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  "documentTitle": "PowerSchool Holdings, Inc. (PWSC)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-04-17 00:00:00",
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  "pageNumber": 85,
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  "notes": "The slide uses a table to compare forecasted vs actual amortization and highlights the growing 'Thereafter' bucket as a percentage of total expenses.",
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      "kind": "callout",
      "text": "PowerSchool Keeps Kicking A Higher % Of Expenses Into The Future",
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      "text": "amortization deferral: 14%",
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      "text": "We observe that in each of the past three years, the Company has systematically amortized significantly more product development costs than it forecasted it would in the previous year; this amortization is then passed off as an add-back to Adj. EBITDA. In addition, we see that the percentage of expenses listed as “Thereafter” in the future keeps increasing as a percentage of total forecasted expenses. The forecasted amortization schedule goes beyond 5 years, despite the Company’s disclosure saying that costs are amortized over 5 years. An alternative potential explanation is that its product development is becoming more complex and requiring more time to complete, which we would also interpret as a negative development.",
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      "text": "Capitalized software development costs are being amortized on a straight-line basis over five years — FY23 10-K",
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      "text": "Source: S-1, Prospectus, 2021, 2022, 2023 10-K",
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      "text": "Schedule of Estimated Future Capitalized Product Development Amortization",
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      "kind": "title",
      "text": "Why Is PowerSchool Deferring More Amortization Farther Into The Future Beyond 5 Years?",
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