EX-99.1 2 psq12020-ex991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

Pluralsight Announces First Quarter 2020 Results

Silicon Slopes, Utah - April 29, 2020 - 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 Highlights
•
Billings - 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 Outlook
The following forward-looking statements reflect Pluralsight's expectations as of April 29, 2020.
Second Quarter 2020 Guidance
•
Revenue 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 Guidance
•
Revenue 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 Information
Pluralsight 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).
Date:
April 29, 2020
Time:
2:30 p.m. MT (4:30 p.m. ET)
Webcast:
https://investors.pluralsight.com/
Dial-in number:
(877) 350-6732 or (629) 228-0693, conference ID: 6975177
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 Pluralsight
Pluralsight 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 Statements
This 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 Metrics
Billings. 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 Measures
Pluralsight 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
(in thousands, except per share amounts)
(unaudited)
 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
 
 
Revenue
 
$
92,646

 
$
69,617

Cost of revenue(1)(2)
 
19,008

 
16,712

Gross profit
 
73,638

 
52,905

Operating expenses(1)(2):
 
 
 
 
Sales and marketing
 
62,415

 
44,171

Technology and content
 
30,144

 
20,271

General and administrative
 
23,371

 
22,191

Total operating expenses
 
115,930

 
86,633

Loss from operations
 
(42,292
)
 
(33,728
)
Other income (expense):
 
 
 
 
Interest expense
 
(7,149
)
 
(1,678
)
Other income, net
 
2,170

 
1,676

Loss before income taxes
 
(47,271
)
 
(33,730
)
Provision for income taxes
 
(242
)
 
(154
)
Net loss
 
$
(47,513
)
 
$
(33,884
)
Less: Net loss attributable to non-controlling interests
 
(12,194
)
 
(14,809
)
Net loss attributable to Pluralsight, Inc.
 
$
(35,319
)
 
$
(19,075
)
Net loss per share, basic and diluted(3)
 
$
(0.34
)
 
$
(0.25
)
Weighted-average shares of Class A common stock used in computing basic and diluted net loss per share
 
104,631

 
75,927

(1) Includes equity-based compensation as follows:
 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
 
 
Cost of revenue
 
$
270

 
$
84

Sales and marketing
 
9,522

 
6,276

Technology and content
 
6,336

 
3,710

General and administrative
 
9,450

 
10,198

Total equity-based compensation
 
$
25,578

 
$
20,268

(2) Includes amortization of acquired intangible assets as follows:
 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
 
 
Cost of revenue
 
$
1,209

 
$
525

Sales and marketing
 
50

 
—

Technology and content
 
176

 
177

Total amortization of acquired intangible assets
 
$
1,435

 
$
702



PLURALSIGHT, INC.
Key Business Metrics and Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)

Key Business Metrics
 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
 
 
Billings
 
$
90,278

 
$
77,928

Billings from business customers
 
$
80,472

 
$
67,156

% of billings from business customers
 
89
%
 
86
%

Non-GAAP Financial Measures
 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
 
 
Reconciliation of gross profit to non-GAAP gross profit:
 
 
 
 
Gross profit
 
$
73,638

 
$
52,905

Equity-based compensation
 
270

 
84

Amortization of acquired intangible assets
 
1,209

 
525

Employer payroll taxes on employee stock transactions
 
17

 
3

Non-GAAP gross profit
 
$
75,134

 
$
53,517

Gross margin
 
79
%
 
76
%
Non-GAAP gross margin
 
81
%
 
77
%



PLURALSIGHT, INC.
Key Business Metrics and Non-GAAP Financial Measures (cont.)
(dollars in thousands)
(unaudited)

 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
 
 
Reconciliation of operating expenses to non-GAAP operating expenses:
 
 
 
 
Sales and marketing
 
$
62,415

 
$
44,171

Less: Equity-based compensation
 
(9,522
)
 
(6,276
)
Less: Amortization of acquired intangible assets
 
(50
)
 
—

Less: Employer payroll taxes on employee stock transactions
 
(492
)
 
(608
)
Non-GAAP sales and marketing
 
$
52,351

 
$
37,287

Sales and marketing as a percentage of revenue
 
67
%
 
63
%
Non-GAAP sales and marketing as a percentage of revenue
 
57
%
 
54
%
 
 
 
 
 
Technology and content
 
$
30,144

 
$
20,271

Less: Equity-based compensation
 
(6,336
)
 
(3,710
)
Less: Amortization of acquired intangible assets
 
(176
)
 
(177
)
Less: Employer payroll taxes on employee stock transactions
 
(471
)
 
(480
)
Non-GAAP technology and content
 
$
23,161

 
$
15,904

Technology and content as a percentage of revenue
 
33
%
 
29
%
Non-GAAP technology and content as a percentage of revenue
 
25
%
 
23
%
 
 
 
 
 
General and administrative
 
$
23,371

 
$
22,191

Less: Equity-based compensation
 
(9,450
)
 
(10,198
)
Less: Employer payroll taxes on employee stock transactions
 
(398
)
 
(353
)
Less: Secondary offering costs
 
—

 
(918
)
Non-GAAP general and administrative
 
$
13,523

 
$
10,722

General and administrative as a percentage of revenue
 
25
%
 
32
%
Non-GAAP general and administrative as a percentage of revenue
 
15
%
 
15
%
Reconciliation of loss from operations to non-GAAP operating loss:
 
 
 
 
Loss from operations
 
$
(42,292
)
 
$
(33,728
)
Equity-based compensation
 
25,578

 
20,268

Amortization of acquired intangible assets
 
1,435

 
702

Employer payroll taxes on employee stock transactions
 
1,378

 
1,444

Secondary offering costs
 
—

 
918

Non-GAAP operating loss
 
$
(13,901
)
 
$
(10,396
)


PLURALSIGHT, INC.
Key Business Metrics and Non-GAAP Financial Measures (cont.)
(in thousands, except per share amounts)
(unaudited)

 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
 
 
Adjusted pro forma net loss per share
 
 
 
 
Numerator:
 
 
 
 
Net loss attributable to Pluralsight, Inc.
 
$
(35,319
)
 
$
(19,075
)
Net loss attributable to non-controlling interests
 
(12,194
)
 
(14,809
)
Equity-based compensation
 
25,578

 
20,268

Amortization of acquired intangibles
 
1,435

 
702

Employer payroll taxes on employee stock transactions
 
1,378

 
1,444

Secondary offering costs
 
—

 
918

Amortization of debt discount and issuance costs
 
6,591

 
1,545

Adjusted pro forma net loss
 
$
(12,531
)
 
$
(9,007
)
Denominator:
 
 
 
 
Weighted-average shares of Class A common stock outstanding
 
104,631

 
75,927

Weighted-average LLC Units of Pluralsight Holdings that are convertible into Class A common stock
 
36,133

 
58,949

Adjusted pro forma weighted-average common shares outstanding, basic and diluted
 
140,764

 
134,876

Adjusted pro forma net loss per share
 
$
(0.09
)
 
$
(0.07
)
Reconciliation of net cash provided by operating activities to free cash flow:
 
 
 
 
Net cash provided by operating activities
 
$
18,295

 
$
5,536

Less: Purchases of property and equipment
 
(13,894
)
 
(2,133
)
Less: Purchases of content library
 
(1,680
)
 
(937
)
Free cash flow
 
$
2,721

 
$
2,466






PLURALSIGHT, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

 
 
March 31,
2020
 
December 31,
2019
 
 
 
 
 
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
94,476

 
$
90,515

Short-term investments
 
311,684

 
332,234

Accounts receivable, net
 
61,208

 
101,576

Deferred contract acquisition costs
 
17,796

 
18,331

Prepaid expenses and other current assets
 
13,957

 
14,174

Total current assets
 
499,121

 
556,830

Restricted cash and cash equivalents
 
24,431

 
28,916

Long-term investments
 
126,214

 
105,805

Property and equipment, net
 
35,401

 
22,896

Right-of-use assets
 
13,912

 
15,804

Content library, net
 
9,777

 
8,958

Intangible assets, net
 
21,204

 
22,631

Goodwill
 
262,532

 
262,532

Deferred contract acquisition costs, noncurrent
 
5,937

 
5,982

Other assets
 
1,771

 
1,599

Total assets
 
$
1,000,300

 
$
1,031,953

Liabilities and stockholders' equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
7,770

 
$
10,615

Accrued expenses
 
35,595

 
40,703

Accrued author fees
 
11,596

 
11,694

Lease liabilities
 
4,532

 
5,752

Deferred revenue
 
214,505

 
215,137

Total current liabilities
 
273,998

 
283,901

Deferred revenue, noncurrent
 
17,416

 
19,517

Convertible senior notes, net
 
476,819

 
470,228

Lease liabilities, noncurrent
 
10,058

 
11,167

Other liabilities
 
859

 
980

Total liabilities
 
779,150

 
785,793

Stockholders' equity:
 
 
 
 
Preferred stock
 
—

 
—

Class A common stock
 
11

 
10

Class B common stock
 
2

 
2

Class C common stock
 
1

 
1

Additional paid-in capital
 
659,480

 
641,128

Accumulated other comprehensive (loss) income
 
(1,102
)
 
225

Accumulated deficit
 
(493,700
)
 
(458,381
)
Total stockholders’ equity attributable to Pluralsight, Inc.
 
164,692

 
182,985

Non-controlling interests
 
56,458

 
63,175

Total stockholders’ equity
 
221,150

 
246,160

Total liabilities and stockholders' equity
 
$
1,000,300

 
$
1,031,953




PLURALSIGHT, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 
Three Months Ended March 31,
 
 
2020
 
2019
 
 
 
 
 
Operating activities
 
 
 
 
Net loss
 
$
(47,513
)
 
$
(33,884
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
Depreciation of property and equipment
 
2,643

 
2,247

Amortization of acquired intangible assets
 
1,435

 
702

Amortization of course creation costs
 
761

 
579

Equity-based compensation
 
25,578

 
20,268

Amortization of deferred contract acquisition costs
 
6,451

 
5,867

Amortization of debt discount and issuance costs
 
6,591

 
1,545

Investment discount and premium amortization, net
 
(376
)
 
—

Other
 
661

 
25

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
39,200

 
11,392

Deferred contract acquisition costs
 
(5,871
)
 
(5,851
)
Prepaid expenses and other assets
 
286

 
(1,801
)
Right-of-use assets
 
1,490

 
1,284

Accounts payable
 
(2,467
)
 
1,035

Accrued expenses and other liabilities
 
(6,331
)
 
(5,159
)
Accrued author fees
 
(98
)
 
735

Lease liabilities
 
(1,925
)
 
(1,736
)
Deferred revenue
 
(2,220
)
 
8,288

Net cash provided by operating activities
 
18,295

 
5,536

Investing activities
 
 
 
 
Purchases of property and equipment
 
(13,894
)
 
(2,133
)
Purchases of content library
 
(1,680
)
 
(937
)
Purchases of investments
 
(161,862
)
 
—

Proceeds from maturities of investments
 
160,535

 
—

Net cash used in investing activities
 
(16,901
)
 
(3,070
)
Financing activities
 
 
 
 
Proceeds from issuance of common stock from employee equity plans
 
699

 
2,621

Taxes paid related to net share settlement
 
(2,350
)
 
—

Proceeds from issuance of convertible senior notes, net of discount and issuance costs
 
—

 
617,663

Purchase of capped calls related to issuance of convertible senior notes
 
—

 
(69,432
)
Net cash (used in) provided by financing activities
 
(1,651
)
 
550,852

Effect of exchange rate changes on cash, cash equivalents, and restricted cash and cash equivalents
 
(267
)
 
26

Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents
 
(524
)
 
553,344

Cash, cash equivalents, and restricted cash and cash equivalents, beginning of period
 
119,431

 
211,071

Cash, cash equivalents, and restricted cash and cash equivalents, end of period
 
$
118,907

 
$
764,415



Investor Relations Contact:
Mark McReynolds
Investor Relations
Pluralsight
801-784-9007
ir@pluralsight.com

Media Contact:
DJ Anderson
Communications/Press
Pluralsight
801-784-9007
dj@pluralsight.com