Instructure Holdings, Inc.

Q1 revenue was $155.5 million, up 20.7% year over year, with 6.8% organic constant-currency revenue growth. Subscription and support revenue was $144.7 million, up 22.1% year over year, with 7.6% organic constant-currency growth; professional services and other revenue was $10.8 million, up 4.2%. Non-GAAP gross margin was 79%, up 103 basis points, and subscription/support gross margin was 82%, up 60 basis points. Non-GAAP operating income was $63.5 million with a 40.8% margin; adjusted EBITDA was $64.9 million with a 41.8% margin, up 34.6% year over year. Non-GAAP net income was $32.7 million, up 17.2% year over year. Deferred revenue was $235 million, up 8.9%, and remaining performance obligations were $820.4 million, up 16.6% year over year. For Q2, revenue is guided to $166.5 million to $167.5 million and adjusted EBITDA to $67.5 million to $68.5 million. For full-year 2024, revenue is guided to $656.5 million to $666.5 million, adjusted EBITDA to $271 million to $274 million, and adjusted unlevered free cash flow to $262 million to $265 million.

Steve Daly framed the quarter as validation of Instructure’s long-term strategy: building an ecosystem for both traditional and nontraditional learners, with Canvas as the anchor and Parchment expanding the platform. He emphasized cross-sell, product bundling, AI-enabled innovation, and a retooled go-to-market approach as reasons the company can grow durably and reach $1 billion of revenue by 2028. His tone was confident and optimistic, but he also acknowledged elongated decision cycles in higher ed and said the company is only early in monetizing its broader portfolio.

Peter Walker highlighted that Q1 beat all guided metrics, with revenue of $155.5 million and adjusted EBITDA of $64.9 million, while margin expansion benefited from scale and some spend shifted later in the year. He noted non-GAAP gross margin of 79%, operating margin of 40.8%, cash flow pressures from the Parchment acquisition and prior-quarter early collections, and ended the quarter with $89.3 million in cash, cash equivalents, restricted cash and funds held for customers. He also said net leverage was 4.7x on a Q1 basis but is expected to improve to about 3.4x by year-end, and he raised full-year guidance modestly, including revenue, EBITDA, and free cash flow.

Analysts focused on the new sales organization, bundling, Parchment integration, retention, and whether higher-ed and K-12 demand is improving or still constrained by macro and funding uncertainty. Management said the new go-to-market structure is still early but showing better collaboration, lead generation, and pipeline build, while bundled and multiproduct deals are contributing to wins. On Parchment, Daly said back-office integration is underway, go-to-market remains separate for now, and early customer feedback has been positive; on macro, management said there has been no material change and that the main headwinds remain elongated cycles, enrollment uncertainty, and budget pressure rather than broad economic conditions.