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Instructure Reports Fourth Quarter and Full Year 2023 Results

Published

3 years ago

on

Reports Record Full Year Revenues, Adjusted EBITDA, and Adjusted Unlevered Free Cash Flow
Expands Scale and Reach of the Instructure Platform by Acquiring Parchment, the World’s Leading Credentialing Platform

SALT LAKE CITY, Feb. 20, 2024 /PRNewswire/ — Instructure Holdings, Inc. (Instructure) (NYSE: INST) today announced financial results for the fourth quarter and full year ended December 31, 2023.

Full Year 2023 Highlights:
(All results compared to prior-year period unless otherwise noted)

Record Revenues of $530.2 million, an increase of 11.6%Net loss of $34.1 million, a slight improvement over prior yearRecord Adjusted EBITDA* of $214.2 million, an increase of 19.3%, and Adjusted EBITDA Margin* of 40.4%Cash flow from operations of $164.0 million, an increase of 16.9% and Adjusted Unlevered Free Cash Flow* of $225.5 million, an increase of 29.9%

Fourth Quarter 2023 Highlights:
(All results compared to prior-year period unless otherwise noted)

Revenues of $135.4 million, an increase of 8.5%Net loss of $5.8 million, comparable to prior yearAdjusted EBITDA* of $56.5 million, an increase of 16.1%, and Adjusted EBITDA Margin* of 41.7%Cash flow from operations of $36.7 million, an increase of over 100%, and Adjusted Unlevered Free Cash Flow* of $51.3 million, an increase of 74.8%

2024 Full Year Guidance:

Full year 2024 guidance ranges for Revenue of $655.0 million to $665.0 million, Non-GAAP Operating Income* of $260.5 million to $265.5 million, Adjusted EBITDA* of $266.5 million to $271.5 million, Non-GAAP Net Income* of $105.5 million to $110.5 million and Adjusted Unlevered Free Cash Flow* of $259.5 million to $264.5 million

*Non-GAAP Operating Income, Adjusted EBITDA, Non-GAAP Net Income and Adjusted Unlevered Free Cash Flow are non-GAAP measures. See “Non-GAAP Financial Measures” in the press release for information regarding the Company’s use of non-GAAP financial measures as well as reconciliations to the most closely comparable GAAP measures for historical periods. Instructure is unable to provide guidance or a reconciliation for forward-looking non-GAAP measures because Instructure cannot provide a meaningful or accurate calculation or estimation of certain items without unreasonable effort. This is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including stock-based compensation and amortization of acquisition-related intangibles. Thus, Instructure is unable to present a quantitative reconciliation of non-GAAP guidance to GAAP guidance because such information is not available.

Key Financials:
(Dollars in millions)

Three months ended
December 31,

Year ended
December 31,

2023

2022

YoY
Percentage

2023

2022

YoY
Percentage

Revenue

$

135.4

$

124.7

8.5

%

$

530.2

$

475.2

11.6

%

Income (loss) from Operations

$

0.2

$

(3.8)

105.9

%

$

(3.2)

$

(16.5)

80.5

%

Non-GAAP Operating Income*

$

55.4

$

46.5

19.1

%

$

209.8

$

173.9

20.6

%

GAAP Net Loss

$

(5.8)

$

(5.7)

(0.8)

%

$

(34.1)

$

(34.2)

0.5

%

GAAP Net Loss Margin

(4.3)

%

(4.6)

%

30 bps

(6.4)

%

(7.2)

%

80 bps

Adjusted EBITDA*

$

56.5

$

48.6

16.1

%

$

214.2

$

179.6

19.3

%

Adjusted EBITDA Margin*

41.7

%

39.0

%

270 bps

40.4

%

37.7

%

270 bps

Cash Flow from Operations

$

36.7

$

17.0

115.9

%

$

164.0

$

140.3

16.9

%

Adjusted Unlevered Free Cash Flow*

$

51.3

$

29.3

74.8

%

$

225.5

$

173.5

29.9

%

Remaining Performance Obligations (“RPO”)

$

833.5

$

760.1

9.7

%

$

833.5

$

760.1

9.7

%

*See “Non-GAAP Financial Measures” for information regarding the Company’s use of non-GAAP financial measures as well as reconciliations to the most closely comparable GAAP measures in this press release.

Steve Daly, Instructure CEO, said, “During the fourth quarter, we exceeded the high end of our guidance range for Revenue, Adjusted EBITDA and Adjusted Unlevered Free Cash Flow, reflecting our unrelenting focus and the strength of our model. These exceptional results were driven by our increasing competitive advantage, strong execution, and the formidable cash flow we generate and reinvest behind high-growth initiatives. We head into 2024 with meaningfully enhanced scale, a broader portfolio, and access to new buyers due to the Parchment acquisition. We have never been more excited about our ability to elevate teaching and learning and drive results for our shareholders.”

Balance Sheet and Cash Flow

As of December 31, 2023, cash, cash equivalents and restricted cash were $344.2 million and total debt was $491.3 million compared to cash, cash equivalents and restricted cash of $190.3 million and total debt of $496.3 million as of December 31, 2022. The increase in cash, cash equivalents and restricted cash since December 31, 2022 was driven by strong business performance and the fact that 2022 included the purchase of LearnPlatform. Instructure ended 2023 with a net leverage ratio of 0.7x Net Debt to Adjusted EBITDA. As of December 31, 2023, available borrowings under Instructure’s revolving credit facility, net of letters of credit outstanding, were $121.8 million. The Company generated cash flow from operations of $164.0 million for the twelve months ended December 31, 2023 compared to $140.3 million in the prior year period, an increase of 16.9% year-over-year. Adjusted Unlevered Free Cash Flow was $225.5 million for the twelve months ended December 31, 2023 compared to $173.5 million in the prior year period, an increase of 29.9% year-over-year.

First Quarter and Full Year 2024 Guidance

The following tables summarize first quarter and full year 2024 guidance. 

First Quarter 2024 Guidance

(dollars in millions)

Amount

Quarter-over-quarter
change

Revenue

$153.8 – $154.8

19.4% – 20.1%

Non-GAAP operating income*

$55.9 – $56.9

17.8% – 19.9%

Adjusted EBITDA*

$57.3 – $58.3

18.1% – 20.2%

Non-GAAP net income*

$20.0 – $21.0

(28.3)% – (24.7)%

Full Year 2024 Guidance

(dollars in millions)

Amount

Year-over-year
 change

Revenue

$655.0 – $665.0

23.5% – 25.4%

Non-GAAP operating income*

$260.5 – $265.5

24.2% – 26.6%

Adjusted EBITDA*

$266.5 – $271.5

24.4% – 26.7%

Non-GAAP net income*

$105.5 – $110.5

(15.5)% – (11.5)%

Adjusted Unlevered Free Cash Flow*

$259.5 – $264.5

15.1% – 17.3%

The Company’s guidance ranges reflect expectations that existing macroeconomic conditions and the current foreign currency environment continue through 2024. These forward-looking statements reflect the Company’s expectations as of today’s date. Actual results may differ materially.

*Instructure is unable to provide guidance or a reconciliation for forward-looking non-GAAP measures because Instructure cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. This is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including stock-based compensation and amortization of acquisition-related intangibles. Thus, Instructure is unable to present a quantitative reconciliation of non-GAAP guidance to GAAP guidance because such information is not available.

Conference Call Information

The Company will hold a conference call to discuss the fourth quarter and full year 2023 financial results today, February 20, 2024 at 3:00 PM Mountain Time (5:00 PM Eastern Time).

Participants may access the conference call by dialing 1-888-330-2384 (U.S. and Canada) or 1-240-789-2701 (International) and using conference code 1348899 approximately ten minutes before the start of the call. A live audio webcast of the conference call will also be available on Instructure’s investor relations website at https://ir.instructure.com under “Events & Presentations”.

A replay will be available after the conclusion of the call on Instructure’s investor relations website under “Events & Presentations” or by dialing 1-800-770-2030 (U.S. and Canada) or 1-647-362-9199 (International) and using conference code 1348899. The telephone replay will be available through Tuesday, February 27, 2024.

About Instructure

Instructure (NYSE: INST) is an education technology company dedicated to elevating student success, amplifying the power of teaching, and inspiring everyone to learn together. Today the Instructure Learning Platform supports tens of millions of educators and learners around the world. Learn more at www.instructure.com.

Non-GAAP Financial Measures

Instructure 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”). In addition to Instructure’s results determined in accordance with GAAP, Instructure believes the following non-GAAP measures are useful in evaluating its operating performance and liquidity. Instructure believes that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

A reconciliation of Instructure’s historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

ACR. We define ACR as the combined receipts of our Company and companies that we have acquired allocated to the period of service delivery. We calculate ACR as the sum of (i) revenue and (ii) the impact of fair value adjustments to acquired unearned revenue related to Thoma Bravo’s acquisition of Instructure (the “Take-Private Transaction”) and the Certica Holdings, LLC (“Certica”), Eesysoft Software International B.V. (which was rebranded to “Impact by Instructure” or “Impact” subsequent to acquisition), and Kimono LLC (which was rebranded to “Elevate Data Sync” subsequent to acquisition) acquisitions where we do not believe such adjustments are reflective of our ongoing operations. Management uses this measure to evaluate the organic growth of the business period over period, as if the Company had operated as a single entity and excluding the impact of acquisitions or adjustments due to purchase accounting. Effective January 1, 2022, Instructure adopted Accounting Standard Update (“ASU”) No. 2021-08, Business Combinations (Topic 805), which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606). As a result, GAAP revenue and ACR have converged.

Non-GAAP Operating Income. We define non-GAAP operating income as income/(loss) from operations excluding the impact of stock-based compensation, transaction costs, sponsor costs, other non-recurring costs, amortization of acquisition-related intangibles, and the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and the Certica, Impact, and Elevate Data Sync acquisitions that we do not believe are reflective of our ongoing operations. We believe non-GAAP operating income is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. Although we exclude the amortization of acquisition-related intangibles from the non-GAAP measure, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

Non-GAAP Net Income. We define non-GAAP net income as net loss excluding the impact of stock-based compensation, amortization of acquisition-related intangibles, the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and the Certica, Impact, and Elevate Data Sync acquisitions, transaction costs, sponsor costs, other non-recurring costs, and effects of foreign currency transaction (gains) and losses that we do not believe are reflective of our ongoing operations. The tax effects of the adjustments are calculated using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction. We believe Non-GAAP net income is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. Although we exclude the amortization of acquisition-related intangibles from the non-GAAP measure, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Basic non-GAAP net income per common share attributable to common stockholders is computed by dividing non-GAAP net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted non-GAAP net income per common share attributable to common stockholders is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period.

Adjusted EBITDA; Adjusted EBITDA Margin. EBITDA is defined as earnings before debt-related costs, including interest and loss on debt extinguishment, benefit for taxes, depreciation, and amortization. We further adjust EBITDA to exclude certain items of a significant or unusual nature, including stock-based compensation, transaction costs, sponsor costs, other non-recurring costs, effects of foreign currency transaction (gains) and losses, amortization of acquisition-related intangibles, and the impact of fair value adjustments to acquired unearned revenue relating to the Take-Private Transaction and the Certica, Impact, and Elevate Data Sync acquisitions. Although we exclude the amortization of acquisition-related intangibles from this non-GAAP measure, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by ACR.

Free Cash Flow, Unlevered Free Cash Flow and Adjusted Unlevered Free Cash Flow. We define free cash flow as net cash provided by operating activities less purchases of property and equipment and intangible assets, net of proceeds from disposals of property and equipment. We define unlevered free cash flow as free cash flow adjusted for cash paid for interest on outstanding debt and cash settled stock-based compensation. We define adjusted unlevered free cash flow as unlevered free cash flow adjusted for transaction costs, sponsor costs, impaired leases, and other non-recurring costs paid in cash. We believe free cash flow, unlevered free cash flow and adjusted unlevered free cash flow facilitate period-to-period comparisons of liquidity. We consider free cash flow, unlevered free cash flow and adjusted unlevered free cash flow to be important measures because they measure the amount of cash we generate and reflect changes in working capital.

Non-GAAP Cost of Revenue and Non-GAAP Operating Expenses. We define non-GAAP cost of revenue and non-GAAP operating expenses as GAAP cost of revenue and GAAP operating expenses, respectively, excluding the impact of stock-based compensation, transaction costs, sponsor costs, other non-recurring costs, and amortization of acquisition-related intangibles that we do not believe are reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangibles from the non-GAAP measures, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

Non-GAAP Gross Profit; Non-GAAP Gross Profit Margin. We define non-GAAP gross profit as gross profit excluding the impact of stock-based compensation, transaction costs, other non-recurring costs, amortization of acquisition-related intangibles, and fair value adjustments to deferred revenue in connection with purchase accounting that we do not believe are reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangibles from the non-GAAP measure, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Non-GAAP Gross Profit Margin is defined as Non-GAAP gross profit divided by ACR.

Net Debt. We define net debt as total outstanding term debt, less cash, cash equivalents and restricted cash. Management uses this supplemental non-GAAP measure to evaluate the Company’s leverage.

Forward-Looking Statements

This press release contains, and statements made during the above referenced conference call will contain, “forward-looking” statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s financial guidance for the first quarter of 2024 and for the full year ending December 31, 2024, the Company’s growth, customer demand and application adoption, the Company’s research and development efforts and future application releases, the Company’s business strategy and the Company’s expectations regarding future revenue, expenses, cash flows and net income or loss.

These statements are not guarantees of future performance, but are based on management’s expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: risks associated with the continued economic uncertainty, including persistent inflation, labor shortages, high interest rates, foreign currency exchange volatility, concerns of economic slowdown or recession, reduced spending by customers and geopolitical instability; failure to continue our recent growth rates; the effects of increased usage of, or interruptions or performance problems associated with, our learning platform; the impact on our business and prospects from health pandemics and epidemics; our history of losses and expectation that we will not be profitable for the foreseeable future; or ability to acquire new customers and successfully retain existing customers; failure of the markets for our applications to develop at anticipated rates; failure to manage our growth effectively; and changes in the spending policies or budget priorities for government funding of Higher Education and K-12 institutions.

These and other important risk factors are described more fully in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. All information provided in this press release and in the conference call is as of the date hereof and Instructure undertakes no duty to update this information except as required by law.

 

INSTRUCTURE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

December 31,
2023

December 31,
2022

Assets

(unaudited)

Current assets:

Cash and cash equivalents

$

341,047

$

185,954

Accounts receivable—net

67,193

71,428

Prepaid expenses

12,082

11,120

Deferred commissions

13,705

13,390

Other current assets

4,797

3,144

Total current assets

438,824

285,036

Property and equipment, net

13,479

12,380

Right-of-use assets

9,002

13,575

Goodwill

1,265,316

1,266,402

Intangible assets, net

399,712

542,679

Noncurrent prepaid expenses

4,182

871

Deferred commissions, net of current portion

13,816

18,781

Deferred tax assets

6,739

8,143

Other assets

6,908

5,622

Total assets

$

2,157,978

$

2,153,489

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

23,589

$

18,792

Accrued liabilities

23,760

28,483

Lease liabilities

7,513

7,205

Long-term debt, current

4,013

4,013

Deferred revenue

291,784

275,564

Total current liabilities

350,659

334,057

Long-term debt, net of current portion

482,387

486,471

Deferred revenue, net of current portion

10,876

13,816

Lease liabilities, net of current portion

9,246

16,610

Deferred tax liabilities

14,420

24,702

Other long-term liabilities

4,898

1,706

Total liabilities

872,486

877,362

Stockholders’ equity:

Common stock

1,452

1,429

Additional paid-in capital

1,619,020

1,575,600

Accumulated deficit

(334,980)

(300,902)

Total stockholders’ equity

1,285,492

1,276,127

Total liabilities and stockholders’ equity                                                                           

$

2,157,978

$

2,153,489

 

INSTRUCTURE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share data)

 

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

(unaudited)

(unaudited)

(unaudited)

Revenue:

Subscription and support

$

125,357

$

114,537

$

485,516

$

430,661

Professional services and other

10,019

10,189

44,694

44,533

Total revenue

135,376

124,726

530,210

475,194

Cost of revenue:

Subscription and support

41,167

38,127

158,699

146,546

Professional services and other

6,600

6,685

27,616

25,748

Total cost of revenue

47,767

44,812

186,315

172,294

Gross profit

87,609

79,914

343,895

302,900

Operating expenses:

Sales and marketing

47,947

46,801

197,690

181,744

Research and development

22,290

20,723

88,162

77,189

General and administrative

17,148

16,170

61,261

60,447

Total operating expenses

87,385

83,694

347,113

319,380

Income (loss) from operations

224

(3,780)

(3,218)

(16,480)

Other income (expense):

Interest income

2,717

1,313

5,738

1,679

Interest expense

(11,382)

(8,258)

(42,024)

(24,595)

Other income (expense)

3,133

3,989

1,168

(2,978)

Total other income (expense), net

(5,532)

(2,956)

(35,118)

(25,894)

Loss before income tax benefit (expense)

(5,308)

(6,736)

(38,336)

(42,374)

Income tax benefit (expense)

(459)

1,013

4,258

8,132

Net loss and comprehensive loss

$

(5,767)

$

(5,723)

$

(34,078)

$

(34,242)

Net loss per common share, basic and diluted

$

(0.04)

$

(0.04)

$

(0.24)

$

(0.24)

Weighted-average common shares used in computing basic and diluted net
loss per common share

144,868

142,643

143,968

141,815

 

INSTRUCTURE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

(unaudited)

(unaudited)

(unaudited)

Operating Activities:

Net loss

$

(5,767)

$

(5,723)

$

(34,078)

$

(34,242)

Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:

Depreciation of property and equipment

1,305

1,346

4,786

4,491

Amortization of intangible assets

35,730

34,522

142,967

136,717

Amortization of deferred financing costs

298

297

1,187

1,178

Stock-based compensation

10,551

8,915

43,537

33,585

Deferred income taxes

1

(158)

(7,792)

(10,222)

Other

(2,448)

(3,042)

658

3,669

Changes in assets and liabilities:

Accounts receivable, net

25,250

1,903

2,653

(18,454)

Prepaid expenses and other assets

6,698

16,881

(8,552)

5,940

Deferred commissions

1,754

685

4,650

(648)

Right-of-use assets

1,225

1,250

4,573

4,888

Accounts payable and accrued liabilities

7,576

168

11

(2,227)

Deferred revenue

(44,444)

(38,383)

13,280

24,238

Lease liabilities

(1,686)

(1,474)

(7,056)

(6,817)

Other liabilities

672

(184)

3,192

(1,825)

Net cash provided by operating activities

36,715

17,003

164,016

140,271

Investing Activities:

Purchases of property and equipment

(1,232)

(1,342)

(5,940)

(6,321)

Proceeds from sale of property and equipment

8

2

50

43

Business acquisitions, net of cash acquired

—

(89,529)

—

(109,013)

Net cash used in investing activities

(1,224)

(90,869)

(5,890)

(115,291)

Financing Activities:

Proceeds from issuance of common stock from employee equity plans

—

—

6,017

7,327

Shares repurchased for tax withholdings on vesting of restricted stock units

(1,682)

(1,939)

(6,630)

(5,272)

Repayments of long-term debt

(1,250)

(1,250)

(5,000)

(3,750)

Payments of financing costs

—

(19)

(84)

(19)

Net cash used in financing activities

(2,932)

(3,208)

(5,697)

(1,714)

Foreign currency impacts on cash, cash equivalents and restricted cash

3,012

3,897

1,513

(2,153)

Net increase (decrease) in cash, cash equivalents and restricted cash

35,571

(73,177)

153,942

21,113

Cash, cash equivalents and restricted cash, beginning of period

308,637

263,443

190,266

169,153

Cash, cash equivalents and restricted cash, end of period

$

344,208

$

190,266

$

344,208

$

190,266

Supplemental cash flow disclosure:

Cash paid for taxes

$

98

$

68

$

2,755

$

3,102

Interest paid

$

10,975

$

8,123

$

42,430

$

18,073

Non-cash investing and financing activities:

Capital expenditures incurred but not yet paid

$

2

$

67

$

2

$

67

 

RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP ALLOCATED COMBINED RECEIPTS

(in thousands)

(unaudited)

 

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Revenue

$

135,376

$

124,726

$

530,210

$

475,194

Fair value adjustments to deferred revenue in connection with purchase
accounting

—

13

—

868

Allocated combined receipts

$

135,376

$

124,739

$

530,210

$

476,062

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP OPERATING INCOME

(in thousands)

(unaudited)

 

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Income (loss) from operations

$

224

$

(3,780)

$

(3,218)

$

(16,480)

Stock-based compensation

10,575

10,856

44,196

39,779

Transaction costs(1)

5,857

4,206

15,512

9,123

Sponsor costs(2)

34

66

147

517

Other non-recurring costs(3)

2,956

630

10,162

3,365

Amortization of acquisition-related intangibles

35,731

34,520

142,965

136,710

Fair value adjustments to deferred revenue in connection with
purchase accounting

—

13

—

868

Non-GAAP operating income

$

55,377

$

46,511

$

209,764

$

173,882

GAAP operating margin

0.2

%

(3.0)

%

(0.6)

%

(3.5)

%

Non-GAAP operating margin

40.9

%

37.3

%

39.6

%

36.5

%

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP ADJUSTED EBITDA

(in thousands)

(unaudited)

 

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Net loss

$

(5,767)

$

(5,723)

$

(34,078)

$

(34,242)

Interest on outstanding debt

11,382

8,257

42,022

24,591

Income tax (benefit) expense

459

(1,013)

(4,258)

(8,132)

Depreciation

1,305

1,346

4,786

4,491

Amortization

—

2

2

7

Stock-based compensation

10,575

10,856

44,196

39,779

Transaction costs(1)

5,857

4,206

15,512

9,123

Sponsor costs(2)

34

66

147

517

Other non-recurring costs(4)

2,956

630

10,269

3,365

Effects of foreign currency transaction (gains) and losses

(3,343)

(4,536)

(1,671)

2,514

Amortization of acquisition-related intangibles

35,731

34,520

142,965

136,710

Interest income

(2,716)

—

(5,679)

—

Fair value adjustments to deferred revenue in connection with purchase
accounting

—

13

—

868

Adjusted EBITDA

$

56,473

$

48,624

$

214,213

$

179,591

Net loss margin

(4.3)

%

(4.6)

%

(6.4)

%

(7.2)

%

Adjusted EBITDA margin

41.7

%

39.0

%

40.4

%

37.7

%

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF FREE CASH FLOW, UNLEVERED FREE CASH FLOW & ADJUSTED UNLEVERED FREE CASH FLOW

(in thousands)

(unaudited)

 

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Net cash provided by operating activities

$

36,715

$

17,003

$

164,016

$

140,271

Purchases of property and equipment

(1,232)

(1,342)

(5,940)

(6,321)

Proceeds from disposals of property and equipment

8

2

50

43

Free cash flow

$

35,491

$

15,663

$

158,126

$

133,993

Cash paid for interest on outstanding debt

10,975

8,123

42,430

18,073

Cash settled stock-based compensation

24

1,941

662

6,194

Unlevered free cash flow

$

46,490

$

25,727

$

201,218

$

158,260

Transaction costs(1)

2,300

2,215

12,174

9,474

Sponsor costs(2)

34

33

169

378

Impaired leases

390

609

1,486

2,074

Other non-recurring costs(5)

2,079

761

10,442

3,359

Adjusted unlevered free cash flow

$

51,293

$

29,345

$

225,489

$

173,545

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP NET INCOME

(in thousands, except per share data)

(unaudited)

 

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Net loss

$

(5,767)

$

(5,723)

$

(34,078)

$

(34,242)

Stock-based compensation

10,575

10,856

44,196

39,779

Amortization of acquisition-related intangibles

35,731

34,520

142,965

136,710

Fair value adjustments to deferred revenue in connection with purchase
accounting

—

13

—

868

Transaction costs(1)

5,857

4,206

15,512

9,123

Sponsor costs(2)

34

66

147

517

Other non-recurring costs(4)

2,956

630

10,269

3,365

Effects of foreign currency transaction (gains) and losses

(3,343)

(4,536)

(1,671)

2,514

Tax effects of adjustments(6)

(12,811)

(11,652)

(52,504)

(47,989)

Non-GAAP net income

$

33,232

$

28,380

$

124,836

$

110,645

Non-GAAP net income per common share, basic

$

0.23

$

0.20

$

0.87

$

0.78

Non-GAAP net income per common share, diluted

$

0.23

$

0.20

$

0.86

$

0.77

Weighted average common shares used in computing basic Non-GAAP
net income per common share

144,868

142,643

143,968

141,815

Weighted average common shares used in computing diluted Non-
GAAP net income per common share

146,176

144,261

145,616

143,440

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP GROSS PROFIT

(in thousands)

(unaudited)

 

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Gross profit

$

87,609

$

79,914

$

343,895

$

302,900

Stock-based compensation

1,042

833

3,993

3,090

Transaction costs(1)

132

—

1,143

226

Other non-recurring costs(7)

635

5

1,909

69

Amortization of acquisition-related intangibles

16,265

15,952

64,868

63,386

Fair value adjustments to deferred revenue in connection with
purchase accounting

—

13

—

868

Non-GAAP gross profit

$

105,683

$

96,717

$

415,808

$

370,539

GAAP gross margin

64.7

%

64.1

%

64.9

%

63.7

%

Non-GAAP gross margin

78.1

%

77.5

%

78.4

%

77.8

%

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NET DEBT

(in thousands)

(unaudited)

 

December 31,
2023

December 31,
2022

Long-term principal, current

$

5,000

$

5,000

Long-term principal, net of current portion

486,250

491,250

Cash, cash equivalents and restricted cash

(344,208)

(190,266)

Net debt

$

147,042

$

305,984

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP COST OF REVENUE

Three Months Ended December 31, 2023

(in thousands)

(unaudited)

 

GAAP

Stock-based
compensation
expense

Transaction
Costs

Other non-
recurring costs

Amortization
of acquired
intangibles

Non-GAAP

Cost of Revenue:

Subscription and support

$

41,167

$

(463)

$

(132)

$

(497)

$

(16,265)

$

23,810

Professional services and other

6,600

(579)

—

(138)

—

5,883

Total cost of revenue

$

47,767

$

(1,042)

$

(132)

$

(635)

$

(16,265)

$

29,693

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP COST OF REVENUE

Three Months Ended December 31, 2022

(in thousands)

(unaudited)

 

GAAP

Stock-based
compensation
expense

Transaction
Costs

Other non-
recurring costs

Amortization
of acquired
intangibles

Non-GAAP

Cost of Revenue:

Subscription and support

$

38,127

$

(383)

$

—

$

(5)

$

(15,952)

$

21,787

Professional services and other

6,685

(450)

—

—

—

6,235

Total cost of revenue

$

44,812

$

(833)

$

—

$

(5)

$

(15,952)

$

28,022

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP COST OF REVENUE

Year Ended December 31, 2023

(in thousands)

(unaudited)

 

GAAP

Stock-based
compensation
expense

Transaction
Costs

Other non-
recurring costs

Amortization
of acquired
intangibles

Non-GAAP

Cost of Revenue:

Subscription and support

$

158,699

$

(1,775)

$

(1,116)

$

(1,563)

$

(64,868)

$

89,377

Professional services and other

27,616

(2,218)

(27)

(346)

—

25,025

Total cost of revenue

$

186,315

$

(3,993)

$

(1,143)

$

(1,909)

$

(64,868)

$

114,402

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP COST OF REVENUE

Year Ended December 31, 2022

(in thousands)

(unaudited)

 

GAAP

Stock-based
compensation
expense

Transaction
Costs

Other non-
recurring costs

Amortization
of acquired
intangibles

Non-GAAP

Cost of Revenue:

Subscription and support

$

146,546

$

(1,348)

$

(135)

$

(33)

$

(63,386)

$

81,644

Professional services and other

25,748

(1,742)

(91)

(36)

—

23,879

Total cost of revenue

$

172,294

$

(3,090)

$

(226)

$

(69)

$

(63,386)

$

105,523

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

Three Months Ended December 31, 2023

(in thousands)

(unaudited)

 

GAAP

Stock-based
compensation
expense

Transaction
costs

Sponsor
costs

Other
non-
recurring
costs

Amortization
of acquired
intangibles

Non-
GAAP

GAAP %
of
revenue

Non-
GAAP %
of
Revenue

Operating expenses:

Sales and marketing

$

47,947

$

(2,829)

$

(170)

$

—

$

(835)

$

(19,462)

$

24,651

35.4

%

18.2

%

Research and development

22,290

(3,887)

(1,502)

—

(268)

(4)

16,629

16.5

%

12.3

%

General and administrative

17,148

(2,817)

(4,053)

(34)

(1,218)

—

9,026

12.7

%

6.7

%

Total operating expenses

$

87,385

$

(9,533)

$

(5,725)

$

(34)

$

(2,321)

$

(19,466)

$

50,306

64.6

%

37.2

%

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

Three Months Ended December 31, 2022

(in thousands)

(unaudited)

 

GAAP

Stock-based
compensation
expense

Transaction
costs

Sponsor
costs

Other
non-
recurring
costs

Amortization
of acquired
intangibles

Non-
GAAP

GAAP %
of
revenue

Non-
GAAP %
of
Revenue

Operating expenses:

Sales and marketing

$

46,801

$

(2,888)

$

(1,129)

$

—

$

(76)

$

(18,568)

$

24,140

37.5

%

19.4

%

Research and development

20,723

(3,206)

(1,170)

—

(9)

—

16,338

16.6

%

13.1

%

General and administrative

16,170

(3,929)

(1,911)

(66)

(536)

—

9,728

13.0

%

7.8

%

Total operating expenses

$

83,694

$

(10,023)

$

(4,210)

$

(66)

$

(621)

$

(18,568)

$

50,206

67.1

%

40.3

%

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

Year Ended December, 2023

(in thousands)

(unaudited)

 

GAAP

Stock-based
compensation
expense

Transaction
costs

Sponsor
costs

Other
non-
recurring
costs

Amortization
of acquired
intangibles

Non-
GAAP

GAAP %
of
revenue

Non-
GAAP %
of
Revenue

Operating expenses:

Sales and marketing

$

197,690

$

(11,971)

$

(2,119)

$

—

$

(2,646)

$

(78,080)

$

102,874

37.3

%

19.4

%

Research and development

88,162

(14,333)

(5,511)

—

(2,986)

(17)

65,315

16.6

%

12.3

%

General and administrative

61,261

(13,899)

(6,739)

(147)

(2,621)

—

37,855

11.6

%

7.1

%

Total operating expenses

$

347,113

$

(40,203)

$

(14,369)

$

(147)

$

(8,253)

$

(78,097)

$

206,044

65.5

%

38.8

%

 

INSTRUCTURE HOLDINGS, INC.

RECONCILIATION OF NON-GAAP OPERATING EXPENSES

Year Ended December, 2022

(in thousands)

(unaudited)

 

GAAP

Stock-based
compensation
expense

Transaction
costs

Sponsor
costs

Other
non-
recurring
costs

Amortization
of acquired
intangibles

Non-
GAAP

GAAP %
of
revenue

Non-
GAAP %
of
Revenue

Operating expenses:

Sales and marketing

$

181,744

$

(11,050)

$

(1,302)

$

—

$

(705)

$

(73,324)

$

95,363

38.2

%

20.0

%

Research and development

77,189

(11,467)

(3,025)

—

(929)

—

61,768

16.2

%

13.0

%

General and administrative

60,447

(14,172)

(4,568)

(518)

(1,663)

—

39,526

12.7

%

8.3

%

Total operating expenses

$

319,380

$

(36,689)

$

(8,895)

$

(518)

$

(3,297)

$

(73,324)

$

196,657

67.1

%

41.3

%

  

FOOTNOTES

(1) Represents expenses incurred with third parties as part of the Company’s merger and acquisition activity, including due diligence, closing and post-closing integration activities.

(2) Represents expenses incurred for services provided by Thoma Bravo and their affiliates.

(3) Includes other non-recurring costs as follows (in thousands):

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Contract modification fees

479

—

1,507

230

Employee severance

881

195

3,469

744

Workforce realignment costs

1,351

267

3,521

1,388

Other insignificant non-recurring costs

245

168

1,665

1,003

Total other non-recurring costs

$

2,956

$

630

$

10,162

$

3,365

(4) Includes other non-recurring costs as follows (in thousands):

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Loss on exit of leased properties

—

—

107

—

Contract modification fees

479

—

1,507

230

Employee severance

881

195

3,469

744

Workforce realignment costs

1,351

267

3,521

1,388

Other insignificant non-recurring costs

245

168

1,665

1,003

Total other non-recurring costs

$

2,956

$

630

$

10,269

$

3,365

(5) Includes other non-recurring costs paid in cash as follows (in thousands):

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Employee severance

$

626

$

234

$

3,044

$

744

Workforce realignment costs

1,152

344

3,245

980

Contract modification fees

—

—

2,613

186

Other insignificant non-recurring costs

301

183

1,540

1,449

Total other non-recurring costs paid in cash

$

2,079

$

761

$

10,442

$

3,359

(6) During the fourth quarter of 2022, we revised the methodology for calculating Non-GAAP Net Income. The table above includes the tax effects of the adjustments calculated by using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction.

(7) Includes other non-recurring costs as follows (in thousands):

Three months ended
December 31,

Year ended
December 31,

2023

2022

2023

2022

Contract modification fees

480

—

1,508

—

Employee severance

27

5

261

65

Workforce realignment costs

19

—

31

—

Other insignificant non-recurring costs

109

—

109

4

Total other non-recurring costs

$

635

$

5

$

1,909

$

69

 

For More Information:

Media Relations:
Brian Watkins
Corporate Communications
Instructure
(801) 610-9722
brian.watkins@instructure.com 

Investor Relations:
April Scee
Managing Director
ICR, Inc.
(917) 497-8992
april.scee@icrinc.com

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/instructure-reports-fourth-quarter-and-full-year-2023-results-302066547.html

SOURCE Instructure Holdings, Inc.

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Technology

Haloid Poll: Majority of Public Safety and Commercial Radio Administrators Would Consider Starlink Integration With LMR Two-Way Radio Networks, but Disruption Unlikely

Published

29 minutes ago

on

October 26, 2026

By

STONY BROOK, N.Y., Oct. 25, 2026 /PRNewswire/ — Following Starlink’s announced entry into the mobile communications space, Haloid’s consulting team polled government and business land mobile radio (LMR) administrators on whether Starlink could replace, or complement, their LMR systems. We found that most radio administrators were receptive to the nascent technology but did not see it as a replacement for their LMR networks.

Sixty-seven percent of radio administrators said they would be willing to integrate Starlink technology if it allowed them to expand coverage or lower infrastructure costs. When asked whether Starlink could completely replace their LMR networks, fewer than 15 percent said yes; the vast majority believed Starlink is not as reliable as the custom networks they have built. Among administrators who already use two-way radio over cellular (also known as push-to-talk over cellular, or PoC), however, nearly 80 percent said that Starlink’s satellite coverage, combined with its newly acquired cellular spectrum, would make it more desirable than the industry’s wireless incumbents because it could eliminate dead spots where cellular does not reach.

In the U.S., hundreds of thousands of radio users rely on traditional cellular carriers for push-to-talk communications, and that number grows each year. While the migration to two-way radio over cellular has affected the LMR industry, it has not replaced it. Many public safety agencies never made the switch, citing the risk that cellular networks could go down during weather events, power outages, or cyberattacks and jeopardize emergency communications.

In fact, during recent cellular outages, Starlink was used to provide emergency communications to affected areas, because its satellite connectivity does not depend on cell towers. But Starlink’s integration with the 800 MHz cellular spectrum — “Starlink 2.0,” as some experts are calling it — exposes it to some of the same vulnerabilities as traditional wireless carriers.

While Starlink’s satellite service might still function if local cell towers go down, a critical portion of an agency’s communications might rely on local towers using the 800 MHz spectrum, leaving the agency vulnerable in a storm or outage.

Expect evolution, not disruption

“Just like cellular didn’t replace LMR, we don’t see Starlink as an existential risk,” said Jeremy Alicandri, President of Haloid Solutions. He expects Starlink to accelerate the industry’s evolution toward shared communications infrastructure, also known as hybrid LMR. “We have public safety customers already using Starlink in their vehicles to extend the coverage of their radios. This trend will continue as Starlink devices become more ubiquitous.”

The stock prices of Verizon, T-Mobile, and AT&T were affected by Starlink’s recent announcement. LMR stocks such as L3Harris, JVCKENWOOD, and BK Technologies, maker of the Bendix King brand, have been unaffected, as Wall Street views Starlink as unlikely to replace LMR technology for the same reasons cellular did not. “But it may be too early to predict the industry’s winners and losers,” Alicandri added. “The cellular incumbents have many advantages, including low-cost devices, existing infrastructure, and their own satellite ambitions.”

About Haloid Solutions Research

Haloid’s Starlink poll drew on respondents to its LMR brand loyalty study, which measures radio administrators’ sentiment toward the ownership and after-sales experience. Haloid’s LMR research is sponsored by investors in the mission-critical communications space.

View original content to download multimedia:https://www.prnewswire.com/news-releases/haloid-poll-majority-of-public-safety-and-commercial-radio-administrators-would-consider-starlink-integration-with-lmr-two-way-radio-networks-but-disruption-unlikely-302918986.html

SOURCE HALOID SOLUTIONS

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Technology

Newborn Town and Viggle Launch AI-Powered 3D Interactive Game, Bringing World Models to Social Gaming

Published

29 minutes ago

on

October 26, 2026

By

HONG KONG, Oct. 26, 2026 /PRNewswire/ — Recently, Newborn Town’s game-oriented social platform TopTop has launched “Slap Showdown”, an AI-powered 3D interactive mini-game developed in collaboration with Viggle, a company specializing in physics-native world models. The launch brings world model technology into social gaming, offering users a more personalized and engaging interactive experience.

Developed by TopTop and powered by Viggle’s self-developed Joint Space-Time (JST) world model, “Slap Showdown” lets users turn uploaded photos into customized 3D characters and take them straight into the game.

Launched in September, “Slap Showdown” has gained particular traction in Japan, among Spanish-speaking users in North America, and across the Middle East. It is now available in multiple countries and regions worldwide.

From Better Gameplay to a Richer Ecosystem: How World Models Could Redefine Social Gaming on TopTop

In terms of gameplay, “Slap Showdown” combines AI-generated 3D characters with multiplayer interaction. Players can simply upload a photo from their phone and generate a personalized 3D character in around 30 seconds, whether it’s an anime protagonist, a cyberpunk cyborg, or a LEGO minifigure. They can then bring their custom characters into the game and face off against other players in fun, interactive battles.

As players use controls such as press-and-hold, tap, and drag, the 3D characters respond with realistic, physics-based movements. This takes AI-generated characters beyond visual customization, integrating them directly into the gameplay experience.

According to TopTop’s operations team, “Slap Showdown” has attracted a growing base of highly engaged, high-spending-potential players in its first month since launch. The game has recorded a 97% match completion rate, while its game-start rate has also exceeded the platform-wide average.

The depth of user engagement is further illustrated by individual player activity. One player in Japan completed 1,041 matches over 22 days, reaching a daily peak of 151 matches and averaging one match every 9.5 minutes. Another particularly avid player in Eastern Europe completed 735 matches in just 11 days, averaging 66.8 matches per day and peaking at 126 matches in a single day.

For a UGC-driven social gaming platform such as TopTop, mini-games serve as entry points and traffic drivers, while social features underpin retention and monetization. Personalized 3D avatars add another dimension to that experience. Beyond their visual appeal, they give users new ways to express themselves, interact with friends and share memorable moments. In turn, richer gameplay and more meaningful social interactions can help improve retention, attract new users and strengthen engagement across the platform.

“Slap Showdown” marks a successful step in TopTop’s efforts to deepen its application of AI technology, as well as a starting point for using world models to enhance gaming and social experiences. TopTop’s operations team said future game releases could make greater use of AI-powered 3D generation, extending beyond avatars to include customized environments. Existing games could also be revitalized by the introduction of new gameplay features, potentially driving stronger retention and user acquisition.

Beyond enriching gameplay, world model capabilities could also reshape social interaction itself, enabling more immersive, face-to-face experiences in virtual spaces. “We’re constantly exploring how AI can transform gaming and social interaction, while bringing new energy and capabilities to our UGC ecosystem,” TopTop’s operations team said.

Viggle Unveils Physics-Native Model JST-2, Setting Its Sights on Becoming the Infrastructure Layer for Physical AI

The world model technology powering “Slap Showdown” is provided by Viggle.

Founded in 2022, Viggle has focused on developing physics-native world foundation models. Its self-developed JST model can generate 3D characters, motion and environments directly, providing a foundation for gaming and a growing range of AI applications.

Viggle previously attracted widespread attention with Meme Maker, its AI-powered video creation product. The tool enables users to animate static characters and generate videos by applying specified movements, making AI character animation and video creation more accessible. In August 2024, Viggle raised USD 19 million in a Series A funding round led by Silicon Valley venture capital firm Andreessen Horowitz (a16z).

However, video creation was an early application of this technology. Viggle’s longer-term ambition is to make JST a foundational technology for AI-powered experiences across gaming, social platforms and other applications.

Viggle is now further expanding its technological boundaries. On 19 October, Viggle launched JST-2 in full, likening its significance for world models to GPT-2’s role in the evolution of language models.

Unlike many world models that infer physical structure indirectly from pixels, JST-2 is built around a physics-native architecture designed to learn the structure and dynamics of the 3D world directly. Its underlying representation consists of units resembling digital “atoms.” Each has a defined position in three-dimensional space, along with physical properties such as material, color and mass, and information describing how it moves and responds to forces. This allows the model to do more than generate convincing images. It can represent and generate 3D characters, motion and scenes with an underlying understanding of their physical properties.

To support this approach, Viggle has developed an integrated technology stack spanning tokenization, model architecture, data engine, pre-training and post-training. After four years of research and development, JST-2 can generate characters, motion and scenes within a single unified architecture.

Compared with other approaches, JST-2 also demonstrates cost efficiency. JST-2 can generate a 3D scene in seconds, at an inference cost of less than one US cent. Once created, the content can be rendered locally without repeatedly running the foundation model to generate each frame.

It is noteworthy that world model technology remains at an early stage, but Viggle is already working toward more advanced capabilities.

Its next-generation model, JST-3, is intended to become a comprehensive world simulator. Such a system could underpin future game and graphics engines, while also serving as a virtual training environment for robotics and other forms of physical AI.

The longer-term goal is for JST-3 to learn the physical rules governing its simulated world directly from data, rather than relying on rules explicitly written by developers.

For Newborn Town, its investment in and partnership with Viggle represents an important step in exploring how advanced AI can reshape social gaming, promoting a deep integration of AI technology with its business operations.

As a leading global social entertainment company, Newborn Town has continued to deepen the use of AI across key areas in recent years, including product R&D, social recommendation systems, intelligent operations, safety and risk management, and marketing and user acquisition, supporting ongoing business growth.

Meanwhile, the company also continued to invest across the AI ecosystem, backing projects in areas including world models, AI companionship, AI Agents and AI interactive gaming. These investments have further enriched its AI application ecosystem, with Viggle among the AI companies previously backed by Newborn Town.

“Slap Showdown” represents an early step in bringing world models into social gaming. For Newborn Town and Viggle, the next challenge is to turn increasingly sophisticated AI capabilities into experiences that users find genuinely engaging — and compelling enough to keep coming back.

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SOURCE Newborn Town

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HKICEC Launches First-Ever Global Mobile Exchange Pavilion at Mobile Electronics Show

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29 minutes ago

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October 26, 2026

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Charting a New Milestone with Outstanding Achievements

HONG KONG, Oct. 26, 2026 /PRNewswire/ — The Hong Kong International Communications Electronic Chamber (HKICEC) made a landmark debut at the Global Sources Mobile Electronics Show, held from October 18-21, 2026, with the inaugural launch of the HKICEC Global Mobile Exchange Pavilion. Spanning 600 square meters, the pavilion brought together nearly 60 industry leaders from mainland China, Hong Kong, India, Japan, the UAE, the US and the UK. As the largest themed pavilion in the mobile electronics sector and a premier highlight of the exhibition, this event marks a new developmental milestone for HKICEC. The pavilion underscores the chamber’s dedication to bridging global markets and serving the communications and electronics industry, injecting vital new momentum into the synergy between Hong Kong’s technology sector and international trade.

The grand opening ceremony on October 18 marked the official launch of the first B2B pavilion in Hong Kong and Asia dedicated exclusively to mobile communications equipment. The milestone event was officiated by a distinguished lineup of devices global business, including  Dr. the Hon. Starry Lee Wai King, GBS, JP, Member of the Standing Committee of the National People’s Congress and President of the Legislative Council; Mr. Zhu Xiaodong, Director of the Kowloon Affairs Department of the Liaison Office of the Central People’s Government in the HKSAR; Dr. the Hon. Horace Cheung Kwok Kwan SBS JP, Deputy Secretary for Justice, HKSAR; Mr. Liu Maozhou, Level 1 Bureau Rank Official, the Economic and Financial Department II, Liaison Office of the Central People’s Government in the HKSAR; Mr. Ho Lap Ki, Denny, JP, District Officer (Kwun Tong), Home Affairs Department; Mr James Liu, CEO of Global Sources; and Mr. Jacky Tse, Chairman of HKICEC, alongside HKICEC Management team. Together, they witnessed the official launch of the first B2B pavilion in Hong Kong and Asia dedicated to mobile communications equipment. The ceremony drew over a hundred political and business leaders, industry representatives, international exhibitors, and major media outlets, reflecting the event’s importance and the industry’s green trading development. Following the inauguration, officials toured the pavilion for high-level discussions with global exhibitors, signaling robust institutional backing for the industry and HKICEC’s strategic expansion.

During the four-day exhibition, the pavilion experienced a continuous flow of visitors. Communications and electronics suppliers and global buyers from overseas visited specifically for business matchmaking and negotiations, unlocking numerous commercial opportunities. Notably, the pavilion also featured a retrospective exhibit of 16 classic mobile phones, tracing the industry’s evolution from early ‘brick’ devices to Mainland China’s first official Apple release, the iPhone 3GS. The historical display proved to be a standout attraction, gathering large crowds throughout the event.

Beyond the exhibition floor, the chamber partnered with Global Sources to co-host an international forum on October 19. Under the theme ” From New Devices to New Life: Building a Global Mobile Device Lifecycle Ecosystem”, the event gathered experts from ecoATM, PCS Wireless, Cenwood, Our Hong Kong Foundation, and the Global Mobile Association. They engaged in profound discussions on cutting-edge topics including the global economic landscape, inventory management, ESG development, the circular ecology of new and used devices, and AI technology.  Attended by over 200 international representatives, the forum successfully catalyzed cross-border collaboration and established a new standard for sustainability discourse in the global mobile industry.

As a capstone to the comprehensive four-day events, HKICEC convened over 500 industry leaders, VIPs, and exhibitors for a high-profile networking banquet designed to accelerate cross-border business alliances. The gathering provided a premier platform for delegates to solidify collaborative ties and exchange strategic insights initiated from the pavilion. Ahead of the exhibition’s conclusion, a special ” Pearl Of The Orient • Victoria Harbour Cruise Party” was organized to showcase Hong Kong’s unique charm as a cosmopolitan city to global guests, providing a memorable networking experience against Hong Kong’s iconic skyline to formally cap off the week’s successes.

High-resolution images: https://bit.ly/3WqHMxu

View original content to download multimedia:https://www.prnewswire.com/apac/news-releases/hkicec-launches-first-ever-global-mobile-exchange-pavilion-at-mobile-electronics-show-302918996.html

SOURCE The Hong Kong International Communications Electronic Chamber (HKICEC)

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