PWSC - Earnings call transcript Q1 2022 | PowerSchool Holdings, Inc.

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Operator

Good afternoon and evening, everyone, and welcome to PowerSchool's First Quarter 2022 Earnings Conference Call.

As a reminder, today's call is being recorded, and your participation implies consent to such recording. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. like Relations. the would Alan over I Investor Taylor, that, to call turn to With you. Thank begin. Please

Alan Taylor

Thank you. for everyone, PowerSchool's ended Good evening, XX, financial us for March results for joining conference call XXXX. the quarter and first thank you

CEO, today, Shander. CFO, PowerSchool's Gulati; and On the have Hardeep call we Eric

company regarding results related portion are, Before call, of and we disclaimer may begin, for to call, This include to me statements. allow statements the the future expected including our a forward-looking statements. forward-looking provide forward-looking the therefore, Q&A

actual may also to release earnings that are and references include risks Our results our to differ projections financial will our uncertainties a uncertainties. and to materially non-GAAP due other and forward-looking from subject in risks statements SEC are number filings. measures. of described remarks The Today's

and definitions corresponding in provided between PowerSchool's Investor at reconciliations information, information Relations is on non-GAAP the financial GAAP to posted including website information, Additional the is press which release, financial investors.powerschool.com.

call for over Eric the will Hardeep. with we you will PowerSchool's Q&A. before highlights. a quarter In begin I'll to addition, a turn that, review first now through be With review will proceed webcast this replay through then call same Hardeep available financials conference of website. the the of via take to

Hardeep Gulati

and and everyone, quarter. fourth and the for both to year, our Welcome, Alan, momentum call. Thanks, for guidance end adjusted range good for XXXX. a evening, for EBITDA the of in the strong start top laying growth and joining We continued you thank business everyone. revenue We consecutive first our foundation had quarter exceeded earnings the

a margin. was XX% up $XX.X million, $XXX.X million, and year-over-year, totaled revenue adjusted quarter EBITDA XX.X% representing First

and districts see which are to operate, educators, student success. core our products, empower continue strong for achieve and We for to demand mission-critical

our by: our existing first, platform, model continued predictability opportunity execution and track resiliency customers; This feel the the market. and consistency We of of expanding into has enterprise This business continue are depth of are of comprehensive largest, the of our breadth in with been scratching four highlight of I platform business of ahead of and demand to about strong consistency is showcases has power K-XX impact enables momentum we on which differentiated the through long-term K-XX also the surface least K-XX more end only our and us. details our success and in this the the excited a most share SaaS opportunity growth and cross-sell continued in the leader growth second, platform for our our driven from just and record differentiated third, unified results cornerstone of logo education, of key and which and on platform; new one quarter. cyclical our platform not our position international; compliance-driven the must-have net in all, the as aspects these America, market wins North I above the predictably finally, continued but markets. the funded will as the

integrated strong record, system system First, of intelligence on into customers, their an of cross-sell district XX,XXX products comprehensive XX-plus all our of and demand our unified built providing enables of operations top compliance. our platform of

with and critical large education. the digital elements education, students, needs transformation engagement a next department see demand Our the priorities. their stakeholders, the are and strategic us of key the and all It for and transforming a customers and system administrators parents, is integrated teachers, towards makes for unified very users partner having across of unique and state of districts broader on midsized conversations we all exciting to potential

biggest to and college, child workforce career the Classroom challenges view of student Talent teacher And Naviance facing shortage. drive readiness should education Insights but and one just example, is whole engagement. should and the of retention to Unified Unified intelligence. For Unified provide today planning. predictive not improve address

together Unified our this Insights these continues be can QX. in consistent growth for and strategic Stanislaus with County customers other cross-sell customers in SIS that, our performance with single pieces many XXX highest area these solution bring of are Florida vendor in see in continuing areas over choice across County customers like like transactions to Marion California. transformation no our drive all we like cross-sell in Akron balanced, but also Lewiston, PowerSchool are and and non-SIS adoption as to We us. With our

growth North as for to top in continue gains we mentioned largest in a our of assessment Our in unified healthy is of districts. which In the selection customers as assessment learning for with closed the challenge to very business our prior formative school the last the three choice a see strong see value classroom we accelerate on America to deployment students, And many even have the vendor districts experience. been states. earnings. briefly and QX, pandemic I

Schoology deployment. a their rounded with added QX. Kickboard selecting programs leading in to a charter to Behavior our continuing out their Take County, a selected West classroom Schoology are special in public Washington piece all school a LMS. our solution. largest becoming school Schoology; is suite existing who classroom in of in adoption district Guam, XX,XXX-student Utah, growth Idaho, Concept see the for Behavior We management of schools; its key suite also entire example, School, Ada, district organization,

prove cross-sell expand customers evaluation across value example, hiring difficult Our long-time ability transform K-XX the educators. provide No and bringing for Unified It for products them our retaining outcomes during has this see student our on up given platform. Cleveland, education our a to with year their other vendor teacher eight their Talent opportunity Unified our to share. has thrilled and products implementation, continue been better to to added platform. validates solution deployed to market I'm district. what continue the to PowerSchool

of We have within fraction dollars the billions cross-sell only opportunity touched a of base. our of

we avenues progressing further acquisitions our rounding K-XX. new innovate create platform for products quarter, SaaS have in breadth, communications have believe best-in-class we is presence students our education within unmatched with growth the regional American our the products them platform of special already that attendance sold to added and Home. intervention. and Already, SIS recent proven integrations North that Second, a The XX,XXX and and representing successfully was through well; helping products, and education with we are using to scale, department we attendance expansion. our of Unified communication our Last territory-wide ability

technology innovation We strategy and enterprise in management push differentiates high step planning further to an are Chalk experiences do course value shortage highest in With to continue every of an closed area innovation deploying college, in life classroom CCLR, solutions our our total excited and for expanding with solution our for release recent readiness through the career, are creating best-in-class support furthers classroom of curriculum market. consistent The towards solution further to and There acquisition and investment consistent in this example personalized There small lesson Monday. to that HSC acquisition one size that platform. we our planning bringing students. pathways curriculum the solution long-term classroom. LMS of to no in broaden of unified platform we partners also options is we hundreds effectively our are opportunity our the unified us differentiated a addressable Naviance's industry around with technology a and learning integrated expand the will of flows. is of portfolio, tuck-in Having our our Chalk, solution. into suite every quality and Take through our our acquisition expand to continue Schoology announce education tuck-ins

leadership We and platform to a not announce XX I'm to over over continue only global in traction increasingly we suite. Arab net-new, representing across Middle our America, two school additional in and an XX head private our in to student we about grow We sharing international the us globe million growth in pipeline management vector in but which Emirates, help K-XX, secured and massive on Ittihad system excited to and Al opportunity. learning brought this East, plans on based this forward North recent as see deals, classroom over position, Liwa more in XX,XXX focus board United will some into reached East the broadly, increase in students. entire Third, and tap students international information Talent countries. demand Unified platform leader or future. full-suite In with as Middle includes of we our our where products recently more our sales groups, look Education

modalities. the is classroom with XXX our classroom level exciting growth million recognition products, customers. we are delivered solution we and learning the adoption value customer assessments our and seeing In all of robust. see the most for QX showing is the alone, impact over our of Finally, usage But to and product

than X.X districts our and scale XXX QX educators critical million X.X With within highlight meet been These few breadth products courses one they just the ability space. needs teacher of live in issues professional These with have by continue our currently X,XXX X.X as stickiness implementation over We taken in their our which customer any proof and and million is jobs are administrators to vendor We and unmatched helping will a of alone. and our to substitute points supporting underscore how and other critical in talent our million solve active go the retention and platform, more have development posted, K-XX solutions believe to biggest the had we grow. This statistics of that day-to-day in evolve. QX positions filled, just recruiting. are our projects. products

of We K-XX are provider software unified, platform leader the end-to-end the the only comprehensive and market serving ecosystem.

have strategic pieces base and drive in that can our we within and have education This as transformation to sustainable proud vendor business the But importantly, these to a built. us grow business together have no choice make results. for to more pipeline the of for allows years reaffirms investments it generate existing to of like are digital and equity single their vision customers and us We to I'm our impact on the allows outcomes, very we customer come. broader consistent model education personalized other us our bring altering positive profitable learning.

with pipeline beyond. are quarter and first healthy results our We pleased have QX for a and

our it in both Eric? year. more beyond. first results and discuss results we deliver XXXX are I to rest detail to forward, QX consistently quarter Eric ability in strong guidance our confident our and in financial of hand for very Looking to will now over provide the and

Eric Shander

to Thank Top-line portfolio momentum evening, as a We was you, the to continues districts balanced had XXXX. of product expectations multiproduct good cross-sell start the unified business in a quarter in out of performance growth everyone. continue reflecting first the the value play and to by year, ahead Hardeep, which driven the strong and across won, recognize suite.

I would confidence opportunities. key drivers results, quarterly that in long-term business the our our like to give into us highlight diving Before three in growth

First of is a end into creating the nature, stability K-XX XX% the the was recurring revenue and the revenue QX revenue and recurring of in predictability stream strong model predictable a future. and of durability market.

rate end interest protected supported economic Importantly, of we in the critical is increases, solutions. K-XX the of believe inflation event mission nature or the our well market by slowdown

Second, is proven value our our driven we the by create strategy cross-sell for customers.

and for to Our student outcomes. customers our products provide a meaningful ROI improved lead

As districts which and increasing more value each the and a of in it purchase from flywheel benefit the creates suite. products more the for stickiness other, customers effect compounding solutions,

allows compelling our invest and is Third, opportunities. profile, strategic in M&A to growth which initiatives us profitability

organic acquisitions. infrastructure, strong company maintained tuck-in while significantly and initiatives, have in margins We growth public investing our

Now services the and growth and of increase strong of deployments beat than $XXX.X support company by was was revenue. turning XX% increased million product on-site million, driven the $XX.X an $XXX.X by quarterly and by guidance. better strong PowerSchool for totaled and to customer of year-over-year, up retention. XX% results. million, quarter the year-over-year, on-site driven end event. $X.X up portfolio year-over-year our revenue demand training Services million, our balanced services The Subscription in XX% and an was across acceleration driven revenue our first top our revenue University, product Total

margin, first the Hobsons net the with QX the an continued maintained purposes, one revenue XX.X% million, up retention included was highlighting March expenses the was and as post-COVID our from profit higher for gross quarter representing of and in-person our XX% QX, the balance $XXX.X customer partially year-over-year, the adjusted offset up continue of million, and to million, of of $XX.X comparative annual million, of our driving last on For up which growth. products. India in cross-sell we year-over-year profit Center ended XX% strategy a which from Gross month basis areas X, revenue and representing XX corporate strong closed XX.X% benefiting helped Excellence, acquisition, event travel of recurring continued XXXX. success of top-line a invest while margin. We our $XXX.X stickiness quarter non-GAAP margins, year leveraging of points $XX.X from We results

to turning the areas compared infrastructure. revenue operating earlier, Now total of operational our and totaled in information to a in continuing of quarter $XX.X first year XX.X% security while reflecting our expenses. R&D innovation ability invest with or million maintain to XX.X% scale

Excluding acquisition, R&D leading was accelerate suite percentage stock-based our which of XX.X% a year driven This solution. stock-based total by $XX.X on versus company-related go-to-market public the SG&A we of strategy. K-XX planning relatively in lesson adding the Chalk, tuck-in costs, from our curriculum first complements compensation, XX.X% our primarily acquired an in increase a higher post-IPO as latest year-over-year expense week, was total revenue headcount expense in basis. revenue, by million and quarter compensation to flat or expense earlier,

focused minimal and to the invest remain strategic profile EBITDA focused expansion the modeling purposes, including XXXX. costs end first in range. maintaining of margin, growth associated in continuing platform margin guidance top it XX.X% M&A. For and opportunities, healthy our on Chalk million, has revenue or beating innovation while for a totaled with We $XX.X Adjusted quarter on

first balance capital. strong cash the ended cash quarter in our a and working million by million We the change revolving driven to draw $XX offset and $XX.X negative on a turning in sheet, million Now, facility, and $XX.X collections leverage. credit liquidity equivalents, by with

in cash requirements working of half peaked the Our a of and become major in then QX first the and source QX. year capital

grow with seasonality year-end the ended $XXX.X X.Xx to the year. in draw and reminder, net revolver QX cash flow a we the our K-XX align with lower to $XX cash due in QX in in flows, leverage to our as this peak cash X.Xx, nature from cyclical we quarter up at of generated As This ratio in QX. million ticked compared QX free resulting our common businesses and net in of in is which of of QX that XXXX a their We a and annual ecosystem, in ratio XXXX the Because renewals expect to and million budgeting number balance year-end. annual cycle we before payments serving majority normalizing leverage we QX. expect coming

IPO. point based considering which of rates we euro-dollar plan, basis specifically to A continue acquisitions in three rates, to in interest less We rate exposure rising million. interest in the current ahead lean de-levering has our be In short-term our of LIBOR. interest original $X expense result than have market XX closed is increase tremendous interest our annual first would since progress environment, loan the increase an term

indispensable states to all Fed and as with such state had monetary nationally more business discuss the states revenues offsetting mission-critical Moreover, public shown more noncyclical combat schools impacts revenues to economic on government of XX financial to And well to current foundational our most the XX% a tighten the depth, with of than funds, criticality any revenues perhaps become increasing believe inflation. willingness inflation-adjusted federal given importantly, operations. Given policy XXXX the environment, but stimulus by solutions macroeconomic as aggressively grew our to extra system such more our information XX%. like downturn, and relief mission We local provide by has the the the our negative solution. especially budgets. school I'd student and increasing nature it model will to durability XXXX, in K-XX an end-market and insulated of K-XX In relatively against is business signaling our

visibility revenue in Please that subscriptions outlook of full-year into when the first to XXXX revenue, was results million total In driven fourth at support services we had financial good quarter, while expectations. announced expect line Now, revenue quarter to outperformance with XX.X% to X, and by we $XX $XXX and a and quarter on guidance. representing note our of in our million to second margin revenue QX second midpoint. $XXX XXXX The and EBITDA and turning million, deliver quarter we full-year million trends. was adjusted the $XX March

ranges adjusted the full-year we we EBITDA, the business. adjusted range million, and and raising revenue the at guidance expected reflecting which representing expect of acquisitions now of the in coming million, EBITDA in million XX.X% see to at in our an $XXX not top $XXX XX.X% rate Chalk, are for EBITDA are the million, recent and XXXX, midpoint midpoint. Kickboard, margin momentum the contribute profitability of For bottom total continued end We in a the costs growth to XXXX. million or $XXX revenue to includes revenue with representing $XXX This $XXX Kinvolved year-over-year tuck-in and adjusted additional guidance from materially to

capital Q&A. and outcomes cross-sell to operations approach position improving advantage. we and supporting unified healthy, you range expect call million The expenditures, and approximately up shares strong for for first we to open million we delivered districts excluding value expected million $X our for we purposes, With the ROI of that, and full-year. and line open competitive to XXX expense of million Operator, modeling remains capitalized year market-leading diluted be remains of quarter now For and our software to solutions $XX the compensation Overall, student provide key are XXX start to the share-based provides XXXX. a questions. the mission-critical platform significant will the are a for for Fully in school in Demand please $XX and opportunities. to happy million shares. approximately differentiator

Operator

the Please with line from our of [Operator Jefferies. Thank you. ahead. And is go Brent question Instructions]. first Thill

Brent Thill

relates the see unveiling next and international you I'm Thanks. it how opportunity three that curious to as over the years. could if Hardeep, comment you

the follow-up rate quick component. a on Just interest

little think going I everyone's about on in side. the a concerned macro what's

you If on the confidence resiliency you Thank just little core in, of more giving macro environment could in business time just drilling is a the the you. spend tightened a what the in side?

Hardeep Gulati

Yes. appreciate Thanks question. I the Brent. And

there highlighting look have breadth, scale let the you depth, start first at international who that is our international, solution. with player the when with we the So got other me has no

of want continuously school get who schools, a the across of a lot we whether education. when their globe private it's So opportunities or local even transform kind either to inbound

breadth suite the PowerSchool very interested and globally and much we have every We proof pretty the country. in in are because points depth

benefits, I international, for UAE take East, and the a of in Middle mentioned, proof schools lot of as got XXX,XXX-plus almost private One example, students schools of multiple there. and international we've example already points,

entire have them to leave even the recognition product is, system, Ittihad talent information is about we Liwa. value secure in value products, our our just even wins more student -- What's our Schoology, -- two help not critical. our these exciting of our well as of which they assessment, our are Al us So as and or classroom also again,

traction it much So going and are is we we're do see translate the broader. to seeing, the we seeing demand

Show, is innings As us in international. for we still Road mentioned in early pretty the this

we even well a the to in International look putting our in So to one investment Head approach things at more an acquisitions aggressive accelerated potentially are more of as of international. of more emphasis and with network a as similarly partner Sales, bringing

plans So the three next share those quarters. few over see happy detailed and next years, to of we in more the are will kind you that, two,

in recessionary things in to protected as K-XX funding K-XX, other highlighted market. remarks, from as this I last report just largely the as Well, inflationary is Eric Brent, look of mentioned pressures. my at earnings prepared you about and the the Now, his question, well one the well, when your the

that the K-XX great budgets inflationary you last And to of the all. even if years, coming any moment money where their also ESSER at that districts and any even state is through ride there is XX during when kind you even So during recession, the additional investment providing are cushion even more investing robust. periods, through is over they largely the to a look disruptions of see school trend

into And as that's our funding So stable guidance. more into for well as very as what's we see see strength environment a our you K-XX. into giving our results healthy, projections,

classroom We that are very or are really operation on further out and the data definitely The seeing waking the districts benefiting talent transformations, of whether Hope that opportunities at whole side, COVID. helps. a side digital side are around on even side looking exciting it's broader or the especially all the coming dialogue. from those we or broader transformation, up the

Operator

Hedberg And Please with our next Markets. question go RBC with ahead is from the line Matt Capital question. your of

Unidentified Analyst

This Hey. for Hedberg. Thanks [ph] question. my Matt Anushka taking for is

others in? calling Could for in environment margin, in confidence improvement guiding what the levers continue the margin gives the their And margins you talk where down. you're are improving you to environment year-over-year EBITDA about an the inflationary we So there? are particularly

Eric Shander

is this sure, Yes, Eric.

So you do We profile, first only margins. expanding to continuing margin where also extremely that we're question. environment growing of at great -- we I not top-line, are proud mean, our look our as off, but in an

to look We've of our leverage we back that at X,XXX as But growing at got be of model. our And got are to the top-line really We've time, too, we've the over Excellence, margins. help said well. operational expenses. terms investment got continued has going within half the we folks to which the good of -- clarity in same grow a areas continue of I in that As of highlight the a a India lot want we've for the as got to Center us. the spend some the we before, year, opportunity operational into to

bps top-line, in the half. we've have the the we visibility bullish of into just end as not on second in certainly, then very, So EBITDA. our adjusted we've on increased And good very are our XX top showed we the but got guide, expenses we

we're last there. lot would of really our operations, how seeing we're customers, to So that seeing model, value few just going a as that servicing we're through the as say, made investments we've scale the predictability back well. of the over cost years continued play the I our our really to And we

there. and bullishness as again, extremely extremely, the to strength to have necessary we strong But profile the margin wanted see to we're really profile, items margin the and overall out. just our continue we second drive playing signal we half going So around

Operator

our Blair. William ahead. the line of question next Please And with comes Stephen go from Sheldon

Stephen Sheldon

for Hardeep Hi, and taking Thanks my Eric. question.

bookings kind the quarter? RFP I second just in in what throughout curious activity seen first and since And quarter. First, of guess trends you've April the

You're now entering the heaviest bookings quarter.

so maybe in any you just the conversations notable there, curious especially starting have funding are flow through increased upticks And activity? to stimulus seen generally And with how going a more. little bit

Hardeep Gulati

again Thanks question. for Stephen. Sure, the

tremendous in little can is just can and the analytics, of small from a out the prepared remarks, an You're how at state that the some understanding level the a the We're about and as projects. the have where for the definitely themselves sitting And year quarters but bit call the on districts I'd that I increase, what QX, seeing so support as pretty definitely but we're absolutely transformation and student, right. right which we lot already the Well, example, QX definitely the We're pipeline, my results, by exciting just the even view shown seeing it's QX, know, and whole not is seeing rest one use of the of area are uptick pipeline seasonally back-to-school they at interest well. large, in not view the and there policies. as level, especially important do even next you longitudinal activity. those they take as an in district is mentioned most like prepare for of a child of

look how is really is ESSER the post-COVID, that mentioned, lots easy and as just and interventions money, fact, kids been you majority well. fund a support and lot further the to the of them provided one still not have to use of areas longer-term different -- As of view not for of that -- spent to even that leverage in at that still but

full view I The operation, of second that throughout but longitudinal workforce. core are briefly not the even mentioned into the we just K-XX, area the the having is on kind conversation is long-term

becoming all we now connection connections So customers. that these relevant Schoology, a of very a and have with are our classroom for important with

and So operations of also post-pandemic, that talent coming of transformation But districts pipeline across products. their we're actually well even our back actually office seeing the the what's exciting to healthy is more see a are as insights aggressively. pretty and we out classrooms as looking now at --

as also in So state is we exciting SIS, as help especially for to to the speaks which can well interest K-XX around we are districts. drive level regional time, how as even broader these seeing transformation much

Stephen Sheldon

once this Got that thinking I it. That's It year. great in to trend guess hear. you how NRR the ticked about are this with background, And up again quarter.

talked I quarter. think you one the year last for about at least percentage improvement point

seeing And potential confident how are any Given what you you're that there now, be think in that? number? upside could to you do

Eric Shander

bps QX into the Yes, Stephen, quarter. increase going great question. We XX a executed as we said we first were to saw -- we from

of year, even the than shaping based trend, to sure. going of point we're to quarter-to-quarter that, percentage at confident sequentially rest the quarter. of quarter; to upside the where it's called that continue we And a that. had going and you're some point off say types do say that about did very we see at way the the this but up point, see for see optimistic to movements kind that we least see mentioned, in last more I you're NRR these to previously one performance I of Certainly, QX we would still saw QX As early, I improvement.

Operator

ahead. Vruwink from And our Please Joe from is line of go question Baird. the next

Joe Vruwink

transactions. strong the with XXX or about last wanted -- cross-sell XXX I cross-sell the spoke transactions stronger you in your XXX of year, quarters the to Great. you earlier. activity Hi everyone. were start of quarter, seasonally In doing some

a kind or demand terms is in Can unusually what's we incremental anything the is period? strength? take So or behind right being strong maybe number of to way where cross-sell of XXX? as seasonally about more XQ at that that think an And there

Hardeep Gulati

Thanks, Thanks. Joe.

each kind me some you of the when customer. we as velocity to a result, sometimes said, velocity. go be looking do, transactions, -- of telling let at look exciting. number within we So of really quarter do the very that on the you are But seems to -- depends pretty about translating we And when at the the size

So you small a a of might you might and large lot have have deals. deal

would I not as So and of we're customers the of parameter could talking number translate transactions that a but about. the into good that directly you the I that, use velocity of think

can multiply absolutely, the I that. from But kind do of directly into the like matter. does a a So not you size of customer growth -- would because that

Joe Vruwink

Okay.

don't right closer, levels to overall. of areas? be that experience. have on of suites growth that you lot Okay. other That's on like a and ability the I in off it and talent strongest time expectation kind forward? to of spend Insights Should analytics just And SIS a was Unified Annual in going offer the was conduit almost growth personalized still of a helpful. product to relative it kind a talk quarter-by-quarter for basis. PowerSchool the going area growth and know Classroom then of Is Report, that faster You the the seems of disclosures But there a organically tutoring administration your about your some

Hardeep Gulati

good very got you Joe, Yes, point.

actually but to in way growth the driving and they look by the as some right, as are manage are the the then also gaps insight improvements at And think can pandemic, the you further factored where -- growths high seeing understand and different No definitely we and these of insights high you on seen areas. in classroom surprise the learning hybrid to both transforming I you classroom pandemic. insights when and prior given even we've were them very help So products, it. the modalities, so different definitely, in from classroom the

the pandemic. But course, products, further even SIS look that it's and healthy talent are they building mission-critical. actually are equally when very you just they're from at the important the because So also they growing

One K-XX continue of then of is and for them get in the funded, things for to -- which that beauty to these their organization, are any organization product remain actually to running be required to compliance our are operations. any able

those very seeing well. mission-critical as applications. well upsell are also absolutely, logo So these as high are sticky growth strong on we new areas And as

be to classroom, growth you areas well. continuing highest those So be will areas. But as say, also the do would we to do definitely, the insight expect and

Operator

question And Sachs. Borges with go Please Instructions]. is Gabriela [Operator from line the of next ahead. our Goldman

Gabriela Borges

And love afternoon. and transition resiliency the the market through in about the Thanks or end more my commentary Hardeep, seeing walk to LMS taking the I'd schools market today. question to the are good all specifically, us paid? appreciate of from ask market. of you're that unpaid to Hi, of causing that the transitioning I in what you you happening on catalysts for could are some additional

Hardeep Gulati

good pleasure a you. So -- to talking it's Gabriela,

very condition very as think that. condition one beauty -- and markets is from of proof marketing going of end market, the where is you kind that said, it's stable else kind into the our a I a everything of of it's resilient

Matters remarks. growth installed PowerSchool LMS key even or solution, who in LMS is are adopting added Performance very over are along see Guam, to where are year, We students to healthy. very high of million one five they of we are to areas prepared LMS. integrated are leveraging our I back-office in an system, of We're well system. other any pandemic, see we XXXX, and an about definitely information of solutions even kind of during a lot using classroom have -- saw our do really adopt similarly definitely West mission-critical. kind as leveraging that our additional Our be still height a four our benefit seeing that assessment mentioned of very a student as the typically, classroom. it our lot that What post-pandemic in Customers of who will one we are the with of opportunity XX the we million to But my the the base. two looking at in of almost adoption And see growth during LMS. customers, broader customers to they as Ada mentioned do seeing students I we million SIS months. assessment

continue unpaid. and point, place. appreciate think see would and which student check assignment and that attendance to their one an of about still to the have assessment we report in check a Bringing probably behavior kind and and all homework is you that and offer of where big their their integrated, it. LMS think grades and in solution, only other it differentiation your a a go having SIS and not we is to Half a -- I place their to together, having market, an

million the which future. are into So where we would continue students them the continuing call do call them. two market, capturing -- I using an we to And to see very collaboration want we lightweight one million additionally that systems, see traction I wouldn't LMS. of foreseeable to

Gabriela Borges

may. us of very in the Eric, That's Thank about if yourself range. you. analytics kind as for for think a the how deal remind to about on the pricing growing or Either add of your basis how sustainably of change analytics? talked you've piece XX% know in past sizes the follow-up, more And customers portfolio helpful. I as I a

Hardeep Gulati

talking when Gabriela, you, this, right, XX-plus about A the products, buys going our size all free see to might I right, if feel on $XX that. -- looking the to eight of upon when who have customer modules, $XXX nine our of at suite, jump at to per to depending $XX somewhere What you you you're customers; between and to can tell you're Gabriela, look Eric, look even student. you're at somebody $XX

as about analytics, us analytics think module, yes, which to So allows continue capture. right, another to

and would doing finance demand the of the student analytic the from is is analytics, key child is the while on assessment which to that I suite see analytics. like the entire whole have do student essential is that one beauty the view, continue We is of engagement. One of we HR things solutions, multiple how student, understanding analytic say the what the

enrollment have We analytics.

of the have And new analytics. are understanding matrix -- effectiveness predictive adding and introducing and also of and education model. one we We we learning professional launching are analytics where areas

district. present per student capture So the additional from can us these we dollars school will

by would of districts it rest the I the there $XX,XXX student because per analytics commitment is driving $XX,XXX data from them $XX the it itself intelligence. value to because a do $XX going spending to be better So helps is pursuant view what provide to by them optimize huge a

that a you analytics. kind think the about understand pricing, hope would from of helps So you how

Operator

question ahead. go Macquarie. the next line of Please from our Fred with is And Havemeyer

Fred Havemeyer

back students that opportunities learning and had personalized students those years or you about your Hi, of past many And the loss the demand thank the year problem were when been school you. really learning. now systems have years normal of really your since with across how in XXXX is -- distance to track it I normalizing was accruing the graveling now past couple had the pandemic, It during was beginning school. couple students break portfolio drive earlier school do any assessments learning LMS begin more thinking haven't schools or COVID especially to adoption many for and in they here anything opportunities that of like been school March you just address today as that have take were schools years? thought of issues would could was from help got of what thinking really be to a get kind portfolio, that had as two-week normalizing going on purchasing, proper see haven't me as of say, substantial initially

Eric Shander

Yes, absolutely.

key You're touching a on point.

studies their prior In They students, XXX,XXX out assignments, almost more three prepared mentioned so in to for who been students make foundation only our as And absolutely our call on using coming a -- fact, they was which in as even managing learning post-pandemic. kids. our They right, almost communication. out a of support of the I daily homework, increased and case as usage top how district, that are had well using wanted pandemic. the my for has the better personalized one use this to right, having opportunities management the do it of you're XXX,XXX they managing it, system a saw been one pandemic school remarks, that is learning to can

adopted So allows of Schoology have integrated they the Performance that a students. to provide understanding into that because our Matters now across them all better assessment,

also in and our example they year. previous Miami-Dade LMS adopted We have with the assessment of calls, started also given where last

so pretty but common see of loss year, every can those this integrated to they dealing helps the this of just game-changers support benefit hundreds an the them environment for before them, as we learning So learning who districts really the taken how with of the we even some see having that a assessment not an actually I'm to pandemic child students be of better other in lot of and mentioning for to provide engagement better. the one an and school -- last have

post-pandemic. actually thing to -- most prior only pandemic, are -- So have is this is accelerated have been of trends -- they got this and

Fred Havemeyer

just to that the different Thank pricing you. know your on a backdrop. or of couple we pricing also rather generally inflationary macro And touch then on really this considering environment, your the ask philosophy market touched I but in of aspects I about wanted leverage

how about you. generally, again with could approaches pricing it PowerSchool walk how just us escalators? Thank and thinks pricing, multiyear So you low through contracts

Eric Shander

Yes.

Eric. So Fred, it's

this. take I'll and -- So

look to at the adopting our modules, becomes overall which our look then the we impact and value and the really times, and first, really value driving customers platform As customers our at few the more it, this more of overall the and we've getting to we said customer. a really of

increases. tell do do So at would I for terms. we the you beginning in price the our think -- they're contracts to those range, negotiate Those low, X% percentage allow X%. the of of contract low

amount point to not done of increases. We have price a increasing those in at this substantial time

back pricing those to, very, driving escalators. this is small really the our model, in there we're driving possible business questions the of that the we and revenue opportunities consistent again, actions one increases customer, through have leverage -- feel as within so driving our as our we keep like, customers. modules, we to more and the less the platform, not Now, renewal seeing really some price fair is is are adoption value the to provided certain and value try increasing across those prices, into of to And -- of in where I that very we've of operational But got some -- in earlier board and continue nature. amount have we the situations addressed the a

Operator

And question Raymond is from go line the our Diane Please Peterson [sic] James. next of from ahead.

Unidentified Analyst

on now you are return wrapping customer, post-pandemic they is to year renewal like as them for early the where using This on from Thanks. upgrade for [indiscernible] year. in well what you Hi, normal back Brian. insights help questions, earlier probably to a this but interested follow-up having is are is to possible as that what feedback next up, school are

Eric Shander

Sure.

get I them. sure, make me Let

what of management our more we tied outcome, are that One is management substitute information standards drive of special to I even as learning system, actually professional teacher or a which or our is is which These to accountability student better learning beauty as I sell talent make things, the in or or our and school our districts like assessments, the an can is also teacher helps getting well. that actually our education, so they getting sure business them these having funded, child are think, critical education our education. These drive and the every state recruitment mentioned, right? solutions the attendance manage and remain compliance compliance in must-have, equity funding the

of It not the or of these benefit have ROI not. they stickiness situation. doesn't years Each is matter that in the need scenarios all value solutions I the been remote or and better for student get many of solution the is and These any in solution actually fully of like, today using they our hybrid the solutions, or in-person. the on based those of engagement and whether it student outcomes. of have So

rates healthy. So continue to renewal be actually our very

core in are our -- even rates gross XXs. our when at products, retentions fact, you In high renewals the look the are

on fact the move the are to solutions it renewals are in definitely applicable really deployed entire transformations and been these basis, in accelerator ongoing additional don't across not district. an a pandemic-only, they at these them it's has all faster, is students, down on is certain the but even helping them solutions, that that. to because we quarter it sidetracked based be really build or look actually situation up and really one where So an sticky or sign anything The on

Operator

from next our line ahead. of go Please Bank question is And the from America. Ikeda of Koji

Tanika Mehra

question our this to Hi, see Thanks on internationally. Tanika great growth is it's Koji. for Mehra and for your taking

vector You land signed with growth to versus Also, two overall, carry than said more schools? pricing international public? customers highlight versus Should And higher difference schools. the would so that international you you demand anything internationally public typical the near-term that is you. is or to private of private customers? there respect say in up domestic Thank

Eric Shander

absolutely And you. question. Thank fair

public. based differentiate pricing So private or on our we don't chart a

more based actually on is pricing size Our the the of district.

deployment, then As pricing you because higher side advantage you school, or you're you're small can have have a if you're of state imagine, deployment private a you the district if the a big volume. of it. on And

dependent not international. is our pricing fairly in that but So on is North pricing across robust America, not just

in to where behavior international U.S. follow-up any about of see I we do question your different than -- to think be areas

that I the was key suite these to of emphasis even the relevant one think deals is trying make that entire -- our internationally. how I fact the was much two with

is it are demand the for system, seeing not information our management talent seeing even or internationally. a are we So we Schoology just for student

enrollment. communication, it for We for assessment, behavior seeing for are management, better better

best-in-class has where that's of are there thought Schoology unique XXX,XXX the across on our full-suite leaders almost a points, proof even mentioned, solutions we about as Report, or than from industry funding other no are inbound like talked lot more we When a a a you're you are XXX,XXX, whether position being very a huge are country Philippines, or education public trillion This interest already have being which international is trillion-plus seeing big, whether I these which reason a And a at international. of private K-XX. almost internationally, these market. So in for very students solution international. all have it XXX,XXX with has player, is relevant And Uruguay globally. school look we And that in we very HolonIQ the even you school $XX K-XX students. $X

deployment have in We countries. across SIS XX

of definitely we points. proof lot have So a

opportunistic have we been they and As largely I mentioned, -- inbound.

investments, markets, especially focus a our have will We are definitely where capturing emerging now strategy start on. big different help turning we these with and markets international us accelerating which the

Operator

at have conference no to the on now will time. back phone we this for line the turn And I further remarks. Gulati questions closing Hardeep

Hardeep Gulati

continued and PowerSchool thank mission. Well, for again your in support you our

with results We guidance, you our from quarter. from the our see in will have continue been and XXXX pleased are can first and we consistent as to And success beyond. very have confident very

in in to which our our but a also also very us the allows very differentiation leverage competitors. a have market, continue from continue distance but our we mentioned, and also to conditions, grow to timeframe, us are of stable I we market to platform As exciting

education but a to and continue growth the to invest, just even learning, that game-changer, platform, we and having XX,XXX which today as personalized continue the proud customers are serve is As not well. the base in unified we

So again, and wonderful evening. thanks, appreciate, I a have and

Operator

conclude and That your today. participation conference call does lines. ask you We for for please your thank that you disconnect your Goodbye.

PowerSchool (PWSC) 7 May 222022 Q1 Earnings call transcript