According to the Complaint, Pluralsight utilizes a subscription-based business model known as “software as a service” (“SaaS”), whereby the Company’s software is licensed to users on a subscription basis. Pluralsight generates substantially all of its revenue based on these subscriptions. To drive revenue growth, Pluralsight relies on its large direct sales force which sells subscriptions to business and enterprise users. Pluralsight utilizes a metric known as “billings” as a primary measure of growth, which it defines as total revenue for a period, plus the change in deferred revenue based on the subscription period.

The Complaint alleges that throughout the Class Period, Pluralsight misrepresented the Company’s business outlook, particularly related to the Company’s salesforce and its ability to generate strong growth in billings. Specifically, the Complaint alleges that the Company failed to disclose that Pluralsight was experiencing substantial delays in hiring and properly training the salesforce necessary to meet its lofty billing projections.