Analyst: Let's start with renewals. When did the relief money actually show up in your numbers?
Expert: Later than everybody thinks. People in your seat were calling me all through the back half of '24 and my answer then was, honestly, we're fine. And we were fine. The obligation deadline came and went, our spring cohort was basically normal. Down a touch. The damage landed a full year later, the cycle that ran January to June of '25, for the school year starting that August.
Analyst: Why the lag?
Expert: Carryover mostly. Late liquidation extensions. A couple of states had stabilisation money still flowing, and a lot of districts were budgeting like it was coming back. I sat in rooms with business officials who, no, I'll be fair to them, they weren't stupid. They'd been told to plan for a range. The top of the range didn't happen.
Analyst: Give me the shape of the decline. Numbers if you can.
Expert: Logo retention we'd run at ninety-one, ninety-two. Boring number, never moved. Went to eighty-three in that '25 cycle. Eighty-three point something, don't hold me to the decimal. Eighty-two point nine, actually, now I say it out loud, because I remember arguing we couldn't round it up to eighty-three in the board deck. Net revenue retention is where it got ugly. We'd been at a hundred and four, hundred and six. That cycle came in at seventy-nine.
Analyst: Hold on. Eight or nine points of logo loss but twenty-five-plus points of dollar loss. Those don't reconcile unless
Expert: Unless they stayed and shrank. Correct.
Analyst: Walk me through that.
Expert: A district that had us in fourteen schools renewed in four. One with about four thousand licences came back and said we'll take eleven hundred, tested grades only. Almost nobody fired us, which is the emotionally confusing part. Tickets were fine. Principals liked us. We were just the cheapest thing to cut, because cutting a software line doesn't require a public hearing and laying off a reading interventionist does.
Analyst: Of your gross churn dollars that year, how much was downgrade inside a retained account versus outright loss?
Expert: Gross churn was eleven and change. Million. Of that, six and a half, six point eight I want to say, was downgrade inside a contract we technically kept. So most of the pain came out of accounts that showed up green in every system we owned.
Analyst: And you'd built nothing to catch that.
Expert: Nothing. Every dashboard flagged accounts at risk of leaving.
Analyst: So what did predict it?
Expert: Nothing we were measuring, and I'll be blunt about that, because I'd signed off on what we measured. We ran it against usage, seat activation, satisfaction, tenure, whether they'd bought coaching. Flat. Couple came out slightly the wrong direction, which was humbling. The thing that actually predicted it was sitting on a document nobody in my organisation had ever opened.