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  "documentTitle": "PowerSchool Holdings, Inc. (PWSC)",
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  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-04-17 00:00:00",
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  "notes": "Uses two tables from financial statements to highlight the discrepancy between cash outflows for software development and the add-backs in non-GAAP metrics.",
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      "kind": "callout",
      "text": "Capitalized cash costs are conveniently added-back to both Adj. EBITDA and Non-GAAP EPS. Capitalized software development costs were nearly 18x PP&E Purchases in 2023",
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      "text": "capitalized product development costs: $40 million",
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      "text": "PowerSchool's reported Adj. EBITDA conveniently ignores ~$40 million of annual capitalized product development costs, a figure that has grown by ~$10 million since 2020.",
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      "text": "Source: PowerSchool FY23 10-K",
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      "text": "Cash flows from investing activities table showing Investment in capitalized product development costs.",
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      "text": "Reconciliation table showing Amortization add-backs.",
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      "text": "We Believe PowerSchool's Adj. EBITDA Ignores The Real Cash Impact From Capitalized Software Costs",
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