is with us, now, Hardeep is CEO. He's started when the company was 500 employees, and now it's over, close to 3,000. They serve more than 45 million students in over 80 countries. This company is very near and dear to my heart, as I have three kids, and go through the pain of having kids in school, and can see how their technology is really helping the schools, the parents, and the kids, all align. Hardeep, thanks for your time. Maybe if you just kinda kick off what you're hearing the most, kinda what you're hearing from your customers in terms of kinda where they're at on their journey of adoption of your products. Sure. Well, thanks for having me in. I think, in the last couple of years, probably the K-12 has been on the news, pretty much every week, right? I think COVID definitely put a lot of the things which the school district was struggling to the front line. We are all hear about the learning loss, so there's a lot of focus still around how do we get catch up the kids, understanding where the kids are, doing assessments, data to understand what is actually the reason of why the kids are falling behind. Is it academic? Is it social- emotional? Is it engagement? Kind of providing the right intervention strategy. We're seeing a lot of demand for data products or MTSS solutions, or intervention solutions. We also continue to see teacher shortage across the country, if not international, and we've seen a lot of requirements around still support for talent recruitment, talent development, talent engagement, so we see a lot of demand there. What's also interesting is now that pandemic is kind of, you know, behind them, a lot of the big district states have started looking at bigger digital transformation projects, which they put on the backstop, and now they are really want to kind of engage that. We talked about in our earnings call, we've been seeing a lot of interest at state and province level, like Puerto Rico, like Alabama, deploying analytics. We just, you know, got a vendor of choice to put a special ed for one state across the entire state. We're seeing more increased demand from state-level opportunities, which is also very interesting. You'd mentioned, you're getting some pretty big wins. I mean, these aren't small deals. These are multi-million dollar transformative projects. We've gotten the question, as you get bigger and bigger deals, you know, catching these elephants. Or, is it harder? Are you dependent on it? Like, we just get a lot of questions around the scale versus breadth, versus chasing the big ones. How do you approach that? Yeah ... address the portfolio? You're absolutely right. I think just like in any other business, large deals do create a level of swing, right? What we in terms of how you get the project live, how do you get the change management adoption, they generally do have a, you know, a lag around that. But the benefit of large deals is that you're actually converting huge amount of, you know, entrenched customer into a sticky customer that you're gonna be able to cross-sell. Especially with state-level opportunities, large districts, we open up significant cross-sell TAM every time we're landing these deals. Strategically, they're very important and very exciting for us. The ability to make an impact at, you know, at such a large scale changes the reference ability for us, not just in North America, but even globally. That's the beauty of these deals, and that's why we have a lot of good focus. In the last two years, we created a whole strategic sales team, and that has definitely transformed us to get really to be able to go after these strategic deals. When you think about, we got into a cadence of you were beating and raising numbers, we got into this cadence now of, Hey, maintain. Things feel good. We've got these large deals in hand. Many asked, does something change? Was there anything that's happened, or is this just timing of these transactions that are more weighted to the back end? We've gotten a lot of questions, so maybe you can clarify. Yeah What's happened there. Absolutely. Well, number one, we have been always on the message that this is a double-digit, low double-digit growth market, right? We're growing faster. If you look at Gartner numbers or anything, you'll talk about high single digits in terms of IT growth in K-12. We're growing faster than the market and the low double-digit. I think there is definitely, as you said, the large deals that kind of definitely create that mix, and especially as we are focusing more on repeatability, efficient services, the services definitely has been more flat to us and, you know, which for us, it's not a strategic, it's really the software and subscription. We're still confident about the double-digit growth prospect of that, you know, for the full year, when you look at take the seasonality and some of the large deal factors out. What's exciting about this business is when you look at the overall of our opportunity, of a diversified platform, to be able to meet all the needs I were talking about, different districts at different points, as well as being able to satisfy not just large state level, but even the small charter schools or international school, we have the portfolio to be able to continue delivering this low double-digit growth for many years. When top of that is where as the investments we are making on international, as we're making on the whole personalized learning with AI, that is where the growth profile will change. I think for us, the key factor with the investors always is that we have the stickiness, we have the stability to deliver growth, but really, the accelerated growth which market wants, that's going to come as our investments on international and personalized learning are going to continue to start showing results. On international, I know it's still early, maybe just help frame where international is today, kinda where are your first, you know, beachheads, where you're building out, and what you think the next kinda 10 years looks like there. When you look at our presence, right, we talk about North America, we have almost 80% of districts, they at least do business in some product with us, right? That's true for U.S. as well as Canada. When you look at markets outside Canada, we have about 1 million students, on different international schools. Some countries, like Uruguay, Philippines, where we have 300,000 students who have adopted different parts of a component. It was never a big focus for us. It's within less than 2% of our revenue. As we have now, what we're seeing post-COVID, the demand international has accelerated. Our solutions from a platform perspective are also have the full platform to be able to go and satisfy the needs of not just private schools and international school chains, but even public schools in different markets. Something which the strength of PowerSchool is that we had to build our system to be very extensible, to localize to different needs. That's how we were able to address different states in U.S. as well as different provinces in Canada. We have inherently a localization framework, which we have also now made it more international and launched that. The question is about how do we build the channel to be able to go sell those products? The investments we are doing this year is around partnerships, where we are coming up with very exclusive hard commitment dollars from these partners to go and take us to different markets. With that, we are able to now get our products to these different channels, which will allow us to really scale international. In the next three years, we expect international to, you know, within the three to four years, for us to actually be material. Early signs we're seeing are definitely give us the confidence we'll be able to do that. When you think about the kind of initial land spots to then the next spot you go, if you, can you talk through? Sure. Well, you know, at least demands we were seeing is definitely Middle East. A lot of interest there, and we already have a lot of good proof points. Take example in UAE, you know, we have more than 100,000 students with a lot of the big private schools names, which are very marquee names. That helped us kind of continue growing that. We're seeing a lot of movement in Saudi Arabia to private and charter schools, so that also has created demand for us with schools like Maarif, the CEO of that. We actually gonna be speaking at our user conference in a month and a half. Really talk about how the Middle East broadly are, you know, looking at investment. We're seeing demand across Qatar, Oman, all the Middle Eastern countries, where they are focusing a lot more on education. India is another big market. There's about 50 million students just in the private school market in India, out of the 200+ million students in K-12. Again, half of those schools are very affluent middle schools, so a lot of demand for modern technology to be able to provide turnkey. We're seeing some good interest on that perspective. We are seeing, even countries in Asia, countries in Latin America, which are, you know, they want to do country-level projects or big chains who want to do it. We're going after very strategically in those those pockets. Through partnerships, but with boots on the ground, definitely in Middle East and India, where we have a direct line of sight of a lot of demand. You said that earlier, 80% of the districts have at least two of your solutions. Maybe you refresh everyone, what is the total opportunity? It's a great question. Sometimes people think, "Okay, you already have 80% of the market." Well, 80% is only with one or two of our solutions, right? That's on average, they're only using one or two. When you look at the opportunity, we have 20-plus modules, and you look at the just across sell TAM, it's about $3.5 billion-plus, right? The IT spend on our solutions, which most of the district buying, is about $8 billion. With our forecast even this year of around, you know, little shy of $700 million, we're still talking about less than 10% of the market share. We are the market leader. A lot of there's a point solutions, 50% of the market is using legacy or homegrown or, you know, just paper. We have tons of opportunity to sell. The benefit of having existing relationship with these customers is, we are able to sell to the current contract, we are able to extend, help them provide integrated solution, reduces our sale customer acquisition cost significantly because we already and, you know, already trusted by that customer. Again, we know that you can't pick a favorite module 'cause you love them all. But when you think about the one or two that, you know, are just primed to be adopted, that maybe the adoption's been low, what would you say the one or two? Well, the one area I talked about in the earnings is the data products analytics. It is still a small portion of our portfolio. You know, we launched it two years back and have now seen significant adoptions, including state-level deals like Maryland and Alabama, I shared last year. What we're seeing is that the interest on that has been tremendous at, even at the mid-level and even now, small schools, who want to put analytics to be able to understand where the kids are. The demand we are seeing is across the board. It's in dashboards to understand student engagement, student achievement, but also understand talent, educator effectiveness, educator retention. We're seeing interest around, we talked about very surgical interventions, and this is part of the ESSER investment as well, is districts need to prove whether the actual ESSER dollars are working in terms of the right effectiveness strategy. MTSS and all is helping them actually be able to deploy those intervention strategy and show that the results are working as well. What we're also seeing is, with a lot of focus on analytics and AI, that we have even big districts like Fairfax or charter schools like Epic Charter or private chains like Challenger School, using our Data-as-a-Service platform with Connected Intelligence to use as a foundation for their analytic AI strategies. You know, that, again, is an very exciting growth area for in terms of data lake platforms, which will help power these state levels to be able to do the right investments. I'll get booed out of the room if I don't ask this question, but, AI, everyone, topic number one... How long have you embraced AI? What foundational pieces, are these yours? Are you leveraging Microsoft or another cloud provider? Can you just walk us through your? Yeah. Holistic AI strategy, and... Yeah. Now I won't get booed out. Yeah, absolutely. It's top of the mind, and sometimes we get the, you know, the education especially, has got a lot of attention that AI is gonna be a disruptive force in education. For us, it's actually it is a disruptive force, but it's gonna be to our advantage because we have the platform, we have the data, we are the foundation on which the districts and states are gonna build their AI strategy. When you look at from a perspective, for us, this is not new. In fact, even when we became a standalone company, one of our key vision was that personalized learning and personalized education is the way to really help address the broader education challenges. I think you've said you have three kids, and you know, every kid learns differently, have different ambition, different skills. Every educator believes that having that personalized approach is gonna be the game changer. We have been marching on that vision, and one of the ways to really personalize is having the ability to AI to help personalize every student. We have been investing in AI tools for many years, including things like where we have launched At-Risk. Its capability is to be able to predict which kids are gonna be at risk before, even they get require the interventions, you can provide the right support for the child. We launched the product almost two years back and have a lot of customer adopt it. We, you know, earlier this year, we had launched capabilities around learning navigation, a personalized learning pathway for each child to be able to master different areas that they are interested in. Generative AI focus now actually helps us even accelerate our personalized learning roadmap even by a few years. Now we are able to leverage that to be able to not just provide tutoring, but even create content. We are less relying on the third-party content to be able to really accelerate our ability to create personalized content for every child as well. That has further. Now, having those out-of-the-box models and has being able to really, do that. We'll be doing some, you know, partnership announcement at ISTE with some leading tech companies around this area, and we're very excited about the potential to really accelerate our personalized learning roadmap with this. Are you leveraging the hyperscalers for this, or are you, Microsoft, AWS, what? Yes, we are partnered with both Microsoft and AWS, and we are definitely both from a the data lake platform as well as the in terms of the AI models, we're partnering with these companies. Many are saying Microsoft feels like they have an advantage here against Amazon. Do you believe that, or do you think it's maybe Amazon has a little more muscle behind the scenes that we can't see yet? As you said, I can't pick which partner. You know, I will be upsetting the other partner. Our strategy is actually both of them bring specific set of things which actually help us accelerate, and we are actually really strategically partnering with both the companies. Makes sense. when you think about how you monetize AI, is it by default, it's like you're getting it in all the modules, or are you gonna have a standalone, you know, AI PowerSchool assistant, you know, where you're like, "Hey, this is a $XYZ add-on"? How does that work to monetize? You know, as I mentioned, like our At-Risk module, so that's a separate module. Mm-hmm. districts buy as a separate, you know, analytics, dashboards. That's priced on, That's priced per students. Yeah. Per student, just like any of our module, it's an additional upsell into an analytics product, so we are able to monetize that. Our learning navigation, again, is a separate module which districts buy per student, and we so monetize that. All of these are different monetization. One of the exciting piece of it is that we are getting to our launch of what we call personalized homework. Next year, what you have the capabilities with our customers would be that they can take advantage for us to be able to augment a teacher's homework, to be able to now create that same homework with personalized learning pathways for each child in a personalized homework. That, again, would be a monetizable separate component that allows us to really now support each child on the homework help, which district spends millions of dollars in tutoring, in content, and supplemental content. It really is helping them now support that in a much better way. One of the challenges that I have as a parent, I get 17 logins for three different kids. All of a sudden I'm like: "I don't even know where the data is. It's hard to navigate." The UI looks like... One looks like Google, the other one looks like, you know, old Commodore 64 system. Where are we at on this, "My family's giving me one login, I can see one picture, I can see this whole unified journey" are we getting closer to that? Absolutely, that's what we have done with our platform. You're absolutely right. When you look at, as I said, 90% of the market is still using fragmented tools or paper or other ways, right? For parents, it's a nightmare, for students, it's a nightmare, for teachers, it's a nightmare, and even for district administrators, it's a nightmare. There have been lack of platforms which provide that holistic aspects to really bring it all together. That is a big differentiator for us. Take example, there's a lot of interest like, "Hey, is learning management or, you know, a student information systems or special ed or Career Pathways?" There are a lot of niche solutions out there, but as a parent and a student, you want one interface to bring it all together, to be able to really understand where the child is and all the different activities that you need to be able to support the child. That's the beauty of our platform. There is nobody else who's bringing all these different elements in one platform, and we are making it better. We, in fact, at our user conference, we're launching what we call Parent Portal, and then will be followed by Student Portal. Not only that you have common login and common look and feel-... You actually would not even see the difference between that this is an SIS or LMS, or this is enrollment. You will actually have one portal with just the task. It takes those silos completely away. That's the exciting part of our differentiator, that it will only help us accelerate our cross-sell because it now changes the game in terms of not just integrating these different modules, but actually unifying them in the experiences fully. At another conference, you said you could move into B2C sometime down the road. What does that mean? When you look at from a perspective, as we've mentioned, of a progression of our learn, you know, we have the platform, we build the platform, we have the data, we have the understanding of what the whole child is and what are the different learning needs are. With bringing Naviance and Career Pathways, we even understand where the kid wants to go, where their ambition is. We've tied this up into the personalized learning to be able to supplement the homework and the support the child needs in the school with the personalized homework. Take that one step further, now you also need supplemental help for Career Pathways to be able to understand what are the other things that would help me develop better, which are outside the things which school might be offering. This is where our ability to continue getting this launch gives us the ability to now be the trusted learning partner for that student, for that family, even outside what they are learning in the school. That's where our B2C capabilities would help. It's a natural progression given the fact that we are continuing to expand our mind share with the student and parent, for us to be able to then also help with them with the supplemental aspects outside school. One of the emerging trends we're hearing is, it's really hard to get into school today, into college. Is there another pathway beyond... that you can help towards other roles that don't require a four-year degree or specific skills? Or, I know you're K-12, is there an on-roading map that could help? Yeah. Is that something? You're absolutely right. This is where our Naviance acquisition, not only where 40% of the high school students in the U.S. use our Naviance to apply to different colleges, but what we have done is also now added capabilities with our Headed2 acquisitions for Career Pathways as well. We have straight contracts with California and Nevada with Headed2. We were providing, you know, kids different Career Pathways that if you want to do a two-year degree, or I want to go into welding, I don't want to do a four-year, I want to do a very professional degree or professional courses. You'll be able to pick where are the jobs, where's the my interest, what pathways even outside the college pathways that might exist for me to be able to do that, and giving that full view integrated into your Naviance college planning or graduation planning, all the way even taking it to middle school and elementary school. Giving kids interest of what possible pathways are exist. This whole workforce planning cloud, which we, you know, which goes beyond what's happening just from a graduation college application, we're getting a very strong interest from large district as well as state levels, who are using that Connected Intelligence plus Naviance, plus Headed2, even tying up with our partners like Ellucian on K-, you know, higher education, to give them a full view of K through 20 longitudinal view, where the jobs are, where the interests are, and giving that awareness to the kids and the families. That is also very exciting, and to, you know, earlier point about B2C, then being able to support them in all the supplemental help they might need to support that. It really opens up goes back to the fact that we have the student record, we have the learning record, we have their college or the graduation plan understanding, we have the understanding of what the whole child is. That allows us to really provide all these kind of data products, analytics, and even services to support the child. Double-digit growth, but you're also very profitable. Where are you getting this profit? Where are the biggest sources of why you're outperforming the bottom line, and then where do you get further margin expansion from here? Talk to us about that pathway. Well, this is the strength of our, the fact that we are in front of 80% of school districts. Our sales and marketing acquisition cost for a customer or new deal is lower than most of the other industries you will see because we are already entrenched with them. That gives us a very strong operating leverage from being able to really not have to spend additional highly for growth, being able to really support the growth with the operating leverage we have. On top of it, our platform, and as we are, you know, continuing to, you know, have the integrated platform, gives us additional advantage to improve our operation, OpEx as well. We also have invested in offshore. You mentioned about 3,000 people, about 1,000+ are in, actually in India, which we have developed over the last couple of years. That team continues to support growth in pretty much every function. That also gives us additional advantage to continue to improve the stuff. It's just our business model, our customer acquisition cost, our operating leverage on the OpEx as well as offshoring gives us a good way to continue to improve profitability. We see this to be, continue to, you know, achieve the 100-150 basis point improvement to our, you know, adjusted EBITDA margins every year. You're not shy about being inquisitive. many ask, you know, I'm not asking for returns. Yeah like, when you think about just the available opportunity now, is it easier, is it harder? Now that we're having the AI boom and valuations are going crazy, is this- Yeah ... is this getting harder again now, or is it-? No, so you know, one of the strengths is because we are the largest, we get to see every company in this space. Going back to that 90% of market, half of that market, again, is very small niche providers. We have a lot of fertile partnerships as well as stuff which we can easily rely to be able to expand our platform from be able to growth from acquisition. We are very strategically focused on platform expansions to be able to really do these acquisitions because we are able to grow market share ourself, right? As we continue to see opportunities which are you know, and when it comes to AI, you know, when you look at for platform, we have the data assets in the AI platform. For us, it's really understanding more about the student, more about the teacher. What else is happening in the school? How do we bring that engagement into the whole child and apply our AI and data platform to it? That's where we, you know, these acquisitions, really, we have a multiplier effect to be able to take these acquisitions, integrate them into their data and our platform products, to be able to now X-ray the growth of each of these, acquired stuff, as well as make our platform more differentiated. Thanks, Hardeep, for joining. Appreciate it. Thank you. Thanks for having me.