Education software company PowerSchool Holdings Inc. lowered its annual loss to $43.1 million in 2021 in its first year reporting as a publicly traded company, down from a loss of $46.6 million in 2020.
Folsom-based PowerSchool (NYSE: PWSC) had revenue of $558.6 million in 2021, up 28.4% from revenue of $434.9 million the year earlier.
"We had a fantastic fourth quarter, exceeding the top ends of our guidance … and capping off a record year for PowerSchool in which annual recurring revenue grew 26% to $538.6 million," said PowerSchool CEO Hardeep Gulati, in a news release.
In the fourth quarter, PowerSchool lost $15.9 million, down from a loss of $17.8 million in the same quarter the previous year. Revenue in the fourth quarter was $146.1 million, up 25.8% from revenue of $116.1 million in the year-earlier period.
The company invested $27.9 million into research and development in the fourth quarter, said Eric Shander, PowerSchool chief financial officer, during a conference call with investors and analysts.
Half of PowerSchool’s annual recurring revenue comes from customers who use at least four of the company’s 18 products, said Gulati, during the investor call. He said the company’s “comprehensive platform gives us the opportunity to expand,” through new customers and from cross-selling existing customers.
PowerSchool software is used to support school administrators with programs that eliminate manual processes for everything from daily attendance to counseling to grades. PowerSchool also provides an online platform for virtual learning, and offers supports to teachers, parents and students with online lesson plans. The company offers analytics and assessment products, as well as career counseling and college search.
During the fourth quarter, PowerSchool acquired two companies, Kinvolved Inc., which supports schools’ efforts to get students to attend classes using a variety of communications technologies, and Kickboard Inc., a provider of K-12 education behavior management products.
PowerSchool’s IPO in July raised $766.1 million, net of underwriting costs and commissions, and was the largest IPO by a Sacramento area company in memory.
Since its IPO at $18, PowerSchool shares have traded as high as $36.56 in August to as low as $12.35 in January. Shares in the company began trading below the offering price following a critical report in December from investment bank Goldman Sachs when it initiated analyst coverage. Goldman Sachs was the lead underwriter of PowerSchool’s initial public offering. PowerSchool disputed the report. Shares in the company closed at $14.15 on Thursday, down 82 cents on the day.
Since going public, PowerSchool has repaid approximately $849 million of debt, including the entirety of the outstanding balance of a bridge loan, a revolving credit facility and other debt it incurred in acquisitions over the past two years. It used both IPO proceeds and cash from operations to pay down the debt.
