Instructure (INST) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 was $170.4M, up 30% year-over-year; net loss was $20.9M, compared to $11.0M in Q2 2023.

• Adjusted EBITDA for Q2 2024 was $73.4M, up from $51.3M in Q2 2023; free cash flow was $(10.0)M, down from $23.5M.

• Instructure entered into a definitive agreement to be acquired by KKR for $23.60 per share in cash; expected to close in H2 2024.

• Acquisitions of Parchment (Feb 2024) and Scribbles (July 2024) expanded the platform's credentialing and records management capabilities.

Financial highlights

• Q2 2024 revenue grew 30% year-over-year to $170.4M; six-month revenue was $325.9M, up 25%.

• Net loss for Q2 2024 was $20.9M (EPS $(0.14)); six-month net loss was $42.1M (EPS $(0.29)).

• Adjusted EBITDA for Q2 2024 was $73.4M; for six months, $138.4M.

• Operating cash flow for Q2 2024 was $(8.2)M; for six months, $(100.7)M.

• Gross margin for Q2 2024 was 66%, consistent with prior year.

Outlook and guidance

• The proposed KKR acquisition is expected to close in the second half of 2024, after which Instructure will become a private company.

• Management expects continued growth in cloud-based education technology adoption and expansion in credentialing markets.