All right, we'll get started here. Good afternoon, everyone. Thank you for joining us. I'm Stephen Sheldon, I'm an analyst at the tech group at William Blair, covering the education technology space, including PowerSchool. Required to inform you that a complete list of research disclosures and potential conflicts of interest is available at our website at williamblair.com. Really excited to have PowerSchool here at our conference once again, this year. We've, you know, been bullish on the story since the IPO. As most probably know, PowerSchool's developed the most comprehensive end-to-end SaaS platform for the K-12 industry. A lot of tailwinds, I think, supporting its adoption, its solutions over time. And we're happy from the company today to have President and CFO, Eric Shander. We also have Shane Harrison from the IR team sitting in the front row up there. So I think Eric will run through a high-level overview presentation. If we have any time at the end, we may run through some fireside chats and Q&A. So thank you, Eric, for spending some time with us. I'll turn it over to you. All right. Afternoon, everybody. How's it going? Good. This is the second day. We'll try it again. Afternoon, how's everybody doing? So, how many of you are familiar with PowerSchool? Look at that! Oh, Stephen, look at this. Did you see this? This is pretty good. All right, sometimes I ask this and, and it's like, okay, well, let me ask, how many of you actually have children? Because if you have children, there's probably a high probability that there is some exposure to PowerSchool. But as Stephen mentioned, so, we are a bit of a unique company. So we did go public in 2021, July of 2021. The timing could not have been more perfect. We went 2021, we went out at $18, and as many of you know, because I know a lot of you follow the markets exceptionally close, you know, 2021, and the second half of 2021 happened, 2022 happened. One of the differentiating things for PowerSchool is, back in the 2021 timeframe, when we took the company public, we were focused on not only the top-line growth, but we were also focused on profitability and free cash flow generation, which those last two pieces weren't really as important until 2022, and then all of a sudden, we garnered a lot of, you know, investor interest because people said: "Hey, wow, you guys are a durable grower, you have a good, strong end market, and you're actually profitable." So it was, it was a really, compelling, and I think, you know, interesting story for people to really kind of pick up some of the, some of the, important things of the company. This is what Stephen read. That's not too important. Let's talk a little bit about, you know, our mission and kinda what fuels the company and what fuels people at, you know, PowerSchool. One of the things, and I will date myself, if, you know, the gray hair doesn't do it, I will tell you, I've been in the tech industry for 34 years. This is the first time that, you know, from a societal impact, I feel like I'm working for a company that actually has a big opportunity and to some extent, a little bit of a responsibility because we do have the opportunity, and for those of you who have children, probably can relate to the fact that the education system is about 10-15 years behind in terms of adopting technology. And even when there is technology in the education system, it's littered with a lot of point solutions. So what that means is a lot of school districts are trying to bring together all these different point solutions. Many of you parents, you know, of your students or of your children, probably have to engage with multiple systems. So one of the things that, you know, PowerSchool is really working to solve is how do we bring all that together into a single platform? So one of the things that we're also solving is the multiple touch points that you all as parents have, as well as the children, your children, as well as the teachers and administrators. So we'll talk a little bit more about that. But, you know, one of the things that we have a firm belief in the company is that, you know, really kind of equalizing the opportunity for every single student, irrespective of their social or economic status through technology, okay? And we'll talk a little bit about what does that really look like. So just at a glance, the company, so you'll see double-digit annual recurring revenue. You know, we were private equity-owned up until 2021. So one of the things that, you know, is deeply ingrained in the company is growth is absolutely important, but growth and profitability are absolutely important. You can see, you know, there is a big focus on free cash flow. You know, we generate positive free cash flow, and we continue to expand that even in this elevated interest environment. Just as an example, and I mentioned this on our last earnings call, last year, our free cash flow margins were 19% for the year. We will maintain at least that percentage this year, even though three percentage points of a headwind are related to interest expense. Without interest rate expense improvement or increases, we would have actually been three points higher. We do have an extensive customer base, so today we've got about 17,000 customers, and one of the things that's, probably important for you all to know, especially for some of you that may have done some work on the company, is we have a broad reach across our customers, right? But the reach actually, not to be confused with penetration. So, we service about 55 of the 60 million students within the US and Canada, but our customers today use on average two of our 19+ modules of the platform. Now, we also, you know, a couple other data points. We have over 2,900 customers that have 4+ parts of 4+ modules of the platform. So there is a lot of growth that's happening for the actual adoption of the platform. But, you know, so that's one of the things that, you know, when we talk to investors, there's a lot of opportunity. And for us, in any given quarter, between 75%-85% of our bookings are related to cross-sell from existing customers, okay? And then again, we service 90% of the largest districts in the US. I'll talk a little bit about international and some of the things we're doing there in a few minutes. One of the things that is important and has resonated with investors, and I think important for all of you to kind of, you know, have a perspective on, is off to the left, and we get asked a lot around funding. Schools, you know, unlike corporations, have a different, you know, funding mechanism. The funding comes from three different sources: it's federal, it's your state, and it's your local, and you can kinda see, you know, what percentages are of those. It may surprise some of you, 'cause I've had some, you know, some people say, "Wow, we're surprised that it, there's not as much, you know, from the federal level." But what you will see is most of it does come from local and state levels. Off to the left here, this really shows how that has trended over the last 30 years. And other than the blue section, which is kinda leveled off, then that was during the housing crisis, we've seen the, we've seen these go up, we've seen the budget go up anywhere from 3%-6% every single year. So the funding environment has actually been quite stable. As you look at where does that funding go, so about 91%, no big surprises, infrastructure, salaries. What I still think is probably underinvested and is a little bit indicative of, you know, just the state of the technology environment within schools is 2%-3% of that is going to IT and software, which is, you know, many of you can probably argue that, you know, it should be at least a few percentage points more than that. To put a little bit of a finer point on what does this really mean? So, on average, a school district, because the way that school districts get funded is they get funded based off the students that attend, okay? So on average, a school district gets about $12,500 per child. About 2%, $250 of that goes to IT. Our revenue per user or revenue per student is only $12-$13. So we're actually still a relatively small piece of the overall IT environment, and meanwhile, we are running the mission-critical systems of school systems. So again, lots of opportunity within the funding environment, but what you can see, it is actually relatively, and it has been durable. The one thing I would just, you know, share with all of you, and some of you may be aware that during COVID, there were some emergency funds that were provided for schools. It was about $180 billion, so not a small number. These, these were. You know, it started in 2020, went, and it goes all the way up through September of this year. What I would say is the first $90 billion or so of that $180 billion was really spent on infrastructure-type things. You know, things around getting air conditioning, you know, upgrades within buildings and capital-type improvements. The other $90 billion has really been focused around student improvement and you know, really improving the outcomes for students. A lot of this is in tutoring, after-school programs, you know, content that schools have had to purchase over the course of the time. That funding is coming to an end, but the core funding still very much intact, but the ESSER funding is coming to an end. PowerSchool itself has been a very little beneficiary to it, so typically, when there's been any kind of ESSER-related funding in any of our deals, it's been about 5%-10% of a deal, typically spent on one-time implementation services. As you would imagine, you know, as a superintendent or a CFO is not gonna spend this temporary funding on subscriptions, which, you know, can, you know, recur year after year after year. So, that is one of the things if you hear about PowerSchool, and some people will say, "Well, there's a funding issue," the funding issue is actually really not related and impacting, the company. As you look at our coverage, I kinda mentioned all of these, I mean, you know, extensive customer base, lots of continued cross-sell opportunity. One of the things that's important around, you know, any school system is, you know, that it is a pretty complicated ecosystem. So, you know, around the circle, you'll see a lot of the personas that we work with on a buying, you know, that are involved in the buying purchase, the purchases of software. At the heart of any school system is the student information system. Think of this as, this is where the heart of all of the data in a school system is housed. But around here, the IT organization is always gonna be involved in the purchasing decision. Depending upon what part of the platform, if it's more in the administrative or HR side, then certainly your head of HR will be involved. The administrators will be involved if it's the student information system. Certainly, the counselors will be involved if it's our College and Career Life Readiness platform. And then, obviously, teachers will be involved with any parts of the platform that are in the school system, okay, in the classroom. But this really, I think, gives you a good perspective of PowerSchool's the only company out there that has this depth and breadth across all of the different key stakeholders within the education school systems. So what does this look like from a competitive standpoint? So we have several competitors across the board. And what you can see in the student information system, and let me just spend a minute on the SIS, because this is, you know, as I mentioned, it's the heart. Every single school, school district has to have a SIS. This is how they comply with all the regulatory and compliance. This is how they get funded. So PowerSchool has a third of the market. These next three, Edupoint, Infinite Campus, and Skyward, collectively have a third of the market. The other 40% of the market is still either state-specific or very legacy technology. That's still an opportunity for us that we go after. The biggest reason for that is because there's a lot of, you know, data technology, with a lot of that 40%. The number one reason why they would make the change to go to a more modern technology like PowerSchool is because of the cyber risk and the cyber... You know, a lot of schools actually have had cyberattacks. A lot of them don't actually necessarily get wide publicity, but they are big targets for cyber threats. So PowerSchool is a dominant player here. That's kinda where we got our start. The classroom solution, so think of LMS, the learning management system. So this is really gonna be us and the largest, you know, the next one is gonna be Instructure with their Canvas product. We're about equal market share. Talent, it's really us and Frontline. While there's other ones, the Frontline's the biggest one. CCR, the College and Career Life Readiness, there's a lot of, you know, niche players. SchooLinks is one of the bigger competitors with us. And then you can kinda see on some of those. But the point here is you don't see anyone other than Frontline, which is in Talent and ERP. You don't see any other provider that's across all of these. And I think what's also important is even on points, you know, even on some of these specific capabilities, we, when we do bake-offs with Frontline, or we do a bake-off with Instructure or any of these others, our product is very, very competitively placed. So you're not trading off product features and capabilities for the value of the platform, and that's really, for us, been one of the biggest differentiators, and I think for, you know, you to believe in the company and you to believe in the value of bringing everything together in a platform, if you buy into that thesis, then, you know, PowerSchool is the dominant player across the entire ecosystem. So, I mentioned personalized education at the onset. This has been one of our, you know, missions for many, many years, in, in not only just providing the core infrastructure for schools to operate, but beyond that is really, you know, the art of the possible around personalized education and what that can mean for, for our children. And we spend a lot of time around getting the context for the, the, you know, the different elements of the personalized education. So what does that look like? So if you think about all of the data and all of the different different disparate data sources within, within a, a school district, we have a platform called Connected Intelligence. And what it does is it will take all of the data from all these different data sources, puts it on top of a data lake, which is built on top of Snowflake, and then we'll through PowerBuddy and through a bunch of machine learning and AI algorithms, it'll actually connect that data and actually give a lot of insights to whether it's the students or the teachers or the parents and the administrators. And that's really, you know, when we think about AI, and we're, I don't know, halfway through, the first time I'm really talking about, you know, AI, this is really our generative AI element. And I would encourage, if you're interested, we actually have some videos out on YouTube. You can, you can, you can look on YouTube, and you can do PowerSchool, PowerBuddy, and you'll see some pretty cool videos that really bring this to life. And this is. And I think it's important, this is markedly different than, like, using ChatGPT. And why is that? Because if you think about within a school district, a school district is gonna determine what's the appropriate content, right, that can be used, what's appropriate for the context of the student at their age level. So if somebody goes into ChatGPT, and let's say they're 12 years old, if they go into PowerBuddy, and if they ask it, "Hey, give me the recipe for a Manhattan," it's gonna tell them that's not age-appropriate. If you went into ChatGPT, it will tell them, "Here's the recipe for a Manhattan," right? The other thing that, you know, our PowerBuddy will do is you know, we have the data that the school district has approved in terms of the appropriate content, right? So it is much more... There's a lot more guardrails around it, than just a general, you know, ChatGPT-type facility. So we have a ton of products, and what's exciting is, you know, for us, you know, I break AI into two components. One, which is mainstream AI, we've been using for many, many years now in our, whether it's our assessments, platform, whether it's our analytics platform, that's not new for the company. What is new, and for a lot of companies, is generative AI, right? So how are we leveraging that? And that's actually accelerated a lot of the personalized learning mission and path that we've been on for the last several years. A lot of that work actually accelerated last year. So you'll see a lot of the different products came to market and are coming to market, and then several that are in beta will be coming out, you know, latter part of this year, in Q3 and Q4. So the exciting thing from my perspective is a lot of the investments we've been making in R&D are now starting to get monetized. So there's. And as that happens, you'll start seeing the investments in R&D coming down because some of these investments, because they are longer term in nature, have been capitalized. So you'll see a lot of the capitalized R&D coming down, which obviously goes into your free cash flow as well. So lots of exciting things along the roadmap here, and, you know, we've got a ton more that we shared at our Investor Day in September that, you know, if you really want to kinda dig into some of these, it's pretty cool. And our Chief Product Officer actually did a live demo of a lot of this. And, you know, it's good to see it on a chart, but it's actually better when you actually can see it live and can see, you know, real-life applicability to it. Just, you know, as I mentioned, you know, to begin with, you know, obviously, revenue growth has been a focus for us. You can see, you know, where we've been in terms of, you know, double-digit CAGR, from 2019 till now, profitability, and then again, you can see, you know, a strong focus on free cash flow. The one thing that's important, and, you know, we say this as much as we can, sometimes, sometimes people hear it, sometimes people don't. And it's interesting because, you know, something can happen in the education field, externally, and we kinda get lumped in with edtech. We've positioned the company since we've gone public, we've been very clear that we're a vertical SaaS company supporting the education industry. Vertical SaaS company supporting the education industry. Why do we make the distinction? We do not, we do not do content, right? We are the infrastructure for schools. So we use content in our assessments platform. We use it from third parties, but we absolutely, we do not do content. And there's a big difference because, you know, the content companies... And, you know, earlier this year, late last year, you know, some of the content companies, you know, were talking about just the sheer disruption that AI was creating for them. And, you know, when that happens, obviously, we kinda get lumped in, and, you know, you start seeing some impact on, on your share price, too, perhaps, I guess, guilt by association. But, you know, at the same time, you know, we've been very open, and we've been very, you know, upfront that, you know, generative AI is actually a net benefit to the company and is something that we've really embraced. But you can see, you know, just how PowerSchool, whether it's, whether it's a revenue growth rate of, you know, where we're at versus profitable vertical SaaS companies versus edtech, you can see where the margins are, and then obviously, on levered free cash flow. So we do look and behave much more like a vertical SaaS company than we do education technology. So I just figured I would at least, hopefully, the chart's helpful for illustrating that. So look, as we, you know, continue, and I get asked a lot, as you would imagine, in terms of: "So what's your capital, you know, allocation philosophy?" You know, one of the things, you know, being public that we've been very, you know, clear on is anytime, we are gonna always be acquisitive, getting new capabilities to the platform. That's how we've kinda built the platform over the last several years. Having said that, we're only going to acquire companies that will be accretive to growth and accretive to margin. So, there have been things that we've looked at over the years that, you know, aren't accretive, that we pass on. So, you know, in terms of the capital allocation priorities for us is, it's gonna be accretive M&A. Absent that, it will be continuing to work down our leverage and, you know, we'll finish the year around 3.5 times net levered. And the other thing that's important, too, you know, and I'll take responsibility for this, we probably, when we went public, we probably didn't spend enough time with investors explaining the seasonality of the business. So this is not, it's, you know, a typical business where you have a massive December, and, you know, everything kinda builds up. Like, every single quarter is always up and to the right until you get to December. School budgets are on 7/1, okay? So what does that mean? That means the second quarter for us is a big bookings quarter. That means in the third quarter, a lot of our renewals happen in the third quarter. So if, you know, so if you think about ARR from Q2 to Q3, typically it's gonna be flat because you're still gonna have net new bookings in Q3. But if you are gonna have churn because you have about 65% of your portfolio renew in Q3, that's gonna offset some of your net new bookings. So typically, ARR, the increase from Q2 to Q3 is not as big as you would expect. So it's not always up and to the right. The other thing that's important, too, from a cash flow perspective, first half of the year is a use of cash. Second half of the year is a big source of cash because again, a lot of our renewals happen in Q3. So I think, you know, that was probably one of my biggest lessons learned, is really spending time educating people on: Here's what the business cycle looks like. You know, I think Stephen and a lot of his peers have helped us really kind of, you know, educate, you know, investors on, you know, really looking at the full year performance of the company, you know, using that as the best barometer, because any one quarter, depending upon the metric you're looking at, could look. If you don't understand the seasonality of it, could have a trend that you may not necessarily be expecting. So as we look at, you know, our expansion, and I, you know, I talk a lot about M&A. You know, as I mentioned, M&A continues to be part of the strategy. So the business is really the core business is, you know, low double-digit organic growth. We will, from time to time, make acquisitions. What you'll see, these are acquisitions that we've made recently. All of these acquisitions, it's important to note, these are capabilities that we've brought into the platform. Every single one of these companies are companies that we work with in our partner ecosystem. So we know how well they are compatible with our current platform. We know the management teams, we know the currency of the products, and a lot of these will have a different story to them. Some of them, Kickboard, as an example, this is our social and emotional wellbeing module. It's a great product. It was very low in revenue. Reason for that was because their best and only salesperson was the CEO. They couldn't continue to invest more. They didn't have enough capital. We bought that company, and all of a sudden, we put that capability into 200 people selling it. So, you know, it's things like that that, you know, we've done through the years, and, you know, as we look at, there's still several areas, whether it's international, whether it's payments, you know, we look at security, health, you know, AI. So there's still a lot of capabilities that we're, you know, looking at either investing in inorganically or organically. This is a chart from our Investor Day. So if anybody looked at the Investor Day, they'll say: "Hey, you took a chart out from that." Yes, I did. The key to this, though, is, you know, back in September of last year, you know, we basically said, "Look, the top line of the company will be over $1 billion. Every single year, we're gonna continue to expand margins by at least 100 basis points." And what's important here is the growth comes from our core business. So we're not... You know, there's very little contribution from both international and our personalized education that we talked about. So those are our AI products. So we have a very, very high level of confidence and conviction in terms of the core business getting us to $1 billion-plus by 2026. We will be over 36%, EBITDA margin, and free cash flow margins will be in the mid-20s, a little bit north of that. So again, lots of opportunity and, super exciting and, you know, I mean, I think it's, it kinda speaks for itself in terms of the durability of the overall core business. So I don't know how much time I left, but I left a few minutes. But look, just kinda wrapping up, you know, if I would just leave with, you know, we are a market leader in this space. We have been investing a lot in terms of the technology. We have a huge opportunity for us, in terms of making the impact, a lot of growth ahead of us. You know, we still have a lot of international expansion that we haven't even gotten to yet. There's 1.3 billion students internationally, that we have not addressed yet. Even if you get a portion of those and a few dollars a student, the math works out to be pretty, pretty significant. And then, you know, just as we look at the, you know, the last chart will show you some of the things around personalized education, around international. As we get into the out years, we do expect those to be, you know, step changes to the growth profile of the company, which is why we've made investments. And, and it's a really... I think this is a, this is a, a special time to be part of the story because a lot of the investments we've made, we're now starting to harvest a lot of the benefits from those from a financial perspective, right? There's still a lot we have to do on international, but I think on the personalized education, a lot of these products that we've been investing in for the last several years are coming to market. We are starting to monetize those, so we're super excited about that. Hopefully, you all learned a little bit more about PowerSchool than you did coming into it. And, with that, I guess... I thought we also had a separate Q&A session. We do after this. Okay. We have a breakout session. We do have a separate breakout session. Yeah. So, I guess I probably went through the time, so we'll, for those of you who want to ask questions, we'd love to, you know, dig into some of the questions that you may have. And anything else? That's great. We'll end it there. The breakout's gonna be upstairs in Richardson. So, Eric, thank you so much for- Yeah, no, thanks. ... the presentation. I appreciate it. Thank you so much, everyone.