PowerSchool (PWSC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue increased 10% year-over-year to $191.6 million, driven by subscriptions and support, meeting guidance.

• Net loss attributable to PowerSchool Holdings, Inc. was $20.0 million; GAAP net loss was $25.7 million (13% of revenue).

• Subscriptions and support revenue grew 16% year-over-year to $170.1 million.

• Announced definitive merger agreement with Bain Capital Private Equity, expected to close in H2 2024.

• Launched MyPowerHub and expanded AI-powered PowerBuddy platform.

Financial highlights

• Q2 2024 gross profit: $111.8 million (58% margin); adjusted gross profit: $133.6 million (70% margin).

• Adjusted EBITDA for Q2 2024: $66.6 million (34.7% margin), up 9% year-over-year.

• Free cash flow for the first six months: $(159.2) million; Q2 2024 free cash flow: $(56.7) million.

• Weighted average diluted shares outstanding: 203.7 million (GAAP), 205.0 million (Non-GAAP).

• Deferred revenue at June 30, 2024: $213.4 million, with 97% expected to be recognized in the next 12 months.

Outlook and guidance

• Merger with Bain Capital expected to close in H2 2024, subject to customary conditions.

• Management suspended financial guidance and will not hold an earnings call due to the pending transaction.

• Focus remains on cross-selling, innovation, and international expansion, but uncertainties persist due to the merger.