Thank you for standing by. This is the conference operator. Welcome to the PowerSchool third quarter 2022 earnings conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Shane Harrison, Senior Vice President of Investor Relations. Please go ahead. Thank you, operator. Welcome everyone to PowerSchool's Earnings Conference Call for the third quarter ended September 30th, 2022. I wanted to first let you know that we posted a slide deck to the investor relations section of our website that accompanies our remarks here. On today's call, we have PowerSchool CEO, Hardeep Gulati, and CFO, Eric Shander. Before getting started, I'd like to emphasize that this call, including the Q&A portion, will include statements related to the expected future results for our company, which are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings. Today's remarks will also include references to non-GAAP financial measures. Additional information, including definitions and reconciliations between non-GAAP financial information to the GAAP financial information, is provided in the corresponding press release and results presentation, which are both posted to PowerSchool's investor relations website at investors.powerschool.com. A replay of this call will also be posted to the same website. Let me now turn the call over to Hardeep. Thank you, Shane, and thank you everyone for taking the time to join us today. Our third quarter was a testament to how well our teams executed on our market differentiated strategy and business model. We continue to drive strong revenue and ARR growth with the power and the breadth of our comprehensive platform that provides mission-critical solutions for K-12 organizations to help effectively manage their ongoing demands and challenges. As demonstrated this quarter, the significant cross-sell opportunity of our diverse portfolio of market-leading solutions to our captive large install base allows us to continue to deliver on the top-line growth, while our operating leverage is providing a meaningful ramp in profitability. Let me begin our review of Q3 on Slide 4 with a summary of our financial results. Total revenue reached $162 million for the quarter, coming in line with the guidance we provided last quarter. We continue to see record pipeline that gives us confidence to reaffirm our increased full-year revenue guidance from the last quarter. In Q3, we grew our adjusted EBITDA 30% year-over-year and drove meaningful margin expansion, reaching 32%. This represents our highest margin since our IPO and exceeds the guidance from the last quarter. Additionally, we are raising further our full-year guidance for profitability. Subscription and support revenue grew double digits year-over-year to $137 million. Our ARR increased 11% year-over-year with strength in our retention, cross-sell, and new business. Our consistent performance to market expectations and metrics showcase our compelling differentiated business model to operate in a highly stable and durable K-12 market, largely insulated from the broader macro inflationary and recessionary factors. Also, it's a testament of our diverse, highly predictable revenue streams that are growing materially and with increased profitability. Let me share with you more details on each of our growth vectors that will help us deliver this consistent performance. Slide 5 shows some of the customer successes in the quarter for these different vectors. The third quarter is generally the busiest time for us as it is not only back to school, but it also is a time where administrators and back office staff are starting their new fiscal year. For us, that means a heavy few months of product renewals and as well system implementation. Our renewals team had a record quarter, and our sales and customer success teams drove higher incremental new bookings from existing customer when you compare it to the prior year. Our net revenue retention rate for the 12 months ended September thirtieth increased 140 basis points to 108.7%, our best sequential improvement since Q2 of 2020. During the quarter, we saw great growth in all aspects of ARR, with particular improvements in retention and cross-sell increases year-over-year. Speaking of cross-sell and continued market expansion, we saw broad-based customer booking activities that spanned our entire product platform as we grew our wallet share with existing customers and continued to add new logos to our customer base. A great example of that is of a large deal at one of the largest online K-12 learning provider, Stride. They selected PowerSchool for their global student information system and enrollment needs for their online public and private schools and with well over 100,000 enrollments. Already a user of our Naviance and student assessment solution for a small student population, Stride wanted to modernize their homegrown back office system for their entire K-12 online infrastructure. With the expected long-term growth in virtual schooling globally in the coming years with a very large TAM, we are excited to partner with global online companies like Stride to grow this space further. The other key growth factor for us is we have the most comprehensive and diverse portfolio of solutions that provide mission-critical capabilities required for the K-12 education ecosystem. There is no shortage of headlines about the stresses in our education system around teacher shortage, learning gaps, attendance shortfalls, social emotional support, equity and data security. Our differentiated platform with 19+ products is becoming even more essential to help districts deal with these challenges and initiatives that span across operations, talent, and classroom. We are seeing continued high demand and growth in our student solutions, our insights and MTSS capabilities, talent management and behavior and curriculum management solutions. Customers of all sizes continue to select our platform as PowerSchool is the only proven vendor that checks all these boxes. Great example of this is our platform win at Plano Independent School District with over 50,000 students. They were looking to replace their existing SIS for an integrated platform solution. Adding our SIS enrollment, ERP, data insights products to already their existing implementation of several of our talent products will improve not only their internal operational efficiency, but also drive better outcomes for teachers and their students. We are continuing to see balanced demand across our product portfolio. We recorded nearly 500 new logo and cross-sell transactions in the quarter, including several sizable wins for SIS, Unified Insights, Talent, Naviance and Classroom products. Building on our proven success in providing classroom solutions at large districts like LAUSD, Miami-Dade, Fairfax, we are excited about another large district, Baltimore City, with 75,000+ students selecting Schoology as their LMS solution this quarter. With the addition of Schoology to the PowerSchool Talent and Naviance products at the district, we look forward to exceeding Baltimore City's expectations and furthering our solutions footprint within their district. As we shared, one of our newest growth vectors is our international expansion. We are seeing similar level of critical need of platform like ours to provide unified, comprehensive capabilities to help international, private, and even local schools in various geographies around the world. Our dedicated sales initiative in the Middle East started earlier this year and has already shown strong success and proves the opportunity we have available to extend that model to other regions. Excited to share another very strategic platform new win in the UAE at Aldar Education, an Abu Dhabi-based education system that manages several charter and public schools in the region. Aldar's Blueprint Public School purchased multiple solutions, including SIS and Schoology from PowerSchool, to provide an integrated view of their systems, students, and operations. Similarly, we gained a new logo for a platform win in Egypt, the International School of Elite Education or ISEE. One of the key aspects that is driving our growth is our scale. Proven track record and vast experience, which allows us to quickly meet and support the most critical urgent needs the districts might have. We had our most successful back-to-school in terms of customer experience and impact across different aspects of the school operations. 3 million+ professional development courses taken. 750,000 substitute teacher positions filled. 1.3 million jobs posted. 46 million+ formative assessments delivered, and 900,000+ college and career assignments completed in the quarter leveraging our platform. Our top-line momentum is very compelling, given we continue to do it while also increasing our profitability. In the third quarter, we exceeded the high end of our guidance range of adjusted EBITDA and continued to expand our adjusted EBITDA margins to levels well ahead of our 2022 targets we communicated at the beginning of the year. I will let Eric go into the more details, but the operational rigors we have applied, coupled with the growing scale we are experiencing, we expect continued expansion in our profitability going forward. Let me also share some very exciting news. Today, we announced Eric's promotion to President and CFO. In this new expanded role, Eric will assume responsibility of our customer renewals operations, having successfully built our public company reporting and G&A infrastructure. I'm excited to have Eric bring his scale and growth experience to this critical part of our business. We are also announcing the addition of Tony Kender as our new Chief Revenue Officer. Tony has 30+ years of expertise in building, scaling, and optimizing global sales organizations, most recently as CRO at FinancialForce, and prior to that, as an SVP and GM at Oracle. We are excited to add him to our exec team and want to thank our current CRO, Greg Porter, for his meaningful contribution to PowerSchool, and wish him the best as he moves to his new endeavors. We are very happy with the continued business momentum we are seeing heading into the fourth quarter and look forward to finishing the year strong. Our sales pipeline continues to be very strong with 20% growth year-over-year, and sales velocity continues to improve overall. In the funnel, we are seeing a great mix of new customer logos, very large opportunities, and abundant cross-sell prospects, many of which we are in the pole position to win. Our confidence is further reinforced by a continued strong funding environment, further supported by three-fourths of ESSER funding still being available for districts to spend over the next few years. It is clear that our value proposition and differentiated comprehensive platform are resonating in the market, which puts us in a better position than the niche providers. Let me pass the call over to Eric and detail the financial performance for the quarter. Eric? Thank you, Hardeep. Our third quarter performance was outstanding, highlighted by the strong sequential improvement in our annual recurring revenue, net revenue retention, and profitability. Our teams continue to execute on the growth strategy by increasing sales to both new and existing customers while delivering best-in-class customer support and service. We continue to see strong demand across our product portfolio with strength in our SIS, analytics, and behavior offerings. At the same time, we've been focused on our internal functions by streamlining processes and controlling costs while continuing to invest in new product development, our international expansion, continued product integrations, and other key growth initiatives. The financial health of the business has never been better, and we remain confident in the resilience of our end market, the durability of our financial model, and the tremendous long-term opportunities ahead of us through international expansion and personalized learning. Now let me dive into the quarterly results with more detail, which you will see on Slide 6. Third quarter revenue was $162.4 million, in line with the guidance range we provided in the second quarter earnings call, and overall revenue was up 9% year-over-year. Subscription and support revenue, which is our most strategic recurring revenue stream, grew at 10% on a year-over-year basis and accounted for 84.4% of total revenue in the quarter, a 100 basis point improvement over the same time period a year ago. Our services business, which generates revenue through fees related to new product implementations, customizations, and customer training, delivered revenue of $19.9 million, representing an increase of 8% year-over-year, driven by higher implementations, customizations, and our in-person PowerSchool University training events. Our services revenue came in slightly below our internal expectations, driven by a few services projects, and there were a few subscription renewals that were also impacted by Hurricane Ian at the end of the quarter, all of which have already been closed in the fourth quarter. The team helped drive a successful back-to-school season with over 1,750 new product go lives that prepared schools and districts for the 2022-2023 school year. We also hosted several PowerSchool University on-site training events that had great attendance. Our consistent dedication to customer success is translating to better retention, higher customer satisfaction, and continued cross-sell momentum. Finally, revenue from license and other, our least strategic and most variable revenue stream, representing 3% of total revenue, came in at $5.4 million for the quarter, representing a slight decline of $800,000 from the same time period last year as we continued to place more focus on subscription-based partner relationships. We ended the third quarter with an annual recurring revenue balance of $585.4 million, representing an 11% increase over the same time period last year. The strong performance was driven by higher cross-sell coupled with continued strong gross retention. Our net revenue retention, or NRR, came in at 108.7%, representing a sequential improvement of 140 basis points and a year-over-year improvement of 310 basis points. The significant sequential improvement in this key metric was driven primarily by our higher LTM cross-sell as well as strong gross retention coupled with our annual contractual price increases. As a reminder of our business seasonality, the third quarter is typically the quarter in which a significant level of our renewals take place. Seeing such a strong improvement in NRR in the quarter was exciting. We expect this metric to slightly moderate in the fourth quarter. However, we anticipate ending the year around 108% which is ahead of our expectations and a validation of the value our customers place on the power of our platform. Adjusted gross profit for the quarter came in at $111.1 million with a 68.4% margin, representing a 30 basis point sequential quarterly increase and a 50 basis point year-over-year improvement. The strong performance was driven by our continued focus on cost efficiencies. Now turning to operating expenses. In the third quarter, our non-GAAP research and development expense came in at $22.6 million, representing 13.9% of revenue, compared with 15% in the same time period last year. Including capitalized R&D expenses, total invested in R&D was 21.5% of revenue, compared with 21.1% in the same time period last year, highlighting our continued commitment to making investments in market differentiating innovation for our customers. Non-GAAP SG&A expense in the third quarter totaled $37 million, representing 22.8% of revenue, compared with 26.3% in Q3 of last year. This 350 basis point improvement in our non-GAAP SG&A margin reflects savings from our facilities consolidation, lower D&O insurance premiums, and savings from our various G&A cost efficiencies driven in the quarter. Third quarter adjusted EBITDA was $52.2 million or 32.2% margin, exceeding the high end of our guidance range for the quarter, representing an increase of 530 basis points from the same time period last year. The third quarter margin was strong and reflects the continued focus we have on driving profitable growth. The margin improvement was driven by the gross margin and operating expense improvements. We will continue to identify additional areas for cost rationalization while still investing in innovation that will fuel our top-line growth. Non-GAAP net income was $0.21 per fully diluted share, which is 40% higher compared to $0.15 last year. Now moving to the balance sheet. We ended the quarter with $108.9 million in cash and equivalents, an increase of 20% over the same time period last year. Cash collections during the seasonally busiest third quarter were strong, and our age to accounts receivable profile is the best ever. In the third quarter, we paid off the $70 million revolver that we drew in the first half of the year. Net debt leverage at the end of the third quarter was 3.6 x, a meaningful improvement over the 4.1x a year earlier and 4.8 x at the end of Q2. Third quarter free cash flow, a non-GAAP measure, was $174.1 million, up 6% from the same time period a year earlier. As I mentioned, we had a very successful renewal season and our collections team did a fantastic job. Now turning to our fourth quarter and full year financial outlook on Slide 6. For the fourth quarter, we expect to deliver total revenue in the range of $161 million-$164 million, representing an 11.2% year-over-year growth at the midpoint. As a reminder of the seasonality of our implementations and training activity, we expect a sequential decline in services revenue in the fourth quarter. For adjusted EBITDA, we expect fourth quarter to finish at $48 million-$51 million, representing a 30.5% margin at the midpoint. For the full year, we're raising the bottom end of our revenue guidance range while raising the top and bottom of our adjusted EBITDA range. We expect total revenue in the range of $631 million-$634 million for the full year, with the midpoint representing a 13.2% year-over-year growth rate. An adjusted EBITDA of $192 million-$195 million, representing a 30.6% adjusted EBITDA margin at the midpoint. For modeling purposes, we expect capital expenditures excluding capitalized software of approximately $5 million and share-based compensation expense of approximately $55 million for the full year. Fully diluted shares by the end of the year are expected to be in the range of 200 million-205 million shares. Overall, we delivered a fantastic third quarter. As Hardeep stated, we are very pleased with the continued business momentum and our performance, which is ahead of our targets and demonstrating the value that our customers are placing on our mission-critical platform. Our teams performed extremely well in driving growth and operational efficiencies. We look forward to finishing the year strong and continued focus on executing our go-to-market operational and investment strategies. This concludes our prepared remarks. Operator, will you please open the line for Q&A? Certainly. We'll now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. Our first question is from Stephen Sheldon with William Blair. Please go ahead. Hey, thanks guys, and congrats on the promotion and the new responsibilities to you, Eric. First one I had to ask, you know, I know. You know, on sales cycles, I guess, you know, curious what you guys have seen in sales cycles with your K-12 customers and knowing that you're coming out of kind of peak selling season. I think there's been some talk of elongation there and school districts being distracted with other issues right now, such as y ou know, the teacher shortage and a variety of other issues. Have you seen that at all, you know, and you think that could have a bigger impact on sales activity as we think about the next few quarters? Stephen, this is Hardeep. Again, thank you for the question. We're actually not seeing any sales cycle slowness. In fact, to the contrary, we continue to see sales cycles improving, and almost to the level of 25%-30% improvement over last year. I think a lot of it is based on the differentiation we have in the market because we are a much more broader platform with almost 19+ diversified products. If you think about a lot of the challenges these districts are facing today when it comes to talent management and recruiting teachers, keeping teachers, they need our talent management solution to help with that. If it's about learning loss, they need to put analytics to understand that and address it. If there's about social emotional, they need our behavior and classroom tools to help engage with the students. A lot of what we are selling is actually mission critical, so it's actually been more beneficial to help them address the needs they are having today. That's great to hear. Appreciate that. As a follow-up, you know, would love to just get some more detail on recent acquisitions, and how they've been performing, you know, thinking about Kickboard, Kinvolved, some of the others. You know, have these solutions been plugged into your existing sales motions? You know, I guess, what do financial contributions look like now that you've owned both for close to a year? Are you seeing a rampant uptake in monetization there on your platform? We actually do. I think we've mentioned that in the prepared remarks. Like, Behavior, which is the Kickboard, actually we're seeing record growth. There is a large deal at Gallup-McKinley County Schools, where we are actually you know, tens of thousands of students where we are actually implementing our Kickboard solution. We're almost seeing in every quarter about 15-20 deals on these products as we are integrating them into our products and bringing them to our sales motion. Similarly on curriculum, you know, that's another large deal out of Hudson County and a few others. Almost again about a dozen-plus customers have already bought that. We had a pretty successful communication starting of the year and even into this quarter. A district like San Diego just are gonna start adopting our unified communication. You can see the momentum is pretty strong with our install base with each of them. They're still a small contribution to our overall numbers, but we do expect them to start becoming more material down the road in the next few years. Yeah. Stephen and Shander, I would just add on, you know, since you asked financially, while we don't provide any specifics, as we've, you know, spoken to a lot of you, we do have pretty aggressive business cases that we put together in terms of, you know, what we want out of these acquisitions. I can tell you every single one that we've done this year, while smaller, and as Hardeep mentioned, you know, the contribution is a little bit less, every single one of them is well ahead of the financial, business cases that we originally put together. You know, we really do look for accretion in a pretty short period of time. We couldn't be more pleased with the financial, you know, benefits we see this year. Obviously as we really get them to be, you know, integrated more into the platform, you know, some of the benefits we'll see into next year and beyond. Got it. Thanks for all the color, and congrats on the strong results. Thank you. Thanks, Stephen. The next question is from Brent Thill with Jefferies. Please go ahead. Hey, guys. This is David on for Brent. Thanks so much for taking the questions. Maybe to kick off, you know, on the issues facing K - 12 schools, obviously, you know, the big ones being teacher shortages and learning loss, just curious, are you seeing customers flock more to your products that help to address some of these issues? You know, and maybe are they driving outsized growth? You're seeing higher adoption there, maybe as like adoption in LMS starts to fade. Just any color there would be helpful. Yeah, sure, David. I think we kind of have been talking about last few quarters, our one of our best-selling product has been our Unified Insights product. Primarily to your point about the learning loss, one of the biggest challenges most of the districts are facing is how to even know where is the learning loss, how much is the learning loss, which strategies and interventions would actually work. In fact, we talked about launching our new innovation of multi-tiered system of supports, MTSS. We are already seeing not only Unified Insights growth throughout the year, we're actually now seeing strong adoption of our MTSS. We have won state deals in this year. We have continued to see extremely well, including large districts like Plano, which bought our entire platform, including Unified Insights. Corpus Christi is another great example of these districts who are actually adopting these Unified Insights to help them address these learning loss. I already mentioned about the talent as well. I think when you look at, you know, almost working with the districts to help address a million teacher jobs and not just on the recruiting new teachers, but managing almost 750,000+ substitute teachers over the quarter, we are kind of right in the middle of helping these districts deal with all these challenges, and it's actually creating more level of trust and partnership with these districts, so they're adopting more and more of our platform components, including some of our add-ons we talked about. Got it. That's super helpful. Thanks for that. Maybe just a quick follow-up on international. I know you guys provided a little color in the opening remarks, and it sounds like things are going well. Maybe expanding that a little bit further. I guess, you know, high level, has your conviction on what international can be for you guys increased as you've kind of put some of the processes in place? You know, what is a good timeline to think about when international can start to become a material driver of revenue? Thanks. Yeah. You know, we're already a market leader when it comes to international schools or American education school across the globe, right? We have presence in 90 countries. Pretty much every major American education school across the globe uses us. What we are seeing, especially over the last few years with bringing Schoology and other platforms, we even have country-level deployments like Uruguay or Philippines. We have 300-400 thousand students as well. One of the key motions what we have been is let's bring the entire platform to international, and we started with actually boots on ground in Middle East. What we are seeing is a lot of now not just international private schools, we are seeing government schools, charter schools in these countries actually now asking for us not just one product, but they are actually buying entire platform. What is proving to us is that even internationally, there is nobody else who's providing this comprehensive platform. The need by these private and local schools is equally strong, especially coming out of COVID, that these different countries are prioritizing the requirement to actually move to a platform. We're actually seeing fairly good demand. I think to your follow-up, as we do think that over the next few years, international is gonna become material part of our growth. We are definitely seeing some very good early signs, especially because there is no strong competition we are seeing either at the private schools or public schools or even at country-level deployments. We're really excited about what it's gonna bring to our growth over the next few years. Yeah. David, it's Eric. I would just add that, you know, as we've said before, you know, good news for us is we've got the opportunity to continue to drive low double-digit organic growth without international. As Hardeep said, I mean, we're extremely, you know, bullish around what we see. We're gonna take a very, you know, I think thoughtful approach in terms of how we expand internationally. I do believe over the next few years, it will be, you know, a fairly material part of the business. The good news is we're gonna do it in a, I think, a very metered fashion. What we see in the early indications are, you know, extremely positive for us. You know, super excited about it. Awesome. Thank you, guys. Really appreciate it. Thank you. The next question is from Gabriela Borges with Goldman Sachs. Please go ahead. Hi, this is Callie on for Gabriela. Thank you for taking my question. First, just where is Schoology continuing to gain share? Are you seeing any changes in the competitive landscape? Any noticeable trends in the types of deals you're seeing? Yeah, we actually still are. You know, when you look at our win rates, they have been pretty consistent at par with our competitors. Especially, we have one large competitor, and we are kind of very similar to both in terms of win rate as well as market share when you look at it in terms of number of students. For example, you know, some of our large deployments in L.A. and Miami, that's 1 million students between those two itself. So when you factor this number of students, we are at par. Baltimore City win I shared is actually a great testament to a large district going through an RFP process and actually selecting us. They don't even use our SIS, but they do use platform components like Naviance and Talent, which actually came into an important part of their decision-making. We've really continued to see the fact that not only our SIS, but our market share in other areas like talent, like professional learning, like classroom broadly, is gonna further help our competitive win rates in this. Right now we are continuing to win, you know, at par with the market. As we've shared in the past, you know, during the COVID, we almost saw 4-5 million students almost getting per year. Now we're kind of back to what we have seen pre-COVID levels, about 1-2 million students is what we are expecting, and we are at par with that. Great. Thank you. Just as a follow-up, what are customers telling you are the biggest gaps in their portfolio? You know, how can you share with us those discussions that are informing your organic product roadmap and your M&A priorities? You know, a lot of the stuff what we are seeing, it has been the things which we have addressed with our products. I think if you'll see our both our tuck-in acquisitions around curriculum, around messaging and attendance intervention, around social emotional have been directly based on the feedback from our customers. Where some of the innovation on MTSS, which helps them manage interventions across all these different areas. Our Connected Intelligence, which lets them not just connect their data sitting in PowerSchool, but bring data from external system, including partnering with their communities to bring almost a full longitudinal view. We're actually seeing very strong demand on that, and that's directly based on what we are seeing in the market. There is a broader, again, more adoption of platform rather than looking at individual products. That's why you see a ton of our innovation and what you're seeing the demand is across not just one product, but actually looking at how the platform so they are not having to connect all this data, and they're not having to deal with data security issues around that. That's where our innovations are very differentiated. Great. Thank you. Congrats on the quarter. Thank you. The next question is from Matt Hedberg with RBC Capital Markets. Please go ahead. Oh, great, guys. Thanks for taking my questions. Congrats, Eric, as well from us. Well deserved. You know, Eric, I know you don't guide to ARR, but I know you provide a little bit of context historically. The last few years you've added, I think, maybe $10 million-$15 million of net new ARR into Q4. Is there anything different about this year seasonality-wise from an ARR perspective? Yeah, I mean, Matt, it's a good question, and I you know always appreciate the opportunity to address the seasonality. You know, I think as everybody you know hopefully knows, I mean, Q3 is our largest renewal period. You know, certainly a lot of activity that happens from a renewals perspective, which you know our net ARR on a Q3 basis, we were really pleased with, you know, adding you know about $5 million in net new ARR this quarter. What I would say is, while we don't guide on it, you know, one of the things that we're seeing from a PowerSchool perspective is that as our deals are getting larger, as we're becoming much more strategic with our customers, you know, deals are getting larger, and you can have the opportunity from any one deal, large deal, getting closed in any one particular quarter, which, you know, certainly can cause a little bit of variability from an ARR perspective. What I would just offer up for Q4, I think similar trending, if you were to kinda look at, you know, where we finished and, you know, I'll say modestly assume around, you know, let's say an $8 million-$10 million increase of net new ARR from this quarter. I think that's probably a pretty good assumption. You know, like I said, obviously any one big deal can certainly sway that. What I would tell you is, you know, as we look at the pipelines, we look at the amount of larger deals that we have, you know, over the next several quarters, we couldn't be more optimistic in terms of just seeing that, you know, momentum, you know, continuing. Now, will they all happen in fourth quarter? Probably not. You know, over the next several quarters, you know, we do see, you know, a line of sight to a lot of larger deals. You know, just look for us to continue to kinda update in terms of the large deal, you know, volume. I would just say, you know, assuming 8-10 is probably a decent assumption as we go from where we ended into the fourth quarter. Super helpful, Eric. That's actually a really nice dovetail for a question for Hardeep. You know, I think it really builds on the strength of the quarter. The 20% pipeline growth, I mean, that certainly stood out to us as well. You know, I know you cited new logos, cross-sell, a number of things that are driving that pipeline build. You know, is there one thing that stood out to you this year versus next year? I mean, I don't know. Is it the funding? Is it just better appreciation? Just maybe, what do you think drove that sort of strong pipeline growth this quarter? Great question, Matt. A couple of things. One is the, I think the key point here where I'm iterating is the diversity of our platform, right? We have such a broad areas that we support the critical needs districts have. As you see that all in the news, the districts coming out of COVID are definitely struggling, but at the same time prioritizing, especially with the sound funding environment, they're making these transformation across the different aspects of their operation talent to be a priority. That's definitely the demand is definitely healthy, which is driving the pipeline. If I have to call out any additional factors, while there's a balanced growth across most of our products, I would say that we do have some very strong large deals in the pipeline, which is also driving the growth percentage. We in fact have line of sight where we have been either a letter of intent or kind of our deals to lose at almost $20 million plus of business over the next few quarters with some couple of large deals as well. That definitely is again very refreshing and welcoming that not only are we delivering on strong quarters, we have good visibility for the next few quarters of some of the large wins too, which adds to our confidence of what we are sharing with you on our guidance. Thanks a lot, guys. Congrats again. Thank you. Thanks, Matt. The next question is from Fred Havemeyer with Macquarie. Please go ahead. Hey, thank you, and I think I'll reiterate the sentiment on the call here and say congratulations on a strong third quarter. I think on that strength, I wanted to ask about. Well, firstly, Eric, also congratulations on your promotion, and this question's in line with that. It looks like 108.7% net retention rate. Looks like a new high watermark for PowerSchool as a public company. I wanted to ask, really specifically actually, Eric, as you assume more customer success and more customer renewal roles with your promotion here, what do you think that PowerSchool could potentially do here to continue progressing this NRR, and do you see opportunity for it to continue moving up? Yeah, first, thanks, Fred. Appreciate it. We do. In fact, you know, we were really pleased with the third quarter where we ended. You know, just as I said, just to, you know, kinda make sure we're all, you know, aligned with where we think we'll end the year. We'll end the year, you know, in the 108 range, which is ahead of our expectations and really just demonstrates the, you know, continued momentum we see within the existing customers. You know, specific to the renewal opportunities, you know, look, I think we've got an opportunity to really leverage that team more as we kinda look at, you know, driving the value of the platform across our existing platform, and really make sure that, you know, our customers see the value of the platform, not just one or two or three of the products, but really, you know, what is the value that we can drive from an overall standpoint. You know, anytime we touch the customer, certainly a renewal opportunity is a perfect opportunity to, you know, really have that discussion and engagement with the customers around, you know, other products that may make sense for the particular customer. I do see that, you know, we've got upward potential, you know, certainly, you know, well beyond where we'll finish this year. You know, as we kinda get into next year, we'll certainly, you know, update everybody in terms of what our future thinking is. You know, clearly we're, you know, really thrilled with the third quarter performance and, you know, we'll end the year above, you know, our expectations. Thank you for that. Perhaps for Hardeep, I was interested in your description of, I think it was Baltimore adding Schoology, expanding some of their purchasing of the platform. You know, it sounded like, I think you said talent and Naviance. It sounded like it was potentially a win that was leveraging some of your solutions outside of SIS. Please correct me if I'm wrong, but I wanted to ask more broadly about also just the opportunity to find more areas for PowerSchool to be pulled in and the platforms to be pulled in among some of those schools that may have been adopters of some of your potentially smaller ARR as a proportion of your total ARR products and potentially even some of your recent acquisitions. Sounds like the cross-sell was very strong. I was interested in that one in particular. Yeah, Fred, it's actually you're making a very good point. If you look at most of our large wins I actually shared, they're all actually coming from a non-SIS cross-sell. So take example Stride. We had a relationship on there with few of them on Naviance and some of our assessment with few of their students. They made a selection not just to expand the relationship into their full student information system across a few hundred thousand students, which they support online direct, you know, part-time and full-time, but they also adopted enrollment and some of the other capabilities. Plano is another good example. They started from talent and then expanded the relationship into a full platform on SIS, ERP, classroom and talent. Baltimore City is another great example. We're not using our SIS, but adopting our Schoology because they already have a relationship. I think what we're trying to make here is that the beauty of the platform of how whether you are in the operations or in the classroom or talent, these things need to work together. Whether you're doing a professional learning for training, you wanna make sure that's in line with your classroom learning management. When you're doing an assessment, you wanna make sure that's in line with your broader SIS student and special ed. All these pieces really work together, and we are the only vendor which actually brings all these together, and that's what's clearly resonating with our customers. Thank you, and congratulations on the quarter. Thanks, Fred. The next question is from Saket Kalia with Barclays. Please go ahead. Okay, great. Hey, guys. Thanks for taking my questions here and echo my congrats on the quarter. Thanks, Saket. Thanks, Saket. Hardeep. Yeah, sure thing. Hardeep, maybe just to start with you. I'd actually love to dig into the Middle East market a little bit more. You know, that's been an early success in international. You mentioned boots on the ground, you know, several deals I think that have been mentioned over the last couple few quarters. I guess the question is, how do you think about that market opportunity, whether that's from a dollars perspective or students perspective? What are you seeing there competitively? I know that you said that no one really has the breadth of the platform, but maybe you could just go one level deeper into that market opportunity and sort of the competitive landscape. Sure, Saket. You know, we've mentioned that in the past maybe that we have about a few hundred thousand students already in the Middle East on American educational schools and as well as some very large private schools as well, the likes of ESOL and GEMS and all. What we have seen is that as we've started taking and putting a little bit more direct, we've brought in a VP of international sales based out of Dubai, and now we are building a team to actually cover the broader, call it, greater almost seven countries, right? We are seeing that the opportunity is almost, you know, almost 52 million-plus students that is of a TAM we can go after. We are not only seeing demand in just one or two areas with our student system or through our learning management. We are seeing the demand for even things like behavior management, messaging, and, you know, analytics actually to be equally strong. The likes of some of the deals we've been sharing with Maarif in Saudi Arabia or in, you know, in, Aldar in UAE, or in Egypt with the ISEE, you're seeing that they're platform buys, and that's the exciting part. We do expect this to be, you know, for us to be able to get a few hundred thousand students, on if not a million-plus students just into the next year, and then really growing pretty strong from there, with the TAM almost of 50 million-plus students that we think is addressable by us. Got it. That's actually. That's super helpful and maybe a good dovetail into the next question. I mean, you mentioned, you know, having boots on the ground and international VP there. You know, maybe just to zoom out a little bit, it was great to see, I think, a new CRO announced today as well. You know, again, understanding that it's early, what are some of the things that you're hoping from this position, which I believe is new, and correct me there if I'm wrong. Yeah, no, we absolutely, one of the opportunities we are looking at really is the international expansion, and having more, not just Middle East as one of the things, but actually expanding similarly, more international capabilities across other geographies where we are similarly seeing some inbounds and good demand. We have a very strong sales team. I always say that's one of the best sales team, not just in terms of coverage, but actually in terms of the partnership, because we have expertise around the different areas. Being able to really leverage some of the experience of our new CRO, which, you know, who came from Oracle and has built global HCM brand for Oracle, we're really excited about how that would help us translate this into a global brand. Very helpful. Thanks, guys. Thank you. The next question is from Koji Ikeda with BofA Securities. Please go ahead. Hey, Hardeep. Hey, Eric. Oh, Eric, congrats on the new promotion here for president. You know, congratulations on that. I wanted to ask you guys a question, thinking about the low double-digit organic growth. Comment that you had earlier. In context to, you know, the product wheel that you guys have, you know, think about the Unified Classroom, administration, talent, communities and home. Could you help us maybe understand as we think about the growth algorithm over the next year- to- year and a half of which one of these, you know, five parts of this wheel are you most excited about or maybe could contribute the most to the growth algorithm over the next 12 months? Sure, Koji. Let me take that, and I'll, you know, if Eric wants to add something, I'll ask him to jump in. Because if you think about our biggest part of the business, our student solution. You know, while in the pandemic, we have talked about that we were recording high single-digit growth, we're actually seeing it to be almost double-digit even post-pandemic with transformation opportunity with very large, not just deals like Stride, but territory or country-level options as well that exist out there. That gives us a very strong confidence. We've kind of shared, bringing one of the fourth-largest district in Canada earlier this year with Peel. This is momentum which makes us very confident about the entire student solution. I think there's a lot of antiquated systems out there, and as districts have gone through COVID, they know that they need an upgrade. They're dealing with a lot of data security aspects and integration issues as well. Districts who have antiquated system, their insurances are going higher because if they're not able to provide the right secure and solutions, then you know, these districts are making a priority to actually upgrade their backend systems. We are kind of in a very strong position to leverage that. Our classroom continues to be double-digit growth. It has seen good growth over COVID and pre-COVID and even post-COVID with all these different components. As you mentioned, it's just not LMS, it's assessment, it's behavior, it's special ed, it's Naviance broader brought in, so that we are excited about that combination. Nobody else offers that breadth. With talent management, definitely post-COVID, there has been a big demand on that. We've seen some state level opportunities, we shared year- to- date. We have been growing double-digit on that as well. Those are good signs that we think we're gonna continue to partner with these districts. Insight is one of our biggest growth areas. That's where we are seeing huge growth, and we expect that to really continue, especially with the innovations we are bringing in. I think we are in a very unique position. There's nobody else who can really match with providing such a comprehensive analytics to not just districts, but even state level. We are in a very fortunate position to be partnering with districts on that. Got it, Hardeep. Thanks for that. Just one follow-up from me is, so you mentioned 20% pipeline growth, which is fantastic. But as we head into 2023 into a potential recession, how should we be thinking about if it becomes harder to close deals, managing, you know, maybe investing more to close deals versus letting the growth moderate and maybe seeing a little bit more margin? How should we even think about that growth versus profits and kind of equation in a potential slowing demand environment? I think one of the things we've been saying is the K-12, the way funding environment is largely insulated from the recession aspects as well. The funding is fairly stable. If you've seen the last 30 years of K-12 funding, IT is a very small portion of that, and typically even more important as they deal with the broader aspects of their organization. ESSER money, which is almost, it's still $140 billion plus which they have, a lot of it needs to tie to also proving that their ESSER funding is working. Some of the demands on the IT is a healthy part of that equation as well. We also see that to be. We're not really expecting any of this, and I think that's demonstrated as we were mentioning our sales velocity or sales cycles actually are decreasing. Sales velocity continues to improve. We're not expecting that. To your point, we are always looking at profitability growth as well. We don't really push for growth as much as to make sure there's a balanced, sustainable growth which comes with profitability. A lot of time we are walking away from the deals which are not profitable. Yeah, I mean, Koji and Eric, I would just add, I mean, you know, we've said this before, kind of given our PE heritage, right? We want both. We want, you know, top-line growth, but we also want it at a profit. You know, given the fact that we are running mission-critical systems, you know, it's not like a lot of the districts have the option to be able to trade the systems out. So, you know, we feel extremely bullish, you know, as we kinda head into next year and, you know, we look forward to finishing the year strong and then certainly, you know, demonstrating the guidance that we're gonna showcase next quarter for full year 2023. Thanks, guys. Thanks so much for taking the questions. Thanks, Koji. Thanks, Koji. The next question is from Brian Peterson with Raymond James. Please go ahead. Thanks, gentlemen, and congrats on the quarter, and Eric, congrats as well. Very well deserved. Wanted to follow up on the last question, actually. I think it's pretty clear in this quarter that the cross-sell momentum is pretty strong. I'd actually love to understand maybe the sales cycles for some of those, and have they come in a little bit quicker than expected? Because we keep hearing about some of the needs for these districts and the problems you're solving. Are they actually coming to you and buying in a lot shorter sales cycle than you've seen in the past? Brian, based on the data we looked through across all our products, that is to be the case, that our sales cycles actually improved, not just year-over-year by almost 25%-30%. Even quarter-over-quarter, it seems to be improving and healthy. One of the key things I think just to again call out is that a lot of times, I think the differentiation we have is the diversity of our platform. We're not kind of compared to niche vendors or dependent on just one particular product and how that sales cycles might change. We're not overly exposed to that. That's what's exciting about us, is that there might be times where one product might have a lesser demand based on the seasonality or what's happening in the market, but the beauty is we don't get exposed like other vendors for that. There is no other public or private comp for the full platform what we provide, and that's what's we're gonna always maintain a good, healthy growth, sustainable growth that is unique, because we are able to address all the different elements that the districts might be focused on, and we are able to provide the right solution, what they need. Certain parts of the country are focusing on curriculum management or assessment. Certain other parts of the country are focusing on putting more on communication or digital learning. We are able to really support depending upon whatever their key priority is. Understood. Maybe just a follow-up on budgets. I know we don't have a crystal ball for next year, but you know, it's interesting when a lot of the spending decisions are being made in kind of the sales cycle that we just went through. You know, as you're looking ahead to next year, are there any things that you think get more emphasis or, you know, any thoughts on how the IT budgets would look overall? Would love to get any color on that. Thanks, guys. Sure, Brian. I think, I've kinda mentioned a few times, and I will reiterate, analytics definitely is a big focus area for a lot of districts across the nation and even globally, because a lot of the understanding of learning loss, what you need to do, how you're spending your ESSER money, and whether it's providing the right recovery on the learning loss, all that is tied to understanding where the students are, how do you provide the right interventions, and how you address it. We are in a unique position because we are the only analytics provider which not only brings student data, but assessment data, their learning data, their talent data to be able to help them understand not just what the learning loss is, but actually what to do about it, what intervention strategies are gonna work to help the students so that you're actually making the right effect. Definitely we are seeing good visibility, including multimillion-dollar deals at state level, large district levels on analytics, where we are seeing a tremendous growth path. We see the rest of the pipeline, again, fairly healthy, but as the other one I called out is that even the student information system, we do see a lot of stronger demand on SIS as well as districts are dealing with security issues, and they're realizing that their current back office systems or how they're integrating all these systems with their SIS is broken, has security holes. You're seeing some of the large districts come under a lot of scrutiny around that. That's where, again, we're in a unique position, which is a wake-up call for a lot of districts who are actually getting hit with higher insurances as well, unless they upgrade their IT environments to handle that. Those two areas definitely the high demand. Pretty much the talent management, some of the areas we talked about are still seem to be doing well. Thanks, Hardeep. All right. Great. I know we are on top of our call, so I'll just close it quickly. I really appreciate everybody dialing in to share, you know, giving us an opportunity to share some of the highlights for this quarter. As reflected in our strong results and guidance, you all hopefully clearly see the unique position we are in to help address some of the most critical current needs K-12 markets are facing with thanks to our diversified, differentiated, unified platform. As we continue to see improvements in sales velocity as well as good pipeline, we do believe that our top-line momentum is not only strong, but also, given our operating leverage, we can continue to drive very strong profitability and create more value for our stakeholders. I do want to thank our 3,000 employees as well as almost our 15,000+ customers and partners in helping us not only deliver these results, but actually partnering with us to make a significant positive impact to millions of teachers and students. Thank you for taking the time to join us today. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.