In its first earnings report as a publicly traded company, Folsom-based PowerSchool Holdings Inc.'s quarterly loss shrank by 79% as it added subscribers for its educational software.
The company reported a loss of $2.55 million in the second quarter, compared with a loss of $12.4 million in the year-earlier period.
Revenue, meanwhile, grew 40.8% to $145.4 million, and CEO Hardeep Gulati said PowerSchool (NYSE: PWSC) will continue to grow through acquisitions, partnerships, new research and development and by selling more of its products to existing customers.
Through some of its products, PowerSchool reaches 45 million students, representing 70% of all K-12 students in the country, he said. Gulati said customers use an average of two of PowerSchool’s 15 products, which is an opportunity for cross-selling additional services to existing customers.
“We have an opportunity to grow to a multiple of our revenue through cross-selling," he said, adding that PowerSchool does business with 93 of the top 100 school districts in the country.
The company's initial public offering in July raised $766.1 million, net of underwriting costs and commissions, and was the largest IPO by a Sacramento area company in recent memory.
PowerSchool has made four acquisitions in the last two years, and Gulati anticipates more in the future, he said on a conference call with investors and analysts.
PowerSchool was featured last month on the Inc. 5000 list of fastest-growing private companies in America, with three-year growth to 2020 of 84%.
Gulati said PowerSchool’s growth is predictive because its services to schools are increasingly mission critical where they have been implemented.
“The trend toward adoption is here to stay,” he said, adding that many of its contracts are for two years. He said subscriptions represent about 85% of revenue.
“The demand for our unified solutions that help accelerate learning outcomes and improve school operations is demonstrated by continued business momentum driving strong and balanced results in the second quarter," Gulati said in a news release.
PowerSchool software is used to support school administrators with a variety of programs that eliminate manual processes for everything from daily attendance to counseling to grades. The company also provides an online platform for virtual learning, and it offers supports to teachers, parents and students. PowerSchool also offers analytics and assessment products, as well as career counseling and college search.
The IPO in late July was led by investment bank underwriters Goldman Sachs & Co. LLC, Barclays, Credit Suisse and UBS.
PowerSchool shares began trading at $18 in July. On Thursday, they closed at $31.99, giving the company a valuation of $5.23 billion.
