Instructure Holdings, Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company achieved total revenue of $173.2 million for the third quarter, marking a 28% increase from $134.9 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue reached $499.1 million, up 26% from $394.8 million year-over-year. The growth was primarily driven by a 30% increase in subscription and support revenue, which amounted to $160.2 million for Q3 2024, compared to $123.1 million in Q3 2023.

Despite the revenue growth, Instructure reported a net loss of $24.7 million for Q3 2024, a substantial increase from a net loss of $5.5 million in Q3 2023. For the nine-month period, the net loss was $66.8 million, compared to $28.3 million in the prior year. The increase in losses was attributed to rising operating expenses, which totaled $126.3 million for Q3 2024, up from $82.9 million in Q3 2023. This rise in expenses was driven by higher costs in sales and marketing, research and development, and general administrative functions.

The company’s total assets increased to $2.93 billion as of September 30, 2024, from $2.16 billion at the end of 2023. Notably, goodwill surged to $1.91 billion, reflecting the impact of recent acquisitions, including the purchase of PCS Holdings, LLC (Parchment) and Community Software Solutions, LLC (Scribbles). The acquisition of Parchment, completed on February 1, 2024, contributed $32.6 million in revenue during Q3 2024 and $83.4 million for the first nine months of 2024.

Instructure's cash and cash equivalents decreased to $187.5 million as of September 30, 2024, down from $341.0 million at the end of 2023. The company reported net cash provided by operating activities of $102.5 million for the nine months ended September 30, 2024, a decline from $127.0 million in the same period of 2023. The net cash used in investing activities surged to $907.7 million, primarily due to the acquisitions, compared to just $4.7 million in the prior year.

The company is also navigating a merger agreement with KKR affiliates, which was unanimously approved by the board and is expected to close in the second half of 2024. Under the terms, stockholders will receive $23.60 per share in cash. The merger is subject to regulatory approvals and could impact relationships with vendors and customers.