Technology

Instructure Reports Fourth Quarter and Full Year 2023 Results

Published

2 years ago

February 20, 2024

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

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)

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)

(0.24)

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)

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

(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

(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

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)

(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

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

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

—

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)

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

—

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

—

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)

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

—

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

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

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)

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

—

868

Transaction costs(1)

5,857

4,206

15,512

9,123

Sponsor costs(2)

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

1,909

Amortization of acquisition-related intangibles

16,265

15,952

64,868

63,386

Fair value adjustments to deferred revenue in connection with
purchase accounting

—

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

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

261

Workforce realignment costs

—

Other insignificant non-recurring costs

109

—

109

Total other non-recurring costs

635

1,909

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

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SOURCE Instructure Holdings, Inc.

Technology

VibeBeats Launches AI-Powered Music Streaming Service for Businesses globally

Published

5 minutes ago

July 24, 2026

Vibebeats AI gives cafés, gyms, retailers, bars and hotels fully licensed, AI-curated streaming music for business from any phone, tablet or browser — no hardware, no lock-in contracts, no licensing paperwork — from A$29 a month with a 7-day free trial.

BRISBANE, Australia, July 24, 2026 /PRNewswire-PRWeb/ — VibeBeats Launches AI-Powered Music Streaming Service for Businesses globally

VibeBeats gives venues fully licensed, AI-curated Music at a fraction of the cost — one app, one licence, one platform.

Most venues playing music through consumer apps are doing it on the wrong licence. VibeBeats, an Australian-built, AI-powered streaming music for business platform, has launched across Australia and worldwide to fix that — turning any phone, tablet or browser into a fully licensed venue sound system in under five minutes. One agreement covers commercial performance rights across OneMusic and APRA AMCOS in Australia, and ASCAP, BMI, PRS and other rights bodies internationally — the same platform serving a café in Melbourne or a gym in London.

The “Spotify for business” that actually exists

Every month, thousands of venue owners worldwide search for “Spotify for business” — a product that doesn’t exist. Consumer streaming accounts are licensed for personal use only, leaving businesses that play them exposed under copyright law in Australia and virtually every other market. VibeBeats fills that gap: a business music streaming service where the commercial music rights are handled under one agreement — no separate music licence for business paperwork to manage.

“The number one thing we see is venue owners assuming it’s fine to play their personal Spotify account in the café — most don’t realise a licence fee even applies,” said Damien King, founder of VibeBeats. “It’s not bad intent. Licensing is complex, and when you’re running a small business there are a hundred competing priorities. VibeBeats solves it with one app, one licence, one platform.”

What VibeBeats delivers

Fully Licensed for Commercial Use — one agreement covers the rights that would otherwise involve OneMusic, APRA AMCOS, ASCAP, BMI, PRS and more.No Hardware Required — any phone, tablet or browser becomes the venue sound system — set up in under five minutes.AI-Curated Background Music for Business — stations matched to venue type and time of day, from morning coffee trade to peak gym floor to late-night bar.Smart Scheduling — playlists by daypart, with music that keeps running through connection drops.Multi-Venue Dashboard — manage every location from a single account.Simple Pricing — from A$29 per month per venue with a 7-day free trial — no lock-in contracts.

Pricing and availability

VibeBeats is available now from $29AUD/$20US per month per venue, and globally, with a 7-day free trial at vibebeats.ai. Purpose-built stations are available for cafés, gyms, retail and in-store environments, bars and hotels.

About VibeBeats

VibeBeats is an AI-powered commercial music streaming platform for businesses, offering direct-licensed music for cafés, restaurants, bars, retail stores, gyms and hotels. One agreement covers commercial performance rights that would otherwise involve PROs, OneMusic, APRA AMCOS, ASCAP, BMI, PRS and more. Australian-built and available globally, VibeBeats AI streams to any device with no proprietary hardware required. Learn more at vibebeats.ai.

VibeBeats is not affiliated with Spotify.

Media Contact

Damien King, Vibebeats AI, 61 0408009067, hello@vibebeats.ai, https://vibebeats.ai

View original content:https://www.prweb.com/releases/vibebeats-launches-ai-powered-music-streaming-service-for-businesses-globally-302832010.html

SOURCE Vibebeats AI

Technology

Inside information: Valmet initiates a strategic review to evaluate a potential separation of its two segments

Published

5 minutes ago

July 24, 2026

Valmet Oyj’s stock exchange release (inside information) on July 24, 2026 at 9.01a.m. EEST

ESPOO, Finland, July 24, 2026 /PRNewswire/ — The Board of Directors of Valmet Oyj (“Valmet” or the “Company”) has decided to initiate a strategic review to evaluate a potential separation of its two core businesses, Biomaterial Solutions and Services, and Process Performance Solutions, into two standalone publicly listed companies. The review will focus on assessing whether a separation of the two businesses and their operation as separately listed companies on Nasdaq Helsinki would create additional value for shareholders compared with the current combined structure.

Both Valmet’s core businesses report as separate segments and they have grown into large, mostly independent profitable businesses, each with strong market positions and scale that allow them to succeed independently. With the recent completion of the Severn acquisition taking Process Performance Solutions to approximately EUR 1.7 billion in annual net sales and the renewed operating model now firmly in place, the Board believes this is the right time to assess whether a separation would unlock shareholder value by enabling each business to better realise its full potential.

The Board also notes that the two core businesses operate relatively independently as they serve mainly different customer industries, exhibit distinct business drivers, and have different capital allocation profiles. Biomaterial Solutions and Services is a global technology and lifecycle services business focused on the pulp, board, paper, tissue and energy industries, where its competitive advantage is anchored in a vast installed base, advanced technology, global presence, strong customer references and global services penetration. Process Performance Solutions is a mission-critical automation and flow control business serving a diversified set of industries. Over the past decade, it has evolved from a business primarily focused on pulp and paper into a diversified industrial platform, with close to 70 percent of net sales generated from other industries today.

Based on the Board’s initial assessment, a separation would allow each business to pursue sustainable profitable growth opportunities more independently and efficiently, with the potential for sharper management focus, greater agility, more tailored capital allocation, and more flexible access to external capital to support both organic and inorganic growth. The Board will also assess whether, if implemented, a separation would improve transparency, simplify governance, and allow capital markets to better recognize the full value of both businesses.

Pekka Vauramo, Chair of the Board, said:
“The Board continuously evaluates how to create the greatest long-term value for Valmet’s shareholders. Today, Valmet consists of two strong businesses with distinct markets, growth opportunities and capital allocation needs. Through this review, we will assess whether they can create more value as independent companies than they can together. We will only proceed with a separation if we conclude after detailed analysis that separation is clearly in the best interests of our shareholders.”

Thomas Hinnerskov, President and CEO of Valmet, said:
“Both of our businesses are well positioned, with strong customer relationships and market positions, as well as talented employees. The review reflects the strength and maturity of both businesses, which we have built through strong execution, organic growth and strategic investments into sizeable and successful operations with the scale, capabilities and opportunities to create further value both together and, potentially, as independent companies. This review does not change our commitment to our customers or our strategy. It is a priority for us to preserve the strength of our full offering and the value our customers gain from services, automation and technology working together. Throughout the process, our focus remains on serving our customers and delivering value for their success.”

Although the strategic review has been initiated, there is no guarantee that the review will result in any transaction, including a separation. The Board will only execute or recommend changes to the Group’s structure if clear evidence of enhanced shareholder value creation can be attained. Valmet will provide an update on the review latest in connection with the publication of its full-year 2026 results.

Further information, please contact:

For investors: Pekka Rouhiainen, VP, Investor Relations, Valmet, tel. +358 10 672 0020

For media: Valmet Communications, media@valmet.com

VALMET

Katri Hokkanen
CFO

Pekka Rouhiainen
VP, Investor Relations

DISTRIBUTION:
Nasdaq Helsinki
Major media
www.valmet.com

Valmet is a global technology leader in serving process industries. We work with our customers throughout the lifecycle, delivering cutting-edge technologies and services, as well as mission-critical automation and flow control solutions. Backed by more than 225 years of industrial experience and a global team of 18,500 professionals close to customers, we are uniquely positioned to transform industries toward a regenerative tomorrow.

In 2025, Valmet’s net sales totaled approximately EUR 5.2 billion. Our head office is in Espoo, Finland, and we have experts in approximately 40 countries around the world. Valmet’s shares are listed on Nasdaq Helsinki.

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Technology

Securitas AB Interim Report Q2 2026 | January-June

Published

5 minutes ago

July 24, 2026

STOCKHOLM, July 24, 2026 /PRNewswire/ —

APRIL–JUNE 2026

Total sales MSEK 37 843 (38 564)Organic sales growth 0 percent (5)Adjusted organic sales growth, 3 percent*Real sales growth within technology and solutions 5 percent (4)Operating income before amortization MSEK 2 824 (2 798)Operating margin 7.5 percent (7.3)Adjusted operating margin, 7.6 percent (7.5)*Items affecting comparability (IAC) MSEK –46 (–166) Earnings per share, SEK 2.88 (2.56)Earnings per share before IAC, SEK 2.94 (2.79)Cash flow from operating activities 87 percent (106)

JANUARY–JUNE 2026

Total sales MSEK 74 054 (78 170)Organic sales growth 0 percent (4)Adjusted organic sales growth, 2 percent*Real sales growth within technology and solutions 4 percent (5)Operating income before amortization MSEK 5 283 (5 323)Operating margin 7.1 percent (6.8)Adjusted operating margin, 7.3 percent (7.1)*Items affecting comparability (IAC) MSEK 138 (–243) whereof MSEK 213 (–5) related to divestitures Earnings per share, SEK 5.68 (4.86)Earnings per share before IAC, SEK 5.40 (5.15)Cash flow from operating activities 65 percent (56)Net debt/EBITDA ratio 2.2 (2.4)

*A new key ratio, operating margin adjusted for the government business within SCIS in the process of being closed down, was added as of the second quarter 2025. A new key ratio, organic sales growth adjusted for the same business, was added as of the third quarter 2025. Refer to note 5 for further information.

Comments from the President and CEO

“Continued profitability improvement”

Organic sales growth in the second quarter, adjusted for the close-down of the SCIS government business, was 3 percent. Organic sales growth in North America was supported by both the Guarding and Technology business units, while active portfolio management had a hampering effect on organic sales growth in Europe.

Real sales growth in technology and solutions reached 5 percent in the second quarter, supported by good performance in Technology in North America. Commercial activity remained healthy in the global technology business with strong growth in installation order intake and backlog.

We execute on our strategy with the share of technology and solutions increasing across all segments but we are not fully satisfied with the overall growth. We have built a strong and differentiated technology-led offering and we are intensifying our efforts to commercialize the capabilities we have built.

We delivered an improved adjusted operating margin in the second quarter, reaching 7.6 percent (7.5), driven by both the technology and solutions and the security services business lines. Operating income increased 3 percent and earnings per share 7 percent. For the first six months earnings per share increased 11 percent.

Cash generation was good, corresponding to 87 percent (106) of operating income in the quarter, and 65 percent (56) for the first six months of the year. The net debt to EBITDA ratio was 2.2 (2.4).

THE TRUSTED PARTNER IN INTELLIGENCE-LED SECURITY

Our recently announced 2030 strategy positions Securitas as the trusted partner in intelligence-led security, combining global presence and deep security expertise with advanced data, analytics and technology. By leveraging actionable risk intelligence and a more consultative approach, we aim to move further up the value chain, delivering proactive, insight-driven security and strengthening our role as a strategic advisor to clients. In an increasingly complex risk environment, growing demand for professional security services supports our continued growth and competitive position.

The close-down of the SCIS government business is progressing according to plan and is expected to be concluded by year-end. As no further activities remain, the strategic assessment program was concluded in the second quarter of 2026.

The shift toward technology and solutions continues to drive profitability improvements. We are also strengthening the performance of our security services business and, as of the second quarter of 2026, have completed portfolio management actions related to underperforming contracts in Europe. Going forward, portfolio optimization will continue as part of normal business operations, with a sustained focus on contract profitability.

CREATING LONG-TERM SHAREHOLDER VALUE

In conjunction with the launch of our strategy, we have updated the Group’s financial targets for the period through 2030. The revised targets include a new headline target of achieving 10 percent average annual earnings per share growth over a business cycle, alongside targets for cash flow, leverage and dividend policy. With a strong focus on quality and innovation, we are accelerating our transformation and remain confident in our ability to deliver sustainable earnings growth and create long-term shareholder value.

Magnus Ahlqvist
President and CEO

PRESENTATION OF THE INTERIM REPORT

Analysts and media are invited to participate in a telephone conference on July 24, 2026, at 9.30 a.m. (CEST) where President and CEO Magnus Ahlqvist and CFO Matteo Dall’Ora will present the report and answer questions. The telephone conference will also be audio cast live via Securitas’ website www.securitas.com

To follow the audio cast of the telephone conference via the web, please follow the link
www.securitas.com/en/investors/financial-reports-and-presentations/

A recorded version of the audio cast will be available at www.securitas.com/en/investors/financial-reports-and-presentations/
after the telephone conference.

For further information, please contact:
Micaela Sjökvist, Vice President, Investor Relations +46 76 116 7443

ABOUT SECURITAS

Securitas is a world-leading safety and security solutions partner that helps make your world a safer place. Nine decades of deep experience means we see what others miss. By leveraging technology in partnership with our clients, combined with an innovative, holistic approach, we’re transforming the security industry. With approximately 322 000 employees in 44 markets, we see a different world and create sustainable value for our clients by protecting what matters most – their people and assets.

Group financial targets

Securitas has the following financial targets:

Average annual earnings per share growth of 10 percent over a business cycle, excluding items affecting comparability and adjusted for changes in exchange rates, with a >10 percent operating margin ambition long-termOperating cash flow of 80–90 percent of operating income before amortizationNet debt to EBITDA below 2.5xDividend policy of 50–60 percent of annual net income over a business cycle, with excess capital returned to shareholders once stra-tegic growth priorities are met

Securitas AB (publ.)
P.O. Box 12307, SE-102 28 Stockholm, Sweden
Visiting address:
Lindhagensplan 70
Telephone: +46 10 470 30 00
Corporate registration number: 556302-7241

www.securitas.com

This is information that Securitas AB is obliged to make public pursuant to the EU Market Abuse Regulation.
The information was submitted for publication, through the agency of the contact person set out above,
at 8.00 a.m. (CEST) on Friday, July 24, 2026.

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/securitas/r/securitas-ab-interim-report-q2-2026—january-june,c4377189

The following files are available for download:

https://mb.cision.com/Main/1062/4377189/4201680.pdf

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