Ladies and gentlemen, thank you for standing by, and welcome to Instructure's Fourth Quarter and Full Year 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a Q&A 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 and welcome to Instructure's Fourth Quarter and Full Year 2023 Earnings Call. We will 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 Peter Walker. 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 actual 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 our annual report on Form 10-K, as well as 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 to the Investor Relations section of the website. All of the non-revenue financial measures we discussed today are non-GAAP unless we state that the measure is a GAAP measure. With that, let me turn the call over to Steve. Thank you, April, and thank you all for joining us for our fourth quarter and full year 2023 earnings conference call. With the successful close of Parchment acquisition in early February, I'm also delighted to extend a warm welcome to our newest team members. Parchment will maintain separate operations in 2024 as we align go-to-market strategies and resources to ensure a seamless transition for our customers. In the interim, we are extremely excited to begin executing the opportunities Parchment offers for driving growth and fostering innovation. I'd like to begin today's earnings call by reflecting on the key milestones and achievements that shaped Instructure's journey in 2023 and set the stage for our future growth. We continue to strengthen our executive leadership team, bringing in four new leaders, each with more than two decades of experience leading scaled organizations. President and COO Chris Ball to unite our go-to-market and accelerate our platform and cross-sell efforts. CFO Peter Walker to elevate our public market expertise. CTO Michael Lysaght to expand our web-scale technology platform. Chief Customer Experience Officer Rachel Orston to grow our customer success programs efficiently and deepen our strategic relationships with our customers. We also continue to innovate across our platform, including developing artificial intelligence solutions with our customers that we believe are safe, cost-effective, and can provide immediate value. Several of our AI solutions entered beta in Q4, and feedback has been positive as we continue to refine where our investments will have the highest impact for teachers, students, and leaders. We further strengthened our competitive moat and amplified the power of network effects, ending 2023 with more than 8,000 customers up roughly 9% year-over-year as we continue to win important new logos. More than 900 partners up nearly 20% year-over-year as other EdTech providers recognize the power of our massive customer base. Over 2 million Instructure community members up nearly 20% year-over-year, further enhancing a feedback loop to drive innovation, product development, and user engagement. We continue to expand our leading market share position in both higher education and K-12, according to EduTechnica and ListEdTech data. We executed our M&A strategy to expand our served markets to gain access to new budgets and buyers, and accelerate our roadmap serving the credentials market through the acquisition of Parchment. We published our inaugural Environmental, Social, and Governance report live now on our website, highlighting our commitment to ESG principles and our dedication to fostering a sustainable future that delivers enduring value for all stakeholders. We surpassed the long-term margin targets we established in 2021, demonstrating best-in-class operational efficiency and financial discipline. Overall, we continue to execute on the promises we made when we IPOed, demonstrating an unrelenting dedication to our mission and highlighting the strength of our model. We could not be more pleased with this progress and the opportunity that we have heading into 2024 and beyond. I will now provide a high-level review of the fourth quarter and full year 2023 results, discuss the drivers of these results, and outline our 2024 priorities. Peter will then detail our results and provide guidance for the first quarter and full year 2024. In the fourth quarter, the company delivered $135.4 million in revenue, up 8.5% year-over-year, including subscription growth of 9.5%. At the same time, we drove 270 basis points of adjusted EBITDA margin expansion to 41.7%, ahead of our long-term target and demonstrating the leverage we have in our business model. Continued exceptional results were driven by our increasing competitive advantage from our comprehensive platform strategy, strong execution, and the formidable cash flow we generate and reinvest behind high-growth initiatives. From a macro perspective, our end markets remain resilient and durable. As we mentioned last quarter, we continued to see an elongation of sales cycles in higher education markets around the world. This is temporarily impacting growth, but in the long term, we believe our customers have an opportunity to educate more students by serving non-traditional learners, and they are looking to us to help fill this need. This long-term trend toward non-traditional learning is expected to significantly expand our available market and result in accelerating growth in higher education in the years to come. K-12 markets continue to be resilient as stimulus funding is available this buying season. We have seen increased interest in our EdTech management solutions, anchored by our LearnPlatform and EesySoft acquisitions, as districts actively evaluate their software investments and demand positive outcomes from them. Our suite of solutions and key position in the classroom will continue to drive durable growth in this market segment. Now we'll share highlights from the quarter, including four key drivers: key competitive wins in new logo acquisitions, continued progress driving cross-sell and increasing take rates of our platform offerings, the expansion of our platform strategy, and how we continue to drive increased operational efficiency. First, we continue to bring in important new logos, winning more than our fair share of competitive bake-offs due to the breadth and strength of our portfolio offerings. As a result, we have been able to continue driving growth. During the quarter, we achieved a significant new logo win with George Mason University, the largest public university in Virginia, renowned for its dedication to educational modernization. This competitive takeaway followed a rigorous RFP process and underscores the positive network effects Instructure derives from focusing on the lifelong learning journey. Instructure's established presence in other Virginia, Maryland, D.C. institutions, and the high percentage of GMU students and professors already familiar with Canvas helped secure the win. Internationally, we continue to replace outdated legacy systems with our cutting-edge platform during the quarter, including our win with the University of Manchester, the UK's largest physical university ranked in the top 50 globally for academics. Our ability to offer the university a comprehensive platform solution that could position them as a leader in flexible lifelong learning enabled us to displace a 10+-year relationship with an entrenched competitor. This win also illustrated how we are landing larger, in this case with a full platform sale. This win will also be a lighthouse for other universities in the region given their size and reputation. Second, we continue to drive growth with existing customers. During the quarter, we saw a 49% year-over-year increase in cross-sell bookings. We estimate that excluding Parchment, cross-sell opportunities could reach $1 billion in our existing customer base alone. Instructure is well-positioned to cross-sell additional platform modules into our huge installed base of 8,000+ global customers since 90% of instructional workflows are facilitated by an LMS. During the quarter, we won the largest higher education credential deals in our history with the Louisiana Board of Regents, which represents the entire public university system in Louisiana. This system includes 31 campuses across four university systems. Their purchase of a unified digital credentialing contract aligns with their target of having 60% of all working-age adults in Louisiana hold a degree or higher value credential by 2030. The win showcases our strengths in serving non-traditional learners and reflects a broad industry trend toward credentialing, with global enterprises prioritizing skills proficiency and easing degree requirements for some roles. Although this is an Instructure Credentials deal, it also helps validate the meaningful Parchment opportunity we see ahead. We also had a significant K-12 win with Cabarrus County Schools in North Carolina. This long-time Canvas customer began evaluating LearnPlatform during the first half of 2023 and chose Instructure during the quarter to help them comply with EdTech and data privacy legislation from the state of North Carolina. We're able to win with Cabarrus due to a tailored approach that helps streamline their compliance with North Carolina state legislation. This win will be a pivotal reference for other North Carolina schools as each addresses the new legislation over the next few months. Third, the power of our platform strategy continued to progress in Q4 through acquisition, partnerships, and innovation. Our acquisition of Parchment was announced in Q4 and closed at the beginning of February, bolstering our Instructure Learning Platform's scale and reach as we engage learners throughout their lifelong learning journey. Our combined solutions will facilitate evidence of learning and streamline the educational process for educators and learners during key transitions. In addition to accelerating our strategy to reach non-traditional learners, Parchment's relationships with new buyers also bring fresh opportunities into our traditional customer base, with an estimated $2 billion expansion of our total addressable market and a high-quality revenue stream with significant growth potential. As mentioned earlier, our partner ecosystem continues to grow to more than 900 partners at the end of 2023, up nearly 20% year-over-year, and it is a key differentiator for us in the selling process. Our recent case study with Clemson University and Praxis AI Virtual Tutor demonstrates the power of the Instructure learning platform ecosystem to bring new technologies like AI to our customers quickly and safely. We continue to expand our platform capabilities through organic innovation, including the launch of AI-based capabilities to select customers during the second half of the year that help with course and content creation, semantic search, and natural language-driven learning analytics. We also had a big win in K-12 during the quarter with a prominent nonprofit organization that needed to replace their homegrown solution with a more adaptable, comprehensive platform that could enhance and accelerate their ability to support accessibility, enable customization, integrate important third-party applications, and modernize assessment. Simply put, Instructure's learning platform enabled them to innovate on Canvas through integrations and development, putting Instructure at the core of teaching and learning across their schools. Finally, our results this quarter once again demonstrated our ability to drive operating leverage in the business. We've delivered best-in-class margins and strong cash flow conversion, which Peter will discuss in more detail shortly. With adjusted gross margin approaching 80% and adjusted EBITDA margins exceeding 40%, our free cash flow generation should enable us to continue investing both organically and through M&A to drive long-term, durable growth. As we look ahead to 2024 and beyond, we have unwavering confidence that the Instructure learning platform's unique advantages address the intricate challenges posed by today's educational landscape. Our strategic focus will remain centered on several key growth pillars. First, harness our enhanced go-to-market function to propel platform growth and foster cross-selling opportunities. Second, accelerate our efforts to displace legacy technology in international markets. Third, assist new and existing customers to meet the needs of non-traditional learners. Fourth, leverage our platform technology to create new revenue opportunities and further embed Instructure as critical infrastructure for teaching and learning. And finally, remain at the forefront of AI and other innovations to drive student success both inside and outside the classroom. Deploying these strategies, we believe we will increase our moat within the EdTech ecosystem and help ensure durable growth across all segments. In summary, I am confident and optimistic about our business as we head into 2024 and beyond. We will talk much more about our roadmap and long-term financial model during our March 12th Investor Day, and we hope you will join us for this discussion. I will now turn the call over to Peter to talk about our financial results and guidance. Thank you, Steve, and good afternoon, everyone. Before discussing 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. During 2023, we set a new company record for annual revenues of $530.2 million. This was an 11.6% increase over 2022, which was impacted by a currency headwind of 80 basis points. We're very proud of these results, which we delivered due to continued share gain as the platform of choice for institutions around the world. We also achieved a new company record for adjusted EBITDA of $214.2 million, a 19.3% increase over 2022. We expanded adjusted EBITDA margin 270 basis points, delivering a full-year 2023 adjusted EBITDA margin of 40.4%. 2023 adjusted unlevered free cash flow was $225.5 million, a 29.9% increase over 2022. This exceeded our expectations, partially driven by approximately $12 million of early collections related to 2024. Turning now to Q4, we continue to deliver a combination of strong revenue growth and best-in-class margins. As Steve mentioned, we generated fourth quarter 2023 total revenue of $135.4 million. This was an 8.5% increase year-over-year, impacted by a minor foreign currency headwind. Subscription and support revenue accounted for 93% of our fourth quarter revenues at $125.4 million, up 9.5% year-over-year, which was impacted by a 30 basis point headwind from currency. Professional services and other revenue accounted for 7% of our fourth quarter revenue at $10 million, down 1.7% year-over-year, which was impacted by 10 basis points of currency headwinds. The decline was primarily driven by lower international services revenue as we evolve our channel distribution in international growth markets. Deferred revenue at the end of fourth quarter was $302.7 million, up 4.6% year-over-year. Remaining performance obligations, or RPO, at the end of the fourth quarter were $833.5 million, up 10% year-over-year. We expect to recognize revenue on approximately 75% of our RPO over the next 24 months. The higher RPO growth rate is driven by deals with later start dates that will benefit future billings and revenue. In discussing the remainder of the income statement, please note that unless otherwise stated, all references to our expenses, operating results, and share counts are on a non-GAAP basis. Our gross margin profile remains very strong given our efficient cloud architecture and our flexible support structure that scales to meet customer demand. In the fourth quarter, our gross profit was $105.7 million, representing a gross margin of 78.1%, up 60 basis points year-over-year. Our operating leverage in the business remains strong, allowing us to continue expanding margin as we scale. Total operating expenses were $50.3 million, approximately the same as prior year. Operating expenses as a percent of revenue were 37.2%, an improvement of 310 basis points over prior year. Non-GAAP operating income for the fourth quarter was $55.4 million, resulting in a 40.9% operating margin, an improvement of 360 basis points over prior year. Adjusted EBITDA for the quarter was $56.5 million, resulting in a 41.7% Adjusted EBITDA margin, an improvement of 270 basis points over prior year. These results demonstrate the power and efficiency of our model. Non-GAAP net income in the fourth quarter was $33.2 million, or non-GAAP net income of $0.23 per share, compared to $28.4 million, or $0.20 per share a year ago. Turning to the balance sheet and cash flow statement, we ended the fourth quarter with $344.2 million in cash, cash equivalents, and restricted cash. This is an increase of $153.9 million over prior year. Our strong cash generation is driven by our favorable billing terms and low capital expenditures. We ended the year with net leverage of 0.7 times net debt to Adjusted EBITDA, a full point lower than year-end 2022. Operating cash flow in the fourth quarter was $36.7 million, compared to $17 million in the fourth quarter of 2022. Free cash flow was $35.5 million in the fourth quarter, compared to $15.7 million in the fourth quarter of 2022. Our adjusted unlevered free cash flow was $51.3 million in the fourth quarter, compared to $29.3 million in the fourth quarter of 2022. As Steve mentioned, we closed our acquisition of Parchment. Parchment is a profitable company with high-quality recurring revenue and strong cash flow conversion. As we have consistently communicated, M&A is an important part of our strategy to drive long-term, durable growth. We have a strong track record of successfully integrating acquired companies, completing six integrations in the last four years, and we have confidence we'll execute similarly with Parchment. We financed the acquisition with cash and incremental debt of $685 million under our existing credit facility. Our net leverage ratio at year-end 2024 is expected to be approximately 3.4 times net debt to Adjusted EBITDA. We expect to delever rapidly as we continue to grow Adjusted EBITDA and generate cash flow. Our capital allocation priorities remain unchanged since our IPO, investing in organic revenue growth, pursuing M&A, and maintaining a healthy balance sheet. I will conclude the call by providing guidance for Q1 and for full-year 2024. We have provided additional guidance details in our earnings press release. Given the timing of when Parchment closed, our first quarter 2024 guidance includes two months of Parchment results, and our full-year guidance includes 11 months of Parchment's results. For the first quarter of 2024, we expect revenue in the range of $153.8 million-$154.8 million, a growth rate of 19.8% at the midpoint. We expected Adjusted EBITDA in the range of $57.3 million-$58.3 million, representing an Adjusted EBITDA margin of 37.4% at the midpoint. For full-year 2024, we expect revenue in the range of $655 million-$665 million, or a growth rate of 24.5% at the midpoint. It's important to note the pro forma annual recurring revenue for the combined Instructure and Parchment business grew in the high single digits 2022 to 2023, and we expect similar high single -digit growth 2023 to 2024. We view annual recurring revenue as the best predictor of future revenue. We expect full-year adjusted EBITDA in the range of $266.5 million-$271.5 million, representing an adjusted EBITDA margin of 40.8% at the midpoint, expanding margins by 40 basis points year over year. We expect full-year adjusted unlevered free cash flow in the range of $259.5 million-$264.5 million, a growth rate of 16% at the midpoint. This growth rate is 28.3% when adjusted for the $12 million of collections in 2023 related to 2024 that I mentioned earlier. We expect the seasonality of 2024 adjusted unlevered free cash flow to be slightly different than prior years due to the acquisition of Parchment. The first half of 2024 should be 4% higher, and the second half of 2024 should be 4% lower when compared to 2023 patterns. As Steve mentioned, we hope all of you will join us at our inaugural Investor Day on March 12th, where we'll update you on the future of business and share new midterm financial targets. That concludes our prepared remarks. At this time, operator, please open the line for questions. Thank you. If you would like to ask a question, please press star followed by the number one on your telephone keypad. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Joe Vruwink from Baird. Please go ahead. Great. Thank you for taking my question. Maybe just a clarification to start. The impacts on growth that you're discussing and kind of the longer deal cycles, is that still centered primarily within the higher ed business, and should we think about K through 12 ultimately growing faster and really not seeing a commensurate slowdown? Yeah, Joe, it's a good question. Those comments were specifically about higher ed globally. And to your point, we feel good about the backdrop in K-12, particularly in this buying season when there's still a lot of ESSER dollars out there. So yes, is a short answer to your question. The higher ed slowdown that we're seeing is entirely in higher ed. Okay, that's helpful. Then you also made the comment that you think coming out of this higher ed growth can be actually faster, growth can accelerate, and that's a reflection of how the platform has evolved and how you're serving more non-traditional learners today. When you talk about faster growth and acceleration, can you maybe put some guardrails around that? I think in the past, you framed kind of the all-in North America business as being a high single-digit grower. Do you think, given how the platform has evolved and certainly the incorporation of Parchment, that it should be something better in the future? Yeah, it's a good question. Part of my answer is going to punt on this one, Joe, till our Investor Day, where we'll go into a lot more detail about the segments and where we're at just as far as what's driving the growth. What I would the tenor of those comments is that as higher ed today is dealing with a few macro challenges like declining enrollments, the number of available learners is much larger than traditionally they have addressed through traditional education. So it is a much larger TAM. It's growing a lot faster. That's kind of the backdrop that we feel good about the ability to kind of accelerate growth in higher ed worldwide, not just in North America. We'll go into a lot more detail in our Investor Day and give you a little more context for that. I would just add, as Steve pointed out, we'll cover more detail at Investor Day, but we believe that long-term, we'll continue to be a high single-digit to low double-digit grower in terms of revenue. Great. I will stick around wanting more and look forward to that update in a few weeks. Thanks very much. Your next question comes from the line of Stephen Sheldon from William Blair. Please go ahead. Hey, thanks for taking my question. First, can you walk through what you've layered into the guidance for Parchment? As I think you noted that you expect high single-digit revenue growth for both Parchment and for Instructure standalone this year. So is that fair? And then how should we think about the Adjusted EBITDA implications for Parchment for the year? Sure. Thanks for the question, Stephen. So what we've shared with you is approximately 25% revenue growth rate year -over -year. And we've not broken that out between inorganic and organic because M&A is a critical part of our growth strategy and really pointed you to the ARR growth rate and the fact that the combined growth rate for the two businesses was in the high single digits in 2023 and will continue to be in the high single digits in 2024. So affirming our long-term view of this as a high single-digit, low double-digit grower. Then in terms of your margin question, we are expanding margin year -over -year by 40 basis points. The Parchment model assumed synergies in G&A. We're executing on those synergies this year, and that will provide additional margin expansion in 2025 once those synergies have been fully executed. Got it. Okay. Then I guess just as a follow-up, it sounds like you're continuing to see good wins with LearnPlatform in K through 12. How are you thinking about the potential to expand its capabilities and potentially roll that out to the higher ed market? Is that an opportunity that you're thinking about over the next few years, given the traction and success you've seen in K through 12? Yeah, it's a great question, and it's a question a lot of our higher ed customers have been asking us as well. So there is demand there, as you can imagine, particularly as they're looking at the software states that have grown almost exponentially over the last couple of years. So yes, there's demand there. There are plans. We expect to be in beta with a solution in the second half of this year to be able to go after that opportunity over the next couple of years, Stephen. Great. Thank you. Your next question comes from the line of Terry Tillman from Truist Securities. Please go ahead. Great. Thanks for taking the question. This is Connor Passarella on for Terry. I just wanted to start with one of the growth pillars you've mentioned, international. So it seems like international performance has fared pretty well. Just curious on how you plan to, I guess, work on both the direct seller channels and the partnership channels this year and maybe how we should think about market share gains internationally as a growth driver this year? Yeah, there's a few dynamics going on there that you brought up. First of all, we feel really good about our position, particularly when we're taking out legacy technology and the need for a next-generation platform that a lot of international institutions need. The University of Manchester case that we talked about on the prepared remarks. Direct's been very successful. We have market-leading share in both Australia and New Zealand, as well as the UK and Ireland markets, and a dominant position in the Nordics. We're seeing some success with the channel. And so per our earlier comments, we're doubling down. We're going with a few fewer partners and going deeper with them. We've actually brought in some new leadership for our channel program, take it to the next level. And we expect that to be a growth driver, particularly in some of the emerging markets that we're playing in. The dynamic there is, in the short term, as the services shift from our own direct services in international over to the channel partners in those emerging markets, you'll see a shift between recurring and services, and we'll actually depress that growth rate a little bit in the short term, but is the right thing for long-term growth. Great. Helpful. And then just a quick follow-up, wanted to jump on something that was mentioned before around the non-traditional learners. I guess in terms of your conversations with customers, are most administrators looking to refine their strategies for this in more, I guess, the immediate term, or will we continue to have some first movers there that are a little more sophisticated to implement before we kind of get to the broader cohort of institutions that get on board? Yeah, it's a great question. We're at early days of that kind of early majority, in my opinion. So we've seen the early adopters, some of our long-time customers like Arizona State University that really have shown the ability to reach those non-traditional learners and grow those at exponential rates. And now we're starting to see it a lot more. It's coming up in almost every conversation we have now. So I expect that, as they work through these strategies and as they make their decisions about what that long-term platform looks like, it will be a growth driver. The next couple of years, we ought to start to see some good kind of early market growth. Great. Really helpful. Thank you. Your next question comes from the line of Ryan McDonald from Needham & Company. Please go ahead. Thanks for taking my question. Steve, correct me if I'm wrong, but in your comments, maybe it sounds like you're talking about a little bit of lower growth than expected from Parchment this year. As I think about maybe what could be the drivers of that, we know that there's obviously been sort of delays with the new FAFSA forms this year, and perhaps that's causing some delays in applications or financial decisions. Is that impacting the Parchment business at all? That's maybe something new versus your prior expectations? Hey, Ryan. Thanks for the question. It's Peter. So maybe just to go back to what we shared in terms of growth rate, the ARR is what we would focus on in terms of growth rate. Our view is that's a double-digit growth rate for the combined businesses in 2023 and 2024. We only have 11 months of Parchment versus 12 in 2024, and all months are not created equal. So what I would say to you is Parchment, in terms of revenue growth, is in line with where we expected it to be based on what we shared with you on Q3 call. J ust to clarify when Peter said high single digit for the ARR growth. Correct. Not double digit. Okay. So high single digit growth for ARR for the combined business? Okay. All right. Thank you. Yes, that's right. In terms of K-12, you mentioned ESSER funding, obviously having a bit of a benefit there. Are you seeing any reprioritization of budgets as we're going into the final, I guess, now seven months for that spending to be allocated? And is that shifting conversations maybe on the prioritization on core LMS in K-12 down the pecking order at all in favor of maybe areas of spend that is being more directly allocated for with those ESSER funds? How are you finding that sort of the early conversations in 2024? Thanks. Yeah. Yeah. It's a question that we've actually seen a trend over the last probably six months that a lot of these funds, because they recognize that the cliff is coming at the end of the federal fiscal year this year, that they're allocating a lot of these towards non-recurring. So we see it going towards implementation, training, professional development efforts. So what we see is it's actually creating a nice kind of backdrop. It's removing any barriers to implementing something like a new LMS. Although when we go through the process with them, we're really making sure that they're ensuring long-term appropriations from the state legislatures to ensure that they have the money to pay for these in the future. But we are seeing it as a nice backdrop for us. I would say the other thing that's happening there is that we're seeing they're starting to try to get ahead of recognizing that they're going to have to do something when those dollars go away. And so we're seeing a lot of interest in our EdTech management solutions like LearnPlatform and Impact because they're looking at it and saying, "Okay, we've got to rationalize some things in the longer term." And so we are seeing some dollars going towards those types of technologies like LearnPlatform and Impact. Appreciate the color. Thanks. Your next question comes from the line of Josh Baer from Morgan Stanley. Please go ahead. Great. Thank you. One for Steve, one for Peter. Steve, just wondering if you could revisit the elongating sales cycles in higher ed and just talk about what is giving you the confidence that those impacts are more temporary and not an execution or a demand, broader, longer-lasting demand issue. Thank you. Yeah. Great question. I'm glad you asked it, Josh. So when we look at the pipeline for higher ed, and particularly when we look at RFP activity, this year or the year that we just concluded, we had the highest RFP activity since 2020. So there's a lot of conversations that are happening, and those conversations are around what is that next-generation platform going to look like? So we feel good about the state of the pipeline. It's just that the deal cycles are stretching out, and the close dates are pushing out on those. But they're not going away. And we continue to win market share. The latest market share reports show that we gained share again this year. So we feel good about how we're positioned in the market for those as those deals start to close. Okay. Great. Then, Peter, just wondering, you're coming into this company that's already very efficient, talking about 40%-41% margins. So just wondering where you see some of the largest sources of leverage from here? Thank you. Sure. So thanks for the question, Josh. So I'd say we have a disciplined approach to capital allocation that prioritizes investing in the long-term durable revenue growth and allows for us to expand margins. So I'm coming in with definitely a framework around how we're going to continue to execute against that going forward. In terms of specifically where does margin expansion come from in the future, I think there's probably two opportunities you can think about. I think first would be optimization of our hosting platform, and that would be in terms of scale and efficiency. As Steve mentioned, we have a new CTO on board, and Michael is already focused on both of these kind of opportunities in the hosting platform. And then the second is really our opportunity to continue to expand our footprint in lower-cost geographies. We've had great success with this in Budapest, and it's really early days for us in terms of what the opp ortunity is here. Got it. Thank you very much. Thanks, Josh. Your next question comes from the line of Devin Au from KeyBanc Capital Markets. Please go ahead. Great. Thanks for taking my questions. I also have another question on the longer deal cycle in higher ed. Maybe just to clarify, did you see the selling environment get more challenging, and did the deal cycle stretch out even more, more so than last quarter? And are you kind of expecting that difficult selling environment to kind of persist or perhaps deteriorate in 2024? Yeah. We saw it was similar as far as what we saw last quarter. We've got a little more fidelity in that Q4 tends to be our large quarter for international. So we saw that the international higher ed was exhibiting similar characteristics. But it hasn't gotten worse, but we are seeing it in Q1. We still see those kind of elongated sales cycles. Got it. That's helpful. And then just one on LearnPlatform. Seems like that business is gaining traction. Could you just give us an update on how that business kind of finished in 2023? And when we look at 2024, could we see LearnPlatform driving a more meaningful contributions to revenue, or is that more of a 2025 and beyond timeframe? Thank you. Yeah. So yes, the business is performing well. We've been able to kind of put it into the seller's bag as they're outselling, and we're seeing good pipeline build, and we started to see some deals close in 2023. So we do expect that to continue to be one of our growth areas. We saw cross-sell was our fastest area of bookings growth in 2023. And as we mentioned in the prepared remarks in Q4, we saw it even accelerating with 49% growth in cross-sell bookings. So this is just one of the products that contributes to that above the overall company growth rate. Your next question comes from the line of Frederick Havemeyer from Macquarie. Please go ahead. Hey. Thank you very much. I wanted to revisit the higher education landscape as well here. Around the deal cycles you're seeing, are there any impacts at all from enrollment trends? Or just generally, how are you seeing enrollment trends in higher education playing out through higher education institutions and their overall demand for software platforms? Yeah. It's good to hear from you, Fred. What we're seeing, I mean, the enrollment trends have been down, right? They've been down for years. And what we're seeing really from our perspective is we haven't seen a change in our retention rates. Our retention rates remain on trend. They're good, world-class retention. So we feel good about that part of the enrollment dynamics. What it is really is really a catalyst for universities and institutions to really look at how do they reach more students, right? Recognizing that the student that's going to plan to come on campus and receive a degree is declining, where do we go get more revenue as an institution? So that really is a big driver for the discussions that we're having. It's a driver for some of the longer conversations because this is a bigger long-term opportunity for the institutions to, again, drive growth into their business model and ultimately into our business model. Thank you very much for that. On the K-12 landscape, I wanted to revisit assessments as well. With and beyond the ESSER landscape, where have you seen assessments in Mastery here ranking in terms of your K-12 priorities? And how are you viewing that into 2024 as an area for potential growth? Yeah. We continue to be bullish on the assessment opportunity. We want to ultimately, we want to own the assessment management platform and the delivery of all assessment content across and integrate that tightly with the learning management system so teachers have a real-time view and get real-time feedback on how they're doing both from a delivery of education as well as learners receiving that education. And so we believe that's still a long-term growth opportunity for us. It's part of what contributed to that outsized growth in cross-sell this year. And we've taken some of the key learnings from 2023 that led to that growth, and we're applying them to our go-to-market model. And Chris will go into that in more detail at the Investor D ay to continue to drive that outsized growth in cross-sell. So we are believers in the assessment business in K-12 and ultimately believe we can apply a lot of those learnings to higher ed, particularly as higher ed moves to more competency-based and outcomes-based learning over time. So we do believe it's a long-term driver of growth for our business. Great. Thank you very much. And I'm looking forward to seeing it at the investor day. Be great. Thanks, Fred. Your next question comes from the line of Brent Thill from Jefferies. Please go ahead. Thanks so much. This is David Lustberg for Brent. I wanted to ask about some of the AI solutions that I think you guys mentioned are in beta. I guess it'd be helpful if you could talk through the AI offerings that you have in beta, any early feedback you've received on these launches. And more broadly, how do you guys think about monetizing AI over time? Is this something that you think is more kind of a plug into the platform, and is it something you can use to justify raising prices in the future? Or do you think you're going to choose specifically for AI SKUs? Thanks. Yeah. It's great questions, David. And we got pretty far in the call before we got an AI question. So good on you for bringing it up. So there are a number of features and products. And I mentioned in the prepared remarks search, natural language analytics, course creation work that we're doing. There's a number of others that we've previewed, but we expect to go into beta in the first half. I would say we are learning as we go along, David, as far as where can we monetize this and where is it going to be core innovation that, again, helps us win more as well as retain and get price increases. I do believe that the analytics piece that we're betaing now will be a charge-for add-on. But again, we're working through all of those questions. In fact, we've made significant progress in this last six months on understanding the cost models and how we can do this most cost-effectively so we don't hammer our gross margins, the underlying privacy architecture that's necessary in education, and the revenue potential for each of these. So again, we'll go into a little more detail in our Investor Day in a couple of weeks. So hopefully, you can make it, David. Yeah. Oh, we'll do that. Maybe just a second question, if I may, thinking about the cross-sell opportunity, you guys will sometimes give some color on different products that are performing well on cross-sell. I think maybe it was last quarter or maybe two quarters ago, you talked about assessments being the fastest-growing product. Just wondering if there's any incremental color you guys can add on what you're seeing on cross-sell and any specific product drivers that are maybe having an outsized impact. That'd be great. Thanks, guys. Yeah. I think what I would say is, look, we've grown, we talked about a 49% increase in bookings in Q4 of cross-sell. We were kind of in the mid-20s kind of growth of cross-sell bookings for the year. So we're seeing acceleration going out of the year. And part of that we attribute to some of the changes that Chris has been making. He's piloted some ideas as far as how do we marry our customer success and our sellers together to get better opportunities and do better from a cross-sell perspective. So we'll share some of those details with you in the investor day. But I will say we're pretty optimistic and pretty bullish about that cross-sell opportunity and our ability to solve more problems for our customers longer term. Got it. We'll be going to talk to some of you guys in a few weeks. Thanks. See you. Your next question comes from the line of William McNamara from BTIG. Please go ahead. Hi. This is Bill on from Matt. And thanks for taking my question. When you're going in and competing for these deals, such as the recent announcement with the Montana University System, what would you say customers are the most interested in that you're kind of able to win them with that set you apart from the competition? Yeah. There's a couple of things. One is just our footprint and the fact that we have a footprint both in K-12 and higher education. So particularly when you're talking about state systems, there's a lot of conversations about how do we keep students as they go from high school into higher ed? How do we make that transition as simple as possible? Specifically in that Montana University System, Parchment had some technology that is integrated with Canvas that made that transition much more seamless and easier for them. And so they really liked we went in and actually joint-sold in that case. And so as we bring that into our portfolio, we think that's going to be an accelerant for us as far as winning more of those types of deals long-term and as we get even tighter integration as one company going forward. So it really is about our footprint, about our ability to manage some of those transitions seamlessly. And then in Montana, in the Alabama Community College System, we already had landed in some of those institutions. And so the experience that they had, both from a user experience as well as the number of integrations that are there, our large partner ecosystem, the community that they were able to join, and how massive that was, all of those played into the decision when they decided which of the incumbents that has a position in those systems to go with, it made Canvas the easy choice. Great. Thanks for taking my question. Your next question comes from the line of Noah Herman from JPMorgan. Please go ahead. Hey, guys. Thanks for taking the question. Just sticking with international a little bit. I mean, what do you really see here now going into this year as the biggest white space opportunity to really expand the expansion with international as a percentage of total revenue? I know it sort of reached a little bit above that 20% mark that you reference pretty frequently. But how should we think about the levers for momentum and growth going forward here? Thanks. Yeah. We've made some investments in some of the developed markets, particularly the Benelux region, Spain in Europe, the Philippines, and some of the Southeast Asian countries. So those will be one growth driver. I think the biggest growth driver for us will continue to be in the channel. And so we have investments that we're making in Japan and India, in some of the public markets in Southeast Asia. Latin America is almost entirely channel. So those are probably the areas where we'll see the most growth in the next couple of years, particularly as we kind of refine our strategy there and put a little more wood behind the arrow around a few of our key partners. Great. And as we are sort of thinking about the guidance philosophy for 2024, I mean, any change there relative to prior years? And are you layering in any extra conservatism in the model at all? Thanks. Yeah. So I appreciate the question there. I would say guidance philosophy is relatively consistent with prior years. I would point you to kind of the midpoint of the range as our expectation for performance. We have no further questions in our queue at this time. I will now turn the call back over to Chief Executive Officer Steve Daly for closing remarks. Well, thank you, everybody, for joining us today. Our exceptional fourth quarter and full year 2023 results were driven by our increasing competitive advantage, our strong execution, and our 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 acquisitions. I've never personally been more excited about our ability to elevate teaching and learning and drive results for our shareholders. We'll share a lot more about our journey and the roadmap ahead in our March 12th Investor Day. We look forward to and hope to see all of you there. Thanks. This concludes today's conference call. Thank you for your participation, and you may now disconnect.