Pluralsight, Inc. (Form: 10-Q, Received: 07/31/2019 16:14:40)

Date: July 31, 2019

/s/ Aaron Skonnard

Aaron Skonnard

Chief Executive Officer

( Principal Executive Officer )

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-38498

PLURALSIGHT, INC.

(Exact name of registrant as specified in its charter)



Delaware		82-3605465
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

182 North Union Avenue

Farmington, Utah 84025

(Address of principle executive offices, including zip code)

(801) 784-9007

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share	PS	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	ý	Smaller reporting company	☐
		Emerging growth company	ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of July 19, 2019, the registrant had 140,016,129 shares of common stock outstanding, consisting of 101,234,524 shares of Class A common stock, 24,594,749 shares of Class B common stock, and 14,186,856 shares of Class C common stock.

PLURALSIGHT, INC.

TABLE OF CONTENTS




		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and 2018	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2019 and 2018	5
	Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity for the Three and Six Months Ended June 30, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018	10
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	51
Item 4.	Controls and Procedures	52

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 6.	Exhibits	57

Signatures		58

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

As used in this Quarterly Report on Form 10-Q, 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.

This Quarterly Report on Form 10-Q, including the section titled “Management's Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions, generally relate to future events or our future financial or operating performance. In some cases, you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “target,” “project,” “contemplate,” or the negative version of these words and other comparable terminology that concern our expectations, strategy, plans, intentions, or projections. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:


•	our ability to attract new customers and retain and expand our relationships with existing customers;


•	our ability to expand our course library and develop new platform features;


•	our future financial performance, including trends in billings, revenue, costs of revenue, gross margin, operating expenses, and free cash flow;


•	the demand for, and market acceptance of, our platform or for cloud-based technology learning solutions in general;


•	our ability to compete successfully in competitive markets;


•	our ability to respond to rapid technological changes;


•	our expectations and management of future growth;


•	our ability to enter new markets and manage our expansion efforts, particularly internationally;


•	our ability to attract and retain key employees and qualified technical and sales personnel;


•	our ability to improve sales management and execution;


•	our ability to effectively and efficiently protect our brand;


•	our ability to timely scale and adapt our infrastructure;


•	our ability to maintain, protect, and enhance our intellectual property and not infringe upon others’ intellectual property;


•	our ability to successfully identify, acquire, and integrate companies and assets;


•	the amount and timing of any payments we make under the fourth amended and restated limited liability company agreement of Pluralsight Holdings, or the Fourth LLC Agreement, and our Tax Receivable Agreement, or TRA, with the members of Pluralsight Holdings;


•	our use of net proceeds from our convertible note offering in March 2019;


•	our ability to satisfy our obligations under the convertible senior notes;


•	our ability to successfully integrate GitPrime, Inc.'s ("GitPrime") operations;


•	our ability to implement our plans, forecasts and other expectations with respect to GitPrime's business; and


•	our ability to realize the anticipated benefits of the acquisition of GitPrime, including the possibility that the expected benefits from the acquisition will not be realized within the expected time period.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors” in our Annual Report on Form 10-K/A as filed with the Securities and Exchange Commission, or the SEC, under the Exchange Act. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements and you should not place undue reliance on our forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

You should read this Quarterly Report on Form 10-Q in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018 included in our Annual Report on Form 10-K/A.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

PLURALSIGHT, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)



	June 30, 2019			December 31, 2018

Assets
Current assets:
Cash and cash equivalents	$	260,313		$	194,306
Short-term investments	276,818			—
Accounts receivable, net of allowances of $3,027 and $2,501 as of June 30, 2019 and December 31, 2018, respectively	57,625			63,436
Deferred contract acquisition costs, net	17,079			—
Prepaid expenses and other current assets	13,115			8,323
Total current assets	624,950			266,065
Restricted cash	27,970			16,765
Long-term investments	35,654			—
Property and equipment, net	49,028			31,641
Content library, net	7,510			7,050
Intangible assets, net	25,483			1,759
Goodwill	261,722			123,119
Deferred contract acquisition costs, noncurrent, net	3,252			—
Other assets	1,367			1,064
Total assets	$	1,036,936		$	447,463
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	8,608		$	7,160
Accrued expenses	29,332			32,047
Accrued author fees	11,301			10,002
Deferred revenue	172,310			157,695
Total current liabilities	221,551			206,904
Deferred revenue, noncurrent	13,748			14,886
Convertible senior notes, net	487,915			—
Facility financing obligations	31,668			15,777
Other liabilities	1,948			1,303
Total liabilities	756,830			238,870
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock, $0.0001 par value per share, 100,000,000 shares authorized, no shares issued and outstanding as of June 30, 2019 and December 31, 2018	—			—
Class A common stock, $0.0001 par value per share, 1,000,000,000 shares authorized, 101,096,472 shares issued and outstanding as of June 30, 2019; 65,191,907 shares issued and outstanding as of December 31, 2018	10			7
Class B common stock, $0.0001 par value per share, 200,000,000 shares authorized, 24,664,113 shares issued and outstanding as of June 30, 2019; 57,490,881 shares issued and outstanding as of December 31, 2018	2			6
Class C common stock, $0.0001 par value per share, 50,000,000 shares authorized, 14,186,856 shares issued and outstanding as of June 30, 2019; 14,586,173 shares issued and outstanding as of December 31, 2018	1			1
Additional paid-in capital	599,558			456,899
Accumulated other comprehensive income (loss)	237			(41		)
Accumulated deficit	(394,048		)	(355,446		)
Total stockholders’ equity attributable to Pluralsight, Inc.	205,760			101,426
Non-controlling interests	74,346			107,167
Total stockholders’ equity	280,106			208,593
Total liabilities and stockholders' equity	$	1,036,936		$	447,463

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
				(Restated)						(Restated)

Revenue	$	75,862		$	53,572		$	145,479		$	103,216
Cost of revenue	17,801			15,933			34,511			30,819
Gross profit	58,061			37,639			110,968			72,397
Operating expenses:
Sales and marketing	49,994			41,857			94,125			71,324
Technology and content	24,786			18,396			45,030			31,721
General and administrative	20,601			26,002			42,774			37,294
Total operating expenses	95,381			86,255			181,929			140,339
Loss from operations	(37,320		)	(48,616		)	(70,961		)	(67,942		)
Other (expense) income:
Interest expense	(7,697		)	(2,424		)	(9,721		)	(6,134		)
Loss on debt extinguishment	—			(4,085		)	—			(4,085		)
Other income, net	4,040			48			5,654			35
Loss before income taxes	(40,977		)	(55,077		)	(75,028		)	(78,126		)
Provision for income taxes	(143		)	(143		)	(297		)	(252		)
Net loss	$	(41,120	)	$	(55,220	)	$	(75,325	)	$	(78,378	)
Less: Net loss attributable to non-controlling interests	(11,740		)	(13,910		)	(26,690		)	(13,910		)
Net loss attributable to Pluralsight, Inc.	$	(29,380	)	$	(41,310	)	$	(48,635	)	$	(64,468	)
Less: Accretion of Series A redeemable convertible preferred units	—			(156,750		)	—			(176,275		)
Net loss attributable to common shares	$	(29,380	)	$	(198,060	)	$	(48,635	)	$	(240,743	)
Net loss per share, basic and diluted ⁽¹⁾	$	(0.30	)	$	(0.20	)	$	(0.56	)	$	(0.20	)
Weighted-average common shares used in computing basic and diluted net loss per share ⁽¹⁾	97,608			62,252			86,827			62,252

________________________

(1)

N et loss per share, basic and diluted and weighted-average common shares used in computing basic and diluted net loss per share for the three and six months ended June 30, 2018 reflect only the activity for the portion of the period following Pluralsight, Inc.'s initial public offering and the Reorganization Transactions described in Note 1—Organization and Description of Business. See Note 17—Net Loss Per Share for additional details.

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
				(Restated)						(Restated)

Net loss	$	(41,120	)	$	(55,220	)	$	(75,325	)	$	(78,378	)
Other comprehensive income (loss):
Unrealized gains on investments	379			—			379			—
Foreign currency translation (losses) gains, net	(7		)	(63		)	11			(58		)
Comprehensive loss	$	(40,748	)	$	(55,283	)	$	(74,935	)	$	(78,436	)
Less: Comprehensive loss attributable to non-controlling interests	(11,636		)	(13,931		)	(26,578		)	(13,931		)
Comprehensive loss attributable to Pluralsight, Inc.	$	(29,112	)	$	(41,352	)	$	(48,357	)	$	(64,505	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity

(in thousands, except share/unit amounts)

(unaudited)

Three Months Ended June 30, 2019



	Redeemable Convertible Preferred Units			Members’ Capital			Class A Common Stock			Class B Common Stock					Class C Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount		Shares	Amount		Shares		Amount			Shares		Amount		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total

Balance at March 31, 2019	—	$	—	—	$	—	95,096,979	$	10	29,071,789		$	3		14,162,311		$	1	$	565,189		$	(31	)	$	(364,668	)	$	85,374		$	285,878
Effect of exchanges of LLC Units	—	—		—	—		4,469,843	—		(4,390,283	)	(1		)	(79,560	)	—		9,425			—			—			(9,424		)	—
Issuance of common stock under employee stock purchase plans	—	—		—	—		621,463	—		—		—			—		—		8,257			—			—			—			8,257
Vesting of restricted stock units	—	—		—	—		655,972	—		—		—			104,105		—		—			—			—			—			—
Exercise of common stock options	—	—		—	—		252,215	—		—		—			—		—		3,753			—			—			—			3,753
Forfeiture of unvested LLC Units	—	—		—	—		—	—		(17,393	)	—			—		—		—			—			—			—			—
Equity-based compensation	—	—		—	—		—	—		—		—			—		—		22,966			—			—			—			22,966
Adjustments to non-controlling interests	—	—		—	—		—	—		—		—			—		—		(10,032		)	—			—			10,032			—
Other comprehensive income	—	—		—	—		—	—		—		—			—		—		—			268			—			104			372
Net loss	—	—		—	—		—	—		—		—			—		—		—			—			(29,380		)	(11,740		)	(41,120		)
Balance at June 30, 2019	—	$	—	—	$	—	101,096,472	$	10	24,664,113		$	2		14,186,856		$	1	$	599,558		$	237		$	(394,048	)	$	74,346		$	280,106

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)

(in thousands, except share/unit amounts)

(unaudited)

Three Months Ended June 30, 2018



	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Non-Controlling Interests			Total

Balance at March 31, 2018	48,447,880		$	425,291		48,407,645		$	—		—	$	—	—	$	—	—	$	—	$	—		$	30		$	(483,428	)	$	—		$	(483,398	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		—			—	—		—	—		—	—		—			—			—			—			—
Equity-based compensation, as restated	—		—			—		18,905			—	—		—	—		—	—		—			—			—			—			18,905
Accretion of Series A redeemable convertible preferred units, as restated	—		156,750			—		(18,905		)	—	—		—	—		—	—		—			—			(137,845		)	—			(156,750		)
Foreign currency translation losses	—		—			—		—			—	—		—	—		—	—		—			(23		)	—			—			(23		)
Net loss, as restated	—		—			—		—			—	—		—	—		—	—		—			—			(28,625		)	—			(28,625		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the Reorganization Transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660	4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000	2		—	—		—	—		324,677			—			—			—			324,679
Allocation of equity to non-controlling interests	—		—			—		—			—	—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Settlement of equity appreciation rights	—		—			—		—			—	—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation, as restated	—		—			—		—			—	—		—	—		—	—		10,074			—			—			—			10,074
Adjustments to non-controlling interests, as restated	—		—			—		—			—	—		—	—		—	—		(5,097		)	—			—			5,097			—
Foreign currency translation losses	—		—			—		—			—	—		—	—		—	—		—			(19		)	—			(21		)	(40		)
Net loss, as restated	—		—			—		—			—	—		—	—		—	—		—			—			(12,685		)	(13,910		)	(26,595		)
Balance at June 30, 2018, as restated	—		$	—		—		$	—		62,915,660	$	6	58,111,572	$	6	14,048,138	$	1	$	437,274		$	(16	)	$	(322,801	)	$	125,395		$	239,865

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)

(in thousands, except share/unit amounts)

(unaudited)

Six Months Ended June 30, 2019



	Redeemable Convertible Preferred Units			Members’ Capital			Class A Common Stock			Class B Common Stock					Class C Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount		Shares	Amount		Shares		Amount			Shares		Amount		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total

Balance at December 31, 2018	—	$	—	—	$	—	65,191,907	$	7	57,490,881		$	6		14,586,173		$	1	$	456,899		$	(41	)	$	(355,446	)	$	107,167		$	208,593
Impact of the adoption of ASC 606	—	—		—	—		—	—		—		—			—		—		—			—			10,033			10,601			20,634
Effect of exchanges of LLC Units	—	—		—	—		33,419,553	3		(32,809,375	)	(4		)	(610,178	)	—		58,920			—			—			(58,919		)	—
Issuance of common stock under employee stock purchase plans	—	—		—	—		621,463	—		—		—			—		—		8,257			—			—			—			8,257
Vesting of restricted stock units	—	—		—	—		1,436,581	—		—		—			210,861		—		—			—			—			—			—
Exercise of common stock options	—	—		—	—		426,968	—		—		—			—		—		6,374			—			—			—			6,374
Forfeiture of unvested LLC Units	—	—		—	—		—	—		(17,393	)	—			—		—		—			—			—			—			—
Equity component of convertible senior notes, net of issuance costs	—	—		—	—		—	—		—		—			—		—		137,033			—			—			—			137,033
Purchase of capped calls related to issuance of convertible senior notes	—	—		—	—		—	—		—		—			—		—		(69,432		)	—			—			—			(69,432		)
Equity-based compensation	—	—		—	—		—	—		—		—			—		—		43,582			—			—			—			43,582
Adjustments to non-controlling interests	—	—		—	—		—	—		—		—			—		—		(42,075		)	—			—			42,075			—
Other comprehensive income	—	—		—	—		—	—		—		—			—		—		—			278			—			112			390
Net loss	—	—		—	—		—	—		—		—			—		—		—			—			(48,635		)	(26,690		)	(75,325		)
Balance at June 30, 2019	—	$	—	—	$	—	101,096,472	$	10	24,664,113		$	2		14,186,856		$	1	$	599,558		$	237		$	(394,048	)	$	74,346		$	280,106

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Condensed Consolidated Statements of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders' Equity (Continued)

(in thousands, except share/unit amounts)

(unaudited)

Six Months Ended June 30, 2018



	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Non-Controlling Interests			Total

Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—	$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—	—		—	—		—	—		—			—			—			—			984
Equity-based compensation, as restated	—		—			—		22,278			—	—		—	—		—	—		—			—			—			—			22,278
Accretion of Series A redeemable convertible preferred units, as restated	—		176,275			—		(23,262		)	—	—		—	—		—	—		—			—			(153,013		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—	—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss, as restated	—		—			—		—			—	—		—	—		—	—		—			—			(51,783		)	—			(51,783		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the Reorganization Transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660	4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000	2		—	—		—	—		324,677			—			—			—			324,679
Allocation of equity to non-controlling interests	—		—			—		—			—	—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Settlement of equity appreciation rights	—		—			—		—			—	—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation, as restated	—		—			—		—			—	—		—	—		—	—		10,074			—			—			—			10,074
Adjustments to non-controlling interests, as restated	—		—			—		—			—	—		—	—		—	—		(5,097		)	—			—			5,097			—
Foreign currency translation losses	—		—			—		—			—	—		—	—		—	—		—			(19		)	—			(21		)	(40		)
Net loss, as restated	—		—			—		—			—	—		—	—		—	—		—			—			(12,685		)	(13,910		)	(26,595		)
Balance at June 30, 2018, as restated	—		$	—		—		$	—		62,915,660	$	6	58,111,572	$	6	14,048,138	$	1	$	437,274		$	(16	)	$	(322,801	)	$	125,395		$	239,865

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



	Six Months Ended June 30,
	2019			2018
				(Restated)

Operating activities
Net loss	$	(75,325	)	$	(78,378	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	4,196			4,358
Amortization of acquired intangible assets	1,609			6,665
Amortization of course creation costs	1,190			930
Equity-based compensation	43,000			32,352
Amortization of deferred contract acquisition costs	11,311			—
Amortization of debt discount and issuance costs	8,294			1,215
Investment discount and premium amortization, net	(706		)	—
Provision for doubtful accounts	22			358
Deferred tax benefit	21			(64		)
Debt extinguishment costs	—			4,180
Other	257			—
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	7,116			1,335
Deferred contract acquisition costs	(11,430		)	—
Prepaid expenses and other assets	(4,194		)	(3,858		)
Accounts payable	1,070			(588		)
Accrued expenses and other liabilities	(2,374		)	(2,839		)
Accrued author fees	1,299			617
Deferred revenue	13,003			17,500
Net cash used in operating activities	(1,641		)	(16,217		)
Investing activities
Purchases of property and equipment	(4,590		)	(4,574		)
Purchases of content library	(2,441		)	(1,504		)
Cash paid for acquisition, net of cash acquired	(163,871		)	—
Purchases of investments	(317,080		)	—
Proceeds from sales of investments	4,967			—
Net cash used in investing activities	(483,015		)	(6,078		)
Financing activities
Proceeds from issuance of convertible senior notes, net of discount and issuance costs	616,654			—
Purchase of capped calls related to issuance of convertible senior notes	(69,432		)	—
Proceeds from issuance of common stock from employee equity plans	14,631			—
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
Repayments of long-term debt	—			(137,710		)
Payments of debt extinguishment costs	—			(2,162		)
Payments of debt issuance costs	—			(450		)
Payments to settle equity appreciation rights	—			(325		)
Taxes paid related to net share settlement	—			(78		)
Other	(7		)	(8		)
Net cash provided by financing activities	561,846			208,262
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	22			(86		)
Net increase in cash, cash equivalents, and restricted cash	77,212			185,881
Cash, cash equivalents, and restricted cash, beginning of period	211,071			28,477
Cash, cash equivalents, and restricted cash, end of period	$	288,283		$	214,358

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Condensed Consolidated Statements of Cash Flows (Continued)

(in thousands)

(unaudited)



	Six Months Ended June 30,
	2019		2018
			(Restated)

Supplemental cash flow disclosure:
Cash paid for interest	$	—	$	4,271
Cash paid for income taxes, net	$	228	$	172
Supplemental disclosure of non-cash investing and financing activities:
Property acquired under build-to-suit agreements	$	15,900	$	—
Unpaid capital expenditures	$	967	$	568
Equity-based compensation capitalized as internal-use software	$	582	$	—
Unrealized gains on investments	$	379	$	—
Conversion of redeemable convertible preferred units	$	—	$	582,041
Redeemable convertible preferred unit accretion	$	—	$	176,275
Costs related to initial public offering, accrued but not yet paid	$	—	$	4,009
Issuance of warrants to purchase shares of Class A common stock	$	—	$	984
Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows:
Cash and cash equivalents	$	260,313	$	213,645
Restricted cash	27,970		713
Total cash, cash equivalents, and restricted cash	$	288,283	$	214,358

The accompanying notes are an integral part of these condensed consolidated financial statements.

PLURALSIGHT, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1. Organization and Description of Business

Pluralsight, Inc. was incorporated as a Delaware corporation on December 4, 2017 as a holding company for the purpose of facilitating an initial public offering (“IPO”) and other related transactions in order to carry on the business of Pluralsight Holdings, LLC (“Pluralsight Holdings”) and its subsidiaries (together with Pluralsight, Inc., the “Company” or “Pluralsight”). Pluralsight Holdings is a limited liability company (“LLC”) and was organized on August 29, 2014 in the state of Delaware and is the parent company of Pluralsight, LLC, and its directly and indirectly wholly-owned subsidiaries. Pluralsight, LLC was organized on June 17, 2004 in the state of Nevada. Pluralsight operates a cloud-based technology skills platform that provides a broad range of tools for businesses and individuals, including skill assessments, a curated library of courses, learning paths, and business analytics. As the sole managing member of Pluralsight Holdings, Pluralsight, Inc. operates and controls all of the business operations and affairs of Pluralsight.

Initial Public Offering

In May 2018, Pluralsight, Inc. completed an IPO, in which it sold 23,805,000 shares of Class A common stock at a public offering price of $15.00 per share for net proceeds of $332.1 million , after deducting underwriters' discounts and commissions, which Pluralsight, Inc. used to purchase newly issued common limited liability company units (“LLC Units") from Pluralsight Holdings. In connection with the IPO, the Company reclassified $7.4 million of offering costs into stockholders’ equity as a reduction of the net proceeds received from the IPO.

Reorganization Transactions

In connection with the IPO, the Company completed the following transactions (“Reorganization Transactions”):

•

The limited liability company agreement of Pluralsight Holdings (“LLC Agreement”) was amended and restated to, among other things: (i) appoint Pluralsight, Inc. as its sole managing member and (ii) effectuate the conversion of all outstanding redeemable convertible preferred limited liability company units, incentive units, and Class B incentive units of Pluralsight Holdings into a single class of common units. See Note 13—Stockholders' Equity for additional details.


•	Certain members of Pluralsight Holdings that were corporations merged with and into Pluralsight, Inc. and certain members of Pluralsight Holdings contributed certain of their LLC Units to Pluralsight, Inc., in each case in exchange for shares of Class A common stock.

•

The certificate of incorporation of Pluralsight, Inc. was amended and restated to authorize three classes of common stock, Class A common stock, Class B common stock, Class C common stock, and one class of preferred stock. Class B and Class C common stock were issued on a one -for-one basis to the members of Pluralsight Holdings who retained LLC Units (“Continuing Members”). Class B and Class C common stock have voting rights but no economic rights. See Note 13—Stockholders' Equity for additional details.

As the sole managing member of Pluralsight Holdings, Pluralsight, Inc. has the sole voting interest in Pluralsight Holdings and controls all of the business operations, affairs, and management of Pluralsight Holdings. Accordingly, Pluralsight, Inc. consolidates the financial results of Pluralsight Holdings and reports the non-controlling interests of the Continuing Members' LLC Units on its consolidated financial statements. As of June 30, 2019 , Pluralsight, Inc. owned 73.5% of Pluralsight Holdings and the Continuing Members owned the remaining 26.5% of Pluralsight Holdings.

As the Reorganization Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Prior to the Reorganization Transactions, Pluralsight, Inc. had no operations.

Secondary Offering

In March 2019, the Company completed a secondary offering, in which certain stockholders sold 15,592,234 shares of Class A common stock at a public offering price of $29.25 per share. Pluralsight did not receive any proceeds from the sale of shares by selling stockholders. A total of $0.9 million in costs were incurred by Pluralsight in connection with this offering. In connection with the secondary offering, the Company issued $633.5 million aggregate principal amount of 0.375% convertible senior notes due in 2024 in a private placement to qualified institutional buyers exempt from registration under the Securities Act. See Note 11—Convertible Senior Notes and Other Long-Term Debt for additional details.

Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the applicable regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018 included in Pluralsight, Inc.'s Annual Report on Form 10-K/A, as filed with the SEC on June 27, 2019 ("Annual Report").

These unaudited condensed consolidated financial statements include the accounts of Pluralsight, Inc. and its directly and indirectly wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

As discussed in Note 1—Organization and Description of Business, Pluralsight, Inc. consolidates the financial results of Pluralsight Holdings as a Variable Interest Entity (“VIE”). The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than a voting interest, in accordance with the VIE accounting model. A VIE is an entity in which the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity's economic performance or the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support.

Interim Unaudited Condensed Consolidated Financial Statements

The accompanying interim condensed consolidated balance sheet as of June 30, 2019 , and the interim condensed consolidated statements of operations, comprehensive loss, redeemable convertible preferred units, members' deficit, and stockholders' equity, for the three and six months ended June 30, 2019 and 2018 , and the interim condensed consolidated cash flows for the six months ended June 30, 2019 and 2018 , are unaudited. The condensed consolidated balance sheet as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial position, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year or any other period.

Revision of Prior Period Financial Statements

In June 2019, the Company identified an error in equity-based compensation expense for the three months ended March 31, 2019 related to the attribution of equity-based compensation with respect to certain restricted stock units containing double-trigger vesting conditions. The Company had incorrectly recognized expense using a straight-line attribution method rather than on a tranche-by-tranche basis for certain awards with a performance condition, resulting in an understatement of equity-based compensation expense of $0.7 million for the three months ended March 31, 2019. The correction increased sales and marketing, technology and content, and general and administrative expenses for the three months ended March 31, 2019 by $0.1 million , $0.2 million , and $0.4 million , respectively. The correction increased loss from operations, loss before income taxes, and net loss by $0.7 million in the three months ended March 31, 2019. Of the increase in net loss, $0.3 million is attributable to non-controlling interests and the remaining $0.4 million is attributable to Pluralsight, Inc. Net loss per share, basic and diluted for the three months ended March 31, 2019 remained at $0.25 after the correction. Additional paid-in capital and accumulated deficit also each increased by $0.4 million resulting in no net impact to total stockholders’ equity as of March 31, 2019. The correction did not impact the total grant date fair value of these awards, revenue, or total cash flows provided by (used in) operating, investing, or financing activities. Management does not believe that this error and related correction were material to the condensed consolidated financial statements for the three months ended March 31, 2019 taken as a whole; therefore, the previously issued condensed consolidated financial statements can continue to be relied upon and an amendment of the previously filed Quarterly Report on Form 10-Q is not required. However, for comparability, these revised amounts will be reflected in the March 31, 2020 Quarterly Report on Form 10-Q that will contain such information, and the amounts discussed above have been appropriately reflected as of and for the six months ended June 30, 2019.

. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses for the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the determination of the fair value of equity awards, fair value of the liability and equity components of the convertible senior notes, the valuation of build-to-suit leases, the fair value of identified assets and liabilities acquired in business combinations, the useful lives of long-lived assets, the impairment of long-

lived and intangible assets, including goodwill, the period of benefit for deferred contract acquisition costs, provisions for doubtful accounts receivable and deferred revenue, and certain accrued expenses, including author fees. These estimates and assumptions are based on the Company’s historical results and management’s future expectations. Actual results could differ from those estimates.

Significant Accounting Policies

The Company’s significant accounting policies are discussed in “Note 1—Description of Business and Summary of Significant Accounting Policies” in the Annual Report. There have been no significant changes to these policies that have had a material impact on the Company's unaudited condensed consolidated financial statements and related notes during the three and six months ended June 30, 2019 , except as noted below.

Revenue Recognition (ASC 606)

The Company derives substantially all of its revenue from subscription services (which include support services) from providing customers access to its platform.

The Company implemented the provisions of Accounting Standards Update ("ASU") 2014-09 (referred to collectively as "ASC 606") effective January 1, 2019 using the modified retrospective transition method as discussed below under the section "Recent Accounting Pronouncements".

Following the adoption of ASC 606, the Company recognizes revenue when control of these services is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services. Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenue. The Company accounts for revenue contracts with customers by applying the following steps:


•	Identification of the contract, or contracts, with a customer


•	Identification of the performance obligations in a contract


•	Determination of the transaction price


•	Allocation of the transaction price to the performance obligations in the contract


•	Recognition of revenue when, or as, performance obligations are satisfied

The Company’s subscription arrangements generally do not provide customers with the right to take possession of the software supporting the platform and, as a result, are accounted for as service arrangements. Access to the Company's platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is generally recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. The Company's subscription contracts typically vary from one month to three years . The Company’s arrangements are generally noncancellable and nonrefundable.

Subscriptions that allow the customer to take software on-premise without significant penalty are treated as time-based licenses. These arrangements generally include access to the software, access to unspecified future products and maintenance and support. Revenue for on-premise software subscriptions is recognized at a point in time when the software is made available to the customer. Revenue for access to unspecified future products, maintenance and support included with on-premise software subscriptions is recognized ratably over the contract term beginning on the date that the access is made available to the customer.

A small portion of the Company’s revenue is derived from providing professional services, which generally consist of content creation or other consulting services. These services are distinct from subscription revenue services. Revenue from professional services is generally recognized upon completion, because the customer consumes the intended benefit and assumes control upon final completion of the service.

Some contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines standalone selling prices considering market conditions and based on overall pricing objectives such as observable standalone selling prices, and other factors, including the value of contracts, types of services sold, customer demographics, and the number and types of users within such contracts.

Deferred Revenue

The Company records contract liabilities to deferred revenue when cash payments are received or billings are due in advance of revenue recognition from subscription services described above, including amounts billed to customers in accordance with the terms of the underlying contracts where the service period has not yet commenced but will commence in the near future. Deferred revenue is recognized when, or as, performance obligations are satisfied. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current; the remaining portion is recorded as non-current deferred revenue.

Cash, Cash Equivalents, Restricted Cash and Investments

The Company considers all highly-liquid investments with a maturity at the time of purchase of 90 days or less to be cash and cash equivalents. Cash consists of deposits with financial institutions. Cash equivalents and investments consist of highly liquid investments in money market funds, U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate debt securities. Cash and cash equivalents that are restricted as to withdrawal or usage are presented as restricted cash on the condensed consolidated balance sheets.

The Company classifies investments as available-for-sale securities. Investments with original maturities beyond 90 days are classified as short-term or long-term investments based on the nature of the securities and their stated maturities. Investments are carried at fair value, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income within stockholders’ equity.

Investments are reviewed periodically to determine whether a decline in a security’s fair value below the amortized cost basis is other-than-temporary. If the cost of an individual investment exceeds its fair value, the Company considers available quantitative and qualitative factors such as the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer and the Company's intent to sell, or whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. If the Company believes that a decline in fair value is determined to be other-than-temporary, the investments are written down to fair value. There were no impairments recognized on investments during the periods presented.

Interest income, amortization of premiums and discounts, realized gains and losses and declines in fair value judged to be other-than-temporary on available-for-sale securities are included in other income, net in the condensed consolidated statements of operations. The Company uses the specific identification method to determine the cost in calculating realized gains and losses upon the sale of these investments.

Accounts Receivable

Accounts receivable represent amounts owed to the Company for subscriptions to the Company’s platform. Accounts receivable balances are recorded at the invoiced amount and are non-interest-bearing. The Company records a contract asset when revenue is recognized in advance of invoicing. Contract assets that represent a right to consideration that is unconditional are presented within accounts receivable on the condensed consolidated balance sheets.

The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables, by assessing the collectability of the accounts by taking into consideration the aging of trade receivables, historical experience, and management judgment. The Company writes off trade receivables against the allowance when management determines a balance is uncollectible and no longer intends to actively pursue collection of the receivable.

Deferred Contract Acquisition Costs

The Company capitalizes sales commissions, and associated fringe costs, such as payroll taxes, paid to direct sales personnel and other incremental costs of obtaining contracts with customers, provided the Company expects to recover those costs. These costs are recorded as deferred contract acquisition costs on the condensed consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are in fact incremental and would not have occurred absent the customer contract.

Sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rates between new and renewal contracts. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit of four years while commissions paid related to renewal contracts are amortized over an estimated period of benefit of approximately 18 months . Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition.

The period of benefit for commissions paid for the acquisition of initial subscription contracts is determined by taking into consideration the initial estimated customer life and the technological life of the Company's platform and related significant features. The Company determines the period of benefit for renewal subscription contracts by considering the average contractual term for renewal contracts. Amortization of deferred contract acquisition costs is included within sales and marketing expense in the condensed consolidated statements of operations.

The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred contract acquisition costs. There were no material impairment losses recorded during the periods presented.

Advertising Costs

Advertising costs are expensed as incurred. The Company recorded advertising costs of $4.4 million and $3.2 million for the three months ended June 30, 2019 and 2018 , respectively, and $8.0 million and $5.8 million for the six months ended June 30, 2019 and 2018 , respectively.

Recent Accounting Pronouncements

Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), the Company meets the definition of an emerging growth company. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an emerging growth company or until the Company affirmatively and irrevocably opts out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs-Contracts with Customers (Subtopic 340-40) , which supersedes nearly all existing revenue recognition guidance. The core principle behind ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering those goods and services. To achieve this core principle, the guidance provides a model, which involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction prices to the performance obligations in the contract, and recognizing revenue when (or as) the entity satisfies the performance obligations. The standard also provides guidance on the recognition of costs related to obtaining customer contracts.

The Company adopted the standard as of January 1, 2019 using the modified retrospective adoption method applied to those contracts that were not completed as of that date. Upon adoption, the Company recognized the cumulative effect of adopting the standard as an adjustment to the opening balance of stockholders' equity. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company updated its accounting policies, processes, internal controls and information systems to conform to the new revenue standard's reporting and disclosure requirements.

Prior to adoption, the Company limited revenue recognition for delivered elements to the amount that is not contingent on the delivery of future services. The adoption of ASC 606 resulted in an acceleration in timing of the Company's revenue for certain sales contracts due to the removal of this limitation. In addition, as a result of the new standard, the Company capitalizes sales commissions and other incremental costs of obtaining contracts with customers. Such costs are amortized over the expected period of benefit, which for initial contracts is an estimated period of four years , while renewal contracts are amortized over an estimated period of benefit of 18 months .

The following table summarizes the adjustments made to the Company's condensed consolidated balance sheet as of January 1, 2019 as a result of applying the modified retrospective method to adopt ASC 606 (in thousands):



	As Reported			Adjustments					As Adjusted
	December 31, 2018			Revenue Recognition			Incremental Costs of Obtaining a Contract		January 1, 2019

Accounts receivable, net	$	63,436		$	33		$	—	$	63,469
Deferred contract acquisition costs, net	—			—			16,461		16,461
Deferred contract acquisition costs, noncurrent, net	—			—			3,751		3,751
Deferred revenue	157,695			(389		)	—		157,306
Deferred revenue, noncurrent	14,886			—			—		14,886
Accumulated deficit	(355,446		)	205			9,828		(345,413		)
Non-controlling interests	107,167			217			10,384		117,768

The decrease of deferred revenue and increase to deferred contract acquisition costs as of January 1, 2019 resulted in additional deferred tax liabilities that reduced the Company's net deferred tax asset position. The net deferred tax assets in the jurisdictions impacted by the adoption of ASC 606 were fully reserved and, accordingly, this impact was offset by a corresponding reduction to the valuation allowance with no resulting net impact to net assets or accumulated deficit.

In addition, the adoption of ASC 606 resulted in changes to the Company's accounting estimates and policies for revenue recognition, deferred contract acquisition costs, deferred revenue, and accounts receivable. See the section titled "Significant Accounting Policies" for a discussion of the Company's updated policies.

Refer to Note 4—Revenue for the ongoing impacts of adopting ASC 606 on the condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. The new guidance is effective for public business entities for annual periods beginning after December 15, 2019, including interim periods within those periods. For all other entities, the ASU is effective for annual periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted for all entities. The Company is currently in the process of evaluating the impact of this standard on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities to require that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The measurement of credit losses for newly recognized financial assets and subsequent changes in the allowance for credit losses are recorded in the statements of operations. For public business entities that meet the definition of an SEC filer, it is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after December 15, 2020. The Company is currently evaluating the potential impact of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. For public business entities, the ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2018. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Due to an expected loss in the Company's emerging growth status as of December 31, 2019, the Company anticipates adopting the standard on December 31, 2019 for the year ended December 31, 2019. The Company is currently evaluating the potential changes to its future financial reporting and disclosures from this ASU. As part of its preliminary assessment, the Company expects to record right-of-use assets and lease liabilities for its operating leases as a result of adopting this standard. While the Company continues to assess all potential impacts under the new standard, including the areas described above, the Company does not know or cannot reasonably estimate quantitative information related to the impact of the adoption of the new standard on its consolidated financial statements at this time.

Note 3. Restatement of Condensed Consolidated Financial Statements

The Company's condensed consolidated financial statements as of and for the three and six months ended June 30, 2018, along with the accompanying footnotes, have been restated herein to correct a material error.

As described in the Company's Annual Report on Form 10-K/A, the Board of Directors of Pluralsight, Inc., in consultation with the Audit Committee of the Board, reached a determination on June 13, 2019 that the Company's consolidated financial statements and related disclosures for the year ended December 31, 2018, and the condensed consolidated financial statements for each of the quarterly and year-to-date periods ended June 30 and September 30, 2018, contained a material error in recognizing non-cash equity-based compensation resulting in an understatement of net loss. This non-cash equity-based compensation error related to the incorrect timing of recognition of expense for certain RSUs, which expense was initially recognized on a straight-line attribution basis. Upon further review, management determined that the non-cash equity-based compensation expense for such RSUs should have been recognized on a tranche-by-tranche basis ("accelerated attribution method") because the RSUs have a graded-vesting schedule and contain a performance condition. The impact of correcting the attribution shifts the non-cash equity-based compensation expense to earlier reporting periods, while the total cumulative expense expected to be recognized over the service period will remain the same.

The Company previously restated the financial statements for the year ended December 31, 2018 in its Annual Report on Form 10-K/A as filed on June 27, 2019, and included detailed disclosure of the restatement impact on the consolidated financial statements for the quarterly and year-to-date periods ended June 30, 2018 and September 30, 2018. However, because the Company did not amend its Quarterly Reports on Form 10-Q for the period ended June 30, 2018, the effects of the restatement on the condensed consolidated financial statements for such interim period are reflected in the comparative interim financial statements contained herein.

The following tables present the effects of the restatement on the Company's unaudited condensed consolidated statements of operations and comprehensive loss for the three and six month periods ended June 30, 2018, and on the unaudited condensed consolidated statements of redeemable convertible preferred units, members’ deficit, and stockholders’ equity, and cash flows for the six months ended June 30, 2018.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)



	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated

Revenue	$	53,572		$	—		$	53,572		$	103,216		$	—		$	103,216
Cost of revenue	15,890			43			15,933			30,776			43			30,819
Gross profit	37,682			(43		)	37,639			72,440			(43		)	72,397
Operating expenses:
Sales and marketing	38,933			2,924			41,857			68,400			2,924			71,324
Technology and content	16,493			1,903			18,396			29,818			1,903			31,721
General and administrative	19,448			6,554			26,002			30,740			6,554			37,294
Total operating expenses	74,874			11,381			86,255			128,958			11,381			140,339
Loss from operations	(37,192		)	(11,424		)	(48,616		)	(56,518		)	(11,424		)	(67,942		)
Other (expense) income:
Interest expense	(2,424		)	—			(2,424		)	(6,134		)	—			(6,134		)
Loss on debt extinguishment	(4,085		)	—			(4,085		)	(4,085		)	—			(4,085		)
Other income, net	48			—			48			35			—			35
Loss before income taxes	(43,653		)	(11,424		)	(55,077		)	(66,702		)	(11,424		)	(78,126		)
Provision for income taxes	(143		)	—			(143		)	(252		)	—			(252		)
Net loss	$	(43,796	)	$	(11,424	)	$	(55,220	)	$	(66,954	)	$	(11,424	)	$	(78,378	)
Less: Net loss attributable to non-controlling interests	(12,706		)	(1,204		)	(13,910		)	(12,706		)	(1,204		)	(13,910		)
Net loss attributable to Pluralsight, Inc.	$	(31,090	)	$	(10,220	)	$	(41,310	)	$	(54,248	)	$	(10,220	)	$	(64,468	)
Less: Accretion of Series A redeemable convertible preferred units	(156,750		)	—			(156,750		)	(176,275		)	—			(176,275		)
Net loss attributable to common shares	$	(187,840	)	$	(10,220	)	$	(198,060	)	$	(230,523	)	$	(10,220	)	$	(240,743	)
Net loss per share, basic and diluted ⁽¹⁾	$	(0.19	)	$	(0.01	)	$	(0.20	)	$	(0.19	)	$	(0.01	)	$	(0.20	)
Weighted-average common shares used in computing basic and diluted net loss per share ⁽¹⁾	62,252						62,252			62,252						62,252

________________________

(1)

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)



	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated

Net loss	$	(43,796	)	$	(11,424	)	$	(55,220	)	$	(66,954	)	$	(11,424	)	$	(78,378	)
Other comprehensive loss:
Foreign currency translation losses, net	(63		)	—			(63		)	(58		)	—			(58		)
Comprehensive loss	$	(43,859	)	$	(11,424	)	$	(55,283	)	$	(67,012	)	$	(11,424	)	$	(78,436	)
Less: Comprehensive loss attributable to non-controlling interests	(12,727		)	(1,204		)	(13,931		)	(12,727		)	(1,204		)	(13,931		)
Comprehensive loss attributable to Pluralsight, Inc.	$	(31,132	)	$	(10,220	)	$	(41,352	)	$	(54,285	)	$	(10,220	)	$	(64,505	)

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit

As Previously Reported for the Six Months Ended June 30, 2018

(in thousands, except share/unit amounts)



	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total

Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—	$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—	—		—	—		—	—		—			—			—			—			984
Equity-based compensation	—		—			—		13,155			—	—		—	—		—	—		—			—			—			—			13,155
Accretion of Series A redeemable convertible preferred units	—		176,275			—		(14,139		)	—	—		—	—		—	—		—			—			(162,136		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—	—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss	—		—			—		—			—	—		—	—		—	—		—			—			(42,660		)	—			(42,660		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the reorganization transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660	4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000	2		—	—		—	—		324,677			—			—			—			324,679
Allocation of equity to non-controlling interests	—		—			—		—			—	—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Settlement of equity appreciation rights	—		—			—		—			—	—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation	—		—			—		—			—	—		—	—		—	—		7,773			—			—			—			7,773
Adjustment to non-controlling interests	—		—			—		—			—	—		—	—		—	—		(3,893		)	—			—			3,893			—
Foreign currency translation losses	—		—			—		—			—	—		—	—		—	—		—			(19		)	—			(21		)	(40		)
Net loss	—		—			—		—			—	—		—	—		—	—		—			—			(11,588		)	(12,706		)	(24,294		)
Balance at June 30, 2018	—		$	—		—		$	—		62,915,660	$	6	58,111,572	$	6	14,048,138	$	1	$	436,177		$	(16	)	$	(321,704	)	$	125,395		$	239,865

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Continued)

Restatement Adjustments for the Six Months Ended June 30, 2018

(in thousands, except share/unit amounts)



	Redeemable Convertible Preferred Units			Members’ Capital				Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit			Non-Controlling Interests			Total
	Units	Amount		Units	Amount			Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit			Non-Controlling Interests			Total

Balance at December 31, 2017	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—	$	—		$	—	$	—		$	—		$	—
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Equity-based compensation	—	—		—	9,123			—	—		—	—		—	—		—			—		—			—			9,123
Accretion of Series A redeemable convertible preferred units	—	—		—	(9,123		)	—	—		—	—		—	—		—			—		9,123			—			—
Foreign currency translation losses	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Net loss	—	—		—	—			—	—		—	—		—	—		—			—		(9,123		)	—			(9,123		)
Effect of the Reorganization Transactions and initial public offering:																												—
Effect of the reorganization transactions	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Initial public offering, net of offering costs	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Allocation of equity to non-controlling interests	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Settlement of equity appreciation rights	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Equity-based compensation	—	—		—	—			—	—		—	—		—	—		2,301			—		—			—			2,301
Adjustment to non-controlling interests	—	—		—	—			—	—		—	—		—	—		(1,204		)	—		—			1,204			—
Foreign currency translation losses	—	—		—	—			—	—		—	—		—	—		—			—		—			—			—
Net loss	—	—		—	—			—	—		—	—		—	—		—			—		(1,097		)	(1,204		)	(2,301		)
Balance at June 30, 2018	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—	$	1,097		$	—	$	(1,097	)	$	—		$	—

Condensed Consolidated Statement of Redeemable Convertible Preferred Units, Members’ Deficit, and Stockholders’ Equity (Continued)

As Restated for the Six Months Ended June 30, 2018

(in thousands, except share/unit amounts)



	Redeemable Convertible Preferred Units					Members’ Capital					Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total
	Units		Amount			Units		Amount			Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Non-Controlling Interests			Total

Balance at December 31, 2017	48,447,880		$	405,766		48,407,645		$	—		—	$	—	—	$	—	—	$	—	$	—		$	25		$	(445,102	)	$	—		$	(445,077	)
Activity prior to the Reorganization Transactions:
Issuance of warrants to purchase Class A common units	—		—			—		984			—	—		—	—		—	—		—			—			—			—			984
Equity-based compensation, as restated	—		—			—		22,278			—	—		—	—		—	—		—			—			—			—			22,278
Accretion of Series A redeemable convertible preferred units, as restated	—		176,275			—		(23,262		)	—	—		—	—		—	—		—			—			(153,013		)	—			(176,275		)
Foreign currency translation losses	—		—			—		—			—	—		—	—		—	—		—			(18		)	—			—			(18		)
Net loss, as restated	—		—			—		—			—	—		—	—		—	—		—			—			(51,783		)	—			(51,783		)
Effect of the Reorganization Transactions and initial public offering:
Effect of the reorganization transactions	(48,447,880	)	(582,041		)	(48,407,645	)	—			39,110,660	4		58,111,572	6		14,048,138	1		581,952			—			—			—			581,963
Initial public offering, net of offering costs	—		—			—		—			23,805,000	2		—	—		—	—		324,677			—			—			—			324,679
Allocation of equity to non-controlling interests	—		—			—		—			—	—		—	—		—	—		(474,007		)	(4		)	339,782			134,229			—
Activity subsequent to the Reorganization Transactions and initial public offering:
Settlement of equity appreciation rights	—		—			—		—			—	—		—	—		—	—		(325		)	—			—			—			(325		)
Equity-based compensation, as restated	—		—			—		—			—	—		—	—		—	—		10,074			—			—			—			10,074
Adjustment to non-controlling interests, as restated	—		—			—		—			—	—		—	—		—	—		(5,097		)	—			—			5,097			—
Foreign currency translation losses	—		—			—		—			—	—		—	—		—	—		—			(19		)	—			(21		)	(40		)
Net loss, as restated	—		—			—		—			—	—		—	—		—	—		—			—			(12,685		)	(13,910		)	(26,595		)
Balance at June 30, 2018, as restated	—		$	—		—		$	—		62,915,660	$	6	58,111,572	$	6	14,048,138	$	1	$	437,274		$	(16	)	$	(322,801	)	$	125,395		$	239,865

Condensed Consolidated Statements of Cash Flows

(in thousands)



	Six Months Ended June 30, 2018
	As Previously Reported			Adjustments			As Restated

Operating activities
Net loss	$	(66,954	)	$	(11,424	)	$	(78,378	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	4,358			—			4,358
Amortization of acquired intangible assets	6,665			—			6,665
Amortization of course creation costs	930			—			930
Equity-based compensation	20,928			11,424			32,352
Provision for doubtful accounts	358			—			358
Amortization of debt discount and debt issuance costs	1,215			—			1,215
Debt extinguishment costs	4,180			—			4,180
Deferred tax benefit	(64		)	—			(64		)
Changes in assets and liabilities:
Accounts receivable	1,335			—			1,335
Prepaid expenses and other assets	(3,858		)	—			(3,858		)
Accounts payable	(588		)	—			(588		)
Accrued expenses and other liabilities	(2,839		)	—			(2,839		)
Accrued author fees	617			—			617
Deferred revenue	17,500			—			17,500
Net cash used in operating activities	(16,217		)	—			(16,217		)
Investing activities
Purchases of property and equipment	(4,574		)	—			(4,574		)
Purchases of content library	(1,504		)	—			(1,504		)
Net cash used in investing activities	(6,078		)	—			(6,078		)
Financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions	332,080			—			332,080
Payments of costs related to initial public offering	(3,085		)	—			(3,085		)
Borrowings of long-term debt	20,000			—			20,000
Repayments of long-term debt	(137,710		)	—			(137,710		)
Payments of debt extinguishment costs	(2,162		)	—			(2,162		)
Payments of debt issuance costs	(450		)	—			(450		)
Payments to settle equity appreciation rights	(325		)	—			(325		)
Taxes paid related to net share settlement	(78		)	—			(78		)
Payments of facility financing obligation	(8		)	—			(8		)
Net cash provided by financing activities	208,262			—			208,262
Effect of exchange rate change on cash, cash equivalents, and restricted cash	(86		)	—			(86		)
Net increase in cash, cash equivalents, and restricted cash	185,881			—			185,881
Cash, cash equivalents, and restricted cash, beginning of period	28,477			—			28,477
Cash, cash equivalents, and restricted cash, end of period	$	214,358		$	—		$	214,358

Description of Adjustments

The adjustments in the tables above reflect an increase in equity-based compensation expense due to the correction of an error in attribution of equity-based compensation from the straight-line method to the accelerated attribution method. The following table outlines the classification of the equity-based compensation adjustments in the statements of operations:



	Three Months Ended June 30, 2018						Six Months Ended June 30, 2018
	As Previously Reported		Adjustments		As Restated		As Previously Reported		Adjustments		As Restated

Cost of revenue	$	46	$	43	$	89	$	46	$	43	$	89
Sales and marketing	4,432		2,924		7,356		4,971		2,924		7,895
Technology and content	2,668		1,903		4,571		3,049		1,903		4,952
General and administrative	10,409		6,554		16,963		12,862		6,554		19,416
Total equity-based compensation	$	17,555	$	11,424	$	28,979	$	20,928	$	11,424	$	32,352

Note 4. Revenue

Effect of Adopting ASC 606

The adoption of ASC 606 resulted in changes to the Company's condensed consolidated balance sheet as of June 30, 2019 and its statement of operations for the three and six months ended June 30, 2019 due to the timing of revenue recognition and the capitalization of incremental costs of obtaining contracts. In addition, there were offsetting shifts in the statement of cash flows through net loss and various changes in operating assets and liabilities, which resulted in no impact on the total cash provided by operating activities. Refer to Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements for a description of the primary impacts resulting from the adoption of ASC 606.

The following tables present the amount by which each condensed consolidated financial statement line item is affected as of and for the three and six months ended June 30, 2019 by ASC 606 (in thousands, except per share data):

Condensed Consolidated Balance Sheet:



	June 30, 2019
	As Reported			Balance without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)

Accounts receivable, net	$	57,625		$	56,890		$	735
Goodwill ⁽¹⁾	261,722			262,945			(1,223		)
Deferred contract acquisition costs, net	17,079			—			17,079
Deferred contract acquisition costs, noncurrent, net	3,252			—			3,252
Deferred revenue	172,310			173,619			(1,309		)
Deferred revenue, noncurrent	13,748			13,748			—
Accumulated deficit	(394,048		)	(409,595		)	15,547
Non-controlling interest	74,346			68,741			5,605


(1)	Reflects the difference in Goodwill from applying ASC 606 to the deferred revenue balance acquired from GitPrime, Inc. See Note 9 for additional details. The difference in deferred revenue under ASC 606 is primarily due to the timing of recognition for subscriptions that allow the customer to install the software on premise without significant penalty.

Condensed Consolidated Statement of Operations:



	Three Months Ended June 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)

Revenue	$	75,862		$	75,744		$	118
Operating expenses:
Sales and marketing	49,994			50,129			(135		)
Loss from operations	(37,320		)	(37,573		)	253
Net loss	(41,120		)	(41,373		)	253
Less: Net loss attributable to non-controlling interests	(11,740		)	(11,812		)	72
Net loss attributable to Pluralsight, Inc.	(29,380		)	(29,561		)	181
Net loss per share, basic and diluted	$	(0.30	)	$	(0.30	)	$	—
Weighted-average common shares used in computing basic and diluted net loss per share	97,608			97,608			—



	Six Months Ended June 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)

Revenue	$	145,479		$	145,080		$	399
Operating expenses:
Sales and marketing	94,125			94,244			(119		)
Loss from operations	(70,961		)	(71,479		)	518
Net loss	(75,325		)	(75,843		)	518
Less: Net loss attributable to non-controlling interests	(26,690		)	(26,878		)	188
Net loss attributable to Pluralsight, Inc.	(48,635		)	(48,965		)	330
Net loss per share, basic and diluted	$	(0.56	)	$	(0.56	)	$	—
Weighted-average common shares used in computing basic and diluted net loss per share	86,827			86,827			—

Condensed Consolidated Statement of Cash Flows:



	Six Months Ended June 30, 2019
	As Reported			Amount without Adoption of ASC 606			Effect of Adoption Increase/(Decrease)

Net loss	$	(75,325	)	$	(75,843	)	$	518
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred contract acquisition costs	11,311			—			11,311
Changes in assets and liabilities:
Accounts receivable	7,116			7,118			(2		)
Deferred contract acquisition costs	(11,430		)	—			(11,430		)
Deferred revenue	13,003			13,400			(397		)
Cash used in operating activities	(1,641		)	(1,641		)	—

Disaggregation of Revenue

Subscription revenue accounted for approximately 97% and 98% of the Company's revenue for the three and six months ended June 30, 2019, respectively.

Revenue by geographic region, based on the physical location of the customer, was as follows (dollars in thousands):



	Three Months Ended June 30,
	2019				2018
	Amount		%		Amount		%

United States	$	47,255	62	%	$	33,955	64	%
Europe, Middle East and Africa ⁽¹⁾	20,904		28	%	14,595		27	%
Other foreign locations	7,703		10	%	5,022		9	%
Total revenue	$	75,862	100	%	$	53,572	100	%



	Six Months Ended June 30,
	2019				2018
	Amount		%		Amount		%

United States	$	90,836	63	%	$	65,533	64	%
Europe, Middle East and Africa ⁽¹⁾	39,890		27	%	28,120		27	%
Other foreign locations	14,753		10	%	9,563		9	%
Total revenue	$	145,479	100	%	$	103,216	100	%


(1)	Revenue from the United Kingdom represented 11% of revenue for the three and six months ended June 30, 2019 and 2018. No other foreign country accounted for 10% or more of revenue during the three and six months ended June 30, 2019 and 2018.

Revenue by type of customer, was as follows (dollars in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018

Business customers	$	64,528	$	42,859	$	123,095	$	81,737
Individual customers	11,334		10,713		22,384		21,479
Total revenue	$	75,862	$	53,572	$	145,479	$	103,216

Contract Balances

For the three and six months ended June 30, 2019, the Company recognized revenue of $65.4 million and $104.9 million , respectively, that was included in the corresponding deferred revenue balance at the beginning of the period. In connection with the acquisition of GitPrime, the Company acquired contract assets of $0.7 million , which are presented within accounts receivable, and deferred revenue of $1.4 million .

Remaining Performance Obligations

As of June 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $254.9 million . The Company expects to recognize 74% of the transaction price over the next 12 months .

Costs to Obtain and Fulfill a Contract

The following table summarizes the activity of the deferred contract acquisition costs (in thousands):



Balance as of January 1, 2019	$	20,212
Capitalization of contract acquisition costs	11,430
Amortization of deferred contract acquisition costs	(11,311		)
Balance as of June 30, 2019	$	20,331

Note 5. Cash Equivalents and Investments

Cash equivalents, short-term investments, and long-term investments consisted of the following as of June 30, 2019 (in thousands):



	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value

Cash equivalents
Money market funds	$	107,067	$	—	$	—		$	107,067
Commercial paper	84,884		—		—			84,884
U.S. treasury securities	49,904		6		—			49,910
Total cash equivalents	$	241,855	$	6	$	—		$	241,861
Short-term investments
Commercial paper	$	43,576	$	—	$	—		$	43,576
U.S. treasury securities	119,298		91		—			119,389
Corporate notes and obligations	98,792		159		(7		)	98,944
U.S. agency obligations	14,901		8		—			14,909
Total short-term investments	$	276,567	$	258	$	(7	)	$	276,818
Long-term investments
Corporate notes and obligations	$	25,532	$	121	$	—		$	25,653
U.S. agency obligations	10,000		1		—			10,001
Total long-term investments	$	35,532	$	122	$	—		$	35,654

Total cash equivalents and investments	$	553,954	$	386	$	(7	)	$	554,333

The amortized cost and fair value of the Company's investments based on their stated maturities consisted of the following as of June 30, 2019 (in thousands):



	Amortized Cost		Fair Value

Due within one year	$	276,567	$	276,818
Due between one and two years	35,532		35,654
Total investments	$	312,099	$	312,472

The Company reviews the individual securities that have unrealized losses in its investment portfolio on a regular basis to evaluate whether or not any security has experienced an other-than-temporary decline in fair value. The Company evaluates, among others, whether it has the intention to sell any of these investments and whether it is more likely than not that it will be required to sell any of them before recovery of the amortized cost basis. Based on this evaluation, the Company determined that there were no other-than-temporary impairments associated with its investments as of June 30, 2019 .

Note 6. Fair Value Measurements

The Company measures and records certain financial assets at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds. The following three levels of inputs are used to measure the fair value of financial instruments:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The fair value of the Company’s financial instruments was as follows (in thousands):



	As of June 30, 2019
	Level 1		Level 2		Level 3		Total

Cash equivalents
Money market funds	$	107,067	$	—	$	—	$	107,067
Commercial paper	—		84,884		—		84,884
U.S. treasury securities	—		49,910		—		49,910
Total cash equivalents	$	107,067	$	134,794	$	—	$	241,861
Short-term investments
Commercial paper	$	—	$	43,576	$	—	$	43,576
U.S. treasury securities	—		119,389		—		119,389
Corporate notes and obligations	—		98,944		—		98,944
U.S. agency obligations	—		14,909		—		14,909
Total short-term investments	$	—	$	276,818	$	—	$	276,818
Long-term investments
Corporate notes and obligations	$	—	$	25,653	$	—	$	25,653
U.S. agency obligations	—		10,001		—		10,001
Total long-term investments	$	—	$	35,654	$	—	$	35,654



	As of December 31, 2018
	Level 1		Level 2		Level 3		Total

Cash equivalents
Money market funds	$	185,405	$	—	$	—	$	185,405

Convertible Senior Notes

As of June 30, 2019 , the estimated fair value of the convertible senior notes was $668.0 million . The Company estimates the fair value based on quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). These convertible senior notes are recorded at face value less unamortized debt discount and transaction costs on the Company's condensed consolidated balance sheet. Refer to Note 11—Convertible Senior Notes and Other Long-Term Debt for further information.

Fair Value of Other Financial Instruments

The carrying amounts of the Company’s accounts receivable, accounts payable, accrued expenses, and other liabilities approximate their fair values due to the short maturities of these assets and liabilities.

Note 7. Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):



	June 30, 2019		December 31, 2018

Prepaid expenses	$	11,531	$	7,931
Other current assets	1,584		392
Prepaid expenses and other current assets	$	13,115	$	8,323

Accrued Expenses

Accrued expenses consisted of the following (in thousands):



	June 30, 2019		December 31, 2018

Accrued compensation	$	14,231	$	22,285
Accrued income and other taxes payable	5,786		5,408
Accrued other current liabilities	9,315		4,354
Accrued expenses	$	29,332	$	32,047

Note 8. Property and Equipment

Property and equipment, net consisted of the following (in thousands):



	June 30, 2019			December 31, 2018

Computer equipment	$	10,603		$	9,369
Software	2,034			2,031
Capitalized internal-use software costs	17,402			13,880
Furniture and fixtures	5,734			5,478
Buildings	11,251			11,251
Leasehold improvements	1,607			1,490
Construction in progress	2,222			1,671
Build-to-suit lease asset under construction	24,181			8,281
Total property and equipment	75,034			53,451
Less: Accumulated depreciation	(26,006		)	(21,810		)
Property and equipment, net	$	49,028		$	31,641

Depreciation expense totaled $2.1 million and $2.2 million for the three months ended June 30, 2019 and 2018 , respectively, and $4.2 million and $4.4 million for the six months ended June 30, 2019 and 2018 , respectively.

Note 9. Acquisition of GitPrime, Inc.

On May 9, 2019, the Company completed the acquisition of GitPrime, Inc. ("GitPrime"), a leading provider of developer productivity software. Under the terms of the agreement, the Company acquired all of the outstanding stock of GitPrime for approximately $163.9 million in cash, excluding cash acquired and working capital adjustments.

The Company accounted for the transaction as a business combination using the acquisition method of accounting. The Company allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition date. The excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The goodwill is attributable to GitPrime's assembled workforce and synergies acquired, and is not deductible for income tax purposes. The preliminary amount of consideration transferred is subject to change during the measurement period (up to one year from the acquisition date) as the Company finalizes the valuation of certain tangible and intangible assets acquired and liabilities assumed in connection with the acquisition. The Company expects the allocation of the consideration transferred to be final within the measurement period.

The Company engaged third party valuation specialists to assist in management's analysis of the fair value of the acquired intangibles. All estimates, key assumptions, and forecasts were reviewed by the Company. While the Company chose to utilize a third-party valuation specialist for assistance, the fair value analysis and related valuations reflect the conclusions of management and not those of any third party.

The following table summarizes the acquisition date fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands):



	Fair Value

Cash and cash equivalents	$	5,290
Accounts receivable	1,798
Other assets acquired	207
Property and equipment	223
Goodwill	138,603
Intangible assets	24,800
Other liabilities assumed	(393		)
Deferred revenue	(1,367		)
Total fair value of net assets acquired	$	169,161

The useful lives, primarily based on the period of benefit to the Company, and fair values of the identifiable intangible assets at acquisition date were as follows (in thousands, except years):



	Fair Value of Intangible Assets Acquired		Useful Lives

Technology	$	24,000	5 years
Customer relationships	800		4 years
Total fair value of intangible assets acquired	$	24,800

The fair value of the technology acquired in the acquisition was determined using the excess earnings model and the customer relationships acquired was determined using a distributor model. These models utilize certain unobservable inputs, including discounted cash flows, historical and projected financial information, customer attrition rates, and technology obsolescence rates, classified as Level 3 measurements as defined by ASC 820.

During the three and six months ended June 30, 2019 , the Company incurred acquisition costs of $0.8 million . These costs include legal, accounting fees and other costs directly related to the acquisition and are classified within general and administrative expenses in the Company's condensed consolidated statements of operations.

The condensed consolidated statements of operations includes the results of GitPrime from the acquisition date. During the three and six months ended June 30, 2019, the condensed consolidated statements of operations includes revenue from GitPrime of approximately $0.4 million . Due to the continued integration of the combined businesses, the information needed to determine earnings of GitPrime included in the condensed consolidated statements of operations was unavailable.

The following unaudited pro forma information has been prepared for illustrative purposes only and assumes the acquisition occurred on January 1, 2018. It includes pro forma adjustments related to the amortization of acquired intangible assets, equity-based compensation expense, adjustments for ASC 606, and fair value adjustments for deferred revenue. The unaudited pro forma results have been prepared based on estimates and assumptions, which management believes are reasonable, however, the results are not necessarily indicative of the consolidated results of operations had the acquisition occurred on January 1, 2018, or of future results of operations (in thousands, except per share amounts):



	Three Months Ended June 30,						Six Months Ended Jun 30,
	2019			2018			2019			2018

Revenue	$	77,100		$	54,205		$	149,369		$	104,352
Net loss	(42,948		)	(59,374		)	(80,733		)	(85,587		)
Net loss per share, basic and diluted	$	(0.32	)	$	(0.22	)	$	(0.60	)	$	(0.22	)

Note 10. Intangible Assets

Intangible assets, net are summarized as follows (in thousands):



	As of June 30, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Book Value

Content library:
Acquired content library	$	32,835	$	32,762	$	73
Course creation costs	15,330		7,893		7,437
Total	$	48,165	$	40,655	$	7,510
Intangible assets:
Technology	$	28,500	$	3,833	$	24,667
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	3,550		2,779		771
Database	40		40		—
Domain names	45		—		45
Total	$	32,687	$	7,204	$	25,483



	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Book Value

Content library:
Acquired content library	$	32,835	$	32,229	$	606
Course creation costs	13,552		7,108		6,444
Total	$	46,387	$	39,337	$	7,050
Intangible assets:
Technology	$	4,500	$	2,786	$	1,714
Trademarks	162		162		—
Noncompetition agreements	390		390		—
Customer relationships	2,750		2,750		—
Database	40		40		—
Domain names	45		—		45
Total	$	7,887	$	6,128	$	1,759

Intangible assets are amortized using the straight-line method over the estimated useful lives. Amortization expense of acquired intangible assets was $0.9 million and $3.3 million for the three months ended June 30, 2019 and 2018 , respectively, and $1.6 million and $6.7 million for the six months ended June 30, 2019 and 2018 , respectively. Amortization expense of course creation costs was $0.6 million and $0.5 million for the three months ended June 30, 2019 and 2018 , respectively, and $1.2 million and $0.9 million for the six months ended June 30, 2019 and 2018 , respectively.

The change in the carrying amount of goodwill for the six months ended June 30, 2019 was as follows (in thousands):



Goodwill at December 31, 2018	$	123,119
Goodwill recorded in connection with acquisition	138,603
Goodwill as of June 30, 2019	$	261,722

Note 11. Convertible Senior Notes and Other Long-Term Debt

Convertible Senior Notes

In March 2019, Pluralsight, Inc. issued $633.5 million aggregate principal amount of 0.375% convertible senior notes due in 2024 (the "Notes"), which includes the initial purchasers’ exercise in full of their option to purchase an additional $83.5 million principal amount of the Notes, in a private placement to qualified institutional buyers exempt from registration under the Securities Act. The net proceeds from the issuance of the Notes were $616.7 million after deducting the initial purchasers’ discounts and estimated issuance costs.

The Notes are governed by an indenture (the “Indenture”) between the Company, as the issuer, and U.S. Bank National Association, as trustee. The Notes are Pluralsight, Inc.'s senior unsecured obligations and rank senior in right of payment to any of its indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company's unsecured indebtedness then existing and future liabilities that are not so subordinated; effectively junior in right of payment to any of the Company's secured indebtedness, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of its subsidiaries. The Indenture does not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by the Company or any of its subsidiaries. The Notes mature on March 1, 2024 unless earlier repurchased or converted. Interest is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2019.

The Notes have an initial conversion rate of 25.8023 shares of the Company's Class A common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $38.76 per share of its Class A common stock and is subject to adjustment if certain events occur. Following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such corporate event. Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” per the Indenture, holders of the Notes may require the Company to repurchase for cash all or a portion of their Notes at a purchase price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest.

Holders of the Notes may convert all or any portion of their Notes at any time prior to the close of business on December 1, 2023, in integral multiples of $1,000 principal amount, only under the following circumstances:

•

During any calendar quarter commencing after the calendar quarter ended on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company's Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•

During the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price as defined in the Indenture per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's Class A common stock and the conversion rate on each such trading day; or


•	Upon the occurrence of specified corporate events described in the Indenture.

On or after December 1, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at the conversion rate at any time irrespective of the foregoing conditions. Upon conversion, holders will receive cash, shares of the Company's Class A common stock or a combination of cash and shares of Class A common stock, at the Company's election.

During the six months ended June 30, 2019 , the conditions allowing holders of the Notes to convert were not met. The Notes are therefore not currently convertible and are classified as long-term debt.

The Company accounts for the Notes as separate liability and equity components. The Company determined the carrying amount of the liability component as the present value of its cash flows using a discount rate of approximately 5.5% based on comparable debt transactions for similar companies. The estimated interest rate was applied to the Notes, which resulted in a fair value of the liability component of $492.7 million upon issuance, calculated as the present value of future contractual payments based on the $633.5 million aggregate principal amount. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, is amortized to interest expense over the term of the Notes using the effective interest method. The $140.8 million difference between the gross proceeds received from issuance of the Notes of $633.5 million and the estimated fair value of the liability component represents the equity component, or the conversion option, of the Notes and was recorded in additional paid-in capital. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

The Company allocates issuance costs related to the issuance of the Notes to the liability and equity components using the same proportions as the initial carrying value of the Notes. Issuance costs attributable to the liability component were $13.1 million and are being amortized to interest expense using the effective interest method over the term of the Notes. Issuance costs attributable to the equity components were $3.7 million and are netted with the equity component of the Notes in stockholders’ equity on the condensed consolidated balance sheets.

The net carrying value of the liability component of the Notes was as follows (in thousands):



	June 30, 2019

Principal	$	633,500
Less: Unamortized debt discount	(133,189		)
Less: Unamortized issuance costs	(12,396		)
Net carrying amount	$	487,915

The net carrying value of the equity component of the Notes was as follows (in thousands):



	June 30, 2019

Proceeds allocated to the conversion option (debt discount)	$	140,776
Less: Issuance costs	(3,743		)
Net carrying amount	$	137,033

The interest expense recognized related to the Notes was as follows (in thousands):



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019

Contractual interest expense	$	594	$	726
Amortization of debt issuance costs and discount	6,749		8,294
Total	$	7,343	$	9,020

Capped Calls

In connection with the offering of the Notes, the Company entered into privately-negotiated capped call transactions ("Capped Calls") with certain counterparties. The Capped Calls each have an initial strike price of approximately $38.76 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have initial cap prices of $58.50 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, 16,345,757 shares of the Company's Class A common stock. The Capped Calls are generally intended to reduce or offset the potential dilution from shares of Class A common stock issued upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. As the Capped Call transactions are considered indexed to the Company's own stock and are considered equity classified, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $69.4 million incurred in connection with the Capped Calls was recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets.

Convertible Promissory Note with Pluralsight Holdings

In connection with the issuance of the Notes, Pluralsight, Inc. entered into a convertible promissory note with Pluralsight Holdings, whereby Pluralsight, Inc. provided the net proceeds from the issuance of the Notes to Pluralsight Holdings. The terms of the convertible promissory note mirror the terms of the Notes issued by Pluralsight, Inc. The intent of the convertible promissory note is to maintain the parity of shares of Class A common stock with LLC Units as required by the LLC Agreement in order to preserve the Company's legal structure.

Note 12. Commitments and Contingencies

Letters of Credit

As of June 30, 2019 and December 31, 2018 , the Company had a total of $0.7 million in letters of credit outstanding with a financial institution. These outstanding letters of credit were issued for purposes of securing certain of the Company’s obligations under facility leases. The letters of credit were collateralized by $0.7 million of the Company’s cash, which is reflected as restricted cash on the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018 , respectively.

Lease Commitments

The Company is committed under certain operating leases with third parties for office space. These leases expire at various times through 2035 . The Company recognizes rent expense on a straight-line basis over the lease period.

In August 2018, the Company entered into a new non-cancellable lease agreement to rent office space for the Company's future headquarters to be constructed in Draper, Utah for a period of 15 years beginning on the earlier to occur of the date that the Company opens for business in the leased premises or the commencement date of June 24, 2020 (which date may be extended by construction delays). The Company will pay basic annual rent in monthly installments beginning on the rent commencement date, which are reflected in the table of future minimum lease payments below. The annual rent amount will be determined based on the cost of construction of the premises. Based on the current estimate of the cost of construction, the basic rent amount for the first year is expected to be $7.9 million , and the annual rent amount will increase by two percent each year following the rent commencement date. In the event the costs incurred by the landlord exceed the agreed upon cost of construction of $90.0 million , the landlord may elect to pay such amounts and add such amounts to the cost of construction and increase the basic rent amount or require the Company to pay such amounts. The landlord has agreed to an abatement of basic rent payments at the commencement of the initial lease term of up to approximately $3.2 million .

Based on the Company's involvement in the design and construction of the building, the Company is deemed the owner of the construction project for accounting purposes during the construction period. As a result, the Company recorded a construction in progress asset of $24.2 million and a corresponding facility financing obligation as of June 30, 2019 .

In connection with the lease agreement, the Company is required to maintain a deposit of $16.0 million with a financial institution for the benefit of the landlord to secure the Company’s obligations under the lease. The deposit is recorded within restricted cash on the condensed consolidated balance sheet. The lease agreement provides for both a partial and full release of the deposit funds to the Company, provided the Company meets certain liquidity and other financial conditions. Additionally, as of June 30, 2019 , the Company has recorded a deposit into restricted cash on the condensed consolidated balance sheet of $11.0 million for use in constructing tenant improvements in connection with the Draper headquarters.

Future Minimum Lease Payments

At June 30, 2019 , future minimum lease payments, including lease payments for the Company’s facilities in Farmington, Utah, and lease payments for the Company’s future headquarters in Draper, Utah were as follows (in thousands):



Year Ended December 31,

2019 (remaining six months)	2,842
2020	7,738
2021	10,032
2022	10,025
2023	9,926
Thereafter	99,324
Less: Sublease rental income	(884		)
Total future minimum lease payments	$	139,003

Rent expense under operating leases was $1.6 million and $1.1 million for the three months ended June 30, 2019 and 2018 , respectively, and $3.2 million and $2.2 million for the six months ended June 30, 2019 and 2018 , respectively.

Other Commitments

The Company has also entered into certain non-cancellable agreements primarily related to cloud infrastructure and software subscriptions in the ordinary course of business. There have been no material changes in the Company's commitments and contingencies, as disclosed in the Annual Report.

Legal Proceedings

The Company is involved in legal proceedings from time to time arising in the normal course of business. Management believes that the outcome of these proceedings will not have a material impact on the Company’s financial position, results of operations, or liquidity.

Warranties and Indemnification

The performance of the Company’s cloud-based technology learning platform is typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable. The Company’s contractual arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying consolidated condensed financial statements.

The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines, and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

Note 13. Stockholders' Equity

Amendment and Restatement of Certificate of Incorporation

In connection with the Reorganization Transactions, the certificate of incorporation of Pluralsight, Inc. was amended and restated to, among other things, provide for the (i) authorization of 1,000,000,000 shares of Class A common stock with a par value of $0.0001 per share; (ii) authorization of 200,000,000 shares of Class B common stock with a par value of $0.0001 per

share; (iii) authorization of 50,000,000 shares of Class C common stock with a par value of $0.0001 per share; (iv) authorization of 100,000,000 shares of undesignated preferred stock that may be issued from time to time; and (v) establishment of a classified board of directors, divided into three classes, each of whose members will serve for staggered three -year terms.

Holders of Class A and Class B common stock are entitled to one vote per share and holders of Class C common stock are entitled to ten votes per share. Except as otherwise required by applicable law, holders of Class A common stock, Class B common stock, and Class C common stock vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of Class B and Class C common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B and Class C common stock may only be issued to the extent necessary to maintain the one -to-one ratio between the number of LLC Units held by the Continuing Members and the number of Class B or Class C common shares held by the Continuing Members. Shares of Class B and Class C common stock are transferable only together with an equal number of LLC Units. Subject to certain limitations and exceptions, Continuing Members may exchange or redeem LLC Units and shares of Class B or Class C common stock, as applicable, for, at the option of Pluralsight, Inc., cash or shares of Class A common stock, on a one -for-one basis.

Pluralsight, Inc. must at all times maintain a ratio of one LLC Unit for each share of Class A common stock issued, and Pluralsight Holdings must at all times maintain a one -to-one ratio between the number of shares of Class B or Class C common stock owned by the Continuing Members and the number of LLC Units owned by the Continuing Members.

Recapitalization of Pluralsight Holdings

In connection with the Reorganization Transactions and the amendment and restatement of the LLC Agreement, all membership interests in Pluralsight Holdings were converted into a single-class of common LLC Units and certain holders of LLC Units elected to exchange LLC Units for Class A common stock of Pluralsight, Inc. The following is a summary of the shares converted or exchanged in connection with the Reorganization Transactions:


•	48,407,645 common units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted on a one -for-one basis into LLC Units.


•	48,447,880 redeemable convertible preferred units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted on a one -for-one basis into LLC Units.


•	15,783,689 incentive units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted into 12,667,778 LLC Units after giving effect to the threshold price and catch-up price per unit.


•	3,000,000 Class B incentive units of Pluralsight Holdings outstanding prior to the Reorganization Transactions were converted into 1,747,067 LLC Units after giving effect to the threshold price and catch-up price per unit.

In connection with the recapitalization, a total of 39,110,660 LLC Units were exchanged for shares of Class A common stock of Pluralsight, Inc. In addition, the Company issued 58,111,572 shares of Class B common stock and 14,048,138 shares of Class C common stock to the Continuing Members on a one -for-one basis to the corresponding LLC Units held by the Continuing Members.

The amended and restated LLC Agreement requires that Pluralsight Holdings at all times maintain (i) a one -to-one ratio between the number of outstanding shares of Class A common stock of Pluralsight, Inc. and the number of LLC Units and (ii) a one -to-one ratio between the number of shares of Class B or Class C common stock owned by the Continuing Members and the number of LLC Units held by the Continuing Members.

Initial Public Offering

As described in Note 1—Organization and Description of Business, in May 2018 , Pluralsight, Inc. completed an IPO of 23,805,000 shares of Class A common stock at a public offering price of $15.00 per share. Pluralsight, Inc. received proceeds of $332.1 million , net of underwriting discounts and commissions, which Pluralsight, Inc. used to purchase newly-issued LLC Units of Pluralsight Holdings at a price per unit equal to the IPO price per share.

Exchanges of LLC Units

During the six months ended June 30, 2019 , certain Continuing Members exchanged 33,419,553 LLC Units of Pluralsight Holdings along with their corresponding shares of Class B and Class C common stock for an equal number of shares of Class A common stock. Simultaneously, and in connection with these exchanges, the Company cancelled the exchanged shares of Class B and Class C common stock.

Note 14. Non-Controlling Interests

In connection with the Reorganization Transactions, Pluralsight, Inc. became the sole managing member of Pluralsight Holdings and as a result consolidates the results of operations of Pluralsight Holdings. The non-controlling interests balance represents the LLC Units held by Continuing Members, based on the portion of LLC Units owned by Continuing Members. During

the three and six months ended June 30, 2019 , the adjustments to the non-controlling interests were primarily related to equity-based compensation, the settlement of equity-based awards, and the issuance of the convertible promissory note with Pluralsight Holdings in connection with the convertible senior notes as discussed in Note 11—Convertible Senior Notes and Other Long-Term Debt. Income or loss is attributed to the non-controlling interests based on the weighted-average ownership percentages of LLC Units outstanding during the period, excluding LLC Units that are subject to time-based vesting requirements. As of June 30, 2019 , the non-controlling interests of Pluralsight Holdings owned 26.5% of the outstanding LLC Units, with the remaining 73.5% owned by Pluralsight, Inc. The ownership of the LLC Units is summarized as follows:



	As of June 30, 2019			As of December 31, 2018
	Units	Ownership %		Units	Ownership %

Pluralsight, Inc.'s ownership of LLC Units	101,096,472	73.5	%	65,191,907	48.6	%
LLC Units owned by the Continuing Members ⁽¹⁾	36,529,694	26.5	%	68,881,732	51.4	%
	137,626,166	100.0	%	134,073,639	100.0	%



(1) Excludes 2,321,275 and 3,195,322 LLC Units still subject to time-based vesting requirements as of June 30, 2019 and December 31, 2018, respectively

Note 15. Equity-Based Compensation

Incentive Unit Plan

Certain employees and directors were granted incentive units in Pluralsight Holdings, pursuant to the Incentive Unit Plan (“2013 Plan”). In connection with the Reorganization Transactions, all outstanding incentive units were converted into LLC Units of Pluralsight Holdings and certain holders of incentive units elected to exchange LLC Units for shares of Class A common stock of Pluralsight, Inc. Shares of Class A common stock and LLC Units issued as a result of the exchange or conversion of unvested incentive units remain subject to the same time-based vesting requirements that existed prior to the Reorganization Transactions. In connection with the IPO, the 2013 Plan was terminated.

The unvested LLC Units following the conversion of unvested incentive units are summarized as follows:



	Unvested Units		Weighted- Average Grant Date Fair Value

Unvested LLC Units outstanding—December 31, 2018	3,195,322		$	7.63
Forfeited or cancelled	(17,393	)	5.38
Vested	(856,654	)	6.91
Unvested LLC Units outstanding—June 30, 2019	2,321,275		$	7.91

As of June 30, 2019 , total unrecognized equity-based compensation related to unvested LLC Units was $16.4 million , which is expected to be recognized over a weighted-average period of 1.8 years. The total fair value of Class A common shares and LLC Units vested during the six months ended June 30, 2019 , was $25.2 million . If a forfeiture of an unvested LLC Unit occurs, the associated shares of Class B common stock or Class C common stock, as applicable, are also forfeited.

Equity Incentive Plans

In June 2017, Pluralsight Holdings adopted the 2017 Equity Incentive Plan (“2017 Plan”) and issued restricted stock units ("RSUs") to employees. In May 2018, Pluralsight, Inc. adopted the 2018 Equity Incentive Plan (“2018 Plan”). The 2018 Plan provides for the grant of nonstatutory stock options, restricted stock, RSUs, stock appreciation rights, performance units, and performance shares to employees, directors, and consultants of the Company.

In connection with the IPO and the adoption of the 2018 Plan, the 2017 Plan was terminated. With the establishment of the 2018 Plan, the Company no longer grants equity-based awards under the 2017 Plan and any shares that expire, terminate, are forfeited or repurchased by the Company, or are withheld by the Company to cover tax withholding obligations, under the 2017 Plan, will automatically be transferred to the 2018 Plan.

In connection with the acquisition of GitPrime, Inc. the Company assumed all existing equity awards under the 2015 and 2018 Equity Incentive Plans of GitPrime.

Stock Options

In connection with the IPO, the Company granted to employees stock options under the 2018 Plan to purchase shares of Class A common stock at an exercise price equal to the IPO price of $15.00 per share. The stock options will vest ratably in equal six -month periods over a period of two years from the IPO date.

In connection with the GitPrime acquisition, the stock options granted to GitPrime employees under the 2015 and 2018 Equity Incentive Plans were automatically converted into options to purchase shares of the Company's Class A common stock, subject to appropriate adjustments to the number of shares issuable pursuant to such options and the exercise price of such options as provided in the Merger Agreement. The options are subject to time-based vesting conditions and continue to vest over the remaining vesting period of the original award ranging from two to four years .

The following table summarizes the stock option activity for the six months ended June 30, 2019 :



	Stock Options Outstanding		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)

Balance as of December 31, 2018	5,143,712		$	15.00
Granted	169,762		1.47
Exercised	(426,968	)	14.93
Forfeited or cancelled	(80,313	)	15.00
Outstanding as of June 30, 2019	4,806,193		$	14.53	8.9	$	75.9
Vested and exercisable—June 30, 2019	2,109,402		$	14.90	8.9	$	32.5

During the six months ended June 30, 2019 , the total intrinsic value of options exercised was $7.2 million . The total unrecognized equity-based compensation related to the stock options was $22.2 million , which is expected to be recognized over a weighted-average period of 1.3 years.

RSUs

RSUs represent the right to receive shares of Pluralsight, Inc.’s Class A common stock at a specified future date. Restricted share units of Pluralsight Holdings under the 2017 Plan are generally subject to both a service condition and a liquidity condition. RSUs under the 2018 Plan are generally subject to a service condition. The service condition is generally satisfied over four years , whereby 25% of the share units satisfy this condition on the first anniversary of the grant date and then ratably on a quarterly basis thereafter through the end of the vesting period. The liquidity condition is satisfied upon the occurrence of a qualifying event, which was satisfied upon expiration of the lock-up period following the IPO.

Under the 2017 Plan, all restricted share units granted were initially restricted share units of Pluralsight Holdings. In connection with the IPO, all restricted share units were converted into RSUs of Pluralsight, Inc., except for Class B restricted share units of Pluralsight Holdings, which remain restricted share units of Pluralsight Holdings, and represent the right to receive LLC Units and corresponding shares of Class C common stock of Pluralsight, Inc. upon vesting.

The activity for RSUs for the six months ended June 30, 2019 was as follows:



	Number of RSUs or Units		Weighted-Average Grant Date Fair Value

RSUs of Pluralsight, Inc.
Balance at December 31, 2018	4,801,536		$	11.11
Granted	4,784,948		31.75
Forfeited or cancelled	(400,757	)	17.11
Vested	(1,273,293	)	11.32
Balance at June 30, 2019	7,912,434		$	23.23
Restricted Share Units of Pluralsight Holdings:
Balance at December 31, 2018	2,062,500		$	8.24
Vested	(375,000	)	8.24
Balance at June 30, 2019	1,687,500		$	8.24

As of June 30, 2019 , unrecognized compensation cost related to RSUs, including restricted share units of Pluralsight Holdings, was $154.9 million , which is expected to be recognized over a weighted-average period of 3.2 years.

Employee Stock Purchase Plan

In May 2018, Pluralsight, Inc.'s board of directors adopted the Employee Stock Purchase Plan ("ESPP"). The ESPP generally provides for consecutive overlapping 24 -month offering periods comprised of four six -month purchase periods. The offering periods start on the first trading day on or after May 31 and November 30 of each year.

The ESPP permits participants to elect to purchase shares of Class A common stock through fixed contributions from eligible compensation paid during each purchase period during an offering period, provided that this fixed contribution amount will not exceed 75.0% of the eligible compensation a participant receives during a purchase period, or $12,500 (increased to $25,000 for purposes of the first purchase period under the ESPP). A participant may purchase a maximum of 5,000 shares during each purchase period. Amounts deducted and accumulated by the participant will be used to purchase shares of Class A common stock at the end of each purchase period. The purchase price of the shares will be 85% of the lower of the fair market value of Class A common stock on the first trading day of each offering period or on the purchase date. If the fair market value of the common stock on any purchase date within an offering period is lower than the stock price as of the beginning of the offering period, the offering period will immediately reset after the purchase of shares on such purchase date and participants will automatically be re-enrolled in a new offering period. Participants may end their participation at any time during an offering period and will be paid their accrued contributions that have not yet been used to purchase shares of common stock. Participation ends automatically upon termination of employment.

ESPP employee payroll contributions accrued at June 30, 2019 and December 31, 2018, totaled $1.7 million and $1.5 million , and are included within accrued expenses in the condensed consolidated balance sheets. Employee payroll contributions ultimately used to purchase shares under the ESPP will be reclassified to stockholders' equity at the end of the purchase period. As of June 30, 2019 , total unrecognized equity-based compensation for purchase rights committed under the ESPP was $13.2 million , which is expected to be recognized over a weighted-average period of 1.2 years.

Equity-Based Compensation

Equity-based compensation was classified as follows in the accompanying condensed consolidated statements of operations (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
			(Restated)				(Restated)

Cost of revenue	$	133	$	89	$	217	$	89
Sales and marketing	7,952		7,356		14,228		7,895
Technology and content	5,137		4,571		8,847		4,952
General and administrative	9,510		16,963		19,708		19,416
Total equity-based compensation	$	22,732	$	28,979	$	43,000	$	32,352

Equity-based compensation capitalized as internal-use software was $0.2 million for the three months ended June 30, 2019 and $0.6 million for the six months ended June 30, 2019 .

Note 16. Income Taxes

As a result of the Reorganization Transactions, Pluralsight, Inc. became the sole managing member of Pluralsight Holdings, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Pluralsight Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Pluralsight Holdings is passed through to and included in the taxable income or loss of its members, including Pluralsight, Inc. following the Reorganization Transactions, on a pro rata basis. Pluralsight, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of Pluralsight Holdings following the Reorganization Transactions. The Company is also subject to taxes in foreign jurisdictions.

The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, are subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments.

For the three months ended June 30, 2019 and 2018 the Company's estimated effective tax rate was (0.5)% . For the six months ended June 30, 2019 and 2018 the Company's estimated effective tax rate was (0.6)% and (0.5)% , respectively. The

variations between the Company's estimated effective tax rate and the U.S. statutory rate are primarily due to the portion of the Company's earnings (or loss) attributable to non-controlling interests following the Reorganization Transactions and the full domestic valuation allowance.

The Company is subject to income tax in the U.S. as well as other tax jurisdictions in which the Company operates. The provision for income taxes consists primarily of income taxes and withholding taxes in foreign jurisdictions in which the Company conducts business. The Company's U.S. operations have resulted in losses, and as such, the Company maintains a full valuation allowance against its U.S. deferred tax assets. While the Company believes its current valuation allowance is appropriate, the Company assesses the need for an adjustment to the valuation allowance on a quarterly basis. The assessment is based on estimates of future sources of taxable income for the jurisdictions in which the Company operates and the periods over which deferred tax assets will be realizable. In the event the Company determines that it will be able to realize all or part of its net deferred tax assets in the future, all or part of the valuation allowance will be released in the period in which the Company makes such determination. The release of all or part of the valuation allowance against deferred tax assets may cause greater volatility in the effective tax rate in the periods in which it is released.

Tax Receivable Agreement

On the date of the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) with Continuing Members that provides for a payment to the Continuing Members of 85% of the amount of tax benefits, if any, that Pluralsight, Inc. realizes, or is deemed to realize as a result of redemptions or exchanges of LLC Units.

During the six months ended June 30, 2019 , certain Continuing Members exchanged 33,419,553 LLC Units for shares of Class A common stock. The Company has concluded that, based on applicable accounting standards, it is more-likely-than-not that its deferred tax assets subject to the TRA will not be realized; therefore, the Company has not recorded a TRA liability related to the tax savings it may realize from the utilization of deferred tax assets arising from the exchanges that have occurred through June 30, 2019 . The total unrecorded TRA liability as of June 30, 2019 is approximately $250.7 million .

Note 17. Net Loss Per Share

The following table presents the calculation of basic and diluted net loss per share for the periods following the Reorganization Transactions (in thousands, except per share amounts):



	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019

Numerator:
Net loss	$	(41,120	)	$	(75,325	)
Less: Net loss attributable to non-controlling interests	(11,740		)	(26,690		)
Net loss attributable to Pluralsight, Inc.	$	(29,380	)	$	(48,635	)
Denominator:
Weighted-average common shares outstanding, basic and diluted	97,608			86,827
Net loss per share:
Net loss per share, basic and diluted	$	(0.30	)	$	(0.56	)

During the three months ended June 30, 2019 , the Company incurred net losses and, therefore, the effect of the Company’s potentially dilutive securities were not included in the calculation of diluted loss per share as the effect would be anti-dilutive.

The following table contains share/unit totals with a potentially dilutive impact (in thousands):



		As of June 30, 2019

LLC Units held by Continuing Members		38,851
Stock options		4,806
RSUs of Pluralsight, Inc.		7,912
Restricted Share Units of Pluralsight Holdings		1,688
Purchase rights committed under the ESPP		1,604
Total		54,861

The Notes will not have an impact on the Company's diluted earnings per share until the average market share price of Class A common stock exceeds the conversion price of $58.50 per share, as the Company intends and has the ability to settle the principal

amount of the Notes in cash upon conversion. The Company is required under the treasury stock method to compute the potentially dilutive shares of common stock related to the Notes for periods it reports net income. However, upon conversion, until the average market price of the Company's common stock exceeds the cap price of $58.50 per share, exercise of the Capped Calls will mitigate dilution from the Notes from the conversion price up to the cap price. Capped Calls are excluded from the calculation of diluted earnings per share, as they would be antidilutive under the treasury stock method.

Note 18. Related Party Transactions

The Company utilizes an aircraft owned by the Company’s Chief Executive Officer on an as-needed basis. The Company has agreed to reimburse the Chief Executive Officer for use of the private aircraft for business purposes at an hourly rate per flight hour. The reimbursement rate was approved by the Company's Board of Directors based upon a review of comparable chartered aircraft rates. The Company accrued approximately $0.1 million as of June 30, 2019 included within accrued expenses on the condensed consolidated balance sheets. A total of $0.6 million has been paid under the arrangement during the six months ended June 30, 2019 .

Tax Receivable Agreement

On the date of the IPO, the Company entered into a TRA with Continuing Members that provides for a payment to the Continuing Members of 85% of the amount of tax benefits, if any, that Pluralsight, Inc. realizes, or is deemed to realize as a result of redemptions or exchanges of LLC Units. As discussed in Note 16—Income Taxes, no amounts were paid or payable to Continuing Members under the TRA as it is more-likely-than-not that the Company’s tax benefits obtained from exchanges subject to the TRA will not be realized.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Management's Discussion and Analysis of Financial Condition and Results of Operations and financial statements included in our Annual Report. As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” in our Annual Report.

Overview

We are a leading provider of technology skill development solutions for businesses and individuals. We enable businesses to innovate in an era of rapid technological change and digital transformation by equipping their employees with the latest technology skills. We provide businesses with visibility into the technical strengths of their workforce, allowing them to better align resources, provide targeted skill development in line with company goals, and advance the skills of individuals and teams.

We started operations in 2004 and focused initially on in-person instructor-led training. Anticipating the increasing demand for online solutions, we began offering online courses in 2008 and shifted entirely to an online delivery model in 2011. Since 2011, we have extended our offering to include new content areas and additional features that have enabled us to expand our addressable market, attract new users, and deepen our foothold within businesses.

We have expanded our platform both organically through internal initiatives and through acquisitions, which have all been focused on adding capabilities to our offerings. In May 2019, we completed the acquisition of GitPrime, Inc., or GitPrime, a leading provider of developer productivity software for approximately $163.9 million in cash, excluding cash acquired and working capital adjustments. We believe the acquisition will enhance our platform to measure developer productivity, which will enable technology leaders to identify talent and areas of improvement within their teams, in order to enhance skills and drive productivity.

Our additions and improvements to our product offering have allowed us to accelerate our revenue growth and enabled us to strengthen our relationships with our business customers. We derive substantially all of our revenue from the sale of subscriptions to our platform. We sell subscriptions to our platform primarily to business customers through our direct sales team, as well as through our website. We also sell subscriptions to our platform to individual customers directly through our website. In addition, small teams often represent the “top of the funnel” for larger deployments, bringing our technology into their workplaces and proliferating usage of our platform within their companies.

We are focused on attracting businesses, particularly large enterprises, to our platform and expanding their use of our platform over time. We believe that there exists a significant opportunity to drive sales to large enterprises, including expanding relationships with existing customers and attracting new customers. Our ability to attract large enterprises to our platform and to expand their use of our platform will be important for the success of our business and our results of operations.

Key Business Metrics

We monitor billings and certain related key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018

	(dollars in thousands)
Billings	$	80,552		$	65,297		$	158,480		$	120,716
Billings from business customers	$	69,104		$	54,623		$	136,260		$	99,875
% of billings from business customers	86		%	84		%	86		%	83		%

Billings

We use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers and our ability to sell subscriptions to our platform to both new and existing customers. Billings represent our total revenue plus the change in deferred revenue in the period, as presented in our condensed consolidated statements of cash flows, less the change in contract assets and unbilled accounts receivable in the period. Billings in any particular period represent amounts invoiced to our customers and reflect subscription renewals and upsells to existing customers plus sales to new customers. Our pricing and subscription periods vary for business customers and individual customers. Subscription periods for our business customers generally range from one to three years, with a majority being one year. We typically invoice our business customers in advance in annual installments. Subscription periods for our individual customers range from one month to one year and we typically invoice them in advance in monthly or annual installments.

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. We believe that billings from business customers will be a significant source of future revenue growth and a key factor affecting our long-term performance. We expect our billings from business customers to continue to increase as a percentage of billings over the long term.

As our billings continue to grow in absolute terms, we expect our billings growth rate to decline over the long term as we achieve scale in our business. As we recognize revenue from subscription fees ratably over the term of the contract, due to the difference in timing of billings received and when we recognize revenue, changes to our billings and billings growth rates are not immediately reflected in our revenue and revenue growth rates.

During the three months ended June 30, 2019, our billings growth rate declined compared to recent quarterly results, primarily due to sales execution challenges, including (i) a lower net retention rate during the three months ended June 30, 2019 than recent quarters and (ii) being slower in hiring additional sales representatives than planned for 2019. As a result of our recent performance, we reorganized our senior leadership within our sales organization and are implementing additional changes that have not yet become effective. We expect that the decline in our billings growth rate during the three months ended June 30, 2019 will have a negative impact on our revenue in future periods.

Components of Results of Operations

Revenue

We derive substantially all of our revenue from the sale of subscriptions to our platform. A small portion of our revenue is derived from providing professional services, which generally consist of content creation or other consulting services. Amounts that have been invoiced are initially recorded as deferred revenue and are recognized ratably as revenue over the subscription period. Subscription terms generally range from one year to three years for business customers and one month to one year for individual customers, and begin on the date access to our platform is made available to the customer. Most of our subscriptions to business customers are billed in annual installments even if customers are contractually committed to multi-year agreements. Subscriptions that allow the customer to take software on-premise without significant penalty are recognized at a point in time when the software is made available to the customer.

Cost of Revenue, Gross Profit and Gross Margin

Cost of revenue includes certain direct costs associated with delivering our platform and includes costs for author fees, amortization of our content library, hosting and delivery fees, merchant processing fees, depreciation of capitalized software development costs for internal-use software, employee-related costs, including equity-based compensation associated with our customer support organization, and third-party transcription costs.

Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by various factors, including the mix of subscriptions we sell, the cost of author fees, the costs associated with third-party hosting services, and the extent to which we expand our customer support and professional services organizations. We expect our gross margin to increase over the long term primarily due to a decrease in author fees as a percentage of revenue, although our gross margin may fluctuate from period to period depending on the interplay of the factors described above.

Operating Expenses

Our operating expenses are classified as sales and marketing, technology and content, and general and administrative. For each of these categories, the largest component is employee-related costs, which include salaries and bonuses, equity-based compensation, and employee benefit costs. We allocate shared overhead costs such as information technology infrastructure and facility-related costs based on headcount in that category.

Sales and Marketing

Sales and marketing expenses consist primarily of employee compensation costs of our sales and marketing employees, including salaries, benefits, bonuses, commissions, equity-based compensation, and allocated overhead costs. Other sales and marketing costs include user events, search engine and email marketing, content syndication, lead generation, and online banner and video advertising. We expect that our sales and marketing expenses will increase in absolute dollars for the foreseeable future and, in the near term, may increase as a percentage of our revenue as we hire additional sales and marketing personnel, increase our marketing activities, and grow our domestic and international operations. Additionally, our sales and marketing expenses may fluctuate as a percentage of our revenue from period to period depending on the timing of expenditures. However, we expect sales and marketing expenses to decrease as a percentage of revenue over the long term.

Technology and Content

Technology costs consist principally of research and development activities including personnel costs, consulting services, other costs associated with platform development efforts, and allocated overhead costs. Content costs consist principally of

personnel costs and other activities associated with content development, course production, curriculum direction, and allocated overhead costs. Technology and content costs are expensed as incurred, except for certain costs relating to the development of internal-use software, including software used to upgrade and enhance our platform and applications supporting our business, which are capitalized and amortized over the estimated useful lives of one to three years. We expect that our technology and content expenses will increase in absolute dollars for the foreseeable future and, in the near term, may increase as a percentage of our revenue as we continue to increase the functionality of and enhance our platform and develop new content and features, including the integration of the GitPrime platform into our existing product offerings. Additionally, our technology and content expense may fluctuate as a percentage of our revenue from period to period depending on the timing of expenditures. However, we expect technology and content expenses to decrease as a percentage of revenue over the long term.

General and Administrative

General and administrative expenses consist of personnel costs and related expenses for executive, finance, legal, people operations, and administrative personnel, including salaries, benefits, bonuses, and equity-based compensation; professional fees for external legal, accounting, recruiting, and other consulting services; and allocated overhead costs. We are incurring additional general and administrative expenses as a result of operating as a public company and our UP-C structure, including additional expenses related to compliance with the rules and regulations of the SEC, additional insurance expenses, investor relations activities, and professional services. In addition, we expect to increase the size of our general and administrative function to support our increased compliance requirements and the growth of our business. As a result, we expect that our general and administrative expenses will increase in absolute dollars for the foreseeable future and, in the near term, may increase as a percentage of our revenue. Additionally, our general and administrative expenses may fluctuate as a percentage of our revenue from period to period depending on the timing of expenditures. However, we expect general and administrative expenses to decrease as a percentage of revenue over the long term.

Other (Expense) Income

Other (expense) income consists primarily of interest expense on the Notes and other long-term debt, gains or losses on foreign currency transactions, and interest income earned on our cash, cash equivalents, and investments.

Results of Operations

The following tables set forth selected unaudited condensed consolidated statements of operations data and such data as a percentage of revenue for each of the periods indicated:



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
				(Restated)						(Restated)

	(in thousands)
Revenue	$	75,862		$	53,572		$	145,479		$	103,216
Cost of revenue ⁽¹⁾⁽²⁾	17,801			15,933			34,511			30,819
Gross profit	58,061			37,639			110,968			72,397
Operating expenses ⁽¹⁾⁽²⁾ :
Sales and marketing	49,994			41,857			94,125			71,324
Technology and content	24,786			18,396			45,030			31,721
General and administrative	20,601			26,002			42,774			37,294
Total operating expenses	95,381			86,255			181,929			140,339
Loss from operations	(37,320		)	(48,616		)	(70,961		)	(67,942		)
Other (expense) income:
Interest expense	(7,697		)	(2,424		)	(9,721		)	(6,134		)
Loss on debt extinguishment	—			(4,085		)	—			(4,085		)
Other income, net	4,040			48			5,654			35
Loss before income taxes	(40,977		)	(55,077		)	(75,028		)	(78,126		)
Provision for income taxes	(143		)	(143		)	(297		)	(252		)
Net loss	$	(41,120	)	$	(55,220	)	$	(75,325	)	$	(78,378	)


(1)	Includes equity-based compensation as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
			(Restated)				(Restated)

	(in thousands)
Cost of revenue	$	133	$	89	$	217	$	89
Sales and marketing	7,952		7,356		14,228		7,895
Technology and content	5,137		4,571		8,847		4,952
General and administrative	9,510		16,963		19,708		19,416
Total equity-based compensation	$	22,732	$	28,979	$	43,000	$	32,352


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



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018

	(in thousands)
Cost of revenue	$	702	$	2,961	$	1,227	$	5,923
Sales and marketing	29		194		29		389
Technology and content	176		177		353		353
Total amortization of acquired intangible assets	$	907	$	3,332	$	1,609	$	6,665



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
			(Restated)				(Restated)

Revenue	100	%	100	%	100	%	100	%
Cost of revenue	23		30		24		30
Gross profit	77		70		76		70
Operating expenses:
Sales and marketing	66		78		65		69
Technology and content	33		34		31		31
General and administrative	27		49		29		36
Total operating expenses	126		161		125		136
Loss from operations	(49	)	(91	)	(49	)	(66	)
Other (expense) income:
Interest expense	(10	)	(5	)	(7	)	(6	)
Loss on debt extinguishment	—		(8	)	—		(4	)
Other income (expense), net	5		—		4		—
Loss before income taxes	(54	)	(104	)	(52	)	(76	)
Provision for income taxes	—		—		—		—
Net loss	(54	)%	(104	)%	(52	)%	(76	)%

Comparison of the Three Months Ended June 30, 2019 and 2018

Revenue



	Three Months Ended June 30,				Change
	2019		2018		Amount		%

	(dollars in thousands)
Revenue	$	75,862	$	53,572	$	22,290	42	%

Revenue was $75.9 million for the three months ended June 30, 2019 , compared to $53.6 million for the three months ended June 30, 2018 , an increase of $22.3 million , or 42% . The increase in revenue was primarily due to a $21.7 million , or 51% , increase in revenue from business customers, driven by an increase of 2,228 business customers from 15,507 business customers as of

June 30, 2018 to 17,735 business customers as of June 30, 2019 , as well as increased sales to our existing business customers. In addition, there was an increase of $0.6 million in revenue from individual customers.

Cost of Revenue and Gross Profit



	Three Months Ended June 30,				Change
	2019		2018		Amount		%
			(Restated)

	(dollars in thousands)
Cost of revenue	$	17,801	$	15,933	$	1,868	12	%
Gross profit	58,061		37,639		20,422		54	%

Cost of revenue was $17.8 million for the three months ended June 30, 2019 , compared to $15.9 million for the three months ended June 30, 2018 , an increase of $1.9 million , or 12% . The increase in cost of revenue was primarily due to an increase of $2.8 million in author fees and an increase of $0.4 million in depreciation of capitalized software development costs. These increases were partially offset by a decrease of $2.1 million in amortization of acquired intangible assets and course creation costs.

Gross profit was $58.1 million for the three months ended June 30, 2019 , compared to $37.6 million for the three months ended June 30, 2018 , an increase of $20.4 million , or 54% . The increase in gross profit was the result of the increase in our revenue during the three months ended June 30, 2019 . Gross margin increased from 70% for the three months ended June 30, 2018 to 77% for the three months ended June 30, 2019 due to a decrease in amortization of acquired intangible assets and a decrease in author fees as a percentage of revenue.

Operating Expenses



	Three Months Ended June 30,				Change
	2019		2018		Amount			%
			(Restated)

	(dollars in thousands)
Sales and marketing	$	49,994	$	41,857	$	8,137		19	%
Technology and content	24,786		18,396		6,390			35	%
General and administrative	20,601		26,002		(5,401		)	(21	)%
Total operating expenses	$	95,381	$	86,255	$	9,126		11	%

Sales and Marketing

Sales and marketing expenses were $50.0 million for the three months ended June 30, 2019 , compared to $41.9 million for the three months ended June 30, 2018 , an increase of $8.1 million , or 19% . The increase was primarily due to an increase of $5.9 million in employee compensation costs, including $0.6 million in equity-based compensation, as we added headcount to support our growth. In addition, there was an increase of $2.5 million related to allocated overhead costs primarily driven by our headcount growth, and an increase of $0.5 million in marketing and event costs.

Technology and Content

Technology and content expenses were $24.8 million for the three months ended June 30, 2019 , compared to $18.4 million for the three months ended June 30, 2018 , an increase of $6.4 million , or 35% . The increase was primarily due to an increase of $5.6 million in employee compensation costs, including $0.6 million in equity-based compensation, as we added headcount to support our growth. In addition, there was an increase of $0.5 million related to allocated overhead costs primarily driven by our headcount growth. These increases were partially offset by an increase of $0.4 million in capitalized software development costs.

General and Administrative

General and administrative expenses were $20.6 million for the three months ended June 30, 2019 , compared to $26.0 million for the three months ended June 30, 2018 , a decrease of $5.4 million , or 21% . The decrease was primarily due to a decrease of $7.5 million in equity-based compensation. The decrease in equity-based compensation is primarily due to a cumulative catch-up adjustment that was recorded during the three months ended June 30, 2018 upon completion of the IPO. In addition, there was an increase of $0.8 million related to costs associated with our merger with GitPrime, and an increase of $0.6 million related to allocated overhead costs primarily driven by our headcount growth.

Other (Expense) Income



	Three Months Ended June 30,						Change
	2019			2018			Amount			%

	(dollars in thousands)
Interest expense	$	(7,697	)	$	(2,424	)	$	(5,273	)	218	%
Loss on debt extinguishment	—			(4,085		)	4,085			NM
Other income, net	4,040			48			3,992			NM

Interest expense increased primarily as a result of the increase in interest expense and amortization of debt discount and issuance costs related to the Notes issued in March 2019. This increase is partially offset by a decrease in interest expense as a result of repayment of long-term debt in May 2018. In connection with the repayment, we incurred a loss on debt extinguishment of $4.1 million.

Other income, net increased primarily as a result of the additional interest income earned from our increased cash, cash equivalents, and investments as a result of net proceeds from our IPO and the issuance of the Notes.

Comparison of the Six Months Ended June 30, 2019 and 2018

Revenue



	Six Months Ended June 30,				Change
	2019		2018		Amount		%

	(dollars in thousands)
Revenue	$	145,479	$	103,216	$	42,263	41	%

Revenue was $145.5 million for the six months ended June 30, 2019 , compared to $103.2 million for the six months ended June 30, 2018 , an increase of $42.3 million , or 41% . The increase in revenue was primarily due to a $41.4 million , or 51% , increase in revenue from business customers, driven by an increase of 2,228 business customers from 15,507 business customers as of June 30, 2018 to 17,735 business customers as of June 30, 2019 , as well as increased sales to our existing business customers. In addition, there was an increase of $0.9 million in revenue from individual customers.

Cost of Revenue and Gross Profit



	Six Months Ended June 30,				Change
	2019		2018		Amount		%
			(Restated)

	(dollars in thousands)
Cost of revenue	$	34,511	$	30,819	$	3,692	12	%
Gross profit	110,968		72,397		38,571		53	%

Cost of revenue was $34.5 million for the six months ended June 30, 2019 , compared to $30.8 million for the six months ended June 30, 2018 , an increase of $3.7 million , or 12% . The increase in cost of revenue was primarily due to an increase of $5.8 million in author fees and an increase of $0.8 million in depreciation of capitalized software development costs. These increases were partially offset by a decrease of $4.4 million in amortization of acquired intangible assets and course creation costs.

Gross profit was $111.0 million for the six months ended June 30, 2019 , compared to $72.4 million for the six months ended June 30, 2018 , an increase of $38.6 million , or 53% . The increase in gross profit was the result of the increase in our revenue during the six months ended June 30, 2019 . Gross margin increased from 70% for the six months ended June 30, 2018 to 76% for the six months ended June 30, 2019 due to a decrease in amortization of acquired intangible assets and a decrease in author fees as a percentage of revenue.

Operating Expenses



	Six Months Ended June 30,				Change
	2019		2018		Amount		%
			(Restated)

	(dollars in thousands)
Sales and marketing	$	94,125	$	71,324	$	22,801	32	%
Technology and content	45,030		31,721		13,309		42	%
General and administrative	42,774		37,294		5,480		15	%
Total operating expenses	$	181,929	$	140,339	$	41,590	30	%

Sales and Marketing

Sales and marketing expenses were $94.1 million for the six months ended June 30, 2019 , compared to $71.3 million for the six months ended June 30, 2018 , an increase of $22.8 million , or 32% . The increase was primarily due to an increase of $20.1 million in employee compensation costs, including $6.3 million in equity-based compensation, as we added headcount to support our growth. In addition, there was an increase of $4.5 million related to allocated overhead costs primarily driven by our headcount growth, and an increase of $0.6 million due to additional travel expenses related to additional headcount. These increases were partially offset by a decrease of $0.9 million in marketing expenses as a result of optimizing our digital marketing expenditures to more efficient channels, and a decrease of $0.4 million in amortization of acquired intangible assets and course creation costs.

Technology and Content

Technology and content expenses were $45.0 million for six months ended June 30, 2019 , compared to $31.7 million for the six months ended June 30, 2018 , an increase of $13.3 million , or 42% . The increase was primarily due to an increase of $13.0 million in employee compensation costs, including $3.9 million in equity-based compensation, as we added headcount to support our growth. In addition, there was an increase of $0.8 million related to allocated overhead costs primarily driven by our headcount growth. These increases were partially offset by a $1.0 million increase in capitalized software development costs.

General and Administrative

General and administrative expenses were $42.8 million for the six months ended June 30, 2019 , compared to $37.3 million for the six months ended June 30, 2018 , an increase of $5.5 million , or 15% . The increase was primarily due to an increase of $1.8 million in employee compensation costs, including $0.3 million in equity-based compensation. In addition, there was an increase of $0.9 million related to allocated overhead costs primarily driven by our headcount growth, an increase of $0.9 million related to costs associated with a secondary offering, an increase of $0.8 million related to costs associated with our acquisition of GitPrime, and an increase of $0.8 million related to professional services primarily driven by the additional costs of operating as a public company.

Other (Expense) Income



	Six Months Ended June 30,						Change
	2019			2018			Amount			%

	(dollars in thousands)
Interest expense	$	(9,721	)	$	(6,134	)	$	(3,587	)	58	%
Loss on debt extinguishment	—			(4,085		)	4,085			NM
Other income, net	5,654			35			5,619			NM

Other income (expense), net increased primarily as a result of the additional interest income earned from our increased cash, cash equivalents and investments as a result of net proceeds from our IPO and the issuance of the Notes.

Non-GAAP Financial Measures



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018

	(dollars in thousands)
Non-GAAP gross profit	$	58,909		$	40,689		$	112,428		$	78,409
Non-GAAP gross margin	78		%	76		%	77		%	76		%
Non-GAAP operating loss	$	(11,517	)	$	(16,305	)	$	(21,826	)	$	(28,925	)
Free cash flow	$	(11,142	)	$	(9,234	)	$	(8,672	)	$	(22,295	)

Non-GAAP Gross Profit and Non-GAAP Gross Margin

Non-GAAP gross profit is a non-GAAP financial measure that we define as gross profit plus equity-based compensation, amortization of acquired intangible assets, and employer payroll taxes on employee stock transactions. We define non-GAAP gross margin as our non-GAAP gross profit divided by our revenue. We believe non-GAAP gross profit and non-GAAP gross margin are useful to investors as these metrics generally eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall profitability or operating performance.

See the section below titled “—Reconciliation of Non-GAAP Financial Measures” for information regarding the limitations of using our non-GAAP gross profit and non-GAAP gross margin as financial measures and for a reconciliation of our non-GAAP gross profit to gross profit, the most directly comparable financial measure calculated in accordance with GAAP.

Non-GAAP Operating Loss

Non-GAAP operating loss is a non-GAAP financial measure that we define as loss from operations plus equity-based compensation, amortization of acquired intangible assets, employer payroll taxes on employee stock transactions, secondary offering costs, and acquisition-related costs. We believe non-GAAP operating loss provides investors with useful information on period-to-period performance as evaluated by management and comparison with our past financial performance. We believe non-GAAP operating loss is useful in evaluating our operating performance compared to that of other companies in our industry, as this metric generally eliminates the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance.

See the section below titled “—Reconciliation of Non-GAAP Financial Measures” for information regarding the limitations of using our non-GAAP operating loss as a financial measure and for a reconciliation of our non-GAAP operating loss to loss from operations, the most directly comparable financial measure calculated in accordance with GAAP.

Free Cash Flow

We define free cash flow as net cash used in operating activities less purchases of property and equipment and purchases of our content library and other intangible assets. We consider free cash flow to be an important measure because it measures the amount of cash we spend or generate and reflects changes in our working capital.

See the section below titled “—Reconciliation of Non-GAAP Financial Measures” for information regarding the limitations of using free cash flow as a financial measure and for a reconciliation of free cash flow to net cash used in operations, the most directly comparable financial measure calculated in accordance with GAAP.

Reconciliation of Non-GAAP Financial Measures

We use non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, and free cash flow in conjunction with traditional GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, and free cash flow should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of non-GAAP gross profit, non-GAAP operating loss, and free cash flow to the related GAAP financial measures, gross profit, loss from operations, and net cash used in operating activities, respectively. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, and free cash flow in conjunction with their respective related GAAP financial measures.

The following table provides a reconciliation of gross profit to non-GAAP gross profit:



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018

	(dollars in thousands)
Gross profit, as restated (2018)	$	58,061		$	37,639		$	110,968		$	72,397
Equity-based compensation, as restated (2018)	133			89			217			89
Amortization of acquired intangible assets	702			2,961			1,227			5,923
Employer payroll taxes on employee stock transactions	13			—			16			—
Non-GAAP gross profit	$	58,909		$	40,689		$	112,428		$	78,409
Gross margin	77		%	70		%	76		%	70		%
Non-GAAP gross margin	78		%	76		%	77		%	76		%

The following table provides a reconciliation of loss from operations to non-GAAP operating loss:



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018

	(in thousands)
Loss from operations, as restated (2018)	$	(37,320	)	$	(48,616	)	$	(70,961	)	$	(67,942	)
Equity-based compensation, as restated (2018)	22,732			28,979			43,000			32,352
Amortization of acquired intangible assets	907			3,332			1,609			6,665
Employer payroll taxes on employee stock transactions	1,329			—			2,773			—
Secondary offering costs	—			—			918			—
Acquisition-related costs	835			—			835			—
Non-GAAP operating loss	$	(11,517	)	$	(16,305	)	$	(21,826	)	$	(28,925	)

The following table provides a reconciliation of net cash provided by (used in) operating activities to free cash flow:



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018

	(in thousands)
Net cash provided by (used in) operating activities	$	(7,181	)	$	(5,793	)	$	(1,641	)	$	(16,217	)
Less: Purchases of property and equipment	(2,457		)	(2,706		)	(4,590		)	(4,574		)
Less: Purchases of content library	(1,504		)	(735		)	(2,441		)	(1,504		)
Free cash flow	$	(11,142	)	$	(9,234	)	$	(8,672	)	$	(22,295	)

Liquidity and Capital Resources

As of June 30, 2019 , our principal sources of liquidity were cash, cash equivalents, restricted cash, and investments totaling $600.8 million , which were held for working capital purposes. Our cash equivalents and investments are comprised primarily of highly liquid investments in money market funds, U.S. treasury securities, U.S. government agency securities, commercial paper, and corporate debt securities. Since our inception, we have financed our operations primarily through sales of equity securities, long-term debt facilities, and our net cash provided by operating activities. On May 9, 2019, we completed the acquisition of GitPrime, a leading provider of developer productivity software for approximately $163.9 million in cash, excluding cash acquired, working capital and transactions cost adjustments.

We believe our existing cash, cash equivalents, restricted cash, and investments, as well as our projected cash flows from operations, will be sufficient to meet our projected operating requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our pace of growth, subscription renewal activity, the timing and extent of spend to support the expansion of sales and marketing activities, technology and content efforts, the continuing market acceptance of our platform, and future acquisitions. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be adversely affected.

In connection with the IPO and our UP-C structure, we entered into the TRA with members of Pluralsight Holdings who did not exchange their LLC Units of Pluralsight Holdings in the Reorganization Transactions, or the TRA Members. As a result of the TRA, we will be obligated to pass along certain tax benefits and cash flows by making future payments to the TRA Members. Although the actual timing and amount of any payments we make to the TRA Members under the TRA will vary, such payments may be significant. Any payments we make to TRA Members under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us and, to the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid by us.

The following table shows cash flows for the six months ended June 30, 2019 and 2018 :



	Six Months Ended June 30,
	2019			2018
				(Restated)

	(in thousands)
Net cash used in operating activities	$	(1,641	)	$	(16,217	)
Net cash used in investing activities	(483,015		)	(6,078		)
Net cash provided by financing activities	561,846			208,262
Effect of exchange rate change on cash, cash equivalents, and restricted cash	22			(86		)
Net increase in cash, cash equivalents, and restricted cash	$	77,212		$	185,881

Operating Activities

Cash used in operating activities for the six months ended June 30, 2019 of $1.6 million was primarily due to a net loss of $75.3 million, offset by equity-based compensation of $43.0 million , amortization of deferred contract acquisition costs of $11.3 million , amortization of debt discount and debt issuance costs of $8.3 million , a favorable change in operating assets and liabilities of $4.5 million , and depreciation of property and equipment of $4.2 million . The net change in operating assets and liabilities was primarily due to an increase in the deferred revenue balance of $13.0 million and a decrease in accounts receivable of $7.1 million , partially offset by an increase in deferred contract acquisition costs of $11.4 million , an increase in prepaid expenses of $4.2 million , and a decrease in accrued expenses of $2.4 million .

Cash used in operating activities for the six months ended June 30, 2018 of $16.2 million was primarily due to a net loss of $78.4 million, partially offset by equity-based compensation of $32.4 million, a favorable change in operating assets and liabilities of $12.2 million, amortization of acquired intangible assets of $6.7 million, amortization of course creation costs of $0.9 million, and depreciation of property and equipment of $4.4 million. The net change in operating assets and liabilities was primarily due to a favorable change in the deferred revenue balance of $17.5 million and a decrease in accounts receivable of $1.3 million, partially offset by an increase in prepaid expenses of $3.9 million and a decrease in accrued expenses of $2.8 million.

Investing Activities

Cash used in investing activities for the six months ended June 30, 2019 of $483.0 million was primarily due purchases of investments of $317.1 million , purchase of a business of $163.9 million , purchases of property and equipment of $4.6 million , and purchases of our content library of $2.4 million , partially offset by sales of marketable securities of $5.0 million .

Cash used in investing activities for the six months ended June 30, 2018 of $6.1 million related to purchases of property and equipment of $4.6 million and purchases of our content library of $1.5 million.

Financing Activities

Cash provided by financing activities for the six months ended June 30, 2019 of $561.8 million was due to net proceeds from the issuance of the Notes of $616.7 million and proceeds from the issuance of common stock from employee equity plans of $14.6 million , partially offset by the purchase of the Capped Calls of $69.4 million .

Cash provided by financing activities for the six months ended June 30, 2018 of $208.3 million was due to $332.1 million in net proceeds from the IPO, $20.0 million in borrowings of long-term debt, partially offset by repayments of long-term debt of $137.7 million, payments of offering costs related to the IPO of $3.1 million, and payments of debt extinguishment costs of $2.2 million.

Commitments and Contractual Obligations

Outside of our 0.375% convertible senior notes due in 2024, and routine transactions made in the ordinary course of business, there have been no material changes to the contractual obligations as disclosed in our Annual Report on Form 10-K/A. Refer to "Note 11—Convertible Senior Notes and Other Long-Term Debt" and "Note 12—Commitments and Contingencies" of our unaudited condensed consolidating financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information regarding our commitments and contractual obligations.

Off-Balance Sheet Arrangements

As of June 30, 2019 and December 31, 2019, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Critical accounting policies and estimates are those that we consider critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

The Company's significant accounting policies are discussed in "Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements" in our Annual Report on Form 10-K/A. There have been no significant changes to these policies for the three months ended June 30, 2019 , except as noted in "Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements" of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

JOBS Act Accounting Election

We meet the definition of an emerging growth company under the Jumpstart Our Business Startups Act of 2012, which permits 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 applicable to public companies.

Recent Accounting Pronouncements

See "Note 2—Summary of Significant Accounting Policies and Recent Accounting Pronouncements" of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information regarding recently issued accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We have operations in the United States and internationally, and we are exposed to market risk in the ordinary course of business. Our market risk is primarily a result of fluctuations in foreign currency exchange rates and variable interest rates.

Foreign Currency Exchange Risk

Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the British Pound Sterling, Euro, Swedish Krona, Australian Dollar, Singapore Dollar, Canadian Dollar, New Zealand Dollar, and Indian Rupee. Due to the relative size of our international operations to date, our foreign currency exposure has been fairly limited and thus we have not instituted a hedging program. We expect our international operations to continue to grow in the near term and we are continually monitoring our foreign currency exposure to determine when we should begin a hedging program. Today, our international contracts are mostly denominated in U.S. dollars, while our international operating expenses are often denominated in local currencies. In the future, we plan to begin denominating certain of our international contracts in local currencies, and over time, an increasing portion of our international contracts may be denominated in local currencies. Additionally, as we expand our international operations a larger portion of our operating expenses will be denominated in local currencies. Therefore, fluctuations in the value of the U.S. dollar and foreign currencies may affect our results of operations when translated into U.S. dollars. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our historical condensed consolidated financial statements for any of the periods presented.

Interest Rate Sensitivity

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. As of June 30, 2019 , we had cash, cash equivalents, restricted cash, and investments of $600.8 million , which consisted primarily of bank deposits and money market funds. Such interest-earning instruments carry a degree of interest rate risk; however, historical fluctuations of interest income have not been significant.

In March 2019, we offered and issued $633.5 million aggregate principal amount of Notes. The Notes have a fixed annual interest rate of 0.375% , and, therefore, we do not have economic interest rate exposure on the Notes. However, the values of the Notes are exposed to interest rate risk. Generally, the fair value of our fixed interest rate Notes will increase as interest rates fall and decrease as interest rates rise. We carry the Notes as face value less unamortized discount on our balance, and we present the fair value for required disclosure purposes only.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a–15(e) and Rule 15d–15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2019 . Based on the evaluation of our disclosure controls and procedures as of June 30, 2019, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, due to the material weakness described below, our disclosure controls and procedures were not effective.

Previously Reported Material Weakness in Internal Control Over Financial Reporting

As reported in our 2018 Form 10-K/A we did not maintain effective internal control over financial reporting as of December 31, 2018, as a result of a material weakness related to accounting for non-standard equity-based compensation awards which continues to exist as of June 30, 2019. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material weakness of our annual or interim financial statements will not be prevented or detected in a timely manner.

Status of Remediation Plan

During the quarter ended June 30, 2019, we implemented additional control procedures to ensure equity-based compensation awards are accounted for in accordance with GAAP. Although we have designed and implemented additional control procedures, the controls have not been in place and operated for a sufficient period to demonstrate the material weakness has been remediated.

Changes in Internal Control Over Financial Reporting

The design and implementation of the control procedures related to the accounting for equity-based compensation awards was considered a change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions,

or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost–effective control system, misstatements due to error or fraud may occur and not be detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are, from time to time, subject to legal proceedings and claims arising from the normal course of business activities, and an unfavorable resolution of any of these matters could materially affect our future business, results of operations, financial condition, and cash flows.

Future litigation may be necessary, among other things, to defend ourselves or our users by determining the scope, enforceability, and validity of third-party proprietary rights or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 1A. Risk Factors

For a discussion of potential risks and uncertainties, see the information in the section titled "Risk Factors" in Amendment No. 1 to our Annual Report on Form 10-K/A filed with the SEC on June 27, 2019, as supplemented by the section title "Risk Factors" in our Quarterly Report on Form 10-Q filed with the SEC on May 1, 2019. The following risk factors supplement and should be read in conjunction with those risk factors referenced above.

Recent and future acquisitions could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations and harm our results of operations.

On May 9, 2019, we completed the acquisition of GitPrime. As part of our business strategy, we may in the future seek to acquire or invest in businesses, people, or technologies that we believe could complement or expand our platform, enhance our content library or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not they are ultimately consummated.

Any integration process may result in unforeseen operating difficulties and require significant time and resources and, although we have been successful in the past, we may not be able to integrate the acquired personnel, operations, and technologies successfully or effectively manage the combined business in connection with any future acquisition.

We may also not achieve the anticipated benefits from the acquired business, including our acquisition of GitPrime, due to a number of factors, including, among others:

• costs or liabilities associated with the acquisition;

• diversion of management’s attention from other business concerns;

• inability to integrate or benefit from acquired content, technologies, or services in a profitable manner;

• harm to our existing relationships with authors and customers as a result of the acquisition;

• difficulty integrating the accounting systems, operations, and personnel of the acquired business;

• difficulty converting the customers of the acquired business onto our platform and contract terms;

• the potential loss of key employees;

• use of resources that are needed in other parts of our business; and

• the use of substantial portions of our available cash or equity to consummate the acquisition.

In the future, if our acquisitions do not yield expected returns, we may be required to take charges for the write-down or impairment of amounts related to goodwill, intangible assets, and our content library, which could negatively impact our results of operations. We may issue additional equity securities in connection with any future acquisitions, that would dilute our existing stockholders, use cash that we may need in the future to operate our business, incur debt on terms unfavorable to us or that we are unable to pay, incur large charges or substantial liabilities, and become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges. These challenges could adversely affect our business, financial conditions, results of operations, and prospects.

The integration of GitPrime presents significant challenges.

In connection with our acquisition of GitPrime, there is a significant degree of difficulty inherent in the process of integrating GitPrime with our company. These difficulties include:

• the integration of GitPrime with our current business while carrying on the ongoing operations of Pluralsight;

• integrating the business cultures of both companies, which may prove to be incompatible;


•	integrating certain information technology, purchasing, accounting, finance, sales, billing, human resources, and payroll systems;


•	the potential difficulty in retaining key officers and personnel.

The process of integrating operations could cause an interruption of, or loss of momentum in, our ongoing business activities. Members of our senior management may be required to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage the business of our company, serve the existing businesses, or develop new products or strategies. If our senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, our business could suffer.

Our successful or cost-effective integration of GitPrime cannot be assured. The failure to do so could have a material adverse effect on our business, financial condition or results of operations going forward.

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 ability to broaden our customer base, particularly our business customer base, and achieve broader market acceptance of our platform will depend to a significant extent on the ability of our sales and marketing organizations to work together to drive our sales pipeline and cultivate customer and partner relationships to drive revenue growth. We have invested in and plan to continue expanding our sales and marketing organizations, both domestically and internationally. Identifying, recruiting, and training sales personnel has and will require significant time, expense, and attention. We have recently made changes to our sales senior leadership team. These changes have the potential to disrupt our operations due to operational and administrative inefficiencies, added costs, and loss of personnel with deep institutional knowledge, all of which could result in significant disruptions to our operations.

We also plan to dedicate significant resources to sales and marketing programs, including lead generation activities and brand awareness campaigns, such as search engine and email marketing, online banner and video advertising, user events such as our annual user conference, Pluralsight LIVE, and webinars. If we are unable to hire, develop, and retain talented sales or marketing personnel, if our new sales or marketing personnel are unable to achieve desired productivity levels in a reasonable period of time, if our sales and marketing programs are not effective, or if we are not able to successfully integrate new senior leadership to our sales organization, our ability to broaden our customer base and achieve broader market acceptance of our platform could be harmed. In addition, the investments we make in our sales and marketing organization will occur in advance of experiencing benefits from such investments, making it difficult to determine in a timely manner if we are efficiently allocating our resources in these areas.

As we continue to expand our sales efforts with larger business customers, our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense. As a result, the timing of our billings and revenue are difficult to predict and may vary substantially from period to period, which may cause our results of operations to fluctuate significantly.

Our results of operations may fluctuate, in part, because of the resource intensive nature of our sales efforts to larger businesses, from which we derive a significant portion of our billings and revenue, the length and variability of our sales cycle, and difficulty in adjusting our operating expenses in the short term. The length of our sales cycle, from identification of the opportunity to delivery of access to our platform, varies significantly from customer to customer, with sales to larger businesses typically taking longer to complete. In addition, as we continue to increase our sales to larger businesses, we face longer more complex customer requirements, and substantial upfront sales costs. With larger businesses, the decision to subscribe to our platform frequently requires the approvals of multiple management personnel and more technical personnel than would be typical of a smaller organization and, accordingly, sales to larger businesses may require us to invest more time educating these potential customers. Purchases by larger businesses are also frequently subject to budget constraints and unplanned administrative, processing, and other delays, which means we may not be able to come to agreement on the terms of the sale to larger businesses.

To the extent our competitors develop products that our prospective customers view as equivalent or superior to our platform, our average sales cycle may increase. Additionally, if a key sales member leaves our employment or if our primary point of contact at a customer or potential customers leaves his or her employment, our sales cycle may be further extended or customer opportunities may be lost. As a result of the buying behavior of enterprises and the efforts of our sales force and partners to meet or exceed their sales objectives by the end of each fiscal quarter, we have historically received and generated a substantial portion of billings during the last month of each fiscal quarter, often the last two weeks of the quarter. These transactions may not close as expected or may be delayed in closing. The unpredictability of the timing of customer purchases,

particularly large purchases, could cause our billings and revenue to vary from period to period or to fall below expected levels for a given period, which will adversely affect our business, results of operations, and financial condition. For example, during the second quarter 2019 we experienced a decline in our billings growth rate compared to recent quarterly results primarily due to sales execution challenges. As a result, we have made changes to our sales senior leadership team. However, our billing growth rate could continue to decline if these measures are not successful.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Use of Proceeds from Convertible Senior Notes

In March 2019, we completed our private placement of $633.5 million aggregate principal of Notes, including the exercise in full by the initial purchasers of the Notes of their option to purchase up to an additional $83.5 million principal amount of Notes. The Notes are our senior unsecured obligations. The Notes were issued pursuant to an Indenture, dated March 11, 2019, between us and U.S. Bank National Association as trustee.

We received net proceeds of $616.7 million , after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $69.4 million of the net proceeds to pay the cost of the capped call transactions related thereto. We intend to use the remainder of the net proceeds for working capital and other general corporate purposes. We may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business. On May 9, 2019, we completed the acquisition of GitPrime, a leading provider of developer productivity software for approximately $163.9 million in cash, excluding cash acquired, working capital and transactions cost adjustments.

Item 5. Other Information

On April 30, 2019, our board of directors amended and restated the Pluralsight, Inc. 2018 Equity Incentive Plan, Pluralsight, Inc. 2017 Equity Incentive Plan, Pluralsight Holdings, LLC Incentive Unit Plan and Pluralsight Holdings, LLC Restricted Share Unit Agreement with Aaron Skonnard to provide for a vesting acceleration benefit upon a participant’s death subject to the terms and conditions set forth therein. Pursuant to this new vesting acceleration benefit, if a participant dies, such participant’s outstanding and unvested equity awards subject to time-based vesting under the applicable equity plans or arrangements will accelerate and fully vest, subject to the limitations and conditions set forth in the applicable plan or arrangement, including that the fair market value of the shares or other securities that vest pursuant to this benefit may not exceed $3,000,000 in the aggregate.

Item 6. Exhibits

Incorporated by Reference

Filed or Furnished Herewith

Exhibit

Number

Description

Form

File No.

Exhibit Number

Filing Date

with SEC

3.1

Certificate of Correction of Amended and Restated Certificate of Incorporation of Pluralsight, Inc.

S-1

333-230057

3.3

3/4/2019

4.1

Indenture, dated March 11, 2019, between Pluralsight, Inc. and U.S. Bank National Association

8-K

001-38498

4.1

3/11/2019

4.2

Form of 0.375% Convertible Senior Note due 2024 (included in Exhibit 4.1)

8-K

001-38498

4.1

3/11/2019

10.1

Purchase Agreement, dated March 6, 2019, by and among Pluralsight, Inc., Pluralsight Holdings, LLC and Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC as representatives of the several parties named in Schedule I thereto

8-K

001-38498

10.1

3/7/2019

10.2

Form of Capped Call Confirmation

10-Q

001-38498

10.2

5/1/2019

10.3

Agreement and Plan of Merger, dated April 30, 2019 by and among Pluralsight, Inc., Sundance Merger Sub, Inc., Gitprime, Inc. and Fortis Advisors LLC as Securityholder Representative

8-K

001-38498

2.1

5/1/2019

10.4

Pluralsight Holdings Incentive Unit Plan

10.5

Amended and Restated Pluralsight Holdings 2017 Equity Incentive Plan and related form of agreement

10.6

Amended and Restated Pluralsight, Inc. 2018 Equity Incentive Plan and related form of agreement

10.7

Form of Third Amended and Restated Restricted Share Unit Agreement between the Registrant, Pluralsight Holdings, and Aaron Skonnard

31.1

Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certifications of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certifications of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

*The certifications attached as Exhibit 32.1 and 32.2 accompanying this Quarterly Report on Form 10-Q, are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Pluralsight, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	PLURALSIGHT , INC .

	By:	/s/ Aaron Skonnard
July 31, 2019		Aaron Skonnard Chief Executive Officer



	PLURALSIGHT , INC .

	By:	/s/ James Budge
July 31, 2019		James Budge Chief Financial Officer

Exhibit 10.4

PLURALSIGHT, LLC

INCENTIVE UNIT PLAN


1.	General

(a) Eligible Unit Award Recipients. The persons eligible to receive Unit Awards under this Plan are Employees and Consultants providing services to the Company.

(b) Available Unit Awards. The Plan provides for the grant of Incentive Units in the Company. All Incentive Units awarded under this Plan are intended to constitute “profits interests” within the meaning of IRS Revenue Procedures 1993-27 and 2001-43 and will constitute “Incentive Units” within the meaning of the LLC Agreement.

(c) Purpose. The Company, by means of the Plan, seeks to secure and retain the services of the group of persons eligible to receive Unit Awards as set forth in Section 1(a), to provide incentives for such persons to exert maximum efforts for the success of the Company, and to provide a means by which such eligible recipients may be given an opportunity to benefit from increases in value of the Company through the granting of Unit Awards.

(d) Rules of Construction. Any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the LLC Agreement.


2.	Administration.

(a) Administration by Board. The Board shall administer the Plan.

(b) Powers of Board. Subject to the LLC Agreement, the Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) To determine from time to time (A) which of the Persons eligible under the Plan shall be granted Unit Awards; (B) when and how each Unit Award shall be granted; (C) the provisions of each Unit Award granted (which need not be identical); (D) the number of Incentive Units with respect to which a Unit Award shall be granted to each such Person; (E) the Strike Price applicable to the Incentive Units granted under a Unit Award; (F) the fair market value of such Incentive Units for tax reporting and withholding purposes; and (G) the Redemption Price for Vested Redemption Units under Section 6(c) below.

(ii) To construe and interpret the Plan and the Offer Letters evidencing Unit Awards granted under the Plan, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Offer Letter evidencing a Unit Award, in a manner and to the extent it shall deem necessary or expedient to make the Plan or Unit Award fully effective.

(iii) To settle all controversies regarding the Plan and Unit Awards and Incentive Units granted under it.

(iv) To accelerate in whole or in part the time at which a Unit Award vests in accordance with the Plan notwithstanding the provisions in the Unit Award stating the time at which it will vest, including in connection with a Sale of the Company.

(v) To suspend or terminate the Plan at any time. Suspension or termination of the Plan shall not impair rights and obligations under any Unit Award granted while the Plan is in effect except with the written consent of the affected Participant.

(vi) To amend the Plan in any respect the Board deems necessary or advisable. However, rights under any Unit Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing.

(vii) To approve forms of Offer Letters evidencing Unit Awards for use under the Plan and to amend the terms of any one or more Offer Letters, including, but not limited to, amendments to provide terms more favorable than previously provided in the Offer Letter, subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that, the rights under any Offer Letter shall not be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing.

(viii) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient under the Plan to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Offer Letters evidencing Unit Awards.

(c) Effect of Board’s Decision. All determinations, interpretations and constructions under or with respect to the Plan and Unit Awards made by the Board in good faith shall not be subject to review by any Person and shall be final, binding and conclusive on all persons.


3.	Incentive Units Subject to the Plan.

(a) General. Subject to Section 8 relating to Capitalization Adjustments, the aggregate number of Incentive Units that may be issued pursuant to Unit Awards under this Plan shall not exceed 6,022,000 Incentive Units.

(b) Forfeitures. If any Incentive Units are forfeited back to the Company because of the failure to meet a contingency or condition required to vest such Incentive Units in the Participant, then the Incentive Units which are forfeited shall revert to and again become available for issuance under the Plan.

(c) Source of Incentive Units. The Incentive Units issuable under the Plan shall be authorized but unissued or reacquired Incentive Units.


4.	Eligibility

Unit Awards may be granted to Employees and Consultants of the Company. No Person shall have any right to receive a Unit Award unless the Unit Award is approved by the Board in its sole discretion and is evidenced by an executed Offer Letter in form acceptable to the Board. The Plan imposes no obligation on the Company or Board to treat Participants and/or potential Participants in an equivalent, consistent or comparable manner.


5.	Unit Award Provisions

(a) General. Each Unit Award shall be evidenced by an Offer Letter in such form and containing such terms and conditions as the Board shall deem appropriate. The provisions of separate Offer Letters and Unit Awards need not be identical.

(b) Transferability of Unit Awards. No Unit Award or underlying Incentive Units may be transferred prior to vesting under the applicable Offer Letter, or in violation of the other restrictions on Transfer contained in the LLC Agreement, which restrictions are incorporated by reference herein. Any attempted Transfer of a Unit Award or underlying Incentive Units prior to vesting or in violation of the LLC Agreement shall be null and void.

(c) Vesting of Incentive Units Generally. The Incentive Units subject to a Unit Award shall be subject to such service-based and performance-based vesting conditions as are determined by the Board and set forth in the applicable Offer Letter. The vesting provisions of individual Unit Awards may vary.

(d) Forfeiture on Termination of Continuous Service. Except as otherwise provided in the applicable Offer Letter evidencing a Unit Award or other written agreement between the Participant and the Company, in the event that a Participant’s Continuous Service terminates for any reason, whether voluntarily or involuntarily, with or without cause (including death), the Participant shall automatically forfeit all of the unvested Incentive Units underlying his or her Unit Award as of 12:01 am MST on the effective date of such termination of Continuous Service. Upon forfeiture, the Participant shall return to the Company any certificates representing his or her forfeited Incentive Units. A Participant shall not be entitled to any compensation, further distributions or other payment from the Company or any other Person for or with respect to his or her forfeited Incentive Units and shall automatically cease to be a member of the Company with respect to such forfeited Incentive Units.

(e) Escrow of Distributions on Unvested Incentive Units. Any “distributions” within the meaning of the LLC Agreement that the Company pays with respect to the Incentive Units underlying any Unit Award that have not yet vested (other than “Tax Distributions” as defined in Section 6.3 of the LLC Agreement) will be held in escrow by the Company or its designee in accordance with the LLC Agreement until: (i) vesting of the Incentive Units with respect to which such escrowed distributions were paid, in which case the escrowed distributions on the Incentive Units which have vested shall be promptly released from escrow and paid to the Participant; or (ii) forfeiture of the Incentive Units with respect to which such escrowed distributions were paid, in which case the escrowed distributions on the forfeited Incentive Units shall be distributed to the other members of the Company pursuant to the LLC Agreement.

(f) Relationship with LLC Agreement. All Incentive Units issued under the Plan shall be subject to the terms and conditions of the LLC Agreement, including without limitation all restrictions on Transfer of Units contained therein.


6.	Company Redemption Right.

(a) General. Upon the occurrence of a Trigger Event with respect to any Participant to whom Incentive Units have been issued under this Plan, the Company shall have the option (the “ Redemption Right ”) at its election to redeem and repurchase from that Participant and, if applicable, from the Participant’s transferees (collectively the “ Sellers ”) all or any portion of the Vested Incentive Units issued to such Participant (the “ Vested Redemption Units ”) on the terms and conditions set forth in this Section 6.

(b) Election to Redeem. To exercise its Redemption Right, the Company must give a written notice of its election to redeem the Vested Redemption Units (a “ Redemption Notice ”) to the Seller (or if applicable Sellers) not later than 180 days after the Company receives written notice of the Trigger Event in question. The Redemption Notice shall specify (i) the number of Vested Redemption Units to be redeemed; (ii) the Redemption Price to be paid for those Vested Redemption Units, as

determined under Section 6(c) below; and (iii) the closing date for the redemption, which shall be not less than 10 nor more than 30 days after the Redemption Notice is delivered to the Sellers. For purposes of this Section 6, if there is more than one Seller, delivery of the Redemption Notice to the affected Participant shall be deemed delivery of the Redemption Notice to all Sellers.

(c) Redemption Price. The price to be paid for each Vested Redemption Unit being redeemed under this Section 6 (the “ Redemption Price ”) shall equal the hypothetical amount that would have been distributed with respect to the Vested Redemption Unit in question under Sections 6.2 and 6.4 of the LLC Agreement (taking into account the Incentive Unit’s Strike Price) had the Company sold all of its business and assets for their fair market value (as determined by the Board in good faith) on the date of the Trigger Event, paid all of its liabilities on that date, and then distributed the remaining net proceeds from the deemed Sale of the Company to its Members in liquidation of the Company. For this purpose, the Board’s determination of fair market value of the Company’s business and assets shall conclusively be deemed to have been made in good faith if based upon an appraisal on the Company as an on-going concern obtained from a qualified independent appraiser selected by the Board.

(d) Closing of Redemption. At closing of the redemption of the Vested Redemption Units, each Seller shall sell, assign and transfer to the Company free and clear of all liens, pledges, encumbrances, options and other third-party interests, and the Company shall redeem and purchase from each Seller, all of the Seller’s right, title and interest in and to the Vested Redemption Units that the Company has timely elected to redeem. At closing:

(i) The Company shall pay to each Seller the applicable Redemption Price for Seller’s Vested Redemption Units being redeemed in the following manner. One third (1/3 ^rd ) of the Redemption Price shall be paid in cash-equivalent funds at closing. The balance of the Redemption Price shall be paid by delivery at closing of the Company’s unsecured promissory note in the principal amount of such deferred balance, which promissory note shall bear interest from the closing date at an annually compounding rate per annum equal to the “applicable federal rate” for short-term debt instruments under Code Section 1274 in effect for the month in which closing occurs. The deferred portion of the Redemption Price evidenced by the Company’s promissory note shall be paid in two equal annual installments of principal and accrued interest on each of the first and second anniversaries of the redemption closing date. The promissory note may be prepaid without penalty in whole or in part at any time.

(ii) The Sellers shall deliver to the Company such instruments of assignment, certificates representing Vested Redemption Units and other documents as the Company reasonably requests to affect the redemption. Those transfer documents shall contain such customary representations and warranties of authority, title and absence of liens and encumbrances, and otherwise be in such form, as the Company reasonably requests.

(e) Unvested Incentive Units. Nothing in this Section 6 shall be construed as affecting the forfeiture of Unvested Incentive Units or as entitling any Participant to any payment with respect to the forfeiture and cancellation of his or her Unvested Incentive Units.


7.	Sale of the Company

The Board shall have authority to provide in any applicable Award Agreement that the vesting of otherwise Unvested Incentive Units shall be accelerated in whole or in part upon a Sale of the Company (or at such earlier time as the Board shall determine).


8.	Adjustment of Units.

In the event of a Capitalization Adjustment, the Board shall proportionately and appropriately adjust the maximum number and classes of membership units subject to the Plan pursuant to Section 3(a). The Board shall make such adjustments, and its determination shall be final, binding and conclusive.


9.	Termination or Suspension of the Plan.

(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner terminated by the Board pursuant to Section 2 this Plan shall continue until January 1, 2023; provided that all Incentive Units shall automatically terminate immediately after a Sale of the Company. No Unit Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

(b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and obligations under any Unit Award granted while the Plan is in effect except with the written consent of the affected Participant.


10.	Effective Date of Plan.

This Plan shall become effective as of January 1, 2013.


11.	Choice of Law.

The law of the State of Nevada shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.


12.	Miscellaneous.

(a) Company Action Constituting Grant of Unit Awards. Unless otherwise expressly provided in the Offer Letter evidencing a Unit Award, the grant by the Company of a Unit Award to any Participant shall be deemed completed as of the date the Offer Letter evidencing the Unit Award is executed by the Participant and delivered to the chief executive officer or president of the Company.

(b) Member Rights. Subject to the terms and conditions of the LLC Agreement, each Participant shall be deemed to be a member of the Company with respect to the Incentive Units underlying the Participant’s Unit Award from the date of grant of such Unit Award.

(c) No Employment or Other Service Rights. Nothing in the Plan, any Offer Letter evidencing a Unit Award or any other instrument executed thereunder or in connection with any Unit Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company in any capacity or shall negate or otherwise affect the right of the Company “at will” to terminate (i) the employment of an Employee with or without notice and with or without cause, or (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company, as the case may be. Without limiting the foregoing, no Participant shall have any right to remain an Employee or Consultant of the Company until his or her Incentive Units wholly or partially vest or until a Sale of the Company occurs, and no Participant shall have any cause of action, claim, or right to recover damages against the Company or its members, managers, officers, employees or agents as a result of any forfeiture of Incentive Units resulting from termination of his or her Continuous Service with the Company.

(d) Investment Assurances. The Company may require a Participant, as a condition of acquiring any Unit Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of the underlying Incentive Units; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring the Incentive Units for the Participant’s own account and not with any present intention of selling or otherwise distributing the Incentive Units. The Company may, upon advice of counsel to the Company, place legends on Incentive Unit certificates, if any, issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Incentive Units.

(e) Withholding Obligations. To the extent provided by the terms of an Offer Letter evidencing a Unit Award, the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to a Unit Award by any of the following means, or by a combination of such means: (i) causing the Participant to tender a cash payment; or (ii) withholding from any compensation paid to the Participant by the Company.

(f) Exemption from Section 409A. The Unit Awards granted hereunder are intended to constitute restricted property exempt from the requirements of Section 409A of the Code. The Plan and Unit Awards shall be interpreted in accordance with that intent. Notwithstanding any provision of the Plan to the contrary, in the event that the Board determines that any Unit Award may be subject to Section 409A of the Code, the Board may adopt such amendments to the Plan and the applicable Unit Award or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (1) exempt the Unit Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Unit Award, or (2) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

(g) Section 83(b) Election. As a condition to receipt of a Unit Award, the Participant shall agree to timely file an election under Section 83(b) of the Code with respect to the Unit Award.

(h) Non-Contractual Duties. Neither the Company nor any of its members, managers, officers, employees or agents shall have any fiduciary or other non-contractual duties or obligations to Participants under or by virtue of this Plan, any Offer Letter or any Unit Awards made hereunder apart from or in excess of the limited fiduciary duties, if any, imposed on them as members, managers or officers of the Company by virtue of the LLC Agreement and the Act.


13.	Definitions.

(a) “Board” means the Board of Managers of the Company.

(b) “ Capitalization Adjustment ” means any change that is made in, or other events that occur with respect to, the Incentive Units subject to the Plan or subject to any Unit Award after January 1, 2013 without the receipt of consideration by

the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, membership unit distribution or split, combination of membership units, exchange of membership units, change in Company structure or other transaction not involving the receipt of consideration by the Company).

(d) “ Company ” means Pluralsight, LLC, a Nevada limited liability company.

(e) “ Consultant” means any person other than an Employee who (i) is engaged by the Company to render consulting or advisory services and is compensated for such services, or (ii) serves as a member of the Board, and is compensated for such services as a manager.

(f) “ Continuous Service ” means that the Participant’s service with the Company, whether as an Employee or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company as an Employee or Consultant, provided that there is no interruption or termination of the Participant’s service with the Company, shall not terminate a Participant’s Continuous Service. For example, a change in status from an employee of the Company to a Consultant of the Company shall not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by the Company, including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a Unit Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

(g) “ Employee ” means any person employed by the Company of the Company.

(h) “ Incentive Units ” means “Incentive Units” as defined in the LLC Agreement.

(i) “LLC Agreement ” means the Amended and Restated Operating Agreement of Pluralsight, LLC dated as of December 20, 2012, as amended from time to time.

(j) “ Offer Letter ” means a written letter agreement, approved by the Board, between the Company and a Participant evidencing the terms and conditions of a Unit Award under the Plan.

(k) “ Participant ” means a Person to whom a Unit Award or Incentive Units are granted pursuant to the Plan or, if applicable, any other Person who holds as a transferee an outstanding Unit Award or Incentive Units issued under the Plan.

(l) “ Person ” has the meaning set forth in the LLC Agreement.

(m) “Plan” means this Pluralsight, LLC Incentive Unit Plan.

(n) “Sale of the Company ” has the meaning set forth in the LLC Agreement.

(o) “Securities Act” means the Securities Act of 1933, as amended.

(p) “ Strike Price” has the meaning set forth in Section 18.2 of the LLC Agreement.

(q) “ Transfer ” has the meaning set forth in the LLC Agreement.

(r) “ Trigger Event ” means with respect to any Participant: (i) the death or permanent disability of a Participant; (ii) the termination for any reason of the Participant’s Continuous Service with the Company; (iii) any Transfer, whether voluntary or involuntary, of the Participant’s Incentive Units in violation of the applicable Offer Letter, this Plan or the LLC Agreement, including any impermissible Transfer resulting from or in connection with a domestic relations order or proceeding, or any bankruptcy-related proceeding, order or case; and (iv) any violation by a Participant of any confidentiality agreement, covenant not to compete, covenant not to solicit or other restrictive covenant in favor of the Company.

(s) “Unit Award ” means a grant of Incentive Units to a Participant under the Plan.

(t) “Unvested Incentive Units ” means Incentive Units that have not yet vested under the applicable Offer Letter and are not Vested Incentive Units.

(u) “ Vested Incentive Units ” has the meaning set forth in Section 18.1 of the LLC Agreement.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized Manager effective as of the 24 ^th day of May, 2013.




PLURALSIGHT, LLC

By:		/s/ Aaron Skonnard
Name:		Aaron Skonnard
Title:		Manager

AMENDMENT NO. 1 TO

PLURALSIGHT, LLC

INCENTIVE UNIT PLAN

THIS AMENDMENT NO. 1 TO PLURALSIGHT, LLC INCENTIVE UNIT PLAN (this “ Amendment ”) is made and adopted effective as of the 28 ^th day of February, 2014, by Pluralsight, LLC, a Nevada limited liability company (the “ Company ”).

WHEREAS, the Company maintains the Pluralsight, LLC Incentive Unit Plan (the “ Plan ”) for the benefit of its employees, managers and consultants; and

WHEREAS, it is necessary and desirable to amend the Plan to clarify certain provisions of the Plan; and

WHEREAS, pursuant to Section 2(b)(vi) of the, the Board of Managers of the Company (the “ Board ”) may amend the Plan in any respect the Board deems necessary or advisable; and

WHEREAS, the Board has approved and adopted this Amendment.

NOW, THEREFORE, the Plan is hereby amended as follows:

1. Section 3(a) of the Plan is hereby amended and restated in its entirety to read as follows:

“(a) General. Subject to Section 8 relating to Capitalization Adjustments, the aggregate number of Incentive Units that may be issued pursuant to Unit Awards under this Plan shall not exceed 9,780,243 Incentive Units.”

Except as provided above, the original terms of the Plan are hereby ratified and confirmed in all respects.

[Rest of this page intentionally left blank.]

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer effective as of the date first above written.




PLURALSIGHT, LLC

By:		/s/ Aaron Skonnard
Name: Aaron Skonnard
Title: Manager

AMENDMENT NO. 2 TO

PLURALSIGHT, LLC

INCENTIVE UNIT PLAN

THIS AMENDMENT NO. 2 TO PLURALSIGHT, LLC INCENTIVE UNIT PLAN (this “ Amendment ”) is made and adopted effective as of the 14 ^th day of November, 2014, by Pluralsight, LLC, a Nevada limited liability company (the “ Company ”).

WHEREAS, the Company maintains the Pluralsight, LLC Incentive Unit Plan (the “ Plan ”) for the benefit of its employees, managers and consultants; and

WHEREAS, the Plan was previously amended on February 28, 2014; and

WHEREAS, on August 28, 2014, Pluralsight Holdings, LLC, a Delaware limited liability company (“ Holdings ”), was formed, and direct ownership of the Company by the various members thereto was consolidated at the Holdings level, with Holdings becoming the sole member and manager of the Company, and all membership units of the Company, including incentive units in the Company, becoming incentive units of Holdings; and

WHEREAS, it is necessary and desirable to amend the Plan to provide that the Plan now applies and pertains to Holdings; and

WHEREAS, pursuant to Section 2(b)(vi) of the, the Board of Managers of the Company (the “ Board ”) may amend the Plan in any respect the Board deems necessary or advisable; and

WHEREAS, the Board has approved and adopted this Amendment.

NOW, THEREFORE, the Plan is hereby amended as follows:

1. The title of the Plan is amended and restated in its entirety to read “Pluralsight Holdings, LLC Incentive Unit Plan.”

2. The definition of “Company” in Section 13(d) is amended and restated in its entirety to read as follows:

“(d) ‘Company’ means Pluralsight Holdings, LLC, Delaware limited liability company.”

3. The definition of “LLC Agreement” in Section 13(i) is amended and restated in its entirety to read as follows:

“(i) ‘ LLC Agreement ’ means the Limited Liability Company Agreement of Pluralsight

Holdings, LLC dated as of September 18, 2014, as amended from time to time.”

4. The definition of “Plan” in Section 13(m) is amended and restated in its entirety to read as follows:

“(m) ‘ Plan ’ means this Pluralsight Holdings, LLC Incentive Unit Plan.”

5. For the avoidance of doubt, it is the intention of the Company that, as the result of the foregoing amendments, all references to the “Company” contained in the Plan shall be deemed to refer to Holdings, and all incentive units in the Company previously issued under the Plan will continue as incentive units in Holdings under the Plan. By its signature below, Holdings hereby assumes the Plan going forward.

Except as provided above, the original terms of the Plan are hereby ratified and confirmed in all respects.

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IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer effective as of the date first above written.




PLURALSIGHT, LLC

By:		Pluralsight Holdings, LLC, a Delaware limited liability company
Its:		Manager

By:		/s/ Aaron Skonnard
Name: Aaron Skonnard
Title: Manager




ACKNOWLEDGED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN:

PLURALSIGHT HOLDINGS, LLC

By:		/s/ Aaron Skonnard
Name: Aaron Skonnard
Title: Manager

Second Amendment to Incentive Unit Plan (Pluralsight Holdings, LLC)

AMENDMENT NO. 3 TO

PLURALSIGHT, LLC

INCENTIVE UNIT PLAN

THIS AMENDMENT NO. 3 TO PLURALSIGHT, LLC INCENTIVE UNIT PLAN (this “ Amendment ”) is made and adopted effective as of April 30, 2019, by Pluralsight, Inc., a Delaware corporation (the “ Company ”).

WHEREAS, the Company maintains the Pluralsight, LLC Incentive Unit Plan (the “ Plan ”) for the benefit of its employees, managers and consultants; and

WHEREAS, it is necessary and desirable to amend the Plan to provide certain vesting acceleration benefits upon a Participant’s death; and

WHEREAS, pursuant to Section 2(b)(vi) of the Plan, the Board of Managers of the Company (the “ Board ”) may amend the Plan in any respect the Board deems necessary or advisable; and

WHEREAS, the Board has approved and adopted this Amendment.

NOW, THEREFORE, the Plan is hereby amended as follows:

1. Section 5(g) is hereby inserted into the Plan, which reads as follows:

“(g) Death Acceleration Benefit. Upon a Participant’s death, Participant’s outstanding and unvested Incentive Units subject to a Unit Award will accelerate and fully vest; provided that the aggregate Fair Market Value (as such term is defined in the Pluralsight, Inc. 2018 Equity Incentive Plan, as amended (the “ 2018 Plan ”) of the Incentive Units covered by Unit Awards that may accelerate and fully vest pursuant to this Section 5(g) and the shares and other securities covered by Pluralsight, Inc. equity awards issued under other equity plans and arrangements (collectively, the “ Eligible Awards ”) that may accelerate and vest pursuant to comparable provisions in such other equity plans and arrangements may not exceed $3,000,000 in the aggregate (the “ Death Benefit Limit ”). The order in which Eligible Awards will accelerate and vest up to the Death Benefit Limit will be determined as follows: (a) Eligible Awards will accelerate and apply toward the Death Benefit Limit based on their class (determined in reverse alphabetical order) and then in the following order: (1) Restricted Stock, (2) Restricted Stock Units, and (3) Stock Options and Stock Appreciation Rights (as such terms are defined in the 2018 Plan), and (b) with respect to Eligible Awards of the same class, awards with an earlier date of grant will accelerate and apply toward the Death Benefit Limit prior to Eligible Awards with a later date of grant. If two or more Eligible Awards are granted on the same date, each Eligible Award will accelerate and vest on a pro-rata basis. For the avoidance of doubt, the acceleration described in this Section 5(g) does not apply to any Eligible Awards with performance-based vesting. Notwithstanding anything in this Section 5(g) to the contrary, in the event a Participant’s death results from a suicide, the acceleration and vesting described in this Section 5(g) will be solely at the Company’s discretion and will not occur automatically.”

Except as provided above, the original terms of the Plan are hereby ratified and confirmed in all respects.

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IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer effective as of the date first above written.




PLURALSIGHT, LLC

By:		Pluralsight Holdings, LLC, a Delaware limited liability company
Its:		Manager

By:		/s/ Matthew Forkner
Name: Matthew Forkner
Title: General Counsel




ACKNOWLEDGED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN:

PLURALSIGHT HOLDINGS, LLC

By:		/s/ Matthew Forkner
Name: Matthew Forkner
Title: General Counsel
PLURALSIGHT INC.

By:		/s/ Matthew Forkner
Name: Matthew Forkner
Title: General Counsel

Third Amendment to Incentive Unit Plan (Pluralsight Holdings, LLC)

Exhibit 10.5

PLURALSIGHT HOLDINGS, LLC

2017 EQUITY INCENTIVE PLAN, AS AMENDED AND RESTATED

1. PURPOSE . This Plan is intended to provide incentives to attract, retain and motivate eligible persons whose services are important to the success of the Company and its Subsidiaries by offering them an opportunity to participate in the Company’s future performance through awards of Options and Restricted Share Units. Capitalized terms not otherwise defined in the text of this Plan document are defined in Section 23 hereof. This Plan is intended to be a written compensatory benefit plan within the meaning of Rule 701 promulgated under the Securities Act, but grants may be made pursuant to this Plan which do not qualify for exemption from registration under Rule 701.

2. UNITS SUBJECT TO THE PLAN .

2.1 Number of Units Available . Subject to Sections 2.2 and 17 hereof, the total number of Units reserved and available for grant and issuance pursuant to this Plan will be 3,622,900. Units subject to Awards that at any time are cancelled, forfeited, settled in cash or that expire by their terms will again be available for grant and issuance in connection with other Awards. At all times the Company will reserve and keep available a sufficient number of Units as will be required to satisfy the requirements of all Awards granted and outstanding under this Plan.

2.2 Adjustment of Units . In the event that the number of outstanding Units of the Company is changed by a distribution of Units, recapitalization, Unit split, reverse Unit split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, then (i) the number of Units reserved for issuance under this Plan and (ii) the Exercise Prices of and number of Units subject to outstanding Options and number of Units subject to other outstanding Awards will be proportionately adjusted subject to any required action by the Committee and compliance with applicable securities laws; provided , however , that fractions of a Unit will not be issued but will either be paid in cash at the Fair Market Value of such fraction of a Unit or will be rounded down to the nearest whole Unit, as determined by the Committee.

2.3 Unfunded Plan . The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special or separate fund or to segregate any assets to assure the performance of the Company’s obligations under the Plan.

3. ELIGIBILITY . The Company may grant Options and Restricted Share Units under the Plan to employees, officers, managers, directors and consultants of the Company or any Subsidiary of the Company, provided such consultants render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. A person may be granted more than one Award under this Plan.

4. ADMINISTRATION .

4.1 Committee Authority . This Plan will be administered by the Committee or the Board if no Committee is created by the Board. Subject to the general purposes, terms and conditions of this Plan, and to the direction of the Board, the Committee will have full power to implement and carry out this Plan. Without limitation, the Committee will have the authority to: (a) construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan; (b) prescribe, amend and rescind rules and regulations relating to this Plan; (c) approve persons to receive Awards; (d) determine the form and terms of Awards; (e) determine the number of Units or other consideration subject to Awards; (f) determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or awards under any other incentive or compensation plan of the Company or any Subsidiary of the Company; (g) grant waivers of any conditions of this Plan or any Award; (h) determine the terms of vesting, exercisability and payment of Awards; (i) correct any defect, supply any omission, or reconcile any inconsistency in this Plan, any Award, any Award Agreement or any Exercise Agreement; (j) determine whether an Award has been earned; (k) make all other determinations necessary or advisable for the administration of this Plan; and (l) extend the vesting period beyond a Participant’s Termination Date.

4.2 Committee Discretion . Unless in contravention of any express terms of this Plan or Award, any determination made by the Committee with respect to any Award will be made in its sole discretion either (a) at the time of

grant of the Award, or (b) subject to Section 5.8 hereof, at any later time. Any such determination will be final and binding on the Company and on all persons having an interest in any Award under this Plan.

4.3 No Uniformity of Treatment . The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or who actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into nonuniform and selective Award Agreements.

4.4 Sub-plans . The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue sky, securities, tax or other laws of various jurisdictions, domestic or foreign, in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.

5. OPTIONS . The Committee may grant Options to eligible persons described in Section 3 hereof. As to each such Option, the Committee shall determine the number of Units subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the Option, subject to the following:

5.1 Form of Option Grant . Each Option granted under this Plan will be evidenced by an Award Agreement (“ Unit Option Agreement ”), and will be in such form and contain such provisions (which need not be the same for each Participant) as the Committee may from time to time approve, and which will comply with and be subject to the terms and conditions of this Plan.

5.2 Date of Grant . The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option. The Unit Option Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option.

5.3 Exercise Period . Options shall be exercisable within the times or upon the events determined by the Committee as set forth in the Unit Option Agreement governing such Option; provided , however , that no Option will be exercisable after the expiration of seven (7) years from the date the Option is granted. The Committee also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Units or percentage of Units as the Committee determines.

5.4 Exercise Price . The Exercise Price per Unit of an Option will be determined by the Committee when the Option is granted and may not be less than one hundred percent (100%) of the Fair Market Value of per Unit on the date of grant. Payment for the Units purchased must be made in accordance with Section 5.10 hereof.

5.5 Method of Exercise . Options may be exercised only by delivery to the Company of a written Option exercise agreement (the “ Exercise Agreement ”) in a form approved by the Committee (which need not be the same for each Participant). The Exercise Agreement will state (i) the number of Units being purchased, (ii) the restrictions imposed on the Units purchased under such Exercise Agreement, if any, and (iii) such representations and agreements regarding Participant’s investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws. The Participant shall execute and deliver to the Company the Exercise Agreement together with payment in full of the Exercise Price, and any applicable taxes, for the number of Units being purchased, in the manner described in Section 5.10 hereof. An Option may not be exercised for a fraction of a Unit.

5.6 Termination . Subject to earlier termination pursuant to Sections 17 and 20 hereof and notwithstanding the exercise periods set forth in the Unit Option Agreement, exercise of an Option will always be subject to the following:

(a) If the Participant is Terminated for any reason other than death, Disability or for Cause, then the Participant may exercise such Participant’s Options only to the extent that such Options are Vested Options upon the Termination Date or as otherwise determined by the Committee, and subject to such additional conditions on exercise as are set forth in the applicable Award Agreement. Such Vested Options, if otherwise exercisable, may only be exercised within ninety (90) days after the Termination Date (or within such longer time period after the Termination Date as may be determined by the Committee, but in any event, no later than the expiration date of the Options, as provided in the applicable Award Agreement).

(b) If the Participant is Terminated because of Participant’s death or Disability (or the Participant dies within ninety (90) days after a Termination other than for Cause), then Participant’s Options may be exercised

only to the extent that such Options are Vested Options on the Termination Date, and subject to Section 24 and such additional conditions on exercise as are set forth in the applicable Award Agreement. Such Vested Options, if otherwise exercisable, may only be exercised by Participant (or Participant’s legal representative or authorized assignee) within twelve (12) months after the Termination Date (or within such longer time period after the Termination Date as may be determined by the Committee, but in any event no later than the expiration date of the Options, as provided in the applicable Award Agreement).

(c) If the Participant is terminated for Cause, except to the extent otherwise determined by the Committee, such Participant’s Options shall automatically become non-exercisable as of 12:01 am local time on the Termination Date, may not thereafter be exercised even if such Options are otherwise Vested Options on the Termination Date, and shall expire and be of no force and effect as of 12:01 am local time on the Participant’s Termination Date.

5.7 Limitations on Exercise . The Committee may specify a reasonable minimum number of Units that may be purchased on any exercise of an Option, provided that such minimum number will not prevent Participant from exercising the Option for the full number of Units for which it is then exercisable.

5.8 Modification, Extension or Renewal . The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution therefor, provided that any such action may not, without the written consent of a Participant, impair any of such Participant’s rights under any Option previously granted. The Committee may not reduce the Exercise Price of outstanding Options.

5.9 Restrictions . Any Units issued pursuant to the exercise of an Option will be subject to the restrictions on transfer and, rights of first refusal set forth in the Company’s Governance Documents and such additional restrictions and repurchase rights as are specified by the Committee and set forth in the applicable Award Agreement.

5.10 Payment for Units Purchased Through Option Exercise . Payment for Units purchased pursuant to Options granted under this Plan may be made by check or, to the extent expressly permitted under the applicable Award Agreement and applicable law, by one or more of the following methods:

(a) on a “net exercise” basis by holdback (i.e., retention by the Company) of Units otherwise being sold to the Participant having a then Fair Market Value, as determined by the Committee, equal to the applicable Exercise Price;

(b) with respect only to purchases upon exercise of an Option, and provided that an IPO has occurred, the Units (or shares of stock into which the Units are freely exchangeable) are registered under the Securities Act, and a public market for the Company’s Units exists:

(i) through a “same day sale” commitment from the Participant and a broker-dealer that is a member of the Finance Regulatory Authority (a “ FINRA Dealer ”) whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Units so purchased sufficient to pay the total Exercise Price, and whereby the FINRA Dealer irrevocably commits upon receipt of such Units to forward the total Exercise Price directly to the Company; or

(ii) through a “margin” commitment from the Participant and a FINRA Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the Units so purchased to the FINRA Dealer in a margin account as security for a loan from the FINRA Dealer in the amount of the total Exercise Price, and whereby the FINRA Dealer irrevocably commits upon receipt of such Units to forward the total Exercise Price directly to the Company; or

6. RESTRICTED SHARE UNITS .

6.1 Awards of Restricted Share Units . A Restricted Share Unit (also called a “ RSU ”) is an Award of a contingent right to receive at a designated future time a specified number of Units or payment equal to the then Fair Market Value of a specified number of underlying Units, which Award will be settled and paid in Units or as otherwise provided under Section 6.2 and the applicable Award Agreement. No purchase price shall apply to RSUs or Units or property issued under a Restricted Share Unit Award. All Restricted Share Units will be evidenced by an Award Agreement (a “ Restricted Share Unit Agreement ”) that will be in such form (which need not be the same for each Participant) as the Committee will from time to time determine, and will comply with and be subject to the terms and conditions of this Plan.

6.2 Form and Timing of Settlement . Payment (i.e., settlement) of Vested Restricted Share Units shall be made in the form of Units or, if otherwise determined by the Committee in its discretion and not prohibited by the Company’s Governance Documents, with equity securities of an Upstream Public Affiliate or other securities to which Units have been or are being converted or with a combination of Units and such other securities. All Restricted Share Units shall be paid and settled on such dates following vesting as are determined by the Committee in its discretion, provided that settlement and payment of any portion of a Restricted Share Unit which has vested shall in all cases be made not later than March 15 of the calendar year following the calendar year in which such portion becomes vested and no longer subject to risk of forfeiture. No payment shall be made with respect to a Restricted Share Unit except to the extent that it has become a Vested Restricted Share Unit.

6.3 Restrictions . Any Units issued in settlement of Restricted Share Unit Awards shall be subject to the restrictions on transfer and, rights of first refusal set forth in the Company’s Governance Documents and such additional restrictions and repurchase rights as are specified by the Committee and set forth in the applicable Award Agreement.

6.4 Forfeiture . Upon Termination of a Participant, the Participant shall automatically and immediately forfeit all of his or her then-Unvested Restricted Share Units except to the extent otherwise expressly provided in his or her Restricted Share Unit Agreement.

7. WITHHOLDING TAXES .

7.1 Withholding Generally . Whenever Units are to be issued in satisfaction of Awards granted under this Plan, the Participant shall remit to the Company (or the Company Subsidiary that employs the Participant, as directed by the Company)) by check or such other means, including the holdback under Section 7.2 of Units otherwise issuable to the Participant, as are approved by the Committee, an amount sufficient to satisfy all federal, state, foreign and local withholding tax requirements as a condition precedent to issuance of such Units and prior to the delivery of any certificate or certificates for such Units. Whenever, under this Plan, payments in satisfaction of Awards are to be made by the Company or a Subsidiary, such payment will be net of an amount sufficient to satisfy federal, state, foreign and local withholding tax requirements.

7.2 Unit Withholding . When, under applicable tax laws, a Participant incurs tax liability in connection with the exercise, vesting and/or settlement of any Award that is subject to tax withholding and the Participant is obligated to pay the Company or a Subsidiary the tax amount required to be withheld, the Committee may in its sole discretion allow the Participant to satisfy the minimum withholding tax obligation by electing to have the Company withhold from the Units to be issued that minimum number of Units having a then Fair Market Value, as determined by the Committee, equal to the minimum tax amount required to be withheld,. All elections by a Participant to have Units withheld for this purpose will be made in accordance with the requirements established by the Committee for such elections and be in writing in a form acceptable to the Committee.

8. CODE SECTION 409A . All Awards under this Plan are intended to qualify for exclusion from the definition of “nonqualified deferred compensation” subject to Section 409A of the Code, and the Plan shall be interpreted and administered to comply with that intent. Specifically, all Options granted under the Plan are intended to be exempt from Code Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(5) and all rights and payments under RSUs are intended to constitute “short-term deferrals” within the meaning of Treasury Regulation Section 1.409A-1(b)(4) and as such are intended to be exempt from Code Section 409A. The Company, however, does not guarantee or assure that the Awards will be excluded from the application of Code Section 409A. Notwithstanding any other provision of this Plan, any Award Agreement or any other agreement to the contrary, neither the Company, its Members, the Board, the Committee nor any other person shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company, its Members, the Board, the Committee nor any other person the Committee will have any liability to any Participant for such tax or penalty.

9. PRIVILEGES OF UNIT OWNERSHIP . No Participant shall be a Member or equity owner of the Company solely by reason of receiving and holding an Award, and no Participant will have any of the rights as a Member of the Company or otherwise with respect to any Units underlying Awards until the Units are actually issued to the Participant upon exercise or settlement of the Award. No Units will be issued to a Participant unless he or she executes and delivers to the Company a joinder or other written agreement in form satisfactory to the Committee to be bound as a Member by the Company’s applicable Governance Documents as then in effect and as subsequently amended. Once Units are issued to the Participant, the Participant will be a Member and have all the rights of a Member with respect to such Units, including the right to vote and receive all distributions made or paid with respect to such Units.

10. TRANSFERABILITY OF AWARDS . Awards granted under this Plan, and any interest therein, will not be transferable or assignable by Participant, other than by will or by the laws of descent and distribution, and may not be made subject to execution, pledge, attachment or similar process. During the lifetime of the Participant an Award will be exercisable only by the Participant or Participant’s legal representative and any elections with respect to an Award may be made only by the Participant or Participant’s legal representative. For the avoidance of doubt, the prohibition against assignment and Transfer applies to Options and RSUs and to the underlying right to Units to be issued on exercise of an Option or settlement of an RSU; and pursuant to the foregoing sentence shall be understood to include, without limitation, a prohibition against any pledge, hypothecation, or other Transfer, including any short position, any “put equivalent position” or any “call equivalent position” (in each case, as defined in Rule 16a-1 promulgated under the Exchange Act).

11. RESTRICTIONS ON TRANSFER OF UNITS .

11.1 Restrictions on Transfer . Without limitation of and in addition to any other restriction on Transfer set forth in the applicable Company Governance Documents and the Award Agreement, no Participant shall Transfer any Units issued under the Plan (or other securities issued in exchange for or otherwise with respect to Units issued under the Plan) without the prior written consent of the Board, which consent the Board may withhold or condition in its sole discretion; provided , that upon the Participant’s death, the Participant’s Units may be Transferred to his estate, heirs or successors in interest under applicable law provided each such Transferee shall agree, as a condition to any Transfer of Units to such Transferee, to be bound by the restrictions set forth herein and in the applicable Governance Documents as may be amended from time to time in the Company’s discretion. The restriction under this Section 11.1 on Transfers of Units without Board approval shall not apply to any Transfer to the Company or, to the purchaser in a Change in Control transaction, or to a Post-IPO Permitted Transfer.

11.2 Securities Law Restrictions . In addition to the restrictions on Transfer of Units set forth in Section 11.1, no Units issued under the Plan may be Transferred unless such Transfer complies with all applicable restrictions on Transfer under applicable Securities Laws, including if applicable SEC Rule 144.

11.3 Effect of Impermissible Transfer . Any Transfer or attempted Transfer of Units in violation of Section 11.1 or Section 11.2 shall be ineffective, null and void.

11.4 Transferee Obligations . Each person to whom Units are Transferred in accordance with the first sentence of Section 11.1 hereof must, as a condition precedent to the validity of such Transfer, acknowledge in writing to the Company that such person is bound by the provisions of this Section 11 and the Company’s Governance Documents to the same extent that such Units would be so subject if retained by the Participant.

12. CERTIFICATES . If the Units are certificated, all certificates for Units or other securities delivered under this Plan will be subject to such Unit transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon which the Units may be listed or quoted.

13. ESCROW OF UNITS . To enforce any restrictions on a Participant’s Units set forth in the Plan, any Award Agreement or the applicable Governance Documents of the Company, the Committee may require the Participant to deposit all certificates representing Units, together with Unit powers or other instruments of transfer approved by the Committee, appropriately endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated. The Committee may cause a legend or legends referencing such restrictions to be placed on the certificates.

14. BUYOUT OF AWARDS . The Committee may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to buy from a Participant an Award previously granted with such consideration, and based on such terms and conditions, as the Committee and the Participant may agree.

15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE . Although this Plan is intended to be a written compensatory benefit plan within the meaning of Rule 701 promulgated under the Securities Act, grants may be made pursuant to this Plan (including the issuance of RSUs) that do constitute sales of securities or that otherwise do not qualify for exemption under Rule 701. An Award will not be effective, and no Units will be issued under the Plan unless such Award or Unit issuance, as applicable, complies with all applicable federal, state and foreign securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Units (or shares of capital stock into which the Units may be converted) may then be listed or quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or other settlement of any Award. Notwithstanding any other

provision in this Plan, the Company will have no obligation to issue or deliver Units under this Plan prior to (i) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable, and/or (ii) compliance with any exemption, completion of any registration or other qualification of such Units under any federal, state or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable. The Company will be under no obligation to register the Units with the SEC or any other governmental agency or to effect compliance with the exemption, registration, qualification or listing requirements of any state or foreign securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.

16. NO EMPLOYMENT RIGHTS . Nothing in this Plan or any Award Agreement under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other service relationship with, the Company or any Subsidiary of the Company, as applicable, or limit in any way the right of the Company or any Subsidiary of the Company to terminate Participant’s employment or other service relationship at any time, with or without Cause.

17. CHANGE OF CONTROL TRANSACTIONS .

17.1 Assumption or Replacement of Awards by Successor or Acquiring Company . In the event of a Change in Control of the Company, any or all outstanding Awards may be assumed, converted or replaced by the successor or acquiring entity (if any), which assumption, conversion or replacement will be binding on all Participants. In the alternative, the successor or acquiring entity may substitute equivalent Awards or provide substantially similar consideration to Participants as was provided to equity holders of the Company (after taking into account the existing provisions of the Awards). In connection with any such assumption, conversion, substitution or replacement of Awards, the Committee may in its discretion, and subject to such terms and conditions as it determines, provide for the accelerated vesting, exercisability and/or payment of all or a portion of such Awards immediately prior to such assumption, replacement, conversion or substitution. Notwithstanding any provision herein to the contrary, no assumption, conversion, replacement or substitution of Awards shall occur if such action would result in the Awards in question violating any applicable requirement of Code Section 409A.

17.2 No Assumption of Replacement of Awards on Change in Control Transaction . In the event of a Change in Control transaction in which the successor or acquiring entity (if any) does not assume, convert, replace or substitute Awards, as provided in Section 17.1 above, then the vesting, exercisability and/or payment of such Awards will accelerate immediately prior to the consummation of such Change in Control event only: (i) to the extent, if any, that the applicable Award Agreement expressly provides for such accelerated vesting, exercisability or payment, in whole or in part; and (ii) to the extent the applicable Award Agreement does not so provide, then to the incremental extent if any (and on such additional terms and conditions) as the Committee in its discretion may determine.

17.3 Accelerated Expiration of Options . Notwithstanding any contrary provision in this Plan or any applicable Award Agreement, in connection with a Change in Control, the Committee may in its discretion determine that, in connection with and contingent upon the occurrence of a Change in Control: (a) each Option outstanding immediately prior to the Change in Control shall terminate and cease to be exercisable within a specified number of days after notice to the Participant (and in no event later than immediately prior to the effective time of the Change in Control transaction); and (b) each Participant shall receive in full cancellation of his or her unexercised Options, with respect to each Unit subject to such Option, an amount equal to the excess of the Fair Market Value of such Unit immediately prior to the occurrence of such Change in Control over the Exercise Price per Unit of such Option; such amount to be payable in cash, in one or more kinds of equity securities or property (including the securities or property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine. For avoidance of doubt, in the cases of Options having an Exercise Price per Unit equal to or greater than the Fair Market Value per Unit of the underlying Units, the Participant’s Options may be cancelled hereunder without any payment to the Participant for his or her cancelled Options hereunder.

17.4 Accelerated Vesting and Settlement of Restricted Share Units . Any provision in this Plan or any applicable Award Agreement to the contrary notwithstanding, in connection with a Change in Control, the Committee may in its discretion determine that, in connection with and contingent upon the occurrence of a Change in Control of the Company: (a) each RSU outstanding immediately prior to the Change in Control shall vest immediately prior to the effective time of the Change in Control transaction, and (b) each Participant shall receive in full payment for his or her Vested RSUs, with respect to each Unit subject to such Vested RSUs, an amount equal to the Fair Market Value of such Unit immediately prior to the occurrence of such Change in Control (such amount to be paid in Units, or in one or more other kinds of equity securities or property (other than cash), including the securities or property, if any, payable in the transaction, or in a combination thereof, as the Committee, in its discretion, shall determine).

17.5 Other Treatment of Awards . Subject to any greater rights granted to Participants under the foregoing provisions of this Section 17, in the event of the occurrence of any Change in Control transaction, any outstanding Awards will be treated as provided in the applicable agreement or plan of sale of securities, reorganization, merger, consolidation, dissolution, liquidation or sale of assets.

18. ADOPTION . This Plan will become effective on the date that it is adopted by the Board (the “ Effective Date ”).

19. TERM OF PLAN/GOVERNING LAW . Unless earlier terminated as provided herein, no Awards shall be granted under the Plan later than ten (10) years after the Effective Date. This Plan and all agreements hereunder shall be governed by and construed in accordance with the laws of the State of Delaware.

20. AMENDMENT OR TERMINATION OF PLAN . Subject to Section 5.8 hereof, the Board may at any time terminate or amend this Plan in any respect, including, without limitation, amendment of any form of Award Agreement or instrument to be executed pursuant to this Plan. The termination of the Plan, or any amendment thereof, shall not affect any Unit previously issued or any Award previously granted under the Plan.

21. NONEXCLUSIVITY OF THE PLAN . Neither the adoption of this Plan by the Board nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of equity awards otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

22. ASSIGNMENT OF PAYMENT OBLIGATIONS . The Company may assign to any Affiliate entity, and any Affiliate entity of the Company may assume, the Company’s otherwise applicable payment obligations with respect to Awards granted to Participants who are employees or contractors of such Subsidiaries.

23. DEFINITIONS . As used in this Plan, the following terms will have the following meanings:

“ Affiliate ” means, with respect to any specified person, any other person directly or indirectly controlling, controlled by or under direct or indirect common control with the specified person.

“ Award ” means any award under this Plan, including any Option or Restricted Share Units.

“ Award Agreement ” means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award, including the Unit Option Agreement and Restricted Share Unit Agreement.

“ Board ” means the Board of Managers of the Company, or if the Company becomes a corporation, the board of directors of that corporation.

“ Cause ” means Termination because of (i) any willful, material violation by the Participant of any law or regulation applicable to the business of the Company or Subsidiary of the Company, the Participant’s conviction for, or guilty plea to, a felony or a crime involving moral turpitude, or any willful perpetration by the Participant of a common law fraud, (ii) the Participant’s commission of an act of personal dishonesty which involves personal profit in connection with the Company or any other entity having a business relationship with the Company, (iii) any material breach by the Participant of any provision of any agreement or understanding between the Company or any Subsidiary of the Company and the Participant regarding the terms of the Participant’s service as an employee, officer, manager, director or consultant to the Company or a Subsidiary of the Company, including without limitation, the willful and continued failure or refusal of the Participant to perform the material duties required of such Participant as an employee, officer, manager, director or consultant of the Company or a Subsidiary of the Company, other than as a result of having a Disability, or a breach of any applicable invention assignment and confidentiality agreement or similar agreement between the Company or a Subsidiary of the Company and the Participant, (iv) Participant’s disregard of the policies of the Company or any Subsidiary of the Company so as to cause loss, damage or injury to the property, reputation or employees of the Company or a Subsidiary of the Company, or (v) any other misconduct by the Participant which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or a Subsidiary of the Company.

“ Change in Control ” means, unless otherwise provided in an Award Agreement (but solely as applicable to any such Award Agreement), the occurrence of any one of the following events after the Effective Date:

(a) Any “person” (as such term is defined in the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) becomes, as a result of its or its Affiliate’s acquisition of Company equity securities occurring after the Effective Date, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the “ Company Voting Securities ”); provided , however , that the event described in this paragraph (a) shall not be deemed to be a Change in Control by virtue of any acquisitions of Company Voting Securities: (i) by the Company, any Subsidiary or any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary; (ii) in connection with an IPO (including by any Upstream Public Affiliate or by any underwriter temporarily holding securities being offered in the IPO); (iii) in connection with a statutory conversion of the Company to another form of business entity or Non-Qualifying Transaction as defined in paragraph (b) below; or (iv) by a person who was a Member on the Effective Date (or is an Affiliate of such a Member) unless with respect to this clause (iv) such person and its Affiliates thereby become the “beneficial owner” as defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of at least seventy-five percent (75%) of the Company Voting Securities;

(b) The consummation of a merger, consolidation, statutory unit or share exchange or similar form of company transaction involving the Company or any of its Subsidiaries that requires the approval of the Company’s Members, whether for such transaction or the issuance of securities in the transaction (a “ Business Combination ”), unless immediately following such Business Combination: (i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination (the “ Surviving Entity ”), or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Entity (the “ Parent Entity ”), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by equity securities into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Entity or the Parent Entity) is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect the members of the board of managers or directors of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) and (iii) at least a majority of the members of the board of managers or directors of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) following the consummation of the Business Combination were members of the Board at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “ Non-Qualifying Transaction ”);

(c) A sale, conveyance or other disposition (or series of related sales, conveyances and dispositions) of all or substantially all of the assets or business of the Company, including a sale or multiple related sales of the Subsidiaries of the Company (whether by way of merger, reorganization, consolidation or otherwise) or of all or substantially all of the assets of the Company’s Subsidiaries which constitute all or substantially all of the consolidated assets of the Company; or

(d) The Members of the Company approve a plan of complete liquidation or dissolution of the Company or the consummation of a sale of all or substantially all of the assets of the Company or all or substantially all of the assets of its Subsidiaries.

For avoidance of doubt, a Change in Control shall not be deemed to occur solely because any Person acquires beneficial ownership of more than fifty percent (50%) of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Committee ” means the committee appointed by the Board to administer this Plan, or if no committee is appointed, the Board.

“ Company ” means Pluralsight Holdings, LLC, a Delaware limited liability company, or any successor entity thereto. In the event the Company converts to a corporation, that corporation shall be the Company.

“ Disability ” means a disability, whether temporary or permanent, partial or total, as determined by the Committee.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended

“ Exercise Price ” means the price at which a holder of an Option may purchase the Units issuable upon exercise of the Option.

“ Fair Market Value ” means, as of any date, the value of Units determined as follows:

(a) if such Unit is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Unit is listed or admitted to trading as reported by Yahoo.com (or any newspaper or other source as the Board may determine);

(b) if such Unit is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported by Yahoo.com (or, if not so reported, as otherwise reported by any newspaper or other source as the Board may determine); or

“ Governance Documents ” means the Company’s LLC Agreement and certificate of formation of the Company (or if the Company becomes a corporation, such corporation’s articles or certificate of incorporation, bylaws and shareholders’ agreement if any), as amended from time to time.

“ IPO ” means (a) the first sale of the Company’s Units to the general public pursuant to a registration statement under the Securities Act; or if earlier (b) the later of (i) the first sale of Upstream Public Affiliate equity securities to the general public pursuant to a registration statement under the Securities Act; or (ii) the acquisition of twenty percent (20%) or more (by voting power and value) of the equity securities of the Company by a publicly-traded Upstream Public Member (or such lesser percentage as the Board may designate in writing).

“ IPO Lockup Agreement ” means with respect to any IPO, any agreement between the underwriters of the public offering, the Company or other issuer, and persons who immediately prior to the IPO hold equity securities of the Company or an Upstream Public Affiliate, restricting the sale or disposition of such equity securities (or the IPO transaction-related proceeds thereof) for a defined period following the effective date of the IPO or related registration statement.

“ IPO Lockup Period ” means any period following an IPO not in excess of 220 days from the effective date of the IPO, as determined by the Committee, during which an IPO Lockup Agreement or SEC Rule 144 restricts the free transferability of Units or other equity securities of the Company or other applicable issuer.

“ LLC Agreement ” means the Company’s amended and restated limited liability company agreement dated as of March 14, 2016, as subsequently amended and restated from time to time.

“ Member ” means a “Member” of the Company within the meaning of the Company’s limited liability company agreement. In the event the Company becomes a corporation, “Member” shall mean a shareholder of that corporation.

“ Option ” means an award of an option to purchase Units pursuant to Section 5 hereof. “Participant” means a person who receives an Award under this Plan.

“ Plan ” means this Pluralsight Holdings, LLC 2017 Equity Incentive Plan, as amended from time to time.

“ Post-IPO Permitted Transfer ” means any Transfer of Units following an IPO if (a) the Units Transferred are subject to an effective registration statement under the Securities Act, are no longer subject to an IPO Lockup Agreement, and are otherwise freely tradable under applicable Securities Laws; or (b) the Units are Transferred to an Upstream Public Affiliate.

“ Restricted Share Unit ” or “ RSU ” means an award made pursuant to Section 6 hereof. The use of the word “Share” in the phrase “Restricted Share Unit” is not intended to be limited to shares of stock.

“ Restricted Share Unit Agreement ” means a written agreement between the Company and a Participant relating to the award of Restricted Share Units to that Participant.

“ SEC ” means the Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Securities Laws ” means the Securities Act and all, other federal, state and foreign laws governing the registration (or exemption from registration) of securities.

“ Subsidiary ” means any corporation, limited liability company or other entity in unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain owns equity securities representing fifty percent (50%) or more of the total combined voting power of all classes of equity securities in one of the other entities in such chain. As of the Effective Date, Pluralsight, LLC, is a Subsidiary of the Company.

“ Termination ” or “ Terminated ” means, for purposes of this Plan with respect to a Participant, that the Participant for any reason, whether voluntarily or involuntarily, has ceased to provide services as an employee, officer, manager, director or consultant to the Company or a Subsidiary of the Company. For greater certainty, “Termination” includes cessation of a Participant’s employment or consulting engagement with the Company or with a Subsidiary of the Company as a result of the Participant’s death, Disability, resignation, expiration of a stated term of engagement, or discharge with or without Cause. A Participant will not be deemed to have ceased to provide services in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee, provided that such leave is for a period of not more than ninety (90) days (a) unless reinstatement upon the expiration of such leave is guaranteed by contract or statute, or (b) unless provided otherwise pursuant to formal policy adopted from time to time by the Board and issued and promulgated in writing. In the case of any Participant on (i) sick leave, (ii) military leave or (iii) an approved leave of absence, the Committee may make such provisions respecting suspension of vesting of the Award while on leave from the Company or a Subsidiary of the Company as it may deem appropriate, except that in no event may an Option be exercised after the expiration of the term set forth in the Unit Option Agreement.

“ Termination Date ” means the effective date of a Participant’s Termination as determined for purposes of this Plan by the Committee in its sole discretion.

“ Transfer ” and “ Transferred ” mean and include any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of an Award or Units or any legal or beneficial interest in such Award or Units, whether or not for value and whether voluntary or involuntary or by operation of law, including without limitation, a transfer of an Award or Units to a nominee (regardless of whether there in a corresponding change in beneficial ownership); provided , however , that the following shall not be considered a “Transfer”: (a) the granting of a revocable proxy to officers of the Company at the request of the Company’s Board in connection with actions to be taken at a meeting of the Members; or (b) entering into a voting agreement to which the Company is party.

“ Units ” means (a) “Class A Common Units” as defined in the Company’s limited liability company agreement (i.e., common units of membership interest in the Company entitling their holder to one vote per unit), and (b) any successor equity security of the Company (including shares of common stock into which Units are converted as a result of the conversion of the Company to a corporation) or shares of common stock of an Upstream Public Affiliate if the Units are convertible into such shares.

“ Unvested RSUs ” means “ Unvested RSUs ” as defined in the applicable Restricted Share Unit Agreement.

“ Unvested Options ” means “ Unvested Options ” as defined in the applicable Unit Option Agreement.

“ Upstream Public Affiliate ” means a Member of the Company that meets all of the following requirements: (a) the Member is an entity the common equity securities of which are offered and issued or being offered to the public pursuant to a registration statement filed under the Securities Act; (b) the Member holds or has the right to acquire twenty percent (20%) or more (by voting power and value) of the equity securities of the Company (or such lesser percentage as the Board may designate in writing); (c) the primary business purpose of Member is to invest in Company equity securities; and (d) the Board in its discretion by action in writing designates the Member as an Upstream Public Affiliate.

“ Vested RSUs ” means “ Vested RSUs ” as defined in the applicable Restricted Share Unit Agreement.

“ Vested Options ” means “ Vested Options ” as defined in the applicable Unit Option Agreement.

24. DEATH ACCELERATION BENEFIT . Upon a Participant’s death, Participant’s outstanding and unvested Units subject to an Award will accelerate and fully vest; provided that the aggregate Fair Market Value (as such term is defined in the Pluralsight, Inc. 2018 Equity Incentive Plan, as amended (the “ 2018 Plan ”)) of the Units covered by Awards that may

accelerate and fully vest pursuant to this Section 24 and the shares and other securities covered by Pluralsight, Inc. equity awards issued under other equity plans and arrangements (the “ Eligible Awards ”) that may accelerate and vest pursuant to comparable provisions in such other equity plans and arrangements may not exceed $3,000,000 in the aggregate (the “ Death Benefit Limit ”). The order in which Eligible Awards will accelerate and vest up to the Death Benefit Limit will be determined as follows: (a) Eligible Awards will accelerate and apply toward the Death Benefit Limit based on their class (determined in reverse alphabetical order) and then in the following order: (1) Restricted Stock, (2) Restricted Stock Units, and (3) Stock Options and Stock Appreciation Rights (as such terms are defined in the 2018 Plan), and (b) with respect to Eligible Awards of the same class, awards with an earlier date of grant will accelerate and apply toward the Death Benefit Limit prior to Eligible Awards with a later date of grant. If two or more Eligible Awards are granted on the same date, each Eligible Award will accelerate and vest on a pro-rata basis. For the avoidance of doubt, the acceleration described in this Section 24 does not apply to any Eligible Awards with performance-based vesting. Notwithstanding anything in this Section 24 to the contrary, in the event a Participant’s death results from suicide, the acceleration and vesting described in this Section 24 will be solely at the Company’s discretion and will not occur automatically.

25. EXECUTION . To record the Board’s and Company’s adoption of the Plan, the Company has caused the undersigned authorized officer of the Company to execute this Plan document effective as of April 30, 2019.

PLURALSIGHT HOLDINGS, LLC

By: /s/ Matthew Forkner

Name: Matthew Forkner

Title: General Counsel

Exhibit 10.6

PLURALSIGHT, INC.

2018 EQUITY INCENTIVE PLAN, AS AMENDED AND RESTATED

( effective April 30, 2019 )

1. Purposes of the Plan . The purposes of this Plan are:


•	to attract and retain the best available personnel for positions of substantial responsibility,


•	to provide additional incentive to Employees, Directors and Consultants, and


•	to promote the success of the Company’s business.

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares.

2. Definitions . As used herein, the following definitions will apply:

(a) “ Administrator ” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.

(b) “ Affiliate ” means any entity, other than a Subsidiary, in which the Company has an equity or other ownership interest.

(c) “ Applicable Laws ” means the legal and regulatory requirements relating to the administration of equity-based awards and the related issuance of Shares thereunder, including but not limited to U.S. federal and state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any non-U.S. country or jurisdiction where Awards are, or will be, granted under the Plan.

(d) “ Award ” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares.

(e) “ Award Agreement ” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

(f) “ Board ” means the Board of Directors of the Company.

(g) “ Change in Control ” means the occurrence of any of the following events:

(i) A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“ Person ”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, (A) the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change in Control, and (B) if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, the direct or indirect beneficial ownership of fifty percent (50%) or more of the total voting power of the stock of the Company or of the ultimate parent entity of the Company, such event will not be considered a Change in Control under this subsection (i). For this purpose, indirect beneficial ownership will include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities; or

(ii) A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12)-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this subsection (ii),

if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

(iii) A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12)‑month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.

Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

(h) “ Code ” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder will include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

(i) “ Committee ” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board, or a duly authorized committee of the Board, in accordance with Section 4 hereof.

(j) “ Common Stock ” means the Class A common stock of the Company.

(k) “ Company ” means Pluralsight, Inc., a Delaware corporation, or any successor thereto.

(l) “ Consultant ” means any natural person, including an advisor, engaged by the Company or a Parent, Affiliate, or Subsidiary to render bona fide services to such entity, provided the services (i) are not in connection with the offer or sale of securities in a capital‑raising transaction, and (ii) do not directly promote or maintain a market for the Company’s securities, in each case, within the meaning of Form S-8 promulgated under the Securities Act, and provided, further, that a Consultant will include only those persons to whom the issuance of Shares may be registered under Form S-8 promulgated under the Securities Act.

(m) “ Director ” means a member of the Board.

(n) “ Disability ” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

(o) “ Employee ” means any person, including Officers and Directors, employed by the Company or any Parent, Affiliate, or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.

(p) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

(q) “ Exchange Program ” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for awards of the same type (which may have higher or lower exercise prices and different terms), awards of a different type, and/or cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is increased or reduced. The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.

(r) “ Fair Market Value ” means, as of any date, the value of Common Stock determined as follows:

(i) For purposes of any Awards granted on the Registration Date, the Fair Market Value will be the initial price to the public as set forth in the final prospectus included within the registration statement in Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Company’s Common Stock.

(ii) For purposes of any Awards granted on any other date, the Fair Market Value will be the closing sales price for Common Stock as quoted on any established stock exchange or national market system (including without limitation the New York Stock Exchange, NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market) on which the Common Stock is listed on the date of determination (or the closing bid, if no sales were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable. If the determination date for the Fair Market Value occurs on a non-trading day (i.e., a weekend or holiday), the Fair Market Value will be such price on the immediately preceding trading day, unless otherwise determined by the Administrator. In the absence of an established market for the Common Stock, the Fair Market Value thereof will be determined in good faith by the Administrator.

The determination of fair market value for purposes of tax withholding may be made in the Administrator’s discretion subject to Applicable Laws and is not required to be consistent with the determination of Fair Market Value for other purposes.

(s) “ Fiscal Year ” means the fiscal year of the Company.

(t) “ Incentive Stock Option ” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(u) “ Inside Director ” means a Director who is an Employee.

(v) “ Nonstatutory Stock Option ” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.

(w) “ Officer ” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(x) “ Option ” means a stock option granted pursuant to the Plan.

(y) “ Outside Director ” means a Director who is not an Employee.

(z) “ Parent ” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(aa) “ Participant ” means the holder of an outstanding Award.

(ab) “ Performance Share ” means an Award denominated in Shares which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine pursuant to Section 10.

(ac) “ Performance Unit ” means an Award which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 10.

(ad) “ Period of Restriction ” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

(ae) “ Plan ” means this 2018 Equity Incentive Plan, as amended and restated.

(af) “ Registration Date ” means the effective date of the first registration statement that is filed by the Company and declared effective pursuant to Section 12(b) of the Exchange Act, with respect to any class of the Company’s securities.

(ag) “ Restricted Stock ” means Shares issued pursuant to a Restricted Stock award under Section 7 of the Plan, or issued pursuant to the early exercise of an Option.

(ah) “ Restricted Stock Unit ” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.

(ai) “ Rule 16b-3 ” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

(aj) “ Section 16(b) ” means Section 16(b) of the Exchange Act.

(ak) “ Section 409A ” means Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

(al) “ Securities Act ” means the Securities Act of 1933, as amended.

(am) “ Service Provider ” means an Employee, Director or Consultant.

(an) “ Share ” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan.

(ao) “ Stock Appreciation Right ” means an Award, granted alone or in connection with an Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.

(ap) “ Subsidiary ” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan .

(a) Stock Subject to the Plan . Subject to the provisions of Section 14 of the Plan and the automatic increase set forth in Section 3(b) of the Plan, the maximum aggregate number of Shares that may be issued under the Plan is 22,149,995 Shares, plus any Shares subject to restricted stock units, or similar awards granted under the Pluralsight Holdings, LLC 2017 Equity Incentive Plan (the “2017 Plan”) that, on or after the Registration Date, expire or otherwise terminate without having been exercised in full, are tendered to or withheld by the Company for payment of tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest, with the maximum number of Shares to be added to the Plan from the 2017 Plan equal to 4,600,000. The Shares may be authorized, but unissued, or reacquired Common Stock.

(b) Automatic Share Reserve Increase . Subject to the provisions of Section 14 of the Plan, the number of Shares available for issuance under the Plan will be increased on the first day of each Fiscal Year beginning with the 2019 Fiscal Year, in an amount equal to the least of (i) 14,900,000 Shares, (ii) 5% of the outstanding shares of all classes of the Company’s common stock on the last day of the immediately preceding Fiscal Year or (iii) such number of Shares determined by the Board.

(c) Lapsed Awards . If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or repurchased by the Company due to failure to vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited or repurchased Shares), which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). With respect to Stock Appreciation Rights, only Shares actually issued (i.e., the net Shares issued) pursuant to a Stock Appreciation Right will cease to be available under the Plan; all remaining Shares under Stock Appreciation Rights will remain available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company, such Shares will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the Plan. To

the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 14, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Sections 3(b) and 3(c).

(d) Share Reserve . The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.

4. Administration of the Plan .

(a) Procedure .

(i) Multiple Administrative Bodies . Different Committees with respect to different groups of Service Providers may administer the Plan.

(ii) Rule 16b-3 . To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.

(iii) Other Administration . Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws.

(b) Powers of the Administrator . Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Awards may be granted hereunder;

(iii) to determine the number of Shares to be covered by each Award granted hereunder;

(iv) to approve forms of Award Agreements for use under the Plan;

(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;

(vi) to institute and determine the terms and conditions of an Exchange Program;

(vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

(viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable non-U.S. laws or for qualifying for favorable tax treatment under applicable non-U.S. laws;

(ix) to modify or amend each Award (subject to Section 19 of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(b) of the Plan regarding Incentive Stock Options);

(x) to allow Participants to satisfy tax withholding obligations in such manner as prescribed in Section 15 of the Plan;

(xi) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

(xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award; and

(xiii) to make all other determinations deemed necessary or advisable for administering the Plan.

(c) Effect of Administrator’s Decision . The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.

5. Eligibility . Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units may be granted to Service Providers. Incentive Stock Options may be granted only to Employees of the Company (or any Parent or Subsidiary).

6. Stock Options .

(a) Limitations . Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate fair market value of the shares with respect to which incentive stock options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such options will be treated as nonstatutory stock options. For purposes of this Section 6(a), incentive stock options will be taken into account in the order in which they were granted. The fair market value of the shares will be determined as of the time the option with respect to such shares is granted.

(b) Term of Option . The term of each Option will be stated in the Award Agreement. In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

(i) Exercise Price . The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the Administrator, subject to the following:

(1) In the case of an Incentive Stock Option

(A) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.

(B) granted to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(2) In the case of a Nonstatutory Stock Option, the per Share exercise price will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.

(ii) Waiting Period and Exercise Dates . At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.

(iii) Form of Consideration . The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator

will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration received by the Company under a broker-assisted (or other) cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6) by net exercise; (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the foregoing methods of payment.

(d) Exercise of Option .

(i) Procedure for Exercise; Rights as a Stockholder . Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.

An Option will be deemed exercised when the Company receives: (i) a notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14 of the Plan.

Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

(ii) Termination of Relationship as a Service Provider . If a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iii) Disability of Participant . If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(iv) Death of Participant . If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan, subject to Section

24 of the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.

(v) Tolling Expiration . A Participant’s Award Agreement may also provide that:

(1) if the exercise of the Option following the termination of Participant’s status as a Service Provider (other than upon the Participant’s death or Disability) would result in liability under Section 16(b), then the Option will terminate on the earlier of (A) the expiration of the term of the Option set forth in the Award Agreement, or (B) the tenth (10 ^th ) day after the last date on which such exercise would result in liability under Section 16(b); or

(2) if the exercise of the Option following the termination of the Participant’s status as a Service Provider (other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act, then the Option will terminate on the earlier of (A) the expiration of the term of the Option or (B) the expiration of a period of thirty (30)-day period after the termination of the Participant’s status as a Service Provider during which the exercise of the Option would not be in violation of such registration requirements.

7. Restricted Stock .

(a) Grant of Restricted Stock . Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

(b) Restricted Stock Agreement . Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.

(c) Transferability . Except as provided in this Section 7 or the Award Agreement, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

(d) Other Restrictions . The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

(e) Removal of Restrictions . Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

(f) Voting Rights . During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.

(g) Dividends and Other Distributions . During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.

(h) Return of Restricted Stock to Company . On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.

8. Restricted Stock Units .

(a) Grant . Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units.

(b) Vesting Criteria and Other Terms . The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or any other basis determined by the Administrator in its discretion.

(c) Earning Restricted Stock Units . Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.

(d) Form and Timing of Payment . Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash, Shares, or a combination of both.

(e) Cancellation . On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.

9. Stock Appreciation Rights .

(a) Grant of Stock Appreciation Rights . Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.

(b) Number of Shares . The Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Service Provider.

(c) Exercise Price and Other Terms . The per share exercise price for the Shares to be issued pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan.

(d) Stock Appreciation Right Agreement . Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

(e) Expiration of Stock Appreciation Rights . A Stock Appreciation Right granted under the Plan will expire ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement, as determined by the Administrator, in its sole discretion. Notwithstanding the foregoing, the rules of Section 6(d) relating to exercise also will apply to Stock Appreciation Rights.

(f) Payment of Stock Appreciation Right Amount . Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:

(i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

(ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.

At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

10. Performance Units and Performance Shares .

(a) Grant of Performance Units/Shares . Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant.

(b) Value of Performance Units/Shares . Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

(c) Performance Objectives and Other Terms . The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Service Providers. The time period during which the performance objectives or other vesting provisions must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, business unit or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion.

(d) Earning of Performance Units/Shares . After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share.

(e) Form and Timing of Payment of Performance Units/Shares . Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.

(f) Cancellation of Performance Units/Shares . On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.

11. Outside Director Limitations . No Outside Director may be paid, issued or granted, in any Fiscal Year, cash compensation and equity awards (including any Awards issued under this Plan) with an aggregate value greater than $600,000 (with the value of each equity award based on its grant date fair value (determined in accordance with U.S. generally accepted accounting principles)). Any cash compensation paid or Awards granted to an individual for his or her services as an Employee, or for his or her services as a Consultant (other than as an Outside Director), will not count for purposes of the limitation under this Section 11.

12. Leaves of Absence/Transfer Between Locations . Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Affiliate or Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.

13. Transferability of Awards . Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate.

14. Adjustments; Dissolution or Liquidation; Merger or Change in Control .

(a) Adjustments . In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits in Section 3 of the Plan.

(b) Dissolution or Liquidation . In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.

(c) Change in Control . In the event of a merger of the Company with or into another corporation or other entity or a Change in Control, each outstanding Award will be treated as the Administrator determines subject to the restriction in the following paragraph, including, without limitation, that each Award be assumed or an equivalent option or right substituted by the successor corporation or a Parent, Affiliate, or Subsidiary of the successor corporation. The Administrator will not be required to treat all Awards or Participants similarly in the transaction.

In the event that the successor corporation does not assume or substitute for the Award, the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, unless specifically provided otherwise under the applicable Award Agreement, a Company policy applicable to the Participant, or other written agreement between the Participant and the Company, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.

For the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, Performance Unit or Performance Share, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

Notwithstanding anything in this Section 14(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

(d) Outside Director Awards . With respect to Awards granted to an Outside Director, in the event of a Change in Control in which such Awards are assumed or substituted for, if on the date of or following such assumption or substitution the Participant’s status as a Director or a director of the successor corporation, as applicable, is terminated other than upon a voluntary resignation by the Participant (unless such resignation is at the request of the acquirer), then the Participant will fully vest in and have the right to exercise Options and/or Stock Appreciation Rights as to all of the Shares underlying such Award, including those Shares which would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, unless specifically provided otherwise under the applicable Award Agreement, a Company policy applicable to the Participant, or other written agreement between the Participant and the Company, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met.

15. Tax .

(a) Withholding Requirements . Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof) or such earlier time as any tax withholding obligations are due, the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy U.S. federal, state, or local taxes, non-U.S. taxes, or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).

(b) Withholding Arrangements . The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable cash or Shares having a fair market value not in excess of the maximum statutory amount required to be withheld, or (iii) delivering to the Company already-owned Shares having a fair market value not in excess of the maximum statutory amount required to be withheld. The fair market value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.

(c) Compliance With Section 409A . Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A. In no event will the Company (or any Parent, Affiliate, or Subsidiary of the Company, as applicable) reimburse a Participant for any taxes imposed or other costs incurred as a result of Section 409A.

16. No Effect on Employment or Service . Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider, nor will they interfere in any way with the Participant’s right or the right of the Company (or any Parent, Affiliate, or Subsidiary of the Company) to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

17. Date of Grant . The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.

18. Term of Plan . Subject to Section 23 of the Plan, the Plan will become effective upon the later to occur of (i) its adoption by the Board or (ii) the business day immediately prior to the Registration Date. It will continue in effect for a term of ten (10) years from the date adopted by the Board, unless terminated earlier under Section 19 of the Plan.

19. Amendment and Termination of the Plan .

(a) Amendment and Termination . The Administrator may at any time amend, alter, suspend or terminate the Plan.

(b) Stockholder Approval . The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

(c) Effect of Amendment or Termination . No amendment, alteration, suspension or termination of the Plan will materially impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

20. Conditions Upon Issuance of Shares .

(a) Legal Compliance . Shares will not be issued pursuant to an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.

(b) Investment Representations . As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

(c) Failure to Accept Award. If a Participant has not accepted an Award or has not taken all administrative and other steps (e.g., setting up an account with a broker designated by the Company) necessary for the Company to issue Shares upon the vesting, exercise, or settlement of the Award prior to the first date the Shares subject to such Award are scheduled to vest, then the Award will be cancelled on such date and the Shares subject to such Award immediately will revert to the Plan for no additional consideration unless otherwise provided by the Administrator.

21. Inability to Obtain Authority . The inability of the Company to obtain authority from any regulatory body having jurisdiction or to complete or comply with the requirements of any registration or other qualification of the Shares under any U.S. federal or state law, any non-U.S. law, or the rules and regulations of the Securities and Exchange Commission, the stock exchange on which Shares of the same class are then listed, or any other governmental or regulatory body, which authority, registration, qualification or rule compliance is deemed by the Company’s counsel to be necessary or advisable for the issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority, registration, qualification or rule compliance will not have been obtained.

22. Forfeiture Events .

(a) All Awards granted under the Plan will be subject to recoupment under any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Laws. In addition, the Administrator may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Administrator determines necessary or appropriate, including but not limited to a reacquisition right regarding previously acquired Shares or other cash or property. Unless this Section 22 is specifically mentioned and waived in an Award Agreement or other document, no recovery of compensation under a clawback policy or otherwise will be an event that triggers or contributes to any right of a Participant to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or a member of the Company Group.

(b) The Administrator may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award will be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but will not be limited to, termination of such Participant’s status as a Service Provider for cause or any specified action or inaction by a Participant, whether before or after the date Participant is no longer a Service Provider, that would constitute cause for termination of such Participant’s status as a Service Provider.

(c) If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under securities laws, any Participant who (1) knowingly or through gross negligence engaged in the misconduct or who knowingly or through gross negligence failed to prevent the misconduct or (2) is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, must reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document embodying such financial reporting requirement.

23. Stockholder Approval . The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.

24. Death Acceleration Benefit. Upon a Participant’s death, Participant’s outstanding and unvested Awards will accelerate and fully vest; provided that the aggregate Fair Market Value of the Shares covered by Awards that may accelerate and fully vest pursuant to this Section 24 and the shares and other securities covered by Company equity awards issued under other equity plans and arrangements (collectively, the “ Eligible Awards ”) that may accelerate and vest pursuant to comparable provisions in such other equity plans and arrangements may not exceed $3,000,000 in the aggregate (the “ Death Benefit Limit ”). The order in which Eligible Awards will accelerate and vest up to the Death Benefit Limit will be determined as follows: (a) Eligible Awards will accelerate and apply toward the Death Benefit Limit based on their class (determined in reverse alphabetical order) and then in the following order: (1) Restricted Stock, (2) Restricted Stock Units, and (3) Stock Options and Stock Appreciation Rights, and (b) with respect to Eligible Awards of the same class, awards with an earlier date of grant will accelerate and apply toward the

Death Benefit Limit prior to Eligible Awards with a later date of grant. If two or more Eligible Awards are granted on the same date, each Eligible Award will accelerate and vest on a pro-rata basis. For the avoidance of doubt, the acceleration described in this Section 24 does not apply to any Eligible Awards with performance-based vesting. Notwithstanding anything in this Section 24 to the contrary, in the event a Participant’s death results from a suicide, the acceleration and vesting described in this Section 24 will be solely at the Company’s discretion and will not occur automatically.

Exhibit 10.7

PLURALSIGHT HOLDINGS, LLC

THIRD AMENDED AND RESTATED RESTRICTED SHARE UNIT AGREEMENT

This Third Amended and Restated Restricted Share Unit Agreement (the “ Agreement ”) is made and entered into as of the date of grant set forth below (the “ Date of Grant ”) by and between Pluralsight Holdings, LLC, a Delaware limited liability company (the “ Company ”), Pluralsight, Inc., a Delaware corporation (“ PubCo ” ) and the participant named below (the “ Participant ”). Capitalized terms not defined herein shall have the meaning ascribed to them in the Fourth Amended and Restated Limited Liability Company Agreement of the Company, as amended from time to time (the “ LLC Agreement ”).

1. AWARD OF RESTRICTED SHARE UNITS . The Company has awarded to the Participant, and the Participant has accepted, the following Restricted Share Units (“ RSUs ”) as of the following RSU Grant Date. The Company, PubCo, and Participant hereby agree that the RSUs shall be subject to all of the terms and conditions of this Agreement and the LLC Agreement:

Participant Name: Aaron Skonnard

Total Number of RSUs: 3,000,000

RSU Grant Date: September 29, 2017

Vesting Start Date: July 25, 2017

Each RSU represents and consists of the contractual deferred right to receive upon future vesting and settlement both one Common Unit and one share of Class C Common Stock, provided that, unless determined otherwise by the Committee, any portion of the RSUs that is used to satisfy Tax Related Items upon future vesting and settlement pursuant to the Sell-to-Cover Method set forth in Section 11(a) will represent the right to receive shares of Class A Common Stock with a Fair Market Value equal to the amount of the Tax Related Items, rounded to the nearest share (and the amount of RSUs that are settled for Common Units and Class C Common Stock will be proportionately decreased to account for the settlement of RSUs for shares of Class A Common Stock) (any interest issued upon settlement collectively referred to as a “ Settlement Interest ”), subject in all cases to the terms and conditions set forth herein.

In the event that the number of outstanding Units is changed by a distribution of Units, recapitalization, unit split, reverse Unit split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, then the number of Common Units subject to this Agreement will be proportionately adjusted subject to any required action by the Committee and compliance with applicable securities laws; provided , however , that fractions of a Unit will not be issued but will either be paid in cash at the Fair Market Value of such fraction of a Unit or will be rounded down to the nearest whole Unit, as determined by the Committee.

In the event that the number of outstanding shares of Class C Common Stock of PubCo is changed by a distribution of stock, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, then the number of shares of Class C Common Stock subject to this Agreement will be proportionately adjusted subject to any required action by the Committee and compliance with applicable securities laws; provided , however , that fractions of a share will not be issued but will either be paid in cash at the Fair Market Value of such fraction of a share or will be rounded down to the nearest whole share, as determined by the Board.

The Participant agrees that the RSUs subject to this Agreement are a separate incentive and not in lieu of any salary or other compensation, and that he is not purchasing or making any payment to the Company for his RSUs or for Settlement Interests or other securities or property issued upon settlement of his RSUs.

2. DEFINITIONS .

(a) Definitions . For all purposes of this Agreement, the following definitions apply:

(i) “ Affiliate ” means an Affiliate of the Company.

(ii) “ Board ” means the Board of Directors of PubCo.

(iii) “ Cause ” means, with respect to Participant: (a) Participant’s willful conduct that is materially injurious to the Company or any of its Affiliates (whether monetary or otherwise) or the commission of any other material act or omission involving dishonesty with respect to the Company or any of its Affiliates; (b) Participant’s conviction of a felony or of any misdemeanor involving a crime of moral turpitude; (c) Participant’s fraud, misappropriation of any money, assets, or other property of the Company or any of its Affiliates, embezzlement, or the like; (d) Participant’s insubordination or other willful refusal to comply with any lawful request of the Board, including without limitation failure to cooperate in any investigation conducted and/or undertaken by the Company or any of its Affiliates that has reasonable and legitimate objectives; or (e) Participant’s material breach of any of his obligations, duties, or agreements to the Company or any of its Affiliates, which breach cannot be cured or, if capable of being cured, is not cured within thirty (30) days after receipt of written notice of the need to cure.

(iv) “ Change in Control ” means the occurrence of any one of the following events:

a. Any “person” (as such term is defined in the Securities Exchange Act of 1934 (the “ Exchange Act ”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) becomes, as a result of its or its Affiliate’s acquisition of Company equity securities, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the “ Company Voting Securities ”); provided , however , that the event described in this paragraph (a) shall not be deemed to be a Change in Control by virtue of any acquisitions of Company Voting Securities: (i) by the Company, any Affiliate or any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate; (ii) in connection with an IPO (including by the PubCo or by any underwriter temporarily holding securities being offered in the IPO); (iii) in connection with a statutory conversion of the Company to another form of business entity or Non-Qualifying Transaction as defined in paragraph (b) below; or (iv) by a person who was a Member on the Date of Grant (or is an Affiliate of such a Member) unless with respect to this clause such person and its Affiliates thereby become the “beneficial owner” as defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of at least seventy-five percent (75%) of the Company Voting Securities;

b. The consummation of a merger, consolidation, statutory unit or share exchange or similar form of company transaction involving the Company or any of its Affiliates that requires the approval of the Company’s Members, whether for such transaction or the issuance of securities in the transaction (a “ Business Combination ”), unless immediately following such Business Combination: (i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination (the “ Surviving Entity ”), or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Entity (the “ Parent Entity ”), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by equity securities into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Entity or the Parent Entity) is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting

securities eligible to elect the members of the board of managers or directors of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) and (iii) at least a majority of the members of the board of managers or directors of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) following the consummation of the Business Combination were members of the Board at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “ Non-Qualifying Transaction ”);

c. A sale, conveyance or other disposition (or series of related sales, conveyances and dispositions) of all or substantially all of the assets or business of the Company, including a sale or multiple related sales of the Affiliates of the Company (whether by way of merger, reorganization, consolidation or otherwise) or of all or substantially all of the assets of the Company’s Affiliates which constitute all or substantially all of the consolidated assets of the Company; or

d. The Members of the Company approve a plan of complete liquidation or dissolution of the Company or the consummation of a sale of all or substantially all of the assets of the Company or all or substantially all of the assets of its Affiliates.

(v) “ Code ” means the Internal Revenue Code of 1986, as amended.

(vi) “ Committee ” means the committee appointed by the Board to administer this Agreement, or if no committee is appointed, the Board.

(vii) “ Disability ” means a disability, whether permanent or temporary, as determined by the Committee.

(viii) “ Fair Market Value ” means, as of any date, the value of Common Units or other equity securities issuable hereunder determined as follows: (a) if such Common Unit or such other equity security (including shares of Class A Common Stock or Class C Common Stock), as applicable, is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Unit is listed or admitted to trading as reported by Yahoo.com (or any newspaper or other source as the Board may determine); (b) if such Common Unit or such other equity security (including Class A Common Stock or Class C Common Stock), as applicable, is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported by Yahoo.com (or, if not so reported, as otherwise reported by any newspaper or other source as the Board may determine); or (c) if none of the foregoing is applicable, by the Committee in good faith.

(ix) “ Good Reason ” means occurrence of one or more of the following without Participant’s express written consent: (a) a material diminution by the Company or its Affiliates in Purchaser’s base salary; provided, however, that, a reduction of base salary that (combined with all prior reductions) totals twenty percent (20%) or less and also applies to substantially all other senior executives of the Company or its Affiliates will not constitute “Good Reason”; (b) a material reduction of Participant’s authority, duties, or responsibilities relative to Participant’s authority, duties, or responsibilities in effect immediately prior to such reduction; or (c) the relocation of Participant’s principal work location to a facility or a location more than thirty-five (35) miles from his prior work location. Notwithstanding the preceding sentence, in order for an event to qualify as Good Reason, Participant must not terminate employment with the Company or its Affiliates without first providing

the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within sixty (60) days of the initial existence of the grounds for “Good Reason” and a reasonable cure period of thirty (30) days following the date of written notice (the “Cure Period”), and Participant must resign within thirty (30) days following the end of the Cure Period if such conditions are not cured.

(x) “ IPO ” means the first sale of the PubCo’s Class A Common Stock to the general public pursuant to a registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”).

(xi) “ IPO Lockup Agreement ” means with respect to any IPO, any agreement between the underwriters of the public offering, PubCo, and persons who immediately prior to the IPO hold equity securities of PubCo or the Company, restricting the sale or disposition of such equity securities (or the IPO transaction-related proceeds thereof) for a defined period following the effective date of the IPO or related registration statement.

(xii) “ IPO Lockup Period ” means any period following an IPO not in excess of 220 days from the effective date of the IPO, as determined by the Committee, during which an IPO Lockup Agreement or the Securities and Exchange Commission Rule 144 restricts the free transferability of Common Units or other equity securities of the Company, PubCo or other applicable issuer

(xiii) “ Initial Vesting Date ” means (A) the effective date of the first Liquidity Event occurring after the RSU Grant Date, or if later (B) the date the Participant completes a Year of Vesting Service.

(xiv) “ Liquidity Event ” means the first of the following events to occur after the RSU Grant Date: (A) a Change in Control; or (B) an IPO with respect to the PubCo and the expiration following such IPO of any IPO Lockup Period resulting from or associated with the IPO. For clarity, in the event of an IPO but no Change in Control, the Liquidity Event and Initial Vesting Date shall not be deemed to occur earlier than the date any IPO Lockup Period resulting from or associated with the IPO expires.

(xv) “ Member ” means a “Member” of the company as defined in the LLC Agreement (or in the event the Company becomes a corporation, “Member” shall mean a shareholder in that corporation).

(xvi) “ Quarter of Additional Vesting Service ” means each additional full three (3) month elapsed, non-overlapping period of continuing service by the Participant as an employee or consultant of the Company or any Affiliate following the Participant’s completion of a Year of Vesting Service. For example, if a Participant completes 19 months of continuous employment with the Company or any Affiliate following his Vesting Start Date, he would have two Quarters of Additional Vesting Service beyond his or her first Year of Vesting Service (one such Quarter of Additional Vesting Service at the 15 month anniversary of the Vesting Start Date and a second at the 18 month anniversary of the Vesting Start Date).

(xvii) “ Subsequent Vesting Dates ” means each three (3) month anniversary of the Vesting Start Date that follows the Initial Vesting Date and occurs on or prior to the fourth (4th) anniversary of the Vesting Start Date, if any.

(xviii) “ Termination ” means with respect to a Participant, that the Participant for any reason, whether voluntarily or involuntarily, has ceased to provide services as an employee, officer, manager, director or consultant to the Company or any Affiliate. For greater certainty, “Termination” includes cessation of a Participant’s employment or consulting engagement with the Company or any

Affiliate as a result of the Participant’s death, Disability, resignation, expiration of a stated term of engagement, or discharge with or without cause. Participant will not be deemed to have ceased to provide services in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee, provided that such leave is for a period of not more than ninety (90) days (a) unless reinstatement upon the expiration of such leave is guaranteed by contract or statute, or (b) unless provided otherwise pursuant to formal policy adopted from time to time by the Board and issued and promulgated in writing. In the case Participant is on (i) sick leave, (ii) military leave or (iii) an approved leave of absence, the Committee may make such provisions respecting suspension of vesting of the Award while on leave from the Company or any Affiliate as it may deem appropriate, except that in no event may an Option be exercised after the expiration of the term set forth in this Agreement.

(xix) “ Unvested RSUs ” means as of any date the portion of the RSUs that have not yet vested under Section 3.

(xx) “ Vested RSUs ” means as of any date the portion of the RSUs that have vested under this Section 3 on or before such date.

(xxi) “ Vesting Start Date ” means the date listed as the Vesting Start Date on the first page of this Agreement.

(xxii) “ Year of Vesting Service ” means a full 365-day continuous period, measured from the Participant’s applicable Vesting Start Date listed above, during which the Participant remains an employee or consultant of the Company or any Affiliate. The Participant will not be credited with a Year of Vesting Service if such Participant experiences a Termination for any reason prior to the first anniversary of the Vesting Start Date.

3. VESTING; SETTLEMENT AND EXPIRATION .

(a) General . This Section 3 governs the vesting, settlement and expiration of RSUs awarded under this Agreement. As described below, the Participant will receive a benefit with respect to his RSUs only if and to the extent the RSUs vest. Two requirements must be satisfied on or before the seventh anniversary of the RSU Grant Date (the “ Expiration Date ”) for the RSUs to vest in whole or in part. First, a Liquidity Event as described below must occur prior to the Expiration Date. Second, the Participant must meet certain time and continuing service-based requirements described below. The RSUs will not vest (in whole or in part) if only one (or if neither) of such vesting requirements is satisfied on or before the applicable Expiration Date.

(b) Vesting Terms . The RSUs covered by this Agreement shall vest (i.e., become Vested RSUs) in installments in accordance with the following vesting terms and schedule:

(i) Prior to the Initial Vesting Date, none of the RSUs shall be Vested RSUs;

(ii) As of the Initial Vesting Date (which requires both the occurrence of a Liquidity Event prior to the Expiration Date and the Participant’s completion of at least a one Year of Vesting Service), the Participant shall vest in 25% of the RSUs covered by this Agreement plus an additional 6.25% of the RSUs covered by this Agreement for each full Quarter of Additional Vesting Service that the Participant has completed on or before the Initial Vesting Date; provided the Participant’s Termination has not occurred prior to that Initial Vesting Date; and

(iii) As of any Subsequent Vesting Date following the Initial Vesting Date, the Participant shall vest in an additional 6.25% of his or her RSUs covered by this Agreement; provided the Participant’s Termination has not occurred prior to that Subsequent Vesting Date.

For avoidance of uncertainty, the above provisions are intended to result in time and continuous service-based vesting (subject to the additional vesting requirement of a Liquidity Event) equal to 25% on the first

anniversary of the Vesting Start Date and an additional 6.25% on each subsequent three-month anniversary of the Vesting Start Date; provided the Participant’s Termination has not occurred prior to the applicable vesting date. The Participant shall not vest further in any RSUs after his Termination and the Participant’s Vested RSUs under this Agreement shall never exceed 100% of the total RSUs subject to this Agreement. If application of a vesting percentage would cause vesting of a fractional RSU, then such vesting shall be rounded down to the nearest whole RSU and shall cumulate with any other fractional RSUs and such fractions shall vest as they aggregate into a whole RSU.

(c) Settlement . Subject to adjustments on account of certain Tax-Related Items (as described in Section 11 below) resulting from vesting or settlement and payment of his Vested RSUs, the Vested RSUs shall be settled as follows:

(i) The portion of the Participant’s RSUs that vests as of the Initial Vesting Date or any Subsequent Vesting Date, as applicable, shall be cancelled and settled (i.e., paid by the Company or a Company-designated Affiliate that employs the Participant and has assumed the Company’s payment obligation) in Settlement Interests. Payment shall be made on such date or dates following the occurrence of the Initial Vesting Date or Subsequent Vesting Date, as applicable, as are determined by the Committee in its discretion, but in no event will settlement and payment of any portion of the RSUs be made later than March 15 following the calendar year of the Initial Vesting Date or Subsequent Vesting Date applicable to such portion of the RSUs (each, a “ Settlement Date ”).

(ii) Settlement means the issuance and delivery to the Participant on a Settlement Date of such number of Settlement Interests as is equal to the number of such RSUs that vested on the Initial Vesting Date or Subsequent Vesting Date, as applicable (i.e., one Settlement Interest for each such Vested RSU).

(iii) The portion of the Settlement Interests relating to the issuance of Class A Common Stock and/or Class C Common Stock on any Settlement Date shall be paid by Participant in services rendered to the Company or any Company-designated Affiliate that employs the Participant.

(iv) For greater certainty, once any Vested RSU has been settled, it shall be cancelled and no further payment shall be due with respect to such Vested RSU.

4. EFFECT OF TERMINATION; NO RIGHT TO CONTINUING EMPLOYMENT .

(a) Upon Participant’s Termination for any reason prior to the Initial Vesting Date, all of Participant’s RSUs shall be immediately and automatically forfeited and terminated, subject to Section 4(f).

(b) Upon Participant’s Termination for any reason after the Initial Vesting Date, all then-Unvested RSUs as of the applicable Termination Date shall be immediately and automatically forfeited and terminated, subject to Section 4(f). Notwithstanding the foregoing, upon Participant’s Termination by the Company without Cause (other than due to Participant’s death or disability) or due to Participant’s resignation for Good Reason, then Participant shall be deemed as of the applicable termination date to have fully satisfied any remaining time and service-based vesting requirement with respect to any then-Unvested RSUs.

(c) Any provision in this Agreement to the contrary notwithstanding, upon Participant’s Termination at any time for Cause, he shall immediately and automatically forfeit without any right to further payment all of his RSUs, whether or not such RSUs are otherwise Vested RSUs or Unvested RSUs.

(d) For all purposes under this Agreement, in case of any dispute as to whether Participant’s Termination has occurred, the Board shall have sole discretion to determine whether Termination has occurred, the effective date of such Termination and whether such Termination was for Cause or Good Reason.

(e) Participant agrees that his employment or consulting relationship with the Company or its Affiliates, as applicable, is for an unspecified duration, can be terminated at any time (i.e., is “at-will”), and that nothing in this Agreement changes the at-will nature of that relationship. Participant acknowledges that the vesting of the RSUs pursuant to this Agreement is conditioned on Participant’s continuous employment or consulting service to the Company or its Affiliates through the Initial Vesting Date or a Subsequent Vesting Date, as applicable. The Company’s grant of RSUs to Participants who are employees of its Affiliates (but not otherwise employees of the Company) does not create or evidence an employment relationship between the Company and such Participants or otherwise render such Participants employees of the Company.

(f) Upon Participant’s death, Participant’s then-Unvested RSUs will accelerate and fully vest; provided that the aggregate Fair Market Value (as such term is defined in the Pluralsight, Inc. 2018 Equity Incentive Plan, as amended (the “ 2018 Plan ”) of the Unvested RSUs that may accelerate and fully vest pursuant to this Section 4(f) and the shares and other securities covered by Pluralsight, Inc. equity awards issued under other equity plans and arrangements that may accelerate and fully vest pursuant to comparable provisions in such other equity plans and arrangements (collectively, the “ Eligible Awards ”) may not exceed $3,000,000 in the aggregate (the “ Death Benefit Limit ”). The order in which Eligible Awards will accelerate and vest up to the Death Benefit Limit will be determined as follows: (a) Eligible Awards will accelerate and apply toward the Death Benefit Limit based on their class (determined in reverse alphabetical order) and then in the following order: (1) Restricted Stock, (2) Restricted Stock Units, and (3) Stock Options and Stock Appreciation Rights (as such terms are defined in the 2018 Plan), and (b) with respect to Eligible Awards of the same class, awards with an earlier date of grant will accelerate and apply toward the Death Benefit Limit prior to Eligible Awards with a later date of grant. If two or more Eligible Awards are granted on the same date, each Eligible Award will accelerate and vest on a pro-rata basis. For the avoidance of doubt, the acceleration described in this Section 4(f) does not apply to any Eligible Awards with performance-based vesting. For purposes of the ordering rules in this Section 4(f), Unvested RSUs will constitute Restricted Stock Units. Notwithstanding anything in this Section 4(f) to the contrary, in the event a Participant’s death results from a suicide, the acceleration and vesting described in this Section 4(f) will be solely at the Company’s discretion and will not occur automatically.

5. MEMBER RIGHTS IN SETTLEMENT INTERESTS; NATURE OF AWARD .

(a) Unless and until such time as Settlement Interests are issued in settlement of Vested RSUs, Participant shall have no ownership of the Settlement Interests underlying and allocated to the RSUs and shall have no right to distributions with respect to such Settlement Interests or other right as a Member of the Company with respect to such Settlement Interests; provided, the Participant shall have the voting rights with respect to the RSUs (and, following settlement, the Settlement Interests) as forth in the LLC Agreement. The RSUs do not represent or constitute any actual membership or equity interest in the Company. Rather they represent a mere unfunded contingent contractual right to receive Settlement Interests or other securities or cash in the future upon settlement of the RSUs subject to certain vesting and other terms and conditions. Therefore, cash or other distributions by the Company, if any, with respect to its Settlement Interests shall not be credited to Participant with respect to his or her RSUs.

(b) The Participant agrees and acknowledges that (i) the grant of the RSUs is voluntary and occasional and does not create any contractual or other right to receive future RSUs or benefits in lieu of RSUs; (ii) he is voluntarily participating in the Agreement; (iii) the Award of RSUs is an extraordinary item and are outside the scope of the Participant’s employment or other services agreement, if any; (iv) the RSUs are not intended to replace any pension rights or compensation and are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or its Affiliates; (v) the current and future values of the RSUs and underlying Settlement Interests are unknown and cannot be predicted with certainty, and neither the Company nor its Affiliates or any other person has made any representation to the Participant as to such current or future values; and (vi) neither the Company, nor any Affiliate is responsible for any foreign exchange fluctuation between local currency and the United States Dollar that may affect the value of RSUs or Settlement Interests issued in settlement of RSUs.

6. NO TRANSFER OF RSUs; REDEMPTION/EXCHANGE OF SETTLEMENT INTERESTS . The RSUs and any interest therein shall not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of, other than by will or by the laws of descent and distribution, and any such sale, transfer or other disposition shall be null and void. Notwithstanding the foregoing, Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of Participant and receive any property distributable with respect to the RSUs following the death of Participant. Any transferee who receives an interest in the RSUs or the underlying Settlement Interests upon the death of Participant shall acknowledge in writing that the RSUs shall continue to be subject to the restrictions set forth in this Section 6 and the restrictions in the LLC Agreement. The Settlement Interests are subject to the transfer, redemption and exchange provisions set forth in Articles X or XI of the LLC Agreement, as applicable.

7. ACKNOWLEDGEMENT . The Company and Participant agree that the RSUs are granted under and governed by this Agreement and the provisions of the LLC Agreement (which is hereby incorporated herein by reference) and that any Settlement Interests issued in settlement of the RSUs will be subject to the provisions of the Company’s LLC Agreement (including, without limitations, the redemption provisions set forth in Article XI of the LLC Agreement) and certificate of formation of the Company (or if the Company becomes a corporation, such corporation’s articles or certificates of incorporation, bylaws and shareholders’ agreement if any) as amended from time to time or PubCo’s corporation’s articles or certificates of incorporation, bylaws and shareholders’ agreement, if any (as applicable, the “ Governance Documents ”). Participant: (i) acknowledges being provided access to a copy of the Governance Documents, (ii) represents that Participant has carefully read and is familiar with the Governance Documents, and (iii) hereby accepts the RSUs subject to all of the terms and conditions set forth herein and in the Governance Documents.

8. [INTENTIONALLY OMITTED].

9. CHANGE IN CONTROL TRANSACTIONS .

(a) In the event of a Change in Control of the Company, any or all outstanding RSUs may be assumed, converted or replaced by the successor or acquiring entity (if any), which assumption, conversion or replacement will be binding on Participant. In the alternative, the successor or acquiring entity may substitute equivalent awards or provide substantially similar consideration to Participant as was provided to equity holders of the Company (after taking into account the existing provisions of the RSUs). In connection with any such assumption, conversion, substitution or replacement of RSUs, the Committee may in its discretion, and subject to such terms and conditions as it determines, provide for the accelerated vesting and/or payment of all or a portion of such RSU immediately prior to such assumption, replacement, conversion or substitution. Notwithstanding any provision herein to the contrary, no assumption, conversion, replacement or substitution of RSUs shall occur if such action would result in the RSUs violating any applicable requirement of Section 409A of the Code (“Section 409A”).

(b) In the event of a Change in Control transaction in which the successor or acquiring entity (if any) does not assume, convert, replace or substitute the RSUs, as provided in Section 9(a) above, then the vesting and/or payment of the RSUs will accelerate immediately prior to the consummation of such Change in Control event to the extent, if any, (i) that this Agreement provides for such accelerated vesting, exercisability or payment, in whole or in part; and (ii) to the extent if any (and on such additional terms and conditions) as the Committee in its discretion may determine.

(c) Any provision in this Agreement to the contrary notwithstanding, in connection with a Change in Control, the Committee may in its discretion determine that, in connection with and contingent upon the occurrence of a Change in Control of the Company: (a) each RSU outstanding immediately prior to the Change in Control shall vest immediately prior to the effective time of the Change in Control transaction, and (b) Participant shall receive in full payment for his or her Vested RSUs, with respect to each Settlement Interest subject to such Vested RSUs, an amount equal to the Fair Market Value of such Settlement Interest immediately prior to the occurrence of such Change in Control (such amount to be paid in Common Units, or in one or more other kinds of equity securities or property (other than cash), including the securities or property, if any, payable in the transaction, or in a combination thereof, as the Committee, in its discretion, shall determine).

(d) Other Treatment . Subject to any greater rights granted to Participants under the foregoing provisions of this Section 9, in the event of the occurrence of any Change in Control transaction, any outstanding RSUs will be treated as provided in the applicable agreement or plan of sale of securities, reorganization, merger, consolidation, dissolution, liquidation or sale of assets.

10. GOVERNANCE DOCUMENTS; OTHER INSTRUMENTS .

(a) Participant agrees that he shall be bound by the Governance Documents with respect to all Settlement Interests issued in settlement of RSUs or otherwise acquired and held by the Participant.

(b) Upon and in connection with the issuance of Settlement Interests in settlement of the Participant’s RSUs, the Participant shall promptly execute and deliver to the Company such form of joinder or other instrument as the Company reasonably requests evidencing the Participant’s agreement to be bound as a Member by the Company’s Governance Documents. Such joinder or other instrument shall be in form and on terms reasonably satisfactory to the Company.

11. WITHHOLDING TAX .

(a) Notwithstanding anything to the contrary in this Agreement, the Company, its Affiliates or their respective agents shall be entitled to satisfy all required tax withholding and related tax items with respect to the RSUs (collectively “ Tax Related Items ”) by one or a combination of the following as determined by the Committee: (i) withholding from the Participant’s wages or other cash compensation paid to the Participant by the Corporation and/or its Affiliates; or (ii) settling a portion of the vested RSUs in shares of Class A Common Stock with a Fair Market Value equal to the amount of the applicable Tax Related Items, and selling such shares of Class A Common Stock on Participant’s behalf at the prevailing market price pursuant to such procedures as the Company may specify from time to time, including through a broker-assisted arrangement (the “ Sell-to-Cover Method ”), with the proceeds from the Sell-to-Cover Method used to satisfy Participant’s Tax Related Items arising with respect to the RSUs and any associated broker or other fees; or (iii) withholding Settlement Interests or other securities to be issued upon settlement of the RSUs (or any securities converted therefrom, including Class A Common Stock). Unless otherwise determined by the Committee, the Tax Related Items shall be satisfied through the method prescribed under clause (ii) of this paragraph. If the Committee determines that the Tax Related Items shall not be satisfied through the method prescribed under clause (ii) of this paragraph, but does not designate one of the above withholding tax payment methods, the Participant shall instead remit to the Company or its designated Affiliate, as applicable, cash in the amount of any required withholding taxes and other Tax Related Items.

(b) Depending on the withholding method, the Company or its Affiliates may withhold or account for Tax Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case the Participant will receive a refund of any over-withheld amount in cash and will have no entitlement to the Unit equivalent. If the obligation for Tax Related Items is satisfied through the mechanism described in clause (iii) in the paragraph above, for tax purposes, the Participant is deemed to have been issued the full number of Settlement Interests subject to the vested RSUs, notwithstanding that a number of Settlement Interests are held back solely for the purpose of paying the Tax Related Items.

(c) Finally, the Participant agrees to pay to the Company or its Affiliates any amount of Tax Related Items that they may be required to withhold or account for as a result of the Participant’s RSUs that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Settlement Interests or the proceeds of the sale of Settlement Interests (or any securities converted therefrom, including Class A Common Stock), if the Participant fails to comply with his obligations in connection with the Tax Related Items.

12. TAX CONSEQUENCES .

(a) THE PARTICIPANT REPRESENTS AND AGREES: (I) THAT THE PARTICIPANT HAS CONSULTED WITH SUCH PERSONAL TAX ADVISERS AS THE PARTICIPANT DEEMS ADVISABLE IN

CONNECTION WITH THE RSUs AND SETTLEMENT INTERESTS AND (II) THAT THE PARTICIPANT IS NOT RELYING ON THE COMPANY, ITS AFFILIATES OR THEIR COUNSEL FOR ANY TAX ADVICE.

(b) The Participant further acknowledges and agrees that, regardless of any action taken by the Company or its Affiliates with respect to Tax-Related Items, Participant remains responsible for all taxes and tax-related interest, penalties and expense that may apply to Participant with respect to the RSUs and such liability may exceed the amount of tax withholding actually withheld by the Company or its Affiliates. The Participant further acknowledges that the Company and its Affiliates have made no and make no representations or undertakings regarding the tax treatment of RSUs or Settlement Interests, including, but not limited to, the tax treatment of grant, vesting or settlement of the RSUs, the subsequent sale of Settlement Interests acquired pursuant to such settlement.

(c) The Participant agrees that neither the Company, its Affiliates nor any of their members, managers, directors, officers, employees or agents shall have any obligation or liability to indemnify, reimburse, gross-up or otherwise compensate the Participant for any taxes or tax-related costs relating to or arising from the grant, vesting or settlement of RSUs or holding or disposition of Settlement Interests acquired through settlement of RSUs. Participant acknowledges that there will be tax consequences upon vesting and/or settlement of the RSUs and/or disposition of the Settlement Interests, if any, received in connection therewith, and Participant should consult a tax adviser regarding Participant’s tax obligations prior to such settlement or disposition.

(d) For purposes of this Agreement, a Termination will be determined consistent with the rules relating to a “separation from service” as defined in Section 409A and the regulations thereunder. To the extent any payment under this Agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Notwithstanding anything else provided herein, to the extent any payment provided under this Agreement in connection with Participant’s termination of employment (i) does not constitute a “short-term deferral” under (and is not otherwise exempt from) Section 409A and (ii) constitutes nonqualified deferred compensation subject to Section 409A, if Participant is deemed at the time of such termination of employment to be a “specified employee” under Section 409A, then such payment shall not be made or commence until the earlier of (A) the expiration of the 6-month period measured from Participant’s separation from service from the Company, or (B) the date of Participant’s death following such a separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Participant including, without limitation, the additional tax for which Participant would otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral. The first payment thereof will include a catch-up payment covering the amount that would have otherwise been paid during the period between Participant’s termination of employment and the first payment date but for the application of this provision, and the balance of the installments (if any) will be payable in accordance with their original schedule. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision will be read in such a manner so that all payments hereunder are exempt from or comply with Section 409A. Payments pursuant to this section are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

13. COMPLIANCE WITH LAWS . The issuance of Settlement Interests or any other securities hereunder will be subject to and conditioned upon compliance by the Company and Participant (including any written representations, warranties and agreements as the Administrator may request of Participant for compliance with Applicable Laws) with all applicable federal, state and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which Class A Common Stock may be listed or quoted at the time of such issuance or transfer.

14. LEGENDS ON CERTIFICATES . Any certificates representing Settlement Interests issued in settlement of RSUs shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under this Agreement or the rules, regulations, and other requirements of the SEC, any stock exchange upon which PubCo’s securities are listed, and any applicable federal, state or foreign laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. The Committee may also cause such certificates to contain customary or other appropriate legends referencing the restrictions on

Transfer of Settlement Interests hereunder and under the Governance Documents. Without limiting the foregoing, such legends shall include:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

THE SETTLEMENT INTERESTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON PUBLIC RESALE AND TRANSFER, AS SET FORTH IN AN AWARD AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SETTLEMENT INTERESTS AND THE ISSUER’S OR PUBCO’S GOVERNANCE DOCUMENTS COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SETTLEMENT INTERSTS (OR ANY SECURITIES CONVERTED THEREFROM).

15. SUCCESSORS AND ASSIGNS . The Company may assign any of its rights and obligations under this Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon Participant and Participant’s heirs, executors, administrators, legal representatives, successors and assigns.

16. ENTIRE AGREEMENT; SEVERABILITY . The LLC Agreement is incorporated herein by reference. The LLC Agreement, this Agreement, and the Governance Documents constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof (including, without limitation, any commitment to make any other form of equity award that may have been set forth in any employment offer letter or other agreement between the parties). If any provision of this Agreement is determined by a court of law to be illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

17. GOVERNING LAW . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware as such laws are applied to agreements between Delaware residents entered into and to be performed entirely within Delaware. If any provision of this Agreement is determined by a court of law to be illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

18. ACCEPTANCE AND CONFIDENTIALITY . Participant hereby acknowledges receipt of a copy of the LLC Agreement and this Agreement. Participant has read and understands the terms and provisions thereof, and accepts the RSUs subject to all the terms and conditions this Agreement. Participant agrees to hold in the strictest confidence and not disclose or provide to any other person (other than Participant’s spouse and Participant’s professional advisors who are under an obligation of confidentiality not to disclose such items) the terms and conditions of his or her RSU Award and this Award Agreement, the Company’s Governance Documents or any summaries, financial statements or other disclosure materials made available to the Participant in connection with his or her RSUs. Intentional violation of the foregoing duty of confidentiality shall constitute grounds for Termination for Cause.

19. FURTHER ASSURANCES . The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

20. TITLES AND HEADINGS . The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

21. COUNTERPARTS . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

22. FACSIMILE AND ELECTRONIC SIGNATURES; CONSENT TO ELECTRONIC DELIVERY . This Agreement may be executed and delivered by facsimile or electronic mail and upon such delivery the facsimile or electronic mail signature will be deemed to have the same effect as if the original signature had been delivered to the other party. This Agreement and the Governance Documents, summaries and prospectus, and financial reports of the Company, or other communications or information related to the RSUs and Settlement Interests issued under this Agreement may be delivered to the Participant electronically. Electronic delivery may include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the RSU award, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. By Participant’s acceptance of this Agreement, Participant consents to the electronic delivery of all documents, award agreements, statements and SEC-mandated disclosures in connection with the RSUs. Participant acknowledges that Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service or electronic mail at legal@pluralsight.com. Participant further acknowledges that Participant will be provided with a paper copy of any documents delivered electronically if electronic delivery fails; similarly, Participant understands that Participant must provide the Company or any designated third party with a paper copy of any documents delivered electronically by Participant or on Participant’s behalf on request if electronic delivery fails. Also, Participant understands that Participant’s consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered (if Participant has provided an electronic mail address), at any time by notifying the Company of such revised or revoked consent by telephone, postal service or electronic mail at legal@pluralsight.com. Finally, Participant understands that Participant is not required to consent to electronic delivery.

23. DISPUTE RESOLUTION . With respect to any future claim, dispute, suit, or action connected with, relating to, or otherwise arising under or with respect to this Agreement, each of the Company and Participant expressly and irrevocably: (a) consents, submits, and subjects himself and any such claim, suit, dispute, or action to the exclusive personal and subject matter jurisdiction of the United States District Court for the District of Utah and the Utah state courts located in Salt Lake County, Utah (“Utah Courts”); (b) agrees that the Utah Courts shall have exclusive personal and subject matter jurisdiction over all such claims, disputes, suits, and actions and that venue properly lies in such Utah Courts as to any such claim, dispute, suit, or action; (c) waives any objection to venue, subject matter jurisdiction, and personal jurisdiction in the Utah Courts; (d) covenants and agrees not to plead or assert any such objection; and (e) consents to service of process by first class mail to his or her most recent address as set forth in the books and records of the Company or any Affiliate. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY AND PARTICIPANT HEREBY IRREVOCABLY WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY LAWSUIT, CAUSE OF ACTION, OR DISPUTE ARISING UNDER THIS AGREEMENT. Each party to any dispute relating to this Agreement shall pay and bear its own attorney’s fees and costs in connection with such dispute.

24. DATA PRIVACY . The Participant consents to the collection, use and transfer, in electronic or other form, of the Participant’s personal data described in this Agreement by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing the Participant’s RSU award.

The Participant understands that the Company and its Affiliates may hold certain personal information about the Participant, including, but not limited to, his or her name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any equity interests or positions held in the Company or any Affiliate, details of all Awards or any other entitlement to Settlement Interests awarded, canceled, exercised, vested, unvested or outstanding in the Participant’s favor, for the exclusive purpose of implementing, administering and managing this Agreement (“ Personal Data ”).

The Participant understands that Personal Data may be transferred to any third parties assisting in the implementation, administration and management of the RSU award, that these recipients may be located in the United States, the Participant’s home country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Participant’s country. The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Personal Data by contacting the Participant’s local human resources representative. The Participant authorizes the recipients to receive, possess, use, retain and transfer the Personal Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s RSUs, including any requisite transfer of such Personal Data as may be required to a broker or other third party with whom the Participant may elect to deposit any Settlement Interests received upon vesting of the RSUs. The Participant understands that Personal Data will be held only as long as is necessary to implement, administer and manage the Participant’s RSUs. The Participant understands that he or she may, at any time, view Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw the consents herein, without cost, by contacting in writing the Participant’s local human resources representative. The Participant understands that refusal or withdrawal of consent may affect the Participant’s ability to realize benefits from the RSUs. For more information on the consequences of the Participant’s refusal to consent or withdrawal of consent, the Participant understands that he or she may contact his or her local human resources representative.

25. ADDITIONAL FOREIGN LAW PROVISIONS . Notwithstanding any provisions in this Agreement, the RSUs shall be subject to any special terms and conditions set forth in Appendix A attached to this Agreement (“Appendix A”) for the Participant’s country of residence. Moreover, if the Participant relocates to one of the countries included in Appendix A, the special terms and conditions for such country will apply to the Participant, to the extent Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the RSUs. As stated above, Appendix A constitutes part of this Agreement.

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IN WITNESS WHEREOF, the Company has caused this Third Amended and Restated Restricted Share Unit Agreement to be executed by its duly authorized representative and the Participant has executed this Third Amended and Restated Restricted Share Unit Agreement.

PLURALSIGHT HOLDINGS, LLC PARTICIPANT

By: By:

Name: James Budge

Title: Chief Financial Officer Address:

Date: Date:

PLURALSIGHT, INC.

By:

Name: James Budge

Title: Chief Financial Officer

Date:

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Aaron Skonnard, certify that:



1.	I have reviewed this Quarterly Report on Form 10-Q of Pluralsight, Inc.;



2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:



	a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



	b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



	c.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;



5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):



	a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and



	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF

THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James Budge, certify that:



1.	I have reviewed this Quarterly Report on Form 10-Q of Pluralsight, Inc.;



2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:



	a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



	b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



	c.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;



5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):



	a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and



	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Aaron Skonnard, Chief Executive Officer of Pluralsight, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:



	1.	the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended June 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and



	2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, James Budge, Chief Financial Officer of Pluralsight, Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:



	1.	the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended June 30, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and



	2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.