PowerSchool Holdings, Inc. (NYSE:PWSC) Q3 2023 Earnings Conference Call November 7, 2023 5:00 PM ET

Company Participants

Shane Harrison - Senior Vice President of Investor Relations

Hardeep Gulati - Chief Executive Officer

Eric Shander - Chief Financial Officer

Conference Call Participants

Saket Kalia - Barclays

Brian Peterson - Raymond James

Ryan MacDonald - Needham & Company

Patrick McIlwee - William Blair

Matt Hedberg - RBC Capital Markets

Joe Vruwink - Baird

Brett Knoblauch - Cantor Fitzgerald

Fred Havemeyer - Macquarie

George McGreehan - Bank of America Securities

Operator

Good afternoon and welcome to the PowerSchool Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Shane Harrison, Senior Vice President, Investor Relations. Please go ahead.

Shane Harrison

Thank you, operator. Welcome, everyone, to PowerSchool's earnings conference call for the third quarter ended September 30, 2023. 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 President and CFO, Eric Shander.

Before getting started, I'd like to emphasize that this call, including the Q&A portion, will include statements related to the expected future results for our company which are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings. Today's remarks will also include references to non-GAAP financial measures. Additional information, including definitions and reconciliations between non-GAAP financial information to the GAAP financial information, is provided in the corresponding press release and results presentation which are both posted on PowerSchool's Investor Relations website at investors.powerschool.com. A replay of this call will also be posted to the same website.

I will now turn the call over to Hardeep.

Hardeep Gulati

Thank you, Shane and thank you, everyone, for joining us today. PowerSchool's third quarter was a continuation of the momentum we have been building over the past few quarters with meaningful growth in revenue and profitability. K-12 organizations are accelerating the adoption of our platform to become more efficient and effective and this is enhancing our ability to execute on our strategies for growth.

Our third quarter results are summarized on Slide 4 of the posted earnings presentation. Revenue was up 12% year-over-year to $182 million, exceeding the high end of our guidance. Product-level growth was diversified with double-digit growth in many of our cloud solutions. Adjusted EBITDA was well ahead of our guidance, reaching $62 million, representing 19% growth over Q3 of 2022 and a 34% margin. We also saw record cash flow in the quarter while continuing to invest in our game-changing product innovations.