Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 21, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 000-25131 | ||
Entity Registrant Name | Avantax, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 91-1718107 | ||
Entity Address, Address Line One | 3200 Olympus Blvd, Suite 100 | ||
Entity Address, City or Town | Dallas | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75019 | ||
City Area Code | 972 | ||
Local Phone Number | 870-6400 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | AVTA | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 870.4 | ||
Entity Common Stock, Shares Outstanding (in shares) | 47,861,156 | ||
Documents Incorporated by Reference | Portions of the Proxy Statement for the registrant’s 2023 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal year ended December 31, 2022, are incorporated by reference in Part III hereof. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part hereof. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001068875 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Dallas, Texas |
Auditor Firm ID | 42 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 263,928 | $ 100,629 |
Accounts receivable, net | 24,117 | 21,214 |
Commissions and advisory fees receivable | 20,679 | 25,073 |
Prepaid expenses and other current assets | 15,027 | 11,731 |
Current assets of discontinued operations | 0 | 41,632 |
Total current assets | 323,751 | 200,279 |
Long-term assets: | ||
Property, equipment, and software, net | 53,041 | 50,040 |
Right-of-use assets, net | 19,361 | 20,466 |
Goodwill, net | 266,279 | 266,279 |
Acquired intangible assets, net | 266,002 | 282,789 |
Other long-term assets | 35,081 | 20,414 |
Long-term assets of discontinued operations | 0 | 231,676 |
Total long-term assets | 639,764 | 871,664 |
Total assets | 963,515 | 1,071,943 |
Current liabilities: | ||
Accounts payable | 7,531 | 6,493 |
Commissions and advisory fees payable | 13,829 | 17,940 |
Accrued expenses and other current liabilities | 111,212 | 55,658 |
Current deferred revenue | 4,583 | 4,792 |
Current lease liabilities | 5,139 | 4,896 |
Current portion of long-term debt | 0 | 1,812 |
Current liabilities of discontinued operations | 0 | 20,131 |
Total current liabilities | 142,294 | 111,722 |
Long-term liabilities: | ||
Long-term debt, net | 0 | 553,134 |
Long-term lease liabilities | 30,332 | 33,267 |
Deferred tax liabilities, net | 20,819 | 19,124 |
Long-term deferred revenue | 4,396 | 5,322 |
Other long-term liabilities | 22,476 | 6,752 |
Long-term liabilities of discontinued operations | 0 | 1,000 |
Total long-term liabilities | 78,023 | 618,599 |
Total liabilities | 220,317 | 730,321 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common stock, par value $0.0001 per share—900,000 shares authorized; 51,260 shares issued and 48,079 shares outstanding as of December 31, 2022; 50,137 shares issued and 48,831 shares outstanding as of December 31, 2021 | 5 | 5 |
Additional paid-in capital | 1,636,134 | 1,619,805 |
Accumulated deficit | (829,542) | (1,249,789) |
Treasury stock, at cost—3,181 shares as of December 31, 2022 and 1,306 shares as of December 31, 2021 | (63,399) | (28,399) |
Total stockholders’ equity | 743,198 | 341,622 |
Total liabilities and stockholders’ equity | $ 963,515 | $ 1,071,943 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par or stated value per share (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock, shares issued (in shares) | 51,260,000 | 50,137,000 |
Common stock, shares outstanding (in shares) | 48,079,000 | 48,831,000 |
Treasury stock (in shares) | 3,181,000 | 1,306,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue | $ 666,496 | $ 658,213 | $ 546,189 |
Operating expenses: | |||
Cost of revenue | 444,918 | 466,464 | 388,063 |
Engineering and technology | 8,701 | 8,190 | 5,743 |
Sales and marketing | 97,914 | 84,828 | 65,979 |
General and administrative | 92,755 | 81,668 | 69,836 |
Acquisition and integration | (4,186) | 32,798 | 31,085 |
Depreciation | 11,882 | 8,987 | 6,823 |
Amortization of acquired intangible assets | 25,850 | 28,320 | 29,745 |
Impairment of goodwill | 0 | 0 | 270,625 |
Total operating expenses | 677,834 | 711,255 | 867,899 |
Operating loss from continuing operations | (11,338) | (53,042) | (321,710) |
Interest expense and other, net | (475) | (422) | (4,670) |
Loss from continuing operations before income taxes | (11,813) | (53,464) | (326,380) |
Income tax benefit (expense) | 14,934 | 9,959 | (41,665) |
Income (loss) from continuing operations | 3,121 | (43,505) | (368,045) |
Discontinued operations (Note 3) | |||
Income from discontinued operations before gain on disposal and income taxes | 52,492 | 52,003 | 25,956 |
Pre-tax gain on disposal | 472,237 | 0 | 0 |
Income from discontinued operations before income taxes | 524,729 | 52,003 | 25,956 |
Income tax benefit (expense) | (107,603) | (741) | (666) |
Income from discontinued operations | 417,126 | 51,262 | 25,290 |
Net income (loss) | $ 420,247 | $ 7,757 | $ (342,755) |
Basic net income (loss) per share: | |||
Continuing operations (in USD per share) | $ 0.07 | $ (0.90) | $ (7.67) |
Discontinued operations (in USD per share) | 8.69 | 1.06 | 0.53 |
Basic net income (loss) per share (in USD per share) | 8.76 | 0.16 | (7.14) |
Diluted net income (loss) per share: | |||
Continuing operations (in USD per share) | 0.06 | (0.90) | (7.67) |
Discontinued operations (in USD per share) | 8.48 | 1.06 | 0.53 |
Diluted net income (loss) per share (in USD per share) | $ 8.54 | $ 0.16 | $ (7.14) |
Weighted average shares outstanding: | |||
Basic (in shares) | 47,994 | 48,578 | 47,978 |
Diluted (in shares) | 49,183 | 48,578 | 47,978 |
Comprehensive income (loss): | |||
Net income (loss) | $ 420,247 | $ 7,757 | $ (342,755) |
Other comprehensive income, net of income taxes | 0 | 0 | 272 |
Comprehensive income (loss) | $ 420,247 | $ 7,757 | $ (342,483) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Treasury stock |
Beginning balance (in shares) at Dec. 31, 2019 | 49,059 | |||||
Beginning balance at Dec. 31, 2019 | $ 643,515 | $ 5 | $ 1,586,972 | $ (914,791) | $ (272) | $ (28,399) |
Beginning balance (in shares) at Dec. 31, 2019 | 1,306 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan (in shares) | 424 | |||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan | 2,355 | 2,355 | ||||
Foreign currency translation adjustment | 272 | 272 | ||||
Stock-based compensation | 10,066 | 10,066 | ||||
Tax payments from shares withheld for equity awards | (1,163) | (1,163) | ||||
Net income (loss) | (342,755) | (342,755) | ||||
Ending balance (in shares) at Dec. 31, 2020 | 49,483 | |||||
Ending balance at Dec. 31, 2020 | 312,290 | $ 5 | 1,598,230 | (1,257,546) | 0 | $ (28,399) |
Ending balance (in shares) at Dec. 31, 2020 | 1,306 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan (in shares) | 654 | |||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan | 3,856 | 3,856 | ||||
Stock-based compensation | 19,363 | 19,363 | ||||
Tax payments from shares withheld for equity awards | (1,644) | (1,644) | ||||
Net income (loss) | $ 7,757 | 7,757 | ||||
Ending balance (in shares) at Dec. 31, 2021 | 48,831 | 50,137 | ||||
Ending balance at Dec. 31, 2021 | $ 341,622 | $ 5 | 1,619,805 | (1,249,789) | 0 | $ (28,399) |
Ending balance (in shares) at Dec. 31, 2021 | 1,306 | 1,306 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan (in shares) | 1,123 | |||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan | $ 4,918 | 4,918 | ||||
Stock repurchases (in shares) | 1,900 | 1,875 | ||||
Stock repurchases | $ (35,000) | $ (35,000) | ||||
Stock-based compensation | 14,000 | 14,000 | ||||
Tax payments from shares withheld for equity awards | (2,589) | (2,589) | ||||
Net income (loss) | $ 420,247 | 420,247 | ||||
Ending balance (in shares) at Dec. 31, 2022 | 48,079 | 51,260 | ||||
Ending balance at Dec. 31, 2022 | $ 743,198 | $ 5 | $ 1,636,134 | $ (829,542) | $ 0 | $ (63,399) |
Ending balance (in shares) at Dec. 31, 2022 | 3,181 | 3,181 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net income (loss) | $ 420,247 | $ 7,757 | $ (342,755) |
Less: Income from discontinued operations, net of income taxes | 417,126 | 51,262 | 25,290 |
Income (loss) from continuing operations | 3,121 | (43,505) | (368,045) |
Adjustments to reconcile income (loss) from continuing operations to net cash from operating activities: | |||
Depreciation and amortization of acquired intangible assets | 37,732 | 37,307 | 36,568 |
Stock-based compensation | 21,153 | 18,119 | 8,059 |
Change in the fair value of acquisition-related contingent consideration | (5,320) | 22,400 | 8,300 |
Reduction of right-of-use lease assets | 1,495 | 2,749 | 8,481 |
Deferred income taxes | 1,695 | (8,909) | 41,145 |
Accretion of lease liabilities | 2,012 | 1,250 | 1,922 |
Impairment of goodwill | 0 | 0 | 270,625 |
Other non-cash items | 5,230 | 2,390 | 1,508 |
Changes in operating assets and liabilities, net of acquisitions and disposals: | |||
Accounts receivable, net | (2,747) | (9,304) | 10,511 |
Commissions and advisory fees receivable | 4,394 | 1,059 | (4,956) |
Prepaid expenses and other current assets | (1,661) | (5,130) | 5,033 |
Other long-term assets | (21,430) | (18,154) | 2,139 |
Accounts payable | 1,038 | 2,290 | (8,281) |
Commissions and advisory fees payable | (4,111) | (857) | (884) |
Lease liabilities | (5,095) | (1,553) | (3,463) |
Deferred revenue | (1,134) | (829) | (1,023) |
Accrued expenses and other current and long-term liabilities | 80,702 | (21,657) | 24,303 |
Net cash provided (used) by operating activities from continuing operations | 117,074 | (22,334) | 31,942 |
Investing activities: | |||
Purchases of property, equipment, and software | (14,892) | (20,999) | (20,366) |
Asset acquisitions | (7,887) | (8,316) | (3,143) |
Business acquisitions, net of cash acquired | 0 | 0 | (101,910) |
Net cash used by investing activities from continuing operations | (22,779) | (29,315) | (125,419) |
Financing activities: | |||
Proceeds from credit facilities, net of debt discount and issuance costs | 0 | (502) | 226,278 |
Payments on credit facilities | (561,344) | (1,812) | (66,531) |
Acquisition-related contingent consideration payments | (15,148) | (14,075) | 0 |
Stock repurchases | (35,000) | 0 | 0 |
Proceeds from issuance of stock through employee stock purchase plan | 3,983 | 3,277 | 2,258 |
Proceeds from stock option exercises | 935 | 579 | 97 |
Tax payments from shares withheld for equity awards | (2,589) | (1,644) | (1,163) |
Net cash provided (used) by financing activities from continuing operations | (609,163) | (14,177) | 160,939 |
Net cash provided (used) by continuing operations | (514,868) | (65,826) | 67,462 |
Net cash provided (used) by operating activities from discontinued operations | (10,452) | 42,890 | 3,390 |
Net cash provided (used) by investing activities from discontinued operations | 688,619 | (9,277) | (15,288) |
Net cash provided by financing activities from discontinued operations | 0 | 0 | 0 |
Net cash provided (used) by discontinued operations | 678,167 | 33,613 | (11,898) |
Net increase (decrease) in cash and cash equivalents | 163,299 | (32,213) | 55,564 |
Cash and cash equivalents, beginning of period | 100,629 | 132,842 | 77,278 |
Cash and cash equivalents, end of period | 263,928 | 100,629 | 132,842 |
Supplemental cash flow information: | |||
Cash paid for income taxes | 5,986 | 3,056 | 1,776 |
Cash paid for interest | 32,442 | 28,897 | 24,279 |
Non-cash investing activities: | |||
Purchases of property, equipment, and software through leasehold incentives | $ 0 | $ 0 | $ 9,726 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Note 1: Description of the Business Avantax, Inc. (the “ Company, ” “ Avantax, ” “ we, ” “ our, ” or “ us ” ) is a leading provider of integrated tax-focused wealth management services and software, assisting consumers, small business owners, tax professionals, financial professionals, and certified public accounting ( “CPA” ) firms. Our integrated tax-focused wealth management services consist of the operations of Avantax Wealth Management and Avantax Planning Partners. Avantax Wealth Management provides tax-focused wealth management solutions for financial professionals, tax professionals, CPA firms, and their clients. Avantax Wealth Management offers its services through its registered broker-dealer, registered investment advisor ( “RIA” ), and insurance agency subsidiaries and is a leading U.S. tax-focused independent broker-dealer. Avantax Wealth Management works with a nationwide network of financial professionals that operate as independent contractors. Avantax Wealth Management provides these financial professionals with an integrated platform of technical, practice, compliance, operations, sales, and product support tools that enable them to offer tax-advantaged planning, investing, and wealth management services to their clients. Avantax Planning Partners is an in-house/employee-based RIA, insurance agency, and wealth management business that partners with CPA firms in order to provide their consumer and small business clients with holistic financial planning and advisory services, as well as retirement plan solutions through Avantax Retirement Plan Services. Avantax Planning Partners formerly operated as Honkamp Krueger Financial Services, Inc. ( “HKFS” ). We acquired HKFS in July 2020 (the “HKFS Acquisition” ) and subsequently rebranded it in order to create tighter brand alignment through one common and recognizable brand. Any reference to Avantax Planning Partners in these financial statements is inclusive of HKFS. Divestiture of Tax Software Business On October 31, 2022, we entered into a Stock Purchase Agreement (the “Purchase Agreement” ) with TaxAct Holdings, Inc. (f/k/a Avantax Holdings, Inc.), a Delaware corporation and a direct subsidiary of Blucora, Inc., Franklin Cedar Bidco, LLC, a Delaware limited liability company (the “Buyer” ), and, solely for purposes of certain provisions thereof, DS Admiral Bidco, LLC, a Delaware limited liability company, pursuant to which we sold our tax software business to Buyer for an aggregate purchase price of $720.0 million in cash, subject to customary purchase price adjustments set forth in the Purchase Agreement (the “ TaxAct Sale ” ). This transaction subsequently closed on December 19, 2022. In accordance with ASC 205, Presentation of Financial Statements ( “ASC 205” ) , we determined that the sale of our tax software business represented a strategic shift that will have a major effect on our operations and financial results. As a result of the TaxAct Sale, the results of our tax software business have been reclassified as a discontinued operation and are excluded from continuing operations for all periods presented within the consolidated financial statements (unless otherwise noted). Significant accounting policies specific to our tax software business have been removed from these financial statements, however these policies can be found in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 25, 2022. Results of discontinued operations include all revenues and expenses directly derived from our tax software business, with the exception of general corporate overhead costs that were previously allocated to our tax software segment but which have not been allocated to discontinued operations. In connection with the TaxAct Sale, we recognized a pre-tax gain on disposal of $472.2 million, which is included within the results of discontinued operations for the year ended December 31, 2022. See "Note 3—Discontinued Operations" for additional information. Segments As a result of the TaxAct Sale encompassing the entirety of our previous tax software segment, our continuing operations represent one reportable segment. Net Capital and Regulatory Requirements Our Avantax Wealth Management broker-dealer subsidiary operates in a highly regulated industry and is subject to various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2: Summary of Significant Accounting Policies Principles of Consolidation and Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ( “GAAP” ). These consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions have been eliminated. Certain items in these consolidated financial statements have been reclassified to conform to current period presentation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingencies. Actual amounts may differ from estimates. Cash and Cash Equivalents We generally invest our excess cash in money market funds that are made up of securities issued by agencies of the U.S. government. From time-to-time, we may invest in other vehicles, such as debt instruments issued by the U.S. federal government and its agencies, international governments, municipalities, and publicly held corporations, as well as commercial paper and insured time deposits with commercial banks. Specific holdings can vary from period to period depending upon our cash requirements. Such investments are reported at fair value on the consolidated balance sheets. Accounts Receivable, Net Accounts receivable are stated at amounts due from clients, net of an allowance for credit losses. Our estimates of credit losses are based on our historical experience, the aging of our trade receivables, and management judgment. The allowance for credit losses was not material as of December 31, 2022 and 2021. Property, Equipment, and Software, Net Property, equipment, and software, net, are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Computer equipment 3 years Purchased software 3 years Data center servers 3 years Internally developed software 3 years Office equipment 7 years Office furniture 7 years Airplane 25 years Leasehold improvements Shorter of lease term or economic life Internally Developed Software Costs incurred to develop software intended for our internal use, primarily contractor costs and employee salaries and benefits, are capitalized during the application development stage. Capitalization of such costs ceases once the project is substantially complete and ready for its intended use. We also capitalize costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional functionality. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. We capitalized $13.0 million, $16.4 million, and $4.0 million of internally developed software costs for the years ended December 31, 2022, 2021, and 2020, respectively. Business Combinations We allocate the fair value of the purchase consideration for our business combinations to the assets acquired and liabilities assumed, generally based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Purchase consideration includes assets transferred, liabilities assumed, and/or equity interests issued by us, all of which are measured at their fair value as of the date of acquisition. Our business combinations may be structured to include a combination of up-front, deferred, and contingent payments to be made at specified dates subsequent to the date of acquisition. Deferred and contingent payments determined to be purchase consideration are recorded at fair value as of the acquisition date. Our contingent consideration arrangements are generally obligations to make future payments to sellers contingent upon the achievement of future financial targets and are remeasured to fair value at the end of each reporting period until the obligations are settled. The valuation of the net assets acquired as well as certain elements of purchase consideration requires management to make significant estimates and assumptions, especially with respect to future expected cash flows, discount rates, growth and attrition rates, and estimated useful lives. Management’s assumptions and estimates of fair value are based on comparable market data and information obtained from the management of acquired entities. These assumptions and estimates are believed to be reasonable, but are inherently uncertain and, as a result, actual results may differ from estimates. During the measurement period, we may record adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Subsequent changes to the fair value of contingent consideration are reflected in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). Acquisition costs are expensed as incurred and are included in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). We include the results of operations from acquired businesses in our consolidated financial statements from the effective date of the acquisition. Asset Acquisitions Acquisitions that do not meet the criteria to be accounted for as a business combination are accounted for as an asset acquisition. Using a cost accumulation model, the purchase price, including certain acquisition-related costs, is allocated to the acquired assets and assumed liabilities based upon their relative fair values as of the acquisition date. No goodwill is contemplated in the allocation process. Our asset acquisitions typically include contingent consideration arrangements that encompass obligations to make future payments to sellers contingent upon the achievement of future financial targets. Contingent consideration is not recognized until all contingencies are resolved and the consideration is payable, at which point the consideration is allocated to the assets acquired on a relative fair value basis. Discontinued Operations We review the presentation of planned business dispositions in the consolidated financial statements based on the available information and events that have occurred. The review consists of evaluating whether the business meets the definition of a component for which the operations and cash flows are clearly distinguishable from the other components of the business, and if so, whether the disposition represents a strategic shift that has a major effect on operations and financial results. In addition, we evaluate whether the business has met the criteria as a business held for sale. In order for a planned disposition to be classified as a business held for sale, the established criteria must be met as of the reporting date, including an active program to market the business and the expected disposition of the business within one year. Planned dispositions are presented as discontinued operations when all the criteria described above are met. For those divestitures that qualify as discontinued operations, all comparative periods presented are reclassified in the consolidated balance sheets. Additionally, the results of operations of a discontinued operation are reclassified to income from discontinued operations, net of tax, for all periods presented in the consolidated statements of comprehensive income (loss). Results of discontinued operations include all revenue and expenses directly derived from such businesses; general corporate overhead is not allocated to discontinued operations. Goodwill and Acquired Intangible Assets, Net We test goodwill and indefinite-lived intangible assets for impairment annually, as of November 30, or more frequently when events or circumstances indicate that impairment may have occurred. For purposes of goodwill impairment testing, our reporting units are consistent with our reporting segments. As a result of the TaxAct Sale, which occurred after our annual impairment assessment, our continuing operations are presented as one reportable segment. We test goodwill for impairment either by assessing qualitative factors to determine whether it is more likely than not that the fair values of our reporting unit(s) are less than their carrying amounts, or by performing a quantitative test. Qualitative factors include industry and market conditions, overall financial performance, and other relevant events and circumstances affecting each reporting unit. If we choose to perform a qualitative assessment and, after considering the totality of events or circumstances, we determine it is more likely than not the fair value(s) of our reporting unit(s) are less than their carrying amounts, then we perform a quantitative fair value test. Our quantitative test utilizes a weighted combination of a discounted cash flow model (known as the income approach) and a market approach which estimates a reporting unit’s fair value by applying income-based valuation multiples for a set of comparable companies to the reporting unit’s income. These approaches involve judgmental assumptions, including forecasted future cash flows expected to be generated by each reporting unit over an extended period of time, long-term growth rates, the identification of comparable companies, and each reporting unit’s weighted average cost of capital. The weighted average cost of capital factors in the relevant risk associated with business-specific characteristics and the uncertainty of achieving projected cash flows. These assumptions are unobservable inputs and are considered Level 3 measurements. Impairment is recognized as the excess of a reporting unit’s carrying amount, including goodwill, over its fair value. We test indefinite-lived intangible assets for impairment either through a qualitative assessment similar to our evaluation for goodwill, or by performing a quantitative test. Our quantitative test estimates the fair values of the assets based on estimated future earnings derived from the assets using an income approach. This discounted cash flow model involves judgmental assumptions, including forecasted future cash flows from estimated royalty rates and the asset’s weighted average cost of capital. The weighted average cost of capital factors in the relevant risk associated with business-specific characteristics and the uncertainty of achieving projected cash flows. These assumptions are unobservable inputs and are considered Level 3 measurements. Impairment is recognized as the excess of the indefinite-lived intangible asset’s carrying amount over its fair value. Impairment of Long-Lived Assets Long-lived assets, including definite-lived intangibles, are reviewed for impairment when events or circumstances indicate that the carrying value of an asset or group of assets may not be recoverable. Factors we consider important that may trigger an impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results, and significant changes in the manner of our use of the asset. If circumstances require that an asset or group of assets be tested for impairment, determination of recoverability is based on an estimate of the undiscounted cash flows expected to be generated by the asset or group of assets. If the carrying amount of the asset or group of assets is not recoverable on an undiscounted cash flow basis, impairment is recognized equal to the excess of the carrying value over its fair value. Financial Professional Loans We periodically extend credit to our financial professionals in the form of recruiting or retention loans, commission advances and other loans. The decision to extend credit to a financial professional is generally based on affiliation with Avantax Wealth Management and their ability to generate future revenues. Loans made in connection with recruiting or retention can either be repayable or forgivable over terms generally up to fifteen years provided that the financial professional remains a service provider to the Company. Forgivable loans are not repaid in cash and are amortized over the term of the loan. If a financial professional terminates their arrangement with the Company prior to the loan maturity date, the remaining balance becomes repayable immediately. We estimate an allowance for credit loss related to both repayable and forgivable loans at inception using estimates and assumptions based on historical loss experience and expectations of future loss rates. Management monitors the adequacy of these estimates on a periodic basis against actual trends experienced. The allowance for credit loss associated with these loans was not material as of December 31, 2022 and 2021. During the years ended December 31, 2022 and 2021, we issued loans to financial professionals for $12.7 million and $22.0 million, respectively. As of December 31, 2022 and 2021, $23.3 million and $17.7 million, respectively, were included within “other long-term assets” on the consolidated balance sheets, and $6.0 million and $4.3 million, respectively, were included in “prepaid expenses and other current assets” on the consolidated balance sheets. During the years ended December 31, 2022, 2021, and 2020, we recognized $5.2 million, $2.3 million, and $0.9 million, respectively, of forgivable loan amortization within “cost of revenue” in the consolidated statements of comprehensive income (loss). Substantially all of our outstanding financial professional loans are considered forgivable. Leases We determine if an arrangement contains a lease at inception. Right-of-use ( “ROU” ) assets represent our right to use an underlying asset for the lease term and the corresponding lease liabilities represent our obligation to make lease payments arising from the lease. On the commencement date, leases are evaluated for classification, and ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The ROU asset is reduced for tenant incentives and excludes any initial direct costs incurred. We have elected to combine the lease and non-lease components of a contract, if applicable, into a single lease component. The implicit rates within our leases are generally not readily determinable, and instead we use our incremental borrowing rate at the lease commencement date to determine the present value of lease payments. Fixed lease cost is recognized on a straight-line basis over the lease term. Variable lease payments are not included in the calculation of the ROU assets and lease liabilities and are recognized as lease costs as incurred. Our variable lease payments generally relate to amounts paid to lessors for common area maintenance. Our lease terms are contractually fixed but may include extension or termination options. These options are included in lease values when it is reasonably certain we will exercise such options. We have elected not to recognize a ROU asset or lease liability for short-term leases, defined as those which have an initial lease term of twelve months or less. Our leases do not contain residual value guarantees or material variable lease payments. We do not have any material restrictions or covenants imposed by leases that would impact our ability to pay dividends or cause us to incur additional financial obligations. Fair Value of Financial Instruments We measure our financial instruments and contingent consideration from our business combinations at fair value at each reporting period using a fair value hierarchy. The classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair value inputs are classified in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs, other than Level 1, or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data and reflect our own assumptions. Revenue Recognition We recognize revenue when all five of the following revenue recognition criteria have been satisfied: • contract(s) with clients have been identified; • performance obligations have been identified; • transaction prices have been determined; • transaction prices have been allocated to the performance obligations; and • the performance obligations have been fulfilled by transferring control over the promised services to the client. The determination of when these criteria are satisfied varies by product or service and is explained in more detail below. Revenue recognition. Revenue primarily consists of advisory revenue, commission revenue, asset-based revenue, and transaction and fee revenue. Revenue is recognized upon the transfer of services to clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those services. Payments received by us in advance of the performance of service are deferred and recognized as revenue when we have satisfied our performance obligation. Advisory revenue includes fees charged to clients in advisory accounts for which we are the RIA. These fees are based on the value of assets within these advisory accounts. For advisory revenues generated by Avantax Wealth Management, advisory fees are typically billed quarterly, in advance, and the related advisory revenues are deferred and recognized ratably over the period in which our performance obligations have been completed. For advisory revenues generated by Avantax Planning Partners, advisory fees are typically billed quarterly, in arrears, and the related advisory revenues are accrued and recognized over the period in which our performance obligations were completed. Commissions represent amounts generated by clients’ purchases and sales of securities and investment products. We serve as the registered broker-dealer or insurance agent for those trades. We generate two types of commissions: (1) transaction-based commissions and (2) trailing commissions. Transaction-based commissions are generated on a per-transaction basis and are recognized as revenue on the trade date, which is when our performance obligations have been substantially completed. Trailing commissions are earned by us based on our ongoing account support to clients. Trailing commissions are based on a percentage of the current market value of clients’ investment holdings in trail-eligible assets and recognized over the period during which our services are performed. Since trailing commission revenue is generally paid in arrears, we estimate it based on a number of factors, including stock market index levels and the amount of trailing commission revenues received in prior periods. These estimates are primarily based on historical information, and there is not significant judgment involved. A substantial portion of advisory revenue and commission revenue is ultimately paid to our financial professionals. In Avantax Wealth Management, advisory fee payments to financial professionals typically occur at the beginning of the quarter, in advance, and therefore do not result in an advisory fee payable amount at quarter end. In Avantax Planning Partners, advisory fee payments (which are primarily composed of payments to CPA firms under fee sharing arrangements) are typically made quarterly, in arrears, and we record an estimate for the advisory fee payable based on the historical payout ratios and financial market movement for the period. For transaction-based commissions, we record an estimate for commissions payable based upon the payout rate of the financial professional generating the accrued commission revenue. For trailing commissions, we record an estimate for trailing commissions payable based upon historical payout ratios. Such amounts are recorded as “Commissions and advisory fees payable” on the consolidated balance sheets and “Cost of revenue” on the consolidated statements of comprehensive income (loss). Asset-based revenue primarily includes fees from financial product manufacturer sponsorship programs, cash sweep programs, and other asset-based revenues, primarily margin revenues and asset-based retirement plan service fees. Asset-based revenue is recognized ratably over the period in which services are provided. Transaction and fee revenue primarily includes (1) support fees charged to financial professionals, which are recognized over time as support services are provided, (2) fees charged for executing certain transactions in client accounts, which are recognized on a trade-date basis, and (3) other fees related to services provided and other account charges as generally outlined in agreements with financial professionals, clients, and financial institutions, which are recognized as services are performed or as earned, as applicable. Costs to obtain a contract. We capitalize the incremental costs of obtaining a contract with a client, primarily one-time commissions paid to affiliates who refer clients, if we expect to recover those costs. These costs are amortized on a straight-line basis over a period of 15 years, which is the period over which we expect to transfer services to the client. The amortization of these costs are included in “Sales and marketing” on the consolidated statements of comprehensive income (loss). Capitalized costs to obtain a contract were not material for the years ended December 31, 2022 and 2021. Advertising Expenses Costs for advertising are recorded within “Sales and marketing” on the consolidated statements of comprehensive income (loss) when the advertisement appears. Advertising expense totaled $0.9 million, $2.0 million, and $1.6 million for the years ended December 31, 2022, 2021, and 2020, respectively. Stock-Based Compensation We measure stock-based compensation for awards of stock options, restricted stock units ( “RSUs” ), and other similar awards based on the estimated fair value of the awards on the date of grant. RSUs typically include service-based vesting requirements ( “time-based RSUs” ) or performance-based vesting requirements ( “performance-based RSUs” ). Compensation expense for awards that vest ratably is recognized net of estimated forfeitures (if applicable) over the requisite service period of the award for each vesting tranche using the straight-line method. Compensation expense for awards that cliff vest is recognized over the requisite service period of the award using the straight-line method. We estimate forfeitures for employee awards at the time of grant, based upon historical data, and revise those estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We recognize forfeitures as they occur for awards to non-employee financial professionals. The fair value of stock options is estimated using a Black-Scholes-Merton valuation method on the date of grant. The fair value of time-based RSUs is equal to the closing price of the Company’s stock on the date of grant. The fair value of performance-based RSUs that contain a market component is estimated using a Monte-Carlo simulation model on the date of grant. For performance-based RSUs, compensation expense is originally based on the number of shares that would vest if we achieve the level of performance that we estimate is the most probable outcome at the grant date. Throughout the requisite service period, we monitor the probability of achieving the performance condition, and adjust compensation expense based on future expected performance. Compensation expense for performance-based RSUs that contain a market component is not reversed if the market criteria are not satisfied. Income Taxes We account for income taxes under the asset and liability method, under which deferred tax assets, including net operating loss carryforwards, and deferred tax liabilities are determined based on temporary differences between the book and tax basis of assets and liabilities. We periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of the deferred tax assets by a valuation allowance to the extent we believe it is more likely than not a portion will not be realized. We consider many factors when assessing the likelihood of future realization of deferred tax assets, including expectations of future taxable income, recent cumulative earnings experience by taxing jurisdiction, and other relevant factors. There is a wide range of possible judgments relating to the valuation of our deferred tax assets. We record liabilities to address uncertain tax positions that have been taken in previously filed tax returns or that are expected to be taken in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that the tax position, based on technical merits, will be sustained upon examination. The tax benefit to be recognized in the financial statements from such a position is measured as the largest amount of benefit that has a greater than 50% cumulative likelihood of being realized upon ultimate settlement with the taxing authority. The difference between the amount recognized and the total tax position is recorded as a liability. The ultimate resolution of these tax positions may be greater or less than the liabilities recorded. We recognize interest and penalties related to uncertain tax positions in interest expense and general and administrative expense, respectively. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term investments, trade accounts receivable, and commissions receivable. These instruments are generally unsecured and uninsured. For cash equivalents, short-term investments, and commissions receivable, we attempt to manage exposure to counterparty credit risk by only entering into agreements with major financial institutions and investment sponsors that are expected to be able to fully perform under the terms of the applicable agreement. Accounts receivable are typically unsecured and are derived from revenues earned from clients primarily located in the United States operating in a variety of geographic areas. We perform ongoing credit evaluations of our clients and maintain allowances for potential credit losses. Geographic Revenue Information Substantially all of our revenue for 2022, 2021, and 2020 was generated from clients located in the United States. All of our tangible fixed assets are located in the United States. Recently Issued Accounting Pronouncements There have been no recent accounting pronouncements, changes in accounting pronouncements, or recently issued accounting guidance during fiscal year 2022 that are material, significant, or potentially significant to us. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 3: Discontinued Operations On October 31, 2022, we entered into the Purchase Agreement with the Buyer to sell our tax software business for an aggregate purchase price of $720.0 million in cash, subject to customary purchase price adjustments set forth in the Purchase Agreement. The TaxAct Sale subsequently closed on December 19, 2022. The following table presents the gain associated with the sale, presented in the results of discontinued operations below (in thousands): Gross purchase price, as adjusted per the terms of the Purchase Agreement $ 717,911 Net assets disposed (228,040) Transaction costs (17,634) Pre-tax gain on disposal $ 472,237 The carrying value of the net assets sold are as follows (in thousands): Cash and cash equivalents $ 4,591 Accounts receivable, net 250 Prepaid expenses and other current assets 7,861 Property, equipment, and software, net 22,377 Goodwill 188,542 Other intangible assets, net 19,500 Other long-term assets 184 Accounts payable (1,433) Accrued expenses and other current liabilities (7,212) Deferred revenue (5,446) Deferred tax liabilities, net (1,174) Total net assets sold $ 228,040 The following table presents summarized information regarding certain components of income (in thousands): Year Ended December 31, 2022 2021 2020 Revenues $ 247,241 $ 226,987 $ 208,763 Operating expenses 155,446 143,326 156,173 Interest expense and other, net (39,303) (31,658) (26,634) Income from discontinued operations before gain on disposal and income taxes 52,492 52,003 25,956 Pre-tax gain on disposal 472,237 — — Income from discontinued operations before income taxes 524,729 52,003 25,956 Income tax benefit (expense) (107,603) (741) (666) Income from discontinued operations $ 417,126 $ 51,262 $ 25,290 In accordance with the terms of our Credit Agreement, approximately $525.4 million of the proceeds from the TaxAct Sale were required to be utilized to repay the remaining principal amount outstanding under our Credit Agreement discussed in "Note 7—Debt." In connection with this repayment, we incurred a loss on debt extinguishment of $4.2 million for the remaining amount of unamortized debt issuance costs and debt discount associated with the outstanding principal. Because the terms of our Credit Agreement required the repayment of our Term Loan in connection with the TaxAct Sale, ASC 205 requires interest expense and any loss on debt extinguishment associated with the borrowings to be reclassified to discontinued operations for all periods presented. The following table presents the aggregate amounts of the classes of assets and liabilities classified as discontinued operations: December 31, 2021 Assets: Cash and cash equivalents $ 34,195 Accounts receivable, net 692 Prepaid expenses and other current assets 6,745 Total current assets of discontinued operations 41,632 Property, equipment, and software, net 23,598 Goodwill, net 188,542 Other intangible assets, net 19,500 Other long-term assets 36 Total assets of discontinued operations $ 273,308 Liabilities: Accounts payable $ 1,723 Accrued expenses and other current liabilities 10,020 Current deferred revenue 8,388 Total current liabilities of discontinued operations 20,131 Deferred tax liabilities, net 1,000 Total liabilities of discontinued operations $ 21,131 The following table presents significant non-cash items and capital expenditures of discontinued operations (in thousands): Year Ended December 31, 2022 2021 2020 Non-cash items: Stock-based compensation $ 1,892 $ 2,635 $ 2,007 Depreciation $ 8,099 $ 6,120 $ 3,339 Amortization of debt discount and issuance costs $ 2,782 $ 2,668 $ 2,065 Loss on debt extinguishment $ 4,192 $ — $ — Purchases of property, equipment, and software $ 7,067 $ 9,277 $ 15,637 Transition Services Agreement and Sublease of Corporate Space In connection with the TaxAct Sale, we entered into a Transition Services Agreement ( “TSA” ) with the Buyer pursuant to which each party will provide the other with certain transition services for an initial period ending on June 19, 2023. The income that we expect to receive from the TSA is expected to largely offset the costs that we will continue to incur during the term of the TSA. Furthermore, the Buyer signed a sublease agreement to sublease a portion of our corporate headquarters for an initial term of five years. The income and costs associated with the TSA and sublease are included within continuing operations of the consolidated statements of comprehensive income (loss) and were not material for the year ended December 31, 2022. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 4: Revenue Recognition Revenue primarily consists of advisory revenue, commission revenue, asset-based revenue, and transaction and fee revenue. Revenues by major category and the timing of revenue recognition was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Recognized upon transaction: Commission $ 75,420 $ 89,970 $ 74,788 Transaction and fee 4,010 4,210 6,494 Total revenue recognized upon transaction $ 79,430 $ 94,180 $ 81,282 Recognized over time: Advisory $ 398,839 $ 395,800 $ 314,751 Commission 98,011 120,707 110,413 Asset-based 65,043 22,101 23,688 Transaction and fee 25,173 25,425 16,055 Total revenue recognized over time $ 587,066 $ 564,033 $ 464,907 Total revenue: Advisory $ 398,839 $ 395,800 $ 314,751 Commission 173,431 210,677 185,201 Asset-based 65,043 22,101 23,688 Transaction and fee 29,183 29,635 22,549 Total revenue $ 666,496 $ 658,213 $ 546,189 |
Asset Acquisitions
Asset Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisitions | Note 5: Asset Acquisitions During the years ended December 31, 2022, 2021 and 2020, we completed several acquisitions that met the criteria to be accounted for as asset acquisitions. Total initial purchase consideration, including acquisition costs and fixed deferred payments, was $5.6 million, $8.5 million, and $4.4 million, respectively. This purchase consideration was allocated to the acquired assets, primarily client relationship intangibles. Client relationship intangibles are amortized on a straight-line basis over an amortization period of 15 years. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets, Net | Note 6: Goodwill and Acquired Intangible Assets, Net Goodwill The following table presents goodwill recorded on our consolidated balance sheets (in thousands): Total Balance as of December 31, 2019 $ 473,833 Acquired 63,737 Purchase accounting adjustments (666) Impairment (270,625) Balance as of December 31, 2020 266,279 Balance as of December 31, 2021 266,279 Balance as of December 31, 2022 $ 266,279 Beginning in March 2020, the COVID-19 pandemic had a significant negative impact on the U.S. and global economy and caused substantial disruption in the U.S. and global securities markets, and as a result, negatively impacted certain key business drivers, such as client asset levels and interest rates. These macroeconomic and Company-specific factors, in totality, served as a triggering event that resulted in the testing of goodwill for potential impairment. As a result of our quantitative impairment test described in “Note 2—Summary of Significant Accounting Policies,” we recorded a $270.6 million goodwill impairment in the first quarter of 2020. No incremental impairments were recognized as of our annual impairment tests performed on November 30, 2022, 2021, and 2020. Acquired Intangible Assets, Net Acquired intangible assets, net, consisted of the following (in thousands): December 31, 2022 December 31, 2021 Weighted average amortization period (years) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets: Financial professional relationships 13.2 $ 318,700 $ (130,969) $ 187,731 $ 318,700 $ (111,916) $ 206,784 Client relationships 12.9 74,532 (10,306) 64,226 65,573 (5,729) 59,844 Sponsor relationships 10.9 17,200 (6,630) 10,570 17,200 (5,655) 11,545 CPA firm relationships 12.5 4,070 (678) 3,392 4,070 (407) 3,663 Trade name 0.5 3,100 (3,017) 83 3,100 (2,379) 721 Technology 0.0 2,980 (2,980) — 2,980 (2,852) 128 Curriculum 0.0 900 (900) — 900 (796) 104 Total acquired intangible assets, net $ 421,482 $ (155,480) $ 266,002 $ 412,523 $ (129,734) $ 282,789 Expected amortization of definite-lived intangible assets held as of December 31, 2022 was as follows (in thousands): 2023 $ 24,845 2024 24,286 2025 23,606 2026 22,985 2027 22,417 Thereafter 147,863 Total $ 266,002 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 7: Debt Our debt consisted of the following as of the periods indicated in the table below (in thousands): December 31, December 31, Senior Secured Credit Facility Principal outstanding $ — $ 561,344 Unamortized debt issuance costs — (3,371) Unamortized debt discount — (3,027) Net carrying value $ — $ 554,946 In May 2017, we entered into a credit agreement (as the same has been amended, the “Credit Agreement” ) with a syndicate of lenders that provides for a term loan facility (the “Term Loan” ) and a revolving line of credit (including a letter of credit sub-facility) (the “Revolver” ) for working capital, capital expenditures, and general business purposes (as amended, the “ Senior Secured Credit Facility ” ). The Term Loan has a maturity date of May 22, 2024 (the “Term Loan Maturity Date” ). On April 26, 2021, to ensure adequate liquidity and flexibility to support the Company’s growth, we entered into Amendment No. 5 to the Credit Agreement (the “Credit Agreement Amendment” ). Pursuant to the Credit Agreement Amendment, the Credit Agreement was amended to, among other things, refinance the existing $65.0 million Revolver and add $25.0 million of additional revolving credit commitments, for an aggregate principal amount of $90.0 million in revolving credit commitments (the “New Revolver” ). The New Revolver has a maturity date of February 21, 2024 (the “New Revolver Maturity Date” ). The Company is required to make mandatory annual prepayments on the Term Loan in certain circumstances, including in the event that the Company generates Excess Cash Flow (as defined in the Credit Agreement) in a given fiscal year. The Credit Agreement permits the Company to voluntarily prepay the Term Loan without premium or penalty. In addition, the Company is required to make principal amortization payments on the Term Loan quarterly on the last business day of each March, June, September, and December, in an amount equal to approximately $0.5 million(subject to reduction for prepayments), with the remaining principal amount of the Term Loan due on the Term Loan Maturity Date. On August 5, 2022, and as provided for within our Senior Secured Credit Facility, we voluntarily prepaid $35.0 million of principal outstanding under our Term Loan. In connection with this prepayment, we recorded a $0.2 million loss on extinguishment of debt for the proportionate amount of unamortized debt issuance costs and debt discount associated with the principal repaid. Furthermore, during the fourth quarter of 2022 and subject to the terms of the Credit Agreement, the remaining principal outstanding of our Term Loan (approximately $525.4 million) was required to be repaid in connection with the close of the TaxAct Sale. In connection with this repayment, we incurred a loss on debt extinguishment of $4.2 million for the remaining amount of unamortized debt issuance costs and debt discount associated with the outstanding principal. As of December 31, 2022, we had no principal amount outstanding under the Term Loan and no amounts outstanding under the New Revolver. Based on aggregate loan commitments as of December 31, 2022, approximately $90.0 million was available for future borrowings under the Senior Secured Credit Facility, subject to customary terms and conditions. The interest rate on the Term Loan is variable at the London Interbank Offered Rate (subject to a floor of 1.0%), plus the applicable interest rate margin of 4.0% for Eurodollar Rate Loans (as defined in the Credit Agreement) and 3.0% for ABR Loans (as defined in the Credit Agreement). For the year ended December 31, 2022, the weighted average applicable interest rate on the Term Loan was 5.9%. Depending on the Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement), the applicable interest rate margin on the New Revolver ranges from 2.0% to 2.5% for Eurodollar Rate Loans and 1.0% to 1.5% for ABR Loans. The Company is required to pay a commitment fee on the undrawn commitment under the New Revolver in a percentage that is dependent on the Consolidated First Lien Net Leverage Ratio that ranges from 0.35% to 0.4%. Interest is payable at the end of each interest period, typically quarterly. Except as described above, and before consideration of the amendment to our Credit Agreement discussed below, there have been no significant changes to the terms of the Term Loan or the New Revolver since previously disclosed within our Annual Report on Form 10-K for the year ended December 31, 2021. The Company was in compliance with the debt covenants of the Senior Secured Credit Facility as of December 31, 2022. On January 24, 2023 (the “Closing Date” ) , we entered into a restatement agreement (the “ Amended and Restated Credit Agreement” ), which amends and restates in its entirety our existing Credit Agreement. The Amended and Restated Credit Agreement provides for a delayed draw term loan facility up to a maximum principal amount of $270.0 million (the “Delayed Draw Term Loan Facility” ) and a revolving credit facility with a commitment amount of $50.0 million (the “Revolving Credit Facility” ). We may borrow term loans under the Delayed Draw Term Loan Facility (the “Term Loans” ) until January 24, 2024. The stated maturity date of the Delayed Draw Term Loan Facility and the Revolving Credit Facility is January 24, 2028 (the “Maturity Date” |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 8: Leases Our leases are primarily related to office space and are classified as operating leases. Operating lease cost, net of sublease income, is recognized in “General and administrative” expense for those net costs related to leases used in our operations and within “Acquisition and integration” expense for those net costs related to an unoccupied lease resulting from our acquisition of 1st Global, Inc. and 1st Global Insurance Services, Inc. (together, the “1st Global Acquisition” ) on the consolidated statements of comprehensive income (loss). Operating lease cost, net of sublease income, cash paid on operating lease liabilities, and ROU assets obtained in exchange for lease obligations for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Fixed lease cost (1) $ 3,858 $ 4,188 $ 6,762 Variable lease cost 1,402 1,057 893 Operating lease cost, before sublease income 5,260 5,245 7,655 Sublease income (937) (464) (1,235) Total operating lease cost, net of sublease income $ 4,323 $ 4,781 $ 6,420 Additional lease information: Cash paid on operating lease liabilities (2) $ 5,095 $ 1,853 $ 3,818 ROU assets obtained in exchange for lease obligations $ 390 $ 93 $ 21,766 ____________________________ (1) For the years ended December 31, 2021 and December 31, 2020, fixed lease cost from discontinued operations were $0.3 million and $0.5 million, respectively. As these amounts were not material to the disclosures above, we have not adjusted the historical presentation. (2) For the years ended December 31, 2021 and December 31, 2020, cash paid on operating lease liabilities from discontinued operations were $0.3 million and $0.5 million. As these amounts were not material to the disclosures above, we have not adjusted the historical presentation. Right-of-use assets and operating leases were recorded on the consolidated balance sheets as follows (in thousands): December 31, 2022 2021 Right-of-use assets, net $ 19,361 $ 20,466 Current lease liabilities $ 5,139 $ 4,896 Long-term lease liabilities 30,332 33,267 Total operating lease liabilities $ 35,471 $ 38,163 Weighted-average remaining lease term (in years) 9.4 10.3 Weighted-average discount rate 5.5 % 5.4 % The maturities of our operating lease liabilities as of December 31, 2022 are as follows (in thousands): Undiscounted cash flows: 2023 $ 5,289 2024 5,184 2025 5,086 2026 4,256 2027 3,858 Thereafter 22,315 Total undiscounted cash flows 45,988 Imputed interest (10,517) Present value of cash flows $ 35,471 During the year ended December 31, 2020, we began subleasing a portion of our former office building acquired in the 1st Global Acquisition for rental rates that were less than those of the original building lease, representing a triggering event to test the right-of-use asset for impairment. The estimated fair value of the asset was calculated using a discounted cash flow analysis that included forecasted cash flows and a discount rate derived from market data, both of which are Level 3 fair value inputs. As a result of this test, we recognized impairment expense of $4.1 million for the year ended December 31, 2020, which was included in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). There was no impairment recognized during the years ended December 31, 2022 and 2021. |
Leases | Note 8: Leases Our leases are primarily related to office space and are classified as operating leases. Operating lease cost, net of sublease income, is recognized in “General and administrative” expense for those net costs related to leases used in our operations and within “Acquisition and integration” expense for those net costs related to an unoccupied lease resulting from our acquisition of 1st Global, Inc. and 1st Global Insurance Services, Inc. (together, the “1st Global Acquisition” ) on the consolidated statements of comprehensive income (loss). Operating lease cost, net of sublease income, cash paid on operating lease liabilities, and ROU assets obtained in exchange for lease obligations for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Fixed lease cost (1) $ 3,858 $ 4,188 $ 6,762 Variable lease cost 1,402 1,057 893 Operating lease cost, before sublease income 5,260 5,245 7,655 Sublease income (937) (464) (1,235) Total operating lease cost, net of sublease income $ 4,323 $ 4,781 $ 6,420 Additional lease information: Cash paid on operating lease liabilities (2) $ 5,095 $ 1,853 $ 3,818 ROU assets obtained in exchange for lease obligations $ 390 $ 93 $ 21,766 ____________________________ (1) For the years ended December 31, 2021 and December 31, 2020, fixed lease cost from discontinued operations were $0.3 million and $0.5 million, respectively. As these amounts were not material to the disclosures above, we have not adjusted the historical presentation. (2) For the years ended December 31, 2021 and December 31, 2020, cash paid on operating lease liabilities from discontinued operations were $0.3 million and $0.5 million. As these amounts were not material to the disclosures above, we have not adjusted the historical presentation. Right-of-use assets and operating leases were recorded on the consolidated balance sheets as follows (in thousands): December 31, 2022 2021 Right-of-use assets, net $ 19,361 $ 20,466 Current lease liabilities $ 5,139 $ 4,896 Long-term lease liabilities 30,332 33,267 Total operating lease liabilities $ 35,471 $ 38,163 Weighted-average remaining lease term (in years) 9.4 10.3 Weighted-average discount rate 5.5 % 5.4 % The maturities of our operating lease liabilities as of December 31, 2022 are as follows (in thousands): Undiscounted cash flows: 2023 $ 5,289 2024 5,184 2025 5,086 2026 4,256 2027 3,858 Thereafter 22,315 Total undiscounted cash flows 45,988 Imputed interest (10,517) Present value of cash flows $ 35,471 During the year ended December 31, 2020, we began subleasing a portion of our former office building acquired in the 1st Global Acquisition for rental rates that were less than those of the original building lease, representing a triggering event to test the right-of-use asset for impairment. The estimated fair value of the asset was calculated using a discounted cash flow analysis that included forecasted cash flows and a discount rate derived from market data, both of which are Level 3 fair value inputs. As a result of this test, we recognized impairment expense of $4.1 million for the year ended December 31, 2020, which was included in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). There was no impairment recognized during the years ended December 31, 2022 and 2021. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Note 9: Balance Sheet Components Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2022 2021 Prepaid expenses $ 7,857 $ 6,393 Forgivable loans 5,951 4,316 Other current assets 1,219 1,022 Total prepaid expenses and other current assets $ 15,027 $ 11,731 Property, equipment, and software, net, consisted of the following (in thousands): December 31, 2022 2021 Internally developed software $ 29,491 $ 14,548 Computer equipment 5,172 4,451 Purchased software 6,433 6,644 Leasehold improvements 16,944 16,953 Airplane 3,770 3,770 Office furniture 7,257 7,257 Office equipment 2,425 2,423 Data center servers 1,253 984 Capital projects in progress (1) 11,237 13,200 Property, equipment, and software, gross 83,982 70,230 Less: Accumulated depreciation (30,941) (20,190) Total property, equipment, and software, net $ 53,041 $ 50,040 ____________________________ (1) Represents costs that have been capitalized for internally developed software projects that have not yet been placed into service. The net carrying value of internally developed software was $26.5 million and $19.4 million as of December 31, 2022 and 2021, respectively. We recorded depreciation expense for internally developed software of $5.9 million, $3.4 million, and $2.5 million for the years ended December 31, 2022, 2021, and 2020, respectively. Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Salaries and related benefit expenses $ 17,481 $ 18,211 HKFS Contingent Consideration liability (2) — 28,300 Accrued legal costs 1,102 2,796 Accrued vendor and advertising costs 2,726 2,040 Accrued taxes (3) 85,965 — Accrued fixed and variable acquisition consideration 897 837 Other 3,041 3,474 Total accrued expenses and other current liabilities $ 111,212 $ 55,658 ____________________________ (2) For more information on our contingent liabilities, see “Note 10—Commitments and Contingencies.” (3) A significant portion of accrued taxes relate to federal and state income taxes, including those related to the TaxAct Sale. See “Note 16—Income Taxes” for more information. Other long-term liabilities consisted of the following (in thousands): December 31, 2022 2021 Deferred compensation $ 7,974 $ — Accrued cash-settled stock-based compensation 7,556 1,391 Other 6,946 5,361 Other long-term liabilities $ 22,476 $ 6,752 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10: Commitments and Contingencies Purchase Commitments Our purchase commitments primarily consist of outsourced information technology, commitments to our portfolio management tool vendor, commitments to our clearing firm provider, and commitments for financial professional support programs. As of December 31, 2022, our purchase commitments for the next five years and thereafter were as follows (in thousands): 2023 $ 14,209 2024 11,010 2025 5,672 2026 4,575 2027 2,269 Thereafter 1,125 Total purchase commitments $ 38,860 TaxAct Indemnification Obligations In connection with the TaxAct Sale, we have certain indemnification obligations to the Buyer, TaxAct Holdings, Inc. and their respective affiliates and representatives with respect to certain losses actually incurred or suffered as a result of any claim, action, suit, or proceeding against such indemnitees arising out of or relating to the use by us or any of our affiliates in the tax software business of website tracking and analytics technologies prior to the closing of the TaxAct Sale. Such indemnification obligations terminate on December 19, 2027 and may not exceed $5.4 million ($1.0 million of which is allocable to the deductible under our insurance policies). We believe that we will be able to recover from our insurers all or a substantial portion of payments made pursuant to such indemnification obligations. The current carrying amount of the liability for these indemnification obligations is $1.0 million as of December 31, 2022 and is included within “Other long-term liabilities” on the consolidated balance sheets. We did not recognize any charges within the consolidated statements of comprehensive income (loss) associated with these indemnification obligations for the year ended December 31, 2022. Liability from 1st Global Acquisition On May 6, 2019, we closed the 1st Global Acquisition. As part of the 1st Global Acquisition, we assumed a contingent liability related to a regulatory inquiry by the SEC. This contingent liability was recorded as part of the opening balance sheet when the acquisition was closed. In the second quarter of 2021, we re-evaluated the range of probable losses as a result of our on-going discussions with the SEC and recorded a $5.5 million increase to the reserve. This increase to the reserve was recognized in “Acquisition and integration” expense on the accompanying consolidated statements of comprehensive income (loss). In December 2021, 1st Global (which is now known as Avantax Investment Services, Inc.) consented to a settlement with the SEC, which resulted in us (without admitting or denying the findings set forth in the SEC’s Order) agreeing to pay disgorgement, interest and a penalty in the total amount of $16.9 million. The total $16.9 million reserve was settled in cash prior to December 31, 2021. HKFS Contingent Consideration Liability On July 1, 2020, we closed the acquisition of Avantax Planning Partners, formerly “HKFS”, for an upfront cash purchase price of $104.4 million. The purchase price was subject to variable contingent consideration, or earn-out payments (the “HKFS Contingent Consideration” ) totaling a maximum of $60.0 million. The amounts owed for the HKFS Contingent Consideration were determined based on advisory asset levels (i) for the period beginning July 1, 2020 and ended June 30, 2021 and (ii) for the period beginning July 1, 2021 and ended June 30, 2022. Pursuant to the Stock Purchase Agreement, dated as of January 6, 2020, by and among the Company, HKFS, the selling stockholders named therein (the “Sellers” ), and JRD Seller Representative, LLC, as the Sellers’ representative (as amended on April 7, 2020, June 30, 2020, and June 29, 2021) (the “HKFS Purchase Agreement” ), the maximum aggregate amount that we were required to pay for each earn-out period was $30.0 million. If the asset market values on the applicable measurement date fell below certain specified thresholds, no payment of consideration was owed to the Sellers for such period. Based on advisory asset levels for each earn-out period, we paid the full $30.0 million to the Sellers in the third quarter of 2021 for the first earn-out, and $23.0 million in the third quarter of 2022 for the second earn-out. There are no remaining contingent payments due to the Sellers as of December 31, 2022. Litigation From time to time, we are subject to various legal proceedings, regulatory matters or fines, or claims that arise in the ordinary course of business. We accrue a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Although we believe that resolving such claims, individually or in aggregate, will not have a material adverse impact on our financial statements, these matters are subject to inherent uncertainties. We are not currently a party to any such matters for which we have recognized a material liability on our condensed consolidated balance sheet as of December 31, 2022. We have entered into indemnification agreements in the ordinary course of business with our officers and directors. Pursuant to these agreements, we may be obligated to advance payment of legal fees and costs incurred by the defendants pursuant to our obligations under these indemnification agreements and applicable Delaware law. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 11: Fair Value Measurements Certain of our assets and liabilities are carried at fair value and are valued using inputs that are classified in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs, other than Level 1, or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data and reflect our own assumptions. Assets and Liabilities Measured on a Recurring Basis The fair value hierarchy of our financial assets and liabilities carried at estimated fair value and measured on a recurring basis were as follows (in thousands): Fair value measurements at the reporting date using December 31, 2022 Quoted prices in active markets using identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents: money market and other funds $ 4,369 $ 4,369 $ — $ — Deferred compensation assets 7,974 7,974 — — Total assets at fair value $ 12,343 $ 12,343 $ — $ — Deferred compensation liabilities 7,974 7,974 — — Total liabilities at fair value $ 7,974 $ 7,974 $ — $ — Fair value measurements at the reporting date using December 31, 2021 Quoted prices in active markets using identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents: money market and other funds $ 4,293 $ 4,293 $ — $ — Total assets at fair value $ 4,293 $ 4,293 $ — $ — HKFS Contingent Consideration liability $ 28,300 $ — $ — $ 28,300 Total liabilities at fair value $ 28,300 $ — $ — $ 28,300 Cash equivalents are classified within Level 1 of the fair value hierarchy because we value them utilizing quoted prices in active markets. We offer non-qualified deferred compensation plans to our executive officers, board of directors, and certain independent financial professionals. Participants in these plans direct the investment of their accounts among the available investment options, which are generally the same as those available under our 401(k) plan. We have elected to fund these obligations through a rabbi trust which mirrors the investment elections made by participants. The assets in the rabbi trust are held for the purpose of satisfying our obligations to participants, however, remain subject to the claims of our creditors in the event we become insolvent. Our obligations and corresponding investments held under these non-qualified deferred compensation plans primarily consist of money market and mutual funds and are classified within Level 1 of the fair value hierarchy because we value them utilizing quoted prices in active markets. These investments, and the corresponding deferred compensation liabilities, are included within “Other long-term assets” and “Other long-term liabilities”, respectively, on the consolidated balance sheets. The HKFS Contingent Consideration liability relates to post-closing earn-out payments resulting from the acquisition of Avantax Planning Partners, formerly “HKFS” (see "Note 10—Commitments and Contingencies"). The final value of the second earn-out was $23.0 million as of June 30, 2022 (the measurement date for the second earn-out payment) and was paid in the third quarter of 2022. Prior to this measurement date, the estimated fair value of the HKFS Contingent Consideration liability was determined using a Monte Carlo simulation model and certain Level 3 inputs previously disclosed within our Annual Report on Form 10-K for the year ended December 31, 2021. The HKFS Contingent Consideration liability was previously included in “Accrued expenses and other current liabilities” on the consolidated balance sheets. A roll forward of the HKFS Contingent Consideration liability is as follows (in thousands): HKFS Contingent Consideration Liability Balance as of December 31, 2020 $ 35,900 Change in fair value 22,400 HKFS Contingent Consideration first earn-out payment (30,000) Balance as of December 31, 2021 28,300 Change in fair value (5,320) HKFS Contingent Consideration second earn-out payment (22,980) Balance as of December 31, 2022 $ — Changes in the fair value of this contingent consideration are reflected in “ Acquisition and integration Fair Value of Financial Instruments We consider the carrying values of accounts receivable, commissions receivable, other receivables, prepaid expenses, other current assets, financial professional loans, accounts payable, commissions and advisory fees payable, accrued expenses, and other current liabilities to approximate fair values primarily due to their short-term natures. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Note 12: Stockholders' Equity Stock Repurchase Plans and Authorizations On December 9, 2021, we announced that our board of directors authorized the Company to repurchase an additional $28.3 million of our common stock pursuant to our stock repurchase plan (the “December 2021 repurchase plan” ), bringing the total authorized repurchases under the December 2021 repurchase plan back to $100.0 million as of December 31, 2021. In November 2022, our board of directors replaced the December 2021 repurchase plan with an authorization to repurchase up to $200.0 million of our common stock. Pursuant to the December 2021 repurchase plan, share repurchases were made through a variety of methods, including open market or privately negotiated transactions. The timing and number of shares repurchased depended on a variety of factors, including price, general business and market conditions, our capital allocation policy, and alternative investment opportunities. The November 2022 stock repurchase authorization does not obligate us to repurchase any specific number of shares, may be suspended or discontinued at any time, and does not have a specified expiration date. For the year ended December 31, 2021, we did not repurchase any shares of our common stock under the December 2021 repurchase plan. For the year ended December 31, 2022 we repurchased approximately 1.9 million shares of our common stock under the December 2021 repurchase plan for an aggregate purchase price of approximately $35.0 million. The remaining authorized amount under the stock authorization as of December 31, 2022, was $200.0 million. Between January 1, 2023 and January 26, 2023, we repurchased approximately 0.5 million shares of our common stock under our stock repurchase authorization for an aggregate purchase price of approximately $12.5 million. The remaining authorized amount under the stock repurchase authorization as of February 24, 2023 was approximately $187.5 million. Capital Return Program On January 27, 2023, we commenced a modified “Dutch Auction” tender offer (the “Tender Offer” ) to purchase shares of our common stock for an aggregate purchase price of up to $250 million at a price per share not less than $27.00 and not greater than $31.00. The Tender Offer is in addition to, and separate from, the $200.0 million stock repurchase authorization discussed above. The Tender Offer was not conditioned upon any minimum number of shares being tendered and was not subject to a financing condition. The Tender Offer expired at 12:00 midnight, New York City Time, at the end of the day on February 24, 2023. Based on the preliminary results of the Tender Offer, we expect to purchase 8.3 million shares, or approximately 17.4% of our outstanding shares of common stock as of February 24, 2023, for aggregate cash consideration of $250.0 million (excluding fees and expenses related to the Tender Offer). |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 13: Stock-based Compensation Employee Stock Purchase Plan The 2016 Employee Stock Purchase Plan ( “ESPP” ) permits eligible employees to contribute up to 15% of their base earnings toward the twice-yearly purchase of our common stock, subject to an annual maximum dollar amount. The purchase price is the lesser of 85% of the fair market value of common stock on the first day or on the last day of an offering period. An aggregate of 2.7 million shares of common stock are authorized for issuance under the ESPP. Of this amount, 0.2 million shares were available for issuance as of December 31, 2022. We issue new shares upon purchase through the ESPP. Stock incentive plan We may grant incentive or non-qualified stock options, stock, RSUs, cash-settled restricted stock units , stock appreciation rights, and performance shares or performance units to employees, non-employee directors, consultants, and financial professionals. In 2018, our stockholders approved the Blucora, Inc. 2018 Long-term Incentive Plan (the “2018 Plan” ), which replaced the Blucora, Inc. 2015 Incentive Plan (as amended and restated). Upon approval of the 2018 Plan, RSUs and options are granted under the 2018 Plan, except for inducement awards made under the Blucora, Inc. 2016 Equity Inducement Plan. RSUs typically include time-based RSUs or performance-based RSUs. Stock options and time-based RSUs generally vest over a period of one Cash-settled restricted stock units represent hypothetical restricted stock units that, upon vesting, require cash settlement equal to the fair value of the Company’s common stock on the date of vesting, less applicable withholding taxes. Because these awards are required to be settled in cash, they are accounted for under the liability method of ASC 718 - Stock Compensation. Compensation expense for these awards is recognized based on the underlying vesting terms. We issue new shares upon the exercise of stock options and upon the vesting of RSUs. If a stock option or RSU is surrendered or otherwise unused, the related shares will continue to be available for issuance under the 2018 Plan. A summary of stock options and RSUs as of December 31, 2022 is as follows: Number of shares authorized for awards 10,715,156 Options and RSUs outstanding 3,003,945 Options and RSUs expected to vest 2,491,300 Options and RSUs available for grant 4,970,588 For the year ended December 31, 2022, the following activity occurred under our stock incentive plans: Number of options Weighted average exercise price Intrinsic value Weighted average remaining contractual term (in years) Stock options: Outstanding as of December 31, 2021 1,703,355 $ 16.81 Granted 187,261 $ 17.68 Forfeited (57,527) $ 13.28 Expired (7,500) $ 20.35 Exercised (168,556) $ 12.96 Outstanding as of December 31, 2022 1,657,033 $ 17.40 $ 13,594 3.7 Exercisable as of December 31, 2022 1,018,453 $ 18.12 $ 7,666 2.8 Vested and expected to vest after December 31, 2022 1,601,834 $ 17.45 $ 13,073 3.6 To estimate stock-based compensation expense, we used the Black-Scholes-Merton valuation method with the following assumptions for stock options granted: Year Ended December 31, 2022 2021 2020 Risk-free interest rate 0.53% - 1.00% 0.20% - 0.84% 0.24% - 1.62% Expected dividend yield — % — % — % Expected volatility 49% - 56% 48% - 51% 39% - 56% Expected life 3.5 3.5 3.5 The risk-free interest rate was based on the implied yield available on U.S. Treasury issues with an equivalent remaining term. The expected dividend yield was zero since we have not paid a dividend since 2008. The expected volatility was based on historical volatility of our stock for the related expected life of the award. The expected life of the award was based on historical experience, including historical post-vesting termination behavior. Number of units Weighted average grant date fair value Intrinsic value Weighted average remaining contractual term (in years) RSUs: Time and performance-based Outstanding as of December 31, 2021 1,852,809 $ 20.09 Granted 610,368 $ 19.00 Forfeited (241,420) $ 18.37 Vested (874,845) $ 22.48 Outstanding as of December 31, 2022 1,346,912 $ 18.36 $ 34,388 1.0 Expected to vest after December 31, 2022 889,466 $ 17.69 $ 22,708 0.7 Cash-settled Outstanding as of December 31, 2021 299,465 $ 17.34 Granted 715,934 $ 18.19 Forfeited (153,239) $ 17.75 Vested (33,529) $ 17.67 Outstanding as of December 31, 2022 828,631 $ 17.99 $ 21,155 1.5 Expected to vest after December 31, 2022 779,943 $ 17.99 $ 19,912 1.5 Supplemental information is presented below: Year Ended December 31, 2022 2021 2020 Stock options: Weighted average grant date fair value per option granted $ 6.69 $ 6.37 $ 6.04 Total intrinsic value of options exercised (in thousands) $ 1,279 $ 268 $ 71 Total fair value of options vested (in thousands) $ 2,468 $ 1,420 $ 4,488 RSUs: Time and performance-based Weighted average grant date fair value per unit granted $ 19.00 $ 15.87 $ 19.06 Total intrinsic value of units vested (in thousands) $ 15,811 $ 7,167 $ 4,115 Total fair value of units vested (in thousands) $ 23,038 $ 10,427 $ 6,182 Cash-settled Weighted average grant date fair value per unit granted $ 18.19 $ 17.34 $ — Total fair value of units settled upon vesting (in thousands) $ 757 $ — $ — We account for stock-based compensation in accordance with ASC 718, Stock Compensation , which requires that compensation related to all share-based awards (including stock options, RSUs, and ESPP shares) be recognized in the consolidated financial statements. Amounts recognized for stock-based compensation expense on the consolidated statements of comprehensive income (loss) were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 6,221 $ 5,086 $ 5,123 Engineering and technology 635 400 363 Sales and marketing 3,007 2,176 1,218 General and administrative (1) 11,290 10,457 1,355 Total in continuing operations 21,153 18,119 8,059 Discontinued operations 1,892 2,635 2,007 Total $ 23,045 $ 20,754 $ 10,066 ___________________________ (1) Stock-based compensation expense for the year ended December 31, 2020 was reduced by $8.5 million related to the reversal of stock-based compensation expense due to: (1) forfeitures resulting from executive departures and (2) the reversal of stock-based compensation expense for performance-based RSUs that are not expected to vest. As of December 31, 2022, total unrecognized stock-based compensation expense related to unvested stock awards was as follows: Expense (in thousands) Weighted average period over which to be recognized (in years) Stock options $ 755 1.2 Time and performance-based RSUs 6,004 1.5 Cash-settled RSUs 10,236 1.8 Total $ 16,995 |
Interest Expense and Other, Net
Interest Expense and Other, Net | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Interest Expense and Other, Net | Note 14: Interest Expense and Other, Net “Interest expense and other, net” on the consolidated statements of comprehensive income (loss) consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 Interest expense $ 217 $ 6 $ 3 Interest income and other 258 416 980 Non-capitalized debt issuance expenses — — 3,687 Interest expense and other, net $ 475 $ 422 $ 4,670 |
401 (k) Plan
401 (k) Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
401 (k) Plan | Note 15: 401(k) Plan We have a 401(k) savings plan covering our employees. Eligible employees may contribute through payroll deductions. Pursuant to a continuing resolution by our board of directors, we match a portion of the 401(k) contributions made by our employees. The amount we have contributed ranges from 1% to 4% of an employee’s salary, depending upon the percentage contributed by the employee. For the years ended December 31, 2022, 2021, and 2020, we contributed $2.9 million, $2.6 million, and $2.0 million, respectively, to our employees’ 401(k) plans. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 16: Income Taxes Loss from continuing operations before income taxes consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 United States $ (11,813) $ (53,464) $ (326,380) Loss from continuing operations before income taxes $ (11,813) $ (53,464) $ (326,380) Income tax expense (benefit) consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current: State $ 1,121 $ (716) $ 29 Total current expense (benefit) 1,121 (716) 29 Deferred: U.S. federal (15,394) (7,712) 41,437 State (661) (1,531) 199 Total deferred expense (benefit) (16,055) (9,243) 41,636 Income tax expense (benefit) $ (14,934) $ (9,959) $ 41,665 Income tax expense (benefit) differed from the amount calculated by applying the statutory federal income tax rate of 21% as follows (in thousands): Year Ended December 31, 2022 2021 2020 Income tax benefit at the statutory federal income tax rate $ (2,481) $ (11,226) $ (68,540) Non-deductible compensation 1,870 1,378 1,589 State income taxes, net of federal benefit 591 (681) 70 Excess tax deficiencies of stock-based compensation 1,402 612 1,142 Uncertain tax positions and audit settlements — (966) (575) Valuation allowance (16,599) (50,934) 23,911 Net operating loss write-off — 29,380 26,791 Capital loss carryforwards write-off — 22,324 — Other 283 154 446 Non-deductible goodwill — — 56,831 Income tax expense (benefit) $ (14,934) $ (9,959) $ 41,665 For the year ended December 31, 2022, the primary difference between the statutory tax rate and the annual effective tax rate was due to a reduction in our valuation allowance. This reduction was a result of the utilization of net operating losses against current year taxable income. Other differences between the statutory rate and the annual effective tax rate are related to non-deductible compensation, excess tax deficiencies for stock compensation, and state taxes. For the year ended December 31, 2021, the primary difference between the statutory tax rate and the annual effective tax rate was due to non-deductible compensation, excess tax deficiencies for stock compensation, and the net impact of the reduction in our valuation allowance, which included the utilization of net operating losses for current year taxable income, the write-off of expired federal net operating losses, and the write-off of expired capital loss carryforwards. Other differences between the statutory rate and the annual effective tax rate are related to state taxes and uncertain tax positions. For the year ended December 31, 2020, the primary differences between the statutory tax rate and the annual effective tax rate were the impact of the non-deductible goodwill impairment, the write-off of expired federal net operating losses, and incremental valuation allowance. Other differences between the statutory rate and the annual effective tax rate are related to non-deductible compensation, excess tax deficiencies for stock compensation, uncertain tax positions, and state taxes. The tax effect of temporary differences and net operating loss carryforwards that gave rise to our deferred tax assets and liabilities were as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Net operating loss and credit carryforwards $ 828 $ 21,828 Capital loss — 429 Accrued compensation 8,033 6,046 Stock-based compensation 5,487 5,996 Deferred revenue 1,741 1,966 Lease liabilities 8,568 9,083 Other, net 2,556 2,630 Total gross deferred tax assets 27,213 47,978 Valuation allowance (202) (16,801) Deferred tax assets, net of valuation allowance 27,011 31,177 Deferred tax liabilities: Amortization (42,875) (44,644) Depreciation (237) (756) Right-of-use assets (4,677) (4,871) Other, net (41) (30) Total gross deferred tax liabilities (47,830) (50,301) Net deferred tax liabilities $ (20,819) $ (19,124) The changes in the valuation allowance for deferred tax assets are shown below (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ 16,801 $ 67,735 $ 43,824 Increase (decrease) in valuation allowance—future year utilization — 2,105 18,136 Increase (decrease) in valuation allowance—current year utilization and expiration (16,599) (53,039) 5,047 Increase (decrease) in valuation allowance—other — — 728 Balance at end of year $ 202 $ 16,801 $ 67,735 As of December 31, 2022, we evaluated the need for a valuation allowance for deferred tax assets based upon our assessment of whether it is more likely than not that we will generate sufficient future taxable income necessary to realize the deferred tax benefits. In 2022, we decreased the valuation allowance by $16.6 million related to the utilization of net operating losses ( “NOLs” ) and capital loss carryforwards to offset current year taxable income. As of December 31, 2022, our U.S. federal net operating loss carryforwards were zero. State net operating loss carryforwards for income tax purposes were $14.0 million ($0.8 million tax effected), which primarily related to excess tax benefits for stock-based compensation. If unutilized, our state net operating loss carryforward will expire between 2025 and 2042. We anticipate state net operating loss carryforwards to be utilized in the future, except for the Avantax Wealth Management, Inc. separate state net operating losses. Therefore, a valuation allowance of $0.2 million will remain until it is more likely than not that these operating losses will be utilized. A reconciliation of the unrecognized tax benefit balances is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ 4,665 $ 7,476 $ 19,483 Gross decreases for tax positions of prior years — — (11,972) Purchase accounting for 1st Global Acquisition — — (35) Statute of limitations expirations (1,856) (2,811) — Balance at end of year $ 2,809 $ 4,665 $ 7,476 The total amount of unrecognized tax benefits that could affect our effective tax rate if recognized was $1.8 million and $1.8 million as of December 31, 2022 and 2021, respectively. The remaining $1.0 million and $2.9 million was not recognized on our consolidated balance sheets as of December 31, 2022 and 2021, respectively, and if recognized, would create a deferred tax asset. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2017, although NOL carryforwards and tax credit carryforwards from any year are subject to examination and adjustment for at least three years following the year in which they are fully utilized. As of December 31, 2022, no significant adjustments have been proposed relative to our tax positions. For the year ended December 31, 2022, we reversed $0.1 million of interest and penalties related to uncertain tax positions. For the year ended December 31, 2021, we reversed $0.2 million of interest and penalties related to uncertain tax positions. For the year ended December 31, 2020, the amount recognized for interest and penalties related to uncertain tax positions was not material. We had $1.5 million and $1.3 million accrued for interest and penalties as of December 31, 2022 and 2021, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Note 17: Net Income (Loss) Per Share “Basic net income (loss) per share” is calculated using the weighted average number of common shares outstanding during the applicable period. “Diluted net income (loss) per share” is calculated using the weighted average number of common shares outstanding plus the number of dilutive potential common shares outstanding during the applicable period. Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of outstanding stock options and the vesting of outstanding RSUs using the treasury stock method. Cash-settled restricted stock units are not settled in common shares and are therefore excluded from dilutive potential common shares. Dilutive potential common shares are excluded from the calculation of diluted net income per share if their effect is antidilutive, including when we report a loss from continuing operations. Certain of our performance-based RSUs are considered contingently issuable shares and are excluded from the diluted weighted average common shares outstanding computation because the related performance-based criteria were not achieved as of the end of the reporting period. The calculation of basic and diluted net income (loss) per share is as follows (in thousands, except per share amounts): Year Ended December 31, 2022 2021 2020 Numerator: Income (loss) from continuing operations $ 3,121 $ (43,505) $ (368,045) Income from discontinued operations 417,126 51,262 25,290 Net income (loss) 420,247 7,757 (342,755) Denominator: Basic weighted average common shares outstanding 47,994 48,578 47,978 Dilutive potential common shares 1,189 — — Diluted weighted average common shares outstanding 49,183 48,578 47,978 Basic net income (loss) per share: Continuing operations $ 0.07 $ (0.90) $ (7.67) Discontinued operations 8.69 1.06 0.53 Basic net income (loss) per share: $ 8.76 $ 0.16 $ (7.14) Diluted net income (loss) per share: Continuing operations $ 0.06 $ (0.90) $ (7.67) Discontinued operations 8.48 1.06 0.53 Diluted net income (loss) per share: $ 8.54 $ 0.16 $ (7.14) Shares excluded (1) 774 3,811 2,936 ____________________________ (1) Potential common shares were excluded from the calculation of diluted net income (loss) per share for these periods because their effect would have been anti-dilutive. For the years ended December 31, 2021 and December 31, 2020, all potential common shares were excluded from the calculation of diluted net income (loss) per share due to the loss from continuing operations. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 18: Subsequent Events Amended and Restated Credit Agreement On January 24, 2023 (the “Closing Date” ), we entered into an Amended and Restated Credit Agreement, which amends and restates in its entirety our existing Credit Agreement. The Amended and Restated Credit Agreement provides for a delayed draw term loan facility up to a maximum principal amount of $270 million (the “Delayed Draw Term Loan Facility” ) and a revolving credit facility with a commitment amount of $50 million (the “Revolving Credit Facility” ). We may borrow term loans under the Delayed Draw Term Loan Facility (the “Term Loans” ) until January 24, 2024. The stated maturity date of the Delayed Draw Term Loan Facility and the Revolving Credit Facility is January 24, 2028 (the “Maturity Date” ). The proceeds of any Term Loans may be used to fund shareholder distributions and for general corporate purposes. The proceeds of any loans under the Revolving Credit Facility may be used to finance working capital needs and for general corporate purposes. On February 24, 2023, we borrowed $170.0 million under the Delayed Draw Term Loan Facility. Stock Repurchases Between January 1, 2023 and January 26, 2023, we repurchased approximately 0.5 million shares of our common stock under our stock repurchase authorization for an aggregate purchase price of approximately $12.5 million. The remaining authorized amount under the stock repurchase authorization as of February 24, 2023 was approximately $187.5 million. Capital Return Program On January 27, 2023, we commenced a modified “Dutch Auction” tender offer (the “Tender Offer” ) to purchase shares of our common stock for an aggregate purchase price of up to $250 million at a price per share not less than $27.00 and not greater than $31.00. The Tender Offer is in addition to, and separate from, the $200.0 million stock repurchase authorization discussed in "Note 12—Stockholders' Equity." The Tender Offer was |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ( “GAAP” |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingencies. Actual amounts may differ from estimates. |
Cash and Cash Equivalents | We generally invest our excess cash in money market funds that are made up of securities issued by agencies of the U.S. government. From time-to-time, we may invest in other vehicles, such as debt instruments issued by the U.S. federal government and its agencies, international governments, municipalities, and publicly held corporations, as well as commercial paper and insured time deposits with commercial banks. Specific holdings can vary from period to period depending upon our cash requirements. Such investments are reported at fair value on the consolidated balance sheets. |
Accounts Receivable, Net | Accounts receivable are stated at amounts due from clients, net of an allowance for credit losses. Our estimates of credit losses are based on our historical experience, the aging of our trade receivables, and management judgment. |
Property, Equipment, and Software, Net | Property, equipment, and software, net, are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Computer equipment 3 years Purchased software 3 years Data center servers 3 years Internally developed software 3 years Office equipment 7 years Office furniture 7 years Airplane 25 years Leasehold improvements Shorter of lease term or economic life Internally Developed Software Costs incurred to develop software intended for our internal use, primarily contractor costs and employee salaries and benefits, are capitalized during the application development stage. Capitalization of such costs ceases once the project is substantially complete and ready for its intended use. We also capitalize costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional functionality. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. |
Business Combinations | We allocate the fair value of the purchase consideration for our business combinations to the assets acquired and liabilities assumed, generally based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Purchase consideration includes assets transferred, liabilities assumed, and/or equity interests issued by us, all of which are measured at their fair value as of the date of acquisition. Our business combinations may be structured to include a combination of up-front, deferred, and contingent payments to be made at specified dates subsequent to the date of acquisition. Deferred and contingent payments determined to be purchase consideration are recorded at fair value as of the acquisition date. Our contingent consideration arrangements are generally obligations to make future payments to sellers contingent upon the achievement of future financial targets and are remeasured to fair value at the end of each reporting period until the obligations are settled. The valuation of the net assets acquired as well as certain elements of purchase consideration requires management to make significant estimates and assumptions, especially with respect to future expected cash flows, discount rates, growth and attrition rates, and estimated useful lives. Management’s assumptions and estimates of fair value are based on comparable market data and information obtained from the management of acquired entities. These assumptions and estimates are believed to be reasonable, but are inherently uncertain and, as a result, actual results may differ from estimates. During the measurement period, we may record adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Subsequent changes to the fair value of contingent consideration are reflected in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). |
Asset Acquisitions | Acquisitions that do not meet the criteria to be accounted for as a business combination are accounted for as an asset acquisition. Using a cost accumulation model, the purchase price, including certain acquisition-related costs, is allocated to the acquired assets and assumed liabilities based upon their relative fair values as of the acquisition date. No goodwill is contemplated in the allocation process. Our asset acquisitions typically include contingent consideration arrangements that encompass obligations to make future payments to sellers contingent upon the achievement of future financial targets. Contingent consideration is not recognized until all contingencies are resolved and the consideration is payable, at which point the consideration is allocated to the assets acquired on a relative fair value basis. |
Discontinued Operations | We review the presentation of planned business dispositions in the consolidated financial statements based on the available information and events that have occurred. The review consists of evaluating whether the business meets the definition of a component for which the operations and cash flows are clearly distinguishable from the other components of the business, and if so, whether the disposition represents a strategic shift that has a major effect on operations and financial results. In addition, we evaluate whether the business has met the criteria as a business held for sale. In order for a planned disposition to be classified as a business held for sale, the established criteria must be met as of the reporting date, including an active program to market the business and the expected disposition of the business within one year. Planned dispositions are presented as discontinued operations when all the criteria described above are met. For those divestitures that qualify as discontinued operations, all comparative periods presented are reclassified in the consolidated balance sheets. Additionally, the results of operations of a discontinued operation are reclassified to income from discontinued operations, net of tax, for all periods presented in the consolidated statements of |
Goodwill and Acquired Intangible Assets, Net | We test goodwill and indefinite-lived intangible assets for impairment annually, as of November 30, or more frequently when events or circumstances indicate that impairment may have occurred. For purposes of goodwill impairment testing, our reporting units are consistent with our reporting segments. As a result of the TaxAct Sale, which occurred after our annual impairment assessment, our continuing operations are presented as one reportable segment. We test goodwill for impairment either by assessing qualitative factors to determine whether it is more likely than not that the fair values of our reporting unit(s) are less than their carrying amounts, or by performing a quantitative test. Qualitative factors include industry and market conditions, overall financial performance, and other relevant events and circumstances affecting each reporting unit. If we choose to perform a qualitative assessment and, after considering the totality of events or circumstances, we determine it is more likely than not the fair value(s) of our reporting unit(s) are less than their carrying amounts, then we perform a quantitative fair value test. Our quantitative test utilizes a weighted combination of a discounted cash flow model (known as the income approach) and a market approach which estimates a reporting unit’s fair value by applying income-based valuation multiples for a set of comparable companies to the reporting unit’s income. These approaches involve judgmental assumptions, including forecasted future cash flows expected to be generated by each reporting unit over an extended period of time, long-term growth rates, the identification of comparable companies, and each reporting unit’s weighted average cost of capital. The weighted average cost of capital factors in the relevant risk associated with business-specific characteristics and the uncertainty of achieving projected cash flows. These assumptions are unobservable inputs and are considered Level 3 measurements. Impairment is recognized as the excess of a reporting unit’s carrying amount, including goodwill, over its fair value. |
Impairment of Long-Lived Assets | Long-lived assets, including definite-lived intangibles, are reviewed for impairment when events or circumstances indicate that the carrying value of an asset or group of assets may not be recoverable. Factors we consider important that may trigger an impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results, and significant changes in the manner of our use of the asset. If circumstances require that an asset or group of assets be tested for impairment, determination of recoverability is based on an estimate of the undiscounted cash flows expected to be generated by the asset or group of assets. If the carrying amount of the asset or group of assets is not recoverable on an undiscounted cash flow basis, impairment is recognized equal to the excess of the carrying value over its fair value. |
Financial Professional Loans | We periodically extend credit to our financial professionals in the form of recruiting or retention loans, commission advances and other loans. The decision to extend credit to a financial professional is generally based on affiliation with Avantax Wealth Management and their ability to generate future revenues. Loans made in connection with recruiting or retention can either be repayable or forgivable over terms generally up to fifteen years provided that the financial professional remains a service provider to the Company. Forgivable loans are not repaid in cash and are amortized over the term of the loan. If a financial professional terminates their arrangement with the Company prior to the loan maturity date, the remaining balance becomes repayable immediately. We estimate an allowance for credit loss related to both repayable and forgivable loans at inception using estimates and assumptions based on historical loss experience and expectations of future loss rates. Management monitors the adequacy of these estimates on a periodic basis against actual trends experienced. |
Leases | We determine if an arrangement contains a lease at inception. Right-of-use ( “ROU” ) assets represent our right to use an underlying asset for the lease term and the corresponding lease liabilities represent our obligation to make lease payments arising from the lease. On the commencement date, leases are evaluated for classification, and ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The ROU asset is reduced for tenant incentives and excludes any initial direct costs incurred. We have elected to combine the lease and non-lease components of a contract, if applicable, into a single lease component. The implicit rates within our leases are generally not readily determinable, and instead we use our incremental borrowing rate at the lease commencement date to determine the present value of lease payments. Fixed lease cost is recognized on a straight-line basis over the lease term. Variable lease payments are not included in the calculation of the ROU assets and lease liabilities and are recognized as lease costs as incurred. Our variable lease payments generally relate to amounts paid to lessors for common area maintenance. Our lease terms are contractually fixed but may include extension or termination options. These options are included in lease values when it is reasonably certain we will exercise such options. We have elected not to recognize a ROU asset or lease liability for short-term leases, defined as those which have an initial lease term of twelve months or less. Our leases do not contain residual value guarantees or material variable lease payments. We do not have any material restrictions or covenants imposed by leases that would impact our ability to pay dividends or cause us to incur additional financial obligations. |
Fair Value of Financial Instruments | We measure our financial instruments and contingent consideration from our business combinations at fair value at each reporting period using a fair value hierarchy. The classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair value inputs are classified in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs, other than Level 1, or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data and reflect our own assumptions. |
Revenue Recognition | We recognize revenue when all five of the following revenue recognition criteria have been satisfied: • contract(s) with clients have been identified; • performance obligations have been identified; • transaction prices have been determined; • transaction prices have been allocated to the performance obligations; and • the performance obligations have been fulfilled by transferring control over the promised services to the client. The determination of when these criteria are satisfied varies by product or service and is explained in more detail below. Revenue recognition. Revenue primarily consists of advisory revenue, commission revenue, asset-based revenue, and transaction and fee revenue. Revenue is recognized upon the transfer of services to clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those services. Payments received by us in advance of the performance of service are deferred and recognized as revenue when we have satisfied our performance obligation. Advisory revenue includes fees charged to clients in advisory accounts for which we are the RIA. These fees are based on the value of assets within these advisory accounts. For advisory revenues generated by Avantax Wealth Management, advisory fees are typically billed quarterly, in advance, and the related advisory revenues are deferred and recognized ratably over the period in which our performance obligations have been completed. For advisory revenues generated by Avantax Planning Partners, advisory fees are typically billed quarterly, in arrears, and the related advisory revenues are accrued and recognized over the period in which our performance obligations were completed. Commissions represent amounts generated by clients’ purchases and sales of securities and investment products. We serve as the registered broker-dealer or insurance agent for those trades. We generate two types of commissions: (1) transaction-based commissions and (2) trailing commissions. Transaction-based commissions are generated on a per-transaction basis and are recognized as revenue on the trade date, which is when our performance obligations have been substantially completed. Trailing commissions are earned by us based on our ongoing account support to clients. Trailing commissions are based on a percentage of the current market value of clients’ investment holdings in trail-eligible assets and recognized over the period during which our services are performed. Since trailing commission revenue is generally paid in arrears, we estimate it based on a number of factors, including stock market index levels and the amount of trailing commission revenues received in prior periods. These estimates are primarily based on historical information, and there is not significant judgment involved. A substantial portion of advisory revenue and commission revenue is ultimately paid to our financial professionals. In Avantax Wealth Management, advisory fee payments to financial professionals typically occur at the beginning of the quarter, in advance, and therefore do not result in an advisory fee payable amount at quarter end. In Avantax Planning Partners, advisory fee payments (which are primarily composed of payments to CPA firms under fee sharing arrangements) are typically made quarterly, in arrears, and we record an estimate for the advisory fee payable based on the historical payout ratios and financial market movement for the period. For transaction-based commissions, we record an estimate for commissions payable based upon the payout rate of the financial professional generating the accrued commission revenue. For trailing commissions, we record an estimate for trailing commissions payable based upon historical payout ratios. Such amounts are recorded as “Commissions and advisory fees payable” on the consolidated balance sheets and “Cost of revenue” on the consolidated statements of comprehensive income (loss). Asset-based revenue primarily includes fees from financial product manufacturer sponsorship programs, cash sweep programs, and other asset-based revenues, primarily margin revenues and asset-based retirement plan service fees. Asset-based revenue is recognized ratably over the period in which services are provided. Transaction and fee revenue primarily includes (1) support fees charged to financial professionals, which are recognized over time as support services are provided, (2) fees charged for executing certain transactions in client accounts, which are recognized on a trade-date basis, and (3) other fees related to services provided and other account charges as generally outlined in agreements with financial professionals, clients, and financial institutions, which are recognized as services are performed or as earned, as applicable. Costs to obtain a contract. We capitalize the incremental costs of obtaining a contract with a client, primarily one-time commissions paid to affiliates who refer clients, if we expect to recover those costs. These costs are |
Advertising Expenses | Costs for advertising are recorded within “Sales and marketing” on the consolidated statements of comprehensive income (loss) when the advertisement appears. |
Stock-Based Compensation | We measure stock-based compensation for awards of stock options, restricted stock units ( “RSUs” ), and other similar awards based on the estimated fair value of the awards on the date of grant. RSUs typically include service-based vesting requirements ( “time-based RSUs” ) or performance-based vesting requirements ( “performance-based RSUs” ). Compensation expense for awards that vest ratably is recognized net of estimated forfeitures (if applicable) over the requisite service period of the award for each vesting tranche using the straight-line method. Compensation expense for awards that cliff vest is recognized over the requisite service period of the award using the straight-line method. We estimate forfeitures for employee awards at the time of grant, based upon historical data, and revise those estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We recognize forfeitures as they occur for awards to non-employee financial professionals. The fair value of stock options is estimated using a Black-Scholes-Merton valuation method on the date of grant. The fair value of time-based RSUs is equal to the closing price of the Company’s stock on the date of grant. The fair value of performance-based RSUs that contain a market component is estimated using a Monte-Carlo simulation model on the date of grant. For performance-based RSUs, compensation expense is originally based on the number of shares that would vest if we achieve the level of performance that we estimate is the most probable outcome at the grant date. Throughout the requisite service period, we monitor the probability of achieving the performance condition, and adjust compensation expense based on future expected performance. Compensation expense for performance-based RSUs that contain a market component is not reversed if the market criteria are not satisfied. |
Income Taxes | We account for income taxes under the asset and liability method, under which deferred tax assets, including net operating loss carryforwards, and deferred tax liabilities are determined based on temporary differences between the book and tax basis of assets and liabilities. We periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of the deferred tax assets by a valuation allowance to the extent we believe it is more likely than not a portion will not be realized. We consider many factors when assessing the likelihood of future realization of deferred tax assets, including expectations of future taxable income, recent cumulative earnings experience by taxing jurisdiction, and other relevant factors. There is a wide range of possible judgments relating to the valuation of our deferred tax assets. We record liabilities to address uncertain tax positions that have been taken in previously filed tax returns or that are expected to be taken in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that the tax position, based on technical merits, will be sustained upon examination. The tax benefit to be recognized in the financial statements from such a position is measured as the largest amount of benefit that has a greater than 50% cumulative likelihood of being realized upon ultimate settlement with the taxing authority. The difference between the amount recognized and the total tax position is recorded as a liability. The ultimate resolution of these tax positions may be greater or less than the liabilities recorded. We recognize interest and penalties related to uncertain tax positions in interest expense and general and administrative expense, respectively. |
Concentration of Credit Risk | Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term investments, trade accounts receivable, and commissions receivable. These instruments are generally unsecured and uninsured. For cash equivalents, short-term investments, and commissions receivable, we attempt to manage exposure to counterparty credit risk by only entering into agreements with major financial institutions and investment sponsors that are expected to be able to fully perform under the terms of the applicable agreement. Accounts receivable are typically unsecured and are derived from revenues earned from clients primarily located in the United States operating in a variety of geographic areas. We perform ongoing credit evaluations of our clients and maintain allowances for potential credit losses. |
Recently Issued Accounting Pronouncements | There have been no recent accounting pronouncements, changes in accounting pronouncements, or recently issued accounting guidance during fiscal year 2022 that are material, significant, or potentially significant to us |
Net Income (Loss) Per Share | Basic net income (loss) per share” is calculated using the weighted average number of common shares outstanding during the applicable period. “Diluted net income (loss) per share” is calculated using the weighted average number of common shares outstanding plus the number of dilutive potential common shares outstanding during the applicable period. Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of outstanding stock options and the vesting of outstanding RSUs using the treasury stock method. Cash-settled restricted stock units are not settled in common shares and are therefore excluded from dilutive potential common shares. Dilutive potential common shares are excluded from the calculation of diluted net income per share if their effect is antidilutive, including when we report a loss from continuing operations. Certain of our performance-based RSUs are considered contingently issuable shares and are excluded from the diluted weighted average common shares outstanding computation because the related performance-based criteria were not achieved as of the end of the reporting period. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment | Property, equipment, and software, net, are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Computer equipment 3 years Purchased software 3 years Data center servers 3 years Internally developed software 3 years Office equipment 7 years Office furniture 7 years Airplane 25 years Leasehold improvements Shorter of lease term or economic life Property, equipment, and software, net, consisted of the following (in thousands): December 31, 2022 2021 Internally developed software $ 29,491 $ 14,548 Computer equipment 5,172 4,451 Purchased software 6,433 6,644 Leasehold improvements 16,944 16,953 Airplane 3,770 3,770 Office furniture 7,257 7,257 Office equipment 2,425 2,423 Data center servers 1,253 984 Capital projects in progress (1) 11,237 13,200 Property, equipment, and software, gross 83,982 70,230 Less: Accumulated depreciation (30,941) (20,190) Total property, equipment, and software, net $ 53,041 $ 50,040 ____________________________ |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | The following table presents the gain associated with the sale, presented in the results of discontinued operations below (in thousands): Gross purchase price, as adjusted per the terms of the Purchase Agreement $ 717,911 Net assets disposed (228,040) Transaction costs (17,634) Pre-tax gain on disposal $ 472,237 The carrying value of the net assets sold are as follows (in thousands): Cash and cash equivalents $ 4,591 Accounts receivable, net 250 Prepaid expenses and other current assets 7,861 Property, equipment, and software, net 22,377 Goodwill 188,542 Other intangible assets, net 19,500 Other long-term assets 184 Accounts payable (1,433) Accrued expenses and other current liabilities (7,212) Deferred revenue (5,446) Deferred tax liabilities, net (1,174) Total net assets sold $ 228,040 The following table presents summarized information regarding certain components of income (in thousands): Year Ended December 31, 2022 2021 2020 Revenues $ 247,241 $ 226,987 $ 208,763 Operating expenses 155,446 143,326 156,173 Interest expense and other, net (39,303) (31,658) (26,634) Income from discontinued operations before gain on disposal and income taxes 52,492 52,003 25,956 Pre-tax gain on disposal 472,237 — — Income from discontinued operations before income taxes 524,729 52,003 25,956 Income tax benefit (expense) (107,603) (741) (666) Income from discontinued operations $ 417,126 $ 51,262 $ 25,290 The following table presents the aggregate amounts of the classes of assets and liabilities classified as discontinued operations: December 31, 2021 Assets: Cash and cash equivalents $ 34,195 Accounts receivable, net 692 Prepaid expenses and other current assets 6,745 Total current assets of discontinued operations 41,632 Property, equipment, and software, net 23,598 Goodwill, net 188,542 Other intangible assets, net 19,500 Other long-term assets 36 Total assets of discontinued operations $ 273,308 Liabilities: Accounts payable $ 1,723 Accrued expenses and other current liabilities 10,020 Current deferred revenue 8,388 Total current liabilities of discontinued operations 20,131 Deferred tax liabilities, net 1,000 Total liabilities of discontinued operations $ 21,131 The following table presents significant non-cash items and capital expenditures of discontinued operations (in thousands): Year Ended December 31, 2022 2021 2020 Non-cash items: Stock-based compensation $ 1,892 $ 2,635 $ 2,007 Depreciation $ 8,099 $ 6,120 $ 3,339 Amortization of debt discount and issuance costs $ 2,782 $ 2,668 $ 2,065 Loss on debt extinguishment $ 4,192 $ — $ — Purchases of property, equipment, and software $ 7,067 $ 9,277 $ 15,637 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments | Revenues by major category and the timing of revenue recognition was as follows (in thousands): Year Ended December 31, 2022 2021 2020 Recognized upon transaction: Commission $ 75,420 $ 89,970 $ 74,788 Transaction and fee 4,010 4,210 6,494 Total revenue recognized upon transaction $ 79,430 $ 94,180 $ 81,282 Recognized over time: Advisory $ 398,839 $ 395,800 $ 314,751 Commission 98,011 120,707 110,413 Asset-based 65,043 22,101 23,688 Transaction and fee 25,173 25,425 16,055 Total revenue recognized over time $ 587,066 $ 564,033 $ 464,907 Total revenue: Advisory $ 398,839 $ 395,800 $ 314,751 Commission 173,431 210,677 185,201 Asset-based 65,043 22,101 23,688 Transaction and fee 29,183 29,635 22,549 Total revenue $ 666,496 $ 658,213 $ 546,189 |
Goodwill and Acquired Intangi_2
Goodwill and Acquired Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Activity | The following table presents goodwill recorded on our consolidated balance sheets (in thousands): Total Balance as of December 31, 2019 $ 473,833 Acquired 63,737 Purchase accounting adjustments (666) Impairment (270,625) Balance as of December 31, 2020 266,279 Balance as of December 31, 2021 266,279 Balance as of December 31, 2022 $ 266,279 |
Schedule of Finite-Lived Intangible Assets | Acquired intangible assets, net, consisted of the following (in thousands): December 31, 2022 December 31, 2021 Weighted average amortization period (years) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets: Financial professional relationships 13.2 $ 318,700 $ (130,969) $ 187,731 $ 318,700 $ (111,916) $ 206,784 Client relationships 12.9 74,532 (10,306) 64,226 65,573 (5,729) 59,844 Sponsor relationships 10.9 17,200 (6,630) 10,570 17,200 (5,655) 11,545 CPA firm relationships 12.5 4,070 (678) 3,392 4,070 (407) 3,663 Trade name 0.5 3,100 (3,017) 83 3,100 (2,379) 721 Technology 0.0 2,980 (2,980) — 2,980 (2,852) 128 Curriculum 0.0 900 (900) — 900 (796) 104 Total acquired intangible assets, net $ 421,482 $ (155,480) $ 266,002 $ 412,523 $ (129,734) $ 282,789 |
Schedule of Information About Expected Amortization of Definite-Lived Intangible Assets | Expected amortization of definite-lived intangible assets held as of December 31, 2022 was as follows (in thousands): 2023 $ 24,845 2024 24,286 2025 23,606 2026 22,985 2027 22,417 Thereafter 147,863 Total $ 266,002 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Company's Debt | Our debt consisted of the following as of the periods indicated in the table below (in thousands): December 31, December 31, Senior Secured Credit Facility Principal outstanding $ — $ 561,344 Unamortized debt issuance costs — (3,371) Unamortized debt discount — (3,027) Net carrying value $ — $ 554,946 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Summary of Operating Lease Expense | Operating lease cost, net of sublease income, cash paid on operating lease liabilities, and ROU assets obtained in exchange for lease obligations for the years ended December 31, 2022, 2021, and 2020 were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Fixed lease cost (1) $ 3,858 $ 4,188 $ 6,762 Variable lease cost 1,402 1,057 893 Operating lease cost, before sublease income 5,260 5,245 7,655 Sublease income (937) (464) (1,235) Total operating lease cost, net of sublease income $ 4,323 $ 4,781 $ 6,420 Additional lease information: Cash paid on operating lease liabilities (2) $ 5,095 $ 1,853 $ 3,818 ROU assets obtained in exchange for lease obligations $ 390 $ 93 $ 21,766 ____________________________ (1) For the years ended December 31, 2021 and December 31, 2020, fixed lease cost from discontinued operations were $0.3 million and $0.5 million, respectively. As these amounts were not material to the disclosures above, we have not adjusted the historical presentation. (2) For the years ended December 31, 2021 and December 31, 2020, cash paid on operating lease liabilities from discontinued operations were $0.3 million and $0.5 million. As these amounts were not material to the disclosures above, we have not adjusted the historical presentation. |
Schedule of Supplemental Balance Sheet Information Related to Leases | Right-of-use assets and operating leases were recorded on the consolidated balance sheets as follows (in thousands): December 31, 2022 2021 Right-of-use assets, net $ 19,361 $ 20,466 Current lease liabilities $ 5,139 $ 4,896 Long-term lease liabilities 30,332 33,267 Total operating lease liabilities $ 35,471 $ 38,163 Weighted-average remaining lease term (in years) 9.4 10.3 Weighted-average discount rate 5.5 % 5.4 % |
Schedule of Maturity of Operating Lease Liabilities | The maturities of our operating lease liabilities as of December 31, 2022 are as follows (in thousands): Undiscounted cash flows: 2023 $ 5,289 2024 5,184 2025 5,086 2026 4,256 2027 3,858 Thereafter 22,315 Total undiscounted cash flows 45,988 Imputed interest (10,517) Present value of cash flows $ 35,471 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2022 2021 Prepaid expenses $ 7,857 $ 6,393 Forgivable loans 5,951 4,316 Other current assets 1,219 1,022 Total prepaid expenses and other current assets $ 15,027 $ 11,731 |
Schedule of Property and Equipment | Property, equipment, and software, net, are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Computer equipment 3 years Purchased software 3 years Data center servers 3 years Internally developed software 3 years Office equipment 7 years Office furniture 7 years Airplane 25 years Leasehold improvements Shorter of lease term or economic life Property, equipment, and software, net, consisted of the following (in thousands): December 31, 2022 2021 Internally developed software $ 29,491 $ 14,548 Computer equipment 5,172 4,451 Purchased software 6,433 6,644 Leasehold improvements 16,944 16,953 Airplane 3,770 3,770 Office furniture 7,257 7,257 Office equipment 2,425 2,423 Data center servers 1,253 984 Capital projects in progress (1) 11,237 13,200 Property, equipment, and software, gross 83,982 70,230 Less: Accumulated depreciation (30,941) (20,190) Total property, equipment, and software, net $ 53,041 $ 50,040 ____________________________ |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Salaries and related benefit expenses $ 17,481 $ 18,211 HKFS Contingent Consideration liability (2) — 28,300 Accrued legal costs 1,102 2,796 Accrued vendor and advertising costs 2,726 2,040 Accrued taxes (3) 85,965 — Accrued fixed and variable acquisition consideration 897 837 Other 3,041 3,474 Total accrued expenses and other current liabilities $ 111,212 $ 55,658 ____________________________ (2) For more information on our contingent liabilities, see “Note 10—Commitments and Contingencies.” |
Schedule of Other Long Term Liabilities | Other long-term liabilities consisted of the following (in thousands): December 31, 2022 2021 Deferred compensation $ 7,974 $ — Accrued cash-settled stock-based compensation 7,556 1,391 Other 6,946 5,361 Other long-term liabilities $ 22,476 $ 6,752 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Contractual Commitments | As of December 31, 2022, our purchase commitments for the next five years and thereafter were as follows (in thousands): 2023 $ 14,209 2024 11,010 2025 5,672 2026 4,575 2027 2,269 Thereafter 1,125 Total purchase commitments $ 38,860 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy of Financial Assets and Liabilities Carried at Fair Value and Measured on Recurring Basis | The fair value hierarchy of our financial assets and liabilities carried at estimated fair value and measured on a recurring basis were as follows (in thousands): Fair value measurements at the reporting date using December 31, 2022 Quoted prices in active markets using identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents: money market and other funds $ 4,369 $ 4,369 $ — $ — Deferred compensation assets 7,974 7,974 — — Total assets at fair value $ 12,343 $ 12,343 $ — $ — Deferred compensation liabilities 7,974 7,974 — — Total liabilities at fair value $ 7,974 $ 7,974 $ — $ — Fair value measurements at the reporting date using December 31, 2021 Quoted prices in active markets using identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents: money market and other funds $ 4,293 $ 4,293 $ — $ — Total assets at fair value $ 4,293 $ 4,293 $ — $ — HKFS Contingent Consideration liability $ 28,300 $ — $ — $ 28,300 Total liabilities at fair value $ 28,300 $ — $ — $ 28,300 |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | A roll forward of the HKFS Contingent Consideration liability is as follows (in thousands): HKFS Contingent Consideration Liability Balance as of December 31, 2020 $ 35,900 Change in fair value 22,400 HKFS Contingent Consideration first earn-out payment (30,000) Balance as of December 31, 2021 28,300 Change in fair value (5,320) HKFS Contingent Consideration second earn-out payment (22,980) Balance as of December 31, 2022 $ — |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Options, RSUs | A summary of stock options and RSUs as of December 31, 2022 is as follows: Number of shares authorized for awards 10,715,156 Options and RSUs outstanding 3,003,945 Options and RSUs expected to vest 2,491,300 Options and RSUs available for grant 4,970,588 |
Schedule of Stock Incentive Plans Activity | For the year ended December 31, 2022, the following activity occurred under our stock incentive plans: Number of options Weighted average exercise price Intrinsic value Weighted average remaining contractual term (in years) Stock options: Outstanding as of December 31, 2021 1,703,355 $ 16.81 Granted 187,261 $ 17.68 Forfeited (57,527) $ 13.28 Expired (7,500) $ 20.35 Exercised (168,556) $ 12.96 Outstanding as of December 31, 2022 1,657,033 $ 17.40 $ 13,594 3.7 Exercisable as of December 31, 2022 1,018,453 $ 18.12 $ 7,666 2.8 Vested and expected to vest after December 31, 2022 1,601,834 $ 17.45 $ 13,073 3.6 The risk-free interest rate was based on the implied yield available on U.S. Treasury issues with an equivalent remaining term. The expected dividend yield was zero since we have not paid a dividend since 2008. The expected volatility was based on historical volatility of our stock for the related expected life of the award. The expected life of the award was based on historical experience, including historical post-vesting termination behavior. Number of units Weighted average grant date fair value Intrinsic value Weighted average remaining contractual term (in years) RSUs: Time and performance-based Outstanding as of December 31, 2021 1,852,809 $ 20.09 Granted 610,368 $ 19.00 Forfeited (241,420) $ 18.37 Vested (874,845) $ 22.48 Outstanding as of December 31, 2022 1,346,912 $ 18.36 $ 34,388 1.0 Expected to vest after December 31, 2022 889,466 $ 17.69 $ 22,708 0.7 Cash-settled Outstanding as of December 31, 2021 299,465 $ 17.34 Granted 715,934 $ 18.19 Forfeited (153,239) $ 17.75 Vested (33,529) $ 17.67 Outstanding as of December 31, 2022 828,631 $ 17.99 $ 21,155 1.5 Expected to vest after December 31, 2022 779,943 $ 17.99 $ 19,912 1.5 |
Schedule of Stock Option Grants, Valuation Assumptions | To estimate stock-based compensation expense, we used the Black-Scholes-Merton valuation method with the following assumptions for stock options granted: Year Ended December 31, 2022 2021 2020 Risk-free interest rate 0.53% - 1.00% 0.20% - 0.84% 0.24% - 1.62% Expected dividend yield — % — % — % Expected volatility 49% - 56% 48% - 51% 39% - 56% Expected life 3.5 3.5 3.5 |
Schedule of Supplemental Information | Supplemental information is presented below: Year Ended December 31, 2022 2021 2020 Stock options: Weighted average grant date fair value per option granted $ 6.69 $ 6.37 $ 6.04 Total intrinsic value of options exercised (in thousands) $ 1,279 $ 268 $ 71 Total fair value of options vested (in thousands) $ 2,468 $ 1,420 $ 4,488 RSUs: Time and performance-based Weighted average grant date fair value per unit granted $ 19.00 $ 15.87 $ 19.06 Total intrinsic value of units vested (in thousands) $ 15,811 $ 7,167 $ 4,115 Total fair value of units vested (in thousands) $ 23,038 $ 10,427 $ 6,182 Cash-settled Weighted average grant date fair value per unit granted $ 18.19 $ 17.34 $ — Total fair value of units settled upon vesting (in thousands) $ 757 $ — $ — |
Schedule of Stock-Based Compensation Expense | We account for stock-based compensation in accordance with ASC 718, Stock Compensation , which requires that compensation related to all share-based awards (including stock options, RSUs, and ESPP shares) be recognized in the consolidated financial statements. Amounts recognized for stock-based compensation expense on the consolidated statements of comprehensive income (loss) were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue $ 6,221 $ 5,086 $ 5,123 Engineering and technology 635 400 363 Sales and marketing 3,007 2,176 1,218 General and administrative (1) 11,290 10,457 1,355 Total in continuing operations 21,153 18,119 8,059 Discontinued operations 1,892 2,635 2,007 Total $ 23,045 $ 20,754 $ 10,066 ___________________________ (1) Stock-based compensation expense for the year ended December 31, 2020 was reduced by $8.5 million related to the reversal of stock-based compensation expense due to: (1) forfeitures resulting from executive departures and (2) the reversal of stock-based compensation expense for performance-based RSUs that are not expected to vest. |
Schedule of Unrecognized Stock-Based Compensation Expense | As of December 31, 2022, total unrecognized stock-based compensation expense related to unvested stock awards was as follows: Expense (in thousands) Weighted average period over which to be recognized (in years) Stock options $ 755 1.2 Time and performance-based RSUs 6,004 1.5 Cash-settled RSUs 10,236 1.8 Total $ 16,995 |
Interest Expense and Other, N_2
Interest Expense and Other, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Interest Expense and Other, Net | “Interest expense and other, net” on the consolidated statements of comprehensive income (loss) consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 Interest expense $ 217 $ 6 $ 3 Interest income and other 258 416 980 Non-capitalized debt issuance expenses — — 3,687 Interest expense and other, net $ 475 $ 422 $ 4,670 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Loss from continuing operations before income taxes consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 United States $ (11,813) $ (53,464) $ (326,380) Loss from continuing operations before income taxes $ (11,813) $ (53,464) $ (326,380) |
Schedule of Income Tax Expense (Benefit) from Continuing Operations | Income tax expense (benefit) consisted of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current: State $ 1,121 $ (716) $ 29 Total current expense (benefit) 1,121 (716) 29 Deferred: U.S. federal (15,394) (7,712) 41,437 State (661) (1,531) 199 Total deferred expense (benefit) (16,055) (9,243) 41,636 Income tax expense (benefit) $ (14,934) $ (9,959) $ 41,665 |
Schedule of Income Tax Expense (Benefit) from Continuing Operations Differed from Amount Computed by Applying Statutory Federal Income Tax Rate | Income tax expense (benefit) differed from the amount calculated by applying the statutory federal income tax rate of 21% as follows (in thousands): Year Ended December 31, 2022 2021 2020 Income tax benefit at the statutory federal income tax rate $ (2,481) $ (11,226) $ (68,540) Non-deductible compensation 1,870 1,378 1,589 State income taxes, net of federal benefit 591 (681) 70 Excess tax deficiencies of stock-based compensation 1,402 612 1,142 Uncertain tax positions and audit settlements — (966) (575) Valuation allowance (16,599) (50,934) 23,911 Net operating loss write-off — 29,380 26,791 Capital loss carryforwards write-off — 22,324 — Other 283 154 446 Non-deductible goodwill — — 56,831 Income tax expense (benefit) $ (14,934) $ (9,959) $ 41,665 |
Schedule of Deferred Tax Assets and Liabilities | The tax effect of temporary differences and net operating loss carryforwards that gave rise to our deferred tax assets and liabilities were as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Net operating loss and credit carryforwards $ 828 $ 21,828 Capital loss — 429 Accrued compensation 8,033 6,046 Stock-based compensation 5,487 5,996 Deferred revenue 1,741 1,966 Lease liabilities 8,568 9,083 Other, net 2,556 2,630 Total gross deferred tax assets 27,213 47,978 Valuation allowance (202) (16,801) Deferred tax assets, net of valuation allowance 27,011 31,177 Deferred tax liabilities: Amortization (42,875) (44,644) Depreciation (237) (756) Right-of-use assets (4,677) (4,871) Other, net (41) (30) Total gross deferred tax liabilities (47,830) (50,301) Net deferred tax liabilities $ (20,819) $ (19,124) |
Schedule of Changes in Valuation Allowance for Deferred Tax Assets | The changes in the valuation allowance for deferred tax assets are shown below (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ 16,801 $ 67,735 $ 43,824 Increase (decrease) in valuation allowance—future year utilization — 2,105 18,136 Increase (decrease) in valuation allowance—current year utilization and expiration (16,599) (53,039) 5,047 Increase (decrease) in valuation allowance—other — — 728 Balance at end of year $ 202 $ 16,801 $ 67,735 |
Schedule of Reconciliation of Unrecognized Tax Benefit Balances | A reconciliation of the unrecognized tax benefit balances is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of year $ 4,665 $ 7,476 $ 19,483 Gross decreases for tax positions of prior years — — (11,972) Purchase accounting for 1st Global Acquisition — — (35) Statute of limitations expirations (1,856) (2,811) — Balance at end of year $ 2,809 $ 4,665 $ 7,476 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Summary of Dilutive Effect for Awards with Exercise Price Less Than Average Stock Price | The calculation of basic and diluted net income (loss) per share is as follows (in thousands, except per share amounts): Year Ended December 31, 2022 2021 2020 Numerator: Income (loss) from continuing operations $ 3,121 $ (43,505) $ (368,045) Income from discontinued operations 417,126 51,262 25,290 Net income (loss) 420,247 7,757 (342,755) Denominator: Basic weighted average common shares outstanding 47,994 48,578 47,978 Dilutive potential common shares 1,189 — — Diluted weighted average common shares outstanding 49,183 48,578 47,978 Basic net income (loss) per share: Continuing operations $ 0.07 $ (0.90) $ (7.67) Discontinued operations 8.69 1.06 0.53 Basic net income (loss) per share: $ 8.76 $ 0.16 $ (7.14) Diluted net income (loss) per share: Continuing operations $ 0.06 $ (0.90) $ (7.67) Discontinued operations 8.48 1.06 0.53 Diluted net income (loss) per share: $ 8.54 $ 0.16 $ (7.14) Shares excluded (1) 774 3,811 2,936 ____________________________ (1) Potential common shares were excluded from the calculation of diluted net income (loss) per share for these periods because their effect would have been anti-dilutive. For the years ended December 31, 2021 and December 31, 2020, all potential common shares were excluded from the calculation of diluted net income (loss) per share due to the loss from continuing operations. |
Description of the Business (De
Description of the Business (Detail) $ in Thousands | 12 Months Ended | |||
Oct. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Pre-tax gain on disposal | $ 472,237 | $ 0 | $ 0 | |
Number of segments | segment | 1 | |||
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Tax Software Business Member | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash received from sale of business | $ 720,000 | |||
Discontinued Operations, Disposed of by Sale | Former Tax Software Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash received from sale of business | $ 720,000 | |||
Pre-tax gain on disposal | $ 472,237 | $ 0 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Estimated Useful Life of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Purchased software | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Data center servers | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Internally developed software | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Office equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Office furniture | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Airplane | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 25 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Software development costs | $ 13 | $ 16.4 | $ 4 |
Number of segments | segment | 1 | ||
General term of loans | 15 years | ||
Outstanding loans issued to financial professionals | $ 12.7 | 22 | |
Forgivable loan amortization | 5.2 | 2.3 | 0.9 |
Advertising expense | $ 0.9 | 2 | $ 1.6 |
Amortization period (in years) | 15 years | ||
Other Noncurrent Assets | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Outstanding loans issued to financial professionals | $ 23.3 | 17.7 | |
Prepaid Expenses and Other Current Assets | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Outstanding loans issued to financial professionals | $ 6 | $ 4.3 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Oct. 31, 2022 | Aug. 05, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Payments on credit facilities | $ 561,344 | $ 1,812 | $ 66,531 | ||
Loss on extinguishment of debt | $ 200 | ||||
Senior Secured Credit Facility | Term Loan | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Payments on credit facilities | $ 525,400 | ||||
Discontinued Operations, Disposed of by Sale | Former Tax Software Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash received from sale of business | $ 720,000 | ||||
Loss on extinguishment of debt | $ 4,200 |
Discontinued Operations - Dispo
Discontinued Operations - Disposal Groups, Including Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Pre-tax gain on disposal | $ 472,237 | $ 0 | $ 0 |
Discontinued Operations, Disposed of by Sale | Former Tax Software Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gross purchase price, as adjusted per the terms of the Purchase Agreement | 717,911 | ||
Net assets disposed | (228,040) | ||
Transaction costs | (17,634) | ||
Pre-tax gain on disposal | 472,237 | 0 | $ 0 |
Cash and cash equivalents | 4,591 | 34,195 | |
Accounts receivable, net | 250 | 692 | |
Prepaid expenses and other current assets | 7,861 | 6,745 | |
Property, equipment, and software, net | 22,377 | 23,598 | |
Goodwill | 188,542 | 188,542 | |
Other intangible assets, net | 19,500 | 19,500 | |
Other long-term assets | 184 | 36 | |
Accounts payable | (1,433) | (1,723) | |
Accrued expenses and other current liabilities | (7,212) | (10,020) | |
Deferred revenue | (5,446) | (8,388) | |
Deferred tax liabilities, net | (1,174) | $ (1,000) | |
Total net assets sold | $ 228,040 |
Discontinued Operations- Income
Discontinued Operations- Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Pre-tax gain on disposal | $ 472,237 | $ 0 | $ 0 |
Income from discontinued operations before income taxes | 524,729 | 52,003 | 25,956 |
Income tax benefit (expense) | (107,603) | (741) | (666) |
Income from discontinued operations | 417,126 | 51,262 | 25,290 |
Discontinued Operations, Disposed of by Sale | Former Tax Software Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenues | 247,241 | 226,987 | 208,763 |
Operating expenses | 155,446 | 143,326 | 156,173 |
Interest expense and other, net | (39,303) | (31,658) | (26,634) |
Income from discontinued operations before gain on disposal and income taxes | 52,492 | 52,003 | 25,956 |
Pre-tax gain on disposal | 472,237 | 0 | 0 |
Income from discontinued operations before income taxes | 524,729 | 52,003 | 25,956 |
Income tax benefit (expense) | (107,603) | (741) | (666) |
Income from discontinued operations | $ 417,126 | $ 51,262 | $ 25,290 |
Discontinued Operations - Balan
Discontinued Operations - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Total current assets of discontinued operations | $ 0 | $ 41,632 |
Liabilities: | ||
Total current liabilities of discontinued operations | 0 | 20,131 |
Discontinued Operations, Disposed of by Sale | Former Tax Software Business | ||
Assets: | ||
Cash and cash equivalents | 4,591 | 34,195 |
Accounts receivable, net | 250 | 692 |
Prepaid expenses and other current assets | 7,861 | 6,745 |
Total current assets of discontinued operations | 41,632 | |
Property, equipment, and software, net | 22,377 | 23,598 |
Goodwill, net | 188,542 | 188,542 |
Other intangible assets, net | 19,500 | 19,500 |
Other long-term assets | 184 | 36 |
Total assets of discontinued operations | 273,308 | |
Liabilities: | ||
Accounts payable | 1,433 | 1,723 |
Accrued expenses and other current liabilities | 7,212 | 10,020 |
Current deferred revenue | 5,446 | 8,388 |
Total current liabilities of discontinued operations | 20,131 | |
Deferred tax liabilities, net | $ 1,174 | 1,000 |
Total liabilities of discontinued operations | $ 21,131 |
Discontinued Operations - Non-c
Discontinued Operations - Non-cash Items (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Purchases of property, equipment, and software | $ 53,041 | $ 50,040 | |
Discontinued Operations, Disposed of by Sale | Former Tax Software Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Stock-based compensation | 1,892 | 2,635 | $ 2,007 |
Depreciation | 8,099 | 6,120 | 3,339 |
Amortization of debt discount and issuance costs | 2,782 | 2,668 | 2,065 |
Loss on debt extinguishment | 4,192 | 0 | 0 |
Purchases of property, equipment, and software | $ 7,067 | $ 9,277 | $ 15,637 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 666,496 | $ 658,213 | $ 546,189 |
Recognized upon transaction: | |||
Revenue | 79,430 | 94,180 | 81,282 |
Recognized over time: | |||
Revenue | 587,066 | 564,033 | 464,907 |
Commission | |||
Revenue | 173,431 | 210,677 | 185,201 |
Commission | Recognized upon transaction: | |||
Revenue | 75,420 | 89,970 | 74,788 |
Commission | Recognized over time: | |||
Revenue | 98,011 | 120,707 | 110,413 |
Transaction and fee | |||
Revenue | 29,183 | 29,635 | 22,549 |
Transaction and fee | Recognized upon transaction: | |||
Revenue | 4,010 | 4,210 | 6,494 |
Transaction and fee | Recognized over time: | |||
Revenue | 25,173 | 25,425 | 16,055 |
Advisory | |||
Revenue | 398,839 | 395,800 | 314,751 |
Advisory | Recognized over time: | |||
Revenue | 398,839 | 395,800 | 314,751 |
Asset-based | |||
Revenue | 65,043 | 22,101 | 23,688 |
Asset-based | Recognized over time: | |||
Revenue | $ 65,043 | $ 22,101 | $ 23,688 |
Asset Acquisitions (Details)
Asset Acquisitions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||
Asset acquisition, consideration transferred | $ 5.6 | $ 8.5 | $ 4.4 |
Maximum future contingent payments | $ 21.3 | ||
Client relationships | |||
Business Acquisition [Line Items] | |||
Useful life | 15 years |
Goodwill and Acquired Intangi_3
Goodwill and Acquired Intangible Assets, Net - Summary of Goodwill Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||||
Goodwill, gross, beginning balance | $ 473,833 | $ 266,279 | $ 266,279 | $ 473,833 |
Acquired | 63,737 | |||
Purchase accounting adjustments | (666) | |||
Impairment | $ (270,600) | 0 | 0 | (270,625) |
Goodwill, gross, ending balance | $ 266,279 | $ 266,279 | $ 266,279 |
Goodwill and Acquired Intangi_4
Goodwill and Acquired Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment of goodwill | $ 270,600 | $ 0 | $ 0 | $ 270,625 |
Goodwill and Acquired Intangi_5
Goodwill and Acquired Intangible Assets, Net - Intangible Assets Other Than Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 421,482 | $ 412,523 |
Accumulated amortization | (155,480) | (129,734) |
Total | $ 266,002 | 282,789 |
Financial professional relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (years) | 13 years 2 months 12 days | |
Gross carrying amount | $ 318,700 | 318,700 |
Accumulated amortization | (130,969) | (111,916) |
Total | $ 187,731 | 206,784 |
Client relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (years) | 12 years 10 months 24 days | |
Gross carrying amount | $ 74,532 | 65,573 |
Accumulated amortization | (10,306) | (5,729) |
Total | $ 64,226 | 59,844 |
Sponsor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (years) | 10 years 10 months 24 days | |
Gross carrying amount | $ 17,200 | 17,200 |
Accumulated amortization | (6,630) | (5,655) |
Total | $ 10,570 | 11,545 |
CPA firm relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (years) | 12 years 6 months | |
Gross carrying amount | $ 4,070 | 4,070 |
Accumulated amortization | (678) | (407) |
Total | $ 3,392 | 3,663 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (years) | 6 months | |
Gross carrying amount | $ 3,100 | 3,100 |
Accumulated amortization | (3,017) | (2,379) |
Total | $ 83 | 721 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (years) | 0 years | |
Gross carrying amount | $ 2,980 | 2,980 |
Accumulated amortization | (2,980) | (2,852) |
Total | $ 0 | 128 |
Curriculum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (years) | 0 years | |
Gross carrying amount | $ 900 | 900 |
Accumulated amortization | (900) | (796) |
Total | $ 0 | $ 104 |
Goodwill and Acquired Intangi_6
Goodwill and Acquired Intangible Assets, Net - Information About Expected Amortization of Definite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 24,845 | |
2024 | 24,286 | |
2025 | 23,606 | |
2026 | 22,985 | |
2027 | 22,417 | |
Thereafter | 147,863 | |
Total | $ 266,002 | $ 282,789 |
Debt - Schedule of Company's De
Debt - Schedule of Company's Debt (Detail) - Senior Secured Credit Facility - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Principal outstanding | $ 0 | $ 561,344 |
Unamortized debt issuance costs | 0 | (3,371) |
Unamortized debt discount | 0 | (3,027) |
Net carrying value | $ 0 | $ 554,946 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 12 Months Ended | |||||
Feb. 24, 2023 | Jan. 24, 2023 | Aug. 05, 2022 | Apr. 26, 2021 | Dec. 31, 2022 | Apr. 25, 2021 | |
Debt Instrument [Line Items] | ||||||
Loss on extinguishment of debt | $ 200,000 | |||||
Discontinued Operations, Disposed of by Sale | Former Tax Software Business | ||||||
Debt Instrument [Line Items] | ||||||
Loss on extinguishment of debt | $ 4,200,000 | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount outstanding | 0 | |||||
Revolving Credit Facility | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility with a commitment amount | $ 50,000,000 | |||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount outstanding | 0 | |||||
Delayed Draw Term Loan Facility | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility | $ 270,000,000 | |||||
Borrowings during period | $ 170,000,000 | |||||
Senior Secured Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of term loan | $ 35,000,000 | |||||
Amount available for future borrowings | $ 90,000,000 | |||||
Senior Secured Credit Facility | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility | $ 90,000,000 | $ 65,000,000 | ||||
Additional revolving credit commitments | $ 25,000,000 | |||||
Senior Secured Credit Facility | Revolving Credit Facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, commitment fee percentage | 0.35% | |||||
Senior Secured Credit Facility | Revolving Credit Facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, commitment fee percentage | 0.40% | |||||
Senior Secured Credit Facility | Revolving Credit Facility | Eurodollar | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate (as a percent) | 2% | |||||
Senior Secured Credit Facility | Revolving Credit Facility | Eurodollar | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate (as a percent) | 2.50% | |||||
Senior Secured Credit Facility | Revolving Credit Facility | ABR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate (as a percent) | 1% | |||||
Senior Secured Credit Facility | Revolving Credit Facility | ABR | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate (as a percent) | 1.50% | |||||
Senior Secured Credit Facility | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, periodic payment, principal | $ 500,000 | |||||
Variable interest rate (as a percent) | 5.90% | |||||
Senior Secured Credit Facility | Term Loan | Eurodollar | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate (as a percent) | 4% | |||||
Senior Secured Credit Facility | Term Loan | Eurodollar | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate (as a percent) | 1% | |||||
Senior Secured Credit Facility | Term Loan | ABR | ||||||
Debt Instrument [Line Items] | ||||||
Variable interest rate (as a percent) | 3% |
Leases - Operating Lease Expens
Leases - Operating Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease, Cost [Abstract] | |||
Fixed lease cost | $ 3,858 | $ 4,188 | $ 6,762 |
Variable lease cost | 1,402 | 1,057 | 893 |
Operating lease cost, before sublease income | 5,260 | 5,245 | 7,655 |
Sublease income | (937) | (464) | (1,235) |
Total operating lease cost, net of sublease income | 4,323 | 4,781 | 6,420 |
Additional lease information: | |||
Cash paid on operating lease liabilities | 5,095 | 1,853 | 3,818 |
ROU assets obtained in exchange for lease obligations | $ 390 | 93 | 21,766 |
Fixed lease cost from discontinued operations | 300 | 500 | |
Cash paid on operating lease liabilities from discontinued operations | $ 300 | $ 500 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Right-of-use assets, net | $ 19,361 | $ 20,466 |
Current lease liabilities | 5,139 | 4,896 |
Long-term lease liabilities | 30,332 | 33,267 |
Total operating lease liabilities | $ 35,471 | $ 38,163 |
Weighted-average remaining lease term (in years) | 9 years 4 months 24 days | 10 years 3 months 18 days |
Weighted-average discount rate | 5.50% | 5.40% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 5,289 | |
2024 | 5,184 | |
2025 | 5,086 | |
2026 | 4,256 | |
2027 | 3,858 | |
Thereafter | 22,315 | |
Total undiscounted cash flows | 45,988 | |
Imputed interest | (10,517) | |
Total operating lease liabilities | $ 35,471 | $ 38,163 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
1st Global | |||
Lessee, Lease, Description [Line Items] | |||
Impairment expense | $ 0 | $ 0 | $ 4,100,000 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid expenses and other current assets, net | ||
Prepaid expenses | $ 7,857 | $ 6,393 |
Forgivable loans | 5,951 | 4,316 |
Other current assets | 1,219 | 1,022 |
Total prepaid expenses and other current assets | $ 15,027 | $ 11,731 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property and equipment | ||
Property, equipment, and software, gross | $ 83,982 | $ 70,230 |
Less: Accumulated depreciation | (30,941) | (20,190) |
Total property, equipment, and software, net | 53,041 | 50,040 |
Internally developed software | ||
Property and equipment | ||
Property, equipment, and software, gross | 29,491 | 14,548 |
Total property, equipment, and software, net | 26,500 | 19,400 |
Computer equipment | ||
Property and equipment | ||
Property, equipment, and software, gross | 5,172 | 4,451 |
Purchased software | ||
Property and equipment | ||
Property, equipment, and software, gross | 6,433 | 6,644 |
Leasehold improvements | ||
Property and equipment | ||
Property, equipment, and software, gross | 16,944 | 16,953 |
Airplane | ||
Property and equipment | ||
Property, equipment, and software, gross | 3,770 | 3,770 |
Office furniture | ||
Property and equipment | ||
Property, equipment, and software, gross | 7,257 | 7,257 |
Office equipment | ||
Property and equipment | ||
Property, equipment, and software, gross | 2,425 | 2,423 |
Data center servers | ||
Property and equipment | ||
Property, equipment, and software, gross | 1,253 | 984 |
Capital projects in progress | ||
Property and equipment | ||
Property, equipment, and software, gross | $ 11,237 | $ 13,200 |
Balance Sheet Components - Narr
Balance Sheet Components - Narrative (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Purchases of property, equipment, and software | $ 53,041 | $ 50,040 | |
Depreciation | 11,882 | 8,987 | $ 6,823 |
Internally Developed Software | |||
Property, Plant and Equipment [Line Items] | |||
Purchases of property, equipment, and software | 26,500 | 19,400 | |
Depreciation | $ 5,900 | $ 3,400 | $ 2,500 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Salaries and related benefit expenses | $ 17,481 | $ 18,211 |
Accrued legal costs | 1,102 | 2,796 |
Accrued vendor and advertising costs | 2,726 | 2,040 |
Accrued taxes | 85,965 | 0 |
Accrued fixed and variable acquisition consideration | 897 | 837 |
Other | 3,041 | 3,474 |
Total accrued expenses and other current liabilities | 111,212 | 55,658 |
HKFS Contingent Consideration liability | ||
Business Acquisition [Line Items] | ||
HKFS Contingent Consideration liability | $ 0 | $ 28,300 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Long Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other long-term liabilities | $ 22,476 | $ 6,752 |
Deferred compensation | ||
Other long-term liabilities | 7,974 | 0 |
Accrued cash-settled stock-based compensation | ||
Other long-term liabilities | 7,556 | 1,391 |
Other | ||
Other long-term liabilities | $ 6,946 | $ 5,361 |
Commitment and Contingencies -
Commitment and Contingencies - Purchase Commitments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 14,209 |
2024 | 11,010 |
2025 | 5,672 |
2026 | 4,575 |
2027 | 2,269 |
Thereafter | 1,125 |
Total purchase commitments | $ 38,860 |
Commitment and Contingencies _2
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jul. 01, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||||||
Change in the fair value of acquisition-related contingent consideration | $ (5,320) | $ 22,400 | $ 8,300 | |||
Payment of contingent consideration | 15,148 | 14,075 | $ 0 | |||
Indemnification Agreement | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Indemnification obligation, maximum amount | 5,400 | |||||
Indemnification obligation, deductible amount | 1,000 | |||||
Indemnification obligation accrual | $ 1,000 | |||||
1st Global | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Change in the fair value of acquisition-related contingent consideration | $ 5,500 | |||||
Reserve for loss contingency accrual | $ 16,900 | |||||
Honkamp Krueger Financial Services, Inc. | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Business combination purchase price | $ 104,400 | |||||
Undiscounted contingent consideration | 60,000 | |||||
Contingent consideration arrangement, maximum range per earn-out period | $ 30,000 | |||||
Payment of contingent consideration | $ 30,000 | $ 23,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Hierarchy of Financial Assets and Liabilities Carried at Fair Value and Measured on Recurring Basis (Detail) - Fair Value Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Cash equivalents: | ||
Deferred compensation assets | $ 7,974 | |
Total assets at fair value | 12,343 | $ 4,293 |
Liabilities | ||
Deferred compensation liabilities | 7,974 | |
Total liabilities at fair value | 7,974 | 28,300 |
Honkamp Krueger Financial Services, Inc. | ||
Liabilities | ||
HKFS Contingent Consideration liability | 28,300 | |
Cash equivalents: money market and other funds | ||
Cash equivalents: | ||
Money market and other funds | 4,369 | 4,293 |
Quoted prices in active markets using identical assets (Level 1) | ||
Cash equivalents: | ||
Deferred compensation assets | 7,974 | |
Total assets at fair value | 12,343 | 4,293 |
Liabilities | ||
Deferred compensation liabilities | 7,974 | |
Total liabilities at fair value | 7,974 | 0 |
Quoted prices in active markets using identical assets (Level 1) | Honkamp Krueger Financial Services, Inc. | ||
Liabilities | ||
HKFS Contingent Consideration liability | 0 | |
Quoted prices in active markets using identical assets (Level 1) | Cash equivalents: money market and other funds | ||
Cash equivalents: | ||
Money market and other funds | 4,369 | 4,293 |
Significant other observable inputs (Level 2) | ||
Cash equivalents: | ||
Deferred compensation assets | 0 | |
Total assets at fair value | 0 | 0 |
Liabilities | ||
Deferred compensation liabilities | 0 | |
Total liabilities at fair value | 0 | 0 |
Significant other observable inputs (Level 2) | Honkamp Krueger Financial Services, Inc. | ||
Liabilities | ||
HKFS Contingent Consideration liability | 0 | |
Significant other observable inputs (Level 2) | Cash equivalents: money market and other funds | ||
Cash equivalents: | ||
Money market and other funds | 0 | 0 |
Significant unobservable inputs (Level 3) | ||
Cash equivalents: | ||
Deferred compensation assets | 0 | |
Total assets at fair value | 0 | 0 |
Liabilities | ||
Deferred compensation liabilities | 0 | |
Total liabilities at fair value | 0 | 28,300 |
Significant unobservable inputs (Level 3) | Honkamp Krueger Financial Services, Inc. | ||
Liabilities | ||
HKFS Contingent Consideration liability | 28,300 | |
Significant unobservable inputs (Level 3) | Cash equivalents: money market and other funds | ||
Cash equivalents: | ||
Money market and other funds | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Final value of second earn-out | $ 23,000 | $ (22,980) | $ (30,000) |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Acquisition and integration | ||
Fair Value | Term Loan | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument, fair value disclosure | $ 0 | 561,300 | |
Carrying Value | Term Loan | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument, fair value disclosure | $ 559,900 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Unobservable Inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ 28,300 | $ 35,900 | |
Change in fair value | (5,320) | 22,400 | |
HKFS Contingent Consideration | $ (23,000) | 22,980 | 30,000 |
Ending balance | $ 0 | $ 28,300 |
Stockholders' Equity (Detail)
Stockholders' Equity (Detail) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 12 Months Ended | |||
Feb. 24, 2023 | Jan. 27, 2023 | Jan. 26, 2023 | Dec. 31, 2022 | Dec. 09, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock repurchase program, additional | $ 28,300,000 | ||||
Authorized repurchase amount, stock repurchase program | $ 200,000,000 | $ 100,000,000 | |||
Stock repurchases (in shares) | 1.9 | ||||
Stock repurchases | $ 35,000,000 | ||||
Subsequent Event | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock repurchases (in shares) | 8.3 | 0.5 | |||
Stock repurchases | $ 250,000,000 | $ 250,000,000 | $ 12,500,000 | ||
Authorized repurchase amount remaining | $ 187,500,000 | ||||
Stock purchases percentage | 17.40% | ||||
Subsequent Event | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share price (in dollars per share) | $ 27 | ||||
Subsequent Event | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share price (in dollars per share) | $ 31 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance | 4,970,588 | |
Vesting period | 3 years | |
Expected dividend yield | 0% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Stock Options And Time-Based Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 7 years | |
Stock Options And Time-Based Restricted Stock Units | Share-based Payment Arrangement, Tranche One | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Vesting percentage | 33.33% | |
Performance-Based Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
2016 Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of employee base earnings | 15% | |
Purchase price of common stock, percent | 85% | |
Shares available for issuance | 200,000 | 2,700,000 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock Options, RSUs and MSUs (Detail) | Dec. 31, 2022 shares |
Share-Based Payment Arrangement [Abstract] | |
Number of shares authorized for awards (in shares) | 10,715,156 |
Options and RSUs outstanding (in shares) | 3,003,945 |
Options and RSUs expected to vest (in shares) | 2,491,300 |
Options and RSUs available for grant (in shares) | 4,970,588 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Incentive Plans Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock options | |||
Number of options | |||
Options, outstanding, beginning balance (in shares) | 1,703,355 | ||
Options, Granted (in shares) | 187,261 | ||
Options, Forfeited (in shares) | (57,527) | ||
Options, Expired (in shares) | (7,500) | ||
Options, Exercised (in shares) | (168,556) | ||
Options, outstanding, ending balance (in shares) | 1,657,033 | 1,703,355 | |
Options, Exercisable, period end (in shares) | 1,018,453 | ||
Options, Vested and expected to vest after period end (in shares) | 1,601,834 | ||
Weighted average exercise price | |||
Weighted average exercise price, beginning balance (in USD per share) | $ 16.81 | ||
Weighted average exercise price, Granted (in USD per share) | 17.68 | ||
Weighted average exercise price, Forfeited (in USD per share) | 13.28 | ||
Weighted-average exercise price, Expired (in USD per share) | 20.35 | ||
Weighted average exercise price, Exercised (in USD per share) | 12.96 | ||
Weighted average exercise price, ending balance (in USD per share) | 17.40 | $ 16.81 | |
Weighted average exercise price, Exercisable, period end (in USD per share) | 18.12 | ||
Weighted average exercise price, Expected to vest after period end (in USD per share) | $ 17.45 | ||
Intrinsic value, Outstanding | $ 13,594 | ||
Intrinsic value, Exercisable, period end | 7,666 | ||
Intrinsic value, Vested and expected to vest after period end | $ 13,073 | ||
Weighted average remaining contractual term (in years), Outstanding | 3 years 8 months 12 days | ||
Weighted average remaining contractual term (in years), Exercisable, period end | 2 years 9 months 18 days | ||
Weighted average remaining contractual term (in years), Vested and expected after period end | 3 years 7 months 6 days | ||
Time and performance-based RSUs | |||
Number of units | |||
Stock units, Outstanding, Beginning balance (in shares) | 1,852,809 | ||
Stock units, Granted (in shares) | 610,368 | ||
Stock units, Forfeited (in shares) | (241,420) | ||
Stock units, Vested (in shares) | (874,845) | ||
Stock units, Outstanding, Ending balance (in shares) | 1,346,912 | 1,852,809 | |
Stock units, Expected to vest after period end (in shares) | 889,466 | ||
Weighted average grant date fair value | |||
Weighted average grant date fair value, Outstanding, Beginning balance (in USD per share) | $ 20.09 | ||
Weighted average grant date fair value, Granted (in USD per share) | 19 | $ 15.87 | $ 19.06 |
Weighted average grant date fair value, Forfeited (in USD per share) | 18.37 | ||
Weighted average grant date fair value, Vested (in USD per share) | 22.48 | ||
Weighted average grant date fair value, Outstanding, Ending balance (in USD per share) | 18.36 | $ 20.09 | |
Weighted average grant date fair value, Expected to vest after period end (in USD per share) | $ 17.69 | ||
Intrinsic value | |||
Intrinsic value, Outstanding | $ 34,388 | ||
Intrinsic value, Expected to vest after period end | $ 22,708 | ||
Weighted average remaining contractual term (in years), Outstanding | 1 year | ||
Weighted average remaining contractual term (in years), Expected to vest after period end | 8 months 12 days | ||
Cash-settled RSUs | |||
Number of units | |||
Stock units, Outstanding, Beginning balance (in shares) | 299,465 | ||
Stock units, Granted (in shares) | 715,934 | ||
Stock units, Forfeited (in shares) | (153,239) | ||
Stock units, Vested (in shares) | (33,529) | ||
Stock units, Outstanding, Ending balance (in shares) | 828,631 | 299,465 | |
Stock units, Expected to vest after period end (in shares) | 779,943 | ||
Weighted average grant date fair value | |||
Weighted average grant date fair value, Outstanding, Beginning balance (in USD per share) | $ 17.34 | ||
Weighted average grant date fair value, Granted (in USD per share) | 18.19 | $ 17.34 | $ 0 |
Weighted average grant date fair value, Forfeited (in USD per share) | 17.75 | ||
Weighted average grant date fair value, Vested (in USD per share) | 17.67 | ||
Weighted average grant date fair value, Outstanding, Ending balance (in USD per share) | 17.99 | $ 17.34 | |
Weighted average grant date fair value, Expected to vest after period end (in USD per share) | $ 17.99 | ||
Intrinsic value | |||
Intrinsic value, Outstanding | $ 21,155 | ||
Intrinsic value, Expected to vest after period end | $ 19,912 | ||
Weighted average remaining contractual term (in years), Outstanding | 1 year 6 months | ||
Weighted average remaining contractual term (in years), Expected to vest after period end | 1 year 6 months |
Stock-based Compensation - St_2
Stock-based Compensation - Stock Option Grants and Warrant (Detail) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0% | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0% | 0% | 0% |
Expected life | 3 years 6 months | 3 years 6 months | 3 years 6 months |
Minimum | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.53% | 0.20% | 0.24% |
Expected volatility | 49% | 48% | 39% |
Maximum | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1% | 0.84% | 1.62% |
Expected volatility | 56% | 51% | 56% |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Supplemental Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock options: | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value per option granted (in USD per share) | $ 6.69 | $ 6.37 | $ 6.04 |
Total intrinsic value of options exercised (in thousands) | $ 1,279 | $ 268 | $ 71 |
Total fair value of options vested (in thousands) | $ 2,468 | $ 1,420 | $ 4,488 |
Time and performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value per unit granted (In USD per share) | $ 19 | $ 15.87 | $ 19.06 |
Total intrinsic value of units vested (in thousands) | $ 15,811 | $ 7,167 | $ 4,115 |
Total fair value of units settled upon vesting (in thousands) | $ 23,038 | $ 10,427 | $ 6,182 |
Cash-settled RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value per unit granted (In USD per share) | $ 18.19 | $ 17.34 | $ 0 |
Total fair value of units settled upon vesting (in thousands) | $ 757 | $ 0 | $ 0 |
Stock-based Compensation - St_3
Stock-based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 23,045 | $ 20,754 | $ 10,066 |
Scenario, Adjustment | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | (8,500) | ||
Continuing Operations | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 21,153 | 18,119 | 8,059 |
Discontinued Operations | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 1,892 | 2,635 | 2,007 |
Cost of revenue | Continuing Operations | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 6,221 | 5,086 | 5,123 |
Engineering and technology | Continuing Operations | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 635 | 400 | 363 |
Sales and marketing | Continuing Operations | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 3,007 | 2,176 | 1,218 |
General and administrative | Continuing Operations | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 11,290 | $ 10,457 | $ 1,355 |
Stock-based Compensation - Unre
Stock-based Compensation - Unrecognized Stock-Based Compensation Expense (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expense | $ 16,995 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expense | $ 755 |
Weighted average period over which to be recognized (in years) | 1 year 2 months 12 days |
Time and performance-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expense | $ 6,004 |
Weighted average period over which to be recognized (in years) | 1 year 6 months |
Cash-settled RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expense | $ 10,236 |
Weighted average period over which to be recognized (in years) | 1 year 9 months 18 days |
Interest Expense and Other, N_3
Interest Expense and Other, Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |||
Interest expense | $ 217 | $ 6 | $ 3 |
Interest income and other | 258 | 416 | 980 |
Non-capitalized debt issuance expenses | 0 | 0 | 3,687 |
Interest expense and other, net | $ 475 | $ 422 | $ 4,670 |
401 (K) Plan (Details)
401 (K) Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Employer discretionary contribution amount | $ 2.9 | $ 2.6 | $ 2 |
Minimum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution as a percentage of employees' gross pay | 1% | ||
Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution as a percentage of employees' gross pay | 4% |
Income Taxes - Loss Before Inco
Income Taxes - Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (11,813) | $ (53,464) | $ (326,380) |
Loss from continuing operations before income taxes | $ (11,813) | $ (53,464) | $ (326,380) |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) from Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
State | $ 1,121 | $ (716) | $ 29 |
Total current expense (benefit) | 1,121 | (716) | 29 |
Deferred: | |||
U.S. federal | (15,394) | (7,712) | 41,437 |
State | (661) | (1,531) | 199 |
Total deferred expense (benefit) | (16,055) | (9,243) | 41,636 |
Income tax expense (benefit) | $ (14,934) | $ (9,959) | $ 41,665 |
Income Taxes - Income Tax Exp_2
Income Taxes - Income Tax Expense (Benefit) from Continuing Operations Differed from Amount Computed by Applying Statutory Federal Income Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit at the statutory federal income tax rate | $ (2,481) | $ (11,226) | $ (68,540) |
Non-deductible compensation | 1,870 | 1,378 | 1,589 |
State income taxes, net of federal benefit | 591 | (681) | 70 |
Excess tax deficiencies of stock-based compensation | 1,402 | 612 | 1,142 |
Uncertain tax positions and audit settlements | 0 | (966) | (575) |
Valuation allowance | (16,599) | (50,934) | 23,911 |
Net operating loss write-off | 0 | 29,380 | 26,791 |
Capital loss carryforwards write-off | 0 | 22,324 | 0 |
Other | 283 | 154 | 446 |
Non-deductible goodwill | 0 | 0 | 56,831 |
Income tax expense (benefit) | $ (14,934) | $ (9,959) | $ 41,665 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||||
Net operating loss and credit carryforwards | $ 828 | $ 21,828 | ||
Capital loss | 0 | 429 | ||
Accrued compensation | 8,033 | 6,046 | ||
Stock-based compensation | 5,487 | 5,996 | ||
Deferred revenue | 1,741 | 1,966 | ||
Lease liabilities | 8,568 | 9,083 | ||
Other, net | 2,556 | 2,630 | ||
Total gross deferred tax assets | 27,213 | 47,978 | ||
Valuation allowance | (202) | (16,801) | $ (67,735) | $ (43,824) |
Deferred tax assets, net of valuation allowance | 27,011 | 31,177 | ||
Deferred tax liabilities: | ||||
Amortization | (42,875) | (44,644) | ||
Depreciation | (237) | (756) | ||
Right-of-use assets | (4,677) | (4,871) | ||
Other, net | (41) | (30) | ||
Total gross deferred tax liabilities | (47,830) | (50,301) | ||
Net deferred tax liabilities | $ (20,819) | $ (19,124) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $ (16,599,000) | $ (50,934,000) | $ 23,911,000 |
State net operating loss carryforwards for income tax purposes | 14,000,000 | ||
Net operating loss and credit carryforwards | 828,000 | 21,828,000 | |
Valuation allowance remaining | 200,000 | ||
Unrecognized tax benefits impacting effective tax rate | 1,800,000 | 1,800,000 | |
Deferred tax asset subject to valuation allowance | 1,000,000 | 2,900,000 | |
Significant adjustments | 0 | ||
Uncertain tax position, interest and penalties | 100,000 | 200,000 | $ 0 |
Interest and penalties accrued | $ 1,500,000 | $ 1,300,000 |
Income Taxes - Changes in Valua
Income Taxes - Changes in Valuation Allowance for Deferred Tax Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Tax Assets Valuation Allowance [Roll Forward] | |||
Balance at beginning of year | $ 16,801 | $ 67,735 | $ 43,824 |
Increase (decrease) in valuation allowance—future year utilization | 0 | 2,105 | 18,136 |
Increase (decrease) in valuation allowance—current year utilization and expiration | (16,599) | (53,039) | 5,047 |
Increase (decrease) in valuation allowance—other | 0 | 0 | 728 |
Balance at end of year | $ 202 | $ 16,801 | $ 67,735 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefit Balances (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | $ 4,665 | $ 7,476 | $ 19,483 |
Gross decreases for tax positions of prior years | 0 | 0 | (11,972) |
Purchase accounting for 1st Global Acquisition | 0 | 0 | (35) |
Statute of limitations expirations | (1,856) | (2,811) | 0 |
Unrecognized tax benefits, ending balance | $ 2,809 | $ 4,665 | $ 7,476 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Dilutive Effect for Awards with Exercise Price Less Than Average Stock Price (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Income (loss) from continuing operations | $ 3,121 | $ (43,505) | $ (368,045) |
Income from discontinued operations | 417,126 | 51,262 | 25,290 |
Net income (loss) | $ 420,247 | $ 7,757 | $ (342,755) |
Basic weighted average common shares outstanding (in shares) | 47,994 | 48,578 | 47,978 |
Dilutive potential common shares (in shares) | 1,189 | 0 | 0 |
Diluted weighted average common shares outstanding (in shares) | 49,183 | 48,578 | 47,978 |
Basic net income (loss) per share: | |||
Continuing operations (in USD per share) | $ 0.07 | $ (0.90) | $ (7.67) |
Discontinued operations (in USD per share) | 8.69 | 1.06 | 0.53 |
Basic net income (loss) per share (in USD per share) | 8.76 | 0.16 | (7.14) |
Diluted net income (loss) per share: | |||
Continuing operations (in USD per share) | 0.06 | (0.90) | (7.67) |
Discontinued operations (in USD per share) | 8.48 | 1.06 | 0.53 |
Diluted net income (loss) per share (in USD per share) | $ 8.54 | $ 0.16 | $ (7.14) |
Shares excluded (in shares) | 774 | 3,811 | 2,936 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 12 Months Ended | |||
Feb. 24, 2023 | Jan. 27, 2023 | Jan. 24, 2023 | Jan. 26, 2023 | Dec. 31, 2022 | |
Subsequent Event [Line Items] | |||||
Stock repurchases (in shares) | 1.9 | ||||
Stock repurchases | $ 35,000 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Stock repurchases (in shares) | 8.3 | 0.5 | |||
Stock repurchases | $ 250,000 | $ 250,000 | $ 12,500 | ||
Authorized repurchase amount remaining | $ 187,500 | ||||
Stock purchases percentage | 17.40% | ||||
Subsequent Event | Minimum | |||||
Subsequent Event [Line Items] | |||||
Share price (in dollars per share) | $ 27 | ||||
Subsequent Event | Maximum | |||||
Subsequent Event [Line Items] | |||||
Share price (in dollars per share) | $ 31 | ||||
Subsequent Event | Delayed Draw Term Loan Facility | |||||
Subsequent Event [Line Items] | |||||
Credit facility | $ 270,000 | ||||
Borrowings during period | $ 170,000 | ||||
Subsequent Event | Revolving Credit Facility | |||||
Subsequent Event [Line Items] | |||||
Revolving credit facility with a commitment amount | $ 50,000 |