Securities Registration Statement (s-1)

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered (1)	Proposed Maximum Offering Price Per Share (2)	Proposed Maximum Aggregate Offering Price (1)(2)	Amount of Registration Fee
Class A common stock, $0.0001 par value per share	15,592,234	$30.62	$477,434,205	$57,865

(1)	Includes additional shares the underwriters have the option to purchase from the selling stockholders.

(2)	Estimated solely for purposes of calculating the amount of the registration fee in accordance with Rule 457(c) under the Securities Act on the basis of the average of the high and low prices of the registrant’s Class A common stock as reported on the Nasdaq Global Select Market on February 27, 2019.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion) Issued March   , 2019

13,558,464 Shares

CLASS A COMMON STOCK

The selling stockholders identified in this prospectus, including certain of our executive officers and directors, are offering 13,558,464 shares of Class A common stock. We will not receive any proceeds from the sale of shares by the selling stockholders.

We have three classes of authorized common stock: The Class A common stock offered hereby, as well as Class B common stock and Class C common stock. The Class A common stock and Class B common stock have one vote per share. The Class C common stock has 10 votes per share. Aaron Skonnard, our co-founder, Chief Executive Officer, and Chairman, personally and through associated entities holds all of our issued and outstanding Class C common stock and holds approximately 54.5% of the combined voting power of our outstanding capital stock. As a result, Mr. Skonnard is able to control or significantly influence actions requiring the general approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions.

Our Class A common stock is listed on the Nasdaq Global Select Market under the symbol “PS.” On March 1, 2019, the last reported sale price of our Class A common stock on the Nasdaq Global Select Market was $34.13 per share.

Concurrently with this offering of shares of Class A common stock, we are offering to qualified institutional buyers, in an offering exempt from registration under the Securities Act of 1933, as amended, $450,000,000 aggregate principal amount of our % Convertible Senior Notes due 2024, which we refer to as the notes, or a total of $517,500,000 aggregate principal amount of notes if the initial purchasers in the concurrent notes offering exercise in full their option to purchase additional notes. We cannot assure you that the concurrent notes offering will be completed or, if completed, on what terms it will be completed. The offering of Class A common stock hereby is not contingent upon the consummation of the concurrent notes offering, and the concurrent notes offering is not contingent upon the consummation of the offering of Class A common stock hereby. See the section titled “Concurrent Convertible Note Offering”. This prospectus is not an offer to sell or a solicitation of an offer to buy any securities being offered in the concurrent offering of notes. See the section titled “Concurrent Convertible Note Offering” for a summary of the terms of the notes and a further description of the concurrent offering of notes.

We are an “emerging growth company” as defined under the federal securities laws. Investing in our Class A common stock involves risks. See the section titled “ Risk Factors”  beginning on page 25.

PRICE $               A SHARE

Price to Public

Underwriting Discounts and Commissions (1)

Proceeds, before expenses, to the Selling Stockholders

Per Share

$

$

$

Total

$

$

$

(1)   See the section titled “Underwriters” for a description of the compensation payable to the underwriters.

The selling stockholders have granted the underwriters the right to purchase up to an additional 2,033,770 shares of Class A common stock at the public offering price less the underwriting discount. The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The underwriters expect to deliver the shares of Class A common stock to purchasers on            , 2019.

MORGAN STANLEY                    J.P. MORGAN                     BARCLAYS                    BofA MERRILL LYNCH                    CITIGROUP

KEYBANC CAPITAL MARKETS                     RAYMOND JAMES                     NEEDHAM & COMPANY                      SUNTRUST ROBINSON HUMPHREY                     FIRST ANALYSIS SECURITIES CORP                      BAIRD

, 2019

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PROSPECTUS SUMMARY

This summary highlights information contained in other parts of this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in shares of our Class A common stock and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. You should read the entire prospectus carefully, especially the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Organizational Structure,” and the consolidated financial statements of Pluralsight, Inc., and the related notes, before deciding to buy shares of our Class A common stock.

As used in this prospectus, unless expressly indicated or the context otherwise requires, references to “Pluralsight,” “we,” “us,” “our,” the “Company,” and similar references refer to Pluralsight, Inc. and its consolidated subsidiaries, including Pluralsight Holdings, LLC, or Pluralsight Holdings, following the reorganization transactions described in the section titled “Organizational Structure — Reorganization Transaction.” In addition, any reference to or description of our concurrent offering of     % Senior Convertible Notes due 2024, or notes, herein is wholly subject to the separate offering memorandum pursuant to which the notes are being offered. The notes are being offered only to qualified institutional buyers pursuant to such offering memorandum. We refer to our concurrent offering of notes as the “Convertible Note Offering.”

PLURALSIGHT

Our Value Proposition

Pluralsight is an enterprise software company committed to closing the global technology skills gap. This gap is holding back companies and entire industries from reaching their full potential.

The skills gap exists because technology is changing faster than the world’s ability to acquire and adapt to new skills. To address this challenge, many companies still use traditional in-person, instructor-led training, or in-person ILT, models, which don’t move fast enough or scale quickly enough to meet the ever-increasing demand.

We disrupt these in-person ILT models by offering a cloud-based technology skills platform that is broadly accessible. Learners on our platform can quickly acquire today’s most valuable technology skills through high-quality learning experiences delivered by subject-matter experts, available on any device at any time. We provide businesses with visibility into the strengths of their workforce, allowing them to better align resources, provide targeted skill development, and advance the skills of their teams.

Our learning experiences empower customers to adapt and thrive in the midst of unprecedented technological change and digital transformation. As a result, technology leaders now see us as their “supply chain for intellectual property.”

Closing the technology skills gap requires more than success in our commercial business. That is why we created Pluralsight One, our social impact initiative, committed to serving marginalized populations that our commercial business will not reach. Pluralsight One is being funded by two of our co-founders, who have together committed to donate one percent of the Company’s equity from their personal holdings. We will also donate one percent of our profit, time, and product to Pluralsight One endeavors.

Ultimately, our mission is to democratize technology skills. The more businesses and individuals we reach through our platform, the bigger our future opportunity becomes as we enable our customers to access an ever-expanding talent pool.

Overview

We are a leading provider of technology skill development solutions. Our cloud-based technology skills platform provides a broad range of tools, including skill and role assessments, a curated library of courses, learning paths, and business analytics. Our platform is powered by Iris, our proprietary machine-learning driven skill and role assessment algorithm and recommendation engine, which enables businesses to more effectively quantify and develop skills across

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technologies. Through our platform we provide both businesses and individuals with the ability to stay smart, stay relevant, and drive results.

Technology has dramatically changed businesses. Companies of any scale across industries are embracing digital transformation as a way to remain competitive. To be successful through digital transformation, companies have had to dramatically adapt their workforces to incorporate more technology professionals. As the pace of technological change increases, companies are striving to improve the skills of their workforces and stay ahead of the latest technology trends.

Simply hiring more technologists is not enough. Companies need to assess the skill set of employees, address skills gaps on an individual level, and continuously help employees advance by building skills on relevant topics. Technology changes rapidly and businesses are under pressure to keep up with this change. From 2004 to 2016, there was an average of four new major software development frameworks created each year, in addition to newly developed derivations of existing software languages. As a result, computer science courses become obsolete quickly. According to a study by the Economist Intelligence Unit, 94% of executives cite a “moderate” or “severe” digital skills gap in their businesses, and a survey by Tech Pro Research indicates that 59% of IT employees worry that their current skills will become obsolete. To counter this trend, businesses are focused on improving technology skill development and increasing its efficacy.

Our cloud-based technology skills platform provides businesses the solutions that they need to improve employee skills and drive better business outcomes. The key components of our platform include:

•

Skill and Role Assessments : Our assessment tool uses machine learning and advanced algorithms to measure a user’s skills, benchmark that user against others in the industry, and recommend opportunities for growth. Skills assessments can be mapped to a defined role in order to measure a user’s technical proficiency required to master that role. We provide a modern skill assessment experience that gives businesses a credible, adaptable, and efficient model for validating technology skills.

•

Course Library : Our course library includes thousands of on-demand and online courses across a range of technology subject areas, including cloud, mobile, security, IT, and data. We have built our exclusive course library primarily by engaging our world-class community of subject-matter experts, or authors, who create content for us and share in our success by receiving revenue-share amounts based on the viewing of their content. Our platform also offers a hands-on learning experience through interactive courses. These courses provide an in-browser developer environment that allows users to practice as they learn through coding challenges with real-time feedback.

•	Learning Paths : Based on either an assessment or a user’s goals, our learning paths are personalized to take users through a set of courses designed to help them master a particular subject area.

•	Business Analytics : Our business analytics tools enable business customers to evaluate the technology skills of their teams, align learning to key business objectives, determine the usage of our platform, examine trends in skill development, and quantify the impact of our platform on their business.

We developed our proprietary machine-learning technology, Iris, to power our platform and improve the value of our skill and role assessments and course recommendations. Iris powers our skill assessments algorithm and guides users on how to develop desired skills. Iris uses machine learning, modern testing approaches, advanced statistical analysis, and data to create a smarter, more personalized development journey.

Our platform is designed for the professional technologist but it can be used by anyone, at any skill level, who has an interest in improving their technology skills. We offer a range of courses from beginner to advanced skill levels, with significant granularity within each topic so users can access content most relevant to their specific needs. We utilize a cloud-based delivery model that enables us to regularly make new content available to users and allows businesses to deliver consistent skill development across distributed workforces. Users can access our platform to learn anytime and anywhere.

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Our platform is used by businesses to train their software developers, IT professionals, data scientists, data engineers, technical engineers, business users, and technology executives. Our platform is also used by individuals to develop and enhance their technology skills. Small teams often represent the “top of the funnel” for larger deployments, bringing our technology into the workplace and proliferating usage within a business. We deploy a direct sales team focused on landing new business customers and expanding business-wide deployments. We have been successful in attracting businesses, particularly large enterprises, to our platform and expanding their use of our platform over time. As of December 31, 2018, our customers included more than 340 of the 2018 Fortune 500. From 2013 to 2018, the billings from our 2018 Fortune 500 customers, including new 2018 Fortune 500 customers that we acquired after 2013, increased by 18.1 times in the aggregate from the billings we generated from those companies in 2013. For year ended December 31, 2018, 85% of our billings came from business customers and 15% came from individual users. Customers subscribe to our platform unassisted through our website or through our direct sales channel. We make adoption easy, with free-trials and transparent pricing for all of our features.

We believe that we have substantial opportunities for growth. According to Training Industry, Inc., or Training Industry, global spend on corporate training initiatives was estimated to be $362 billion in 2017. Evans Data Corporation estimates that in 2017, there were over 102 million members of technical teams globally. Based in part on this information from Evans Data Corporation, we estimate that our current total addressable market exceeds $31 billion.

In recent years, we have reached significant scale in users and our customer base, which span over 180 countries across the globe. As of December 31, 2018, we had 16,756 business customers, including over 810,000 business users, compared to 575,000 business users as of December 31, 2017. Our content is developed and sourced from a network of over 1,550 authors. Today, we have thousands of on-demand and online courses on our platform and are adding on average more than 80 new courses each month. Our scale, growth, and rapid adoption are a testament to the applicability and effectiveness of our platform in the market for businesses and individuals.

We have achieved significant growth in recent periods. For the years ended December 31, 2016, 2017, and 2018, our billings were $149.2 million, $205.8 million, and $293.6 million, respectively, representing year-over-year growth of 15%, 38%, and 43%, respectively. Our billings from business customers for the same periods were $104.9 million, $163.0 million, and $248.2 million, respectively, representing year-over-year growth of 25%, 55%, and 52%, respectively. For the years ended December 31, 2016, 2017, and 2018, our revenue was $131.8 million, $166.8 million, and $232.0 million, respectively, and our net loss was $20.6 million, $96.5 million, and $128.6 million, respectively, which reflects our substantial investments in the future growth of our business.

We are building our business to generate strong free cash flow over the long term. For the years ended December 31, 2016, 2017, and 2018, cash provided by (used in) operations was $4.5 million, ($12.1 million), and ($5.9 million), respectively. For the years ended December 31, 2016, 2017, and 2018, our free cash flow was ($7.9 million), ($20.5 million), and ($18.0 million), respectively, and our free cash flow included cash payments for interest on our long-term debt of $5.5 million, $6.9 million, and $4.3 million, respectively. We expect our free cash flow to improve as we experience greater scale in our business and improve operational efficiency. See the section titled “Selected Consolidated Financial and Other Data—Non-GAAP Financial Measures” for a description of free cash flow and for a reconciliation of free cash flow to net cash provided by (used in) operations, the most directly comparable financial measure calculated in accordance with GAAP.

Industry Background

Companies have to drive innovation through technology to remain competitive

As technology evolves, competition across businesses intensifies. Industry leaders that were once measured by their scale, product quality, and reputation are increasingly measured by the success of their transition into the digital age. Software is displacing manual processes throughout businesses and every company is becoming a technology company. As a result, companies are seeking to hire and retain talent that can drive lasting innovation in technology. Managers need to empower their employees to innovate in order to create or maintain a competitive advantage.

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The number of technical positions is growing across all industries

Demand for qualified technology professionals is growing as companies race to become bigger, better, and faster. The number of technology-related functions across industries is expanding as companies move into the digital age. To remain competitive, businesses must adapt to changing needs and ensure that they get the best long-term return on their investment in human capital by hiring and retaining the best talent and helping employees maintain and enhance their skill sets.

Technology skills are in high demand, but become obsolete quickly

The market for technology talent is growing and constantly evolving due to the continuously changing needs of firms and their employees. Simply filling positions, however, is not enough. Technology evolves and becomes obsolete quickly, and new technologies are perpetually emerging. As such, technology professionals must constantly keep their skills current.

Professionals in many other industries, such as medicine, law, and education, are required to undertake continuing education to maintain their professional licenses. There is no such requirement for technology professionals despite how quickly their skills can become obsolete and must be replaced. Businesses need a way to assess the ongoing technological proficiency of their workforces.

High levels of employee skill development result in better performing companies

Employee skill development has a direct impact on a company’s overall performance. According to Deloitte Touche Tohmatsu Limited, or Deloitte, organizations with a strong learning culture are 56% more likely to be the first to market with their products versus their peers, and outperform the profitability of their peers, by 17%. As a result, businesses that fail to proactively improve the skills of their employees often lag behind competitors, and the consequences of this failure can be significant.

The way content is created and delivered impacts the effectiveness on the learner

In-person ILT remains the primary method to deliver content to individuals. This approach often fails to deliver satisfactory results because the creators of the content lack sufficient expertise in the subject or because the learning methods employed are antiquated or ineffective. Certain modern learning approaches provide lasting retention of information. These modern learning approaches provide diversity in delivery and improve efficacy of instruction for students, and include:

•	Short segments of digestible content to hold attention;

•	Use of visuals to target one of the four forms of learning styles (visual, auditory, written, and kinesthetic);

•	Learning from other people;

•	Delivery of content by subject-matter experts with relevant experience;

•	Information delivered when it is most useful; and

•	Subject matter that is relatable to an individual.

The ability to incorporate these qualities into technology skill development can have lasting effects on user engagement with content, understanding of key concepts, and long-term knowledge retention.

Businesses need end-to-end solutions to incorporate assessment, skill development, and analytics

Businesses need a way to accurately measure the skills of their employees in order to deliver relevant skill development and appropriately staff teams for success. With the fast pace of technological innovation, frequently assessing skills and elevating employee knowledge will be critical. Businesses need ways to measure employees against peer groups, identify where there are gaps in knowledge, and assign targeted skill development to best suit the needs

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of individuals. They also need to ensure that the skill development is effective and that employees understand the concepts they have been taught.

The Shortcomings of Existing Solutions

Many current approaches to technology skill development are inadequate. The creators of content often lack sufficient subject-matter expertise, the approaches do not focus on the needs of technology professionals, the learning methods are insufficient for the needs of modern businesses, and the offerings do not effectively enable businesses to measure concept mastery by their employees. Shortcomings of these approaches include:

In-person, instructor-led training is costly and does not scale

Still the most widely used form of corporate skill development, in-person ILT has numerous disadvantages. In-person ILT is costly, not scalable through a large or distributed business, not available on-demand, not tailored to an individual’s needs, and does not typically include capabilities for assessment.

Legacy business e-learning is standardized, not personalized

These solutions typically consist of general, corporate-mandated static courses. These courses quickly become outdated and are designed to be accessed from desktops at work. This approach typically sacrifices depth and personalization in an attempt to make the content relevant to a large audience.

Consumer-centric e-learning does not provide advanced technology skill development or scale

A number of online learning solutions have emerged for individuals, such as solutions offering crash courses in coding or web design in an attempt to prepare people for entry-level programming jobs. These solutions do not provide advanced levels of technology skill development for technology professionals, or scale to meet the needs of businesses.

Free resources can be shallow, inconsistent, and inaccurate, and are not curated for specific needs

Free courses are available online from sources such as YouTube and can be accessed via Google searches. Free courses may not have been created by subject-matter experts, generally do not provide the level of depth that is required for skill development by technology professionals, and lack efficient discoverability, relevancy to a specific need, quality control, and measurement of success or concept mastery.

The Pluralsight Platform

Our solution consists of a cloud-based technology skills platform that provides businesses with tools to train their workforces and individuals with tools to advance their careers. We enable businesses to evaluate the technical abilities of their teams, align learning to key business objectives, develop talent, and close skills gaps in critical technology areas, such as cloud, mobile, security, IT, and data. With our large network of technology subject-matter experts, extensive and growing course library, and our ability to quantify the impact and value of our solution, we are helping business leaders to succeed in the digital age.

Our platform includes skill and role assessments, a curated library of courses, learnings paths, and business analytics. We developed our proprietary machine-learning technology, Iris, to power our platform and improve the value of our skill and role assessments and course recommendations. Iris powers our skill and role assessments algorithm and guides users on how to develop desired skills. Iris uses machine learning, modern testing approaches, advanced statistical analysis, and data to create a smarter, more personalized development journey.

All of our courses are delivered on demand and across a range of devices and operating systems, including iOS, Android, Windows, and Mac. In addition, Pluralsight applications are available for TV applications, including Amazon Fire TV, Apple TV, Chromecast, and Roku.

Skill and Role Assessments

Through our skill and role assessments, we are able to assess an individual’s proficiency in a topic or role through adaptive tests, identify gaps in skill sets, benchmark against peers, and provide him or her with an Iris Quotient, or IQ.

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Through our proprietary Pluralsight IQ technology, users can receive a Skill IQ in a particular skill, such as Angular, or a Role IQ in a broader role, such as Angular Web Developer.

Skill IQ is a numeric assessment of a skill and includes the skill area or technology, rating, skill level, and benchmarked percentile. Powered by Iris, our skill assessments provide highly indicative results on knowledge in specialized areas within 20 questions in under 10 minutes. Skill IQ provides a modern skill assessment experience that gives businesses a credible, adaptable, and efficient model for validating technology skills.

Multiple skill assessments can be mapped to a defined role, in order to define a user’s technical proficiency, or Role IQ, for a specified role. Our Role IQ is a standard of measuring success in technology roles. Role IQ quantifies a user’s technical proficiency in a specific role and recommends courses for further development.

We also offer certification practice exams through our platform. Users utilize these practice exams to assess and validate their IT, management, and technical skills. Businesses can leverage certification practice exams to help certify their employees in areas of strategic importance to the business.

Course Library

Our course library includes thousands of on-demand and online courses across a range of technology subject areas, including cloud, mobile, security, IT, and data. A course generally consists of between two and four hours of video, broken into multiple modules consisting of two- to five-minute clips on specific topics, presented by an author who is an expert on the subject. These videos and modules are searchable, so users can either take an entire course, or target a particular segment for a specific need. At the end of a course, users can take a knowledge check to determine if they have mastered the material and are presented recommendations for future skill development.

We have built our exclusive course library primarily by engaging our world-class community of authors to create content for us and share in our success by receiving revenue-share amounts based on the viewing of their content. Our philosophy is that the more our authors earn, the more they are incentivized to create new content, which drives customer growth and user adoption.

Our platform also offers interactive courses with hands-on coding modules, which allow users to practice as they learn. Our platform uses Iris to identify coding errors and provide real-time feedback. Our projects feature allows users to practice real-world scenarios in the customer’s local coding environment. These features allow users to apply their knowledge to drive measurable learning outcomes.

Learning Paths

Based on either an assessment or an individual’s goals, our learning paths are personalized to take users through a set of courses designed to help them master a particular subject area. Our learning paths take into account the skill level of each individual to guide users to the content that is most relevant to them, and not require them to spend time reviewing content that they already know. In addition, periodic learning assessments are available to ensure that users are on target with their learning objectives.

Our platform also allows businesses to create channels, which are a self-curated list of courses, modules, clips, and links to external resources. Channels can be shared with specific teams and throughout the business to enable custom skill development that aligns to specific objectives, which allows companies to reach their learning goals and business objectives more effectively and efficiently.

Business Analytics

Our business analytics tools enable business customers to evaluate the technical abilities of their teams, align skill development to key business objectives, determine the usage of our platform, examine trends in employee learning and quantify the impact of our personalized learning solution on their teams’ skills and roles. This enables our business customers to develop their employees’ talent and close any skills gap.

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Key Benefits of Our Platform

The most relevant skill development for a wide range of technology professionals

We are a company founded by software engineers, and we understand first-hand the importance of keeping up with constantly changing technologies. We are focused on delivering learning content addressing the technology languages, tools, and frameworks used by the majority of technology professionals in the workplace.

Integrated technology skills platform

Our integrated platform combines skill and role assessments, course library, learning paths, and business analytics to ensure that learners are taking the courses most useful to them and demonstrating comprehension of the subject matter. By gathering such insights from our platform, businesses can understand skills gaps, benchmark employees against consistent standards, and address learning needs in an efficient and targeted manner.

High quality curated content

Our content is the product of our industry-leading authors. We have spent many years identifying, cultivating, and growing our author network, and over 1,550 authors have contributed to our current course library. One of the primary challenges for businesses and individuals seeking to enhance technology skills is finding the right resources. We address that challenge for them. Our extensive relationships within the developer and technical community allow us to source and retain the best subject-matter experts to produce relevant content for our users. We provide quality assurance on our authors’ expertise.

Cost effective technology skills platform

We believe our pricing model provides a significant cost advantage compared to traditional technology skill development offerings. Organizations spent an average of $1,296 per employee in 2017 on direct learning expenditures, according to the Association for Talent Development. While we currently only address a portion of our customers’ skill development needs, we believe that technology skill development represents a significant and growing portion of our customers’ skill development expenditures. Additionally, we have expanded, and intend to continue to expand, our course library to address a wider range of our customers’ skill development needs. Our published pricing ranges from $579 to $779 per user per year for business subscriptions, providing what we believe to be a significant cost advantage over alternative solutions.

Optimized for on-demand accessibility

We offer our content the way users want to consume it. Our cloud-based technology skills platform is an on-demand solution that allows globally distributed users to access courses anytime they want, online or offline from almost any device, maximizing utilization of our product and workplace efficiency.

Our Market Opportunity

In 2017, an estimated $362 billion was spent on corporate training initiatives, according to Training Industry. The majority of corporate spending today is on in-person ILT and legacy e-learning solutions. We believe as companies adopt more effective, on-demand, and cost-advantageous solutions for employees, we will take a significant share of market spend. Further, Evans Data Corporation estimates that in 2017, there were over 102 million members of technical teams globally. Based in part on this information from Evans Data Corporation, we estimate that our current total addressable market exceeds $31 billion.

Competitive Strengths

Focus on addressing the needs of businesses

We are focused on enhancing skills development for technology professionals within businesses. Our cloud-hosted, multi-tenant application platform is designed for enterprise scalability to accommodate significant growth in user base, support businesses with highly distributed locations, and provide service-level agreements around system availability. We provide services to help ensure our customers realize the full value of our platform.

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Target ongoing development of technology professionals

The skill development needs within a business are different from those of recent high school graduates, recreational learners, or individuals changing careers. Our content is focused on ensuring employees can master the latest emerging technologies and improve their skills in existing areas. Our course library includes thousands of on-demand and online courses across a range of technology subject areas, including cloud, mobile, security, IT, and data. We have built our extensive course library primarily by engaging our world-class community of authors, who create content for us. Our course library and community of authors enables us to provide high-quality content across a range of technology subject areas so our users can improve their performance in these key areas.

Consistent innovation and product expansion

Since 2012, we have expanded our course library at a compound annual growth rate, or CAGR, of approximately 28% while maintaining high quality, adding major skill development categories, and expanding our end-to-end portfolio to include assessments and analytics. Our cloud-based delivery model combined with our distributed and scalable technology architecture allows us to regularly introduce new content and platform features to our customers quickly and seamlessly.

Advance skill and role assessments with personalized learning paths

Our ability to analyze, track, and benchmark employees differentiates our platform in the market, drives lasting value to businesses, and supports our high level of revenue retention from our business customers. Through our skill and role assessments, businesses are able to identify talent within their organizations and assess proficiency of a topic through adaptive tests, identify gaps in skills, and invest intelligently in their teams’ learning. With every assessment and course completed, Iris analyzes information about the state of technology skills of a specific business customer’s users and further personalizes the platform to each user’s needs.

Highly efficient content development model

Our content development model allows us to source and distribute content in a highly efficient manner without having to hire content authors as full-time employees. We identify authors that are subject-matter experts in various technology areas, and engage them to develop content for our platform. By publishing their courses on our platform, we provide authors with exposure to our broad user base, thereby enabling our authors to build their reputations and increase their name recognition as a trusted source in the market. In addition, we share our success with our authors, who receive revenue-share amounts based on the viewing of their content. This incentivizes authors to create new high-quality content, which drives further user adoption and customer growth on our platform. The strength of our platform and our approach to our author relationships enables us to attract and retain leading authors. The number of authors on our platform has increased from over 100 as of December 31, 2012 to over 1,550 as of December 31, 2018.

In 2018, we introduced the Pluralsight Technology Index, which captures billions of data points from popular developer sites and search engines to calculate the global popularity and trending growth rates of over 300 technologies. This allows us to efficiently identify the most popular technology trends, which influences areas of future content development for us and keeps our customers informed.

Blue-chip customer base

As of December 31, 2018, our customers included over 340 of the 2018 Fortune 500. We derived approximately $70.4 million of our billings from our Fortune 500 customers in the year ended December 31, 2018. We believe there exists a significant opportunity to drive sales to large enterprises, including expanding relationships with existing customers and attracting new customers.

Mission-driven culture

Our mission of “democratizing technology skills” inspires everything we do. This is our North Star—it is the why and how behind all of our decisions. We have chosen to grow in a way that we believe will make our mission a reality. This includes creating a values-based culture that empowers our team to do the best, most purposeful work of their careers.

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Growth Strategy

Expand deployments within our customer base

We utilize a land-and-expand strategy within businesses, beginning with either small teams or departmental deployments. Our platform is used by individuals, developer groups, IT departments, line of business users, and human resources. We intend to drive increased sales to existing customers by targeting new users, departments, and geographies within our customers.

Grow our business customer base

We have significantly expanded our direct sales force to focus on business sales and have aligned our sales team’s compensation structure to fit this objective. We intend to pursue a greater proportion of large scale, recurring business transactions and to more effectively drive business customer engagement throughout the life of the relationship.

Geographic expansion

For the year ended December 31, 2018, we generated 64% of our revenue from customers in the United States. We see a significant opportunity to expand our reach into other regions, particularly where there are large developer groups for multi-national businesses. We have users in over 180 countries around the world who have access to our platform, and we are building out sales teams in Europe and Asia to further address these large markets impacted by rapidly changing technologies.

Expand course library with new content areas and offer additional platform features

We plan to continue to expand our course library to address the most relevant topics for users. Since January 1, 2013, we have added an average of over 80 new courses every month, with an average of over 200 new hours of video per month. We will continue to add additional features to our technology skills platform over time which we believe will provide us the opportunity to generate more revenue from our customers.

Strategic acquisitions

Strategic acquisitions have enabled us to quickly scale our business, expand our course library, add features to our cloud-based technology skills platform, and address new areas of technology in high demand by our customers. Over the past six years, we have made targeted strategic acquisitions, which have allowed us to expand our content catalog, author base, and platform capabilities. We will continue to selectively add content and capabilities through acquisitions that enhance value to our customers.

Pluralsight One

We believe technology has the power to create freedom, equality, and opportunity around the globe. Pluralsight One is our social impact initiative dedicated to closing the technology skills gap. The initiative supports nonprofit organizations and amplifies their impact by equipping them and the people they serve with the technology skills needed to solve the world’s greatest challenges. The more individuals we reach through our platform, the bigger our future opportunity becomes as we enable our customers to access an ever-expanding talent pool.

Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. Key risks include:

•	Market adoption of cloud-based learning solutions is new and unproven and may not grow as we expect, which may harm our business and results of operations, and even if market demand increases, the demand for our platform may not increase.

•	If we are not able to expand our course library effectively or develop new platform features that respond to constantly evolving technologies and the needs of our customers, our business and results of operations would be adversely affected.

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•	The market in which we participate is competitive, and if we do not compete effectively, our results of operations could be harmed.

•	If our business customers do not expand their use of our platform beyond their current organizational engagements or renew their existing contracts with us, our ability to grow our business and improve our results of operations may be adversely affected.

•	If we are unable to increase sales of subscriptions to our platform to business customers while mitigating the risks associated with serving such customers, our business, financial condition, and results of operations would suffer.

•	Failure to effectively expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform.

•	Our future performance depends in large part on attracting and retaining authors and producing content that addresses our customers’ needs.

•	Our quarterly and annual results of operations may vary significantly and may be difficult to predict. If we fail to meet the expectations of investors or securities analysts, our stock price and the value of your investment could decline.

•	If our security measures are breached or unauthorized access to customer data is otherwise obtained, our platform may be perceived as insecure, we may lose existing customers or fail to attract new customers, our reputation may be harmed, and we may incur significant liabilities.

•	Privacy, data protection, and information security concerns, and data collection and transfer restrictions and related domestic or foreign regulations, may limit the use and adoption of our platform and adversely affect our business.

•	If we fail to retain key employees, including Aaron Skonnard, our co-founder, Chief Executive Officer, and Chairman, or to recruit qualified technical and sales personnel, our business could be harmed.

•	Our principal asset is our interest in Pluralsight Holdings, and we are dependent upon Pluralsight Holdings and its consolidated subsidiaries for our results of operations, cash flows, and distributions.

•	We will be required to pay certain of our Members for certain tax benefits we may claim, and we expect that the payments we will be required to make will be substantial.

•	The multi-class structure of our common stock has the effect of concentrating voting control with Aaron Skonnard, our co-founder, Chief Executive Officer, and Chairman; this limits or precludes your ability to influence corporate matters and may have a negative impact on the price of our Class A common stock.

If we are unable to adequately address these and other risks we face, our business, financial condition, results of operations, and prospects may be adversely affected.

Our Organizational Structure

In connection with the completion of our initial public offering, or IPO, we completed a series of reorganization transactions, or the Reorganization Transactions, including: (i) the amendment and restatement of Pluralsight Holding’s limited liability company agreement, or the Fourth LLC Agreement, to, among other things, appoint us as Pluralsight Holding’s sole managing member, effectuate the conversion of all outstanding membership units of Pluralsight Holdings, or the LLC Units, and reclassify all LLC Units as non-voting units; (ii) the merger of certain members of Pluralsight Holdings that were corporations into Pluralsight, Inc. and the exchange of certain members’ LLC Units for shares of Class A common stock; (iii) the amendment and restatement of the certificate of incorporation of Pluralsight, Inc. to, among other things, authorize three classes of common stock; and (iv) the issuance of shares of Class B and Class C common stock to Pluralsight Holding’s existing owners, or the Continuing Members, on a one-to-one basis with the number of LLC Units owned.

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We are the sole managing member of Pluralsight Holdings. As its sole managing member, we operate and control the business and affairs of Pluralsight Holdings and its subsidiaries. In addition, we have the sole voting interest in, and control the management of, Pluralsight Holdings. As a result, Pluralsight, Inc. consolidates Pluralsight Holdings in its consolidated financial statements and reports the non-controlling interests related to the LLC Units held by the Continuing Members. Following the completion of this offering, based on the number of LLC Units the Continuing Members expect to exchange for Class A common stock and sell in this offering, we will hold a 54.2% ownership interest in Pluralsight Holdings.

Concurrent with the completion of the IPO and the Reorganization Transactions, we became a party to a Tax Receivable Agreement, or TRA with the Continuing Members. The TRA provides for payment to the Continuing Members of approximately 85% of the amount of the calculated tax savings, if any, we will realize due to future exchanges of LLC Units (together with the corresponding shares of Class B or Class C common stock, as applicable) for Class A common stock. See the sections titled “Risk Factors—Risks Related to Our Organizational Structure,” “Organizational Structure,” and “Certain Relationships and Related Party Transactions” for additional information regarding the TRA.

Our Initial Public Offering

In May 2018, we completed our IPO of 23,805,000 shares of Class A common stock and received $332.1 million in proceeds, net of underwriting discounts and commissions, which we used to (i) purchase newly issued LLC Units from Pluralsight Holdings at a price per unit equal to the IPO price, less underwriting discounts and commissions, (ii) pay the IPO offering expenses, in an amount of approximately $7.4 million, (iii) prepay in full our outstanding indebtedness under our credit facility and the related prepayment premium thereto, and (iv) settle outstanding non-transferable equity appreciation rights, or EARs, issued by one of our subsidiaries that vested and settled in cash upon the completion of the IPO in an amount of approximately $0.3 million.

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The diagram below depicts our organizational structure immediately following the Reorganization Transactions, the IPO, and completion of this offering assuming no exercise by the underwriters of their option to purchase additional shares of our Class A common stock from the selling stockholders.

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(1)	Includes (i) the shareholders of Former Members that were corporations and that merged into Pluralsight, Inc. and (ii) Former Members who exchanged their LLC Units for Class A common stock in Pluralsight, Inc.

(2)	Includes all Continuing Members, except Aaron Skonnard and his associated entities.

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Concurrent Convertible Note Offering

Concurrently with this offering of Class A common stock, we are offering to qualified institutional buyers, in an offering exempt from registration under the Securities Act of 1933, as amended, or the Securities Act, $450 million aggregate principal amount of notes, or a total of $517.5 million aggregate principal amount of notes if the initial purchasers in the concurrent Convertible Note Offering exercise in full their option to purchase additional notes. We cannot assure you that the concurrent Convertible Note Offering will be completed or, if completed, on what terms it will be completed. The offering of Class A common stock hereby is not contingent upon the consummation of the concurrent Convertible Note Offering, and the concurrent Convertible Note Offering is not contingent upon the consummation of the offering of Class A common stock hereby. See the section titled “Concurrent Convertible Note Offering.”

Corporate Information

We were incorporated in Delaware in December 2017 and have no material assets other than our ownership of LLC Units and have not engaged in any business or other activities except in connection with the Reorganization Transactions described in the section titled “Organizational Structure.” Our principal executive offices are located at 182 North Union Avenue, Farmington, Utah 84025, and our telephone number is (801) 784-9007. Our corporate website address is pluralsight.com. Information contained on or accessible through our website is not incorporated by reference into this prospectus, and inclusion of our website address in this prospectus is an inactive textual reference only. You should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our Class A common stock.

“Pluralsight,” our logo, and our other registered or common law trademarks, service marks, or trade names appearing in this prospectus are the property of Pluralsight, Inc., Pluralsight Holdings, and their subsidiaries. Other trademarks and trade names referred to in this prospectus are the property of their respective owners.

Emerging Growth Company

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise generally applicable to public companies. These reduced reporting requirements include:

•	an exemption from compliance with the auditor attestation requirement on the effectiveness of our internal control over financial reporting;

•	an exemption from compliance with any requirement that the Public Company Accounting Oversight Board may adopt regarding a supplement to the auditor’s report providing additional information about the audit and the financial statements;

•	reduced disclosure about our executive compensation arrangements;

•	an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or golden parachute arrangements; and

•	extended transition periods for complying with new or revised accounting standards.

We may take advantage of these provisions until we are no longer an emerging growth company. We would cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenues; (ii) the date we qualify as a large accelerated filer, with at least $700 million of equity securities held by non-affiliates; (iii) the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; and (iv) December 31, 2023. We may choose to take advantage of some but not all of these reduced reporting requirements. We have taken advantage of certain reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

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The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

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