Ladies and gentlemen, greetings and welcome to the PowerSchool Fourth Quarter 2022 earnings call. At this time, all participant lines are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Shane Harrison, SVP, Investor Relations. Please go ahead. Thank you, operator. Welcome, everyone, to PowerSchool's earning conference call for the fourth quarter ended December thirty-first, 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 the call today, 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 of 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 and the GAAP financial information, is provided in the corresponding press release and results presentation, which are both posted on 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 pass the microphone over to Hardeep. Thank you, Shane. Thank you everyone for joining us today. We are excited to discuss our performance in Q4 and full year 2022. We had a strong close to a very successful year. We have committed to you that we will continue to deliver annual double-digit top-line growth coupled with margin expansion. As you see from this quarter results, we delivered this commitment in 2022 by significantly expanding our EBITDA margin and growing revenue double digits for the year. You will also see from our guidance, which Eric will discuss in more detail later, we are looking forward to another year of double-digit revenue growth and further margin expansion. As you see on slide 4, fourth quarter revenue reached $161 million, growing 10% over the prior year, and our adjusted EBITDA grew 59% year-over-year to $53 million, representing a 32.8% margin. ARR grew 11% over the prior year to $596 million as we continued our trend of strong net revenue retention. Looking at the specific highlights in the quarter and for the full year 2022. On slide 5, our strong business momentum continued across all product lines with breakout performance from our Unified Insights data analytics product suite. In this quarter, we won our largest statewide Unified Insights contract with value ramping up to $5 million per year ARR with Alabama State Department of Education to enable their learning acceleration and student support program. This adds to the state's usage of six of our other platform products which work together to benefit all students in the state. During the quarter, the Unified Insights solution suite also had its biggest Snowflake Connected Intelligence win for whole child analytics at the second-largest school district in the U.S., Los Angeles Unified School District, integrating to numerous systems. Another important cross-sell in the quarter was to Philadelphia School District. To date, a customer of our Naviance college career and life readiness tool, they are now expanding their use of our platform by implementing two of our talent solutions that will help them more efficiently evaluate, train, and develop their teachers. One key new customer win was our sale of our Unified Home Communication solution to one of the top 50 largest school district in U.S., Jefferson County Public Schools in Louisville. They chose our Unified Home Communication solution to improve their capabilities in family engagement and student attendance. These wins across the platform helped drive a record Q4 cross-sell performance, propelling our NRR rate to a record 109.1% in the quarter, while we also added over 100 new logos in the same period. I am proud of the tremendous progress we have made as a company in 2022. For the full year, we eclipsed $600 million in revenue, finished with annual revenue growth of 13%, improved our adjusted EBITDA margin by 2.2 percentage points to 31.1%, and generated $104 million of free cash flow. Our go-to-market teams were very successful during the year, adding almost 600 new customers to our base. During the year, the number of students benefiting from our solution now exceeds 50 million. As we look at these 2022 results and our go forward 2023 plans, I would like to give you progress update on the four key foundations which we have reinforced with you in the past and are the pillars of our success, strategy, and go forward commitment. First, the resiliency of our business and the K-12 market. Second, the differentiation of our comprehensive, diversified platform. Third, our financial durability that drives predictable double-digit top line growth coupled with consistent margin expansion. Fourth, the opportunity and the further upside through international expansion, innovation, and M&A. The first foundation is our business resiliency, a key factor in the predictability of our success. As shown on slide 6, this resiliency is built by several factors. Strong customer demand of sticky mission-critical products with robust budgets. U.S. education funding continues to be robust. As we have seen over decades, its ability to remain relatively insulated in the face of the macroeconomic headwinds. In 2022, the U.S. Department of Education received its greatest increase in discretionary spending since the start of the pandemic. $100 billion of federal relief ESSER funds still remains to be spent. The robust budgets are supporting the continued increase in strong demand of our products, which are fueled by the urgent and growing need of digital transformation across a variety of K-12 processes. As shown in our continued strong deal velocity, we are seeing ARR pipeline growth of nearly 25% year-over-year for the first half of the year. Reinforcing the resiliency of our business, we saw increased demand across our product portfolio. Our largest and most mission-critical product line, Student Information System, center of all the technology infrastructure of any K-12 organization, saw accelerated growth of ARR in the low teens for the full year 2022 from many new customers, large and small. 2023 is off to a great start. We are very excited to share that we have been chosen for a territory-wide SIS deployment for Puerto Rico. The Puerto Rico Department of Education is seeking to modernize and transform their K-12 education infrastructure by selecting our SIS as the core to power their scheduling, registration, attendance, compliance, reporting, grading, and a lot more for their 250,000 students. We look forward to partnering with them on this critical project and their further technology initiatives to drive improved operational continuity and education outcomes for every student in the territory. Our differentiated platform is the second key foundation of our strategy and success. On slide 7, as you know, no other player in the industry has the comprehensive and diversified product platform that cover all the key pillars of SIS and operations, classroom, and talent, and has market leadership in all these pillars. We are also continuing to see further adoption of the full breadth of our platform. The number of customers that are using products from each of our pillar is approaching 1,000, and the amount of our ARR that comes from customers with 7 or more products is now over $100 million. We continue to differentiate even further with increased leadership and expanded opportunity in data-centric solutions. Unified Insights and Connected Intelligence data as a service grew well over 50% in 2022, and we are confident of a strong growth of these products in the coming years. On slide 8, we update you on the progress on our third key foundation, our financial durability. The attractiveness of our financial model comes from large underpenetrated and growing $3 billion cross-sell TAM within U.S. and Canada, and with a significant percentage of the market still using outdated legacy and paper-based solutions. With over 15,000 existing customer and a growing platform of products, our accelerating cross-sell opportunity provides a meaningful path to a sustained, durable, long-term growth when you consider these customers currently only having 2 of our 19 products on average. We have demonstrated continued momentum in cross-selling the platform with the number of customers with four or more of our products growing nearly 30% to over 2,400 as of the end of 2022. We are seeing this cross-sell success being further amplified by the flywheel effect, in which products benefit from each other, compounding the value for our customers and increasing the stickiness of our suite. Our recently announced six persona-specific multi-product cloud bundles will further increase our cross-sell velocity and create more operating leverage. We also have several other margin expansion opportunities given our scalable SaaS and operating business model. In 2022, we grew our international operations in India to now total over 1,200 employees and cover nearly all functions within the company. Our fourth key foundation is the further upside through international expansion, innovation, and M&A, as shown in slide 9. We are delivering double-digit growth in North America and expect this to continue over the long run with additional upside through international expansion. We announced late in the year that we will be opening our sales and support office in Dubai this spring to support growth in the Middle East with several new logo wins and a strong pipeline for 2023. Today, I am very excited to announce our expansion into Africa through our strategic partnership with OneConnect. Based in Johannesburg, OneConnect is a provider of full-service technology solutions in Africa and is committed to bringing PowerSchool solutions to over half a million students this year with a strong long-term opportunity for us to support improving education outcome for over 240 million students across the Sub-Saharan Africa. Innovation is at the heart of our company, and we are investing in product roadmaps. An example of this innovation is our recent announcement last month of our new LearningNav and ContentNav solutions. Key milestones in the push towards a data-centric, automated, and highly impactful personalized learning solution. A market opportunity we estimate to be over $100 billion. These tools utilize artificial intelligence to automate a student's learning pathway and ease the selection of customer-approved content resources that support those instructional pathways. M&A has been an important tool for expanding our technology capabilities and growth opportunities, and we have demonstrated tremendous success with each of our acquisitions. The recent acquisition of Kickboard, Kinvolved, Chalk, and Headed2 have already been integrated and are outperforming our deal models, driving growth in each of the pillars and have expanded our cross-sell TAM by over $500 million. We intend to continue acquiring best-of-breed technologies to enhance our platform and global presence in 2023 and beyond. As I have outlined in these 4 key takeaways, we have proven our capability to execute on our financial metrics and goals. During our IPO in the summer of 2021, we communicated several targets for our key metrics, most of which we have surpassed in our first one and a half years of being a public company. On slide 10, you will see that our stated long-term target NRR rate of between 105%-107% was surpassed this year, reaching 109% in this fourth quarter. We also have already met our long-term net debt leverage target of 3 to 4 times EBITDA, finishing the year at 3 times. Our IPO targets for 2022 revenue and adjusted EBITDA were eclipsed. On the unlevered free cash flow, we beat our 2022 target of $127 million by $6 million. This speaks to our ability to perform and deliver on our commitments, and you can expect us to increase many of these targets in our 2023 investor day that Eric will share. With these strategies, our team and our resilient market, we expect to deliver another year of low double-digit revenue growth combined with a meaningful margin expansion, which you will see in our guidance. Let me now pass the call over to Eric to review the financial details of the fourth quarter and the full year 2022 and provide the details of our guidance for 2023. Eric? Thank you, Hardeep. We are pleased to finish 2022 with such a great quarter. Looking back on the year, I'm proud of the performance we delivered. We drove top-line growth of 13% coupled with an adjusted EBITDA margin of 31.1%, which reflects a 220 basis point year-over-year improvement. All of this was achieved while continuing to invest in innovation for long-term durable growth. Our customer base has expanded to over 15,000 districts, and our differentiated unified platform of mission-critical products drove record cross-sell performance during the year. This resulted in a meaningful improvement in our Net Revenue Retention rate, which has increased each quarter since we IPO'd in mid-2021. As Hardeep outlined, we are already well ahead of many of the long-term targets we laid out at the time of the IPO, which is a testament to our team's tremendous ability to execute. Moving to the results and summarized on slide 11, fourth quarter total revenue came in at $161 million, up 10% year-over-year and in line with the guidance range we provided on our last earnings call. Full year 2022 revenue was $631 million, representing a growth rate of 13% for the year. Subscription and support revenue, our most strategic revenue stream, grew 10% year-over-year and accounted for 88% of total revenue in the quarter. For the year, SMS grew 14% and represented 86% of total revenue. Our services business generated revenue of $15 million, an increase of 6% year-over-year, which is moderated from prior period growth rates driven by our faster implementations and more efficient deployment cycles. On a full year basis, our services business grew 14% over 2021. Revenue from license and other, which relates mainly to our third-party revenue, came in at $4 million for the quarter, representing a 21% increase over last year. As a reminder, LNO is our least strategic and non-material revenue stream, representing only 3% of total revenue. We ended the year with an annual recurring revenue balance of $596 million, an 11% increase over last year. Our net revenue retention rate, or NRR, came in at 109.1%, representing a sequential improvement of 40 basis points and our 5th consecutive quarter of sequential improvement. Year-over-year NRR improved 270 basis points. This strong performance was driven primarily by higher cross-sell and our normal contracted price increases. Our net retention success reflects the deep value and ROI we provide to our customers who continue to expand their relationship with PowerSchool. Adjusted gross profit for the quarter came in at $112 million with a 69.5% margin, representing a 110 basis point sequential increase and a 370 basis point year-over-year improvement. For the full year, adjusted gross profit reached $429 million or a 68.1% margin, representing an 80 basis point improvement over 2021. Looking at fourth quarter operating expenses, our non-GAAP research and development expense came in at $22 million, representing 13.8% of revenue compared with 16.9% last year. Including capitalized R&D expenses, the total invested in R&D was 19% of revenue compared with 22.1% last year. Full year non-GAAP R&D expense grew 5% to $90.5 million. Non-GAAP SG&A expense declined 3% year-over-year in the fourth quarter to $37 million, representing 23% of revenue, which is 320 basis points lower than the 26.2% in Q4 of last year. non-GAAP SG&A expense for the full year 2022 increased 11%. Our fourth quarter adjusted EBITDA was $53 million or 32.8% margin, exceeding the high end of our guidance range by $2 million. Full year adjusted EBITDA was $196 million, representing a 31.1% margin and 22% higher than 2021 and 190 basis points higher than the original guidance we provided at the beginning of 2022. non-GAAP net income in the fourth quarter was $0.27 per fully diluted share, which is nearly double the $0.14 per diluted share in the same time period last year. Full year 2022 non-GAAP EPS was $0.85, 35% higher than the $0.63 we earned in 2021. On slide 12, you will see a summary of our 2022 margin improvement driven by multiple levers. The strong adjusted gross profit performance was driven by improved operational scale, responsible hiring, and a continued focus on process efficiencies. non-GAAP R&D expense declined as a% of revenue as our development is streamlined, associated with more cloud bundles, and our India Center of Excellence continues to accelerate the pace of our innovation. On adjusted SG&A, we saw a 40 basis point improvement year-over-year in spend as a% of revenue as we realized savings from our 2022 facilities consolidation, savings from various G&A process and cost rationalization initiatives, and the normalization of fixed public company costs we brought on in 2021. One of our biggest priorities is to continue improving our already strong margins in 2023 and beyond. We will do this by being laser focused on operational efficiencies and innovation initiatives. As I have mentioned before, our target is to improve our adjusted EBITDA margin by 50 to 100 basis points each year. In 2023, we expect to exceed the high end of this range, delivering almost 150 basis points of improvement. Fourth quarter free cash flow, a non-GAAP measure, was $33.2 million, up 182% from the same time period last year and was driven primarily by increased profitability. Full year free cash flow was $104 million or 16.5% of revenue. Moving to the balance sheet, we ended the quarter with $137 million in cash and equivalents, an increase of 59% over the same period last year, driven by strong free cash flow performance. Net debt leverage at the end of the year was 3x, a meaningful improvement over the 4.1x a year earlier. Turning to our 2023 full year and first quarter financial outlook on slide 13. For the full year 2023, we expect total revenue in the range of $688 million-$694 million, with the midpoint representing a 10% year-over-year growth rate and adjusted EBITDA of $222 million-$227 million, representing a 32.5% adjusted margin at the midpoint. For the first quarter, we expect to deliver total revenue in the range of $158 million-$160 million, representing a 7% year-over-year growth rate at the top end. We remain committed to our low double-digit full year top line growth expectations. This Q1 growth rate is being impacted by the delay of a very large deal, which affected the timing of services and LNO revenue recognition. For the first quarter, adjusted EBITDA, we expect a range of $47 million-$49 million, representing a 30.2% margin at the midpoint. Our adjusted EBITDA margin for the first quarter is impacted by some seasonal in-person events such as a sales kickoff, which are held early in the year to maximize their impact. For modeling purposes, we expect capital expenditures excluding capitalized software of approximately $5 million-$8 million and share-based compensation expense of approximately $70 million for the full year. Fully diluted shares by the end of the year are expected to be in the range of 200 million to 205 million shares. We're excited to announce we will host our first Investor Day, which will take place on Wednesday, July 12th in conjunction with our EDGE 2023 event, which is our flagship user group event. Attendees will hear from our executive leadership team, including updated long-term goals, and will also have the opportunity to meet with our top customers and product leaders and attend breakout sessions to dive deeper into PowerSchool's products. This will be our first Edge event since the pandemic began in 2020 and our inaugural Investor Day, so we're very excited to share the latest and greatest with all of you. In closing, we are proud of our team in the execution in 2022 and look forward to continuing our momentum in 2023. We believe the large and resilient global K-12 market is recognizing the importance and impact of technology in advancing student outcomes, which positions us to deliver long-term, durable growth and provide significant value to our customers and shareholders. This concludes our prepared remarks. Operator, will you please open the line for Q&A? Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question comes from the line of Saket Kalia from Barclays. Please go ahead. Hey, guys. Thanks for taking my questions here. Nice way to end the year. Thanks, Saket. Hardeep, maybe for you. A couple of big wins that you called out in your prepared remarks and the press release, which included Unified Insights, I believe, in one or two of them. I was wondering if you could just remind us how Unified Insights and maybe that broader data portfolio complements the broader product slate for PowerSchool, how that Unified Insights offering is priced and maybe how much room there is inside of your base for further adoption? Sure, Saket. You know, you're absolutely right. One of the beauties of a Unified Insights product is not only it's the most differentiated, given that we have the breadth of the platform, we are able to offer whole channel analytics, it's also a very large opportunity. We have multiple products within Unified Insights around student success, student essential, talent analytics, operational analytics as well as career analytics as well. When you look at the breadth of that, right, that's almost $10-$20 per student. You know, just within North America, that's a $1 billion-plus TAM. We're still only penetrated less than 10% of our base in the market. There's a significant upside more. We're already seeing phenomenal growth of almost 50%+ through the Unified Insights. Given our leadership today, as well as with some of the investments we have done by adopting Snowflake and on AWS as a platform, we're actually opening up a whole slew of opportunities around Connected Intelligence, where we're able to even go beyond the K-12 districts to counties to states to even countries on whole workforce analytics, bringing not just K-12, but K-20 data. Very strong and big opportunity ahead of us. Yeah, that's really interesting. Eric, maybe for my follow-up for you, great to see the margin expansion for next year off of already a year that's expanded margins nicely. Maybe for 23, maybe you could just talk to us about two things within that expansion. First- How you're thinking about services mix, right? Because of course, that has gross margin, you know, a gross margin impact. Also how you're thinking about the investment in international scaling, just as the revenue there grows, but also as you continue to invest there. Let me just, as you think about the adjusted gross margins, you know, as mentioned, we've expanded them, you know, over 220 basis points year-over-year, you know, 2021 versus 2022. In our guide, you're seeing another 150 basis points. Within that, I think it's important, and we've been really, you know, reiterating this, is investments like personalized learning, investments like the international, which are key priorities for us, those are still, you know, folded into that. While we're able to continue to manage the margin expansion, we're also reinvesting significantly in these key priorities. I think it's important that international, personalized learning, those are top priorities. Those are gonna continue to be primary investments. When you think about the services business, and Hardeep had mentioned one of the large deals in Q1 that, you know, we've been chosen for, you know, you'll see some of the impacts that the services business will have in the results. Certainly, the Q1 revenue guide was a bit lower. That's all driven in, you know, as I mentioned in my pre-prepared remarks, by services revenue as well as LNO revenue. I think it's important that, you know, we are gonna see as we continue to get larger and more strategic, there will be some services variability. You know, as you mentioned, you know, it does come with a little bit of a lower margin profile. However, you know, we're still gonna manage the overall margin profile to expand. you know, some of the services variability will impact just the revenue that we see from quarter-to-quarter. I think it's important, and, you know, we reiterated it very much so in our prepared remarks, that we are absolutely committed to driving low double-digit, you know, revenue growth. Obviously, the most strategic piece of our revenue is our subs and support, and we remain committed to driving that low double digit. I think it's important that I, you know, hit that head-on because I know certainly some of you, as you look at the Q1 guide, will note that it's, you know, it's gonna be a little bit lower, but obviously full year we're right at the 10%, which is our commitment. That's all very clear. Thanks, guys. Thank you. Thank you. Our next question comes from the line of Brent Thill from Jefferies. Please go ahead. Hey, guys, this is David on for Brent. Appreciate you guys taking the question. Wanted to ask about the One Connect partnership that you guys have in Africa. Just talk to us a little bit about how the economics vary there versus, you know, you guys kind of going in and doing it yourself and how we should think about you guys deploying the strategy a little bit further in some of the other international regions. Thanks. David. Thank you. David, as you know that we've already talked about some of our investment in Middle East with our foot, you know, boots on ground. There's offices there. We've also seen expansion in India. We continue to further invest there. This is very exciting with our partnership with OneConnect, which is an exclusive partnership. We, you know, we have got a partner who's committing half a million students who are gonna adopt it with a multimillion-dollar commit. That's the kind of partnership we're looking for. Expect that before year-end, we pretty much most of the regions across the globe, we're gonna have very exclusive, tight relationship with dozens of partners who are gonna have major commitments around adopting PowerSchool solutions with the local school districts, not just international and private schools, but even with government schools. We do expect international to almost double up this year. Over the next two to five years, we expect this to go almost $80 million-$100 million, and we're gonna be walking through some of that roadmap with the investor day with you guys. Got it. That's super helpful. maybe as a follow-up, sorry to, you know, keep pounding on the international side, obviously a super exciting growth opportunity. I know it's super early, you know, you haven't even opened up all the offices, as you guys think about maybe some of the biggest roadblocks you've experienced, maybe it's, you know, localization of content or is that of the product or, you know, regulation. Just curious, like what are some of the roadblocks that you guys are coming up against? The beauty is that when you look at our CourseFit platform and our Schoology platform, we actually have adoptions already in multiple countries, right? Almost 90 countries. Not just with American education schools international, but even with local and private schools. The platform does localize. We still do need to your point, invest in partnerships and content and curriculum with the local partners. That's where these exclusive partnerships really come into picture as they invest with us in building those, you know, integrations with the local curriculum providers and allows us to have full turn-key solutions. We're already seeing some great success, and these partnerships will help us accelerate this pretty quickly. Got it. Appreciate it, guys. Take care. All right. Thank you. Thank you. Our next question comes from the line of Koji Ikeda from Bank of America. Please go ahead. Hey, guys. Thanks for taking the questions. I actually wanted to kinda go back to a previous question and thinking about the guidance and, you know, really kinda honing in on the subscription and support revenue line. Looking at the guide and the, you know, the commentary previously on the services and kind of the LNO revenue, I guess the question is, you know, could subscription or should subscription revenue for 2023 stay at the double-digit level or is there an instance where this could dip into the 9s, you know, kind of like 9% growth range to kinda get to that guidance? Yeah, we, Koji, thanks for the question. We absolutely do not see any case where on the full year basis that the SMS revenue will dip below 10%. We just don't see that. Got it. Okay. No, that's super helpful. On the net revenue retention, you know, 109.1%. Really nice there. Six straight quarters of expansion too. I mean, where could this metric go? You know, how should we be thinking about this metric? Could it expand into the, you know, kind of the 110+ range here in 2023? What assumptions do you have for net revenue retention for the guidance for 2023? Thanks, guys. Yep. Yep. What you see when we finish the year is really a reflection of the strong cross-sell that we saw as well as the, you know, industry leading gross retention rates that we see. That's, you know, why we ended, you know, as high as we did. You know, as I mentioned in my prepared remarks, you know, we've seen a nice increase since the beginning of the year. What I would say, and if you go back to the long-term guidance that we provided when we went public, is we said we would be in the 108-110 range. You know, what I would tell you is we're, you know, tighten that up a little bit to the, you know, 109-110 range this year. You know, you'll see a little bit of variability from quarter to quarter. You know, I think this year, what I would tell you is we'll, you know, we should be in the high 109% range. Then, you know, as we start to get, you know, a little bit further into this year, you know, then I think we can provide some further guidance on that in terms of, you know, does it go into 110 or, you know, some level beyond that, you know, in the future. At this point, I would say remaining within our long-term guide of 108-110, you know, and with the current results, I would say that we'll be on the higher end of that range. Got it. Thanks, guys. Thanks for taking the questions. Yep. Thanks, Koji. Thank you. Our next question comes from the line of Stephen Sheldon from William Blair. Please go ahead. Thanks, and congrats on the strong end to the year here. First question, just as we think about the SIS, and I think you talked about revenue acceleration there in 2022. I think you've talked about 40% market share in the U.S. still being held by a variety of smaller, fragmented kind of legacy SIS players. I guess would you expect to see a continued pickup in school districts on smaller, more legacy SIS solutions convert to a higher end solution over the next few years? What's the hold up from them doing so in this type of environment? Stephen. Thanks for your comments about the quarter. You know, we're definitely very excited about the success broadly on the platform with a record cross-sell for a Q4. Also to your point, successes within our products like over the largest product base which is in SIS having almost growth in teens. We do expect that with the wins like what I shared that with Puerto Rico choosing us. We definitely see that growth to sustain. More and more the 40%, the legacy SIS space is seeing challenges around being able to cope up with some of the digital transformation needs, whether that's around more automation, more data visibility, as well as more data security. All those things are kind of key drivers which are actually driving the legacy SIS customers to Xray. That's why you see our growth actually accelerating post-pandemic. We expect that to continue as most of the districts who are, you know, kind of kept themselves went through the pain during the pandemic are realizing that they gotta start modifying their SIS. Got it. That's helpful. And then as a follow-up, wanted to ask about the pipeline. I think I heard that the pipeline is up 25% year-over-year. Just wanted to confirm that. As we progress towards the key selling season that's coming up here, are you seeing anything surprising about the level of interest across different products in your portfolio at this point? First reiterating my comment, pipeline is 25% up even for the first half. It's still early for the full year pipeline, and we'll get more visibility throughout the year for you, and we'll provide that. Our deal velocity, our deal demand across the products remains consistent. As I mentioned, the bright spot definitely are the analytics. The SIS transformation, talent management continues to grow actually very strongly as well as the classroom products. We're seeing pretty much growth in all of our major product lines. Great. Thank you. All right. Thank you. Thank you. Our next question comes from the line of Matt Hedberg from RBC. Please go ahead. Oh, hey guys, thanks for taking my questions. congrats from me as well on the strong end of the year. you know, Hardeep, you know, obviously one of the standouts was the new wins but also the cross-sell and NRR that somebody asked about previously. I guess I'm curious, you know, we've sort of been, you know, impressed with the true platform play that PowerSchool we think it is. That said, can you talk about the competitive environment? Have your win rates improved, you know, over the last couple of years? Just maybe a little bit more on the competitive dynamic. Yes. Yeah. Thanks again, Matthew, comments there. Absolutely, you know, our win rates are actually holding up well, in fact improving, especially when it comes to win rate against the legacy vendors. You know, to your point, one of the differentiator which is really playing out is the platform, right? There's a lot of people who call themselves platform, but they are platform just within one pillar of a classroom or from an operation. Nobody has the SIS, which is the core, the classroom, the talent, and all those pieces. One of the data points I shared, when you look at customers who actually have products from each of the pillar, that itself now is in 1,000. Customers who have 7+ product, almost a full platform, that almost is a $100 million for ARR. Almost 20% of our business coming from those customers. That's the flywheel effect. The more they're buying, they're buying more products from us, and that's what's accelerating the cross-sell as well as creating more demand. Outside that in NetNew who are realizing that, hey, we have best-in-class products, and they can really start consolidating their platforms. Got it. Helpful. Last quarter, you announced your new CRO, Tony Kender. Just sort of, you know, now that you've had a chance to work with him a bit longer, any changes that he's making to sort of the, you know, the sales kickoff or territories or plant quotas or anything like that's worth noting? We actually had a very phenomenal kickoff with almost 400 people. Our sales team has almost doubled, when you look at from, you know, just two years back from where it is. We're very excited to see, you know, all the sales really geared up, and Tony's bringing a lot of discipline around not just the commitment and the forecasting process, but actually solution selling, which you saw from our press release around bundling and selling more solutions. We're actually selling more products at the same time, so that actually creates our customer acquisition and cross-sell acquisition even faster. What's exciting about it with the... You know, with people like Tony, who have years of experience at Oracle and NetSuite, with people like Paul who we brought in as a CTO with public company experience like HashiCorp and New Relic and Oracle. Eric, for example, with years of experience at Red Hat. We now have management team who actually not only manage billion-dollar-plus businesses but actually even helped them scale up and, you know, manage the public company commitments, expectations as well. Very excited about the leadership team and where that allows us to almost, you know, make us into a billion-dollar enterprise. Thanks, Hardeep. Thank you. Thank you. Our next question comes from the line of Joe Vruwink from Baird. Please go ahead. Hi. Great. Hi, everyone. I wanted to go back to Unified Insights, and I guess I'm curious on the labeling of this quarter as the breakout quarter since it's been one of your faster growing products, certainly not a stranger to statewide deals. Was this maybe more just referring to the absolute size of the awards in the quarter, or are you maybe starting to see the scope and use cases broaden out, and so the potential for this suite become something bigger than maybe you thought about when, you know, the products like Hoonuit started coming together to make Unified Insights? That's a great fine point, Joe. When you look at from, you know. We already have market leadership in Unified Insights. In fact, we have 10-plus state contracts. We talked about Maryland earlier last year. What's exciting about the Alabama win is the fact that it's not only the student success analytics, but actually multiple modules of analytics, including our new product around MTSS, multi-tier system of support we launched last year. It's already showing this differentiation. As Alabama looked through an RFP process and looked through all vendors, they selected us to be that partner who can give that, the holistic analytics and MTSS support. That just shows you the strength of our leadership already and the innovation and how we are quickly able to bring those innovations to the district. You take another spectrum of LA Unified, where they're adopting our Snowflake platform for Connected Intelligence, bringing data even from. They don't use our SIS. They're bringing data from multiple of their system. El Paso is another good one. There's a lot more districts who are actually now adopting our full Snowflake Connected Intelligence. That also shows you the breadth for us to now able to go with analytics to even a much broader audience. I think that's why it's a very exciting quarter from the analytics perspective. Okay. That's great. I guess on new logos, so as I recall, I think last year was a very high rate of growth in new logos, and I think this year it's tended higher as well. Yet you're bringing in more new customers, and your net retention is still going up. I guess the question is that new customers of PowerSchool do not seem to be necessarily smaller, where the deals are getting smaller in scope. Is that fair? Then I guess it begs the question, since you do have fairly large coverage of the market already, we shouldn't really think about as you're moving maybe into down market or private, that that's a lesser opportunity. It sounds like these new customers are continuing along kind of the same journey as your heritage customers. No, it's a great point, you know, what I'll say is that to take example of a district in, you know, Rhode Island, Pawtucket, or a Community Unit School District 308 in Illinois, they're not just buying our SIS as a backroom. They're actually buying 4 or 5 modules in that chart. To your point, we're seeing more multi-module deals with our new logos as well, including tons of the charter schools and small schools as well, including private schools. Epic Charter doubled down with the adoption of a curriculum solution. We've got tons of successes happening at that level as well. YES Prep in Texas buying our Schoology platform. We are seeing the demand across the full spectrum. Great. Thank you very much. Thank you. Thank you. Our next question comes from the line of Fred Havemeyer from Macquarie. Please go ahead. Hey, thank you. Congrats, Hardeep, Eric, and the entire PowerSchool team here. I think just bigger picture on ESSER funding at this point. You know, we're at a place where schools can certainly continue to deploy ESSER funding, and at the same time, we're considering the 2024 timeframe ending of the availability of some of those funds. You know, Hardeep and Eric, could you just give some context about how schools are thinking about continuing their purchasing of PowerSchool in any case where perhaps ESSER funds were applied? Yeah, thanks, Fred. Fred, the first thing, based on all of our deals observation, still majority of the deals, in fact, 80% plus of them still are using the core funding. They're not relying on ESSER. We do feel some of the districts would adopt the ESSER fund for the first 2 years, they still are allocating budget for ongoing basis for those products. The beauty of our business, products are right when they adopt it's sticky. They're doing it for multiyear. They're not necessarily using ESSER as the only buying pattern. It does help them. It provides them the cushion, the initial implementation costs and everything, they can X-ray. Good example of that, how Puerto Rico is doing that. That's definitely not a restriction. As you said, there's still about $100 billion to be spent on ESSER. We still feel that the budget environment, core budget environment remains stable. ESSER continues to provide that additional cushion, we're not expecting this to change our demand or adoption or growth rate in any shape or form. Got it. Thank you. It sounds like it's really just helping getting deals across the line there, especially on some of those non-recurring items. Is that? That's a fair comment, yes. Awesome. Thank you. You know, it was really helpful seeing some of the comparison of what you achieved versus your initial IPO timeframe targets. You know, back at the IPO, we were also talking about how PowerSchool has penetrated, not just among schools, but in terms of the overall wallet share of just IT spend within schools and software spend by schools. I wanted to check in on that. Just at that time, we've seen substantial multi-product progress here, certainly seeing 3% year-over-year growth in the overall 4-plus product customers you have. Just where do you presently stand or where does PowerSchool stand with respect to overall wallet penetration among IT spend to schools? Can you remind us about how to think about where that could go over time? Sure. When you look at from a multi-product, like even 2 products, we've said on average our customers have little more than 2 products. That has improved. In fact, now the number of customers who have 2-plus product has improved from almost 2021, it was in the low 40s to almost now in the high 40s. We are already seeing more adoption. What's an interesting is that especially with focus on strategic and enterprise customers, that multi-product option is already 3-plus. Our biggest focus in our sales channels are actually showing that, you know, we can easily move our customers to 3-plus. We do have a lot of opportunity, and it continues to improve. As we also said, as we are improving that, we also added 5 million new students. It's kind of, you know, that changing the denominator as well. Thank you. Thank you. Thank you. Our next question comes from the line of Brian Peterson from Raymond James. Please go ahead. Hi, gentlemen. I'll echo my congrats on the strong quarter. Maybe two higher level ones for Hardeep, but first on the international opportunity, and I kinda wanted to hone in on Africa a little bit. You know, I'd be curious what products do you think will be kind of the first to be adopted in that market? You know, curious about things like, you know, learning loss or compliance orientation where you guys are really strong here in North America. Like, I guess I would be curious if there's a narrative on point of emphasis for the initial adoption there. What would that look like as you guys build up in Africa? That's a great question. You know, the primary initial adoption of half a million student commitment is actually coming from our Student Information System and the Schoology products. Those are our two main products we are basing the commitment on. We do have upsell opportunity as we expand into the data insights and to the talent products as well. Those would be future kind of our roadmaps. But typically when we are entering the market, those are the two products we are entering the market with, and then having the rest of the products follow through. We have seen, and take example in Middle East, where we get example of customers who are buying multiple products as well. They're almost buying like 9-10 products. We do have opportunities with these products to pretty much apply, but we initially focus on systems Schoology. Great. Super clear. A follow-up just on pricing, I wanted to look at that maybe in some of your analytics offerings. Obviously, you have some large deals that you referenced in the call today. I'm curious, what is the variability on what some districts can pay for that? Are you able to kinda address maybe the smaller and then the largers because maybe they would have different needs, or is that not how it works? I'd love to understand the bounds on a pricing perspective just given that there may be functionally different needs. Thanks, guys. Yeah, that's fair, Brian. When you think about it, like there are multiple analytics as I was talking about, right? You've got the core essential analytics, then you have the student success analytics that allows you to do your modeling around where the students are, what are the at-risk students. We've got talent analytics, we have operational analytics, and then even broader Connected Intelligence to bring other data. There are multiple. Each of these products are $5-$10 kind of price points, right? Per student count, typically we price it. If you're a large district or state, you're paying the lower end. You're a smaller sort of district, you're paying the higher end. As you bundle, you get an option to buy these clouds as well, which allows you to kind of have take advantage of that. You know, we can walk through this a little bit more in our investor day so you guys can get a clear picture. Great. Thanks, Hardeep. Thank you. Thank you. Our next question comes from the line of Rich Hilliker from Credit Suisse. Please go ahead. Hi, guys. Thanks for taking my question. I wanted to circle back and talk about new persona specific clouds. Hardeep, I think you touched a little bit on this, but I was wondering if you could more fully flesh out how you think about this really playing into your go-to-market strategy, multi-product expansion efforts, the way the portfolio looks, feels, and how customers maybe buy moving forward. Would love to understand your trajectory and your view there. Yeah. That's a great question, Rich. Think about what we were seeing as people are buying multiple of our products, we're also seeing based on persona, that likelihood to be buying multiple products at the same time. We created these bundles around solutions of Student Cloud on a Personalized Learning Cloud for classroom, for a Student Success Cloud around to, you know, college readiness and the success of a lot of our workforce spanning. We're creating these bundles that allows us to go with the persona and give them the full turnkey solution for all their key problems rather than one, à la carte kind of a product at a time. That is based on how we are seeing the deals happening. It helps us kind of create more efficiencies on our side with selling and marketing. It. To Eric's point about services, right? It also creates efficiency in our services to implement these things more together. That does bring our services cost a little bit lower, right? That's why you receive some of the reflection on the service revenue. It actually is great for the customer and great for acceleration of our velocity of creating more business and our overall subscription growth. That's how we've kind of structured this, and we are already seeing some good results. Even our development and our hosting and all processes are getting optimized around these cloud rollouts. Excellent. Okay. That's very helpful. Then maybe just as a follow-up, the LearningNav and ContentNav, I think you highlighted how this really helps position you even more strongly for the $100 billion personalized learning opportunity. I was wondering if you can bring to life, how this changes the average customer's path towards this vision, which I think a few years ago felt a little lofty, but now it seems like it's coming into focus. How does this change the game for customers, really striving towards personalized learning? Thanks. It's a great point, Rich. You know, as we've been talking about the unique opportunity we have is because we have the biggest platform, we have the biggest and, we have the system of record, we have the system of engagement across these persona. We also have the system of intelligence with the data. We are in a unique position to provide more personalization and automation through AI to really augment the teacher in achieving this. We've been working towards this and building all the pieces, and now we are actually there and launching with this content recommendation and learning paths recommendation using AI. We're actually now able to start working with the districts on creating that. We still, it's a one to two years before we kind of pretty much harden these models and AI models to be able to really launch it fully across the North American base. Expect that over the next two, three years, we actually would be in a position where we can fully have a personalized learning platform for our customer base. Very helpful. Thanks and congratulations. Thank you. Thank you. Our next question comes from the line of Gabriela Borges from Goldman Sachs. Please go ahead. Hi, this is Callie Valenti on for Gabriela. Congrats on the continued business momentum. What are customers telling you are kind of the biggest gaps in the PowerSchool portfolio that you guys have yet to address? Can you share how these discussions are informing your organic product roadmap and maybe M&A priorities? Look, as we know, we've been talking about that we've got all the mission-critical pieces. The most core components, if you ask a district, we actually have that in the platform. We do see continued expansion opportunities on other adjacencies as well as international and tuck-ins around technology or further functionality. We've been doing that, things like communication, curriculum. We do have a roadmap around further expansion, especially around analytics, on unified parent experiences and stuff like that, with payments to be another area of expansion. Those things will both coming through organic plus our in an M&A roadmap would allow us to continue expanding the platform. That makes sense. As a follow-up, where is Schoology continuing to gain share? Are you seeing any changes in competition or any noticeable trends with the types of deals you're seeing in this space? My impression, it's a little bit more competitive, in, yeah, the learning management system, so it'd be great to get some color. Yeah, I think, you know, it's basically I would call it, you know, us and the Canvas are the two strong LMS platforms, and then you've got Google Classroom, which if the district wants to have a low-end kind of collaboration, then they have a Google Classroom. We typically see Google Classroom customers. That's 25% market that doesn't use anything to be where we get it. We added about 1.5 million students plus in Schoology this year, and we are That's what was happening before pandemic. In pandemic, we did add almost 4 million+ students, but we're kind of back to pre-pandemic levels of about 1 million to 1.5 million students. Congrats again. Thank you. Thank you. Thank you. Our next question comes from the line of Karl Keirstad from UBS. Please go ahead. Okay, great. Maybe 2 for me. Eric, you pinned the Q1 revenues coming in a little bit light on the delay of a very large deal. Do you mind elaborating how one-off was that and when you expect the deal to close? Yep. The deal should be closing any time now. It's a rather large deal that Hardeep had mentioned in his prepared remarks. Yeah. It's just a matter of days away from actually getting closed. I will tell you, I mean, a lot of times when we have these deals that we're very confident we're gonna win, we do a lot. You know, we'll do, to the extent we can, we'll do some upfront work to help kind of accelerate that. You know, I can tell you that the majority of the impact that we're seeing in Q1, we'll start picking that up in the out quarters when this big deal does sign. Got it. Okay, thanks. Secondly, Eric, as we try to model out cash flow, I do notice in 2022, your EBITDA margins were up about 220 bips year-over-year, but your operating cash flow margins were down 190 bips. There was a big divergence there. When we're modeling 2023 operating cash flow, should it be a little bit more correlated to the pace of the EBITDA margin expansion or is there something funky in 2023 that you would advise we keep in mind as we model our cash flow? Yeah. I mean, we, we historically do not provide cash flow guidance. What, what I would just say, Karl, if you're looking at operating cash flows, you know, what I would encourage you to look at is look at 2022 dynamics, as an indicator for 2023. 2021, obviously we had a couple, items in there that would have been a little bit more favorable. I would say, you know, look at the dynamics in 2022 as you're kinda, you know, going through some of your assumptions. We're happy to, you know, work offline with you in terms of some of your modeling assumptions, if that's helpful as well. Okay. That's helpful, and congrats on the margin performance, this past year. Thank you. Thank you. Our next question comes from the line of Ryan McDonald from Needham. Please go ahead. Hi. Thanks for taking my questions, congrats on a nice quarter. Hardeep, I wanted to get your sense of the funding dynamics that you're seeing within the core budgets across the states. We're seeing more governors budgets now and state of state addresses talk about, you know, obviously sustained support for K-12, we're also seeing sort of an increase in tax cuts that are being proposed as well, which could have an impact on state budgets. I'm just curious as you think about the 2023 to 2024 school year upcoming and what that budget cycle could look like, you know, how you're feeling about the pipeline and potential opportunities there. What we think is still the budget situation to be pretty strong and healthy. As you said, the mostly K-12 budgets are protected from most of the federal and the state level stuff. Especially with the additional federal discretionary spend with ESSER that's providing some of the cushion or the concern if anybody has about, hey, if there's any pressure on the state tax-based budget allocation. And, you know, one of the beauties is what we do is mission-critical, right? Typically it actually helps districts save money. A lot of time actually, even if the budget gets tight, they actually do adopt our solution because that's the only way for them to have a sustained execution. Super helpful. Maybe just a quick follow-up on that. You know, one of the main priorities that keeps getting cited, you know, at the state level is around mental health services within K-12. I'm curious, you know, what impact you think this has on the demand for the Kickboard offering, and, you know, sort of whether or not you think this maybe increased focus heading into 2023 here creates a potential inflection point in the adoption cycle of that offering. Thanks. Yeah. There is a lot of focus on social emotional support. In fact, a lot of that is also what's driving some of the analytics as well, because part of the analytics is to understand the whole child, not just their academic achievement, but also bringing their SEL data. We definitely see that SEL to be focused in our data opportunities and our behavior opportunities as well as upgrading their SIS because that also helps them get a better understanding and the communication aspects with the parents and students. Great. Operator, are you still there? Yes, I'm here. Thank you. Our next question comes from the line of Brett Knoblauch from Cantor Fitzgerald. Please go ahead. Hi, guys. Congrats on the quarter. I guess now that you guys have reached your maybe long-term, you know, net debt leverage target, you know, as 2023 is expected to, you know, probably be a bigger free cash flow year, would you consider using some of that incremental cash to pay down debt given kind of interest expense has went up a bit or is M&A your kind of primary focus there? Brett, it's Eric. Appreciate the question. Absolutely. Look, as you heard from Hardeep, we are gonna continue to be very opportunistic around M&A, M&A remains a top priority. We feel that that's a more likely use of the cash versus paying down the debt. We're gonna continue to work down the debt in its normal scheduled terms, we feel very, you know, optimistic around the M&A opportunities, and are still very active in the market. Perfect. Maybe just one follow-up. In terms of that large deal, like a pushback, did you include that in your NRR or no? No. Got it. Thanks, guys. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I would like to turn the conference over to Hardeep Gulati, CEO, for closing comments. Thank you. Sorry for running two minutes late. A lot of great questions. As you can see, we had a phenomenal good fourth quarter. What's exciting is we are poised for another year of double-digit revenue growth and even further margin expansion. We operate in a market that is really large, growing, and durable. With our sticky mission-critical products, we are kind of really essential to the school operations. We really feel excited about our ability to continue to perform. As the only player who has the most comprehensive platform, we are really poised to meet the evolving needs of K-12 ecosystem. I wanna thank each one of you for joining our earnings call, as well as our employees and customers for their support. We are excited about all the opportunities ahead of expansion as well, and we'll keep you guys updated as we progress on them throughout the year. Thank you again for your time for joining us today. Thank you. The conference of PowerSchool has now concluded. Thank you for your participation. You may now disconnect your line.