-- Billings grew 42 percent period over period to $65.3 million in Q2 2018 -- Revenue grew 38 percent period over period to $53.6 million in Q2 2018

SILICON SLOPES, Utah, Aug. 01, 2018 (GLOBE NEWSWIRE) -- Pluralsight, the enterprise technology learning company, today announced financial results for the second quarter ended June 30, 2018.

“We completed our IPO process early in the quarter and went on to deliver strong topline growth, as well as year over year improvement in operating performance,” said Aaron Skonnard, co-founder and CEO of Pluralsight. “We continue to disrupt the technology skills development market with a platform that enables industry leaders and their teams to keep up with the rapid pace of technology change and deliver key innovations on time and on budget.”

Financial Highlights for the Second Quarter 2018

-- Billings -Q2 2018 billings were $65.3 million, an increase of 42% period over period. Q2 2018 billings from business customers were $54.6 million, an increase of 52% period over period. -- Revenue -Q2 2018 revenue was $53.6 million, an increase of 38% period over period. -- Gross margin -Q2 2018 gross margin was 70%, compared to 69% in Q2 2017. Q2 2018 non-GAAP gross margin was 76%, compared to 74% in Q2 2017. -- Adjusted pro forma net loss per share -Adjusted pro forma net loss per share for Q2 2018 was $0.21, compared to $0.29 in Q2 2017. -- Cash Flows -Cash used in operations was $5.8 million, a 35% improvement over cash used in operations in Q2 2017. Free cash flow improved by $1.7 million in Q2 2018 compared to Q2 2017. -- Cash - Cash and cash equivalents were $213.6 million as of June 30, 2018.

For information regarding the non-GAAP financial measures discussed in this press release, please see the section titled “Non-GAAP Financial Measures.” Reconciliations between GAAP and non-GAAP financial measures are provided in the tables of this press release. GAAP net loss per share is excluded above as it is only presented for the period following the initial public offering and is not indicative of the results for the entire quarter.

Financial Outlook

Pluralsight is providing the following financial guidance for the third quarter and full year 2018:

Third Quarter 2018 guidance:

-- Revenue is expected to be in the range of $57 million to $58 million. -- Adjusted pro forma net loss per share is expected to be in the range of $0.14 to $0.13, assuming weighted average shares outstanding of approximately 130.9 million.

Full Year guidance:

-- Revenue is expected to be in the range of $222 million to $225 million. -- Adjusted pro forma net loss per share is expected to be in the range of $0.68 to $0.65, assuming weighted average shares outstanding of approximately 100.5 million.

Guidance for non-GAAP financial measures excludes equity-based compensation, amortization of acquired intangible assets, and loss on debt extinguishment. Pluralsight has not reconciled its expectations as to adjusted pro forma net loss and adjusted pro forma net loss per share to their most directly comparable GAAP measures because certain items cannot be reasonably predicted. Accordingly, a reconciliation for adjusted pro forma net loss and adjusted pro forma net loss per share is not available without unreasonable effort.

Conference Call Information

Pluralsight will host a conference call for analysts and investors to discuss its second quarter 2018 results and outlook for its third quarter and full year 2018 today at 2:30 p.m., Mountain time (4:30 p.m. Eastern time).

Date: Wednesday, August 1 Time: 2:30 p.m. MT (4:30 p.m. ET) Webcast: https://investors.pluralsight.com/ Dial-in number: (877) 350-6732 or (629) 228-0693, conference ID: 8170746

A live audio webcast of the conference call will also be accessible from the Pluralsight website at investors.pluralsight.com. A telephonic replay of the call will be available three hours after the call, will run for seven days, and may be accessed by dialing (855) 859-2056 or (404) 537-3406 and entering the passcode 8170746.

About Pluralsight

Pluralsight is an enterprise technology learning platform that delivers a unified, end-to-end learning experience for businesses across the globe. Through its subscription service, companies are empowered to move at the speed of technology, increasing proficiency, innovation and efficiency. Founded in 2004, brought online in 2011, and trusted by Fortune 500 companies, Pluralsight provides subscribers with on-demand access to a digital ecosystem of learning tools, including adaptive skill tests, directed learning paths, expert-authored courses, interactive labs and live mentoring.

Pluralsight and the Pluralsight logo are trademarks of Pluralsight, LLC in the United States and in jurisdictions throughout the world.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of federal securities laws that involve risks and uncertainties, including statements regarding our future financial and operating performance, including our financial outlook for the third quarter and the full year 2018. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: the pace of market adoption of cloud-based learning solutions; our ability to expand our course library and develop new platform features; competition; our ability to attract and retain customers; our ability to increase sales of subscriptions to our platform to customers; our ability to expand our sales and marketing capabilities; and general market, political, economic, and business conditions.

Additional risks and uncertainties that could affect our financial results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our final prospectus filed with the SEC on May 17, 2018 (File No. 333-224301), which is available on our website at investors.pluralsight.com and on the SEC’s website at www.sec.gov. Additional information will also be set forth in other filings that we make with the SEC from time to time. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

Key Business Metrics

Billings. Billings represent total revenue plus the change in deferred revenue in the period, as presented in our condensed consolidated statements of cash flows. Billings in any particular period represent amounts invoiced to customers and reflects subscription renewals and upsells to existing customers plus sales to new customers. We use billings to measure our ability to sell subscriptions to our platform to both existing and new customers. We use billings from business customers and our percentage of billings from business customers to measure and monitor our ability to sell subscriptions to our platform to business customers.

Non-GAAP Financial Measures

Pluralsight has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Pluralsight uses the non-GAAP financial measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, adjusted pro forma net loss, adjusted pro forma net loss per share and free cash flow in analyzing its financial results and believes that the use of these metrics is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing Pluralsight’s financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

The presentation of these non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. A reconciliation of our historical non-GAAP financial measures to their most directly comparable GAAP measures have been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.

Non-GAAP gross profit. We define non-GAAP gross profit as gross profit plus equity-based compensation and amortization related to acquired intangible assets.

Non-GAAP gross margin. We define non-GAAP gross margin as non-GAAP gross profit divided by our revenue.

Non-GAAP operating loss. We define non-GAAP operating loss as loss from operations plus equity-based compensation and amortization of acquired intangible assets.

Adjusted pro forma net loss and adjusted pro forma net loss per share. We define adjusted pro forma net loss as net loss attributable to common shares adjusted for the accretion of redeemable convertible preferred units and the reallocation of loss attributable to non-controlling interests from the assumed exchange of LLC Units of Pluralsight Holdings for newly issued shares of Class A common stock of Pluralsight, Inc. and further adjusted for non-cash or one-time charges, including equity-based compensation, amortization of acquired intangible assets, and loss on debt extinguishment. We define adjusted pro forma net loss per share as adjusted pro forma net loss divided by the weighted-average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC Units of Pluralsight Holdings for newly issued shares of Class A common stock of Pluralsight, Inc.

Free cash flow. We define free cash flow as cash used in operating activities less purchases of property and equipment and purchases of our content library.

PLURALSIGHT, INC. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) Three Months Ended June Six Months Ended June 30, 30, 2018 2017 2018 2017 ------------ ----------- ------------ ----------- Revenue $ 53,572 $ 38,891 $ 103,216 $ 76,130 Cost of revenue(1)(2) 15,890 11,887 30,776 23,096 ---------- - --------- - ---------- - --------- - Gross profit 37,682 27,004 72,440 53,034 Operating expenses(1)(2): Sales and marketing 38,933 23,018 68,400 40,844 Technology and content 16,493 11,326 29,818 21,531 General and administrative 19,448 9,412 30,740 15,679 ---------- - --------- - ---------- - --------- - Total operating expenses 74,874 43,756 128,958 78,054 ---------- - --------- - ---------- - --------- - Loss from operations (37,192 ) (16,752 ) (56,518 ) (25,020 ) Other (expense) income: Interest expense (2,424 ) (3,597 ) (6,134 ) (5,124 ) Loss on debt extinguishment (4,085 ) (1,882 ) (4,085 ) (1,882 ) Other income, net 48 21 35 69 ---------- - --------- - ---------- - --------- - Loss before income taxes (43,653 ) (22,210 ) (66,702 ) (31,957 ) Provision for income taxes (143 ) (68 ) (252 ) (126 ) ---------- - --------- - ---------- - --------- - Net loss $ (43,796 ) $ (22,278 ) $ (66,954 ) $ (32,083 ) - -------- - - ------- - - -------- - - ------- - Less: net loss attributable to non-controlling interests (12,706 ) — (12,706 ) — Net loss attributable to Pluralsight, Inc. $ (31,090 ) $ (22,278 ) $ (54,248 ) $ (32,083 ) - -------- - - ------- - - -------- - - ------- - Less: accretion of Series A redeemable convertible (156,750 ) (21,175 ) (176,275 ) (22,825 ) preferred units ---------- - --------- - ---------- - --------- - Net loss attributable to common shares $ (187,840 ) $ (43,453 ) $ (230,523 ) $ (54,908 ) - -------- - - ------- - - -------- - - ------- - Net loss per share, basic and diluted(3) $ (0.19 ) $ (0.19 ) - -------- - - -------- - Weighted-average common shares used in computing basic 62,252 62,252 and diluted net loss per share(3)

(1) Includes equity-based compensation expense as follows:

Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 --------- ---------------- --------- -------------- (in thousands) Cost of revenue $ 46 $ 5 $ 46 $ 10 Sales and marketing 4,432 715 4,971 1,379 Technology and content 2,668 526 3,049 990 General and administrative 10,409 3,133 12,862 3,712 -------- ------- -------- -------- ------- ------ Total equity-based compensation $ 17,555 $ 4,379 $ 20,928 $ 6,091 - ------ - ----- -------- - ------ - ----- ------

PLURALSIGHT, INC.

Condensed Consolidated Statements of Operations (cont.)(in thousands)(unaudited)

(2) Includes amortization of acquired intangible assets as follows:

Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 -------- ----------------- -------- --------------- (in thousands) Cost of revenue $ 2,961 $ 1,642 $ 5,923 $ 3,284 Sales and marketing 194 161 389 322 Technology and content 177 176 353 352 General and administrative — 27 — 54 ------- ------- --------- ------- ------- ------- Total amortization of acquired intangible assets $ 3,332 $ 2,006 $ 6,665 $ 4,012 - ----- - ----- --------- - ----- - ----- -------

(3) Represents net loss per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the period from May 16, 2018 through June 30, 2018, the period following the reorganization transactions and Pluralsight, Inc.'s initial public offering.

PLURALSIGHT, INC.

Key Business Metrics and Non-GAAP Financial Measures(dollars in thousands)(unaudited)

Key Business Metrics

Three Months Ended Six Months Ended June June 30, 30, 2018 2017 2018 2017 ---------- ---------- ----------- ---------- Billings $ 65,297 $ 46,029 $ 120,716 $ 84,912 Billings from business customers $ 54,623 $ 35,845 $ 99,875 $ 65,172 % of billings from business customers 84 % 78 % 83 % 77 %

Non-GAAP Financial Measures

Three Months Ended June Six Months Ended June 30, 30, 2018 2017 2018 2017 ----------- ----------- ----------- ----------- Reconciliation of gross profit to non-GAAP gross profit: Gross profit $ 37,682 $ 27,004 $ 72,440 $ 53,034 Equity-based compensation 46 5 46 10 Amortization of acquired intangible assets 2,961 1,642 5,923 3,284 --------- - --------- - --------- - --------- - Non-GAAP gross profit $ 40,689 $ 28,651 $ 78,409 $ 56,328 - ------- - - ------- - - ------- - - ------- - Gross margin 70 % 69 % 70 % 70 % Non-GAAP gross margin 76 % 74 % 76 % 74 % Reconciliation of loss from operations to non-GAAP operating loss: Loss from operations $ (37,192 ) $ (16,752 ) $ (56,518 ) $ (25,020 ) Equity-based compensation 17,555 4,379 20,928 6,091 Amortization of acquired intangible assets 3,332 2,006 6,665 4,012 --------- - --------- - --------- - --------- - Non-GAAP operating loss $ (16,305 ) $ (10,367 ) $ (28,925 ) $ (14,917 ) - ------- - - ------- - - ------- - - ------- -

PLURALSIGHT, INC. Key Business Metrics and Non-GAAP Financial Measures (in thousands, except per share amounts) (unaudited) Three Months Ended June Six Months Ended June 30, 30, 2018 2017 2018 2017 ------------ ----------- ------------ ----------- Adjusted pro forma net loss per share Numerator: GAAP net loss attributable to common shares $ (187,840 ) $ (43,453 ) $ (230,523 ) $ (54,908 ) Accretion of Series A redeemable convertible preferred 156,750 21,175 176,275 22,825 units Reallocation of net loss attributable to non-controlling interests from the assumed exchange of LLC Units of (12,706 ) — (12,706 ) — Pluralsight Holdings for Class A common stock Equity-based compensation 17,555 4,379 20,928 6,091 Amortization of acquired intangibles 3,332 2,006 6,665 4,012 Loss on debt extinguishment 4,085 1,882 4,085 1,882 Adjusted pro forma net loss $ (18,824 ) $ (14,011 ) $ (35,276 ) $ (20,098 ) - -------- - - ------- - - -------- - - ------- - Denominator: Adjusted pro forma weighted-average common shares 89,006 47,786 68,819 47,784 outstanding, basic and diluted(1) ------------ ----------- ------------ ----------- Adjusted pro forma net loss per share $ (0.21 ) $ (0.29 ) $ (0.51 ) $ (0.42 ) - -------- - - ------- - - -------- - - ------- - Reconciliation of net cash used in operating activities to free cash flow: Net cash used in operating activities $ (5,793 ) $ (8,904 ) $ (16,217 ) $ (3,950 ) Less: purchases of property and equipment (2,706 ) (1,457 ) (4,574 ) (3,025 ) Less: purchases of content library (735 ) (606 ) (1,504 ) (1,229 ) ---------- - --------- - ---------- - --------- - Free cash flow $ (9,234 ) $ (10,967 ) $ (22,295 ) $ (8,204 ) - -------- - - ------- - - -------- - - ------- -

(1) Reflects the weighted-average shares of Class A common stock outstanding for each period presented, assuming the full exchange of LLC Units of Pluralsight Holdings into shares of Class A common stock.

PLURALSIGHT, INC. Condensed Consolidated Balance Sheets (in thousands) (unaudited) June 30, December 2018 31, 2017 ----------- ----------- Assets Current assets: Cash and cash equivalents $ 213,645 $ 28,267 Accounts receivable, net 36,268 38,229 Prepaid expenses and other current assets 8,907 5,125 --------- - --------- - Total current assets 258,820 71,621 Property and equipment, net 22,683 22,457 Content library, net 8,093 13,441 Intangible assets, net 2,111 2,854 Goodwill 123,119 123,119 Other assets 1,396 2,928 --------- - --------- - Total assets $ 416,222 $ 236,420 - ------- - - ------- - Liabilities, redeemable convertible preferred units, and stockholders' equity/members’ deficit Current liabilities: Accounts payable $ 6,836 $ 6,029 Accrued expenses 24,208 26,514 Accrued author fees 8,496 7,879 Deferred revenue 121,978 103,107 --------- - --------- - Total current liabilities 161,518 143,529 Deferred revenue, net of current portion 6,555 8,194 Long-term debt — 116,037 Facility financing obligation 7,505 7,513 Other liabilities 779 458 --------- - --------- - Total liabilities 176,357 275,731 Redeemable convertible preferred units — 405,766 Stockholders' equity/members’ deficit: Preferred stock — — Class A common stock 6 — Class B common stock 6 — Class C common stock 1 — Additional paid-in capital 436,177 — Members’ capital — — Accumulated other comprehensive (loss) income (16 ) 25 Accumulated deficit (321,704 ) (445,102 ) --------- - --------- - Total stockholders' equity attributable to Pluralsight, Inc./members' deficit 114,470 (445,077 ) Non-controlling interests 125,395 — --------- - --------- - Total stockholders' equity/members' deficit 239,865 (445,077 ) Total liabilities, redeemable convertible preferred units, and stockholders' $ 416,222 $ 236,420 equity/members’ deficit - ------- - - ------- -

PLURALSIGHT, INC. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended June 30, 2018 2017 ----------- ----------- Operating activities Net loss $ (66,954 ) $ (32,083 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of property and equipment 4,358 2,626 Amortization of acquired intangible assets 6,665 4,012 Amortization of course creation costs 930 671 Equity-based compensation 20,928 6,091 Provision for doubtful accounts 358 188 Amortization of debt discount and debt issuance costs 1,215 306 Debt extinguishment costs 4,180 931 Deferred tax benefit (64 ) — Changes in assets and liabilities: Accounts receivable 1,335 1,833 Prepaid expenses and other assets (3,858 ) (3,215 ) Accounts payable (588 ) 1,328 Accrued expenses and other liabilities (2,839 ) 3,641 Accrued author fees 617 939 Deferred revenue 17,500 8,782 --------- - --------- - Net cash used in operating activities (16,217 ) (3,950 ) --------- - --------- - Investing activities Purchases of property and equipment (4,574 ) (3,025 ) Purchases of content library (1,504 ) (1,229 ) Net cash used in investing activities (6,078 ) (4,254 ) --------- - --------- - Financing activities Proceeds from initial public offering, net of underwriting discounts and commissions 332,080 — Payments of costs related to initial public offering (3,085 ) — Borrowings of long-term debt 20,000 115,000 Repayments of long-term debt (137,710 ) (85,000 ) Payments of debt extinguishment costs (2,162 ) — Payments of debt issuance costs (450 ) (809 ) Payments to settle equity appreciation rights (325 ) — Taxes paid related to net share settlement (78 ) — Proceeds from the issuance of common units — 22 Payments of facility financing obligation (8 ) (8 ) Net cash provided by financing activities 208,262 29,205 --------- - --------- - Effect of exchange rate change on cash, cash equivalents, and restricted cash (86 ) 24 --------- - --------- - Net increase in cash, cash equivalents, and restricted cash 185,881 21,025 Cash, cash equivalents, and restricted cash, beginning of period 28,477 19,397 --------- - --------- - Cash, cash equivalents, and restricted cash, end of period $ 214,358 $ 40,422 - ------- - - ------- - Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 213,645 $ 40,212 Restricted cash included in other assets 713 210 --------- - --------- - Total cash, cash equivalents, and restricted cash $ 214,358 $ 40,422 - ------- - - ------- -

Investor Relations Contact:Mark McReynoldsInvestor RelationsPluralsight801-784-9007 mark-mcreynolds@pluralsight.com

Media Contact:DJ AndersonCommunications/PressPluralsight801-784-9007 dj@pluralsight.com