Ladies and gentlemen, thank you for standing by and welcome to Instructure's first quarter 2023 earnings call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that this conference is being recorded. I would now like to turn the conference over to your first speaker, April Scee., Investor Relations. April, please go ahead. Good afternoon, welcome to Instructure's first quarter 2023 earnings conference call. We'll be discussing the results announced in our press release issued after the market closed today. With me are Instructure's Chief Executive Officer, Steve Daly, and Chief Financial Officer, Dale Bowen. Before we begin, I'd like to remind you that today's conference call will include forward-looking statements based on the company's current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and our results may differ materially. For discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's earnings release and other reports and filings we file from time to time with the Securities and Exchange Commission. All of our statements are made as of today based on information available to us today, and except as required by law, we assume no obligation to update any such statements. During the call, we will also refer to both GAAP and non-GAAP financial measures. You can find the reconciliation of our GAAP to non-GAAP measures included in our press release, which is posted on the investor relations section of our website. With that, let me turn the call over to Steve. Thanks, April. I'm delighted to welcome everyone to Instructure's Q1 2023 earnings call. During today's call, Dale and I will share the details of our first quarter results and provide guidance for Q2 and the full year 2023. First quarter 2023 results exceeded our previously communicated guidance ranges for revenue and Adjusted EBITDA, fueled by our efficient go-to-market organization and unyielding dedication to customer satisfaction. First quarter revenue was $128.8 million, up 13.6% year-over-year, including an 80 basis point headwind from foreign exchange. First quarter Adjusted EBITDA grew 10.8% year-over-year to $48.3 million at 37.5% margin. The strength of our first quarter performance demonstrates the power of our business model. I'll next share five areas that contributed to our continued success. Strong new logo sales, the power of our platform strategy, our wins in non-traditional education, traction from acquired businesses, and continued operational efficiency. Our new logo win rates remain strong across all of our markets. Success is being driven by our focused go-to-market engine, best-in-class customer experience, expanded set of offerings, and our ability to solve real-world challenges across the teaching and learning landscape. In one win this quarter, we scored a perfect 100% in our RFP response in categories such as vision and innovative power, completeness of the solution, and problem-solving power. These are areas above and beyond our features and functions of our product where Instructure consistently shines, and that helps us to drive our growth. In North American higher ed, we have a greater than 40% market share, and we continue to see RFP activity in line with our expectations. We win a very high percentage of new deals as customers recognize the value we offer. During the quarter, we had a significant win with the University of Massachusetts Amherst, which chose the Instructure Learning Platform based on positive feedback from students and faculty during a successful pilot engagement. UMass Amherst wanted a common experience for all their students and faculty, whether they were engaged in a traditional, in-person, online or non-traditional education. They chose to partner with Instructure as their platform for the future. They were able to replace multiple LMS vendors with Canvas and also incorporate Studio, Catalog and Impact. We're proud to partner with UMass Amherst in providing an exceptional learning experience for their students and faculty. In North American K-12, our platform and tailored services continue to drive success and continue to support our market-leading position with nearly 30% share according to ListEdTech. The green shoots we mentioned during our last quarterly call resulted in strong bookings for Q1 as K-12 decision-makers continue to recognize our products as mission-critical. We are particularly pleased with the traction in Assessments. During Q1, we won a competitive RFP for Sioux Falls School District, which included seven products: Canvas LMS, Studio, and the full suite of Mastery products. In doing so, we displaced the LMS and AMS incumbents due to our comprehensive solution, our customization capabilities, and our ability to migrate the district's benchmark data to Mastery Connect. Looking ahead, we feel great about our prospects in K-12 as we continue to focus on multi-product suites and increasing deal sizes. International remained the fastest-growing part of our business during the quarter, excluding the impact from FX. With strong performance from both our direct business and our channel partner program. We secured a direct win with CVO Gent, a continuing education school in Belgium, to replace an outdated LMS. The customer chose Instructure in part because no other vendor could meet the extensive requirements in its RFP. Underscoring their high level of satisfaction with our platform, we've already received multiple referrals as a result of our relationship. Separately, we had our largest channel deal to date in APAC, highlighting the ongoing success of our channel partner program. Second, our success in the education technology industry continues to be driven by our platform strategy and our ability to stay ahead of the curve in terms of innovation. We estimate that our current product lineup represents over a billion-dollar cross-sell opportunity to our existing customer base, and we continue to see strong success capturing this opportunity as customers take advantage of the breadth of our solutions. Our pipeline is strong and we are seeing positive trends in cross-selling as our customers look to expand their use of our products to improve teaching and learning outcomes. We are also proud to report a higher penetration year-over-year of our products across our customer base. Fueling the higher penetration rate are deals like Green Bay Area Public School District. This district added Mastery Connect and Assessments, Catalog, and Credentials. Comparing our current contract with our new contract with them, we saw an increase of over 8 times the contract value. In another win, we closed our largest credentials deal since the Concentric Sky acquisition, highlighting the potential for growth in this area. The power of our platform strategy extends beyond our products. The platform allows us to elevate our partners and uniquely meet our customers' challenges together. These robust partnerships help drive our above-average win rates and demonstrate the power of our platform and ecosystem. The Sioux Falls wins, for example, included a partner product that helped us set us apart from our competition. We were also able to win the Netherlands Institute for Public Safety, NIPV, during the quarter since the Instructure Learning Platform's openness allowed Drieam to seamlessly integrate their software products to provide a complete solution for NIPV's educational needs. Third, our non-traditional capabilities have helped drive growth for our company. We are committed to providing innovative solutions that meet the evolving needs of our customers. Our current focus on lifelong learning and vocational training has resulted in a number of exciting wins, including a multi-year deal with Deltion College in the Netherlands this quarter, which we completed against 4 other competitors in a rigorous EU tender process. With this partnership, Canvas will be made available to 18,000 students for continuing education, company training courses, and more. Additionally, a large existing K-12 customer purchased Canvas Catalog to enable teachers to access professional development training on demand by self-enrolling in courses. Finally, an update on one of our large non-traditional deals. PeopleCert is now fully operational after less than two quarters. This is a significant milestone as Canvas will now be used to train and certify 250,000 PeopleCert learners worldwide. We believe that this partnership demonstrates the power of our platform to address non-traditional educational paths, and we're excited to see how it will drive growth for our company in the years to come. We are confident we will continue to unlock new opportunities and drive value for our customers in the dynamic education technology space. Fourth, we are seeing strong results from our M&A strategy, with the recent LearnPlatform acquisition exceeding expectations for the quarter. The strong uptake and pipeline growth for LearnPlatform has revealed significant untapped potential from both new and existing customers. K-12 decision-makers are recognizing value in LearnPlatform's ability to manage and evaluate their full suite of education technology tools. LearnPlatform's evidence-based capabilities are top of mind with our partners given the proof of efficacy required by regulators. We further integrate LearnPlatform into our go-to-market motion, we believe we can capitalize on this meaningful growth opportunity. We believe that our plan to continue to enhance our platform through organic and inorganic means will keep us at the forefront of the education technology space. I want to highlight our continued profitable growth. Our best-in-class margins have enabled us to make disciplined investments that expand our platform and drive long-term growth, including investments in embedded analytics for Canvas administrators, a new data access platform to extend the Instructure Learning Platform, and making progress with New Quizzes during the quarter. We are also able to uplevel our go-to-market engine under the leadership of Chris Ball. We believe we can maintain a healthy balance of growth and profitability while maintaining flexibility to invest in high return opportunities. In conclusion, our impressive Q1 results and expanding impact on education position us as the clear leader in the education technology space. We look forward to continuing to drive value for our customers and shareholders in the months and years ahead. Now I will turn it over to Dale to provide further details on our Q1 financial performance and guidance for the Q2 and the full year 2023. Dale, please go ahead. Thank you, Steve, thanks again to everyone for joining us today. Before discussing our detailed financial results, I'd like to point out that in addition to our GAAP results, I'll be discussing certain non-GAAP results. Our GAAP financial results, along with a reconciliation between GAAP and non-GAAP results, can be found in our earnings release, which is posted in the investor relations section of our website. In the first quarter, we continue to show a combination of strong top-line growth and best-in-class EBITDA margins. As Steve mentioned, we generated first quarter 2023 total GAAP revenue of $128.8 million. Subscription and support accounted for 92% of our first quarter revenue at $118.5 million, up 14.5% year-over-year, primarily as a result of the continued momentum within our core Canvas LMS products, both domestically and internationally, in addition to the strong upselling cross-sell of our other products. Professional services and other revenue accounted for 8% of our first quarter revenue at $10.4 million, up 3.9% year-over-year. Deferred revenue at the end of the first quarter was $215.7 million, up 14.2% year-over-year. Remaining performance obligations, or RPO, were $703.7 million at the end of the first quarter, up 5% year-over-year. We expect to recognize revenue on approximately 76% of our RPO over the next twenty-four months. In discussing the remainder of the income statement, please note that unless otherwise stated, all references to our expenses, operating results, and share count are on a non-GAAP basis. Our strong gross margin profile was supported by our optimized cloud architecture and flexible support model that scales to meet seasonal customer demand. In the first quarter, gross profit was $100.4 million, representing a 77.9% gross margin, down from 78.4% in the first quarter of 2022. Turning now to operating expenses. Sales and marketing expenses for the first quarter were $26.9 million, or 20.9% of ACR, up from 19.7% in the first quarter of 2022. Research and development expenses for the first quarter were $17.0 million or 13.2% of ACR, compared to 12.6% in the first quarter of 2022, as we invested to pursue our robust product roadmap. General and administrative expenses for the first quarter were $9.4 million or 7.3% of ACR, down from 8.8% in the first quarter of 2022. Non-GAAP operating income for the first quarter was $47.2 million, representing a 36.6% operating margin, down from 37.3% in the first quarter of 2022. First quarter adjusted EBITDA was $48.3 million, representing a 37.5% adjusted EBITDA margin, down from 38.2% in the first quarter of 2022. Non-GAAP net income, normalized for the newly added tax effective adjustments, was $27.9 million in the first quarter, or $0.19 per share, compared to $28.9 million, or $0.21 per share a year ago. Turning to the balance sheet and cash flow statement. We ended the first quarter with $109.1 million in cash equivalents, and restricted cash, and $489.5 million of long-term debt, net of discount, resulting in a 2.06x net debt to trailing twelve months Adjusted EBITDA ratio. Free cash flow for the quarter was -$82.2 million compared to -$67.3 million in the prior year, in line with our expectations. Adjusted unlevered free cash flow, which adjusts for the impact of transaction costs, sponsor costs, impaired leases, and other non-recurring costs paid in cash, was negative $63.4 million, a 5.2% year-over-year decrease from negative $60.3 million in the year ago quarter. I will now conclude the call by providing guidance for Q2 and for the full year of 2023 for revenue and Adjusted EBITDA. We have provided additional guidance details in our earnings press release. For the second quarter of fiscal 2023, we expect revenue in the range of $128.5 million-$129.5 million. For the full year, we expect revenue to be in the range of $521.3 million-$525.3 million. We expect second quarter Adjusted EBITDA in the range of $48.5 million-$49.5 million, representing an Adjusted EBITDA margin of 38.0% at the midpoint of the range. For the full year, we expect Adjusted EBITDA in the range of $199.4 million-$203.4 million, representing an Adjusted EBITDA margin of 38.5% at the midpoint of the range. For the full year, we expect Adjusted unlevered free cash flow to be in the range of $202.5 million-$206.5 million. In summary, the first quarter provided a great start to 2023. We executed at a very high level and exceeded our guidance while continuing to deliver a rare combination of double-digit growth and best-in-class margins. We couldn't be more pleased about our momentum in the marketplace and look forward to updating you on our progress throughout 2023. With that, Steve and I are happy to take any of your questions. Thank you. We will now begin the question and answer session. If you have a question, please press star, one on your telephone keypad. If you would like to remove yourself from the queue, you may press star one again. Your first question comes from the line of Josh Baer of Morgan Stanley. Please go ahead. Hey, guys. It's Matt Austin on for Josh Baer. Thanks for taking the questions. It's nice to hear that Q1 bookings were strong in K-12. I'm just curious if there's any kind of qualitative commentary that you guys can provide around what you're seeing there. I know last year, you guys had noted there were some staffing shortages, and a few other issues that were pushing deals out. I'm curious if those have resolved or potentially, the multi-product adoption is what is creating that uplift or potentially both. Just any kind of additional commentary there would be helpful. Thanks. Yeah, happy to. You know, in our last call, we talked about seeing a lot more activity, in the K-12 space in particular, and that continued throughout the quarter. A couple of things that are happening there. First of all, the teacher shortage, hasn't been resolved. You know, they're still dealing with that. What they've started to recognize is that, technology can play a role in helping deal with this, on a longer term basis. We can free up some teacher time, we can help with. Subs, there's a lot of things that technology can help with to solve that problem. The other piece was that, from an administrator perspective, we are seeing more cycles spent, more activity, more interest in figuring out how to accelerate the digital transformation and recognizing that while the second half of last year, they were kinda hunkering down, that they need to be ready for fall start come 2023. Really, those are the two things, two differences I would say, in Q1 versus what we saw in the second half. Yeah, I think that's helpful. Your next question comes from the line of Fred Havemeyer with Macquarie. Please go ahead. Hey, thank you very much. Congratulations on a very strong quarter here. Would love to ask, as you're looking at the shape of deals in the K-12 landscape and with ESSER funds still flowing this year, just kind of a two-parter here. Firstly, are you seeing or how are you seeing the pipeline build throughout this year and as you're going into the, certainly the K-12 purchasing cycle? Secondly, are you seeing ESSER funds, how are you seeing them being deployed? Is it something that's perhaps helping you and your ability to get some of these deals across the line, perhaps on the implementation side? Those are good, they're good questions, Fred, and good to hear from you. Thank you. From a pipeline build, we're seeing, along with that increased activity that we saw coming into the first of the year here, we're seeing the pipeline build nicely. We're seeing a lot of, a lot of interest, a lot of activity going into, as you, as you mentioned, the end of the budget year, this quarter, and then the start of the, the new investment, going into July. The pipeline really is looking good. We've got good coverage for the quarter. We're seeing good out pipeline build as well, we're on track to where we think we should be at this point of the year for the rest of the year. I would say, from an ESSER funding perspective, this is always the, the question we get asked, and a couple things I would say. First of all, it's difficult for us to tell, directly,, are these ESSER funds that are being used or not. But I would say what it's creating is a nice background in macro condition in K-12, at least for the next eighteen months, where there are still a lot of dollars in the system. We make sure in the sales process that we're working with our sponsors, we're working with local legislatures to ensure that, the funding is enduring and that we've got durable funding for our solutions as they are kind of the foundation of digital transformation and strategies that are multiyear. I would say it's more of a kind of a tailwind from the perspective of kind of that macro, lots of dollars in the system. What we are seeing is that a lot of these dollars are coming, with this, with a couple things. Legislatively, show efficacy of tools that are being purchased with these dollars. That's driving a lot of interest and pipeline build for the LearnPlatform technology that we acquired. As well as we've kind of exploded in the number of apps being used in K-12, we're getting a lot of demand around, help us rationalize that, help us, get visibility on what's being used. Is it being used well? Is it having the outcomes that we expected? We expect that to be some enduring demand for our products, again, indirectly related to the fact that a lot of these tools were bought during this time of rich funding through ESSER. That's how I would characterize the impact that ESSER's having on our overall business, Fred. Okay. Thank you very much for that context. Love to ask another question actually about market share, which you had called out, and you have quite robust market share in higher ed. I think there comes a time where there's some concerns that are raised about, well, has a company reached market share saturation? Just wanted to ask, with respect to higher ed, you know, can you just also provide some context about how you're seeing pipeline build specifically there, whether you think that you've hit a point of market saturation, and generally what your kind of expanding platform strategy means for the company in general as you have this already robust market share? Yeah. Yeah. It is a question that we've gotten a number of times, Fred. You're right. I would say that, first of all we have, you know, looking at the latest data, about 44% by an enrollment perspective, about 36% by institution perspective. Still 40% of institutions in the U.S. in higher ed are using Blackboard or Moodle. So there's still a lot of room to run from a market share perspective. You know, as those renewals are coming up for renewal, within those existing arrangements, we're there through the RFP process or through whatever process they use for purchasing. I still think there's a lot of room for us to run from a market share perspective in U.S. higher ed, and not too worried and not really seeing a slowdown, if you will, in the interest as people are looking for what's their digital transformation strategy for the future. You know, I would add also that our market share, we're much lower penetration internationally. On average across all of the markets that we play in, it's the high single digits, so there's still a lot of room for us to run from a market share perspective in international as well. Thank you very much. Your next question comes from the line of Joe Vruwink with Baird. Please go ahead. Great. Hi, everyone. You gave this interesting example with UMass Amherst where Canvas sort of becomes, I guess it's an omni-channel learning platform. Is that a typical scope in RFPs you're now seeing where an institution wants to consolidate all of their offerings onto one platform, one vendor? When you made the comment that RFP activity is in line with your expectations, in terms of higher ed, is that quantity of RFPs? I guess, embedded in that question, are the dollar opportunities getting larger even if the, you know, number of opportunities is maybe in line? Yeah. Good questions. On the first one, yes, absolutely is the short answer to your question about omni-channel. With UMass Amherst in particular, right, they had a system and a whole process that they set up for online students. They had a different system with different processes that they used for their matriculating or traditional, you know, on-campus. They're saying, "Look, This is changing, right? Students are gonna be both at some point in their learning journey, and so we're happy to... You know, we're we need to bring that together, and we're that was part of our strategy, as a university. We are seeing that across the board and more and more thinking about this differently, whether they're an existing customer who now wants to bring their online program in line with the traditional matriculating students or not. I do think that'll be a key driver. It is a key driver from our sales perspective. You know, from a from the second part of your question, around what are we seeing from a RFP perspective. We are seeing, you know, deal sizes are varying. We are seeing some big deals like UMass Amherst. I think, you know, by virtue of the fact that we are very successful in the existing R1s and some of the bigger ones. Some of these deal sizes are, a little smaller than they have been in the past. We'll, we're seeing with the dollar perspective, it's very consistent as far as the dollar amount from an RFP perspective. Volume is up more than the dollar amount is. When we talk about that kind of consistent with our expectations, I was really referring to that dollar figure rather than the volume figure. Okay. Okay, great. Then I guess just on the updated EBITDA outlook, I think the forecast entails higher margins, something probably 39% or better EBITDA margins in the back half. Anything you can touch on just in terms of the second half versus first half improvement that's embedded in the outlook? Yeah, sure. We do have. Q1 margins had a little bit of noise in them associated with some timing of some services. As you've seen with the guidance that we provided and some sequential growth in our margins from Q4 of 2022, we've got confidence in where we have leverage in our business to expand our margins in the second half. Okay. great. Thank you. Your next question comes from the line of Brian Peterson with Raymond James. Please go ahead. Congrats on the strong results, guys. Just starting on international, Steve, I'd love to understand, you know, how the pace of the pipeline development there is working. Would you say maybe there's more strength with the direct or indirect in certain regions? Maybe if you could kinda double-click on how that movement through the pipeline is working in some of these international markets. Sure. Thanks, Brian. Yes. I would say, you know, we're still in the pipeline build from a channel perspective, as we're into new markets there. You know, we're about almost a year into our development of the channel program. Our maturity, if you will, in the direct is much further ahead than in indirect. From that perspective alone, we're seeing good direct pipeline build. Now, at the same time, we track different metrics with our channel program, including enablement and selling capability, support capability, those types of things. We're seeing really good progress from a channel build perspective, from that in that space. Now, you know, our channel, I would say our channel efforts, are going well in Latin America, and APAC. Those are the more, earlier. We've had some longer-term channel partners in EMEA. EMEA's channel may be a little bit ahead of those others too, but we're, you know, we're seeing pretty good progress across the board, across GL. I would say, you know, in summary, that the direct is probably a little bit ahead of the international just from a maturity perspective. Got it. Thanks for the color there, Steve. Maybe a follow-up. It sounds like if you're looking at the K-12 pipeline, there might be more interest in people buying multiple products at the same time. Is that been a recent phenomenon, or is that something that's been building? I know you have a lot more products you can sell. I'd love to understand if people are really coming in with kind of this multi-product mentality more so now than they did in the past. Thanks, guys. Yeah. I think, you know, this has clearly been a focus from a strategy perspective for us for a while. I think part of it is our maturing in our solution selling and our platform as we've added more pieces, and we've integrated them more tightly in the process. We've also, you know, came out with some packaging models and ways for us to sell this better. I would say, you know, the need hasn't changed, right? With coming out of the pandemic, the need to assess, the need to assess learning loss, all those things have been top of mind for our K-12 customers. I think our ability to sell has gotten better. I also think, you know, again, second half of last year, we just saw a general kind of slowdown and now it's picking back up. The interest and the activity has picked back up in the first quarter. It's as much a market need as it is our ability to deliver on the integration of the platform and the strategy and the selling motion. Thanks, Steve. Your next question. Thanks, Brian. Sorry. Your next question comes from the line of Terry Tillman with Truist. Please go ahead. Hey, good afternoon, Steve and Dale, congrats from me. I had 2 questions. First, on the LearnPlatform side, Evidence as a Service seems like an emerging market and very timely given the ESSER funds. What I'm curious about is, anything you can share in terms of the contribution of that acquisition, and where do you see the bigger revenue synergies? You just giving it care and feeding and driving a lot more Evidence-as-a-Service deals? 'Cause I do know that they had a monetization strategy. You all really driving K-12 and all the platform products you have into maybe their installed base or who they were engaging with. I had a follow-up. Yeah. I would say yes, you're absolutely right. Very timely. It was, you know, part of our investment thesis that the need for Evidence as a Service was going to be much more important over time. You know, there's a couple things where we feel really good about our ability to kind of accelerate the business after the acquisition. Again, we saw a good pipeline build in Q1 that we believe that Impact will happen kind of later in the year into 2024 to drive growth, which is, as we mentioned, we expect a kind of de minimis impact in 2023 from the LearnPlatform acquisition. Really there's a couple areas where we are uniquely positioned to help LearnPlatform go a lot faster than they could as a standalone. The biggest is probably in the provider business. You know, we have an ecosystem of, you know, 600, 700 partners that are already integrated into the Instructure Learning Platform. It's by combining it with some of the technologies that we already had through some of our other acquisitions like Kimono and with Certica, some of the technologies they had, we now have a much more robust solution to take to the ISV community, the edtech community. It's adding to our ability from a go-to-market and just our reach perspective to go a lot faster. That was a, you know, that was a part of their business that was very new when we bought them, right? They'd only been operating about a quarter, selling to providers. That's where we believe a lot of that acceleration will come. In addition, we have a number of, you know, we have a lot of state-level contracts, that we're taking Learn into. We're, you know, we're using those to leverage our existing contracts. There's a lot of things that we can do to kind of grease the skids from a purchasing perspective within the state purchasing or the LEAs, within K-12 as well. A lot of good synergies that we believe we can leverage over the next, you know, three-four quarters. Got it. That's helpful. I guess on the Chris Ball side, I was gonna ask about, I'm assuming he's still in the honeymoon phase, but he's got several quarters under his belt. I don't know if the Wisconsin School District deal kind of is some of his work, but 8 times contract increase or contract value increase is impressive. What are some of the early kind of, low-hanging fruit areas that Chris Ball is having an effect? Thank you. Yeah. No, great question, Terry. As always, you do great questions, Terry. The Chris has been on the job for 90 days, so, I don't wanna sort of over, you know, over sensationalize the impact. What I will say is he has had a big impact on our focus on solution selling, on how to sell that whole suite. You know, yes, there's a definitely, I would say, he had an impact on that deal in particular. Really what he's, what he's done a really good job at and is bringing two teams together, right? The sales, marketing, and the customer success teams. They're excited, they're energized, they're really, you know, they're really leaning in on how do we, how do we make sure that that customer journey is seamless? How do we ensure that we're able to find more opportunities to help in more ways with our customers? Marrying the customer success manager with the seller, and we believe ultimately, which will drive a much better cross-sell and allow us to help our customers much more deeply than just one or two products. So good. I'm really pleased with the progress so far that Chris has made, and I'm excited about, you know, what we'll be able to share with you in the coming quarters as he starts to really put his fingerprints on our go-to-market motion. It's good to hear. Thanks. Your next question comes from the line of Matt VanVliet of BTIG. Please go ahead. Yeah, thanks. Appreciate you taking my question. Good afternoon. I guess first on the platform commentary and multi-product selling, curious if we could get much of an update on how the catalog product is driving demand, especially in higher ed there? Is it still something that a number of schools are looking at either revamping or launching their own online programs, and you're gonna help them with that? Maybe just any commentary around the demand environment, today versus, you know, six or twelve months ago? Yeah. I'm gonna address that in the context of really how do we help a school either go online or kind of bring that kind of omni-channel experience, right, online or in the classroom. The short answer is yes, we see a lot of demand. The pipeline has been building for a while. You know, last two years, we've made a concerted effort and a increase in our investment in catalog, but also with the acquisition of Concentric Sky, marrying that with now the credentials, the badging, the ability to map programs for online students, you know, that lead to a credential or a badge, is a whole product now that really is starting to pay off for us. It's doing a couple things for us. One, it's really a differentiator as we go into a deal like UMass Amherst, where we have a robust solution on both sides of the offering, as well as, it's giving us a lot of good cross-sell opportunity and ability to kind of, again, be much more of a solution provider for our existing customers. Yes, that is a key part of the overall solution for delivering that kind of omni-channel experience for universities, and it's creating a nice differentiation for us. Okay. Very helpful. I guess as you look out towards a number of those Blackboard or Moodle renewals in higher ed that you've mentioned, still maybe 40% of the market, how often are you meeting sort of a, "I'm not sure we're gonna do anything," kind of no decision, kick the can down the road for another year or two? Is that already starting to happen, or have we gotten to the point now where schools understand that they need to upgrade to something more modern, and it's just a matter of kind of setting the right calendar, figuring out which year is best to implement it, and they're sort of making vendor selections even if they haven't signed a contract yet? Yeah. It's much more the latter. You know, it's. We saw more of that behavior, say, "I'm just gonna renew," kind of when we were closer to the pandemic, right? They weren't sure what was gonna happen, and they had something in place, so now's not the time for me to make a change. But we're, a lot of it, a lot of activity, and it has been, you know, this isn't a new phenomenon, but a lot of activity is trying to figure out, "Okay, what is my, you know, what is my next platform for the next decade or two," right? So a lot of these that haven't moved, are, right, are very they've been very long-term customers of these existing technologies. Again, the recognizing it's time to change and, you know, I think you articulated it right in that question, Matt, was that, you know, it's not we're just kicking the can down the road, but we're being very deliberate about how do we plan this out? How, you know, how are we gonna do change management? You know, we'll either sign, either they're signing now or in the near future for, again, this kind of this staged rollout and deployment of the technology over time. All right. Great. Thank you. Very helpful. Your next question comes from the line of Stephen Sheldon with William Blair. Please go ahead. Hey, thanks. Another question here on LMS market share in higher ed, and maybe pulling off that last question. As you think about institutions on legacy or lower-end LMS solutions and the potential of stepping to replace them, do you have much visibility into the pace of renewals over the next few years? If so, how does that look? Will there be steady opportunities, you know, kind of near term for market share gains relative to the 40% you have right now? Yeah. I mean, we have a reasonable, we have a reasonable view into those renewals. It's part of the sales motion. Everybody in their territory is out mining for those renewals. It is, you know, we expect it to be a fairly, you know, steady, kinda deliberate move. I don't see, you know, everybody's gonna do it next year, for instance. You know, it'll be a measured kind of gain in market share, similar to what we've seen over the last year. I think we're kind of in kind of more of a steady state than we did coming right out of the pandemic when there was a bunch of activity. Got it. That's great. Just as a follow-up, would love an update on Assessments adoption in K-12. When you win new customers on that side, is it mainly, you know, greenfield wins? How much different does that look between bigger and smaller school districts? Is there any way to frame how quickly assessment solutions are growing across your platform? Do you think this will be a contin- you know, an outsized area of growth over the next few years, given what you're seeing? Yeah. You know, I would say this, there is, there is a move to try to consolidate, on, you know, a number of vendors as well as a platform. When we, when we go into a sales opportunity, really the value that we sell with our assessment solutions is that integration with the LMS and the fact that you can get a closed loop look at a student and how well they're doing, you know, not only what's being taught, who's engaging with the content, but then how are they doing against the standards and closing the loop that way. That really is where the value accrues. It is a combination of, you know, moving people off of pen and paper, as well as, one of the deals we talked about in the script. You know, we displaced an existing assessment management system that was there already. It is a little bit of a combination of those two. But again, really, the opportunity is that we have, you know, we have a very tightly integrated solution that closes the loop, helps, you know, helps teachers understand whether some of those remediations that they're putting in place to address learning loss are working, and get that feedback in near real time, so that they can make changes and address the individualized teaching that they're doing for each of the students. Still a lot of opportunity to cross-sell. It was, I believe it was our fastest-growing product in K-12 this last quarter. Do believe that that'll be a growth contributor to us for a while, Stephen. Great to hear. Thank you. Your next question comes from the line of Brent Thill with Jefferies. Please go ahead. Hey, good afternoon, guys. This is David Lustberg on for Brent. Sorry if these have been addressed. I'm just getting off another call where they said that another education tech call where they said that AI has become a headwind to the story. You know, I don't think of AI as having too much of an impact on you guys, but maybe potentially some opportunities, right? To, you know, plug AI into the LMS and maybe cut down on some of the teachers' time and help, you know, improve the efficiencies of teachers. Again, sorry if this has been asked, at a high level, how are you guys thinking about, the impact of AI, and is there anything that potentially you guys can do with it? I had a follow-up. Yeah. I think, David, you answered the question pretty well, actually. Thank you for leading the witness on that one. You know, the reality is, we share your opinion, right? We think that AI is an opportunity for us. It doesn't really replace anything that we do in the environment. When you marry this with the LMS, we think there's a number of areas that are really interesting that we're exploring. You mentioned one of them, helping teachers get better at, you know, the manual tasks, simplifying some of their, you know, whether it's course creation, authoring, whether it's Assessments and how do they generate those, you know, those questions on their quizzes, those types of things. We think all of that will help teachers. When we integrate it in as part of the ongoing workflow that they're engaged in and used to in the LMS, it makes their life much easier. There's also the opportunity to do, you know, things like virtual tutoring built into the LMS. Because of the way that the technology is designed by integrating it with the LMS, for instance, give institutions, give school districts the ability to control kind of the scope of that tutoring. You know, so, they can limit it because of the LMS. The third is also, we think there's going to be a big opportunity in accelerating the ability to for universities or, you know, high schools with students that are going directly into the workforce, to address skill-based workforce training and reskilling, allowing institutions to map their coursework to skills, much more easily and simply, use the technology to map them against taxonomies, for instance. We do think it'll actually accelerate, you know, competency-based or skills-based, education going forward. All of those, again, we believe by integrating them in the LMS, to your point, right? It's an opportunity for us, and it's also an opportunity, I mean, it's a unique opportunity for LMS providers because of the relationships we have with teachers and learners and the technology to manage the whole process of delivering on teaching and learning. We are excited about the opportunity and already working on things. Super helpful. Thanks for the color there. You know, shifting gears a little bit, and I don't think this is how we would normally phrase it. If I kind of break down the business, right? Think like, you know, core LMS and then, everything else you have, right? You know, Assessments in K-12 you just mentioned is your fastest-growing product in K-12. If I take out the LMS and look at the business, talk a little bit about how those businesses are growing. Is growth accelerating? Are you seeing really strong, commitments there? Would just be super, you know, interesting to talk about, like, the non-LMS part of the business 'cause obviously, the LMS tends to get the most focus. know you guys are doing some interesting stuff, you know, as it relates to assessment and other things. would be great to, you know, hear any color you can provide there. Sure. I think, you know, we've been pretty consistent in that we're not breaking out those specifically, the different types of products, the different areas, that we are cross-selling. I would say, you know, that cross-selling is improving. We continue to add the, you know, both on the initial sale with new logos, the number of deals that have more than one product, as well as the number of customers that have more than one solution from us. We, you know, I think the biggest growers Assessments a huge opportunity right now. We're seeing that acceleration. Addressing the non-traditional learner opportunity is a great growth opportunity for us in two ways. One is in cross-selling to existing learning institutions that we already have relationships with, as well as, you know, the non-traditional educators, like a PeopleCert that we talked about in the script, you know, that is training outside of what you would traditionally consider a, you know, a higher ed institution. We do think those two are probably the biggest growth drivers and the ones that we're seeing the most growth in, contributing the most to our growth in the near term. Super helpful. Appreciate it, guys. Okay. Thanks, Steve. Your next question comes from the line of Steve Enders with Citi. Please go ahead. Okay, great. Thanks for taking the question here. I guess I do want to ask a little bit on the guide and the revenue outlook in particular. you know, I guess good beat in ways if we're looking at 1Q -2Q. How should we be thinking about the second half of the year and what you're guiding to here? Is there, you know, I guess, any change in the seasonality of the business that we should be thinking about here, or is there an added level of conservatism, as I think about the second half in particular here? Yeah, I don't think there's anything outside of what we've already talked about in the second half of the year that we're looking for the guide. We do put out numbers that we feel confident in achieving. As Steve talked about, we had a great Q1, a little bit of overperformance there in our bookings. We feel good about the targets that we've shared with you and our ability to hit them. Okay. I guess as we think about the, you know, funding environment in K-12, I think there's been reports of, you know, ESSER funding coming in at, you know, 75% plus at this point. I guess how do we think about how much is still kinda left out there for you to go after and how you're thinking about maybe the pace of that funding environment, you know, as that begins to close in the next 6 quarters or so? Yeah. You know, the way that we think about it, Steve, is that, it creates a nice kind of macro backdrop for us in that, you know, the schools are, you know, still flush with cash. They still have the, you know, the appetite to make these investments. You know, the reality is, first of all, it's hard for us to kind of really break down, you know, when we close a deal, was that ESSER funds or were, you know, ESSER funds in the background? I will say that, you know, what we're seeing is an interest in digital transformation. The recognition that the technologies that we provide around, particularly in K-12, around LMS and assessment management are core infrastructure for digital transformation. They're a must-have in there. A lot of these conversations, again, when we're working with our decision makers as well as the funding sources at the state level, is that, you know, we are ensured that these are durable funding sources. You know, we still have eighteen months left to spend the existing dollars that are out there. We do think that this background is, you know, it's still a favorable macro backdrop for us. We do expect that we'll still have a lot of activity for the next, you know, next eighteen to twenty four months. Okay. Perfect. Appreciate you taking the question. Your next question comes from the line of Noah Herman with JPMorgan. Please go ahead. Hey, guys. Thanks for taking the question. Just one on our end. Sort of coming back to the, you know, more so the non-traditional or non-university customer opportunity, you know, the PeopleCert deal, you know, coming more into fruition after two quarters, that seems like a really strong bright spot and data point. You know, I mean, How do you sort of see the opportunity with non-traditional customers really growing at this point, and how do you sort of see that acting as another lever for, you know, durable revenue growth today? Thanks. Yeah. I'm glad you asked that question because when we talk about non-traditional, you know, we have a whole installed base of institutions that are trying to figure out how do they address not just your traditional student, but also that non-traditional. We do believe that there's a, you know, a market that we're just starting to tap into. You know, the PeopleCert is one of those, City & Guilds is another one. We talked about CVO Gent on the call today in Belgium, are all about those non-traditional institutions, not just non-traditional students. We do think that this is a, you know, an emerging opportunity for us. It's a market that we haven't addressed in the past, it opens up a nice TAM for us to address, and we're still early days in tapping into that market. It gives us a lot of confidence, you know, in our ability to drive double-digit top-line growth for the foreseeable future. You know, and we're really pleased with the early traction that we've gotten. Again, the PeopleCert quick turnaround, up and running, an excellent reference customer, well-known in the market and, you know, kind of one of those lighthouse accounts to help us drive that ongoing growth. Great. Thank you so much. There are no further questions at this time. I will turn the call back to CEO, Steve Daly. Thank you, operator, thank you, everybody. As you heard today, you know, our commitment to innovation, customer success, and disciplined investments in our platform will continue to unlock new opportunities like this non-traditional space and drive value for our customers and shareholders in this dynamic market that we're playing in with the educational technology. You know, we're early days still. We feel in our growth as a company, we're also seeing a lot of opportunity to drive, you know, digital transformation across education. We're very excited about the future. We look forward to continuing to drive that top-line growth, but also, you know, world-class margins in the months and years ahead. Thank you for your time, and we look forward to talking to you in another quarter. Thanks, everybody. This concludes today's conference call. You may now disconnect your line.