EX-99.1 3 psq119-ex991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

Pluralsight Announces First Quarter 2019 Results

First quarter billings grew 41 percent period over period to $77.9 million
First quarter revenue grew 40 percent period over period to $69.6 million
Announces the acquisition of GitPrime, the leading developer productivity platform

Silicon Slopes, Utah - May 1, 2019 - Pluralsight, Inc. (NASDAQ: PS), the enterprise technology skills company, today announced financial results for the first quarter ended March 31, 2019.
“Our Q1 financial results marked a great start to 2019. Revenue and billings growth continue to be strong with both up over 40% year over year. We continue to demonstrate the efficiency in our model with our third consecutive quarter of positive cash flow.” said Aaron Skonnard, co-founder and CEO of Pluralsight. “Today, we are expanding our platform further to provide even more value to technologists and tech leaders. We are excited to announce our acquisition of GitPrime, the leading developer productivity platform. We are thrilled about the opportunity GitPrime brings to our customers. Combined with the ability to learn and assess technology skills at scale, Pluralsight and GitPrime provides the most complete and targeted platform for technology leaders to successfully execute and deliver their digital transformation strategies.”
First Quarter Financial Highlights
Billings - Q1 2019 billings were $77.9 million, an increase of 41% period over period. Q1 2019 billings from business customers were $67.2 million, an increase of 48% period over period.
Revenue - Q1 2019 revenue was $69.6 million, an increase of 40% period over period.
Gross margin - Q1 2019 gross margin was 76%, compared to 70% in Q1 2018. Q1 2019 non-GAAP gross margin was 77%, compared to 76% in Q1 2018.
Net loss per share - GAAP net loss per share for Q1 2019 was $0.25. Adjusted pro forma net loss per share for Q1 2019 was $0.07, compared to $0.34 in Q1 2018.
Cash flows - Cash provided by operations was $5.5 million for Q1 2019, compared to cash used in operations of $10.4 million in Q1 2018. Free cash flow was $2.5 million for Q1 2019, compared to negative free cash flow of $13.1 million in Q1 2018.
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
Pluralsight is providing the following financial guidance for the second quarter 2019, and the full year 2019, which includes the anticipated results of the proposed GitPrime acquisition:
Second Quarter 2019 guidance:
Revenue is expected to be in the range of $73.5 million to $74 million.



Adjusted pro forma net loss per share is expected to be in the range of $0.15 to $0.13, assuming weighted-average shares outstanding of approximately 137 million.
Full Year 2019 guidance:
Revenue is expected to be in the range of $312 million to $318 million.
Adjusted pro forma net loss per share is expected to be in the range of $0.42 to $0.38, which includes investments related to the proposed GitPrime acquisition, assuming weighted-average shares outstanding of approximately 137 million.
Guidance for non-GAAP financial measures excludes equity-based compensation, amortization of acquired intangible assets, employer payroll taxes on employee stock transactions, secondary offering costs, and amortization of debt discount and issuance costs. 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.
Conference Call Information
Pluralsight will host a conference call for analysts and investors to discuss its first quarter 2019 results and outlook for its second quarter and full year 2019, today at 2:30 p.m. Mountain time (4:30 p.m. Eastern time).
Date:
May 1, 2019
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: 6096825
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 6096825.
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 members 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 statements regarding our future financial and



operating performance, including our financial outlook for the second quarter 2019, and the full year 2019. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: the pace of market adoption of cloud-based learning solutions; our ability to expand our course library and develop new platform features; competition; our ability to attract and retain customers; our ability to increase sales of subscriptions to our platform to customers; our ability to expand our sales and marketing capabilities; and general 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 filed with the SEC on February 21, 2019, 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 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 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 secondary offering costs.
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, secondary offering costs, and amortization of debt discount and issuance costs. 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 (used in) 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,
 
 
2019
 
2018
Revenue
 
$
69,617

 
$
49,644

Cost of revenue(1)(2)
 
16,705

 
14,886

Gross profit
 
52,912

 
34,758

Operating expenses(1)(2):
 
 
 
 
Sales and marketing
 
44,050

 
29,467

Technology and content
 
20,032

 
13,325

General and administrative
 
21,809

 
11,292

Total operating expenses
 
85,891

 
54,084

Loss from operations
 
(32,979
)
 
(19,326
)
Other (expense) income:
 
 
 
 
Interest expense
 
(2,024
)
 
(3,710
)
Other income (expense), net
 
1,614

 
(13
)
Loss before income taxes
 
(33,389
)
 
(23,049
)
Provision for income taxes
 
(154
)
 
(109
)
Net loss
 
$
(33,543
)
 
$
(23,158
)
Less: Net loss attributable to non-controlling interests
 
(14,660
)
 

Net loss attributable to Pluralsight, Inc.
 
$
(18,883
)
 
$
(23,158
)
Less: Accretion of Series A redeemable convertible preferred units
 

 
(19,525
)
Net loss attributable to common shares
 
$
(18,883
)
 
$
(42,683
)
Net loss per share, basic and diluted(3)
 
$
(0.25
)
 
 
Weighted-average common shares used in computing basic and diluted net loss per share(3)
 
75,927

 
 

(1) Includes equity-based compensation as follows:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Cost of revenue
 
$
79

 
$

Sales and marketing
 
6,195

 
539

Technology and content
 
3,498

 
381

General and administrative
 
9,834

 
2,453

Total equity-based compensation
 
$
19,606

 
$
3,373







PLURALSIGHT, INC.
Condensed Consolidated Statements of Operations (cont.)
(in thousands)
(unaudited)

(2) Includes amortization of acquired intangible assets as follows:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Cost of revenue
 
$
525

 
$
2,962

Sales and marketing
 

 
195

Technology and content
 
177

 
176

Total amortization of acquired intangible assets
 
$
702

 
$
3,333


(3) Represents net loss per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the periods following the reorganization transactions and Pluralsight, Inc.'s initial public offering.
























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


Key Business Metrics
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Billings
 
$
77,928

 
$
55,419

Billings from business customers
 
$
67,156

 
$
45,252

% of billings from business customers
 
86
%
 
82
%

Non-GAAP Financial Measures
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Reconciliation of gross profit to non-GAAP gross profit:
 
 
 
 
Gross profit
 
$
52,912

 
$
34,758

Equity-based compensation
 
79

 

Amortization of acquired intangible assets
 
525

 
2,962

Employer payroll taxes on employee stock transactions
 
3

 

Non-GAAP gross profit
 
$
53,519

 
$
37,720

Gross margin
 
76
%
 
70
%
Non-GAAP gross margin
 
77
%
 
76
%
Reconciliation of loss from operations to non-GAAP operating loss:
 
 
 
 
Loss from operations
 
$
(32,979
)
 
$
(19,326
)
Equity-based compensation
 
19,606

 
3,373

Amortization of acquired intangible assets
 
702

 
3,333

Employer payroll taxes on employee stock transactions
 
1,444

 

Secondary offering costs
 
918

 

Non-GAAP operating loss
 
$
(10,309
)
 
$
(12,620
)




















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

 
 
Three Months Ended March 31,
 
 
2019
 
2018
Adjusted pro forma net loss per share
 
 
 
 
Numerator:
 
 
 
 
GAAP net loss attributable to common shares
 
$
(18,883
)
 
$
(42,683
)
Accretion of Series A redeemable convertible preferred units
 

 
19,525

Reallocation of net loss attributable to non-controlling interests from the assumed exchange of LLC Units of Pluralsight Holdings for Class A common stock
 
(14,660
)
 

Equity-based compensation
 
19,606

 
3,373

Amortization of acquired intangibles
 
702

 
3,333

Employer payroll taxes on employee stock transactions
 
1,444

 

Secondary offering costs
 
918

 

Amortization of debt discount and issuance costs
 
1,545

 
73

Adjusted pro forma net loss
 
$
(9,328
)
 
$
(16,379
)
Denominator:
 
 
 
 
Weighted-average shares of Class A common stock outstanding
 
75,927

 

Weighted-average LLC Units of Pluralsight Holdings that are convertible into Class A common stock
 
58,949

 
48,408

Adjusted pro forma weighted-average common shares outstanding, basic and diluted
 
134,876

 
48,408

Adjusted pro forma net loss per share
 
$
(0.07
)
 
$
(0.34
)

Reconciliation of net cash provided by (used in) operating activities to free cash flow:
 
 
 
 
Net cash provided by (used in) operating activities
 
$
5,540

 
$
(10,424
)
Less: Purchases of property and equipment
 
(2,133
)
 
(1,868
)
Less: Purchases of content library
 
(937
)
 
(769
)
Free cash flow
 
$
2,470

 
$
(13,061
)














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

 
 
March 31, 2019
 
December 31, 2018
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
736,566

 
$
194,306

Accounts receivable, net
 
51,865

 
63,436

Deferred contract acquisition costs, net
 
16,863

 

Prepaid expenses and other current assets
 
10,238

 
8,323

Total current assets
 
815,532

 
266,065

Restricted cash
 
27,849

 
16,765

Property and equipment, net
 
36,552

 
31,641

Content library, net
 
6,858

 
7,050

Intangible assets, net
 
1,582

 
1,759

Goodwill
 
123,119

 
123,119

Deferred contract acquisition costs, noncurrent, net
 
3,333

 

Other assets
 
1,085

 
1,064

Total assets
 
$
1,015,910

 
$
447,463

Liabilities and stockholders' equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
8,605

 
$
7,160

Accrued expenses
 
27,644

 
32,047

Accrued author fees
 
10,737

 
10,002

Deferred revenue
 
167,956

 
157,695

Total current liabilities
 
214,942

 
206,904

Deferred revenue, noncurrent
 
12,339

 
14,886

Convertible senior notes, net
 
481,167

 

Facility financing obligations
 
20,070

 
15,777

Other liabilities
 
1,514

 
1,303

Total liabilities
 
730,032

 
238,870

Stockholders' equity:
 
 
 
 
Preferred stock
 

 

Class A common stock
 
10

 
7

Class B common stock
 
3

 
6

Class C common stock
 
1

 
1

Additional paid-in capital
 
560,493

 
452,576

Accumulated other comprehensive loss
 
(31
)
 
(41
)
Accumulated deficit
 
(359,973
)
 
(351,123
)
Total stockholders' equity attributable to Pluralsight, Inc.
 
200,503

 
101,426

Non-controlling interests
 
85,375

 
107,167

Total stockholders' equity
 
285,878

 
208,593

Total liabilities and stockholders' equity
 
$
1,015,910

 
$
447,463







PLURALSIGHT, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Operating activities
 
 
 
 
Net loss
 
$
(33,543
)
 
$
(23,158
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
 
Depreciation of property and equipment
 
2,056

 
2,191

Amortization of acquired intangible assets
 
702

 
3,333

Amortization of course creation costs
 
579

 
447

Equity-based compensation
 
19,606

 
3,373

Amortization of deferred contract acquisition costs
 
5,867

 

Amortization of debt discount and issuance costs
 
1,545

 
876

Provision for doubtful accounts
 
27

 
222

Deferred tax benefit
 
(27
)
 

Other
 
25

 

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
11,392

 
6,802

Deferred contract acquisition costs
 
(5,851
)
 

Prepaid expenses and other assets
 
(1,917
)
 
(1,966
)
Accounts payable
 
1,035

 
2,063

Accrued expenses and other liabilities
 
(4,979
)
 
(10,203
)
Accrued author fees
 
735

 
(179
)
Deferred revenue
 
8,288

 
5,775

Net cash provided by (used in) operating activities
 
5,540

 
(10,424
)
Investing activities
 
 
 
 
Purchases of property and equipment
 
(2,133
)
 
(1,868
)
Purchases of content library
 
(937
)
 
(769
)
Net cash used in investing activities
 
(3,070
)
 
(2,637
)
Financing activities
 
 
 
 
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
)
 

Proceeds from issuance of common stock from employee equity plans
 
2,621

 

Borrowings of long-term debt
 

 
20,000

Payments of costs related to initial public offering
 

 
(1,899
)
Payments of debt issuance costs
 

 
(450
)
Other
 
(4
)
 
(4
)
Net cash provided by financing activities
 
550,848

 
17,647

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

 
9

Net increase in cash, cash equivalents, and restricted cash
 
553,344

 
4,595

Cash, cash equivalents, and restricted cash, beginning of period
 
211,071

 
28,477

Cash, cash equivalents, and restricted cash, end of period
 
$
764,415

 
$
33,072

Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows:

 
 
 
 
Cash and cash equivalents
 
$
736,566

 
$
32,359

Restricted cash
 
27,849

 
713

Total cash, cash equivalents, and restricted cash
 
$
764,415

 
$
33,072




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