Instructure Holdings Inc (INST) Reports Solid Revenue Growth and Record Adjusted EBITDA in FY 2023
Revenue Growth: Full year 2023 revenue increased by 11.6% to $530.2 million.
Adjusted EBITDA: Record full year Adjusted EBITDA of $214.2 million, up 19.3%.
Net Loss: Slight improvement in net loss to $34.1 million for the full year.
Cash Flow: Cash flow from operations grew by 16.9% to $164.0 million.
Acquisition: Acquired Parchment, expanding the scale and reach of the Instructure platform.
Guidance: Provided optimistic full year 2024 guidance with revenue expected between $655.0 million and $665.0 million.
On February 20, 2024, Instructure Holdings Inc (NYSE:INST), a leading education technology company, released its 8-K filing, detailing the financial results for the fourth quarter and full year ended December 31, 2023. The company, known for its commitment to enhancing the learning process and improving student outcomes, supports over 30 million educators and learners across the globe.
Fiscal Performance Highlights
Instructure reported an 11.6% increase in full year revenues, reaching a record $530.2 million. The company's net loss showed a slight improvement from the previous year, standing at $34.1 million. A significant achievement for Instructure was the record Adjusted EBITDA of $214.2 million, marking a 19.3% increase, with an Adjusted EBITDA Margin of 40.4%. The fourth quarter also saw robust performance with revenues of $135.4 million, an 8.5% increase, and a net loss of $5.8 million, which was comparable to the prior year.
The company's financial achievements are particularly important as they reflect the strength of Instructure's business model in the competitive software industry. The growth in revenue and Adjusted EBITDA demonstrates the company's ability to scale effectively while managing costs and investing in growth initiatives.
Operational and Strategic Developments
CEO Steve Daly commented on the company's performance, stating,
During the fourth quarter, we exceeded the high end of our guidance range for Revenue, Adjusted EBITDA and Adjusted Unlevered Free Cash Flow, reflecting our unrelenting focus and the strength of our model."
Daly also highlighted the strategic acquisition of Parchment, which broadens Instructure's portfolio and market reach.
The balance sheet as of December 31, 2023, showed cash, cash equivalents, and restricted cash of $344.2 million, with total debt at $491.3 million. The company's net leverage ratio was a comfortable 0.7x Net Debt to Adjusted EBITDA. The strong cash flow from operations, which increased by 16.9% to $164.0 million, and the Adjusted Unlevered Free Cash Flow, which rose by 29.9% to $225.5 million, underscore the company's solid operational performance.
Looking Ahead
For the full year 2024, Instructure provided guidance with revenue expected to be between $655.0 million and $665.0 million. The company anticipates Non-GAAP Operating Income to range from $260.5 million to $265.5 million and Adjusted EBITDA from $266.5 million to $271.5 million. The guidance reflects the company's expectations that current macroeconomic conditions will continue through 2024.
Instructure's performance in 2023 sets a positive tone for the upcoming year. With a strategic acquisition and a strong financial foundation, the company is poised for continued growth and success in the edtech industry. Investors and stakeholders can look forward to Instructure's sustained commitment to driving shareholder value and enhancing the educational experience for learners and educators worldwide.
For more detailed information, investors and analysts are encouraged to review the full financial statements and management's discussion in the 8-K filing and to join the conference call scheduled for today at 3:00 PM Mountain Time (5:00 PM Eastern Time).
Explore the complete 8-K earnings release (here) from Instructure Holdings Inc for further details.
This article first appeared on GuruFocus.
