Restricted Stock Awards (in shares) | 1,000 | ||||||||||
Management incentive unit and share-based compensation | 15,280 | 15,280 | |||||||||
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | (1,284) | 1,284 | |||||||||
Foreign currency translation | 89 | 89 | |||||||||
Allocation of equity to noncontrolling interests | 0 | (772) | 772 | ||||||||
Exchange of Class B common stock for Class A common stock related to secondary offering | $ 2,274 | $ (2,274) | 27,642 | (27,642) | |||||||
Adjustments to deferred taxes and Tax Receivable Agreement liability related to secondary offering | (1,255) | (1,255) | |||||||||
Net loss | (14,813) | (11,853) | (2,960) | ||||||||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2023 | 162,870 | 37,654 | |||||||||
Stockholders' equity, ending balance at Mar. 31, 2023 | 1,731,961 | $ 16 | $ 4 | 1,477,630 | (2,033) | (199,103) | 455,447 | ||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2022 | 159,596 | 39,928 | |||||||||
Stockholders' equity, beginning balance at Dec. 31, 2022 | 1,733,944 | $ 16 | $ 4 | 1,438,019 | (2,122) | (187,250) | 485,277 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (19,108) | ||||||||||
Member's investment, ending balance at Jun. 30, 2023 | 1,746,030 | (2,012) | (202,298) | ||||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2023 | 163,456 | 37,654 | |||||||||
Stockholders' equity, ending balance at Jun. 30, 2023 | 1,746,030 | $ 16 | $ 4 | 1,493,586 | 456,734 | ||||||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2023 | 162,870 | 37,654 | |||||||||
Stockholders' equity, beginning balance at Mar. 31, 2023 | 1,731,961 | $ 16 | $ 4 | 1,477,630 | (2,033) | (199,103) | 455,447 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of common stock upon vesting of Restricted Stock Awards (in shares) | 586 | ||||||||||
Management incentive unit and share-based compensation | 18,261 | 18,261 | |||||||||
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | (141) | 141 | |||||||||
Foreign currency translation | 21 | 21 | |||||||||
Allocation of equity to noncontrolling interests | (2,387) | 2,387 | |||||||||
Adjustments to deferred taxes and Tax Receivable Agreement liability related to secondary offering | 223 | 223 | |||||||||
Net loss | (4,295) | (3,195) | (1,100) | ||||||||
Member's investment, ending balance at Jun. 30, 2023 | 1,746,030 | $ (2,012) | $ (202,298) | ||||||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2023 | 163,456 | 37,654 | |||||||||
Stockholders' equity, ending balance at Jun. 30, 2023 | $ 1,746,030 | $ 16 | $ 4 | $ 1,493,586 | $ 456,734 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Cash flows from operating activities: | |||||||
Net loss | $ (4,295) | $ (14,813) | $ (6,458) | $ (14,120) | $ (19,108) | $ (20,577) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 63,664 | 60,307 | |||||
Share-based compensation | 32,043 | 25,610 | |||||
Operating Lease, Right-of-Use Asset, Amortization Expense | (1,599) | (482) | |||||
Fair value adjustments | (635) | (635) | (5,926) | $ (4,886) | |||
Amortization of Debt Issuance Costs | 1,761 | 1,761 | |||||
Prepaid expenses and other current assets | 1,364 | (495) | |||||
Gain (Loss) on Termination of Lease | 53 | 0 | |||||
Gain (Loss) on Disposition of Property Plant Equipment | 8,617 | (41) | |||||
Changes in operating assets and liabilities — net of effects of acquisitions: | |||||||
Accounts receivables | (25,151) | (6,643) | |||||
Prepaid expenses and other current assets | (2,687) | 3,315 | |||||
Other assets | (3,277) | (3,815) | |||||
Accounts payable | (183) | (5,112) | |||||
Accrued expenses | (12,207) | (7,854) | |||||
Other liabilities | (3,222) | (5,217) | |||||
Deferred taxes | (2,834) | 1,579 | |||||
Deferred revenue | (123,962) | (125,387) | |||||
Net cash used in operating activities | (92,741) | (80,319) | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (938) | (2,201) | |||||
Investment in capitalized product development costs | (19,948) | (20,927) | |||||
Acquisitions—net of cash acquired | 0 | (31,155) | |||||
Payment | 0 | (1,392) | (1,392) | ||||
Net cash used in investing activities | (20,886) | (55,675) | |||||
Cash flows from financing activities: | |||||||
Payment, Tax Withholding, Share-based Payment Arrangement | (1,425) | ||||||
Proceeds from Revolving Credit Agreement | 10,000 | 70,000 | |||||
Payments of deferred offering costs | 0 | (295) | |||||
Net cash provided by financing activities | 4,700 | 65,830 | |||||
Effect of foreign exchange rate changes on cash | (161) | (872) | |||||
Net decrease in cash, cash equivalents, and restricted cash | (109,088) | (71,036) | |||||
Cash, cash equivalents, and restricted cash—Beginning of period | $ 137,982 | $ 86,991 | 137,982 | 86,991 | 86,991 | ||
Cash, cash equivalents, and restricted cash—End of period | 28,894 | 15,955 | 28,894 | 15,955 | 137,982 | ||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for interest | 27,669 | 14,172 | |||||
Cash paid for income taxes | 1,806 | 1,106 | |||||
Supplemental disclosures of noncash investing and financing activities: | |||||||
Property and equipment additions in accounts payable and accrued liabilities | 83 | 88 | |||||
Capitalized interest related to investment in capitalized product development costs | 753 | 243 | |||||
Reconciliation of cash, cash equivalents, and restricted cash | |||||||
Cash and cash equivalents | 28,394 | 15,445 | 28,394 | 15,445 | 137,471 | ||
Restricted cash, included in other current assets | 500 | 510 | 500 | 510 | |||
Total cash, cash equivalents, and restricted cash | $ 28,894 | $ 15,955 | 28,894 | 15,955 | $ 137,982 | ||
First Lien Debt | |||||||
Cash flows from financing activities: | |||||||
Repayments of lines of credit | $ (3,875) | $ (3,875) |
BUSINESS
BUSINESS | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Background and Nature of Operations PowerSchool Holdings, Inc. (the “Company,” “PowerSchool,” “we,” “us,” or “our” ) was formed as a Delaware corporation on November 30, 2020 for the purpose of completing an initial public offering (“IPO”) and a series of transactions in order to carry on the business of PowerSchool Holdings LLC (“Holdings LLC”), formerly known as Severin Holdings, LLC . Our Principal Stockholders are Onex Partners Managers LP (“Onex”) and Vista Equity Partners (“Vista”). The transactions included amendments to the Company’s operating agreement to modify its capital structure by replacing the membership interests then held by its existing owners with a new class of membership interests (“LLC Units”) held initially by Severin Topco LLC (“Topco LLC”), a portion of which have a participation threshold (the “Participation Units”) and appointing the Company as the sole managing member of Holdings LLC; issuance of unrestricted and restricted Class A common stock in exchange for vested and unvested pre-IPO share-based awards, issuance of 39,928,472 shares of Class B common stock, par value $0.0001 per share to Topco LLC, on a one-to-one basis with the number of LLC Units (other than Participation Units), restructuring of certain entities (“Blocker Entities”) associated with the Principal Stockholders, and execution of an exchange agreement (the “Exchange Agreement”) with Topco LLC. Pursuant to the Exchange Agreement, Topco LLC is entitled to exchange LLC Units (other than Participation Units), together with an equal number of shares of Class B common stock, for shares of Class A common stock on a one-for-one basis or, at its election, for cash from a substantially concurrent public offering or private sale. Participation Units may be exchanged for a number of shares of Class A common stock based on an exchange formula that takes into account the current value of a share of Class A common stock and a pre-determined participation threshold. Additionally, the Company entered into a tax receivable agreement (the “TRA”) with Topco LLC, and the Principal Stockholders that provides for the payment by the Company to Topco LLC and the Principal Stockholders, collectively, of 85% of the amount of cash savings, if any, in U.S. federal, state and local income taxes. Collectively, these transactions are referred to as “Organizational Transactions”. The Company’s cloud platform is an integrated, enterprise-scale suite of solutions purpose-built for the K-12 education market. The Company’s platform is embedded in school workflows and is used by educators, students, administrators, and parents. Its cloud-based technology platform helps schools and districts efficiently manage state reporting and related compliance, special education, finance, human resources, talent, registration, attendance, funding, learning, instruction, grading, assessments and analytics in one unified platform. The Company’s integrated technology approach streamlines operations, aggregates disparate data sets, and develops insights using predictive modelling and machine learning. The Company is headquartered in Folsom, California, and together with its subsidiaries has locations in the United States (“U.S.”), Canada, India, and the United Arab Emirates (“UAE”). |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS We did not have any acquisitions during the six months ended June 30, 2023 and completed three acquisitions in fiscal year 2022. The purchase price allocation for acquisitions, discussed in detail below, reflects various fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, income taxes and goodwill, which are subject to change within the measurement period as preliminary valuations are finalized. Measurement period adjustments are recorded in the reporting period in which the estimates are finalized and adjustment amounts are determined. The fair value of the assets and liabilities acquired are based on valuations using the Level 3, unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The results of operations of these business combinations have been included in the Company’s consolidated financial statements from their respective acquisition dates. Fiscal 2022 Acquisitions Kinvolved, Inc. On February 1, 2022, the Company acquired all of the equity interests of Kinvolved, Inc. (“Kinvolved”). Kinvolved is a leading provider of K-12 communications, attendance and engagement solutions software. The purpose of the acquisition was to enhance and expand PowerSchool’s product offering. The total purchase price for Kinvolved was $23.3 million, which included $16.2 million of cash and additional contingent cash consideration, payable based on the achievement of certain performance conditions. The acquisition-date fair value of the contingent consideration was $7.1 million. Transaction costs of $1.2 million are recorded in acquisition costs in the consolidated statements of operations and comprehensive loss. The Company has accounted for this acquisition as a business combination and recognized intangible assets of $4.5 million and net tangible assets of $0.2 million. The Company recorded $18.6 million of goodwill arising from the acquisition, none of which is expected to be deductible for tax purposes. The goodwill is a result of the growth expected by creating a comprehensive education technology portfolio. Chalk.com Education ULC On May 2, 2022, the Company acquired all of the equity interests of Chalk.com Education ULC (“Chalk”). Chalk is an integrated curriculum planning and analytics platform for K-12 schools. The purpose of the acquisition was to enhance and expand PowerSchool’s product offering. The total purchase price for Chalk was $13.5 million, which included $10.4 million of cash and additional contingent cash consideration payable based on the achievement of certain performance conditions. The acquisition-date fair value of the contingent consideration was $3.1 million. Transaction costs of $0.9 million are recorded in acquisition costs in the consolidated statements of operations and comprehensive loss. The Company has accounted for this acquisition as a business combination and recognized intangible assets of $3.6 million and net tangible liabilities of $0.2 million. The Company recorded goodwill of $10.0 million arising from the acquisition, all of which is expected to be deductible for U.S. income tax purposes. The goodwill is a result of the growth expected by creating a comprehensive education technology portfolio. Headed2, LLC On June 1, 2022, the Company acquired all of the equity interests of Headed2, LLC (“Headed2”). Headed2 is a career path planning platform that delivers state-level support for college, career, military, and life readiness to students of all ages by providing a more complete approach to researching and preparing for future success. The purpose of the acquisition was to enhance and expand PowerSchool’s product offering. The total purchase price for Headed2 was $5.8 million, which was paid in cash. Transaction costs of $0.5 million are recorded in acquisition costs in the consolidated statements of operations and comprehensive loss. The Company has accounted for this acquisition as a business combination and recognized intangible assets of $2.3 million and net tangible assets of $0.2 million. The Company recorded goodwill of $3.3 million arising from the acquisition, all of which is expected to be deductible for U.S. income tax purposes. The goodwill is a result of the growth expected by creating a comprehensive education technology portfolio. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregation of Revenue The following table depicts the disaggregation of revenue according to the Company’s revenue streams. The Company believes this depicts the nature, amount, timing and uncertainty of revenue and cash flows consistent with how we evaluate our financial statements (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 SaaS $ 118,288 $ 107,552 $ 232,252 $ 210,216 Professional services 20,197 19,119 36,429 35,182 Software maintenance 28,215 27,458 55,324 54,559 License and other 7,197 3,462 9,345 7,227 Total revenue $ 173,897 $ 157,591 $ 333,350 $ 307,184 Revenue recognized for the three and six month periods ended June 30, 2023 and 2022 from performance obligations satisfied in the prior periods was immaterial. Revenue by principal geographic areas based on where the customer is located was as follows (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 United States $ 162,579 $ 145,106 $ 311,385 $ 283,568 Canada 8,475 9,239 16,653 17,983 Other 2,843 3,246 5,312 5,633 Total revenue $ 173,897 $ 157,591 $ 333,350 $ 307,184 The Company had no customers accounting for more than 10% of total revenue for the periods presented. Deferred Revenue The changes in the deferred revenue balance were as follows (in thousands): June 30, 2023 December 31, 2022 Balance at beginning of period $ 315,839 $ 301,157 Decrease from revenue recognized (242,578) (289,328) Increase from acquisitions — 1,586 Increase from current period net deferred revenue additions 118,616 302,424 Balance at end of period $ 191,877 $ 315,839 As of June 30, 2023, the Company expects to recognize revenue on approximately 97% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. The estimated revenues from the remaining performance obligations do not include uncommitted contract amounts such as (i) amounts that are cancellable by the customer without significant penalty, (ii) future billings for time and material contracts, and (iii) amounts associated with optional renewal periods. Contract Cost Assets Contract cost assets are included in prepaid expenses and other current assets and other assets, respectively, on the consolidated balance sheets as follows (in thousands): June 30, 2023 December 31, 2022 Contract costs, current $ 7,018 $ 6,103 Contract costs, noncurrent 26,272 23,843 Total contract costs $ 33,290 $ 29,946 Amortization expense for contract cost assets was $1.5 million and $3.0 million for the three and six months ended June 30, 2023, respectively, and $1.1 million and $2.1 million as of the three and six months ended June 30, 2022, respectively. There was no impairment of contract cost assets during the periods presented. |
PROPERTY AND EQUIPMENT_NET
PROPERTY AND EQUIPMENT—NET | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT—NET | PROPERTY AND EQUIPMENT - NET Property and equipment by category are as follows (in thousands): June 30, 2023 December 31, 2022 Computer and software $ 16,136 $ 16,272 Furniture and fixtures 1,564 1,563 Leasehold improvements 2,402 2,377 Property and equipment 20,102 20,212 Less: accumulated depreciation (14,816) (14,039) Property and equipment—net $ 5,286 $ 6,173 |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The changes in the carrying amounts of goodwill were as follows (in thousands): Balance—December 31, 2022 $ 2,487,007 Other adjustments 228 Balance—June 30, 2023 $ 2,487,235 |
OTHER INTANGIBLE ASSETS_NET
OTHER INTANGIBLE ASSETS—NET | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
OTHER INTANGIBLE ASSETS—NET | OTHER INTANGIBLE ASSETS—NET Intangible assets are amortized using the straight-line method based on the expected useful lives of the assets. The carrying values of acquired amortizing intangible assets are as follows (in thousands): June 30, 2023 Weighted- Average Useful Life December 31, 2022 Weighted- Average Useful Life Intangible Assets—Gross Developed technology $ 293,650 8 years $ 293,599 8 years Customer relationships 742,600 14 years 742,600 14 years Trademarks 53,482 9 years 53,474 9 years $ 1,089,732 $ 1,089,673 Accumulated Amortization Developed technology $ (151,844) $ (134,691) Customer relationships (237,741) (210,120) Trademarks (25,304) (22,715) $ (414,889) $ (367,526) Intangible Assets—Net Developed technology $ 141,806 $ 158,908 Customer relationships 504,859 532,480 Trademarks 28,178 30,759 $ 674,843 $ 722,147 Amortization of developed technology is recorded in cost of revenue, while the amortization of trademarks and customer relationships is included in selling, general, and administrative expense on the Company’s consolidated statements of operations and comprehensive loss. The following table summarizes the classification of amortization expense of intangible assets (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Cost of revenue $ 8,575 $ 8,467 $ 17,148 $ 16,845 Selling, general, and administrative expense 15,109 15,070 30,215 30,039 Total amortization of acquired intangible assets $ 23,684 $ 23,537 $ 47,363 $ 46,884 The estimated future amortization of intangible assets as of June 30, 2023, is as follows (in thousands): Year Ending December 31, 2023 (remaining six months) $ 47,362 2024 94,082 2025 93,893 2026 82,826 2027 66,544 Thereafter 290,136 Total $ 674,843 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES The following table presents the detail of accrued expenses (in thousands): June 30, 2023 December 31, 2022 Accrued compensation $ 28,451 $ 38,966 Accrued interest 10,652 9,094 Accrued taxes 1,671 2,130 Tax Receivable Agreement liability, current 28,640 1,862 Other accrued expenses 28,985 32,218 Total accrued expenses $ 98,399 $ 84,270 |
Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring | Included within other accrued expenses is the contingent consideration liability related to the acquisition of Chalk. The fair value of the contingent consideration is determined using the Monte Carlo simulation and is recorded as selling, general, and administrative expenses within operating expenses in the consolidated statements of operations and comprehensive loss. The fair value is estimated quarterly and is based on unobservable inputs, including management estimates and assumptions about achieving future revenues and the Company's share price, and is, therefore, classified as Level 3 in the fair value hierarchy. The outstanding balance of the contingent consideration as of June 30, 2023 is expected to be paid in the third quarter of fiscal year 2023. The changes in the fair value of the contingent consideration liability is as follows (in thousands): Balance—January 1, 2022 $ — Acquisition date fair value 10,079 Payment (1,392) Fair value adjustments (4,886) Balance—December 31, 2022 $ 3,801 Fair value adjustments (635) Balance—June 30, 2023 $ 3,166 |
LONG-TERM DEBT AND REVOLVING CR
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT | LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT First Lien Credit Agreement (“First Lien”) In August 2018, the Company entered into a loan agreement with a consortium of lenders which provided $775.0 million of term loans. The First Lien also provides for a Revolving Credit Agreement, discussed in more detail below. The First Lien is repayable in quarterly payments of $1.9 million through July 31, 2025, with all remaining outstanding principal due on July 31, 2025, the maturity date of the First Lien. As of June 30, 2023, the interest rate for the First Lien is the rate per annum equal to the Secured Overnight Financing Rate (“SOFR”), plus the applicable margin. The applicable margin is initially 3.25% per annum with a 0.25% step down based on the First Lien Net Leverage Ratio. The interest rate for the First Lien as of June 30, 2023 and December 31, 2022 was 8.05% and 7.09%, respectively. The First Lien is collateralized on a first lien basis by substantially all of the assets and property of Holdings LLC and its domestic subsidiaries. Revolving Credit Agreement The First Lien provides for a Revolving Credit Agreement allowing the Company to borrow funds from time to time. In July 2021, the Revolving Credit Agreement was amended and permitted the Company to borrow up to $289.0 million. The Revolving Credit Agreement matures on May 2, 2025. The interest rate of the Revolving Credit Agreement is equal to SOFR, plus the applicable margin. The applicable margin is initially 3.25% per annum with up to a 0.50% step down based on the First Lien Net Leverage Ratio. We are also required to pay a commitment fee on the unused portion of the Revolving Credit Agreement of 0.50% per annum with up to a 0.25% step down based on the First Lien Net Leverage Ratio, payable quarterly in arrears. During the six months ended June 30, 2023, the Company borrowed $10.0 million on the Revolving Credit Agreement, which was reflected as the outstanding balance on the facility as of June 30, 2023. There was no outstanding balance as of December 31, 2022. The Revolving Credit Agreement requires the Company to maintain a First Lien Net Leverage Ratio of not more than 7.75 to 1.00 if the Company has an outstanding balance on the Revolving Credit Agreement of greater than 35% of the borrowing capacity (excluding certain letters of credit) at a quarter end. As of June 30, 2023 and December 31, 2022, the Company’s outstanding balances under the Revolving Credit Agreement were less than 35% of the borrowing capacity. The following table presents the outstanding long-term debt (in thousands): June 30, 2023 December 31, 2022 Total outstanding principal—First Lien $ 740,125 $ 744,000 Less: current portion of long-term debt (7,750) (7,750) Less: unamortized debt discount (578) (715) Less: unamortized debt issuance costs (5,586) (6,911) Total long-term debt—net $ 726,211 $ 728,624 Maturities on long-term debt outstanding as of June 30, 2023 are as follows (in thousands): Year Ending December 31, 2023 (remaining six months) $ 3,875 2024 7,750 2025 728,500 Total $ 740,125 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
LEASES | Leases The Company leases its office and data center facilities under non-cancelable operating leases that expire at various times through 2026. The Company is also responsible for certain real estate taxes, utilities, and maintenance costs related to its office facilities. Rent expense was $0.9 million and $1.9 million for the three and six months ended June 30, 2023, respectively, and $1.3 million and $3.3 million for the three and six months ended June 30, 2022, respectively. Lease costs for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Operating lease cost $ 943 $ 11,694 $ 1,897 $ 17,249 Short-term lease cost 3 20 19 72 Variable lease cost and other, net 199 369 573 660 Total lease cost $ 1,145 $ 12,083 $ 2,489 $ 17,981 Six Months Ended 2023 2022 Cash paid for operating leases $ 3,663 $ 4,495 ROU assets obtained in exchange for new lease liabilities — 3,654 Future minimum lease payments under non-cancelable operating lease agreements as of June 30, 2023 are as follows (in thousands): Year Ending December 31, 2023 (remaining six months) $ 2,509 2024 4,216 2025 1,698 2026 1,020 2027 748 Total undiscounted cash flows $ 10,191 Less imputed interest 539 Present value of lease liabilities $ 9,652 Weighted average remaining term (years) 2.9 Weighted average discount rate 4.1 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contractual Obligations We have contractual obligations related to, among others, data centers, cloud hosting arrangements and other services we purchase as part of our normal operations. In certain cases, these arrangements require a minimum annual purchase commitment by us. As of June 30, 2023, the remaining aggregate minimum purchase commitment under these arrangements was approximately $221.8 million through 2027. Self-Insured Health Plan The Company is generally self-insured for losses and liabilities related to health benefits. The estimated liability for incurred, but not reported, medical claims was $2.2 million and $2.2 million as of June 30, 2023 and December 31, 2022, respectively. Indemnification The Company enters into indemnification arrangements within customer contracts as part of the ordinary course of its business. Under the Company’s standard contractual terms, these arrangements typically consist of the Company agreeing to indemnify, hold harmless and reimburse the indemnified customer(s) for losses suffered or incurred directly, in connection with any trade secret, copyright, patent, or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The term of these indemnification agreements is generally concurrent with the term of the contract, but in some cases, may survive the expiration or termination of the underlying contract. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made. The Company carries directors and officers insurance policies pursuant to the Company’s certificate of formation, bylaws, and applicable Delaware law. Legal Proceedings From time to time, the Company is involved in disputes, litigation, and other legal actions. On a quarterly basis, the Company evaluates developments in its legal matters that could affect the amount of liability that has been previously accrued, if any, or result in the Company accruing a liability, and the matters and related ranges of possible losses disclosed, and makes adjustments and changes to our disclosures as appropriate. Significant judgment is required to determine both (i) the likelihood of loss and (ii) the estimated amount of such loss related to such legal matters. Until the final resolution of such legal matters, there may be an exposure to loss, and such amounts could be material. For legal proceedings for which there is a reasonable possibility of loss (meaning those losses for which the likelihood is more than remote but less than probable), the Company has determined it does not have material exposure on an aggregate basis at this time. |
STOCKHOLDERS_ EQUITY AND NON-CO
STOCKHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST | STOCKHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST Stockholders’ Equity The Company’s amended and restated certificate of incorporation effective July 27, 2021 authorizes (i) 50,000,000 shares of preferred stock, par value $0.0001 per share, (ii) 500,000,000 shares of Class A common stock, par value $0.0001 per share, and (iii) 300,000,000 shares of Class B common stock, par value $0.0001 per share. Holders of our Class A common stock and Class B common stock vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by law. Each share of Class A common stock and Class B common stock entitles its holder to one vote on all matters presented to our stockholders generally. As of June 30, 2023, t he holders of our issued Class A common stock collectively held approximately 81.3% of the economic interest and voting power in the Company and holders of our issued Class B common stock collectively held approximately 18.7% of the economic interest and voting power in the Company. As of December 31, 2022, the Class B common stock collectively held approximately 20.0% of the economic interest and voting power in the Company. Non-controlling interest The weighted average non-controlling interest percentage used to calculate the net loss and other comprehensive loss attributable to the non-controlling interest holders in the three and six months ended June 30, 2023 and 2022 was 18.8% and 20.1%, respectively. |
EARNINGS (LOSS) PER SHARE ATTRI
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (EPS) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (EPS) | EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (EPS) The table below sets forth a calculation of basic and diluted EPS. Three Months Ended Six Months Ended 2023 2022 2023 2022 Basic net income (loss) per share: Numerator: Net Loss $ (4,295) $ (6,458) $ (19,108) $ (20,577) Less: net loss attributable to non-controlling interest (1,100) (1,933) (4,060) (3,940) Net loss attributable to PowerSchool Holdings, Inc., basic $ (3,195) $ (4,525) $ (15,048) $ (16,637) Denominator: Weighted average shares of Class A common stock, basic 163,067,859 158,229,171 161,794,290 158,171,056 Net loss attributable to PowerSchool Holdings, Inc. per share of Class A common stock, basic $ (0.02) $ (0.03) $ (0.09) $ (0.11) Diluted net income (loss) per share: Numerator: Net loss attributable to PowerSchool Holdings, Inc., basic $ (3,195) $ (4,525) $ (15,048) $ (16,637) Adjustment from LLC Units $ (885) $ — $ — $ — Net loss attributable to PowerSchool Holdings, Inc., diluted $ (4,080) $ (4,525) $ (15,048) $ (16,637) Denominator: Weighted average shares of Class A common stock, basic 163,067,859 158,229,171 161,794,290 158,171,056 Dilutive impact of LLC Units 37,654,059 — — — Weighted average shares of Class A common stock, diluted 200,721,918 158,229,171 161,794,290 158,171,056 Net loss attributable to PowerSchool Holdings, Inc. per share of Class A common stock, diluted $ (0.02) $ (0.03) $ (0.09) $ (0.11) As shares of our Class B common stock are considered non-participating securities, separate presentation of EPS of Class B common stock under the two-class method has not been presented. In addition, the following securities were not included in the computation of diluted shares outstanding for the three and six months ended June 30, 2023 and 2022 because they were antidilutive, but could potentially dilute earnings (loss) per share in the future: Three Months Ended Six Months Ended 2023 2022 2023 2022 Unvested RSAs and RSUs 8,839,703 10,113,893 8,839,703 10,113,893 LLC Units — 39,928,472 37,654,059 39,928,472 Unvested MSUs 474,846 — 474,846 — Total excluded from diluted EPS calculation 9,314,549 50,042,365 46,968,608 50,042,365 |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS The Company has entered into arrangements with Vista Equity Partners for certain services, and the Vista Consulting Group for management consulting, systems implementation, and manpower support (collectively, “Vista Consulting”). These services were provided on a time and material basis and were generally related to integration of the various companies acquired by the Company. Total costs of these related party services were de minimis for all periods presented. We may continue to engage Vista Consulting from time to time, subject to compliance with our related party transactions policy. The Company also entered into arrangements with Onex for general management services, acquisition advisory, and treasury services. Total costs of these related-party services were de minimis for all periods presented. The Company also purchased services from entities that share common ownership with Vista and Onex. The cost was $2.6 million and $7.4 million for all other services purchased from entities with common ownership for the three and six months ended June 30, 2023, respectively, and $0.7 and $2.4 for the three and six months ended June 30, 2022, respectively. Substantially all of the expenses related to Vista and Onex services are included in selling, general, and administrative expense in the consolidated statements of operations and comprehensive loss. Amounts due to entities that share common ownership were $0.1 million and $0.5 million as of June 30, 2023 and December 31, 2022, respectively, and are included in accounts payables and accrued liabilities in the consolidated balance sheet. There were no sales to or outstanding accounts receivable arising from this agreement during or as of the end of any of the periods presented. The Company has a strategic partnership with EAB Global, Inc. (“EAB”), a portfolio company of Vista, pursuant to a Reseller Agreement (the “Agreement”). Pursuant to the Agreement, EAB serves as, among other terms, the exclusive reseller of the Intersect product in the U.S. and Canada. The Agreement has a ten-year term and includes annual minimum revenue commitments from EAB. The commitment amount for the annual period was $36.8 million, and will increase upon the anniversary of the Agreement. The Company may begin to revoke its exclusivity with EAB after the fourth year of the Agreement or terminate the relationship upon material breach of the contract. Under the terms of the Agreement, the Company pays a fee to EAB for selling products to third party customers on the Company’s behalf. The Company recognized $4.0 million and $6.3 million in selling, general, and administrative expense and, to a lesser extent, cost of revenue, for fees owed to EAB under the Agreement for the three and six months ended June 30, 2023, respectively, and $2.9 million and $5.4 million for the three and six months ended June 30, 2022, respectively. In February 2023, certain selling stockholders, which included Hardeep Gulati, the Company’s Chief Executive Officer, Topco LLC, and certain funds affiliated with Vista and Onex, conducted a secondary offering of 8,700,000 shares of the Company’s Class A common stock. The Company did not receive any proceeds from the sale of the Class A common stock by the selling stockholders, but bore the costs associated with the secondary offering (other than underwriting discounts and commissions), which were approximately $1.4 million and were recorded as selling, general, and administrative expenses in the consolidated statements of operations and comprehensive loss. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANSDefined Contribution Plan—The Company has a defined contribution plan under Section 401(k) of the Internal Revenue Code (“401(k) Plan”) covering all full-time employees who meet certain eligibility requirements. Eligible employees may defer a percentage of their pretax compensation, up to the annual maximum allowed by the Internal Revenue Service. Under the 401(k) Plan, the Company matches a portion of the employee contributions up to a defined maximum. The Company made matching contributions of $2.7 million and $5.4 million for the three and six months ended June 30, 2023, respectively, and $2.6 million and $5.1 million for the three and six months ended June 30, 2022, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | The Company has evaluated subsequent events from the consolidated balance sheets date through August 8, 2023, the date at which the condensed consolidated financial statements were available to be issued. On July 11, 2023, the Company announced that it had entered into a definitive agreement to acquire all the ownership interests of SchoolMessenger, a leading provider of K-12 communication tools in North America, from West Technology Group, LLC, for cash consideration of approximately $300 million. We expect to fund the acquisition with cash on hand, borrowings under the Revolving Credit Facility, and incremental term loans under the First Lien. The acquisition is expected to close in the third quarter of fiscal year 2023, subject to satisfaction of customary closing conditions and regulatory requirements. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) | $ (3,195) | $ (4,525) | $ (15,048) | $ (16,637) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | true |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | The accompanying interim condensed consolidated balance sheet as of June 30, 2023, the interim condensed consolidated statements of operations and comprehensive loss and stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022, and the notes to such interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. As permitted under those rules, we have condensed or omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary to state fairly the consolidated financial position of the Company as of June 30, 2023, the results of operations for the three and six months ended June 30, 2023 and 2022 and cash flows for the six months ended June 30, 2023 and 2022. These adjustments consist of normal and recurring items. The results of operations for the six months ended June 30, 2023 and cash flows for the six months ended June 30, 2023 are not necessarily indicative of the results expected for the year ending December 31, 2023 or any future interim or annual period. Our unaudited interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and related notes provided in our Annual Report on Form 10-K for the year ended December 31, 2022. The Company is an Emerging Growth Company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, Emerging Growth Companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an Emerging Growth Company or (ii) it affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. On June 30, 2023, the last day of our second fiscal quarter in 2023, the market value of our Class A common stock held by non-affiliates exceeded $700.0 million. Accordingly, we will be deemed a large accelerated filer as of December 31, 2023. As such, we will no longer (i) qualify as an Emerging Growth Company and (ii) be able to take advantage of the extended timeline to comply with new or revised accounting standards applicable to public companies beginning with our Annual Report on Form 10-K for the year ending December 31, 2023. | |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |
Use of Estimates | Use of estimates is required in the preparation of the consolidated financial statements in conformity with GAAP. Management makes estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments. Management bases its estimates and judgments on historical experience and on various other factors that it believes are reasonable under the circumstances. The estimates the Company evaluates include, but are not limited to: • the fair value of assets acquired and liabilities assumed in business combinations, including acquired intangible assets, goodwill, contingent consideration and liabilities associated with deferred revenue and deferred taxes; • the average period of benefit related to contract cost assets; • the allowance for doubtful accounts; • the fair value of certain stock awards; • the useful lives and recoverability of long-lived assets, including capitalized product development costs; • the recognition, measurement and valuation of deferred income taxes; and • the actual amounts and timing of payments under the Tax Receivable Agreement Actual results could differ from those estimates under different assumptions or c onditions. | |
Recent Accounting Pronouncements Not Yet Adopted and Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted On January 1, 2023, the Company prospectively adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). This update changes the accounting for recognizing impairments of financial assets, such that credit losses for certain types of financial instruments will be estimated based on expected losses. The update also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The adoption of the accounting pronouncement did not have a material impact on the valuation of the Company’s financial instruments. Cash and cash equivalents |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The Company believes this depicts the nature, amount, timing and uncertainty of revenue and cash flows consistent with how we evaluate our financial statements (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 SaaS $ 118,288 $ 107,552 $ 232,252 $ 210,216 Professional services 20,197 19,119 36,429 35,182 Software maintenance 28,215 27,458 55,324 54,559 License and other 7,197 3,462 9,345 7,227 Total revenue $ 173,897 $ 157,591 $ 333,350 $ 307,184 |
Revenue by Geographical Area | Revenue by principal geographic areas based on where the customer is located was as follows (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 United States $ 162,579 $ 145,106 $ 311,385 $ 283,568 Canada 8,475 9,239 16,653 17,983 Other 2,843 3,246 5,312 5,633 Total revenue $ 173,897 $ 157,591 $ 333,350 $ 307,184 |
Schedules of Deferred Revenue | The changes in the deferred revenue balance were as follows (in thousands): June 30, 2023 December 31, 2022 Balance at beginning of period $ 315,839 $ 301,157 Decrease from revenue recognized (242,578) (289,328) Increase from acquisitions — 1,586 Increase from current period net deferred revenue additions 118,616 302,424 Balance at end of period $ 191,877 $ 315,839 |
Contract Cost Assets | Contract cost assets are included in prepaid expenses and other current assets and other assets, respectively, on the consolidated balance sheets as follows (in thousands): June 30, 2023 December 31, 2022 Contract costs, current $ 7,018 $ 6,103 Contract costs, noncurrent 26,272 23,843 Total contract costs $ 33,290 $ 29,946 |
PROPERTY AND EQUIPMENT_NET (Tab
PROPERTY AND EQUIPMENT—NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment by Category | Property and equipment by category are as follows (in thousands): June 30, 2023 December 31, 2022 Computer and software $ 16,136 $ 16,272 Furniture and fixtures 1,564 1,563 Leasehold improvements 2,402 2,377 Property and equipment 20,102 20,212 Less: accumulated depreciation (14,816) (14,039) Property and equipment—net $ 5,286 $ 6,173 |
CAPITALIZED PRODUCT DEVELOPMENT
CAPITALIZED PRODUCT DEVELOPMENT COSTS—NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Research and Development [Abstract] | |
Schedule of Capitalized Product Development Costs | The carrying values of acquired amortizing intangible assets are as follows (in thousands): June 30, 2023 Weighted- Average Useful Life December 31, 2022 Weighted- Average Useful Life Intangible Assets—Gross Developed technology $ 293,650 8 years $ 293,599 8 years Customer relationships 742,600 14 years 742,600 14 years Trademarks 53,482 9 years 53,474 9 years $ 1,089,732 $ 1,089,673 Accumulated Amortization Developed technology $ (151,844) $ (134,691) Customer relationships (237,741) (210,120) Trademarks (25,304) (22,715) $ (414,889) $ (367,526) Intangible Assets—Net Developed technology $ 141,806 $ 158,908 Customer relationships 504,859 532,480 Trademarks 28,178 30,759 $ 674,843 $ 722,147 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amounts of goodwill were as follows (in thousands): Balance—December 31, 2022 $ 2,487,007 Other adjustments 228 Balance—June 30, 2023 $ 2,487,235 |
OTHER INTANGIBLE ASSETS_NET (Ta
OTHER INTANGIBLE ASSETS—NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Values of Acquired Intangible Assets | The carrying values of acquired amortizing intangible assets are as follows (in thousands): June 30, 2023 Weighted- Average Useful Life December 31, 2022 Weighted- Average Useful Life Intangible Assets—Gross Developed technology $ 293,650 8 years $ 293,599 8 years Customer relationships 742,600 14 years 742,600 14 years Trademarks 53,482 9 years 53,474 9 years $ 1,089,732 $ 1,089,673 Accumulated Amortization Developed technology $ (151,844) $ (134,691) Customer relationships (237,741) (210,120) Trademarks (25,304) (22,715) $ (414,889) $ (367,526) Intangible Assets—Net Developed technology $ 141,806 $ 158,908 Customer relationships 504,859 532,480 Trademarks 28,178 30,759 $ 674,843 $ 722,147 |
Schedule of Amortization Expense of Intangible Assets | The following table summarizes the classification of amortization expense of intangible assets (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Cost of revenue $ 8,575 $ 8,467 $ 17,148 $ 16,845 Selling, general, and administrative expense 15,109 15,070 30,215 30,039 Total amortization of acquired intangible assets $ 23,684 $ 23,537 $ 47,363 $ 46,884 |
Schedule of Estimated Future Amortization of Intangible Assets | The estimated future amortization of intangible assets as of June 30, 2023, is as follows (in thousands): Year Ending December 31, 2023 (remaining six months) $ 47,362 2024 94,082 2025 93,893 2026 82,826 2027 66,544 Thereafter 290,136 Total $ 674,843 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | The following table presents the detail of accrued expenses (in thousands): June 30, 2023 December 31, 2022 Accrued compensation $ 28,451 $ 38,966 Accrued interest 10,652 9,094 Accrued taxes 1,671 2,130 Tax Receivable Agreement liability, current 28,640 1,862 Other accrued expenses 28,985 32,218 Total accrued expenses $ 98,399 $ 84,270 |
LONG-TERM DEBT AND REVOLVING _2
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-Term Debt | The following table presents the outstanding long-term debt (in thousands): June 30, 2023 December 31, 2022 Total outstanding principal—First Lien $ 740,125 $ 744,000 Less: current portion of long-term debt (7,750) (7,750) Less: unamortized debt discount (578) (715) Less: unamortized debt issuance costs (5,586) (6,911) Total long-term debt—net $ 726,211 $ 728,624 |
Schedule of Maturities of Long-Term Debt | Maturities on long-term debt outstanding as of June 30, 2023 are as follows (in thousands): Year Ending December 31, 2023 (remaining six months) $ 3,875 2024 7,750 2025 728,500 Total $ 740,125 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Cost | The Company leases its office and data center facilities under non-cancelable operating leases that expire at various times through 2026. The Company is also responsible for certain real estate taxes, utilities, and maintenance costs related to its office facilities. Rent expense was $0.9 million and $1.9 million for the three and six months ended June 30, 2023, respectively, and $1.3 million and $3.3 million for the three and six months ended June 30, 2022, respectively. Lease costs for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Operating lease cost $ 943 $ 11,694 $ 1,897 $ 17,249 Short-term lease cost 3 20 19 72 Variable lease cost and other, net 199 369 573 660 Total lease cost $ 1,145 $ 12,083 $ 2,489 $ 17,981 Six Months Ended 2023 2022 Cash paid for operating leases $ 3,663 $ 4,495 ROU assets obtained in exchange for new lease liabilities — 3,654 |
Schedule of Future Minimum Lease Payments, Post Adoption | Future minimum lease payments under non-cancelable operating lease agreements as of June 30, 2023 are as follows (in thousands): Year Ending December 31, 2023 (remaining six months) $ 2,509 2024 4,216 2025 1,698 2026 1,020 2027 748 Total undiscounted cash flows $ 10,191 Less imputed interest 539 Present value of lease liabilities $ 9,652 Weighted average remaining term (years) 2.9 Weighted average discount rate 4.1 % |
Schedule of Future Minimum Lease Payments, Prior to Adoption |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of RSU and RSA Activity | RSU and RSA activity for the six-months ended June 30, 2023 is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Awards Weighted Average Grant Date Fair Value Balance—December 31, 2022 7,880,419 $ 20.52 54,516 $ 8.43 Granted 2,886,577 $ 19.32 — — Vested (1,630,899) $ 19.59 (19,693) $ 8.73 Canceled (331,217) $ 20.32 — — Balance—June 30, 2023 8,804,880 $ 20.30 34,823 $ 8.25 |
Schedule of Share-based Compensation Expense | The following table presents the classification of share-based compensation in the accompanying condensed consolidated statements of operations and comprehensive loss (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of revenue Subscriptions and support $ 1,623 $ 1,243 $ 3,011 $ 2,277 Service 919 1,262 1,730 2,246 Research and development 4,536 3,558 8,265 6,428 Selling, general, and administrative 10,416 7,997 19,037 14,659 Total stock-based compensation $ 17,494 $ 14,060 $ 32,043 $ 25,610 Share-based compensation capitalized as product development costs was $0.8 million and $1.5 million for the three and six months ended June 30, 2023, respectively, and $0.8 million and $1.5 million for the three and six months ended June 30, 2022, respectively. As of June 30, 2023, the total future compensation cost related to unvested share awards is $176.1 million, which is expected to be recognized over a weighted-average period of 2.8 years. |
EARNINGS (LOSS) PER SHARE ATT_2
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (EPS) (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) per Share | Three Months Ended Six Months Ended 2023 2022 2023 2022 Basic net income (loss) per share: Numerator: Net Loss $ (4,295) $ (6,458) $ (19,108) $ (20,577) Less: net loss attributable to non-controlling interest (1,100) (1,933) (4,060) (3,940) Net loss attributable to PowerSchool Holdings, Inc., basic $ (3,195) $ (4,525) $ (15,048) $ (16,637) Denominator: Weighted average shares of Class A common stock, basic 163,067,859 158,229,171 161,794,290 158,171,056 Net loss attributable to PowerSchool Holdings, Inc. per share of Class A common stock, basic $ (0.02) $ (0.03) $ (0.09) $ (0.11) Diluted net income (loss) per share: Numerator: Net loss attributable to PowerSchool Holdings, Inc., basic $ (3,195) $ (4,525) $ (15,048) $ (16,637) Adjustment from LLC Units $ (885) $ — $ — $ — Net loss attributable to PowerSchool Holdings, Inc., diluted $ (4,080) $ (4,525) $ (15,048) $ (16,637) Denominator: Weighted average shares of Class A common stock, basic 163,067,859 158,229,171 161,794,290 158,171,056 Dilutive impact of LLC Units 37,654,059 — — — Weighted average shares of Class A common stock, diluted 200,721,918 158,229,171 161,794,290 158,171,056 Net loss attributable to PowerSchool Holdings, Inc. per share of Class A common stock, diluted $ (0.02) $ (0.03) $ (0.09) $ (0.11) |
Schedule of Antidilutive Shares | In addition, the following securities were not included in the computation of diluted shares outstanding for the three and six months ended June 30, 2023 and 2022 because they were antidilutive, but could potentially dilute earnings (loss) per share in the future: Three Months Ended Six Months Ended 2023 2022 2023 2022 Unvested RSAs and RSUs 8,839,703 10,113,893 8,839,703 10,113,893 LLC Units — 39,928,472 37,654,059 39,928,472 Unvested MSUs 474,846 — 474,846 — Total excluded from diluted EPS calculation 9,314,549 50,042,365 46,968,608 50,042,365 |
BUSINESS (Details)
BUSINESS (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |||
Jul. 30, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Class of Stock [Line Items] | ||||
Underwriting discounts and commissions | $ 0 | $ 295 | ||
Percentage of cash savings payable | 85% | |||
Class A common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Class B common stock | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Class B common stock | IPO | ||||
Class of Stock [Line Items] | ||||
Number of shares issued (in shares) | 39,928,472 | |||
Common stock, par value (in dollars per share) | $ 0.0001 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 7,173 | $ 8,877 |
Operating lease liability | 9,652 | |
Decrease in accumulated deficit | $ (1,289,296) | $ (1,248,667) |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 01, 2022 | May 02, 2022 | Feb. 01, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||||||
Acquisition costs | $ 0 | $ 1,043 | $ 0 | $ 2,618 | ||||
Goodwill | 2,487,235 | 2,487,235 | $ 2,487,007 | |||||
Kinvolved, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 23,300 | |||||||
Acquisition costs | 1,200 | |||||||
Goodwill | 18,600 | |||||||
Payments to Acquire Businesses, Gross | 16,200 | |||||||
Fair value of deferred cash consideration | $ 7,100 | |||||||
Chalk.com Education, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 13,500 | |||||||
Acquisition costs | $ 900 | |||||||
Goodwill | 10,000 | |||||||
Payments to Acquire Businesses, Gross | 10,400 | |||||||
Additional deferred cash consideration | $ 3,100 | |||||||
Headed2, LLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 5,800 | |||||||
Acquisition costs | $ 500 | |||||||
Goodwill | $ 3,300 |
BUSINESS COMBINATIONS - Assets
BUSINESS COMBINATIONS - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Feb. 01, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 01, 2022 | May 02, 2022 |
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net Assets | $ 200 | $ (200) | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 2,300 | $ 3,600 | |||
Goodwill | $ 2,487,235 | $ 2,487,007 | |||
Kinvolved, Inc. | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net Assets | $ 200 | ||||
Business Combination, Consideration Transferred [Abstract] | |||||
Payments to Acquire Businesses, Gross | 16,200 | ||||
Business Combination, Consideration Transferred, Liabilities Incurred | 7,100 | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | 4,500 | ||||
Goodwill | $ 18,600 | ||||
Headed2, LLC | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 3,300 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 173,897 | $ 157,591 | $ 333,350 | $ 307,184 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 162,579 | 145,106 | 311,385 | 283,568 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 8,475 | 9,239 | 16,653 | 17,983 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,843 | 3,246 | 5,312 | 5,633 |
SaaS | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 118,288 | 107,552 | 232,252 | 210,216 |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 20,197 | 19,119 | 36,429 | 35,182 |
Software maintenance | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 28,215 | 27,458 | 55,324 | 54,559 |
License and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 7,197 | $ 3,462 | $ 9,345 | $ 7,227 |
REVENUE - Changes in Deferred R
REVENUE - Changes in Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2021 | |
Contract with Customer, Liability [Roll Forward] | ||
Balance at beginning of period | $ 315,839 | |
Decrease from revenue recognized | (242,578) | $ (289,328) |
Increase from acquisitions | 0 | 1,586 |
Increase from current period net deferred revenue additions | 118,616 | 302,424 |
Balance at end of period | $ 191,877 | $ 301,157 |
REVENUE - Performance Obligatio
REVENUE - Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | Jun. 30, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of remaining performance obligations expected to be recognized | 97% |
Performance obligations expected to be recognized, expected timing | 12 months |
REVENUE - Contract Cost Assets
REVENUE - Contract Cost Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |||||
Contract costs, current | $ 7,018 | $ 7,018 | $ 6,103 | ||
Contract costs, noncurrent | 26,272 | 26,272 | 23,843 | ||
Total contract costs | 33,290 | 33,290 | $ 29,946 | ||
Amortization expense for contract costs | $ 1,500 | $ 1,100 | $ 3,000 | $ 2,100 |
ACCOUNTS RECEIVABLE - Schedule
ACCOUNTS RECEIVABLE - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ (5,283) | $ (4,712) |
Accounts Receivable, after Allowance for Credit Loss, Current, Total | $ 78,082 | $ 54,296 |
ACCOUNTS RECEIVABLE - Schedul_2
ACCOUNTS RECEIVABLE - Schedule of Allowance for Credit Loss (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Accounts Receivable, Allowance for Credit Loss, Current | $ 4,712 |
Accounts Receivable, Allowance for Credit Loss, Current | $ 5,283 |
PROPERTY AND EQUIPMENT_NET (Det
PROPERTY AND EQUIPMENT—NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | $ 20,102 | $ 20,102 | $ 20,212 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (14,816) | (14,816) | (14,039) | ||
Property, Plant and Equipment, Net, Total | 5,286 | 5,286 | 6,173 | ||
Depreciation expense | 800 | $ 1,300 | 1,700 | $ 2,600 | |
Computers Equipment And Software [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 16,136 | 16,136 | 16,272 | ||
Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | 1,564 | 1,564 | 1,563 | ||
Leasehold Improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Gross | $ 2,402 | $ 2,402 | $ 2,377 |
CAPITALIZED PRODUCT DEVELOPME_2
CAPITALIZED PRODUCT DEVELOPMENT COSTS—NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Research and Development [Abstract] | ||||
Capitalized Computer Software, Gross | $ 174,341 | $ 152,663 | $ 174,341 | $ 152,663 |
Capitalized Computer Software, Accumulated Amortization | (66,411) | (51,802) | (66,411) | (51,802) |
Capitalized Computer Software, Net, Total | 107,930 | 100,861 | 107,930 | 100,861 |
Capitalized Computer Software, Amortization | $ 7,400 | $ 5,500 | $ 14,600 | $ 10,800 |
GOODWILL (Details)
GOODWILL (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 2,487,007 |
Other adjustments | 228 |
Ending balance | $ 2,487,235 |
OTHER INTANGIBLE ASSETS_NET - C
OTHER INTANGIBLE ASSETS—NET - Carrying Values of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets—Gross | $ 1,089,732 | $ 1,089,673 |
Accumulated Amortization | (414,889) | (367,526) |
Intangible Assets—Net | 674,843 | 722,147 |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets—Gross | 293,650 | 293,599 |
Accumulated Amortization | (151,844) | (134,691) |
Intangible Assets—Net | $ 141,806 | $ 158,908 |
Weighted- Average Useful Life | 8 years | 8 years |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets—Gross | $ 742,600 | $ 742,600 |
Accumulated Amortization | (237,741) | (210,120) |
Intangible Assets—Net | $ 504,859 | $ 532,480 |
Weighted- Average Useful Life | 14 years | 14 years |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets—Gross | $ 53,482 | $ 53,474 |
Accumulated Amortization | (25,304) | (22,715) |
Intangible Assets—Net | $ 28,178 | $ 30,759 |
Weighted- Average Useful Life | 9 years | 9 years |
OTHER INTANGIBLE ASSETS_NET - A
OTHER INTANGIBLE ASSETS—NET - Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization of acquired intangible assets | $ 23,684 | $ 23,537 | $ 47,363 | $ 46,884 |
Cost of revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization of acquired intangible assets | 8,575 | 8,467 | 17,148 | 16,845 |
Selling, general, and administrative expense | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization of acquired intangible assets | $ 15,109 | $ 15,070 | $ 30,215 | $ 30,039 |
OTHER INTANGIBLE ASSETS_NET - E
OTHER INTANGIBLE ASSETS—NET - Estimated Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2022 (remaining nine months) | $ 47,362 | |
2024 | 94,082 | |
2025 | 93,893 | |
2026 | 82,826 | |
2027 | 66,544 | |
Thereafter | 290,136 | |
Intangible Assets—Net | $ 674,843 | $ 722,147 |
ACCRUED EXPENSES - Schedule Acc
ACCRUED EXPENSES - Schedule Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 28,451 | $ 38,966 |
Accrued interest | 10,652 | 9,094 |
Accrued taxes | 1,671 | 2,130 |
Other accrued expenses | 28,985 | 32,218 |
Tax Receivable Agreement liability, current | 28,640 | 1,862 |
Total accrued expenses | $ 98,399 | $ 84,270 |
ACCRUED EXPENSES - Fair Value o
ACCRUED EXPENSES - Fair Value of Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Contingent Consideration Liability Rollfoward [Roll Forward] | ||||
Balance at beginning of period | $ 3,801 | $ 0 | $ 0 | |
Acquisition date fair value | 10,079 | |||
Payment | 0 | (1,392) | (1,392) | |
Fair value adjustments | $ (635) | (635) | $ (5,926) | (4,886) |
Balance at end of period | $ 3,166 | $ 3,166 | $ 3,801 |
LONG-TERM DEBT AND REVOLVING _3
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 01, 2018 | Jun. 30, 2023 | Jun. 30, 2023 | Jul. 31, 2023 | Dec. 31, 2022 | Jul. 30, 2021 | |
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 840,100 | |||||
Debt discounts | $ 578 | $ 578 | $ 715 | |||
Debt issuance costs | 5,586 | 5,586 | 6,911 | |||
Revolving credit facility | 10,000 | $ 10,000 | $ 0 | |||
Debt Instrument, Periodic Payment | $ 1,900 | |||||
Line of Credit | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 289,000 | |||||
Commitment fee percentage | 0.50% | |||||
First lien net coverage ratio | 7.75 | |||||
Outstanding balance as a percentage of borrowing capacity | 35% | 35% | 35% | 35% | ||
Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin | 3.25% | |||||
Step-down percentage | 0.50% | |||||
First Lien | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 775,000 | |||||
Percentage of principal due quarterly | 0.25% | |||||
First Lien | Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin | 3.25% | |||||
Interest rate | 8.05% | 8.05% | 7.09% |
LONG-TERM DEBT AND REVOLVING _4
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT - Schedule of Outstanding Long-Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Less: current portion of long-term debt | $ (7,750) | $ (7,750) |
Less: unamortized debt discount | (578) | (715) |
Less: unamortized debt issuance costs | (5,586) | (6,911) |
Total long-term debt—net | 726,211 | 728,624 |
Secured Debt | First Lien | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 740,125 | $ 744,000 |
LONG-TERM DEBT AND REVOLVING _5
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENT - Maturities of Long-Term Debt (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Maturities of Long-term Debt [Abstract] | |
2022 (remaining nine months) | $ 3,875 |
2024 | 7,750 |
2025 | 728,500 |
Total | $ 740,125 |
LEASES - Components of Operatin
LEASES - Components of Operating Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||||
Rent expense | $ 900 | $ 1,300 | $ 1,900 | $ 3,300 |
Lease, Cost [Abstract] | ||||
Operating lease cost | 943 | 11,694 | 1,897 | 17,249 |
Short-term lease cost | 3 | 20 | 19 | 72 |
Variable lease cost and other, net | 199 | 369 | 573 | 660 |
Total lease cost | $ 1,145 | $ 12,083 | 2,489 | 17,981 |
Operating Lease, Payments | $ 3,663 | 4,495 | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 3,654 |
LEASES - Schedule of Future Min
LEASES - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Lease Arrangements (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2022 (remaining nine months) | $ 2,509 |
2024 | 4,216 |
2025 | 1,698 |
2026 | 1,020 |
2027 | 748 |
Total undiscounted cash flows | 10,191 |
Less imputed interest | 539 |
Present value of lease liabilities | $ 9,652 |
P2Y11M | 2 years 10 months 24 days |
0.0407 | 4.10% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies [Line Items] | ||
Estimated liability for incurred, but not reported, medical claims | $ 2.2 | $ 2.2 |
Data Center, Cloud Hosting Arrangements and Other Services | ||
Commitments and Contingencies [Line Items] | ||
Remaining aggregate minimum purchase commitment | $ 221.8 |
STOCKHOLDERS_ EQUITY AND NON-_2
STOCKHOLDERS’ EQUITY AND NON-CONTROLLING INTEREST (Details) - $ / shares | 6 Months Ended | 8 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | Jul. 27, 2021 | |
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized (in shares) | 50,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | ||||
PowerSchool Holdings, LLC | |||||
Class of Stock [Line Items] | |||||
Non-controlling interest percentage | 18.80% | 20.10% | |||
Class A common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Percentage of voting power | 81.30% | ||||
Class B common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Percentage of voting power | 18.70% | 20% |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 17,494 | $ 14,060 | $ 32,043 | $ 25,610 |
Future compensation cost related to unvested units | 176,100 | $ 176,100 | ||
Future compensation cost recognition period | 2 years 9 months 18 days | |||
Share-based Payment Arrangement, Amount Capitalized | $ 800 | $ 800 | $ 1,500 | $ 1,500 |
Member Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | $ 26.64 | |||
Units granted (in shares) | 474,846 | |||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | $ 19.32 | |||
Units granted (in shares) | 2,886,577 | |||
Restricted Stock Units | 2021 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Shares reserved for future issuance (in shares) | 19,315,000 | 19,315,000 | ||
Vesting percentage | 25% | |||
market share award | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 1,300 | $ 1,400 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of MIU Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
Weighted-Average Grant-Date Fair Value | |||
Volatility | 58% | ||
Risk-free rate | 3.70% | ||
Aggregate intrinsic value (in USD) | $ 12,600 | $ 12,600 | |
Restricted Stock Units | |||
Number of Underlying Units | |||
Beginning balance (in shares) | 7,880,419 | ||
Units granted (in shares) | 2,886,577 | ||
Units canceled (in shares) | (331,217) | ||
Ending balance (in shares) | 8,804,880 | 8,804,880 | |
Number of underlying units vested (in shares) | 1,630,899 | ||
Weighted-Average Grant-Date Fair Value | |||
Beginning balance (in dollars per share) | $ 20.52 | ||
Ending balance (in dollars per share) | $ 20.30 | 20.30 | |
Weighted-average grant date-fair value, vested (in dollars per share) | 19.59 | ||
Granted (in dollars per share) | $ 19.32 | ||
Member Units | |||
Number of Underlying Units | |||
Beginning balance (in shares) | 0 | ||
Units granted (in shares) | 474,846 | ||
Units canceled (in shares) | 0 | ||
Ending balance (in shares) | 474,846 | 474,846 | |
Number of underlying units vested (in shares) | 0 | ||
Weighted-Average Grant-Date Fair Value | |||
Beginning balance (in dollars per share) | $ 0 | ||
Ending balance (in dollars per share) | $ 26.64 | $ 26.64 | $ 0 |
Weighted-average grant date-fair value, vested (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | $ 26.64 | ||
Dividend yield | 0% |
SHARE-BASED COMPENSATION - Sc_2
SHARE-BASED COMPENSATION - Schedule of Restricted Stock Unit and Restricted Stock Award Activity (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Restricted Stock Units | |
Shares | |
Beginning balance (in shares) | shares | 7,880,419 |
Granted (in shares) | shares | 2,886,577 |
Vested (in shares) | shares | (1,630,899) |
Canceled (in shares) | shares | (331,217) |
Ending balance (in shares) | shares | 8,804,880 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 20.52 |
Granted (in dollars per share) | $ / shares | 19.32 |
Vested (in dollars per share) | $ / shares | 19.59 |
Canceled (in dollars per share) | $ / shares | 20.32 |
Ending balance (in dollars per share) | $ / shares | $ 20.30 |
Restricted Stock Awards | |
Shares | |
Beginning balance (in shares) | shares | 54,516 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (19,693) |
Canceled (in shares) | shares | 0 |
Ending balance (in shares) | shares | 34,823 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 8.43 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 8.73 |
Canceled (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 8.25 |
SHARE-BASED COMPENSATION - Shar
SHARE-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 17,494 | $ 14,060 | $ 32,043 | $ 25,610 |
Cost of revenue | Subscriptions and support | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 1,623 | 1,243 | 3,011 | 2,277 |
Cost of revenue | Service | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 919 | 1,262 | 1,730 | 2,246 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 4,536 | 3,558 | 8,265 | 6,428 |
Selling, general, and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 10,416 | $ 7,997 | $ 19,037 | $ 14,659 |
EARNINGS (LOSS) PER SHARE ATT_3
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (EPS) - Schedule of Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract] | ||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ (4,295) | $ (14,813) | $ (6,458) | $ (14,120) | $ (19,108) | $ (20,577) |
Less: Net loss attributable to non-controlling interest | (1,100) | (1,933) | (4,060) | (3,940) | ||
Net loss attributable to PowerSchool Holdings, Inc. | (3,195) | (4,525) | (15,048) | (16,637) | ||
Participating Securities, Distributed and Undistributed Earnings (Loss), Diluted | (885) | |||||
Net Income (Loss) Attributable to Parent, Diluted | $ (4,080) | $ (4,525) | $ (15,048) | $ (16,637) | ||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||||||
Weighted average shares of Class A common stock outstanding - basic (in shares) | 163,067,859 | 158,229,171 | 161,794,290 | 158,171,056 | ||
Unvested RSAs and RSUs (in shares) | 37,654,059 | |||||
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 200,721,918 | 158,229,171 | 161,794,290 | 158,171,056 | ||
Net loss attributable to the PowerSchool Holdings, Inc. per share of Class A common stock - basic (in dollars per share) | $ (0.02) | $ (0.03) | $ (0.09) | $ (0.11) | ||
Net loss attributable to the PowerSchool Holdings, Inc. per share of Class A common stock - diluted (in dollars per share) | $ (0.02) | $ (0.03) | $ (0.09) | $ (0.11) |
EARNINGS (LOSS) PER SHARE ATT_4
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (EPS) - Schedule of Antidilutive Shares (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total excluded from diluted EPS calculation (in shares) | 9,314,549 | 50,042,365 | 46,968,608 | 50,042,365 |
Unvested RSAs and RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total excluded from diluted EPS calculation (in shares) | 8,839,703 | 10,113,893 | 8,839,703 | 10,113,893 |
LLC Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total excluded from diluted EPS calculation (in shares) | 0 | 39,928,472 | 37,654,059 | 39,928,472 |
Member Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total excluded from diluted EPS calculation (in shares) | 474,846 | 474,846 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Income Tax Examination [Line Items] | |||||
Income tax (benefit) expense | $ (1,724) | $ (2,933) | $ (1,769) | $ 1,605 | |
Effective tax rate | 28.40% | 31.20% | 8.50% | (8.40%) | |
Unrecognized tax benefits | $ 14,000 | $ 14,000 | |||
Unrecognized tax benefits that would impact effective tax rate | $ 14,000 | $ 14,000 | |||
Remaining percentage of tax benefits | 15% | 15% | |||
Non-current liability recorded under tax receivable agreement | $ (392,700) | $ (392,700) | |||
Impact to Equity due to change in TRA | 1,600 | ||||
Change in TRA liability | 8,700 | ||||
Change in deferred tax liability, TRA | 7,100 | ||||
Tax Receivable Agreement liability, current | $ 28,640 | $ 28,640 | $ 1,862 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2023 | Mar. 03, 2023 | Dec. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Consulting and Implementation Services | Affiliated Entity with Common Ownership | |||||||
Related Party Transaction [Line Items] | |||||||
Purchases from related parties | $ 100 | $ 500 | |||||
Costs and Expenses, Related Party | $ 2,600 | $ 700 | $ 7,400 | $ 2,400 | |||
Reseller Agreement | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Term of related party agreement | 10 years | ||||||
Amount of transactions with related parties | $ 36,800 | ||||||
Costs and Expenses, Related Party | $ 4,000 | $ 2,900 | 6,300 | $ 5,400 | |||
Secondary offering | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Costs and Expenses, Related Party | $ 1,400 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Retirement Benefits [Abstract] | ||||
Employer matching contributions | $ 2.7 | $ 2.6 | $ 5.4 | $ 5.1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Jul. 31, 2023 | Jul. 11, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Aug. 01, 2018 |
Subsequent Event [Line Items] | |||||
Line of Credit Facility, Increase (Decrease), Net | $ 100,000 | ||||
Aggregate principal amount | $ 840,100 | ||||
Revolving Credit Facility | Line of Credit | |||||
Subsequent Event [Line Items] | |||||
Outstanding balance as a percentage of borrowing capacity | 35% | 35% | 35% | ||
Subsequent Event | SchoolMessenger | |||||
Subsequent Event [Line Items] | |||||
Consideration transferred | $ 300,000 |