Pluralsight Announces First Quarter 2020 Results

SILICON SLOPES, Utah, April 29, 2020 (GLOBE NEWSWIRE) — Pluralsight, Inc. (NASDAQ: PS), the enterprise technology skills company, today announced financial results for the first quarter ended March 31, 2020.
“We went into the year with overall strength in the business prior to hitting the pandemic headwinds.  We have moved aggressively with our cost structure to preserve balance sheet flexibility while investing in our product, which the world needs now more than ever,” said Aaron Skonnard, co-founder and CEO of Pluralsight. “During this time of uncertainty, we believe companies that invest in technology skills development give themselves the chance to rebound stronger as we emerge from this pandemic.  As a result of focusing on our customer’s immediate needs and partnering to problem solve, we expect that in the long term all of our stakeholders will benefit.”First Quarter Financial HighlightsBillings – Q1 2020 billings were $90.3 million, an increase of 16% period over period. Q1 2020 billings from business customers were $80.5 million, an increase of 20% period over period.Revenue – Q1 2020 revenue was $92.6 million, an increase of 33% period over period.Gross margin – Q1 2020 gross margin was 79%, compared to 76% in Q1 2019. Q1 2020 non-GAAP gross margin was 81%, compared to 77% in Q1 2019.Net loss per share – GAAP net loss per share for Q1 2020 was $0.34, compared to $0.25 in Q1 2019. Adjusted pro forma net loss per share for Q1 2020 was $0.09, compared to $0.07 in Q1 2019.Cash flows – Cash provided by operations was $18.3 million for Q1 2020, compared to $5.5 million in Q1 2019. Free cash flow was $2.7 million for Q1 2020, compared to $2.5 million in Q1 2019.For information regarding the non-GAAP financial measures discussed in this press release, please see the section titled “Non-GAAP Financial Measures.” Reconciliations between GAAP and non-GAAP financial measures are provided in the tables of this press release.Financial OutlookThe following forward-looking statements reflect Pluralsight’s expectations as of April 29, 2020.Second Quarter 2020 GuidanceRevenue is expected to be in the range of $87.5 million to $89 million.Adjusted pro forma net loss per share is expected to be in the range of $0.11 to $0.13, assuming weighted-average shares outstanding of approximately 142 million.Full Year 2020 GuidanceRevenue is expected to be in the range of $365 million to $390 million.Adjusted pro forma net loss per share is expected to be in the range of $0.31 to $0.44, assuming weighted-average shares outstanding of approximately 143 million.Guidance for non-GAAP financial measures excludes equity-based compensation, amortization of acquired intangible assets, employer payroll taxes on employee stock transactions, amortization of debt discount and issuance costs, and, as applicable, other special items, which may be significant. Pluralsight has not reconciled its expectations as to adjusted pro forma net loss per share to their most directly comparable GAAP measures because certain items cannot be reasonably predicted. Accordingly, a reconciliation for expectations of adjusted pro forma net loss per share is not available without unreasonable effort.Pluralsight’s guidance for the second quarter and full year 2020 reflects its expectations for the periods after taking into account the impact of COVID-19. However, the crisis that this pandemic has created is very fluid, and the situation is constantly evolving. As such, Pluralsight’s actual results may differ materially from such guidance based on a variety of factors, including Pluralsight’s ability to execute its business during this crisis, the impact of the crisis on Pluralsight’s suppliers, customers and partners, governmental action taken in response to COVID-19, and other factors.Conference Call InformationPluralsight will host a conference call for analysts and investors to discuss its first quarter 2020 results and outlook for its second quarter and full year 2020, today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time).A live audio webcast of the conference call will also be accessible from the Pluralsight website at investors.pluralsight.com. A telephonic replay of the call will be available three hours after the call, will run for seven days, and may be accessed by dialing (855) 859-2056 or (404) 537-3406 and entering the passcode 6975177.About PluralsightPluralsight is an enterprise technology skills platform that delivers a unified, end-to-end learning experience for businesses across the globe. Through a subscription service, companies are empowered to move at the speed of technology, increasing proficiency, innovation, and efficiency. Founded in 2004 and trusted by Fortune 500 companies, Pluralsight provides customers with on-demand access to a digital ecosystem of learning tools, including adaptive skill tests, directed learning paths, expert-authored courses, interactive labs and analytics. For more information, visit pluralsight.com.Pluralsight and the Pluralsight logo are trademarks of Pluralsight, LLC in the United States and in jurisdictions throughout the world.Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of federal securities laws that involve risks and uncertainties, including the quotations of management and statements regarding our future financial and operating performance, and our financial outlook for the second quarter and full year 2020. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: our ability to attract and retain customers; our ability to expand our course library and develop new platform features; the demand for, and market acceptance of our platform; competition; our ability to improve sales management and execution; our expectations of the potential impact the COVID-19 pandemic may have on our business; and other market, political, economic, and business conditions.Additional risks and uncertainties that could affect our financial results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K/A filed with the SEC on March 2, 2020 and in our quarterly report on Form 10-Q filed with the SEC on April 29, 2020, which is available on our website at investors.pluralsight.com and on the SEC’s website at www.sec.gov. Additional information will also be set forth in other filings that we make with the SEC from time to time. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.Key Business MetricsBillings. Billings represents total revenue plus the change in deferred revenue in the period, as presented in our condensed consolidated statements of cash flows, less the change in contract assets and unbilled accounts receivable in the period. Billings in any particular period represents amounts invoiced to customers and reflects subscription renewals and upsells to existing customers plus sales to new customers. We use billings to measure our ability to sell subscriptions to our platform to both new and existing customers. We use billings from business customers and our percentage of billings from business customers to measure and monitor our ability to sell subscriptions to our platform to business customers.Non-GAAP Financial MeasuresPluralsight has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Pluralsight uses the non-GAAP financial measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, adjusted pro forma net loss, adjusted pro forma net loss per share, and free cash flow in analyzing its financial results and believes that the use of these metrics is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing Pluralsight’s financial results with other companies in its industry, many of which present similar non-GAAP financial measures.The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. A reconciliation of our historical non-GAAP financial measures to their most directly comparable GAAP measures have been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.Non-GAAP gross profit. We define non-GAAP gross profit as gross profit plus equity-based compensation, amortization of acquired intangible assets, and employer payroll taxes on employee stock transactions.Non-GAAP gross margin. We define non-GAAP gross margin as non-GAAP gross profit divided by our revenue.Non-GAAP operating expenses. We define non-GAAP operating expenses as operating expenses less equity-based compensation, amortization of acquired intangible assets, and employer payroll taxes on employee stock transactions, and, as applicable, other special items.Non-GAAP operating loss. We define non-GAAP operating loss as loss from operations plus equity-based compensation, amortization of acquired intangible assets, employer payroll taxes on employee stock transactions, and, as applicable, other special items.Adjusted pro forma net loss and adjusted pro forma net loss per share. We define adjusted pro forma net loss as net loss attributable to Pluralsight, Inc. adjusted for the reallocation of loss attributable to non-controlling interests from the assumed exchange of LLC Units of Pluralsight Holdings for newly-issued shares of Class A common stock of Pluralsight, Inc. and further adjusted for equity-based compensation, amortization of acquired intangible assets, employer payroll taxes on employee stock transactions, amortization of debt discount and issuance costs, and, as applicable, other special items. We define adjusted pro forma net loss per share as adjusted pro forma net loss divided by the weighted-average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Units of Pluralsight Holdings for newly-issued shares of Class A common stock of Pluralsight, Inc.Free cash flow. We define free cash flow as cash provided by operating activities less purchases of property and equipment and purchases of our content library.PLURALSIGHT, INC.Condensed Consolidated Statements of Operations
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(unaudited)Investor Relations Contact:
Mark McReynolds
Investor Relations
Pluralsight
801-784-9007
ir@pluralsight.comMedia Contact:
DJ Anderson
Communications/Press
Pluralsight
801-784-9007
dj@pluralsight.com