Funding

• Byju's raised USD 250 million via a structured credit transaction led by Davidson Kempner Capital Management to support its core business activities and expansion plans. The transaction included non-convertible debentures (NCDs) and a smaller portion of compulsorily convertible debentures (CCDs) linked to subsidiary Aakash's final valuation for its upcoming IPO. (May 12, 2023; Entrackr)

M&As

• Houghton Mifflin Harcourt (HMH) acquired Classcraft, the developer of an educational role-playing game, to bring Classcraft's innovative functionality and engineering team into HMH, with the aim of enhancing the customer experience and supporting student engagement. (May 11, 2023; Benzinga)

Earnings/results

• Kahoot! reported a recognized revenue growth of 18% YoY to USD 40.5 million and invoiced revenue (billings) growth of 11% YoY to USD 37.6 million for Q1 2023 (ending March 31, 2023). The company also achieved an adjusted EBITDA of USD 10 million for Q1 2023, indicating a margin of 25%, compared to 17% in Q1 2022. For the full-year 2023, Kahoot! maintains its forecast expectation of continuing to achieve double-digit YoY growth in billings, with recognized revenues surpassing USD 170 million and moderate yearly growth in operational costs. The company also expects an adjusted EBITDA growth exceeding 40% YoY and solid free cash flow. (May 4, 2023; Company quarterly report, Earnings presentation)

• Nerdy reported a revenue growth of 5% YoY to USD 49.2 million in Q1 2023 (ending March 31, 2023), driven by recurring revenue products, increased adoption of Learning Memberships, expansion of lifetime value, and growth in the consumer business segment. It also achieved a positive adjusted EBITDA of USD 1.4 million during this period, a significant improvement compared to the USD 6.6 million loss reported in Q1 2022. Looking ahead to the full year of 2023, Nerdy raised its revenue targets to a range of USD 193 million–200 million, which represents a 21% growth rate compared to the 2022 revenue of USD 162.7 million. Additionally, the company raised its target for adjusted EBITDA loss to a range of USD 7 million to break-even. (May 09, 2023; Press release)

• Instructure reported a GAAP revenue growth of 13.6% YoY to USD 128.8 million in Q1 2023 (ending March 31, 2023), with the subscription and support segment contributing 92% of total revenue, growing by 14.5% YoY. The company also reported an adjusted EBITDA of USD 48.3 million in Q1 2023, indicating strong operational performance. Additionally, the net loss was USD 0.08 per share in Q1 2023, compared to a loss of USD 0.04 per share in Q1 2022. For the full-year 2023, the company increased its guidance, with revenue expected to range from USD 521.3 million–525.3 million, and adjusted EBITDA to range from USD 199.4 million–203.4 million. (May 01, 2023; Company press release)  

• PowerSchool reported a revenue growth of 6.6% YoY to USD 159.5 million in Q1 2023 (ending March 31, 2023), with the subscription and support segment contributing 88.5% of total revenue and growing by 9% YoY. The company also reported an adjusted EBITDA of USD 49.4 million (up by 16% YoY) in Q1 2023, with an adjusted EPS of USD 0.18 per share (Q1 2022: USD 0.16 per share). For the full-year 2023, the company reaffirmed its guidance, with revenue expected to range from USD 688 million–694 million while adjusted EBITDA is expected to range USD 222 million–227 million. (May 04, 2023; Company press release)

• Duolingo reported revenue growth of 42% YoY to USD 115.7 million in Q1 2023 (ending March 31, 2023), while total bookings grew by 37% YoY to USD 140.1 million. The company also reported an adjusted EBITDA of USD 15.1 million, indicating a margin of 13%. Net loss decreased significantly by 79% YoY, amounting to USD 2.6 million. For the full-year 2023, Duolingo upgraded its guidance, with revenue expected to range from USD 500 million–509 million, while total bookings are expected to range from USD 552 million–561 million, and adjusted EBITDA to range from USD 55 million–61 million. (May 09, 2023; Company press release , Shareholder letter)