Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 24, 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 | 0-25965 | ||
Entity Registrant Name | ZIFF DAVIS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-1053457 | ||
Entity Address, Address Line One | 114 5th Avenue | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10011 | ||
City Area Code | 212 | ||
Local Phone Number | 503-3500 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | ZD | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
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 | $ 2,056,960,448 | ||
Entity Common Stock, Shares Outstanding | 47,260,252 | ||
Documents Incorporated by Reference | Portions of the definitive Proxy Statement to be delivered to stockholders in connection with the Annual Meeting of Stockholders to be held May 5, 2023 are incorporated by reference into Part III of this Form 10-K. | ||
Entity Central Index Key | 0001084048 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | BDO USA, LLP |
Auditor Location | Los Angeles, California |
Auditor Firm ID | 243 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 652,793 | $ 694,842 |
Short-term investments | 58,421 | 229,200 |
Accounts receivable, net of allowances of $6,868 and $9,811, respectively (includes $0 and $9,272 due from related party, respectively) | 304,739 | 316,342 |
Prepaid expenses and other current assets | 68,319 | 60,290 |
Total current assets | 1,084,272 | 1,300,674 |
Long-term investments | 127,871 | 122,593 |
Property and equipment, net | 178,184 | 161,209 |
Trade names, net | 136,192 | 147,761 |
Customer relationships, net | 208,057 | 275,451 |
Goodwill | 1,591,474 | 1,531,455 |
Other purchased intangibles, net | 118,566 | 149,513 |
Deferred income taxes | 8,523 | 5,917 |
Other assets | 80,131 | 75,707 |
TOTAL ASSETS | 3,533,270 | 3,770,280 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable | 120,829 | 130,978 |
Accrued employee related costs | 42,178 | 54,616 |
Other accrued liabilities | 39,539 | 41,027 |
Income taxes payable, current | 19,712 | 3,151 |
Deferred revenue, current | 187,904 | 185,571 |
Current portion of long-term debt | 0 | 54,609 |
Other current liabilities | 22,286 | 27,286 |
Total current liabilities | 432,448 | 497,238 |
Long-term debt | 999,053 | 1,036,018 |
Deferred revenue, noncurrent | 9,103 | 14,839 |
Income taxes payable, noncurrent | 11,675 | 11,675 |
Liability for uncertain tax positions | 40,379 | 42,546 |
Deferred income taxes | 79,007 | 108,982 |
Other long-term liabilities | 68,994 | 91,250 |
TOTAL LIABILITIES | 1,640,659 | 1,802,548 |
Commitments and contingencies (Note 12) | ||
Preferred stock | 0 | 0 |
Common stock, $0.01 par value. Authorized 95,000,000; total issued and outstanding 47,269,446 and 47,440,137 shares at December 31, 2022 and 2021, respectively. | 473 | 474 |
Additional paid-in capital | 439,681 | 509,122 |
Retained earnings | 1,537,830 | 1,515,358 |
Accumulated other comprehensive loss | (85,373) | (57,222) |
TOTAL STOCKHOLDERS’ EQUITY | 1,892,611 | 1,967,732 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 3,533,270 | 3,770,280 |
Series A Preferred Stock | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Preferred stock | 0 | 0 |
Series B Preferred Stock | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Preferred stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Allowance for doubtful accounts | $ 6,868 | $ 9,811 |
Related party transaction, due from (to) related party | $ 0 | $ 9,272 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 95,000,000 | 95,000,000 |
Common stock, shares issued (in shares) | 47,269,446 | 47,440,137 |
Common stock, shares outstanding (in shares) | 47,269,446 | 47,440,137 |
Series A Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 6,000 | 6,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series B Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Revenues | $ 1,390,997 | $ 1,416,722 | $ 1,158,829 | |
Operating costs and expenses: | ||||
Cost of revenues | [1] | 195,554 | 188,053 | 178,403 |
Sales and marketing | [1] | 490,777 | 493,049 | 366,359 |
Research, development and engineering | [1] | 74,093 | 78,874 | 57,148 |
General and administrative | [1] | 404,263 | 456,777 | 418,579 |
Goodwill impairment on business | 27,369 | 32,629 | 0 | |
Total operating costs and expenses | 1,192,056 | 1,249,382 | 1,020,489 | |
Income from operations | 198,941 | 167,340 | 138,340 | |
Interest expense, net | (33,842) | (72,023) | (56,188) | |
Gain (loss) on debt extinguishment, net | 11,505 | (5,274) | 0 | |
(Loss) gain on sale of businesses | 0 | (21,798) | 17,122 | |
Unrealized (loss) gain on short-term investments held at the reporting date, net | (7,145) | 298,490 | 0 | |
Loss on investments, net | (46,743) | (16,677) | (20,991) | |
Other income, net | 8,437 | 1,293 | 65 | |
Income from continuing operations before income tax (expense) benefit and changes from equity method investment | 131,153 | 351,351 | 78,348 | |
Income tax (expense) benefit | (57,957) | 14,199 | (38,350) | |
(Loss) income from equity method investment, net of income taxes | (7,730) | 35,845 | (11,338) | |
Net income from continuing operations | 65,466 | 401,395 | 28,660 | |
(Loss) income from discontinued operations, net of income taxes | (1,709) | 95,319 | 122,008 | |
Net income | $ 63,757 | $ 496,714 | $ 150,668 | |
Net income per common share from continuing operations: | ||||
Basic (in dollars per share) | $ 1.39 | $ 8.74 | $ 0.62 | |
Diluted (in dollars per share) | 1.39 | 8.38 | 0.61 | |
Net (loss) income per common share from discontinued operations: | ||||
Basic (in dollars per share) | (0.04) | 2.08 | 2.62 | |
Diluted (in dollars per share) | (0.04) | 1.99 | 2.58 | |
Net income per common share: | ||||
Basic (in dollars per share) | 1.36 | 10.81 | 3.24 | |
Diluted (in dollars per share) | $ 1.36 | $ 10.37 | $ 3.18 | |
Weighted average shares outstanding: | ||||
Basic (in shares) | 46,954,558 | 45,893,928 | 46,308,825 | |
Diluted (in shares) | 47,025,849 | 47,862,745 | 47,115,609 | |
Share-based compensation expense | $ 26,601 | $ 24,129 | $ 22,520 | |
Cost of revenues | ||||
Weighted average shares outstanding: | ||||
Share-based compensation expense | 341 | 306 | 332 | |
Sales and marketing | ||||
Weighted average shares outstanding: | ||||
Share-based compensation expense | 3,083 | 1,288 | 1,011 | |
Research, development and engineering | ||||
Weighted average shares outstanding: | ||||
Share-based compensation expense | 2,503 | 1,984 | 1,396 | |
General and administrative | ||||
Weighted average shares outstanding: | ||||
Share-based compensation expense | $ 20,674 | $ 20,551 | $ 19,781 | |
[1] (1) Includes share-based compensation expense as follows: Cost of revenues $ 341 $ 306 $ 332 Sales and marketing 3,083 1,288 1,011 Research, development and engineering 2,503 1,984 1,396 General and administrative 20,674 20,551 19,781 Total $ 26,601 $ 24,129 $ 22,520 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 63,757 | $ 496,714 | $ 150,668 |
Other comprehensive loss, net of tax: | |||
Foreign currency translation adjustment | (32,479) | (21,268) | (8,902) |
Consensus separation adjustment | 4,056 | 18,966 | 0 |
Change in fair value on available-for-sale investments, net of tax expense (benefit) of $0, $0 and $181 for the years ended December 31, 2022, 2021 and 2020, respectively | 272 | (114) | 558 |
Other comprehensive loss, net of tax | (28,151) | (2,416) | (8,344) |
Comprehensive income | $ 35,606 | $ 494,298 | $ 142,324 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Tax expense (benefit) for unrealized holding gain (loss) on available-for-sale investments | $ 0 | $ 0 | $ 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 | |
Cash flows from operating activities: | |||
Net income | $ 63,757 | $ 496,714 | $ 150,668 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 233,400 | 258,303 | 228,737 |
Amortization of financing costs and discounts | 2,692 | 26,090 | 28,476 |
Non-cash operating lease costs | 13,412 | 1,485 | 17,686 |
Share-based compensation | 26,601 | 25,248 | 24,006 |
Provision (benefit) for credit losses on accounts receivable | (255) | 8,738 | 13,283 |
Deferred income taxes, net | (12,991) | (13,433) | 5,840 |
(Gain) loss on extinguishment of debt | (11,505) | 14,024 | 37,969 |
Loss (gain) on sale of businesses | 0 | 21,798 | (17,122) |
Goodwill impairment on business | 27,369 | 32,629 | 0 |
Changes in fair value of contingent consideration | (2,575) | (1,223) | (80) |
Loss (income) from equity method investments, net | 7,730 | (35,845) | 11,338 |
Unrealized loss (gain) on short-term investments held at the reporting date | 7,145 | (298,490) | 0 |
Loss on investments, net | 46,743 | 16,677 | 20,991 |
Other | 945 | 13,180 | (22,690) |
Decrease (increase) in: | |||
Accounts receivable | 14,948 | (18,050) | (31,611) |
Prepaid expenses and other current assets | 9,665 | (15,650) | 3,046 |
Operating lease right-of-use assets | 3,739 | 15,267 | 8,711 |
Other assets | (19,979) | (3,824) | (3) |
Increase (decrease) in: | |||
Accounts payable and accrued expenses (includes $0, $17,635 and $0 with related parties) | (37,569) | 22,262 | 2,184 |
Income taxes payable | 17,323 | (21,783) | 6,489 |
Deferred revenue | (20,962) | 14,282 | 4,720 |
Operating lease liabilities | (27,131) | (30,581) | (25,150) |
Liability for uncertain tax positions | (2,167) | (10,383) | 9,391 |
Other long-term liabilities | (3,891) | (899) | 3,200 |
Net cash provided by operating activities | 336,444 | 516,536 | 480,079 |
Cash flows from investing activities: | |||
Proceeds on sale of available-for-sale investments | 0 | 663 | 0 |
Investment in available-for-sale securities | (15,000) | 0 | 0 |
Distribution from equity method investment | 0 | 15,327 | 0 |
Purchases of equity method investment | 0 | (23,249) | (31,937) |
Purchase of equity investments | 0 | (999) | (1,246) |
Proceeds from sale of equity investments | 4,527 | 14,330 | 0 |
Purchases of property and equipment | (106,154) | (113,740) | (92,552) |
Proceeds from sale of assets | 0 | 0 | 507 |
Acquisition of businesses, net of cash received | (104,094) | (141,146) | (482,227) |
Proceeds from sale of businesses, net of cash divested | 0 | 48,876 | 24,353 |
Purchases of intangible assets | (50) | (78) | (3,118) |
Proceeds from divestiture of discontinued operations | 0 | 259,104 | 0 |
Net cash (used in) provided by investing activities | (220,771) | 59,088 | (586,220) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 0 | 0 | 750,000 |
Payment of note payable | 0 | 0 | (400) |
Proceeds from bridge loan | 0 | 485,000 | 0 |
Debt issuance cost | 0 | 0 | (7,272) |
Payment of debt | (166,904) | (512,388) | (650,000) |
Debt extinguishment costs (includes reimbursement of $0, $7,500 and $0 with related parties) | (756) | (1,096) | (29,250) |
Proceeds from term loan | 112,286 | 0 | 0 |
Repurchase of common stock | (78,291) | (78,327) | (275,654) |
Issuance of common stock under employee stock purchase plan | 9,431 | 9,231 | 7,382 |
Proceeds from exercise of stock options | 148 | 2,939 | 1,619 |
Deferred payments for acquisitions | (16,116) | (14,387) | (29,180) |
Other | (630) | (4,060) | (1,878) |
Net cash used in financing activities | (140,832) | (113,088) | (234,633) |
Effect of exchange rate changes on cash and cash equivalents | (16,890) | (10,346) | 7,811 |
Net change in cash and cash equivalents | (42,049) | 452,190 | (332,963) |
Cash and cash equivalents at beginning of year | 694,842 | 242,652 | 575,615 |
Cash and cash equivalents at beginning of year associated with discontinued operations | 0 | 66,210 | 51,141 |
Cash and cash equivalents at beginning of year associated with continuing operations | 694,842 | 176,442 | 524,474 |
Cash and cash equivalents at end of year | 652,793 | 694,842 | 242,652 |
Cash and cash equivalents at end of year associated with discontinued operations | 0 | 0 | 66,210 |
Cash and cash equivalents at end of year associated with continuing operations | $ 652,793 | $ 694,842 | $ 176,442 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Cash Flows [Abstract] | |||
Due to related parties | $ 0 | $ 17,635,000 | $ 0 |
Due from related parties | $ 0 | $ 7,500 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common stock | Additional paid-in capital | Additional paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Treasury stock | Retained earnings | Retained earnings Cumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive income (loss) |
Beginning balance (in shares) at Dec. 31, 2019 | 47,654,929 | 0 | |||||||
Beginning balance at Dec. 31, 2019 | $ 1,311,192 | $ 476 | $ 465,652 | $ 0 | $ 891,526 | $ (46,462) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 150,668 | 150,668 | |||||||
Other comprehensive income, net of tax expense | $ (8,344) | (8,344) | |||||||
Exercise of stock options (in shares) | 42,740 | 42,740 | |||||||
Exercise of stock options | $ 1,619 | 1,619 | |||||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 118,629 | ||||||||
Issuance of shares under Employee Stock Purchase Plan | 7,382 | $ 1 | 7,381 | ||||||
Equity portion of 3.25% convertible debt | (12) | (12) | |||||||
Issuance of restricted stock, net (in shares) | 273,201 | ||||||||
Issuance of restricted stock, net | 0 | $ 3 | (3) | ||||||
Repurchase and retirement of common stock (in shares) | (3,742,869) | ||||||||
Repurchase and retirement of common stock | (275,654) | $ (37) | (42,530) | (233,087) | |||||
Share-based compensation | 24,006 | 24,006 | |||||||
Consensus separation adjustment | 0 | ||||||||
Other, net | 161 | 161 | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 44,346,630 | 0 | |||||||
Ending balance at Dec. 31, 2020 | 1,211,018 | $ 443 | 456,274 | $ 0 | 809,107 | (54,806) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 496,714 | 496,714 | |||||||
Other comprehensive income, net of tax expense | $ (21,382) | (21,382) | |||||||
Exercise of stock options (in shares) | 70,776 | 70,776 | |||||||
Exercise of stock options | $ 2,939 | $ 1 | 2,938 | ||||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 109,248 | ||||||||
Issuance of shares under Employee Stock Purchase Plan | 9,231 | $ 1 | 9,230 | ||||||
Issuance of restricted stock, net (in shares) | 560,290 | ||||||||
Issuance of restricted stock, net | 0 | $ 5 | (5) | ||||||
Repurchase and retirement of common stock (in shares) | (697,657) | (445,711) | |||||||
Repurchase and retirement of common stock | (30,586) | $ (7) | (26,275) | $ 47,741 | (52,045) | ||||
Repurchase of shares of common stock (in shares) | 445,711 | ||||||||
Repurchase of shares of common stock | (47,741) | $ (47,741) | |||||||
Share-based compensation | 25,248 | 25,248 | |||||||
Conversion shares issued as extinguishment cost on 3.25% convertible notes (in shares) | 3,050,850 | ||||||||
Conversion shares issued as extinguishment cost to redeem 3.25% Convertible Notes | 431,952 | $ 31 | 431,921 | ||||||
Consensus separation adjustment | (390,526) | (390,526) | |||||||
Consensus Separation | 280,360 | 261,394 | 18,966 | ||||||
Other, net | 505 | 317 | 188 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 47,440,137 | 0 | |||||||
Ending balance at Dec. 31, 2021 | 1,967,732 | $ (64,701) | $ 474 | 509,122 | $ (88,137) | $ 0 | 1,515,358 | $ 23,436 | (57,222) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 63,757 | 63,757 | |||||||
Other comprehensive income, net of tax expense | $ (32,207) | (206) | 206 | (32,207) | |||||
Exercise of stock options (in shares) | 5,439 | 5,439 | |||||||
Exercise of stock options | $ 148 | $ 0 | 148 | ||||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 139,992 | ||||||||
Issuance of shares under Employee Stock Purchase Plan | 9,431 | $ 1 | 9,430 | ||||||
Issuance of restricted stock, net (in shares) | 493,300 | ||||||||
Issuance of restricted stock, net | (1) | $ 5 | (6) | ||||||
Repurchase and retirement of common stock (in shares) | (809,422) | (736,536) | |||||||
Repurchase and retirement of common stock | (6,954) | $ (7) | (17,277) | $ 71,337 | (61,007) | ||||
Repurchase of shares of common stock (in shares) | 736,536 | ||||||||
Repurchase of shares of common stock | (71,337) | $ (71,337) | |||||||
Share-based compensation | 26,601 | 26,601 | |||||||
Consensus separation adjustment | 0 | ||||||||
Consensus Separation | 4,056 | ||||||||
Other, net | 142 | 6 | (3,920) | 4,056 | |||||
Ending balance (in shares) at Dec. 31, 2022 | 47,269,446 | 0 | |||||||
Ending balance at Dec. 31, 2022 | $ 1,892,611 | $ 473 | $ 439,681 | $ 0 | $ 1,537,830 | $ (85,373) |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 15, 2019 | Jun. 10, 2014 | |
Tax expense (benefit) for unrealized holding gain (loss) on available-for-sale investments | $ 0 | $ 0 | $ 181 | ||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 [Member] | ||||
Convertible Debt | 3.25% Convertible Notes | |||||
Stated interest rate | 3.25% | ||||
Convertible Debt | 1.75% Convertible Notes | |||||
Stated interest rate | 1.75% |
The Company
The Company | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The CompanyZiff Davis, Inc., together with its subsidiaries (“Ziff Davis”, the “Company”, “our”, “us”, or “we”), is a vertically focused digital media and internet company whose portfolio includes brands in technology, shopping, gaming and entertainment, connectivity, health, cybersecurity, and martech. The Company’s Digital Media business specializes in the technology, shopping, gaming, and healthcare markets, offering content, tools and services to consumers and businesses. The Company’s Cybersecurity and Martech business provides cloud-based subscription services to consumers and businesses including cybersecurity, privacy and marketing technology.On October 7, 2021, in connection with the spin-off of its cloud fax business described further below, the Company changed its name from J2 Global, Inc. to Ziff Davis, Inc. (for certain events prior to October 7, 2021, the Company may be referred to as J2 Global). |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of Ziff Davis and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications and the reported amounts of net revenue and expenses during the reporting period. The Company believes that its most significant estimates are those related to revenue recognition, valuation and impairment of investments, its assessment of ownership interests as variable interest entities and the related determination of consolidation, share-based compensation expense, fair value of assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies, and allowance for credit losses. On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances. Actual results could materially differ from those estimates. Consensus, Inc. Spin-Off and Discontinued Operations On September 21, 2021, the Company announced that its Board of Directors approved its previously announced separation of the cloud fax business (the “Separation”) into an independent publicly traded company, Consensus Cloud Solutions, Inc. (“Consensus”). On October 7, 2021 (the “Distribution Date”), the Separation was completed and the Company transferred J2 Cloud Service, LLC to Consensus who in turn transferred non-fax assets and liabilities back to Ziff Davis such that Consensus was left with the cloud fax business. The Separation was achieved through the Company’s distribution of 80.1% of the shares of Consensus common stock to holders of J2 Global common stock as of the close of business on October 1, 2021, the record date for the distribution. The Company’s stockholders of record received one share of Consensus common stock for every three shares of J2 Global’s common stock. On October 8, 2021, Consensus began trading on Nasdaq under the stock symbol “CCSI”. Ziff Davis, Inc. retained a 19.9% interest in Consensus following the Separation (the “Investment in Consensus”). On October 7, 2021, Consensus paid Ziff Davis approximately $259.1 million of cash in a distribution that was anticipated to be tax-free provided certain requirements were met, and issued $500.0 million of senior notes due 2028 to Ziff Davis, which Ziff Davis then exchanged with the lenders under the Credit Agreement and Credit Agreement Amendments by and among the subsidiaries of Ziff Davis party thereto as guarantors, Citicorp North America Inc. and MUFG Union Bank, N.A. and MUFG Union Bank, N.A., as administrative agent for the lenders, for the extinguishment of indebtedness outstanding under the Bridge Loan Facility. Refer to Note 10 - Debt for additional details. Such lenders or their affiliates agreed to resell the 2028 notes to qualified institutional buyers in the United States pursuant to Rule 144A. The accounting requirements for reporting the Company’s cloud fax business as a discontinued operation were met when the Separation was completed. Accordingly, the consolidated financial statements reflect the results of the cloud fax business as a discontinued operation for all periods presented. Ziff Davis did not retain a controlling interest in Consensus. During the year ended December 31, 2022, the Company entered into a Fifth Amendment and Sixth Amendment to its existing Credit Agreement, providing for the issuance of senior secured term loans under the Credit Agreement (the “Term Loan Facilities”), in an aggregate principal amount of approximately $112.3 million. During the year ended December 31, 2022, the Company subsequently completed non-cash exchanges of 2,800,000 shares of its common stock of Consensus with the lenders under the Fifth and Sixth Amendments to settle the Company’s obligations of $112.3 million outstanding aggregate principal amount of the Term Loan Facilities plus related interest. Refer to Note 10 - Debt for additional details. As of December 31, 2022, the Company continues to hold approximately 1.1 million shares of common stock of Investment in Consensus. The Investment in Consensus represents the investment in equity securities for which the Company elected the fair value option and subsequent fair value changes in the Consensus shares are included in the assets of and results from continuing operations. Refer to Note 5 - Investments and Note 6 - Discontinued Operations and Dispositions for additional information. Allowances for Credit Losses The Company maintains an allowance for credit losses on accounts receivable, which is recorded as a reduction to accounts receivable. Changes in the allowance are classified as ‘General and administrative’ expenses in the Consolidated Statements of Operations. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when it identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status. It also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. On an ongoing basis, management evaluates the adequacy of these reserves. The rollforward of allowance for credit losses on Accounts receivable, net is as follows (in thousands): Year ended December 31, 2022 2021 2020 Beginning balance $ 9,811 $ 11,552 $ 8,480 (Decreases) increases to bad debt expense (255) 3,107 5,315 Write-offs, net of recoveries (2,688) (4,848) (2,243) Ending balance $ 6,868 $ 9,811 $ 11,552 Revenue Recognition The Company recognizes revenue when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Refer to Note 3 - Revenues for additional details. Principal vs. Agent The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , for principal-agent considerations and assesses: (i) if another party is involved in providing goods or services to the customer, (ii) whether the Company controls the specified goods or services prior to transferring control to the customer and (iii) whether the Company has discretion on pricing. Sales Taxes The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by the Company from a customer. Fair Value Measurements The Company complies with the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. The carrying values of cash and cash equivalents, accounts receivable, interest receivable, accounts payable, accrued expenses, interest payable, customer deposits, and long-term debt are reflected in the financial statements at cost. With the exception of certain investments and long-term debt, cost approximates fair value due to the short-term nature of such instruments. The fair value of the Company’s outstanding debt was determined using the quoted market prices of debt instruments with similar terms and maturities when available. As of the same dates, the carrying value of other long-term liabilities approximated fair value as the related interest rates approximate rates currently available to the Company. Cash and Cash Equivalents The Company considers the balance of its investment in funds that substantially hold securities that mature within three months or less from the date the Company purchases these securities to be cash equivalents. The carrying amount of cash and cash equivalents either approximates fair value due to the short-term maturity of these instruments or are at fair value. Investments The Company accounts for its investments in debt securities in accordance with ASC Topic 320, Investments - Debt Securities (“ASC 320”). Debt investments are typically comprised of corporate debt securities, which are classified as available-for-sale. Available-for-sale securities are carried at fair value with unrealized gains and losses included in other comprehensive income. All debt securities are accounted for on a specific identification basis. The Company’s available-for-sale debt securities are carried at an estimated fair value with any unrealized gains or losses, net of taxes, included in accumulated other comprehensive loss on our Consolidated Balance Sheets. Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Expected credit losses on available-for-sale debt securities are recognized in loss on investments, net on our Consolidated Statements of Operations, and any remaining unrealized losses, net of taxes, are included in accumulated comprehensive loss on our Consolidated Balance Sheets. The Company accounts for its investments in equity securities in accordance with ASC Topic 321, Investments - Equity Securities (“ASC 321”) which requires the accounting for equity investments, other than those accounted for under the equity method of accounting, generally be measured at fair value for equity securities with readily determinable fair values. Equity securities without a readily determinable fair value, which are not accounted for under the equity method of accounting, are measured at their cost, less impairment, if any, and adjusted for observable price changes arising from orderly transactions in the same or similar investment from the same issuer. Any unrealized gains or losses will be reported within earnings on our Consolidated Statements of Operations. The Company assesses whether an other-than-temporary impairment loss on an investment has occurred due to declines in fair value or other market conditions. Refer to Note 5 - Investments for additional information. The Investment in Consensus are equity securities accounted for at fair value under the fair value option, and the related fair value gains and losses are recognized in earnings. As the initial carrying value of the Investment in Consensus was negative immediately following the Separation, the Company elected the fair value option under ASC 825-10-25 to support the initial recognition of the Investment in Consensus at fair value and the negative book value was recorded as a gain at the date of Separation. The fair value of Consensus common stock is readily available as Consensus is a publicly traded company. Variable Interest Entities (“VIE”s) A VIE requires consolidation by the entity’s primary beneficiary. The Company evaluates its investments in entities in which it is involved to determine if the entity is a VIE and if so, whether it holds a variable interest and is the primary beneficiary. The Company has determined that it holds a variable interest in its investment as a limited partner in the OCV Fund I, LP (“OCV Fund”, “OCV” or the “Fund”), as well as, another independent corporation. In determining whether the Company is deemed to be the primary beneficiary of the VIE, both of the following characteristics must be present: a) the Company has the power to direct the activities of the VIE that most significantly impact the VIEs economic performance (the power criterion); and b) the Company has the obligation to absorb losses of the VIE, or the right to receive benefits of the VIE, that could potentially be significant to the VIE (the economic criterion). The Company has concluded that, as a limited partner in OCV, although the obligations to absorb losses or the right to benefit from the gains is not insignificant, the Company does not have “power” over OCV because it does not have the ability to direct the significant decisions which impact the economics of OCV. The Company believes that the OCV general partner, as a single decision maker, holds the ability to make the decisions about the activities that most significantly impact the OCV Fund’s economic performance. As a result, the Company has concluded that it will not consolidate OCV, as it is not the primary beneficiary of the OCV Fund, and will account for this investment under the equity-method of accounting (see Note 5 - Investments ). OCV qualifies as an investment company under ASC Topic 946, Financial Services, Investment Companies (“ASC 946”). Under ASC Topic 323, Investments - Equity Method and Joint Ventures , an investor that holds investments that qualify for specialized industry accounting for investment companies in accordance with ASC 946 should record its share of the earnings or losses, realized or unrealized, as reported by its equity method investees in the Consolidated Statements of Operations. The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline. Debt Issuance Costs and Debt Discount The Company capitalizes costs incurred with borrowing and issuance of debt securities and records debt issuance costs and discounts as a reduction to the debt amount. These costs and discounts are amortized and included in interest expense over the life of the borrowing using the effective interest method. Concentration of Credit Risk The Company primarily invests its cash, cash equivalents and marketable securities with major financial institutions primarily within the United States, Canada, United Kingdom, and the European Union. These investments are made in accordance with the Company’s investment policy with the principal objectives being preservation of capital, fulfillment of liquidity needs and above market returns commensurate with preservation of capital. The Company’s investment policy also requires that investments in marketable securities be in only highly rated instruments, with limitations on investing in securities of any single issuer. However, these investments are not insured against the possibility of a total or near complete loss of earnings or principal and are inherently subject to the credit risk related to the continued credit worthiness of the underlying issuer and general credit market risks. At December 31, 2022, the Company’s cash and cash equivalents that were maintained in demand deposit accounts in qualifying financial institutions are insured up to the limit determined by the applicable governmental agency. Foreign Currency Most of the Company’s foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities are translated at exchange rates prevailing at the balance sheet dates. Revenues and expenses are translated into U.S. Dollars at average exchange rates for the period. Gains and losses resulting from translation are recorded as a component of accumulated other comprehensive income/(loss). Net translation loss was $32.5 million, $21.3 million and $8.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. Realized gains and losses from foreign currency transactions are recognized within ‘Other income (loss), net’ on our Consolidated Statements of Operations. Foreign exchange gains (losses) amounted to $8.2 million, $2.0 million and $(3.1) million for the years ended December 31, 2022, 2021 and 2020, respectively. Property and Equipment Property and equipment are stated at cost. Equipment under a finance lease is stated at the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets and is recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Operations. The estimated useful lives of property and equipment range from one Impairment or Disposal of Long-Lived Assets The Company accounts for long-lived assets, which include property and equipment, operating lease right-of-use assets and identifiable intangible assets with finite useful lives (subject to amortization), in accordance with the provisions of ASC Topic 360, Property, Plant, and Equipment (“ASC 360”), which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset to the expected undiscounted future net cash flows generated by the asset. If it is determined that the asset may not be recoverable, and if the carrying amount of an asset exceeds its estimated fair value, an impairment charge is recognized to the extent of the difference. The Company assesses the impairment of identifiable definite-lived intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it considers important which could individually or in combination trigger an impairment include the following: • Significant underperformance relative to expected historical or projected future operating results; • Significant changes in the manner of our use of the acquired assets or the strategy for the Company’s overall business; • Significant negative industry or economic trends; • Significant decline in the Company’s stock price for a sustained period; and • The Company’s market capitalization relative to net book value. If the Company determined that the carrying value of definite-lived intangibles and long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, it would record an impairment equal to the excess of the carrying amount of the asset over its estimated fair value. The Company assessed whether events or changes in circumstances have occurred that potentially indicate the carrying amount of definite-lived assets may not be recoverable. During the years ended December 31, 2022, 2021 and 2020, the Company did not have any events or circumstances indicating impairment of long-lived assets, other than the recording of an impairment of certain operating lease right-of-use assets and associated property and equipment. The Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a permanent “remote” or “partial remote” work model. The impairment is presented in general and administrative expense on our Consolidated Statements of Operations. Refer to Note 11 - Leases for additional details. The Company classifies its long-lived assets to be sold as held for sale in the period (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable and the transfer is expected to qualify for recognition as a sale within one year, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation expense on the asset. The Company assesses the fair value of a long-lived asset less any costs to sell at each reporting period and until the asset is no longer classified as held for sale. Business Combinations and Valuation of Goodwill and Intangible Assets The Company applies the acquisition method of accounting for business combinations in accordance with GAAP and uses estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets, including identifiable intangible assets and liabilities acquired. Such estimates may be based on significant unobservable inputs and assumptions such as, but not limited to, future revenue growth rates, gross and operating margins, customer attrition rates, royalty rates, discount rates and terminal growth rate assumptions. The Company uses established valuation techniques and may engage reputable valuation specialists to assist with the valuations. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets. Intangible assets subject to amortization are amortized over the period of estimated economic benefit ranging from one Intangibles - Goodwill and Other (“ASC 350”), which provides that goodwill and other intangible assets with indefinite lives are not amortized but tested annually for impairment or more frequently if the Company believes indicators of impairment exist. In connection with the annual impairment test for goodwill, the Company has the option to perform a qualitative assessment in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, it then it performs an impairment test of goodwill. The impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. The Company generally determines the fair value of its reporting units using a mix of an income approach and a market approach. If the carrying value of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized for the difference. During the years ended December 31, 2022, 2021, and 2020 the Company recorded a goodwill impairment of $27.4 million, $32.6 million and zero, respectively. Refer to Note 9 - Goodwill and Intangible Assets for additional details. The Company performed the annual impairment test for intangible assets with indefinite lives for fiscal 2021 and 2020 using a qualitative assessment primarily taking into consideration macroeconomic, industry and market conditions, overall financial performance and any other relevant company-specific factors. The Company concluded that there were no impairments in 2021 and 2020. The Company did not perform an assessment in 2022, as there were no intangible assets with indefinite lives during 2022. Contingent Consideration Certain of the Company’s acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future income thresholds or other metrics. The contingent earn-out arrangements are based upon the Company’s valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, the Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and records the estimated fair value of contingent consideration as a liability on the Consolidated Balance Sheets. The Company considers several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former shareholders of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of the Company’s other key employees. The contingent earn-out payments are not affected by employment termination. The Company measures its contingent earn-out liabilities in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (see Note 7 - Fair Value Measurements ). The Company may use various valuation techniques depending on the terms and conditions of the contingent consideration, including a Monte-Carlo simulation. This simulation uses a probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our Consolidated Statements of Cash Flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities. The Company reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior amounts. Changes in the estimated fair value of its contingent earn-out liabilities and adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in general and administrative expenses on our Consolidated Statements of Operations. Self-Insurance Program The Company provides health and dental insurance plans to certain of its employees through a self-insurance structure. The Company has secured reinsurance in the form of a two tiered stop-loss coverage that limits the exposure arising from any claims made. Self-insurance claims filed and claims incurred but not reported are accrued based on management’s estimate of the discounted ultimate costs for self-insured claims incurred using actuarial assumptions followed in the insurance industry and historical experience. Although management believes it has the ability to reasonably estimate losses related to claims, it is possible that actual results could differ from recorded self-insurance liabilities. Income Taxes The Company’s income is subject to taxation in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the Company believes that certain positions might be challenged despite the Company’s belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities to be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. The valuation allowance is reviewed quarterly based upon the facts and circumstances known at the time. In assessing this valuation allowance, the Company reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable. ASC 740 provides guidance on the minimum threshold that an uncertain income tax benefit is required to meet before it can be recognized in the financial statements and applies to all income tax positions taken by a company. ASC 740 contains a two-step approach to recognizing and measuring uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit will be recorded. Uncertain income tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company recognizes accrued interest and penalties related to uncertain income tax positions in income tax expense on its Consolidated Statements of Operations. On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (“CARES”) Act” was enacted into law providing for changes to various tax laws that imp |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Digital Media Digital Media revenues are earned primarily from the delivery of advertising services and from subscriptions to services and information. Revenue is earned from the delivery of advertising services on websites that are owned and operated by us and on those websites that are part of Digital Media’s advertising network. Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when any of the following performance obligations are satisfied: (i) when an advertisement is placed for viewing, (ii) when a qualified sales lead is delivered, (iii) when a visitor “clicks through” on an advertisement or (iv) when commissions are earned upon the sale of an advertised product. Revenue from subscriptions is earned through the granting of access to, or delivery of, data products or services to customers. Subscriptions cover video games and related content, health information, data and other copyrighted material. Revenues under such agreements are recognized over the contract term for use of the service. Revenues are also earned from listing fees, subscriptions to online publications, and from other sources. Subscription revenues are recognized over time. We also generate Digital Media subscription revenues through the license of certain assets to clients. Assets are licensed for clients’ use in their own promotional materials or otherwise and may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized over the contract term for use of the asset. In instances when technology assets are licensed to our clients, revenues from the license of these assets are recognized over the term of the access period. The Digital Media business also generates revenue from other sources which include marketing and production services. Such other revenues are generally recognized over the period in which the products or services are delivered. We also generate Digital Media revenues from transactions involving the sale of perpetual software licenses, related software support and maintenance, hardware used in conjunction with its software, and other related services. Revenue is recognized for these software transactions with multiple performance obligations after (i) the contract has been approved and we are committed to perform the respective obligations and (ii) we can identify and quantify each obligation and its respective selling price. Once the respective performance obligations have been identified and quantified, revenue will be recognized when the obligations are met, either over time or at a point in time depending on the nature of the obligation. Revenues from software license performance obligations are generally recognized upfront at the point in time that the software is made available to the customer to download and use. Revenues for related software support and maintenance performance obligations are related to technical support provided to customers as needed and unspecified software product upgrades, maintenance releases and patches during the term of the support period when they are available. We are obligated to make the support services available continuously throughout the contract period. Therefore, revenues for support contracts are generally recognized ratably over the contractual period the support services are provided. Hardware product and related software performance obligations, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a bundled performance obligation. The revenues for this bundled performance obligation are generally recognized at the point in time that the hardware and software products are delivered and ownership is transferred to the customer. Other service revenues are generally recognized over time as the services are performed. The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned and operated web properties, on third-party sites or on unaffiliated advertising networks; (ii) through the Company’s lead-generation business; and (iii) through the Company’s subscriptions. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third-party sites. Cybersecurity and Martech The Company’s Cybersecurity and Martech revenues substantially consist of subscription revenues which include subscription, usage-based fees, a significant portion of which are paid in advance. The Company defers the portions of monthly, quarterly, semi-annual and annual fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned. Along with its numerous proprietary Cybersecurity and Martech solutions, the Company also generates subscription revenues by reselling various third-party solutions, primarily through its email security line of business. These third-party solutions, along with the Company’s proprietary products, allow it to offer customers a variety of solutions to better meet the customer’s needs. The Company records revenue on a gross basis with respect to reseller revenue because the Company has control of the specified good or service prior to transferring control to the customer. Revenues from external customers classified by revenue source are as follows (in thousands). See Note 18 - Segment Information for additional information. Year ended December 31, Digital Media 2022 2021 2020 Advertising $ 788,135 $ 838,075 $ 627,198 Subscription 244,694 197,354 166,219 Other 46,343 33,871 17,943 Total Digital Media revenues $ 1,079,172 $ 1,069,300 $ 811,360 Cybersecurity and Martech Subscription $ 312,626 $ 348,611 $ 347,697 Total Cybersecurity and Martech revenues $ 312,626 $ 348,611 $ 347,697 Corporate $ — $ — $ 1 Elimination of inter-segment revenues (801) (1,189) (229) Total Revenues $ 1,390,997 $ 1,416,722 $ 1,158,829 Timing of revenue recognition Point in time $ 46,770 $ 42,276 $ 27,685 Over time 1,344,227 1,374,446 1,131,144 Total $ 1,390,997 $ 1,416,722 $ 1,158,829 The Company has recorded $174.7 million and $153.0 million of revenue for the years ended December 31, 2022 and 2021, respectively, which was previously included in the deferred revenue balance as of the beginning of each respective year. As of December 31, 2022 and 2021, the Company acquired $21.5 million and $9.5 million, respectively, of deferred revenue in connection with the Company’s business acquisitions, which are subject to purchase accounting adjustments, as appropriate. Refer to Note 4 - Business Acquisitions for additional details . Performance Obligations The Company is often a party to multiple concurrent contracts with the same customer, or a party related to that customer. These situations require judgment to determine if those arrangements should be accounted for as a single contract. Consideration of both the form and the substance of the arrangement is required. The Company’s contracts with customers may include multiple performance obligations, including complex contracts when advertising and licensing services are sold together. The Company determines the transaction price based on the amount to which the Company expects to be entitled in exchange for services provided. The Company includes any fixed consideration within its contracts as part of the total transaction price. The Company’s contracts occasionally contain some component of variable consideration, which is often immaterial and estimated. The Company does not include in the transaction price taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by us from the customer. Due to the nature of the services provided, there are no obligations for returns. The Company satisfies its performance obligations within the Digital Media business upon delivery of services to its customers. In addition, the Company provides content to its advertising partners which the Company sells to its partners’ customer base and receives a revenue share based on the terms of the agreement. The Company satisfies its performance obligations within the Cybersecurity and Martech business upon delivery of services to its customers. Payment terms vary by type and location of our customers and the services offered. The time between invoicing and when payment is due is not significant. Significant Judgments Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is also required to determine the standalone selling price for each distinct performance obligation. Performance Obligations Satisfied Over Time Our Digital Media business consists primarily of performance obligations that are satisfied over time. This was determined based on a review of the contracts and the nature of the services offered, where the customer simultaneously receives and consumes the benefit of the services provided. Satisfaction of these performance obligations is evidenced in the following ways: Advertising • Website reporting by the Company, the customer, or a third-party contains the delivery evidence needed to satisfy the performance obligations within the advertising contract • Successfully delivered leads are evidenced by either delivery reports from the Company’s internal lead management systems or through e-mail communication and/or other evidence of delivery showing acceptance of leads by the customer • Commission is evidenced by direct site reporting from the affiliate or via direct confirmation from the customer Subscription • Evidence of delivery is contained in the Company’s systems or from correspondence with the customer which tracks when a customer accepts delivery of any assets, digital keys or download links Revenue is recognized based on delivery of services over the contract period for advertising and on a straight-line basis over the contract period for subscriptions. The Company believes that the methods described are a faithful depiction of the transfer of goods and services. Our Cybersecurity and Martech business consists primarily of performance obligations that are satisfied over time. This has been determined based on the fact that the nature of services offered are subscription based where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not. Depending on the individual contracts with the customer, revenue for these services are recognized over the contract period when any of the following materially distinct performance obligations are satisfied: • Voice, email marketing and search engine optimization as services are delivered • Consumer privacy services and data backup capabilities are provided • Security solutions, including email and endpoint are provided • Faxing capabilities are provided (included in discontinued operations through October 7, 2021) The Company has concluded the best measure of progress toward the complete satisfaction of the performance obligation over time is a time-based measure. The Company recognizes revenue on a straight-line basis throughout the subscription period, or as usage occurs, and believes that the method used is a faithful depiction of the transfer of goods and services. Performance Obligations Satisfied at a Point in Time The Company’s Digital Media business has technology subscriptions that have standalone functionality. As a result, they are considered to be functional intellectual property where the performance obligations are satisfied at a point in time. This is evidenced once a digital key is delivered to the customer. Once the key is delivered to the customer, the customer has full control of the technology and the Company has no further performance obligations. The Company has concluded that revenue is recognized once the digital key is delivered. The Company believes that this method is a faithful depiction of the transfer of goods and services. Practical expedients Existence of a Significant Financing Component in a Contract If at contract inception, the Company expects that the period between payment by the customer and the transfer of promised goods or services by the Company to the customer will be one year or less, the Company does not assess whether a contract has a significant financing component. In addition, the Company has determined that the payment terms that the Company provides to its customers are structured primarily for reasons other than the provision of finance to the Company. The Company typically charges a single upfront amount for services because other payment terms would affect the nature of the risk assumed by the Company to provide service given the costs of the customer acquisition and the highly competitive and commoditized nature of the business we operate which allows customers to easily move from one provider to another. This additional risk may make it uneconomical to provide the service. Costs to Obtain a Contract The Company’s revenues are primarily generated from customer contracts that are for one year or less. Costs primarily consist of incentive compensation paid based on the achievements of sales targets in a given period for related revenue streams and are recognized in the month when the revenue is earned. Incentive compensation is paid on the issuance or renewal of the customer contract. As a practical expedient, for amortization periods which are determined to be one year or less, the Company expenses any incremental costs of obtaining the contract with a customer when incurred. For those customers with amortization periods determined to be greater than one year, the Company capitalizes and amortizes the expenses over the period of benefit. In addition, the Company partners with various affiliates in order to generate a portion of its revenue for certain lines of business. The commissions earned by the Company’s affiliates are incentive based and are paid on the acquisition of new customers in a given period. For those customers with amortization periods determined to be greater than one year, the Company capitalizes and amortizes the expenses over the period of benefit. Revenues Invoiced The Company has applied the practical expedient for certain revenues streams to exclude the disclosure of the value of remaining performance obligations for the following types of contracts: i. Contracts within an original expected term of one year or less, ii. Contracts for which the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed. Transaction Price Allocation to Future Performance Obligations As of December 31, 2022, the aggregate amount of transaction price that is allocated to future performance obligations was approximately $21.2 million and is expected to be recognized as follows: 93% by December 31, 2023 and 7% by December 31, 2025. The amount disclosed does not include revenues related to performance obligations that are part of a contract with original expected duration of 12 months or less or portions of the contract that remain subject to cancellations. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Business Acquisitions The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, and acquire skilled personnel. 2022 Acquisitions The Company completed the following acquisitions during the year ended December 31, 2022, paying the purchase price in cash in each transaction: (a) a purchase of 100% equity interests of Lifecycle Marketing Group Limited, acquired on January 21, 2022, a United Kingdom-based portfolio of pregnancy and parenting brands, including Emma’s Diary and Health Professional Academy, reported within our Digital Media segment; (b) a purchase of 100% equity interests of FitNow, Inc., acquired on June 2, 2022, a Massachusetts-based provider of weight loss products and support, reported within our Digital Media segment; and (c) four other immaterial Digital Media acquisitions. The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2022, reflect the results of operations of all 2022 acquisitions. For the year ended December 31, 2022, these acquisitions contributed $33.0 million to the Company’s revenues. Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide. Total consideration for these transactions was $121.7 million, net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid. The following table summarizes the allocation of the preliminary purchase consideration for all 2022 acquisitions as of December 31, 2022 (in thousands): Assets and Liabilities Valuation Accounts receivable $ 7,433 Prepaid expenses and other current assets 4,915 Property and equipment 369 Operating lease right-of-use assets, noncurrent 545 Trade names 12,839 Customer relationships 20,040 Goodwill 95,737 Other intangibles 18,166 Other long-term assets 11 Accounts payable and accrued expenses (6,221) Deferred revenue (21,474) Deferred tax liability (10,140) Other long-term liabilities (516) Total $ 121,704 The initial accounting for all of the 2022 acquisitions is incomplete due to timing of available information and is subject to change. The Company has recorded provisional amounts which may be based upon past acquisitions with similar attributes for certain intangible assets (including trade names, software and customer relationships), preliminary acquisition date working capital, and related tax items. The fair value of the assets acquired includes accounts receivable of $7.4 million, all of which is expected to be collectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized associated with these acquisitions during the year ended December 31, 2022 is $95.7 million, of which $1.2 million is expected to be deductible for income tax purposes. During the year ended December 31, 2022, the purchase price accounting has been finalized for the following 2021 acquisitions: DailyOM, SEOmoz, Solutelia, LLC, Arthur L. Davis Publishing and four other immaterial Digital Media and Cybersecurity and Martech acquired businesses. During the year ended December 31, 2022, the Company recorded adjustments to the initial working capital and to the purchase accounting of certain other prior period acquisitions due to the finalization of prior period acquisitions in the Digital Media business. These measurement period adjustments resulted in a net increase in goodwill of $4.5 million, which included a $3.2 million increase in connection with the unfavorable contract liability for an acquired contract. The unfavorable contract liability is expected to be accreted over 3 years as of December 31, 2022. In addition, the Company recorded adjustments to the initial working capital and to the purchase accounting of certain prior period acquisitions due to the finalization of prior period acquisitions in the Cybersecurity and Martech businesses which resulted in a net decrease in goodwill of $0.1 million. Such adjustments had an immaterial impact on the amortization expense within the Consolidated Statements of Operations for the year ended December 31, 2022. Refer to Note 9 - Goodwill and Intangible Assets for additional information. Unaudited Pro Forma Financial Information for All 2022 Acquisitions The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2021. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2022 acquisitions as if each acquisition had occurred on January 1, 2021 (in thousands, except per share amounts): Year ended December 31, 2022 2021 (unaudited) Revenues $ 1,407,300 $ 1,461,178 Net income from continuing operations $ 64,877 $ 398,201 Income per common share from continuing operations - Basic $ 1.38 $ 8.67 Income per common share from continuing operations - Diluted $ 1.38 $ 8.31 2021 Acquisitions The Company completed the following acquisitions during the year ended December 31, 2021, paying the purchase price in cash in each transaction: (a) an asset purchase of DailyOM, acquired on April 30, 2021, a California-based provider of health and wellness digital media, content and learning business; (b) a share purchase of SEOmoz, acquired on June 4, 2021, a Seattle-based provider of search engine optimization (“SEO”) solutions; (c) an asset purchase of Solutelia, LLC, acquired on July 15, 2021, a Colorado-based on-demand wireless telecommunications network monitoring and analysis, testing and optimization software business and related wireless telecommunications engineering services business; (d) a stock purchase of Arthur L. Davis Publishing, acquired on September 23, 2021, an Iowa-based digital nursing publication; (e) a stock purchase of Root Wireless, Inc. acquired on December 13, 2021, a Washington-based mobile analytics firm; and (f) four other immaterial Digital Media acquisitions. The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2021, reflect the results of operations of all 2021 acquisitions. For the year ended December 31, 2021, these acquisitions contributed $39.9 million to the Company’s revenues. Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide. Total consideration for these transactions was $160.4 million, net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid. The following table summarizes the allocation of the purchase consideration for all 2021 acquisitions as of December 31, 2021, including individually material acquisitions noted separately (in thousands): Assets and Liabilities Valuation Accounts receivable $ 9,513 Prepaid expenses and other current assets 1,655 Property and equipment 2,188 Operating lease right-of-use assets, noncurrent 5,888 Trade names 16,349 Customer relationships 21,945 Goodwill 97,032 Other intangibles 38,894 Other long-term assets 62 Deferred tax asset 230 Accounts payable and accrued expenses (5,863) Deferred revenue (9,491) Operating lease liabilities, current (7,191) Other current liabilities (14) Deferred tax liability (9,237) Other long-term liabilities (1,511) Total $ 160,449 The fair value of the assets acquired includes accounts receivable of $9.5 million. The gross amount due under contracts is $9.9 million, of which $0.4 million was expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized associated with these acquisitions during the year ended December 31, 2021 is $97.0 million, of which $42.1 million is expected to be deductible for income tax purposes. Unaudited Pro Forma Financial Information for All 2021 Acquisitions The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2020. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2021 acquisitions as if each acquisition had occurred on January 1, 2020 (in thousands, except per share amounts): Year ended December 31, 2021 2020 (unaudited) Revenues $ 1,482,323 $ 1,267,280 Net income from continuing operations $ 416,348 $ 33,351 Income per common share from continuing operations - Basic $ 9.06 $ 0.72 Income per common share from continuing operations - Diluted $ 8.69 $ 0.71 SEOmoz Acquisition On June 4, 2021, the Company acquired all the outstanding issued capital of SEOmoz at a purchase consideration of $67.0 million, net of cash acquired and assumed liabilities. SEOmoz is a provider of search engine optimization (“SEO”) solutions. The Consolidated Statement of Operations since the date of acquisition and balance sheet as of December 31, 2021, reflect the results of operations of SEOmoz. For the year ended December 31, 2021, SEOmoz contributed $25.6 million to the Company’s revenues. Net income from continuing operations contributed by SEOmoz since the acquisition date was not separately identifiable due to the Company’s integration activities and is impracticable to provide. The following table summarizes the allocation of the purchase consideration for the SEOmoz acquisition (in thousands): Assets and Liabilities Valuation Accounts receivable $ 3,278 Prepaid expenses and other current assets 1,547 Property and equipment 1,845 Operating lease right of use asset 5,888 Trade names 7,406 Customer relationships 5,000 Goodwill 41,329 Other intangibles 22,777 Other long-term assets 62 Accounts payables and accrued expenses (2,655) Other current liabilities (14) Deferred revenue (6,398) Operating lease liabilities, current (7,191) Deferred tax liability (5,327) Other long-term liabilities (550) Total $ 66,997 The fair value of the assets acquired includes accounts receivable of $3.3 million. The gross amount due under contracts is $3.6 million, of which $0.3 million was expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized in connection with this acquisition during the year ended December 31, 2021 is $41.3 million of which zero is expected to be deductible for income tax purposes. During the year ended December 31, 2021, the Company recorded adjustments to the initial working capital and to the purchase accounting due to the finalization of prior period acquisitions in the Digital Media business, which resulted in a net decrease in goodwill of $1.4 million. In addition, the Company recorded adjustments to the initial working capital and to the purchase accounting due to the finalization of prior period acquisitions in the Cybersecurity and Martech businesses which resulted in a net increase in goodwill of $0.5 million. Such adjustments had an immaterial impact on the amortization expense within the Consolidated Statements of Operations for the year ended December 31, 2021. Refer to Note 9 - Goodwill and Intangible Assets for additional information. Unaudited Pro Forma Financial Information for SEOmoz Acquisition The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired business been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from this business acquisition had it occurred on January 1, 2020. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the SEOmoz acquisition, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and SEOmoz as if the acquisition had occurred on January 1, 2020 (in thousands, except per share amounts): Year ended December 31, 2021 2020 (unaudited) Revenues $ 1,438,099 $ 1,207,910 Net income from continuing operations $ 406,281 $ 29,382 Income per common share from continuing operations - Basic $ 8.84 $ 0.63 Income per common share from continuing operations - Diluted $ 8.48 $ 0.62 2020 Acquisitions The Company completed the following acquisitions during the year ended December 31, 2020, paying the purchase price in cash in each transaction: (a) a share purchase of the entire issued capital of RetailMeNot, Inc. acquired on October 28, 2020, a Texas-based provider of marketing solutions; (b) a share purchase of the entire issued capital of Inspired eLearning, LLC, acquired on November 2, 2020, a Texas-based platform for cybersecurity awareness and compliance training; (c) a share purchase of the entire issued capital of The Aberdeen Group, LLC and The Big Willow, Inc., acquired on November 20, 2020, a Massachusetts-based provider in digital marketing solutions; and (d) other immaterial acquisitions of email marketing, security and digital media businesses. The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2020, reflect the results of operations of all 2020 acquisitions. For the year ended December 31, 2020, these acquisitions contributed $54.6 million to the Company’s revenues. Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide. Total consideration for these transactions was $472.8 million, net of cash acquired and assumed liabilities and subject to certain post-closing adjustments which may increase or decrease the final consideration paid. The following table summarizes the allocation of the purchase consideration for all 2020 acquisitions, including individually material acquisitions noted separately (in thousands): Assets and Liabilities Valuation Accounts receivable $ 46,138 Prepaid expenses and other current assets 9,105 Property and equipment 2,204 Operating lease right of use asset 10,644 Trade names 66,763 Customer relationships 214,347 Goodwill 202,901 Other intangibles 56,424 Other long-term assets 685 Deferred tax asset 992 Accounts payables and accrued expenses (28,979) Deferred revenue (21,918) Operating lease liabilities, current (4,520) Long-term debt (910) Operating lease liabilities, noncurrent (13,104) Income taxes payable (3,297) Liability for uncertain tax positions (1,576) Deferred tax liability (53,870) Other long-term liabilities (9,269) Total $ 472,760 During the year ended December 31, 2020, the Company recorded adjustments to prior period acquisitions due to changes in the initial working capital and related purchase accounting within the Cybersecurity and Martech businesses, which resulted in a net decrease in goodwill of $2.1 million. In addition, the Company recorded adjustments to prior period acquisitions due to changes in the initial working capital and related purchase accounting within the Digital Media business, which resulted in a net increase in goodwill of $9.7 million. Such adjustments had an immaterial impact to amortization expense within the Consolidated Statements of Operations for the year ended December 31, 2020. The fair value of the assets acquired includes accounts receivable of $46.1 million. The gross amount due under contracts is $53.0 million, of which $6.9 million was expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized in connection with these acquisitions during the year ended December 31, 2020 is $202.9 million, of which $55.0 million is expected to be deductible for income tax purposes. Unaudited Pro Forma Financial Information for All 2020 Acquisitions The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2020 and do not take into consideration the exiting of any acquired lines of business. The Company acquired a line of business through the RetailMeNot, Inc. acquisition which was in the process of being exited prior to the acquisition. This line of business accounts for $0.1 million of revenue in 2020, respectively, which is included in the pro forma results below. In addition, during 2020, the Company sold certain Voice assets in Australia and New Zealand. This divestiture represented $8.4 million of revenue during the 2020 fiscal year. This unaudited pro forma supplemental information includes incremental intangible asset amortization, income tax expense, and interest income as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2020 acquisitions as if each acquisition had occurred on January 1, 2020 (in thousands, except per share amounts): Year ended December 31, 2020 (unaudited) Revenues $ 1,339,927 Net income from continuing operations $ 21,450 Income per common share from continuing operations - Basic $ 0.46 Income per common share from continuing operations - Diluted $ 0.45 RetailMeNot, Inc. Acquisition On October 28, 2020, the Company acquired all the outstanding issued capital of RetailMeNot, Inc. at a purchase consideration of $414.4 million, net of cash acquired and assumed liabilities. RetailMeNot, Inc. (“RMN”) is a leading savings destination that influences purchase decisions through the power of savings and coupons. The multinational company operates digital savings websites and mobile applications connecting consumers, both online and in-store, to retailers that advertise with RMN. The Consolidated Statement of Operations since the date of acquisition and balance sheet as of December 31, 2020, reflect the results of operations of RetailMeNot, Inc. For the year ended December 31, 2020, RetailMeNot, Inc. contributed $47.6 million to the Company’s revenues. Net income from continuing operations contributed by RetailMeNot, Inc. since the acquisition date was not separately identifiable due to the Company’s integration activities and is impracticable to provide. The following table summarizes the allocation of the purchase consideration for the RetailMeNot, Inc. acquisition (in thousands): Assets and Liabilities Valuation Accounts receivable $ 40,525 Prepaid expenses and other current assets 7,367 Property and equipment 587 Operating lease right of use asset 10,313 Trade names 62,940 Customer relationships 198,840 Goodwill 169,581 Other intangibles 42,610 Other long-term assets 494 Deferred tax asset 605 Accounts payables and accrued expenses (24,526) Deferred revenue (11,175) Operating lease liabilities, current (4,029) Operating lease liabilities, noncurrent (13,085) Income taxes payable (3,308) Liability for uncertain tax positions (1,576) Deferred tax liability (52,504) Other long-term liabilities (9,275) Total $ 414,384 The fair value of the assets acquired included accounts receivable of $40.5 million. The gross amount due under contracts was $47.2 million, of which $6.7 million was expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and represents intangible assets that do not qualify for separate recognition. Goodwill recognized in connection with this acquisition during the year ended December 31, 2020 was $169.6 million, of which $36.6 million was expected to be deductible for income tax purposes. Unaudited Pro Forma Financial Information for RetailMeNot, Inc. Acquisition The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired business been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from this business acquisition had it occurred on January 1, 2020 and do not take into consideration the exiting of any acquired lines of business. The Company acquired a line of business, through the RetailMeNot, Inc. acquisition which was in the process of being exited prior to the acquisition. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and RetailMeNot, Inc. as if the acquisition had occurred on January 1, 2020 (in thousands, except per share amounts): Year ended December 31, 2020 (unaudited) Revenues $ 1,308,731 Net income from continuing operations $ 23,395 Income per common share from continuing operations - Basic $ 0.50 Income per common share from continuing operations - Diluted $ 0.49 As of December 31, 2022, future payments associated with long-term contractual obligations for holdback payments in connection with all business acquisitions are as follows (in thousands): 2023 $ 19,208 2024 7,359 $ 26,567 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments consist of equity and debt securities. Investment in equity securities Investment in Consensus As of December 31, 2022, the investment in equity securities consists of publicly traded common stock of Consensus. During the year ended December 31, 2022, the Company completed the non-cash tax-free debt-for-equity exchanges of 2,800,000 shares of its Investment in Consensus for the extinguishment of $112.3 million of principal of the Company’s Term Loan Facilities, and related interest. During the year ended December 31, 2022, the Company also sold 73,919 shares of common stock of Consensus in the open market. Gains (losses) on equity securities recognized in ‘Unrealized gain (loss) on short-term investments held at the reporting date’ consisted of the following (in thousands): Year ended December 31, 2022 2021 Net (losses) gains during the period $ (53,888) $ 298,490 Less: losses on securities sold during the period (46,743) — Unrealized (losses) gains recognized during the period on short-term investments held at the reporting date $ (7,145) $ 298,490 As of the December 31, 2022 and 2021, the Company held approximately 1.1 million and 4.0 million shares, respectively, of the common stock of Consensus. As of December 31, 2022 and 2021, the Investment in Consensus was $58.4 million and $229.2 million, respectively, and was recorded as a short-term investment on the Consolidated Balance Sheets. Other investment Prior to December 31, 2021, the Company owned certain equity securities without a readily determinable fair value, which it received as part of the consideration for the sale of the subsidiary in 2017. These securities were privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. The Company elected to measure this investment at cost, less impairment, adjusted for subsequent observable price changes to estimate fair value. The Company made a “reasonable effort” to identify any observable price changes for identical or similar investments with the issuer that were known and could be reasonably known. Any changes in the carrying value of the equity securities were reported in current earnings as Gain (loss) on investment, net. As part of the consideration for the sale of the subsidiary in 2017, the Company received shares of redeemable preferred stock that were classified as corporate debt securities and were accounted for as available-for-sale-securities. During the year ended December 31, 2020, in a non-cash transaction of $18.3 million, the Company exchanged these shares of redeemable preferred stock that were previously accounted for as available-for-sale corporate debt securities for a new series of preferred stock, classified as equity securities without a readily determinable fair value. The Company recognized a loss on exchange of $4.4 million in 2020, which is reflected in ‘Loss on investments, net’ in the Consolidated Statements of Operations. During the year ended December 31, 2020, the Company recorded a $19.6 million impairment loss related to a decline in value associated with certain preferred stock primarily due to the recapitalization of the investee and overall market volatility. The Company was not expected to recover the recorded cost of these securities and reduced such amount to what the Company received as a result of the recapitalization. During the year ended December 31, 2021, the Company recorded a $16.7 million impairment loss on investments related to a decline in value due to a sales transaction of an investee. The Company subsequently sold its remaining investments in these securities with proceeds of $14.3 million and a realized loss of approximately $0.3 million. As of December 31, 2021 and 2020, cumulative impairment losses on these securities were $40.5 million and $23.8 million, respectively. The following table summarizes the historical cost and estimated fair values for the Company’s securities without a readily determinable fair value as of December 31, 2021 and 2020 (in thousands). Impairment losses are included within Loss on investments, net in the Consolidated Statements of Operations. As of December 31, 2021 2020 Cost $ 17,156 $ 50,384 Impairment (16,677) (19,605) Adjustments (479) (479) Reported amount $ — $ 30,300 Investment in corporate debt security On April 12, 2022, the Company entered into an agreement with an entity to acquire 4% convertible notes with an aggregate value of $15.0 million. This investment is included in ‘Long-term investments, net’ in our Consolidated Balance Sheets and is classified as available-for-sale. This investment is initially measured at its transaction price and subsequently remeasured at fair value, with unrealized gains and losses reported as a component of other comprehensive income. The table below summarizes the carrying value and the maximum exposure of Company’s investment in corporate debt securities as of December 31, 2022 (in thousands): December 31, 2022 Fair value Maximum exposure Investment in corporate debt securities $ 15,586 $ 15,586 The following table summarizes the gross unrealized gains and losses and fair values for investments classified as available-for-sale (in thousands): Amortized Gross Unrealized Gross Unrealized Fair December 31, 2022 Investment in corporate debt securities $ 15,000 $ 586 $ — $ 15,586 December 31, 2021 Investment in corporate debt securities $ — $ — $ — $ — December 31, 2020 Investment in corporate debt securities $ 511 $ 152 $ — $ 663 The following table summarizes the Company’s corporate debt securities designated as available-for-sale, classified by the contractual maturity date of the security (in thousands): December 31, 2022 2021 Due within 1 year $ — $ — Due within more than 1 year but less than 5 years 15,586 — Due within more than 5 years but less than 10 years — — Due 10 years or after — — Total $ 15,586 $ — There were no investments in an unrealized loss position as of December 31, 2022 or December 31, 2021. As of December 31, 2022, 2021 and 2020, the Company did not recognize any other-than-temporary impairment losses on its debt securities. Equity method investment On September 25, 2017, the Company entered into a commitment to invest $200 million (approximately 76.6% of equity) in the OCV Fund. The primary purpose of the Fund is to provide a limited number of select investors with the opportunity to realize long-term appreciation from public and private companies, with a particular focus on the technology and life science industries. The general activities of the OCV Fund is to buy, sell, hold and otherwise invest in securities of every kind and nature and rights and options with respect thereto, including, without limitation, stock, notes, bonds, debentures and evidence of indebtedness; to exercise all rights, powers, privileges and other incidents of ownership or possession with respect to securities held or owned by the OCV Fund; to enter into, make and perform all contracts and other undertakings; and to engage in all activities and transactions as may be necessary, advisable or desirable to carry out the foregoing. The manager, OCV Management, LLC, and general partner of the Fund are entities with respect to which Richard S. Ressler, former Chairman of the Board of Directors (the “Board”) of the Company, is indirectly the majority equity holder. Mr. Ressler’s tenure with the Board ended as of May 10, 2022. As a limited partner in the Fund, prior to the settlement of certain litigation generally related to the Company’s investment in the Fund in January 2022, the Company paid an annual management fee to the manager equal to 2.0% of capital commitments. In addition, subject to the terms and conditions of the Fund’s limited partnership agreement, once the Company has received distributions equal to its invested capital, the Fund’s general partner would be entitled to a carried interest equal to 20%. The Fund has a six year investment period, subject to certain exceptions. The commitment was approved by the Audit Committee of the Board in accordance with the Company’s related-party transaction approval policy. At the time of the settlement of the litigation (see Note 12 - Commitments and Contingencies ), the Company had invested approximately $128.8 million in the Fund. In connection with the settlement of the litigation, among other terms, no further capital calls will be made in connection with the Company’s investment in the Fund, nor will any management fees be paid by the Company to the manager. During the year ended December 31, 2022, the Company received no capital call notices from the manager of the Fund. During the year ended 2021, the Company received capital call notices from the management of OCV Management, LLC for $22.2 million, inclusive of certain management fees, of which $22.2 million has been paid for the year ended December 31, 2021. During 2020, the Company received capital call notices from the management of OCV Management, LLC for $32.9 million, inclusive of certain management fees, of which $31.9 million has been paid for the year ended December 31, 2020. During the years ended December 31, 2022, 2021 and 2020, the Company received a distribution from OCV of zero, $15.3 million and zero, respectively. The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline. During the years ended December 31, 2022, 2021, and 2020, the Company recognized (Loss) income from equity method investment, net of $(7.7) million, $35.8 million, and $(11.3) million, net of tax expense (benefit), respectively. The gains and losses in 2022 and 2021 were primarily the result of gains and losses in the underlying investments. The fiscal 2020 loss was primarily a result of the impairment of two of the Fund’s investments as a result of COVID-19 in the amount of $7.0 million net of tax benefit. In addition, the Company recognized an investment loss in fiscal 2020 in the amount of $4.3 million, net of tax benefit. During the years ended December 31, 2022, 2021, and 2020, the Company recognized management fees of $1.5 million, $3.0 million, and $3.0 million, net of tax benefit, respectively. The following table discloses the carrying amount for the Company’s equity method investment (in thousands). These equity securities are included within ‘Long-term investments’ in the Consolidated Balance Sheets. December 31, 2022 December 31, 2021 Carrying value Maximum exposure Carrying value Maximum exposure Equity method investment $ 112,285 $ 112,285 $ 122,593 $ 122,593 As a limited partner, the Company’s maximum exposure to loss is limited to its proportional ownership in the partnership. In addition, the Company is not required to contribute capital in an aggregate amount in excess of its capital commitment and any expected losses will not be in excess of the Capital Account. Finally, there are no call or put options, or other types of arrangements, which limit the Company’s ability to participate in losses and returns of the Fund. |
Discontinued Operations and Dis
Discontinued Operations and Dispositions | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations and Dispositions | Discontinued Operations and Dispositions Consensus Spin-Off As further described in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies , on October 7, 2021, the Separation of the cloud fax business was completed. No gain or loss was recorded on the Separation in the Consolidated Statements of Operations. On October 7, 2021, Consensus paid Ziff Davis approximately $259.1 million of cash in a distribution that is anticipated to be tax-free provided certain requirements are met, and issued $500.0 million of senior notes due 2028 to Ziff Davis, which Ziff Davis then exchanged such notes with the lenders under the Credit Agreement and Credit Agreement Amendments by and among the subsidiaries of Ziff Davis party thereto as guarantors, Citicorp North America Inc. and MUFG Union Bank, N.A. and MUFG Union Bank, N.A., as administrative agent for the lenders, in exchange for extinguishment of indebtedness outstanding under the Bridge Loan Facility. Refer to Note 10 - Debt for additional details. Such lenders or their affiliates agreed to resell the 2028 notes to qualified institutional buyers in the United States pursuant to Rule 144A. The Company incurred a net loss on extinguishment of debt principal outstanding on the Bridge Loan Facility of approximately $8.8 million, which is recorded within ‘Gain (loss) on debt extinguishment, net’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statements of Operations for the year ended December 31, 2021 (see note 10 - Debt ). The divestiture of the cloud fax business was determined to qualify for US Federal tax-free treatment under certain sections of the Internal Revenue Code. The accounting requirements for reporting the Company’s cloud fax business as a discontinued operation were met when the Separation was completed as the Separation constituted a strategic shift that would have a major effect on the Company’s operations and financial results. Accordingly, the consolidated financial statements reflect the results of the cloud fax business as a discontinued operation for the years ended December 31, 2021 and 2020. The Consolidated Balance Sheets and Consolidated Statements of Operations report discontinued operations separate from continuing operations. The Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows, including Note 19 - Supplemental Cash Flow Information, and Consolidated Statements of Stockholders’ Equity combine continuing and discontinued operations. The key components of cash flows from discontinued operations were as follows (in thousands): Year ended December 31, 2021 2020 Capital expenditures $ 15,252 $ 16,237 Depreciation and amortization $ 9,010 $ 22,759 Loss on debt extinguishment $ 8,750 $ 37,969 Amortization of financing costs and discounts $ — $ 1,171 Foreign currency remeasurement gain $ — $ 31,537 Deferred taxes $ 8,015 $ 5,534 In preparation for and executing the Separation, the Company incurred $11.6 million, net of reimbursement from Consensus, in transaction-related costs including legal and accounting fees during the year ended December 31, 2021, which were recorded in ‘General and administrative expenses’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statement of Operations. These transaction costs primarily related to professional fees associated with preparation of regulatory filings and transaction execution and separation activities within finance, tax and legal functions. In connection with the Separation, Ziff Davis and Consensus entered into several agreements that govern the relationship of the parties following the Separation, which are further discussed in Note 21 - Related Party Transactions . Further, certain of the Company’s management and members of its board of directors resigned from the Company as of the Distribution Date and joined Consensus. The Company made an accounting policy election not to allocate interest to discontinued operations. Interest expense included in discontinued operations relates to the 6.0% Senior Notes (as defined in Note 10 - Debt ) issued by J2 Cloud Services, LLC and the Bridge Loan Facility (as defined in Note 10 - Debt ), which was required to be repaid as part of the Separation. During the year ended December 31, 2022, the Company recorded $1.7 million in income tax expense within ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statement of Operations related to the finalization of state tax returns related to the Separation. The key components of income from discontinued operations were as follows (in thousands): Year ended December 31, 2022 2021 2020 Revenues $ — $ 270,248 $ 330,764 Cost of revenues — (44,306) (53,379) Sales and marketing — (40,980) (47,116) Research, development and engineering — (5,814) (7,146) General and administrative — (39,279) (26,852) Interest expense and other — (13,856) (44,220) Income before income taxes — 126,013 152,051 Income tax expense (1,709) (30,694) (30,043) (Loss) income from discontinued operations, net of income taxes $ (1,709) $ 95,319 $ 122,008 B2B Back-up and Voice Asset Sales The Company completed the following dispositions that did not meet the criteria for discontinued operations. During the year ended December 31, 2021, the Company committed to a plan to sell certain Voice assets in the United Kingdom as they were determined to be non-core assets. Such assets were recorded within the Cybersecurity and Martech reportable segment. On February 9, 2021, in a cash transaction, the Company sold the Voice assets. The total gain recognized on the sale of these Voice assets was $2.8 million, which is presented in ‘(Loss) gain on sale of businesses’ on the Consolidated Statement of Operations in the year ended December 31, 2021. During the year ended December 31, 2021, the Company committed to a plan to sell its B2B Backup business as it was determined to be a non-core business. The B2B Backup business met the held for sale criteria, and accordingly, the assets and liabilities were presented as held for sale on the Consolidated Statement Balance Sheets at March 31, 2021 and June 30, 2021. The business was recorded within the Cybersecurity and Martech reportable segment. During the second quarter of 2021, the Company received an offer to purchase the B2B Backup business and management determined that the fair value of the business less cost to sell was lower than its carrying amount. As a result, the Company recorded an impairment to goodwill of $32.6 million during the year ended December 31, 2021, which is presented in ‘Goodwill impairment on business” on the Consolidated Statement of Operations. Refer to Note 9 - Goodwill and Intangible Assets . On September 17, 2021, in a cash transaction, the Company sold the B2B Backup business. The total loss recognized on the sale of the B2B Backup business was $24.6 million, which is presented in ‘(Loss) gain on sale of businesses’ on the Consolidated Statement of Operations in the year ended December 31, 2021. During the second quarter of 2020, the Company committed to a plan to sell certain Voice assets in Australia and New Zealand as they were determined to be non-core assets. Such assets were recorded within the Cybersecurity and Martech reportable segment. On August 31, 2020, in a cash transaction, the Company sold these Voice assets for a gain of $17.1 million which was recorded in gain on sale of businesses |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: § Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. § Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. § Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s money market funds are classified within Level 1. The Company values these Level 1 investments using quoted market prices. The fair value of long-term debt is determined using recent quoted market prices or dealer quotes for each of the Company’s instruments, which are Level 1 inputs. The Investment in Consensus are equity securities for which the Company elected the fair value option, and the fair value of the Investment in Consensus and subsequent fair value changes are included in our assets of and results from continuing operations, respectively. At December 31, 2022 and 2021, our investment in Consensus common stock was remeasured at fair value based on Consensus’ closing stock price, with unrealized (losses) gains of $(7.1) million and $298.5 million, respectively, recorded in the Consolidated Statement of Operations and a balance of $58.4 million and $229.2 million, respectively, in the Consolidated Balance Sheet. The fair value of the investment in Consensus is determined using the quoted market prices, which is a Level 1 input. The fair value of our 4.625% Senior Notes and our 1.75% Convertible Notes (as defined in Note 10 - Debt ) was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 1 inputs. Certain of the Company’s debt securities are classified within Level 2. The Company values these Level 2 investments based on model-driven valuations using significant inputs derived from or corroborated by observable market data. The Company has investment in a corporate debt security that is measured at fair value on the Consolidated Balance Sheets. Unrealized gains and losses are reported in other comprehensive income until realized. These corporate debt securities do not have a readily determinable fair value because acquired securities are privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. The investment in corporate debt securities is classified as available-for-sale and is initially measured at its transaction price. The fair value of the corporate debt securities is determined primarily based on significant estimates and assumptions, including Level 3 inputs. As of December 31, 2022, the fair value was determined based upon various probability-weighted scenarios and included assumptions of a 13% discount rate and conversion in a range of 0.8 years - 1.3 years. The Company classifies its contingent consideration liability in connection with acquisitions within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not supported by market activity. The valuation approaches used to value Level 3 investments considers unobservable inputs in the market such as time to liquidity, volatility, dividend yield, and breakpoints. Significant increases or decreases in either of the inputs in isolation would result in a significantly lower or higher fair value measurement. As of December 31, 2022, the contingent consideration was determined using a 100% probability of payout, without any other estimates applied. The following table presents the fair values, valuation techniques, unobservable inputs, and ranges of the Company’s financial liabilities categorized within Level 3. The weighted averages below are a product of the unobservable input and fair value of the contingent consideration arrangement as of December 31, 2021. Valuation Technique Unobservable Input Range Weighted Average Contingent Consideration Option-Based Model Risk free rate 1.9% - 2.2% 2.0 % Debt spread 0.0% - 74.7% 13.6 % Probabilities 10.0% - 100.0% 80.5 % Present value factor 2.2% - 26.9% 19.0 % Discount rate 27.3% - 38.0% 30.7 % The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 312,010 $ — $ — $ 312,010 $ 312,010 Investment in corporate debt securities — — 15,586 15,586 15,586 Investment in Consensus 58,421 — — 58,421 58,421 Total assets measured at fair value $ 370,431 $ — $ 15,586 $ 386,017 $ 386,017 Liabilities: Contingent consideration $ — $ — $ 555 $ 555 $ 555 Debt 939,319 — — 939,319 999,053 Total liabilities measured at fair value $ 939,319 $ — $ 555 $ 939,874 $ 999,608 December 31, 2021 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 144,255 $ — $ — $ 144,255 $ 144,255 Investment in Consensus 229,200 — — 229,200 229,200 Total assets measured at fair value $ 373,455 $ — $ — $ 373,455 $ 373,455 Liabilities: Contingent consideration $ — $ — $ 5,775 $ 5,775 $ 5,775 Debt 1,345,311 — — 1,345,311 1,090,627 Total liabilities measured at fair value $ 1,345,311 $ — $ 5,775 $ 1,351,086 $ 1,096,402 At the end of each reporting period, management reviews the inputs to the fair value measurements of financial and non-financial assets and liabilities to determine when transfers between levels are deemed to have occurred. For the year ended December 31, 2022 and 2021, there were no transfers that occurred between levels. The following table presents a reconciliation of the Company’s Level 3 financial assets related to our investment in corporate debt securities that are measured at fair value on a recurring basis (in thousands): Level 3 Affected line item in the Statement of Operations Balance as of January 1, 2022 $ — Investment in corporate debt securities 15,586 Not applicable Balance as of December 31, 2022 $ 15,586 The following table presents a reconciliation of the Company’s Level 3 financial liabilities related to contingent consideration that are measured at fair value on a recurring basis (in thousands): Level 3 Affected line item in the Statement of Operations Balance as of January 1, 2021 $ 5,022 Contingent consideration 4,713 Total fair value adjustments reported in earnings (1,910) General and administrative Contingent consideration payments (2,050) Not applicable Balance as of December 31, 2021 $ 5,775 Contingent consideration 555 Total fair value adjustments reported in earnings (2,575) General and administrative Contingent consideration payments (3,200) Not applicable Balance as of December 31, 2022 $ 555 In connection with the Company’s other acquisition activity, contingent consideration of up to $0.6 million may be payable upon achieving certain future earnings before interest, taxes, depreciation and amortization (EBITDA), revenue, and/or unique visitor thresholds and had a combined fair value of $0.6 million and $5.8 million at December 31, 2022 and 2021, respectively. Due to the achievement of certain thresholds, $3.2 million and $2.1 million was paid during the years ended December 31, 2022 and 2021, respectively. The Company’s non-financial assets, such as goodwill, intangible assets, right-of-use assets and property, plant and equipment, are adjusted to fair value only when an impairment is recognized. See Note 9 - Goodwill and Intangible Assets for further information. Such fair value measurements are based predominately on Level 3 inputs. See Note 9 - Goodwill and Intangible Assets for further information. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, stated at cost, consists of the following (in thousands): December 31, 2022 2021 Computer hardware, software and related equipment $ 424,275 $ 343,101 Furniture and equipment 881 934 Leasehold improvements 8,614 8,287 433,770 352,322 Less: Accumulated depreciation and amortization (255,586) (191,113) Total property and equipment, net $ 178,184 $ 161,209 Depreciation and amortization expense was $76.7 million, $63.6 million and $60.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Total disposals of long-lived assets was $0.2 million, $11.0 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination and is assigned to the reporting unit that is expected to benefit from the synergies of the combination. Goodwill is tested for impairment annually on October 1st at the reporting unit level, or more frequently if indicators of impairment exist, or if a decision is made to dispose of a business. The Company’s Digital Media reportable segment is comprised of seven reporting units and the Cybersecurity and Martech reportable segment is comprised of two reporting units. The changes in carrying amounts of goodwill for the years ended December 31, 2022 and 2021 are as follows (in thousands): Digital Media Cybersecurity and Martech Consolidated Balance as of January 1, 2021 $ 942,934 $ 582,066 $ 1,525,000 Goodwill acquired (Note 4) 55,704 41,328 97,032 Goodwill removed due to sale of businesses (1) — (50,277) (50,277) Goodwill impairment — (32,629) (32,629) Purchase accounting adjustments (2) (1,437) 505 (932) Foreign exchange translation (542) (6,197) (6,739) Balance as of December 31, 2021 $ 996,659 $ 534,796 $ 1,531,455 Goodwill acquired (Note 4) 95,737 — 95,737 Goodwill impairment (27,369) — (27,369) Purchase accounting adjustments (2) 4,475 (137) 4,338 Foreign exchange translation (3,513) (9,174) (12,687) Balance as of December 31, 2022 $ 1,065,989 $ 525,485 $ 1,591,474 (1) On February 9, 2021, in a cash transaction, the Company sold certain of its Voice assets in the United Kingdom which resulted in $1.3 million of goodwill being removed in connection with this sale and on September 17, 2021, the Company sold certain of its B2B Backup assets which resulted in $49.0 million of goodwill being removed in connection with the sale (see Note 6 - Discontinued Operations and Dispositions). (2) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions (see Note 4 - B usiness Acquisitions ). During the year ended December 31, 2022, the Company reassessed the fair value of a reporting unit within the Digital Media reportable segment as a result of a forecasted reduction in revenue and operating income in that reporting unit, as well as an increase in interest rates and market volatility that would affect the Company’s assumptions on its discount rate. Based on the quantitative fair value test, the carrying value of the reporting unit exceeded its fair value, and the Company recorded an impairment of approximately $27.4 million during the year ended December 31, 2022. The fair value of the reporting unit was determined using an equal weighting of an income approach that was based on the discounted estimated future cash flows of the reporting unit and a market approach that uses the guideline public company approach. We believe the combination of these approaches provides a reasonable valuation approach because it incorporates the expected cash generation of the reporting unit in addition to how a third-party market participant would value the reporting unit. As the business is assumed to continue in perpetuity, the discounted future cash flows include a terminal value. Determining fair value using a discounted estimated future cash flow analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates. The expected cash flows used in the discounted cash flow analyses were based on the most recent forecast for the reporting unit. For years beyond the forecast period, the estimates were based, in part, on forecasted growth rates. The discount rate the Company used represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in its reporting unit operations and the rate of return a market participant would expect to earn. Determining fair value using a market approach considers multiples of financial metrics based on trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined, which is applied to financial metrics to estimate the fair value of the reporting unit. Following the impairment, this reporting unit had goodwill of approximately $86.9 million and the carrying value approximated its fair value. During the year ended December 31, 2022, the Company realigned two reporting units within the Digital Media reportable segment. The Company re-allocated goodwill between the two identified reporting units based upon the relative fair value of the respective reporting units. Immediately before and immediately following this change in reporting units, the Company performed a quantitative fair value assessment using the income approach and market approach noted above, and each of these reporting units exceeded their respective carrying values and, therefore, there was no impairment to goodwill. During the year ended December 31, 2021, the Company recorded an impairment of approximately $32.6 million related to the Company’s B2B Backup business (included in the Cybersecurity and Martech reportable segment). In 2021, the Company received an offer to purchase the B2B Backup business and management determined that the fair value of that business less cost to sell was lower than its carrying amount. The fair value of the business was determined based upon the offer price. The fair value of the remaining reporting unit was determined using an equal weighting of an income approach and a market approach, and was in excess of the remaining carrying value of the reporting unit. Goodwill as of December 31, 2022 and 2021 reflects accumulated impairment losses of $27.4 million and $32.6 million, respectively, in the Digital Media reportable segment and the Cybersecurity and Martech reportable segment, respectively. Intangible Assets Subject to Amortization Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies, and other intangible assets. The fair values of these identified intangible assets are based upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, trade names and patent lives. These determinations are primarily based upon the Company’s historical experience and expected benefit of each intangible asset. If it is determined that such assumptions are not accurate, then the resulting change will impact the fair value of the intangible asset. Identifiable intangible assets are amortized over the period of estimated economic benefit, which ranges from one As of December 31, 2022, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Accumulated Net Trade names 10.0 years $ 261,614 $ 125,422 $ 136,192 Customer relationships (1) 7.9 years 687,798 479,741 208,057 Other purchased intangibles 8.3 years 481,973 363,407 118,566 Total $ 1,431,385 $ 968,570 $ 462,815 (1) The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. During the year ended December 31, 2022, the Company completed acquisitions (see Note 4 - Business Acquisitions ) which were individually immaterial. The identified intangible assets were recognized as part of all 2022 acquisitions and their respective estimated weighted average amortizations were as follows as of December 31, 2022 (in thousands): Weighted-Average Amortization Period Carrying Value Trade names 9.6 years $ 12,423 Customer relationships 7.3 years 18,714 Other purchased intangibles 2.4 years 17,567 Total $ 48,704 As of December 31, 2021, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Historical Accumulated Net Trade names 9.7 years $ 250,418 $ 102,657 $ 147,761 Customer relationships (1) 8.1 years 673,847 398,396 275,451 Other purchased intangibles 9.3 years 467,028 317,515 149,513 Total $ 1,391,293 $ 818,568 $ 572,725 (1) The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. Expected amortization expenses for intangible assets subject to amortization at December 31, 2022 are as follows (in thousands): Fiscal Year: 2023 $ 139,975 2024 99,158 2025 76,614 2026 68,813 2027 29,467 Thereafter 48,788 Total expected amortization expense $ 462,815 Amortization expense, included in General and administrative expense on our Consolidated Statements of Operations, approximated $156.7 million, $185.7 million, and $156.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consists of the following (in thousands): December 31, 2022 2021 4.625% Senior Notes $ 460,038 $ 641,276 Convertible Notes: 1.75% Convertible Notes 550,000 550,000 Total Notes 1,010,038 1,191,276 Less: Unamortized discount (2,764) (91,593) Deferred issuance costs (8,221) (9,056) Total debt 999,053 1,090,627 Less: current portion — (54,609) Total long-term debt, less current portion $ 999,053 $ 1,036,018 At December 31, 2022, future principal and interest payments for debt are as follows (in thousands): Principal Interest 2023 $ — $ 30,902 2024 — 30,902 2025 — 30,902 2026 550,000 30,902 2027 — 21,276 Thereafter 460,038 63,830 $ 1,010,038 $ 208,714 Interest expense was $37.1 million, $79.6 million and $58.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. 6.0% Senior Notes On June 27, 2017, J2 Cloud Services, LLC (“J2 Cloud”) and J2 Cloud Co-Obligor, Inc. (the “Co-Issuer” and together with J2 Cloud, the “Issuers”), wholly-owned subsidiaries of the Company, completed the issuance and sale of $650.0 million aggregate principal amount of their 6.0% senior notes due in 2025 (the “6.0% Senior Notes”) in a private placement offering exempt from the registration requirements of the Securities Act of 1933. J2 Cloud received proceeds of $636.5 million, after deducting the initial purchasers’ discounts, commissions, and offering expenses. The 6.0% Senior Notes bore interest at a rate of 6.0% per annum, payable semi-annually in arrears on January 15 and July 15 of each year. On October 7, 2020, J2 Cloud redeemed all of its outstanding $650.0 million 6.0% Senior Notes due in 2025 for $694.6 million, including an early redemption premium of $29.2 million and accrued and unpaid interest of $15.4 million. The Company recorded a loss on extinguishment of $38.0 million which is recorded in ‘Interest expense and other’ within (Loss) income from discontinued operations, net of income taxes on our Consolidated Statements of Operations. Refer to Note 6 - Discontinued Operations and Dispositions for additional details. 4.625% Senior Notes On October 7, 2020, the Company completed the issuance and sale of $750.0 million aggregate principal amount of its 4.625% senior notes due 2030 (the “4.625% Senior Notes”) in a private placement offering exempt from the registration requirements of the Securities Act of 1933. The Company received proceeds of $742.7 million after deducting the initial purchasers’ discounts, commissions and offering expenses. The net proceeds were used to redeem all of its outstanding 6.0% Senior Notes due in 2025 and, the remaining net proceeds were available for general corporate purposes which may include acquisitions and the repurchase or redemption of other outstanding indebtedness. These senior notes bear interest at a rate of 4.625% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2021. The 4.625% Senior Notes mature on October 15, 2030, and are senior unsecured obligations of the Company which are guaranteed, jointly and severally, on an unsecured basis by certain of the Company’s existing and future domestic direct and indirect wholly-owned subsidiaries (collectively, the “Guarantors”). If the Company or any of its restricted subsidiaries acquires or creates a domestic restricted subsidiary, other than an Insignificant Subsidiary (as defined in the indenture pursuant to which the 4.625% Senior Notes were issued (the “Indenture”)), after the issue date, or any Insignificant Subsidiary ceases to fit within the definition of Insignificant Subsidiary, such restricted subsidiary is required to unconditionally guarantee, jointly and severally, on an unsecured basis, the Company’s obligations under the 4.625% Senior Notes. The Company may redeem some or all of the 4.625% Senior Notes at any time on or after October 15, 2025 at specified redemption prices plus accrued and unpaid interest, if any, up to, but excluding the redemption date. Before October 15, 2023, and following certain equity offerings, the Company also may redeem up to 40% of the 4.625% Senior Notes at a price equal to 104.625% of the principal amount, plus accrued and unpaid interest, if any, up to, but excluding the redemption date. The Company may make such redemption only if, after such redemption, at least 50% of the aggregate principal amount of the 4.625% Senior Notes remains outstanding. In addition, at any time prior to October 15, 2025, the Company may redeem some or all of the 4.625% Senior Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus an applicable “make-whole” premium. The discount and deferred issuance costs are being amortized, at an effective interest rate of 4.7%, to interest expense through the maturity date. The Indenture contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock or repurchase the Company’s capital stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. These covenants contain certain exceptions. Restricted payments are applicable only if the Company and subsidiaries designated as restricted subsidiaries have a net leverage ratio of greater than 3.5 to 1.0. In addition, if such net leverage ratio is in excess of 3.5 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not exceeding the greater of (A) $250 million and (B) 50.0% of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available. The Company is in compliance with its debt covenants for the 4.625% Senior Notes as of December 31, 2022. On October 8, 2021, Ziff Davis announced that it had accepted tender offers to purchase $83.3 million in aggregate principal of its 4.625% Senior Notes for an aggregate purchase price of $90.0 million. The tender offer expired on October 22, 2021. As such, the Company recognized a loss of approximately $7.4 million associated with the tender of the 4.625% Senior Notes during the year ended December 31, 2021, which is presented in ‘Gain (loss) on debt extinguishment, net’ on the Consolidated Statements of Operations. Repurchases of 4.625% Senior Notes on the open market (excluding those from a tender offer) were as follows (in thousands): Year ended December 31, 2022 2021 Principal repurchased $ 181,238 $ 25,391 Aggregate purchase price $ 167,661 $ 26,035 (Gain) loss on repurchase (1) $ (12,060) $ 644 (1) Presented within ‘Gain (loss) on debt extinguishment, net’ on the Consolidated Statements of Operations. As of December 31, 2022 and 2021, the estimated fair value of the 4.625% Senior Notes was approximately $390.9 million and $659.9 million, respectively, and was based on recent quoted market prices or dealer quotes for the 4.625% Senior Notes which are Level 1 inputs. Refer to Note 7 - Fair Value Measurements for additional details. The following table provides additional information on the 4.625% Senior Notes (in thousands): December 31, 2022 2021 Principal amount of 4.625% Senior Notes $ 460,038 $ 641,276 Less: Unamortized discount (2,764) (4,259) Less: Debt issuance costs (874) (1,339) Net carrying amount of 4.625% Senior Notes $ 456,400 $ 635,678 The following table provides the components of interest expense related to 4.625% Senior Notes (in thousands): Year ended December 31, 2022 2021 2020 Coupon interest expense $ 24,500 $ 33,899 $ 8,094 Non-cash amortization of discount on 4.625% Senior Notes 333 529 103 Amortization of debt issuance costs 109 66 29 Total interest expense related to 4.625% Senior Notes $ 24,942 $ 34,494 $ 8,226 3.25% Convertible Notes On June 10, 2014, the Company issued $402.5 million aggregate principal amount of 3.25% convertible senior notes due June 15, 2029 (the “3.25% Convertible Notes”). The 3.25% Convertible Notes bear interest at a rate of 3.25% per annum, payable semiannually in arrears on June 15 and December 15 of each year. Beginning with the six-month interest period commencing on June 15, 2021, the Company had to pay contingent interest on the 3.25% Convertible Notes during any six-month interest period if the trading price per $1,000 principal amount of the 3.25% Convertible Notes for each of the five In connection with the Separation, the Company redeemed in full all of its outstanding 3.25% Convertible Notes. During the year ended December 31, 2021, the Company satisfied its conversion obligation by paying the principal of $402.4 million in cash and issued 3,050,850 shares of the Company’s common stock. Refer to Note 14 - Stockholders’ Equity for additional details. The redemption of the liability component of the 3.25% Convertible Notes, resulted in a gain of approximately $2.8 million during the year ended December 31, 2021 within ‘Gain (loss) on debt extinguishment, net’ on our Consolidated Statement of Operations. The reacquisition of the equity component of the 3.25% Convertible Notes resulted in a reduction of stockholders’ equity of approximately $390.5 million, net of tax. The following table provides the components of interest expense related to the 3.25% Convertible Notes (in thousands): Year ended December 31, 2021 2020 Coupon interest expense $ 5,994 $ 13,080 Non-cash amortization of discount on 3.25% Convertible Notes 4,645 9,717 Amortization of debt issuance costs 855 1,749 Total interest expense related to 3.25% Convertible Notes $ 11,494 $ 24,546 No changes in fair value associated with the contingent interest feature of the 3.25% Convertible Notes in interest expense were recorded for the years ended December 31, 2021 and 2020, respectively. Refer to Note 7 - Fair Value Measurements for additional details. 1.75% Convertible Notes On November 15, 2019, the Company issued $550.0 million aggregate principal amount of 1.75% convertible senior notes due November 1, 2026 (the “1.75% Convertible Notes”). The Company received proceeds of $537.1 million in cash, net of purchasers’ discounts and commissions and other debt issuance costs. A portion of the net proceeds were used to pay off all amounts outstanding under the then-existing Credit Facility. The 1.75% Convertible Notes bear interest at a rate of 1.75% per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2020. The 1.75% Convertible Notes will mature on November 1, 2026, unless earlier converted or repurchased. Holders may surrender their 1.75% Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding July 1, 2026 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding the calendar quarter is greater than 130% of the applicable conversion price of the 1.75% Convertible Notes on each such applicable trading day; (ii) during the five business day period following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 1.75% Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after July 1, 2026, and prior to the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances. The Company will settle conversions of the 1.75% Convertible Notes by paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination thereof at the Company’s election. The Company currently intends to satisfy its conversion obligation by paying and delivering a combination of cash and shares of the Company’s common stock. Holders of the notes will have the right to require the Company to repurchase for cash all or any portion of their notes upon the occurrence of certain corporate events, subject to certain conditions. As of December 31, 2022 and December 31, 2021, the market trigger conditions did not meet the conversion requirements of the 1.75% Convertible Notes and, accordingly, the 1.75% Convertible Notes are classified as long-term debt on the Consolidated Balance Sheets. Prior to the Separation, the conversion rate on the 1.75% Convertible Notes was 7.9864 shares of the Company’s common stock for each $1,000 principal amount of 1.75% Convertible Notes, which represents a conversion price of approximately $125.21 per share of the Company’s common stock. The Separation constituted an event under the 1.75% Convertible Notes that required an adjustment and the conversion rate increased to 9.3783 shares of the Company’s common stock for each $1,000 principal amount of 1.75% Convertible Notes (or 5,158,071 shares), which represents a conversion price of approximately $106.63 per share of the Company’s common stock. The conversion rate is subject to adjustment for certain events as set forth in the indenture governing the 1.75% Convertible Notes, but will not be adjusted for accrued interest. In addition, upon the occurrence of a “Make-Whole Fundamental Change” (as defined in the 1.75% Convertible Note Indenture), the Company will increase the conversion rate for a holder that elects to convert its 1.75% Convertible Notes in connection with such a corporate event in certain circumstances. The Company may not redeem the 1.75% Convertible Notes prior to November 1, 2026, and no sinking fund is provided for the 1.75% Convertible Notes. The 1.75% Convertible Notes are the Company’s general senior unsecured obligations and rank: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 1.75% Convertible Notes; (ii) equal in right of payment to the Company’s existing and future indebtedness that is not so subordinated; (iii) effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all existing and future indebtedness and other liabilities incurred by the Company’s subsidiaries. Accounting for the 1.75% Convertible Notes On January 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method. As a result of this adoption, the Company de-recognized the remaining unamortized debt discount of $87.3 million on the 1.75% Convertible Notes and, therefore, no longer recognizes any amortization of debt discounts as interest expense. Refer to Note 2 - Basis of Presentation and Summary of Significant Accounting Policie s for additional details. In connection with the issuance of the 1.75% Convertible Notes, the Company incurred $12.9 million of deferred issuance costs, which primarily consisted of the underwriters’ discount, legal and other professional service fees. Of the total deferred issuance costs incurred, $10.1 million of such deferred issuance costs were attributable to the liability component and are being amortized, at an effective interest rate of 5.5%, to interest expense through the maturity date. The remaining $2.8 million of the deferred issuance costs were netted with the equity component in additional paid-in capital at the issuance date. Upon adoption of ASU 2020-06, the Company reclassified the $2.8 million from additional paid-in-capital to long-term liability and recorded a cumulative adjustment to retained earnings for amortization from the issuance date through January 1, 2022 and will record amortization expense for these debt issuance costs through the maturity date. The 1.75% Convertible Notes are carried at face value less any unamortized debt discount (prior to adoption of ASU 2020-06) and issuance costs. The fair value of the 1.75% Convertible Notes at each balance sheet date is determined based on recent quoted market prices or dealer quotes for the 1.75% Convertible Notes, which are Level 1 inputs (see Note 7 - Fair Value Measurements ). If such information is not available, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature. As of December 31, 2022 and December 31, 2021, the estimated fair value of the 1.75% Convertible Notes was approximately $548.4 million and $685.4 million, respectively. The following table provides additional information related to the 1.75% Convertible Notes (in thousands): December 31, 2022 2021 Additional paid-in capital $ — $ 88,137 Principal amount of 1.75% Convertible Notes $ 550,000 $ 550,000 Less: Unamortized discount of the liability component — (87,334) Less: Carrying amount of debt issuance costs (7,347) (7,717) Net carrying amount of 1.75% Convertible Notes $ 542,653 $ 454,949 The following table provides the components of interest expense related to the 1.75% Convertible Notes (in thousands): Year Ended December 31, 2022 (1) 2021 2020 Coupon interest expense $ 9,776 $ 9,625 $ 9,653 Non-cash amortization of discount on 1.75% Convertible Notes — 15,338 14,563 Amortization of debt issuance costs 1,858 1,173 1,098 Total interest expense related to 1.75% Convertible Notes $ 11,634 $ 26,136 $ 25,314 (1) On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective method. At the time of adoption, the Company de-recognized the remaining unamortized debt discount. No amortization of debt discount was recorded during the year ended December 31, 2022. Credit Agreement On April 7, 2021, the Company entered into a $100.0 million Credit Agreement (the “Credit Agreement”). Subject to customary conditions, the Company may, from time to time, request increases in the commitments under the Credit Agreement in an aggregate amount up to $250.0 million, for a total aggregate commitment of up to $350.0 million. The final maturity of the Credit Facility will occur on April 7, 2026. At the Company’s option, amounts borrowed under the Credit Agreement will bear interest at either (i) a base rate equal to the greater of (x) the Federal Funds Effective Rate (as defined in the Credit Agreement) in effect on such day plus 0.5% per annum, (y) the rate of interest per annum most recently announced by the Agent (as defined in the Credit Agreement) as its U.S. Dollar “Reference Rate” and (z) one month LIBOR plus 1.00% or (ii) a rate per annum equal to LIBOR divided by 1.00 minus the LIBOR Reserve Requirements (as defined in the Credit Agreement), in each case, plus an applicable margin. The applicable margin relating to any base rate loan will range from 0.50% to 1.25% and the applicable margin relating to any LIBOR loan will range from 1.50% to 2.25%, in each case, depending on the total leverage ratio of the Company. The Company is permitted to make voluntary prepayments of the Credit Facility at any time without payment of a premium or penalty. The Credit Agreement is secured by an associated collateral agreement that provides for a lien on the majority of the Company’s assets and the assets of the guarantors, in each case, subject to customary exceptions. As of December 31, 2022, there were no amounts outstanding under the Credit Agreement. The Credit Agreement contains financial maintenance covenants, including (i) a maximum total leverage ratio as of the last date of any fiscal quarter not to exceed 4.00:1.00 for the Company and its restricted subsidiaries and (ii) a minimum interest coverage ratio as of the last date of any fiscal quarter not less than 3.00:1.00 for the Company and its restricted subsidiaries. The Credit Agreement also contains restrictive covenants that limit, among other things, the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, create, incur or assume liens, consolidate, merge, liquidate or dissolve, pay dividends or make other distributions or other restricted payments, make or hold any investments, enter into certain transactions with affiliates, sell assets other than on terms specified by the Credit Agreement, amend the terms of certain other indebtedness and organizational documents and change their lines of business and fiscal years, in each case, subject to customary exceptions. The Credit Agreement also sets forth customary events of default, including, among other things, the failure to make timely payments under the Credit Facility, the failure to satisfy certain covenants, cross-default and cross-acceleration to other material debt for borrowed money, the occurrence of a change of control and specified events of bankruptcy and insolvency. The Company is in compliance with its debt covenants for the Credit Agreement as of December 31, 2022. On June 2, 2021, June 21, 2021, August 20, 2021 and September 16, 2021, the Company entered into First, Second, Third and Fourth Amendments (together the “Amendments”) to the Credit Agreement. The Amendments (i) provided for the issuance of a senior secured term loan under the Credit Agreement, in an aggregate principal amount of $485.0 million (the “Bridge Loan Facility”), (ii) permitted the spin-off of the Company’s cloud fax business into a new publicly traded company, and (iii) provided for certain other changes to the Credit Agreement. The Bridge Loan Facility bore interest at a rate per annum equal to (i) initially upon funding of the loan, either a base rate plus 2.00%, or a LIBOR rate plus 3.00%, (ii) from six months after the funding date of the Bridge Loan Facility until twelve months after the funding date of the Bridge Loan Facility, either a base rate plus 2.50%, or a LIBOR rate plus 3.50%, and (iii) from twelve months after the funding date of the Bridge Loan Facility until repayment of the Bridge Loan Facility, either a base rate plus 3.00% or a LIBOR rate plus 4.00%. The Bridge Loan Facility was to mature on the date that is 364 days after the funding date of the Bridge Loan Facility, with two automatic extensions, each for an additional three months, if SEC approval of the spin-off transaction was still outstanding. The Company was required to pay a funding fee of 0.50% of the aggregate principal amount of Bridge Loan Facility made on the funding date thereof, as well as a duration fee of 0.25% of the aggregate principal amount of outstanding Bridge Loans on the sixth month anniversary of the funding of the Bridge Loans, and a fee of 0.50% of the aggregate principal amount of outstanding Bridge Loans on each of the nine-month, twelve-month and fifteen-month anniversaries of the funding of the Bridge Loans. The Company incurred approximately $6.3 million ($5.2 million in the third quarter of 2021 and $1.1 million in the fourth quarter of 2021) in costs and interest associated with the Bridge Loan Facility recorded within ‘Interest and other expense’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statements of Operations for the year ended December 31, 2021. In connection with the spin-off of Consensus, the Company drew the full amount of the Bridge Loan Facility and used the proceeds of the Bridge Loan Facility to redeem the 3.25% Convertible Notes and a portion of the 4.625% Senior Notes. On October 7, 2021, Consensus issued $500.0 million of senior notes due 2028 to Ziff Davis, which Ziff Davis then exchanged such notes with the lenders under the Credit Agreement and Credit Agreement Amendments by and among the subsidiaries of Ziff Davis party thereto as guarantors, Citicorp North America Inc. and MUFG Union Bank, N.A. and MUFG Union Bank, N.A., as administrative agent for the lenders, in exchange for the extinguishment of the indebtedness outstanding under the Bridge Loan Facility. Such lenders or their affiliates agreed to resell the 2028 notes to qualified institutional buyers in the United States pursuant to Rule 144A. The Company incurred a net loss on extinguishment of approximately $8.8 million recorded within ‘Gain (loss) on debt extinguishment, net’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statements of Operations for the year ended December 31, 2021. On June 10, 2022 (the “Term Loan Funding Date”), the Company entered into a Fifth Amendment to its Credit Agreement with MUFG Union Bank, N.A, as administrative agent and collateral agent and the lenders party thereto to effectuate the debt-for-equity exchange. The Fifth Amendment to the Credit Agreement provided for the Term Loan Facility in an aggregate principal amount of $90.0 million and certain other changes to the Credit Agreement. The Term Loan Facility had a maturity date that was 60 days after the Term Loan Funding Date. The Term Loan Facility bore interest at a base rate equal to the greater of (x) the Federal Funds Effective Rate, as defined in the Credit Agreement, in effect on such day plus 0.5% per annum, (y) the rate of interest per annum most recently announced by the Agent, as defined in the Credit Agreement, as its U.S. Dollar "Reference Rate" and (z) one month LIBOR plus 1%, provided that the base rate for any term loan made under the Credit Agreement shall be greater of clause (x) and (y) above in each case. During June 2022, the Company borrowed approximately $90.0 million under the Term Loan Facility and completed the non-cash debt-for-equity exchange of 2,300,000 shares of its common stock of Consensus to settle its obligation of $90.0 million outstanding aggregate principal amount of the Term Loan Facility plus an immaterial amount of interest. On September 15, 2022 (the “Term Loan Two Funding Date”), the Company entered into a Sixth Amendment to its Credit Agreement with MUFG Union Bank, N.A, as administrative agent and collateral agent and the lenders party thereto to effectuate the debt-for-equity exchange. The Sixth Amendment to the Credit Agreement provided for the Term Loan Two Facility in an aggregate principal amount of approximately $22.3 million and certain other changes to the Credit Agreement. The Term Loan Two Facility had a maturity date that was 60 days after the Term Loan Two Funding Date. The Term Loan Two Facility bore interest at a base rate equal to the greater of (x) the Federal Funds Effective Rate, as defined in the Credit Agreement, in effect on such day plus 0.5% per annum, (y) the rate of interest per annum most recently announced by the Agent, as defined in the Credit Agreement, as its U.S. Dollar "Reference Rate" and (z) one month LIBOR plus 1%, provided that the base rate for any term loan made under the Credit Agreement shall be greater of clause (x) and (y) above in each case. During September 2022, the Company borrowed approximately $22.3 million under the Term Loan Two Facility and completed the non-cash debt-for-equity exchange of 500,000 shares of its common stock of Consensus to settle its obligation of $22.3 million outstanding aggregate principal amount of the Term Loan Two Facility plus an immaterial amount of interest. As of December 31, 2022, the Company recorded a loss on extinguishment of debt of approximately $0.6 million, related to the debt-for-equity exchanges, which is presented within ‘Gain (loss) on debt extinguishment, net’ on our Consolidated Statements of Operations. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company leases certain facilities and equipment under non-cancelable operating and finance leases which expire at various dates through 2031. Office and equipment leases are typically for terms of three During the year ended December 31, 2022, the Company recorded impairments of $1.0 million on its operating lease right-of-use assets primarily related to exiting certain lease spaces within Digital Media and Cybersecurity and Martech. During the year ended December 31, 2021, the Company recorded impairments of $12.7 million on its operating lease right of use assets within Digital Media and Cybersecurity and Martech primarily related to exiting certain lease space as the Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a permanent “remote” or “partial remote” work model. During the year ended December 31, 2020, the Company had also decided to exit and seek subleases for certain leased facilities in the Digital Media reportable segment primarily also due to work from home models. The Company recorded a non-cash impairment charge of $12.1 million related to operating lease right-of-use assets for the affected facilities and an impairment charge of $3.6 million for associated property and equipment. The impairments were determined by comparing the fair value of the impacted right-of-use asset to the carrying value of the asset as of the impairment measurement date, as required under ASC 360, Property, Plant, and Equipment . The fair value of the right-of-use asset was based on the estimated sublease income for the affected facilities taking into consideration the time it will take to obtain a sublease tenant, the applicable discount rate and the sublease rate which represent Level 3 unobservable inputs. The impairments are presented in ‘General and administrative’ expenses on the Consolidated Statements of Operations. In certain agreements in which the Company leases office space where the Company is the tenant, it subleases the site to various other companies through a sublease agreement. Operating right-of-use assets are included in ‘Other assets’ on the Consolidated Balance Sheets. Operating lease liabilities are included in ‘Other current liabilities’ and ‘Other noncurrent liabilities’, respectively, on the Consolidated Balance Sheets as follows (in thousands): December 31, 2022 2021 Operating lease right-of-use assets $ 40,640 $ 55,617 Operating lease liabilities, current $ 22,153 $ 27,156 Operating lease liabilities, noncurrent 33,996 53,708 Total operating lease liabilities $ 56,149 $ 80,864 The components of lease expense are as follows (in thousands): Year ended December 31, 2022 2021 Operating lease cost $ 17,656 $ 31,396 Short-term lease cost (1) 1,127 2,754 Total lease cost $ 18,783 $ 34,150 (1) The Company made an election to account for a short-term lease payments on a straight-line basis over the term of the lease. Other supplemental operating lease information consists of the following: December 31, 2022 2021 Operating leases: Weighted average remaining lease term 3.3 years 3.9 years Weighted average discount rate 3.08 % 3.48 % As of December 31, 2022, maturities of operating lease liabilities were as follows (in thousands): 2023 $ 23,000 2024 17,453 2025 8,527 2026 5,470 2027 2,443 Thereafter 2,445 Total lease payments $ 59,338 Less: Imputed interest 3,189 Present value of operating lease liabilities $ 56,149 Sublease Total sublease income for the years ended December 31, 2022, 2021 and 2020 was $6.8 million $2.0 million, and $2.6 million, respectively. Total estimated aggregate sublease income to be received in the future is $11.9 million. In 2020, the Company recorded $2.1 million associated with its sublease tenants in default as a result of the economic effects of COVID-19. The impairment is presented in general and administrative expenses on the Consolidated Statement of Operations. Finance leases are not material to the Company’s consolidated financial statements. Significant Judgments Discount Rate The majority of the Company’s leases are discounted using the Company’s incremental borrowing rate as the rate implicit in the lease is not readily determinable. Rates are obtained from various large banks to determine the appropriate incremental borrowing rate each quarter for collateralized loans with a maturity similar to the lease term. Options The lease term is generally the minimum noncancellable period of the lease. The Company does not include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs. |
Leases | Leases The Company leases certain facilities and equipment under non-cancelable operating and finance leases which expire at various dates through 2031. Office and equipment leases are typically for terms of three During the year ended December 31, 2022, the Company recorded impairments of $1.0 million on its operating lease right-of-use assets primarily related to exiting certain lease spaces within Digital Media and Cybersecurity and Martech. During the year ended December 31, 2021, the Company recorded impairments of $12.7 million on its operating lease right of use assets within Digital Media and Cybersecurity and Martech primarily related to exiting certain lease space as the Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a permanent “remote” or “partial remote” work model. During the year ended December 31, 2020, the Company had also decided to exit and seek subleases for certain leased facilities in the Digital Media reportable segment primarily also due to work from home models. The Company recorded a non-cash impairment charge of $12.1 million related to operating lease right-of-use assets for the affected facilities and an impairment charge of $3.6 million for associated property and equipment. The impairments were determined by comparing the fair value of the impacted right-of-use asset to the carrying value of the asset as of the impairment measurement date, as required under ASC 360, Property, Plant, and Equipment . The fair value of the right-of-use asset was based on the estimated sublease income for the affected facilities taking into consideration the time it will take to obtain a sublease tenant, the applicable discount rate and the sublease rate which represent Level 3 unobservable inputs. The impairments are presented in ‘General and administrative’ expenses on the Consolidated Statements of Operations. In certain agreements in which the Company leases office space where the Company is the tenant, it subleases the site to various other companies through a sublease agreement. Operating right-of-use assets are included in ‘Other assets’ on the Consolidated Balance Sheets. Operating lease liabilities are included in ‘Other current liabilities’ and ‘Other noncurrent liabilities’, respectively, on the Consolidated Balance Sheets as follows (in thousands): December 31, 2022 2021 Operating lease right-of-use assets $ 40,640 $ 55,617 Operating lease liabilities, current $ 22,153 $ 27,156 Operating lease liabilities, noncurrent 33,996 53,708 Total operating lease liabilities $ 56,149 $ 80,864 The components of lease expense are as follows (in thousands): Year ended December 31, 2022 2021 Operating lease cost $ 17,656 $ 31,396 Short-term lease cost (1) 1,127 2,754 Total lease cost $ 18,783 $ 34,150 (1) The Company made an election to account for a short-term lease payments on a straight-line basis over the term of the lease. Other supplemental operating lease information consists of the following: December 31, 2022 2021 Operating leases: Weighted average remaining lease term 3.3 years 3.9 years Weighted average discount rate 3.08 % 3.48 % As of December 31, 2022, maturities of operating lease liabilities were as follows (in thousands): 2023 $ 23,000 2024 17,453 2025 8,527 2026 5,470 2027 2,443 Thereafter 2,445 Total lease payments $ 59,338 Less: Imputed interest 3,189 Present value of operating lease liabilities $ 56,149 Sublease Total sublease income for the years ended December 31, 2022, 2021 and 2020 was $6.8 million $2.0 million, and $2.6 million, respectively. Total estimated aggregate sublease income to be received in the future is $11.9 million. In 2020, the Company recorded $2.1 million associated with its sublease tenants in default as a result of the economic effects of COVID-19. The impairment is presented in general and administrative expenses on the Consolidated Statement of Operations. Finance leases are not material to the Company’s consolidated financial statements. Significant Judgments Discount Rate The majority of the Company’s leases are discounted using the Company’s incremental borrowing rate as the rate implicit in the lease is not readily determinable. Rates are obtained from various large banks to determine the appropriate incremental borrowing rate each quarter for collateralized loans with a maturity similar to the lease term. Options The lease term is generally the minimum noncancellable period of the lease. The Company does not include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, the Company and its affiliates are involved in litigation and other legal disputes or regulatory inquiries that arise in the ordinary course of business. Any claims or regulatory actions against the Company and its affiliates, whether meritorious or not, could be time consuming and costly, and could divert significant operational resources. The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief. On July 8, 2020, Jeffrey Garcia filed a putative class action lawsuit against the Company in the Central District of California (20-cv-06096), alleging violations of federal securities laws. The court appointed a lead plaintiff. The Company moved to dismiss the consolidated class action complaint. The court granted the motion to dismiss and the lead plaintiff filed an amended complaint. The Company moved to dismiss the amended complaint. On August 8, 2022, the court granted the Company’s motion to dismiss the amended complaint without leave to amend. The lead plaintiff has filed a notice of appeal. On September 24, 2020, International Union of Operating Engineers of Eastern Pennsylvania and Delaware filed a lawsuit in the Delaware Court of Chancery (C.A. No. 2020-0819-VCL) asserting derivative claims for breach of fiduciary duty and related theories against directors of the Company and other third parties relating generally to the investment by the Company in OCV Fund I, L.P. (the “Chancery Court Derivative Action”). On November 17, 2020, the court entered an order allowing Orlando Police Pension Fund to intervene as a plaintiff in the case. The parties reached an agreement to settle the lawsuit, which required court approval. On July 29, 2021, the parties filed a stipulation of settlement that provided the terms of the settlement and began the settlement approval process with the Court. On January 20, 2022 the Court approved the settlement. Among other terms of the settlement, no further management fees will be charged and no further capital calls will be made in connection with the Company’s investment in OCV Fund I, L.P. On December 11, 2020, Danning Huang filed a lawsuit in the District of Delaware (20-cv-01687-LPS) asserting derivative claims against directors of the Company and other third parties. The lawsuit alleges violations of Section 14(a), Section 10(b), Section 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, as well as breach of fiduciary duty, unjust enrichment and abuse of control. On March 24, 2021, Fritz Ringling filed a lawsuit in the District of Delaware (21-cv-00421-UNA) asserting substantially similar derivative claims, and on April 8, 2021, the district court consolidated the two actions under the caption In re J2 Global Stockholder Derivative Litigation. No.: 20-cv-01687-LPS. As part of the settlement of the Chancery Court Derivative Action described above, the Company and its directors and officers intend to defend against the remaining claims in the other actions. The Company does not believe, based on current knowledge, that the foregoing legal proceedings or claims, after giving effect to existing accrued liabilities, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could have a material effect on the Company’s consolidated financial position, results of operations, or cash flows in a particular period. The Company has not accrued for any material loss contingencies relating to these legal proceedings because materially unfavorable outcomes are not considered probable by management. It is the Company’s policy to expense as incurred legal fees related to various litigations. Non-Income Related Taxes The Company does not collect and remit sales and use, telecommunication, or similar taxes and fees in certain jurisdictions where the Company believes such taxes are not applicable or legally required. Several states and other taxing jurisdictions have presented or threatened the Company with assessments, alleging that the Company is required to collect and remit such taxes there. The Company is currently under audit or is subject to audit for indirect taxes in various states, municipalities and foreign jurisdictions. The Company has a $25.5 million and $24.0 million reserve established for these matters as of December 31, 2022 and 2021, respectively, which is included within ‘Accounts payable and accrued expenses’ and ‘Other long-term liabilities’ on the Consolidated Balance Sheet. It is reasonably possible that additional liabilities could be incurred resulting in additional expense, which could have a material impact to our financial results. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The continuing operations income tax (expense) benefit consisted of the following (in thousands): Year ended December 31, 2022 2021 2020 Current: Federal $ (42,698) $ 8,435 $ (15,112) State (12,184) 248 (4,300) Foreign (16,066) (15,931) (18,631) Total current (70,948) (7,248) (38,043) Deferred: Federal 12,667 17,132 6,022 State (1,577) 5,044 67 Foreign 1,901 (729) (6,396) Total deferred 12,991 21,447 (307) Income tax (expense) benefit from continuing operations $ (57,957) $ 14,199 $ (38,350) A reconciliation of the statutory federal income tax rate with the Company’s continuing operations effective income tax rate is as follows: Year ended December 31, 2022 2021 2020 Statutory tax rate 21.0 % 21.0 % 21.0 % State income taxes, net 5.0 (1.3) 1.8 Foreign rate differential 1.0 (0.3) 2.8 Foreign income inclusion 5.4 0.7 5.2 Foreign tax credit (5.1) (0.8) (4.3) Reserve for uncertain tax positions (3.2) (2.4) 11.5 Valuation allowance — (1.7) 9.9 Impact on deferred taxes of enacted tax law and rate changes 1.4 (0.5) 3.3 Tax credits and incentives (5.0) (1.5) (7.2) Mark-to market on investment in Consensus 22.1 (18.0) — Return to provision adjustments 1.1 0.5 2.4 Executive compensation 1.5 0.7 2.7 Other (1.0) (0.4) (0.2) Effective tax rates 44.2 % (4.0) % 48.9 % The effective tax rate for continuing operations for the year ended December 31, 2022 differs from the federal statutory rate primarily due to a book-tax difference related to the loss recognized for accounting purposes related to the Company’s shares held in Consensus stock. The Company recognized a deferred tax liability resulting in tax expense of $13.4 million on the outside basis difference between the book basis exceeding the tax basis of the Investment in Consensus on October 7, 2022 due to future disposals of the shares being subject to tax based on guidance and requirements set out by the Internal Revenue Service. Additional reasons the effective tax rate differs from the federal statutory tax rate is due to income earned in the United States also being subject to income taxes in various state jurisdictions with statutory tax rates that can range from 2.5 percent to 11.5 percent. This increase in the effective income tax rate is offset by a decrease in the net reserve for uncertain tax positions during 2022 and a tax benefit claimed in the United States related to a deduction for foreign-derived intangible income. The decrease in the reserve for uncertain tax positions is primarily due to the lapse of the statute of limitations for U.S. tax reserves. The effective tax rate for continuing operations for 2021 differs from the federal statutory rate primarily due to a book-tax difference related to the $298.5 million of book income recognized related to the Company’s shares held in Consensus stock. The income was not subject to tax since the Company had the ability to dispose of the investment in a tax-free manner based on guidance and requirements set out by the Internal Revenue Service. Additionally, the Company recorded a decrease in the net reserve for uncertain tax positions during 2021 and a reduction in the valuation allowance on deferred tax assets related to realized and unrealized capital losses. The decrease in the reserve for uncertain tax positions is primarily due to the lapse of the statute of limitations for U.S. tax reserves. The reduction in the valuation allowance is primarily due to an increase in unrealized capital gains on investments held by the Company which can provide a source of capital gain income in future years to realize the benefit of the capital losses. The effective tax rate for continuing operations for 2020 differs from the federal statutory rate primarily due to the Company recording a net increase in the reserve for uncertain tax positions during 2020 and recording a valuation allowance for a capital loss recognized due to the sale of assets related to its Voice business unit in Australia and New Zealand and the impairment of certain U.S. investments. Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Temporary differences and carryforwards which give rise to deferred tax assets and liabilities from continuing operations are as follows (in thousands): Years Ended December 31, 2022 2021 Deferred tax assets: Net operating loss and other carryforwards $ 19,513 $ 28,393 Tax credit carryforwards 4,222 2,801 Accrued expenses 10,702 12,548 Allowance for bad debt 1,445 2,116 Share-based compensation expense 3,885 3,545 Operating lease liabilities 16,756 21,771 Basis difference in fixed assets 14,642 — Deferred revenue 2,994 4,331 State taxes 4,447 3,771 Other 3,920 4,351 82,526 83,627 Less: valuation allowance (1,699) (1,812) Total deferred tax assets $ 80,827 $ 81,815 Deferred tax liabilities: Basis difference in property and equipment $ — $ (8,337) Operating lease right-of-use assets (14,008) (16,696) Basis difference in intangible assets (101,797) (117,244) Unrealized gains on investments (24,123) (11,291) Prepaid insurance (2,744) (3,121) Convertible debt — (21,972) Other (8,639) (6,219) Total deferred tax liabilities (151,311) (184,880) Net deferred tax liabilities $ (70,484) $ (103,065) The Company had approximately $80.8 million and $81.8 million in deferred tax assets from continuing operations as of December 31, 2022 and 2021, respectively, related primarily to net operating loss, operating lease liabilities, interest expense and capital loss carryforwards, tax credit carryforwards, capitalized research and development expenses and accrued expenses treated differently between its financial statements and its tax returns. Based on the weight of available evidence, the Company assesses whether it is more likely than not that some portion or all of a deferred tax asset will not be realized. If necessary, the Company records a valuation allowance sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. The deferred tax assets should be realized through future operating results and the reversal of temporary differences. The Company had a valuation allowance on deferred tax assets from continuing operations of $1.7 million and $1.8 million as of December 31, 2022 and 2021, respectively. The valuation allowance related to net operating loss and capital loss carryforward in certain foreign jurisdictions decreased $0.1 million primarily as a result of re-measurement due to tax rate changes. The rollforward of the valuation allowance on the deferred tax assets from continuing operations is as follows (in thousands): Year ended December 31, 2022 2021 2020 Beginning balance $ 1,812 $ 8,262 $ 563 Charges to costs and expenses — 178 9,456 Write-offs and recoveries (113) (6,628) (1,757) Ending balance $ 1,699 $ 1,812 $ 8,262 As of December 31, 2022, the Company had federal net operating loss carryforwards (“NOLs”) of $22.8 million, after considering substantial restrictions on the utilization of these NOLs due to “ownership changes”, as defined in the Internal Revenue Code of 1986, as amended. The Company estimates that all of the above-mentioned federal NOLs will be available for use before their expiration. $20.7 million of the NOLs expire through the year 2037 and $2.1 million of the NOLs carry forward indefinitely depending on the year the loss was incurred. As of December 31, 2022 and 2021, the Company’s deferred tax assets include interest expense limitation carryovers of $6.4 million and $23.3 million, respectively, which last indefinitely. The Company also has federal capital loss limitation carryforwards as of December 31, 2022 and 2021 of $24.1 million and $28.7 million, respectively that begin to expire in 2031. In addition, as of December 31, 2022 and 2021, we had available state research and development tax credit carryforwards of $3.5 million and $5.1 million, respectively, which last indefinitely. The Company had no foreign tax credit carryforwards as of December 31, 2022 and 2021. The Company has not provided for deferred taxes on approximately $307.8 million of undistributed earnings from foreign subsidiaries as of December 31, 2022. The Company has not provided any additional deferred taxes with respect to items such as foreign withholding taxes, state income tax or foreign exchange gain or loss that would be due when cash is actually repatriated to the U.S. because those foreign earnings are considered permanently reinvested in the business or may be remitted substantially free of any additional taxes. Because of the various avenues in which to repatriate the earnings, it is not practicable to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings if eventually remitted. Certain taxes are prepaid during the year and, where appropriate, included within ‘Prepaid expenses and other current assets’ on the Consolidated Balance Sheet. The Company’s prepaid taxes were $3.2 million and $0.8 million at December 31, 2022 and 2021, respectively. Income (loss) from continuing operations before income taxes included income from domestic operations of $71.8 million, $279.7 million , $(2.0) million for the years ended December 31, 2022, 2021 and 2020, respectively, and income from foreign operations of $59.4 million, $71.7 million and $80.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. Uncertain Income Tax Positions Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as non-current liabilities in the Consolidated Balance Sheets. As of December 31, 2022, the total amount of unrecognized tax benefits for continuing operations was $34.2 million , of which $32.7 million, if recognized, would affect the Company’s effective tax rate. As of December 31, 2021, the total amount of unrecognized tax benefits for continuing operations was $39.5 million, of which $35.6 million, if recognized, would affect the Company’s effective tax rate. As of December 31, 2020, the total amount of unrecognized tax benefits for continuing operations was $46.0 million, of which $44.9 million, if recognized, would affect the Company’s effective tax rate. The aggregate changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for 2022, 2021 and 2020, is as follows (in thousands): Year ended December 31, 2022 2021 2020 Beginning balance $ 39,527 $ 46,032 $ 43,687 Increases related to tax positions during a prior year — 3,448 3,953 Decreases related to tax positions taken during a prior year (2,816) (5,511) (244) Increases related to tax positions taken in the current year 819 4,675 4,264 Settlements — — (5,628) Decreases related to expiration of statute of limitations (3,322) (9,117) — Ending balance $ 34,208 $ 39,527 $ 46,032 The Company includes interest and penalties related to unrecognized tax benefits within ‘Income tax expense’ on the Consolidated Statements of Operations. As of December 31, 2022, 2021 and 2020, the total amount of interest and penalties accrued was $6.3 million, $5.7 million, $7.2 million, respectively, which is classified as a liability for uncertain tax positions on the Consolidated Balance Sheets. In connection with the liability for unrecognized tax benefits, the Company recognized interest and penalty expense (benefit) in 2022, 2021 and 2020 of $0.7 million, $(1.5) million and $2.8 million, respectively. Uncertain income tax positions are reasonably possible to significantly change during the next 12 months as a result of completion of income tax audits and expiration of statutes of limitations. At this point it is not possible to provide an estimate of the amount, if any, of significant changes in reserves for uncertain income tax positions as a result of the completion of income tax audits that are reasonably possible to occur in the next 12 months. In addition, the Company cannot currently estimate the amount of, if any, uncertain income tax positions which will be released in the next 12 months as a result of expiration of statutes of limitations due to ongoing audits. As a result of ongoing federal, state and foreign income tax audits (discussed below), it is reasonably possible that the Company’s entire reserve for uncertain income tax positions for the periods under audit will be released. It is also reasonably possible that the Company’s reserves will be inadequate to cover the entire amount of any such income tax liability. Income Tax Audits: The Company is in various stages of audit by the U.S. Internal Revenue Service (“IRS”) for its 2012 through 2016 tax years. On February 24, 2021, the Company received a Notice of Deficiency for tax years 2012 through 2014 which disallowed certain deductions for domestic production. The Company disagrees with the Notice and has filed a petition with the United States Tax Court on May 24, 2021 and has continued to work with the IRS to reach a conclusion. As of December 31, 2022, the audits are ongoing. The Company is under audit by the California Franchise Tax Board (“FTB”) for its tax years 2012 and 2013. The FTB, however, has agreed to suspend its audit for 2012 and 2013 pending the outcome of the IRS audit for such tax years. In August 2018, the FTB notified the Company that it will commence an audit of tax years 2015 and 2016. The Company responded to the inquiries from the FTB. The tax years remain open pending the outcome of the IRS audit for such tax years. As of December 31, 2022, the audits are ongoing. In June 2019, the New York State Department of Taxation and Finance (“NYS”) notified the Company that it will commence an audit for tax year 2015. In April 2020, the NYS notified the Company that it would also commence an audit for tax years 2016 and 2017. The tax years remain open pending the outcome of the IRS audit for such tax years. On October 2022, the Company signed an additional extension of the statute of limitations for tax years 2015 to 2017 to September 2023. As of December 31, 2022, the audits are ongoing. We conduct business on a global basis and as a result, one or more of our subsidiaries files income tax returns in the U.S. federal and in multiple state, local, and foreign tax jurisdictions. As noted previously, our U.S. federal income tax returns for years 2012 through 2016 are under various stages of audit by the IRS. We are also under audit for various U.S. state and local tax purposes as noted above for our significant jurisdictions. With limited exception, our significant foreign tax jurisdictions are no longer subject to an income tax audit by the various tax authorities for tax years prior to 2017. It is reasonably possible that these audits may conclude in the next twelve months and that the uncertain tax positions the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods. If the recorded uncertain tax positions were inadequate to cover the associated tax liabilities, the Company would be required to record additional tax expense in the relevant period, which could be material. If the recorded uncertain tax positions were |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity In February 2012, the Company’s Board of Directors approved a program authorizing the repurchase of up to five million shares of the Company’s common stock through February 20, 2013 (the “2012 Program”) which was subsequently extended through February 20, 2021. During the year ended December 31, 2020, the Company repurchased 1,140,819 shares at an aggregate cost of $87.5 million under the 2012 Program, which were subsequently retired in the same year. As of December 31, 2020, all of the available shares were repurchased under the 2012 Program. On August 6, 2020, the Company’s Board of Directors approved a program authorizing the repurchase of up to ten million shares of the Company’s common stock through August 6, 2025 (the “2020 Program”). The Company entered into certain Rule 10b5-1 trading plans during the years ended December 31, 2022, 2021 and 2020 to execute repurchases under the 2020 Program. During the years ended December 31, 2022, 2021 and 2020, the Company repurchased 736,536, 445,711 and 2,490,599 shares, respectively, at an aggregate cost of $71.3 million, $47.7 million and $177.8 million, respectively (including an immaterial amount of commission fees) under the 2020 Program. These shares were subsequently retired. Cumulatively as of December 31, 2022, 3,672,846 shares were repurchased at an aggregate cost of $296.9 million (including an immaterial amount of commission fees) under the 2020 Program. As a result of the repurchases, the number of shares of the Company’s common stock available for purchase as of December 31, 2022 was 6,327,154 shares. In connection with the Separation, the Company called its 3.25% Convertible Notes for redemption and during the year ended December 31, 2021, the Company issued 3,050,850 shares of the Company’s common stock in connection with that redemption (see Note 10 - Debt ). Periodically, participants in the Company’s stock plans surrender to the Company shares of stock to pay the exercise price or to satisfy tax withholding obligations arising upon the exercise of stock options or the vesting of restricted stock. During the years ended December 31, 2022, 2021 and 2020, the Company purchased and retired 72,886, 251,946 and 111,451 shares, respectively, at an aggregate cost of approximately $7.0 million, $30.6 million and $10.4 million, respectively, from plan participants for this purpose. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Based Compensation | Stock Based Compensation The Company’s share-based compensation plans include the 2015 Stock Option Plan (the “2015 Plan”) and 2001 Employee Stock Purchase Plan (the “Purchase Plan”). Each plan is described below. The 2015 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units and other share-based awards. 4,200,000 shares of the Company’s common stock are authorized to be used for 2015 Plan purposes. Options under the 2015 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the higher of the par value or 100% of the fair market value of the Company’s common stock subject to the option on the date the option is granted. As of December 31, 2022, 435,135 shares underlying options and 464,354 shares of restricted stock units were outstanding under the 2015 Plan. At December 31, 2022, there were 1,496,619 additional shares underlying options, shares of restricted stock and other share-based awards available for grant under the 2015 Plan. In connection with the Separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each stock-based award outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the related exercise price for the stock options was divided by a factor of approximately 1.09, which was intended to preserve the intrinsic value of the awards prior to the Separation. Further, the price targets for the Company’s market-based restricted stock units were reduced by $21.41. These adjustments to the Company’s equity compensation awards did not result in additional compensation expense. Stock based compensation awards that were held by Consensus employees were terminated and replaced with awards issued under the Consensus stock compensation plan (including under the Purchase Plan). Stock-based compensation expense through the Separation date for Consensus employees is included in results from discontinued operations. Stock Options At December 31, 2022, 2021 and 2020, options to purchase 217,567, 168,614 and 175,601 shares of common stock were exercisable under and outside of the 2015 Plan, at weighted average exercise prices of $68.97, $67.62, $60.35, respectively. Stock options generally expire after 10 years and vest over a 5-year period. All stock option grants are approved by “outside directors” within the meaning of Internal Revenue Code Section 162(m). Stock option activity for the years ended December 31, 2022, 2021 and 2020 is summarized as follows: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Options outstanding at January 1, 2020 518,341 $ 65.77 Granted — — Exercised (42,740) 23.11 Canceled — — Options outstanding at December 31, 2020 475,601 $ 69.61 Granted — — Exercised (70,776) 41.63 Canceled — — Adjustment due to Consensus Separation (1) 35,749 $ 68.25 Options outstanding at December 31, 2021 440,574 $ 68.45 Granted — $ — Exercised (5,439) $ 27.15 Canceled — $ — Options outstanding at December 31, 2022 435,135 $ 68.97 5.0 $ 4,407,918 Exercisable at December 31, 2022 217,567 $ 68.97 5.0 $ 2,203,954 Vested and expected to vest at December 31, 2022 396,185 $ 68.97 5.0 $ 4,013,353 (1) As noted above, in connection with the Consensus separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each stock option outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the related exercise price for the stock options was divided by a factor of approximately 1.09, which was intended to preserve the intrinsic value of the awards prior to the Separation. The total intrinsic values of options exercised during the years ended December 31, 2022, 2021 and 2020 was $0.4 million, $5.8 million and $3.0 million, respectively. The total fair value of options vested during the years ended December 31, 2022, 2021 and 2020 was $1.1 million, $1.0 million and $1.0 million, respectively. Cash received from options exercised under all share-based payment arrangements for the years ended December 31, 2022, 2021 and 2020 was $0.1 million, $2.9 million and $1.6 million, respectively. The actual tax benefit realized for the tax deductions from option exercises under the share-based payment arrangements totaled $0.3 million, $1.9 million and $0.7 million, respectively, for the years ended December 31, 2022, 2021 and 2020, respectively. The following table summarizes information concerning outstanding and exercisable options as of December 31, 2022: Options Outstanding Exercisable Options Exercise Price Number Outstanding December 31, 2022 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable December 31, 2022 Weighted Average Exercise Price $ 68.97 435,135 5.0 years $ 68.97 217,567 $ 68.97 As of December 31, 2022, there was $3.9 million of total unrecognized compensation expense related to nonvested share-based compensation options granted under the 2015 Plan. That expense is expected to be recognized ratably over a weighted average period of 3.0 years (i.e., the remaining requisite service period). Fair Value Disclosure The Company uses the Black-Scholes option pricing model to calculate the fair value of each option grant. The expected volatility is based on historical volatility of the Company’s common stock. The Company estimates the expected term based upon the historical exercise behavior of its employees. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant. The Company uses an annualized dividend yield based upon the per share dividends declared by its Board of Directors. There were no dividends declared during the years ended December 31, 2022, 2021 and 2020. Estimated forfeiture rates were 13.0%, 12.4% and 13.0% as of December 31, 2022, 2021 and 2020, respectively. Restricted Stock and Restricted Stock Units The Company has awarded restricted stock and restricted stock units to its Board of Directors and senior staff pursuant to certain share-based compensation plans. Compensation expense resulting from restricted stock and restricted unit grants is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period. Vesting periods are approximately one year for awards to members of the Company’s Board of Directors, four four Restricted Stock and Restricted Stock Units with Market Conditions The Company has awarded certain key employees market-based restricted stock and market-based restricted stock units pursuant to the 2015 Plan. The market-based awards have vesting conditions that are based on specified stock price targets of the Company’s common stock. Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets with a 20-day and 30-day lookback (trading days). Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period using the graded-vesting method regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. During the years ended December 31, 2022, 2021, and 2020 the Company awarded 100,193, 73,094 and 82,112 market-based restricted stock units, respectively. The per share weighted average grant-date fair values of the market-based restricted stock units granted during the years ended December 31, 2022, 2021 and 2020 were $87.11, $94.40 and $70.99, respectively. The weighted-average fair values of market-based restricted stock units granted have been estimated utilizing the following assumptions: December 31, 2022 2021 2020 Underlying stock price at valuation date $ 99.32 $ 113.27 $ 91.17 Expected volatility 36.7 % 30.3 % 27.0 % Risk-free interest rate 1.8 % 1.3 % 0.7 % Restricted stock activity for the years ended December 31, 2022, 2021 and 2020 is set forth below: Shares Weighted-Average Nonvested at January 1, 2020 1,105,059 $ 64.76 Granted 1,268 98.63 Vested (264,172) 70.25 Canceled (21,589) 79.34 Nonvested at December 31, 2020 820,566 $ 62.66 Granted — — Vested (435,529) 60.52 Canceled (33,194) 83.23 Adjustment due to Consensus Separation (1) 32,120 74.62 Nonvested at December 31, 2021 383,963 $ 62.66 Granted — — Vested (67,762) 80.64 Canceled (4,920) 84.77 Nonvested at December 31, 2022 311,281 $ 59.90 (1) As noted above, in connection with the Consensus separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each restricted stock award outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the market condition stock price target for marked-based restricted stock awards was also adjusted. Restricted stock unit activity for the years ended December 31, 2022, 2021 and 2020 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2020 20,874 Granted 210,630 Vested (9,029) Canceled (12,691) Outstanding at December 31, 2020 209,784 Granted 319,345 Vested (124,761) Canceled (60,201) Adjustment due to Consensus Separation (1) 16,576 Outstanding at December 31, 2021 360,743 Granted 254,215 Vested (115,523) Canceled (35,081) Outstanding at December 31, 2022 464,354 2.61 $ 36,730,401 Vested and expected to vest at December 31, 2022 334,674 2.12 $ 26,472,675 (1) As noted above, in connection with the Consensus separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each restricted stock unit outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the market condition stock price target for marked-based restricted stock units was also adjusted. As of December 31, 2022, the Company had unrecognized share-based compensation cost of $40.1 million associated with these restricted stock and restricted stock units. This cost is expected to be recognized over a weighted-average period of 2.8 years for restricted stock and 3.4 years for restricted stock units. The total fair value of restricted stock and restricted stock units vested during the years ended December 31, 2022, 2021 and 2020 was $12.4 million, $68.1 million and $18.6 million, respectively. The actual tax benefit realized for the tax deductions from the vesting of restricted stock and restricted stock units totaled $2.8 million, $9.5 million and $2.1 million, respectively, for the years ended December 31, 2022, 2021 and 2020. Employee Stock Purchase Plan The Purchase Plan provides for the issuance of a maximum of two million shares of the Company’s common stock. Under the Purchase Plan, eligible employees can have up to 15% of their earnings withheld, up to certain maximums, to be used to purchase shares of the Company’s common stock at certain plan-defined dates. The price of the Company’s common stock purchased under the Purchase Plan for the offering periods is equal to 85% of the lesser of the fair market value of a share of the common stock on the beginning or the end of the offering period. On February 2, 2018, the Company approved an amendment to the Company’s Amended and Restated 2001 Employee Stock Purchase Plan, to be effective May 1, 2018, such that (i) the purchase price for each offering period shall be 85% of the lesser of the fair market value of a share of common stock of the Company (a “Share”) on the beginning or the end of the offering period, rather than 95% of the fair market value of a Share at the end of the offering period, and (ii) each offering period will be six months, rather than three months. The Company determined that a plan provision exists which allows for the more favorable of two exercise prices, commonly referred to as a “look-back” feature. The purchase price discount and the look-back feature cause the Purchase Plan to be compensatory and the Company to recognize compensation expense. The compensation cost is recognized on a straight-line basis over the requisite service period. The Company used the Black-Scholes option pricing model to calculate the estimated fair value of the purchase right issued under the Purchase Plan. The expected volatility is based on historical volatility of the Company’s common stock. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant. The Company uses an annualized dividend yield based upon the per share dividends declared by its Board of Directors. Estimated forfeiture rates were 11.83%, 11.15% and 11.15% as of December 31, 2022, 2021, and 2020, respectively. The increase in forfeiture rate comes as a result of the Purchase Plan being offered to all employees regardless of employment location. During 2022, 2021 and 2020, 139,992, 109,248 and 118,629 shares, respectively were purchased under the Purchase Plan at price ranging from $66.33 to $68.22 per share during 2022. Cash received upon the issuance of the Company’s common stock under the Purchase Plan was $9.4 million, $9.2 million and $7.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. As of December 31, 2022, 1,155,699 shares were available under the Purchase Plan for future issuance. The compensation expense related to the Purchase Plan has been estimated utilizing the following weighted average assumptions: December 31, 2022 2021 2020 Risk-free interest rate 1.17% 0.05% 0.73% Expected term (in years) 0.5 0.5 0.5 Dividend yield 0.0% 0.0% 0.0% Expected volatility 40.7% 35.0% 25.3% |
Defined Contribution 401(k) Sav
Defined Contribution 401(k) Savings Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Defined Contribution 401(k) Savings Plan | Defined Contribution 401(k) Savings PlanThe Company has several 401(k) Savings Plans that qualify under Section 401(k) of the Internal Revenue Code. Eligible employees may contribute a portion of their salary through payroll deductions, subject to certain limitations. The Company may make annual contributions at its sole discretion to these plans. For the years ended December 31, 2022, 2021 and 2020, the Company made contributions of $5.1 million, $4.8 million, and $3.3 million, respectively, to these 401(k) Savings Plans. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share Reconciliation [Abstract] | |
Earnings Per Share | Earnings Per Share The components of basic and diluted earnings per share from continuing operations are as follows (in thousands, except share and per share data): Year ended December 31, 2022 2021 2020 Numerator for basic and diluted net income per common share: Net income from continuing operations $ 65,466 $ 401,395 $ 28,660 Net income available to participating securities (1) (20) (326) (120) 1.75% Convertible Notes interest expense (after-tax) (2) — — — Net income available to the Company’s common shareholders from continuing operations $ 65,446 $ 401,069 $ 28,540 Denominator: Basic weighted-average outstanding shares of common stock 46,954,558 45,893,928 46,308,825 Effect of dilution: Equity incentive plans 71,291 311,585 7,537 Convertible debt (2) — 1,657,232 799,247 Diluted weighted-average outstanding shares of common stock 47,025,849 47,862,745 47,115,609 Net income per share from continuing operations: Basic $ 1.39 $ 8.74 $ 0.62 Diluted $ 1.39 $ 8.38 $ 0.61 Weighted-average shares excluded from diluted weighted-average shares outstanding: Anti-dilutive stock options and restricted stock — — — Anti-dilutive convertible debt 5,158,071 — — (1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). (2) Under the modified retrospective method of adoption of ASU 2020-06, the dilutive impact of convertible debt was calculated using the if-converted method for the year ended December 31, 2022. The dilutive impact of convertible debt was calculated using the treasury stock method for the years ended December 31, 2021 and 2020 (see Note 10 - Debt ). |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s businesses are based on the organizational structure used by the chief operating decision maker (“CODM”). The Company aggregates its operating segments into two reportable segments: Cybersecurity and Martech and Digital Media. The accounting policies of the businesses are the same as those described in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies. The Company evaluates performance based on revenue and profit or loss from operations. Information on reportable segments and reconciliation to income from operations is as follows (in thousands): Years Ended December 31, 2022 2021 2020 Revenue by reportable segment: Digital Media $ 1,079,172 $ 1,069,300 $ 811,360 Cybersecurity and Martech 312,626 348,611 347,697 Elimination of inter-segment revenues (801) (1,189) (229) Total segment revenues 1,390,997 1,416,722 1,158,828 Corporate (1) — — 1 Total revenues $ 1,390,997 $ 1,416,722 $ 1,158,829 Operating costs and expenses by reportable segment (2) : Digital Media 880,240 851,807 672,280 Cybersecurity and Martech (3) 262,426 338,464 294,765 Elimination of inter-segment operating expenses (801) (1,189) (229) Total segment operating expenses 1,141,865 1,189,082 966,816 Corporate (1)(3) 50,191 60,300 53,673 Total operating costs and expenses 1,192,056 1,249,382 1,020,489 Operating income by reportable segment: Digital Media operating income $ 198,932 $ 217,493 $ 139,080 Cybersecurity and Martech operating income (3) 50,200 10,147 52,932 Total segment operating income 249,132 227,640 192,012 Corporate (1)(3) (50,191) (60,300) (53,672) Income from operations $ 198,941 $ 167,340 $ 138,340 (1) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment. (2) Operating expenses for each segment include cost of sales and other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses. For the twelve months ended December 31, 2021, goodwill impairment related to our B2B Backup business is also included within operating costs and expenses for Cybersecurity and Martech. For the twelve months ended December 31, 2022, the Company had an impairment to goodwill within operating costs and expenses for Digital Media. (3) For the year ended December 31, 2021, approximately $19.2 million of general and administrative costs were reflected as Corporate operating costs and expenses in the Company’s December 31, 2021 Form 10-K, however, should have been reflected as an operating cost for the Cybersecurity and Martech reportable segment. The Company reclassified these costs in the table above as an operating cost for the Cybersecurity and Martech reportable segment and as a reduction of operating costs for Corporate, as well as the resulting impact in operating income (loss) for Cybersecurity and Martech and Corporate. The reclassification has no impact on consolidated operating income (loss) from continuing operations for the year ended December 31, 2021. The CODM does not use Balance Sheet information in connection with operating and investment decisions and as such that information is not presented. The CODM does use capital expenditures by reportable segment in connection with operating and investment decisions. Accordingly, the following segment information is presented for Digital Media and Cybersecurity and Martech. Year ended December 31, 2022 2021 2020 Capital expenditures: Digital Media $ 85,049 $ 80,877 $ 59,693 Cybersecurity and Martech 21,094 17,611 16,622 Total from reportable segments 106,143 98,488 76,315 Corporate 11 — — Capital expenditures of discontinued operations — 15,252 16,237 Total capital expenditures $ 106,154 $ 113,740 $ 92,552 Depreciation and amortization: Digital Media $ 184,658 $ 193,661 $ 145,321 Cybersecurity and Martech 48,714 55,344 56,999 Total from reportable segments 233,372 249,005 202,320 Corporate 28 288 3,658 Depreciation and amortization of — 9,010 22,759 Total depreciation and amortization $ 233,400 $ 258,303 $ 228,737 The Company maintains operations in the U.S., Canada, Ireland, the United Kingdom, India and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands). Year ended December 31, 2022 2021 2020 Revenues: United States $ 1,181,936 $ 1,187,207 $ 958,833 All other countries 209,061 229,515 199,996 Total $ 1,390,997 $ 1,416,722 $ 1,158,829 Long-lived assets, excluding goodwill and other intangible assets are as follows (in thousands): December 31, 2022 2021 Long-lived assets: United States $ 171,957 $ 170,490 All other countries 46,867 46,336 Total $ 218,824 $ 216,826 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Non-cash investing and financing activities were as follows (in thousands): Year ended December 31, 2022 2021 (1) 2020 (1) Non-cash investing activity: Property and equipment, accrued but unpaid $ 150 $ 50 $ 3,154 Right-of-use assets acquired in exchange for operating lease obligations $ 4,130 $ 9,850 $ 31,148 Exchange of corporate debt securities (2) $ — $ — $ 18,326 Disposition of Investment in Consensus (3) $ 112,286 $ — $ — Non-cash financing activity: Debt principal settled in exchange for Investment in Consensus (3) $ 112,286 $ — $ — Debt principal settled in exchange for Consensus senior notes due 2028 $ — $ 485,000 $ — Conversion shares issued as extinguishment cost to redeem 3.25% Convertible Notes $ — $ 431,952 $ — Reacquisition of 3.25% Convertible Notes, net of tax $ — $ 390,526 $ — (1) Combines continuing and discontinued operations. (2) During the year ended December 31, 2020, the Company exchanged shares of redeemable preferred stock that were previously classified as available-for-sale corporate debt securities for a new series of preferred stock, classified as equity securities without a readily determinable fair value. Refer to Note 5 - Investments for additional details. (3) During the year ended December 31, 2022, the Company disposed $160.1 million of its Investment in Consensus in exchange for $112.3 million of debt and recorded $47.8 million of loss on investment, net. Supplemental data (in thousands): Year ended December 31, 2022 2021 2020 Interest paid $ 36,168 $ 54,479 $ 105,962 Income taxes paid, net of refunds $ 59,543 $ 61,162 $ 45,046 Operating cash outflows related to lease liabilities were as follows (in thousands): Year ended December 31, 2022 2021 2020 Operating cash outflows related to lease liabilities $ 26,921 $ 27,798 $ 27,402 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table summarizes the changes in accumulated balances of other comprehensive loss (income), net of tax, for the years ended December 31, 2022, 2021, and 2020 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Balance as of January 1, 2020 $ (275) $ (46,187) $ (46,462) Other comprehensive income (loss) before reclassifications 558 (8,902) (8,344) Net current period other comprehensive income (loss) 558 (8,902) (8,344) Balance as of December 31, 2020 $ 283 $ (55,089) $ (54,806) Other comprehensive income (loss) before reclassifications (114) (21,268) (21,382) Consensus separation — 18,966 18,966 Net current period other comprehensive income (loss) (114) (2,302) (2,416) Balance as of December 31, 2021 $ 169 $ (57,391) $ (57,222) Other comprehensive loss before reclassifications 272 (32,479) (32,207) Consensus separation adjustment — 4,056 4,056 Net current period other comprehensive loss 272 (28,423) (28,151) Balance as of December 31, 2022 $ 441 $ (85,814) $ (85,373) The following table provides details about reclassifications out of accumulated other comprehensive loss for the years ended December 31, 2022, 2021, and 2020. Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Statements of Operations For the year ending December 31, 2022 2021 2020 Unrealized loss on available-for-sale investments $ — $ (151) $ 698 Loss on investments, net — (151) 698 Income before income taxes — — — Income tax expense Total reclassifications for the period $ — $ (151) $ 698 Net income |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Consensus As of December 31, 2022, the Company holds approximately 1.1 million shares of the common stock of Consensus, representing approximately 5% of the Consensus outstanding common stock. The Company determined that Consensus is no longer a related party after September 30, 2022. Related party transactions with Consensus through September 30, 2022 are included within the disclosures below. In preparation for and in executing the Separation, the Company incurred transaction-related costs, some of which were reimbursed by Consensus, of approximately $23.3 million (excluding costs associated with the debt exchange noted below), before reimbursement by Consensus. These transaction costs primarily related to professional fees associated with preparation of regulatory filings and transaction execution and separation activities within finance, tax and legal functions. During the year ended December 31, 2021, Ziff Davis received or expected to receive approximately $11.7 million (excluding the reimbursement of a portion of the debt exchange noted below) from Consensus resulting in net transaction costs of $11.6 million. These net transaction-related costs were recorded in ‘General and administrative expenses’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statement of Operations. During the year ended December 31, 2021, Consensus also reimbursed Ziff Davis for certain costs associated with the debt exchange in connection with the Separation totaling $7.5 million, which was recorded as an offset to the loss on extinguishment of debt on the Consolidated Statement of Operations. In addition, Consensus paid the Company approximately $8.5 million subsequent to the Separation due to excess cash held at the Separation date net of other related items pursuant to the Separation and Distribution Agreement. In connection with the Separation, Ziff Davis and Consensus entered into several agreements that govern the relationship of the parties following the Separation, including a separation and distribution agreement, a transition services agreement, a tax matters agreement, an employee matters agreement, an intellectual property license agreement, and a stockholder and registration rights agreement. The transition services agreement governs services including certain information technology services, finance and accounting services and human resource and employee benefit services. The agreed-upon charges for such services are generally intended to allow the providing company to recover all costs and expenses of providing such services, and nearly all such services were terminated without extension twelve months after the Separation. During the years ended December 31, 2022 and 2021, the Company recorded an offset to expense of approximately $1.2 million and $2.1 million, respectively, from Consensus related to the transition services agreement within ‘General and administrative expenses’ within the Consolidated Statements of Operations. Further, the Company assigned its lease of office space in Los Angeles, California to Consensus. Ziff Davis remained the lessee under this lease and its obligations remained through October 7, 2022, after which time Consensus took over the lease in full. During the years ended December 31, 2022 and 2021, the Company recorded an offset to lease expense of approximately $1.5 million and $0.5 million, respectively, related to this lease, however, Consensus paid the landlord directly and not Ziff Davis. Amounts due from Consensus as of December 31, 2021 was $9.3 million (comprised of $2.1 million related to services provided under the transition services agreement and $7.2 million related to reimbursement of certain transaction related costs and other reimbursements), and is included in within ‘Accounts receivable’ within the Consolidated Balance Sheets. OCV On September 25, 2017, the Company entered into a commitment to invest in the Fund. The manager, OCV, and general partner of the Fund are entities with respect to which Richard S. Ressler, former Chairman of the Board of Directors of the Company, is indirectly the majority equity holder. Mr. Ressler’s tenure with the Board ended as of May 10, 2022. During the years ended December 31, 2022, 2021, and 2020, the Company recognized expense for management fees of $1.5 million, $3.0 million, and $3.0 million, net of tax benefit, respectively. During the years ended 2021 and 2020, the Company received capital call notices from the management of OCV Management, LLC for $22.2 million and $32.9 million, inclusive of certain management fees, of which $22.2 million and $31.9 million had been paid as of the end of each respective year. In connection with the settlement of certain litigation generally related to the Company’s investment in the Fund (see Note 12 - Commitments and Contingencies |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Ziff Davis and its direct and indirect wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about investment classifications and the reported amounts of net revenue and expenses during the reporting period. The Company believes that its most significant estimates are those related to revenue recognition, valuation and impairment of investments, its assessment of ownership interests as variable interest entities and the related determination of consolidation, share-based compensation expense, fair value of assets acquired and liabilities assumed in connection with business combinations, long-lived and intangible asset impairment, contingent consideration, income taxes and contingencies, and allowance for credit losses. On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances. Actual results could materially differ from those estimates. |
Consensus, Inc. Spin-Off and Discontinued Operations | Consensus, Inc. Spin-Off and Discontinued Operations On September 21, 2021, the Company announced that its Board of Directors approved its previously announced separation of the cloud fax business (the “Separation”) into an independent publicly traded company, Consensus Cloud Solutions, Inc. (“Consensus”). On October 7, 2021 (the “Distribution Date”), the Separation was completed and the Company transferred J2 Cloud Service, LLC to Consensus who in turn transferred non-fax assets and liabilities back to Ziff Davis such that Consensus was left with the cloud fax business. The Separation was achieved through the Company’s distribution of 80.1% of the shares of Consensus common stock to holders of J2 Global common stock as of the close of business on October 1, 2021, the record date for the distribution. The Company’s stockholders of record received one share of Consensus common stock for every three shares of J2 Global’s common stock. On October 8, 2021, Consensus began trading on Nasdaq under the stock symbol “CCSI”. Ziff Davis, Inc. retained a 19.9% interest in Consensus following the Separation (the “Investment in Consensus”). On October 7, 2021, Consensus paid Ziff Davis approximately $259.1 million of cash in a distribution that was anticipated to be tax-free provided certain requirements were met, and issued $500.0 million of senior notes due 2028 to Ziff Davis, which Ziff Davis then exchanged with the lenders under the Credit Agreement and Credit Agreement Amendments by and among the subsidiaries of Ziff Davis party thereto as guarantors, Citicorp North America Inc. and MUFG Union Bank, N.A. and MUFG Union Bank, N.A., as administrative agent for the lenders, for the extinguishment of indebtedness outstanding under the Bridge Loan Facility. Refer to Note 10 - Debt for additional details. Such lenders or their affiliates agreed to resell the 2028 notes to qualified institutional buyers in the United States pursuant to Rule 144A. The accounting requirements for reporting the Company’s cloud fax business as a discontinued operation were met when the Separation was completed. Accordingly, the consolidated financial statements reflect the results of the cloud fax business as a discontinued operation for all periods presented. Ziff Davis did not retain a controlling interest in Consensus. During the year ended December 31, 2022, the Company entered into a Fifth Amendment and Sixth Amendment to its existing Credit Agreement, providing for the issuance of senior secured term loans under the Credit Agreement (the “Term Loan Facilities”), in an aggregate principal amount of approximately $112.3 million. During the year ended December 31, 2022, the Company subsequently completed non-cash exchanges of 2,800,000 shares of its common stock of Consensus with the lenders under the Fifth and Sixth Amendments to settle the Company’s obligations of $112.3 million outstanding aggregate principal amount of the Term Loan Facilities plus related interest. Refer to Note 10 - Debt for additional details. As of December 31, 2022, the Company continues to hold approximately 1.1 million shares of common stock of Investment in Consensus. The Investment in Consensus represents the investment in equity securities for which the Company elected the fair value option and subsequent fair value changes in the Consensus shares are included in the assets of and results from continuing operations. Refer to Note 5 - Investments and Note 6 - Discontinued Operations and Dispositions |
Allowances for Doubtful Accounts | Allowances for Credit Losses The Company maintains an allowance for credit losses on accounts receivable, which is recorded as a reduction to accounts receivable. Changes in the allowance are classified as ‘General and administrative’ expenses in the Consolidated Statements of Operations. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when it identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status. It also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. On an ongoing basis, management evaluates the adequacy of these reserves. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Refer to Note 3 - Revenues for additional details. Principal vs. Agent The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers , for principal-agent considerations and assesses: (i) if another party is involved in providing goods or services to the customer, (ii) whether the Company controls the specified goods or services prior to transferring control to the customer and (iii) whether the Company has discretion on pricing. Sales Taxes The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by the Company from a customer. Digital Media Digital Media revenues are earned primarily from the delivery of advertising services and from subscriptions to services and information. Revenue is earned from the delivery of advertising services on websites that are owned and operated by us and on those websites that are part of Digital Media’s advertising network. Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when any of the following performance obligations are satisfied: (i) when an advertisement is placed for viewing, (ii) when a qualified sales lead is delivered, (iii) when a visitor “clicks through” on an advertisement or (iv) when commissions are earned upon the sale of an advertised product. Revenue from subscriptions is earned through the granting of access to, or delivery of, data products or services to customers. Subscriptions cover video games and related content, health information, data and other copyrighted material. Revenues under such agreements are recognized over the contract term for use of the service. Revenues are also earned from listing fees, subscriptions to online publications, and from other sources. Subscription revenues are recognized over time. We also generate Digital Media subscription revenues through the license of certain assets to clients. Assets are licensed for clients’ use in their own promotional materials or otherwise and may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized over the contract term for use of the asset. In instances when technology assets are licensed to our clients, revenues from the license of these assets are recognized over the term of the access period. The Digital Media business also generates revenue from other sources which include marketing and production services. Such other revenues are generally recognized over the period in which the products or services are delivered. We also generate Digital Media revenues from transactions involving the sale of perpetual software licenses, related software support and maintenance, hardware used in conjunction with its software, and other related services. Revenue is recognized for these software transactions with multiple performance obligations after (i) the contract has been approved and we are committed to perform the respective obligations and (ii) we can identify and quantify each obligation and its respective selling price. Once the respective performance obligations have been identified and quantified, revenue will be recognized when the obligations are met, either over time or at a point in time depending on the nature of the obligation. Revenues from software license performance obligations are generally recognized upfront at the point in time that the software is made available to the customer to download and use. Revenues for related software support and maintenance performance obligations are related to technical support provided to customers as needed and unspecified software product upgrades, maintenance releases and patches during the term of the support period when they are available. We are obligated to make the support services available continuously throughout the contract period. Therefore, revenues for support contracts are generally recognized ratably over the contractual period the support services are provided. Hardware product and related software performance obligations, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a bundled performance obligation. The revenues for this bundled performance obligation are generally recognized at the point in time that the hardware and software products are delivered and ownership is transferred to the customer. Other service revenues are generally recognized over time as the services are performed. The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned and operated web properties, on third-party sites or on unaffiliated advertising networks; (ii) through the Company’s lead-generation business; and (iii) through the Company’s subscriptions. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third-party sites. Cybersecurity and Martech The Company’s Cybersecurity and Martech revenues substantially consist of subscription revenues which include subscription, usage-based fees, a significant portion of which are paid in advance. The Company defers the portions of monthly, quarterly, semi-annual and annual fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned. Along with its numerous proprietary Cybersecurity and Martech solutions, the Company also generates subscription revenues by reselling various third-party solutions, primarily through its email security line of business. These third-party solutions, along with the Company’s proprietary products, allow it to offer customers a variety of solutions to better meet the customer’s needs. The Company records revenue on a gross basis with respect to reseller revenue because the Company has control of the specified good or service prior to transferring control to the customer. Revenues from external customers classified by revenue source are as follows (in thousands). See Note 18 - Segment Information for additional information. Performance Obligations The Company is often a party to multiple concurrent contracts with the same customer, or a party related to that customer. These situations require judgment to determine if those arrangements should be accounted for as a single contract. Consideration of both the form and the substance of the arrangement is required. The Company’s contracts with customers may include multiple performance obligations, including complex contracts when advertising and licensing services are sold together. The Company determines the transaction price based on the amount to which the Company expects to be entitled in exchange for services provided. The Company includes any fixed consideration within its contracts as part of the total transaction price. The Company’s contracts occasionally contain some component of variable consideration, which is often immaterial and estimated. The Company does not include in the transaction price taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by us from the customer. Due to the nature of the services provided, there are no obligations for returns. |
Fair Value Measurements | Fair Value Measurements The Company complies with the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. The carrying values of cash and cash equivalents, accounts receivable, interest receivable, accounts payable, accrued expenses, interest payable, customer deposits, and long-term debt are reflected in the financial statements at cost. With the exception of certain investments and long-term debt, cost approximates fair value due to the short-term nature of such instruments. The fair value of the Company’s outstanding debt was determined using the quoted market prices of debt instruments with similar terms and maturities when available. As of the same dates, the carrying value of other long-term liabilities approximated fair value as the related interest rates approximate rates currently available to the Company. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers the balance of its investment in funds that substantially hold securities that mature within three months or less from the date the Company purchases these securities to be cash equivalents. The carrying amount of cash and cash equivalents either approximates fair value due to the short-term maturity of these instruments or are at fair value. |
Investments | Investments The Company accounts for its investments in debt securities in accordance with ASC Topic 320, Investments - Debt Securities (“ASC 320”). Debt investments are typically comprised of corporate debt securities, which are classified as available-for-sale. Available-for-sale securities are carried at fair value with unrealized gains and losses included in other comprehensive income. All debt securities are accounted for on a specific identification basis. The Company’s available-for-sale debt securities are carried at an estimated fair value with any unrealized gains or losses, net of taxes, included in accumulated other comprehensive loss on our Consolidated Balance Sheets. Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Expected credit losses on available-for-sale debt securities are recognized in loss on investments, net on our Consolidated Statements of Operations, and any remaining unrealized losses, net of taxes, are included in accumulated comprehensive loss on our Consolidated Balance Sheets. The Company accounts for its investments in equity securities in accordance with ASC Topic 321, Investments - Equity Securities (“ASC 321”) which requires the accounting for equity investments, other than those accounted for under the equity method of accounting, generally be measured at fair value for equity securities with readily determinable fair values. Equity securities without a readily determinable fair value, which are not accounted for under the equity method of accounting, are measured at their cost, less impairment, if any, and adjusted for observable price changes arising from orderly transactions in the same or similar investment from the same issuer. Any unrealized gains or losses will be reported within earnings on our Consolidated Statements of Operations. The Company assesses whether an other-than-temporary impairment loss on an investment has occurred due to declines in fair value or other market conditions. Refer to Note 5 - Investments for additional information. |
Variable Interest Entities (“VIE”s) | Variable Interest Entities (“VIE”s) A VIE requires consolidation by the entity’s primary beneficiary. The Company evaluates its investments in entities in which it is involved to determine if the entity is a VIE and if so, whether it holds a variable interest and is the primary beneficiary. The Company has determined that it holds a variable interest in its investment as a limited partner in the OCV Fund I, LP (“OCV Fund”, “OCV” or the “Fund”), as well as, another independent corporation. In determining whether the Company is deemed to be the primary beneficiary of the VIE, both of the following characteristics must be present: a) the Company has the power to direct the activities of the VIE that most significantly impact the VIEs economic performance (the power criterion); and b) the Company has the obligation to absorb losses of the VIE, or the right to receive benefits of the VIE, that could potentially be significant to the VIE (the economic criterion). The Company has concluded that, as a limited partner in OCV, although the obligations to absorb losses or the right to benefit from the gains is not insignificant, the Company does not have “power” over OCV because it does not have the ability to direct the significant decisions which impact the economics of OCV. The Company believes that the OCV general partner, as a single decision maker, holds the ability to make the decisions about the activities that most significantly impact the OCV Fund’s economic performance. As a result, the Company has concluded that it will not consolidate OCV, as it is not the primary beneficiary of the OCV Fund, and will account for this investment under the equity-method of accounting (see Note 5 - Investments ). OCV qualifies as an investment company under ASC Topic 946, Financial Services, Investment Companies (“ASC 946”). Under ASC Topic 323, Investments - Equity Method and Joint Ventures , an investor that holds investments that qualify for specialized industry accounting for investment companies in accordance with ASC 946 should record its share of the earnings or losses, realized or unrealized, as reported by its equity method investees in the Consolidated Statements of Operations. The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline. |
Debt Issuance Costs and Debt Discount | Debt Issuance Costs and Debt Discount The Company capitalizes costs incurred with borrowing and issuance of debt securities and records debt issuance costs and discounts as a reduction to the debt amount. These costs and discounts are amortized and included in interest expense over the life of the borrowing using the effective interest method. |
Concentration of Credit Risk | Concentration of Credit RiskThe Company primarily invests its cash, cash equivalents and marketable securities with major financial institutions primarily within the United States, Canada, United Kingdom, and the European Union. These investments are made in accordance with the Company’s investment policy with the principal objectives being preservation of capital, fulfillment of liquidity needs and above market returns commensurate with preservation of capital. The Company’s investment policy also requires that investments in marketable securities be in only highly rated instruments, with limitations on investing in securities of any single issuer. However, these investments are not insured against the possibility of a total or near complete loss of earnings or principal and are inherently subject to the credit risk related to the continued credit worthiness of the underlying issuer and general credit market risks. |
Foreign Currency | Foreign CurrencyMost of the Company’s foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities are translated at exchange rates prevailing at the balance sheet dates. Revenues and expenses are translated into U.S. Dollars at average exchange rates for the period. Gains and losses resulting from translation are recorded as a component of accumulated other comprehensive income/(loss). |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Equipment under a finance lease is stated at the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets and is recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Operations. The estimated useful lives of property and equipment range from one |
Impairment or Disposal of Long-Lived Assets | Impairment or Disposal of Long-Lived Assets The Company accounts for long-lived assets, which include property and equipment, operating lease right-of-use assets and identifiable intangible assets with finite useful lives (subject to amortization), in accordance with the provisions of ASC Topic 360, Property, Plant, and Equipment (“ASC 360”), which requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset to the expected undiscounted future net cash flows generated by the asset. If it is determined that the asset may not be recoverable, and if the carrying amount of an asset exceeds its estimated fair value, an impairment charge is recognized to the extent of the difference. The Company assesses the impairment of identifiable definite-lived intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it considers important which could individually or in combination trigger an impairment include the following: • Significant underperformance relative to expected historical or projected future operating results; • Significant changes in the manner of our use of the acquired assets or the strategy for the Company’s overall business; • Significant negative industry or economic trends; • Significant decline in the Company’s stock price for a sustained period; and • The Company’s market capitalization relative to net book value. If the Company determined that the carrying value of definite-lived intangibles and long-lived assets may not be recoverable based upon the existence of one or more indicators of impairment, it would record an impairment equal to the excess of the carrying amount of the asset over its estimated fair value. The Company assessed whether events or changes in circumstances have occurred that potentially indicate the carrying amount of definite-lived assets may not be recoverable. During the years ended December 31, 2022, 2021 and 2020, the Company did not have any events or circumstances indicating impairment of long-lived assets, other than the recording of an impairment of certain operating lease right-of-use assets and associated property and equipment. The Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a permanent “remote” or “partial remote” work model. The impairment is presented in general and administrative expense on our Consolidated Statements of Operations. Refer to Note 11 - Leases for additional details. |
Business Combinations and Valuation of Goodwill and Intangible Assets | Business Combinations and Valuation of Goodwill and Intangible Assets The Company applies the acquisition method of accounting for business combinations in accordance with GAAP and uses estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets, including identifiable intangible assets and liabilities acquired. Such estimates may be based on significant unobservable inputs and assumptions such as, but not limited to, future revenue growth rates, gross and operating margins, customer attrition rates, royalty rates, discount rates and terminal growth rate assumptions. The Company uses established valuation techniques and may engage reputable valuation specialists to assist with the valuations. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets. Intangible assets subject to amortization are amortized over the period of estimated economic benefit ranging from one Intangibles - Goodwill and Other (“ASC 350”), which provides that goodwill and other intangible assets with indefinite lives are not amortized but tested annually for impairment or more frequently if the Company believes indicators of impairment exist. In connection with the annual impairment test for goodwill, the Company has the option to perform a qualitative assessment in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, it then it performs an impairment test of goodwill. The impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. The Company generally determines the fair value of its reporting units using a mix of an income approach and a market approach. If the carrying value of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized for the difference. During the years ended December 31, 2022, 2021, and 2020 the Company recorded a goodwill impairment of $27.4 million, $32.6 million and zero, respectively. Refer to Note 9 - Goodwill and Intangible Assets for additional details. |
Contingent Consideration | Contingent Consideration Certain of the Company’s acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future income thresholds or other metrics. The contingent earn-out arrangements are based upon the Company’s valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, the Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and records the estimated fair value of contingent consideration as a liability on the Consolidated Balance Sheets. The Company considers several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former shareholders of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of the Company’s other key employees. The contingent earn-out payments are not affected by employment termination. The Company measures its contingent earn-out liabilities in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy (see Note 7 - Fair Value Measurements ). The Company may use various valuation techniques depending on the terms and conditions of the contingent consideration, including a Monte-Carlo simulation. This simulation uses a probability distribution for each significant input to produce hundreds or thousands of possible outcomes and the results are analyzed to determine probabilities of different outcomes occurring. Significant increases or decreases to these inputs in isolation would result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings. The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our Consolidated Statements of Cash Flows. Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities. The Company reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior amounts. Changes in the estimated fair value of its contingent earn-out liabilities and adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in general and administrative expenses on our Consolidated Statements of Operations. |
Self-Insurance Program | Self-Insurance Program The Company provides health and dental insurance plans to certain of its employees through a self-insurance structure. The Company has secured reinsurance in the form of a two tiered stop-loss coverage that limits the exposure arising from any claims made. Self-insurance claims filed and claims incurred but not reported are accrued based on management’s estimate of the discounted ultimate costs for self-insured claims incurred using actuarial assumptions followed in the insurance industry and historical experience. Although management believes it has the ability to reasonably estimate losses related to claims, it is possible that actual results could differ from recorded self-insurance liabilities. |
Income Taxes | Income Taxes The Company’s income is subject to taxation in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the Company believes that certain positions might be challenged despite the Company’s belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities to be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. The valuation allowance is reviewed quarterly based upon the facts and circumstances known at the time. In assessing this valuation allowance, the Company reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable. ASC 740 provides guidance on the minimum threshold that an uncertain income tax benefit is required to meet before it can be recognized in the financial statements and applies to all income tax positions taken by a company. ASC 740 contains a two-step approach to recognizing and measuring uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit will be recorded. Uncertain income tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company |
Share-Based Compensation | Share-Based Compensation The Company accounts for share-based awards to employees and non-employees in accordance with the provisions of ASC Topic 718, Compensation - Stock Compensation (“ASC 718”), which requires compensation cost, measured at the grant date fair value, to be recognized over the employee’s requisite service period using the straight-line method. The measurement of share-based compensation expense is based on several criteria, including but not limited to the valuation model used and associated input factors, such as expected term of the award, stock price volatility, risk free interest rate, dividend rate, and award cancellation rate. Certain of these inputs are subjective and are determined using management’s judgment. If differences arise between the assumptions used in determining share-based compensation expense and the actual factors, which become known over time, the Company may change the input factors used in determining future share-based compensation expense. Any such changes could materially impact the Company’s results of operations in the period in which the changes are made and in periods thereafter. The Company estimates the vesting term based upon the historical exercise behavior of its employees. |
Earnings Per Common Share (“EPS”) | Earnings Per Common Share (“EPS”) EPS is calculated pursuant to the two-class method as defined in ASC Topic 260, Earnings per Share (“ASC 260”), which specifies that all outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends or dividend equivalents are considered participating securities and should be included in the computation of EPS pursuant to the two-class method. Basic EPS is calculated by dividing net distributed and undistributed earnings allocated to common shareholders, excluding participating securities, by the weighted-average number of common shares outstanding. The Company’s participating securities consist of its unvested share-based payment awards that contain rights to non-forfeitable dividends or dividend equivalents. On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Research, Development and Engineering | Research, Development and EngineeringResearch, development and engineering costs are expensed as incurred. Costs for software development incurred subsequent to establishing technological feasibility, in the form of a working model, are capitalized and amortized over their estimated useful lives. |
Segment Reporting | Segment Reporting ASC Topic 280, Segment Reporting (“ASC 280”), establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company’s business segments are based on the organization structure used by the chief operating decision maker for making operating and investment decisions and for assessing performance. The Company has two reportable segments: (i) Digital Media and (ii) Cybersecurity and Martech. Refer to Note 18 - Segment Information for additional detail. |
Advertising Costs | Advertising CostsThe Company incurs external advertising costs to promote its brands. These costs primarily consist of expenses related to digital advertising on websites and apps of third parties, creative services, trade shows and similar events, marketing expenses, and marketing intelligence expenses. Advertising costs are expensed as incurred. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements In August 2020, the FASB issued ASU 2020-06. The provisions of this update simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt - Debt with Conversion and Other Options , for convertible instruments. The convertible debt instruments are be accounted for as a single liability at the amortized cost if separation is no longer required unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. Among other potential impacts, this change is expected to reduce reported noncash interest expense, increase reported net income, and result in a reclassification of certain conversion feature balance sheet amounts from stockholders’ equity to liabilities. Similarly, the debt discount, which is equal to the carrying value of the embedded conversion feature upon issuance, will no longer be amortized into income as interest expense over the life of the instrument. Additionally, ASU 2020-06 requires the use of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, which includes the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards . On January 1, 2022, the Company adopted ASU 2020-06 Debt below) by approximately $85.9 million, increased retained earnings by approximately $23.4 million, reduced deferred tax liabilities by approximately $21.2 million and reduced additional paid-in capital by approximately $88.1 million. The effect of the change on the earnings per share of the Company was an increase of $0.25 on each Basic and Diluted Net income per common share from continuing operations for the year ended December 31, 2022. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This update requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606. This update is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2022, with early adoption permitted, including in interim periods. The Company early adopted ASU 2021-08 during the second quarter of 2022. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. Therefore, the adoption of ASU 2021-08 was applied retrospectively to January 1, 2022. The adoption of ASU 2021-08 did not have a material impact on our consolidated financial statements and related disclosures. Recently issued applicable accounting pronouncements not yet adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This update provides for optional financial reporting alternatives to reduce cost and complexities associated with accounting for contracts, hedging relationships, and other transactions affected by reference rate reform. This update applies only to contracts, hedging relationships, and other transactions that reference London Interbank Offer Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The accommodations were available for all entities through December 31, 2022, with early adoption permitted. This update was later amended by ASU 2022-06. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 . This update defers the expiration date of ASC Topic 848 from December 31, 2022 to December 31, 2024. We are currently evaluating the effect the adoption of this update will have on our consolidated financial statements and related disclosures. |
Reclassifications | Reclassifications Certain prior year reported amounts have been reclassified to conform with the 2022 presentation. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Credit Losses | The rollforward of allowance for credit losses on Accounts receivable, net is as follows (in thousands): Year ended December 31, 2022 2021 2020 Beginning balance $ 9,811 $ 11,552 $ 8,480 (Decreases) increases to bad debt expense (255) 3,107 5,315 Write-offs, net of recoveries (2,688) (4,848) (2,243) Ending balance $ 6,868 $ 9,811 $ 11,552 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues from external customers classified by revenue source are as follows (in thousands). See Note 18 - Segment Information for additional information. Year ended December 31, Digital Media 2022 2021 2020 Advertising $ 788,135 $ 838,075 $ 627,198 Subscription 244,694 197,354 166,219 Other 46,343 33,871 17,943 Total Digital Media revenues $ 1,079,172 $ 1,069,300 $ 811,360 Cybersecurity and Martech Subscription $ 312,626 $ 348,611 $ 347,697 Total Cybersecurity and Martech revenues $ 312,626 $ 348,611 $ 347,697 Corporate $ — $ — $ 1 Elimination of inter-segment revenues (801) (1,189) (229) Total Revenues $ 1,390,997 $ 1,416,722 $ 1,158,829 Timing of revenue recognition Point in time $ 46,770 $ 42,276 $ 27,685 Over time 1,344,227 1,374,446 1,131,144 Total $ 1,390,997 $ 1,416,722 $ 1,158,829 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Allocation of Aggregate Purchase Consideration | The following table summarizes the allocation of the preliminary purchase consideration for all 2022 acquisitions as of December 31, 2022 (in thousands): Assets and Liabilities Valuation Accounts receivable $ 7,433 Prepaid expenses and other current assets 4,915 Property and equipment 369 Operating lease right-of-use assets, noncurrent 545 Trade names 12,839 Customer relationships 20,040 Goodwill 95,737 Other intangibles 18,166 Other long-term assets 11 Accounts payable and accrued expenses (6,221) Deferred revenue (21,474) Deferred tax liability (10,140) Other long-term liabilities (516) Total $ 121,704 The following table summarizes the allocation of the purchase consideration for all 2021 acquisitions as of December 31, 2021, including individually material acquisitions noted separately (in thousands): Assets and Liabilities Valuation Accounts receivable $ 9,513 Prepaid expenses and other current assets 1,655 Property and equipment 2,188 Operating lease right-of-use assets, noncurrent 5,888 Trade names 16,349 Customer relationships 21,945 Goodwill 97,032 Other intangibles 38,894 Other long-term assets 62 Deferred tax asset 230 Accounts payable and accrued expenses (5,863) Deferred revenue (9,491) Operating lease liabilities, current (7,191) Other current liabilities (14) Deferred tax liability (9,237) Other long-term liabilities (1,511) Total $ 160,449 The following table summarizes the allocation of the purchase consideration for the SEOmoz acquisition (in thousands): Assets and Liabilities Valuation Accounts receivable $ 3,278 Prepaid expenses and other current assets 1,547 Property and equipment 1,845 Operating lease right of use asset 5,888 Trade names 7,406 Customer relationships 5,000 Goodwill 41,329 Other intangibles 22,777 Other long-term assets 62 Accounts payables and accrued expenses (2,655) Other current liabilities (14) Deferred revenue (6,398) Operating lease liabilities, current (7,191) Deferred tax liability (5,327) Other long-term liabilities (550) Total $ 66,997 The following table summarizes the allocation of the purchase consideration for all 2020 acquisitions, including individually material acquisitions noted separately (in thousands): Assets and Liabilities Valuation Accounts receivable $ 46,138 Prepaid expenses and other current assets 9,105 Property and equipment 2,204 Operating lease right of use asset 10,644 Trade names 66,763 Customer relationships 214,347 Goodwill 202,901 Other intangibles 56,424 Other long-term assets 685 Deferred tax asset 992 Accounts payables and accrued expenses (28,979) Deferred revenue (21,918) Operating lease liabilities, current (4,520) Long-term debt (910) Operating lease liabilities, noncurrent (13,104) Income taxes payable (3,297) Liability for uncertain tax positions (1,576) Deferred tax liability (53,870) Other long-term liabilities (9,269) Total $ 472,760 The following table summarizes the allocation of the purchase consideration for the RetailMeNot, Inc. acquisition (in thousands): Assets and Liabilities Valuation Accounts receivable $ 40,525 Prepaid expenses and other current assets 7,367 Property and equipment 587 Operating lease right of use asset 10,313 Trade names 62,940 Customer relationships 198,840 Goodwill 169,581 Other intangibles 42,610 Other long-term assets 494 Deferred tax asset 605 Accounts payables and accrued expenses (24,526) Deferred revenue (11,175) Operating lease liabilities, current (4,029) Operating lease liabilities, noncurrent (13,085) Income taxes payable (3,308) Liability for uncertain tax positions (1,576) Deferred tax liability (52,504) Other long-term liabilities (9,275) Total $ 414,384 |
Supplementary Information on Unaudited Pro Forma Financial Basis | The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2022 acquisitions as if each acquisition had occurred on January 1, 2021 (in thousands, except per share amounts): Year ended December 31, 2022 2021 (unaudited) Revenues $ 1,407,300 $ 1,461,178 Net income from continuing operations $ 64,877 $ 398,201 Income per common share from continuing operations - Basic $ 1.38 $ 8.67 Income per common share from continuing operations - Diluted $ 1.38 $ 8.31 The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2021 acquisitions as if each acquisition had occurred on January 1, 2020 (in thousands, except per share amounts): Year ended December 31, 2021 2020 (unaudited) Revenues $ 1,482,323 $ 1,267,280 Net income from continuing operations $ 416,348 $ 33,351 Income per common share from continuing operations - Basic $ 9.06 $ 0.72 Income per common share from continuing operations - Diluted $ 8.69 $ 0.71 The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and SEOmoz as if the acquisition had occurred on January 1, 2020 (in thousands, except per share amounts): Year ended December 31, 2021 2020 (unaudited) Revenues $ 1,438,099 $ 1,207,910 Net income from continuing operations $ 406,281 $ 29,382 Income per common share from continuing operations - Basic $ 8.84 $ 0.63 Income per common share from continuing operations - Diluted $ 8.48 $ 0.62 The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2020 acquisitions as if each acquisition had occurred on January 1, 2020 (in thousands, except per share amounts): Year ended December 31, 2020 (unaudited) Revenues $ 1,339,927 Net income from continuing operations $ 21,450 Income per common share from continuing operations - Basic $ 0.46 Income per common share from continuing operations - Diluted $ 0.45 The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and RetailMeNot, Inc. as if the acquisition had occurred on January 1, 2020 (in thousands, except per share amounts): Year ended December 31, 2020 (unaudited) Revenues $ 1,308,731 Net income from continuing operations $ 23,395 Income per common share from continuing operations - Basic $ 0.50 Income per common share from continuing operations - Diluted $ 0.49 |
Contractual Obligation, Fiscal Year Maturity | As of December 31, 2022, future payments associated with long-term contractual obligations for holdback payments in connection with all business acquisitions are as follows (in thousands): 2023 $ 19,208 2024 7,359 $ 26,567 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Debt Securities, Trading, and Equity Securities, FV-NI | Gains (losses) on equity securities recognized in ‘Unrealized gain (loss) on short-term investments held at the reporting date’ consisted of the following (in thousands): Year ended December 31, 2022 2021 Net (losses) gains during the period $ (53,888) $ 298,490 Less: losses on securities sold during the period (46,743) — Unrealized (losses) gains recognized during the period on short-term investments held at the reporting date $ (7,145) $ 298,490 |
Summary of Securities without Readily Determinable Fair Value | The following table summarizes the historical cost and estimated fair values for the Company’s securities without a readily determinable fair value as of December 31, 2021 and 2020 (in thousands). Impairment losses are included within Loss on investments, net in the Consolidated Statements of Operations. As of December 31, 2021 2020 Cost $ 17,156 $ 50,384 Impairment (16,677) (19,605) Adjustments (479) (479) Reported amount $ — $ 30,300 |
Summary of Available-for-sale Investments | The table below summarizes the carrying value and the maximum exposure of Company’s investment in corporate debt securities as of December 31, 2022 (in thousands): December 31, 2022 Fair value Maximum exposure Investment in corporate debt securities $ 15,586 $ 15,586 The following table summarizes the gross unrealized gains and losses and fair values for investments classified as available-for-sale (in thousands): Amortized Gross Unrealized Gross Unrealized Fair December 31, 2022 Investment in corporate debt securities $ 15,000 $ 586 $ — $ 15,586 December 31, 2021 Investment in corporate debt securities $ — $ — $ — $ — December 31, 2020 Investment in corporate debt securities $ 511 $ 152 $ — $ 663 |
Unrealized Gain (Loss) on Investments | |
Available-for-Sale Securities Classified by Contractual Maturity Date | The following table summarizes the Company’s corporate debt securities designated as available-for-sale, classified by the contractual maturity date of the security (in thousands): December 31, 2022 2021 Due within 1 year $ — $ — Due within more than 1 year but less than 5 years 15,586 — Due within more than 5 years but less than 10 years — — Due 10 years or after — — Total $ 15,586 $ — |
Carrying Amount for Equity Method Investment | The following table discloses the carrying amount for the Company’s equity method investment (in thousands). These equity securities are included within ‘Long-term investments’ in the Consolidated Balance Sheets. December 31, 2022 December 31, 2021 Carrying value Maximum exposure Carrying value Maximum exposure Equity method investment $ 112,285 $ 112,285 $ 122,593 $ 122,593 |
Discontinued Operations and D_2
Discontinued Operations and Disposal Groups (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | The key components of cash flows from discontinued operations were as follows (in thousands): Year ended December 31, 2021 2020 Capital expenditures $ 15,252 $ 16,237 Depreciation and amortization $ 9,010 $ 22,759 Loss on debt extinguishment $ 8,750 $ 37,969 Amortization of financing costs and discounts $ — $ 1,171 Foreign currency remeasurement gain $ — $ 31,537 Deferred taxes $ 8,015 $ 5,534 The key components of income from discontinued operations were as follows (in thousands): Year ended December 31, 2022 2021 2020 Revenues $ — $ 270,248 $ 330,764 Cost of revenues — (44,306) (53,379) Sales and marketing — (40,980) (47,116) Research, development and engineering — (5,814) (7,146) General and administrative — (39,279) (26,852) Interest expense and other — (13,856) (44,220) Income before income taxes — 126,013 152,051 Income tax expense (1,709) (30,694) (30,043) (Loss) income from discontinued operations, net of income taxes $ (1,709) $ 95,319 $ 122,008 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | The weighted averages below are a product of the unobservable input and fair value of the contingent consideration arrangement as of December 31, 2021. Valuation Technique Unobservable Input Range Weighted Average Contingent Consideration Option-Based Model Risk free rate 1.9% - 2.2% 2.0 % Debt spread 0.0% - 74.7% 13.6 % Probabilities 10.0% - 100.0% 80.5 % Present value factor 2.2% - 26.9% 19.0 % Discount rate 27.3% - 38.0% 30.7 % |
Fair Values of Financial Instruments Measured On Recurring Basis | The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands): December 31, 2022 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 312,010 $ — $ — $ 312,010 $ 312,010 Investment in corporate debt securities — — 15,586 15,586 15,586 Investment in Consensus 58,421 — — 58,421 58,421 Total assets measured at fair value $ 370,431 $ — $ 15,586 $ 386,017 $ 386,017 Liabilities: Contingent consideration $ — $ — $ 555 $ 555 $ 555 Debt 939,319 — — 939,319 999,053 Total liabilities measured at fair value $ 939,319 $ — $ 555 $ 939,874 $ 999,608 December 31, 2021 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 144,255 $ — $ — $ 144,255 $ 144,255 Investment in Consensus 229,200 — — 229,200 229,200 Total assets measured at fair value $ 373,455 $ — $ — $ 373,455 $ 373,455 Liabilities: Contingent consideration $ — $ — $ 5,775 $ 5,775 $ 5,775 Debt 1,345,311 — — 1,345,311 1,090,627 Total liabilities measured at fair value $ 1,345,311 $ — $ 5,775 $ 1,351,086 $ 1,096,402 |
Reconciliation of Level 3 Financial Assets Measured on Recurring Basis | The following table presents a reconciliation of the Company’s Level 3 financial assets related to our investment in corporate debt securities that are measured at fair value on a recurring basis (in thousands): Level 3 Affected line item in the Statement of Operations Balance as of January 1, 2022 $ — Investment in corporate debt securities 15,586 Not applicable Balance as of December 31, 2022 $ 15,586 |
Reconciliation of Level 3 Financial Liabilities Measured on Recurring Basis | The following table presents a reconciliation of the Company’s Level 3 financial liabilities related to contingent consideration that are measured at fair value on a recurring basis (in thousands): Level 3 Affected line item in the Statement of Operations Balance as of January 1, 2021 $ 5,022 Contingent consideration 4,713 Total fair value adjustments reported in earnings (1,910) General and administrative Contingent consideration payments (2,050) Not applicable Balance as of December 31, 2021 $ 5,775 Contingent consideration 555 Total fair value adjustments reported in earnings (2,575) General and administrative Contingent consideration payments (3,200) Not applicable Balance as of December 31, 2022 $ 555 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, stated at cost, consists of the following (in thousands): December 31, 2022 2021 Computer hardware, software and related equipment $ 424,275 $ 343,101 Furniture and equipment 881 934 Leasehold improvements 8,614 8,287 433,770 352,322 Less: Accumulated depreciation and amortization (255,586) (191,113) Total property and equipment, net $ 178,184 $ 161,209 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes In Carrying Amounts Of Goodwill | The changes in carrying amounts of goodwill for the years ended December 31, 2022 and 2021 are as follows (in thousands): Digital Media Cybersecurity and Martech Consolidated Balance as of January 1, 2021 $ 942,934 $ 582,066 $ 1,525,000 Goodwill acquired (Note 4) 55,704 41,328 97,032 Goodwill removed due to sale of businesses (1) — (50,277) (50,277) Goodwill impairment — (32,629) (32,629) Purchase accounting adjustments (2) (1,437) 505 (932) Foreign exchange translation (542) (6,197) (6,739) Balance as of December 31, 2021 $ 996,659 $ 534,796 $ 1,531,455 Goodwill acquired (Note 4) 95,737 — 95,737 Goodwill impairment (27,369) — (27,369) Purchase accounting adjustments (2) 4,475 (137) 4,338 Foreign exchange translation (3,513) (9,174) (12,687) Balance as of December 31, 2022 $ 1,065,989 $ 525,485 $ 1,591,474 (1) On February 9, 2021, in a cash transaction, the Company sold certain of its Voice assets in the United Kingdom which resulted in $1.3 million of goodwill being removed in connection with this sale and on September 17, 2021, the Company sold certain of its B2B Backup assets which resulted in $49.0 million of goodwill being removed in connection with the sale (see Note 6 - Discontinued Operations and Dispositions). (2) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions (see Note 4 - B usiness Acquisitions ). |
Intangible Assets Subject to Amortization | As of December 31, 2022, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Accumulated Net Trade names 10.0 years $ 261,614 $ 125,422 $ 136,192 Customer relationships (1) 7.9 years 687,798 479,741 208,057 Other purchased intangibles 8.3 years 481,973 363,407 118,566 Total $ 1,431,385 $ 968,570 $ 462,815 (1) The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. As of December 31, 2021, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Historical Accumulated Net Trade names 9.7 years $ 250,418 $ 102,657 $ 147,761 Customer relationships (1) 8.1 years 673,847 398,396 275,451 Other purchased intangibles 9.3 years 467,028 317,515 149,513 Total $ 1,391,293 $ 818,568 $ 572,725 (1) The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | During the year ended December 31, 2022, the Company completed acquisitions (see Note 4 - Business Acquisitions ) which were individually immaterial. The identified intangible assets were recognized as part of all 2022 acquisitions and their respective estimated weighted average amortizations were as follows as of December 31, 2022 (in thousands): Weighted-Average Amortization Period Carrying Value Trade names 9.6 years $ 12,423 Customer relationships 7.3 years 18,714 Other purchased intangibles 2.4 years 17,567 Total $ 48,704 |
Expected Amortization Expenses for Intangible Assets Subject To Amortization | Expected amortization expenses for intangible assets subject to amortization at December 31, 2022 are as follows (in thousands): Fiscal Year: 2023 $ 139,975 2024 99,158 2025 76,614 2026 68,813 2027 29,467 Thereafter 48,788 Total expected amortization expense $ 462,815 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Long-term debt consists of the following (in thousands): December 31, 2022 2021 4.625% Senior Notes $ 460,038 $ 641,276 Convertible Notes: 1.75% Convertible Notes 550,000 550,000 Total Notes 1,010,038 1,191,276 Less: Unamortized discount (2,764) (91,593) Deferred issuance costs (8,221) (9,056) Total debt 999,053 1,090,627 Less: current portion — (54,609) Total long-term debt, less current portion $ 999,053 $ 1,036,018 |
Future Principal Payments for Debt | At December 31, 2022, future principal and interest payments for debt are as follows (in thousands): Principal Interest 2023 $ — $ 30,902 2024 — 30,902 2025 — 30,902 2026 550,000 30,902 2027 — 21,276 Thereafter 460,038 63,830 $ 1,010,038 $ 208,714 |
Schedule of Repurchase Agreements | epurchases of 4.625% Senior Notes on the open market (excluding those from a tender offer) were as follows (in thousands): Year ended December 31, 2022 2021 Principal repurchased $ 181,238 $ 25,391 Aggregate purchase price $ 167,661 $ 26,035 (Gain) loss on repurchase (1) $ (12,060) $ 644 |
Schedule of Debt | The following table provides additional information on the 4.625% Senior Notes (in thousands): December 31, 2022 2021 Principal amount of 4.625% Senior Notes $ 460,038 $ 641,276 Less: Unamortized discount (2,764) (4,259) Less: Debt issuance costs (874) (1,339) Net carrying amount of 4.625% Senior Notes $ 456,400 $ 635,678 The following table provides the components of interest expense related to 4.625% Senior Notes (in thousands): Year ended December 31, 2022 2021 2020 Coupon interest expense $ 24,500 $ 33,899 $ 8,094 Non-cash amortization of discount on 4.625% Senior Notes 333 529 103 Amortization of debt issuance costs 109 66 29 Total interest expense related to 4.625% Senior Notes $ 24,942 $ 34,494 $ 8,226 |
Components of Interest Expense Related to Convertible Notes | The following table provides the components of interest expense related to the 3.25% Convertible Notes (in thousands): Year ended December 31, 2021 2020 Coupon interest expense $ 5,994 $ 13,080 Non-cash amortization of discount on 3.25% Convertible Notes 4,645 9,717 Amortization of debt issuance costs 855 1,749 Total interest expense related to 3.25% Convertible Notes $ 11,494 $ 24,546 The following table provides the components of interest expense related to the 1.75% Convertible Notes (in thousands): Year Ended December 31, 2022 (1) 2021 2020 Coupon interest expense $ 9,776 $ 9,625 $ 9,653 Non-cash amortization of discount on 1.75% Convertible Notes — 15,338 14,563 Amortization of debt issuance costs 1,858 1,173 1,098 Total interest expense related to 1.75% Convertible Notes $ 11,634 $ 26,136 $ 25,314 (1) On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective method. At the time of adoption, the Company de-recognized the remaining unamortized debt discount. No amortization of debt discount was recorded during the year ended December 31, 2022. |
Additional Information Related to Convertible Notes | The following table provides additional information related to the 1.75% Convertible Notes (in thousands): December 31, 2022 2021 Additional paid-in capital $ — $ 88,137 Principal amount of 1.75% Convertible Notes $ 550,000 $ 550,000 Less: Unamortized discount of the liability component — (87,334) Less: Carrying amount of debt issuance costs (7,347) (7,717) Net carrying amount of 1.75% Convertible Notes $ 542,653 $ 454,949 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Balance Sheet and Other Supplemental Operating Lease Information | Operating right-of-use assets are included in ‘Other assets’ on the Consolidated Balance Sheets. Operating lease liabilities are included in ‘Other current liabilities’ and ‘Other noncurrent liabilities’, respectively, on the Consolidated Balance Sheets as follows (in thousands): December 31, 2022 2021 Operating lease right-of-use assets $ 40,640 $ 55,617 Operating lease liabilities, current $ 22,153 $ 27,156 Operating lease liabilities, noncurrent 33,996 53,708 Total operating lease liabilities $ 56,149 $ 80,864 Other supplemental operating lease information consists of the following: December 31, 2022 2021 Operating leases: Weighted average remaining lease term 3.3 years 3.9 years Weighted average discount rate 3.08 % 3.48 % |
Components of Lease Expense and Supplemental Cash Flow Information | The components of lease expense are as follows (in thousands): Year ended December 31, 2022 2021 Operating lease cost $ 17,656 $ 31,396 Short-term lease cost (1) 1,127 2,754 Total lease cost $ 18,783 $ 34,150 (1) The Company made an election to account for a short-term lease payments on a straight-line basis over the term of the lease. |
Maturities of Operating Lease Liabilities | As of December 31, 2022, maturities of operating lease liabilities were as follows (in thousands): 2023 $ 23,000 2024 17,453 2025 8,527 2026 5,470 2027 2,443 Thereafter 2,445 Total lease payments $ 59,338 Less: Imputed interest 3,189 Present value of operating lease liabilities $ 56,149 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Tax | The continuing operations income tax (expense) benefit consisted of the following (in thousands): Year ended December 31, 2022 2021 2020 Current: Federal $ (42,698) $ 8,435 $ (15,112) State (12,184) 248 (4,300) Foreign (16,066) (15,931) (18,631) Total current (70,948) (7,248) (38,043) Deferred: Federal 12,667 17,132 6,022 State (1,577) 5,044 67 Foreign 1,901 (729) (6,396) Total deferred 12,991 21,447 (307) Income tax (expense) benefit from continuing operations $ (57,957) $ 14,199 $ (38,350) |
Reconciliation of Statutory Federal Income Tax Rate with Effective Income Tax Rate | A reconciliation of the statutory federal income tax rate with the Company’s continuing operations effective income tax rate is as follows: Year ended December 31, 2022 2021 2020 Statutory tax rate 21.0 % 21.0 % 21.0 % State income taxes, net 5.0 (1.3) 1.8 Foreign rate differential 1.0 (0.3) 2.8 Foreign income inclusion 5.4 0.7 5.2 Foreign tax credit (5.1) (0.8) (4.3) Reserve for uncertain tax positions (3.2) (2.4) 11.5 Valuation allowance — (1.7) 9.9 Impact on deferred taxes of enacted tax law and rate changes 1.4 (0.5) 3.3 Tax credits and incentives (5.0) (1.5) (7.2) Mark-to market on investment in Consensus 22.1 (18.0) — Return to provision adjustments 1.1 0.5 2.4 Executive compensation 1.5 0.7 2.7 Other (1.0) (0.4) (0.2) Effective tax rates 44.2 % (4.0) % 48.9 % |
Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Temporary differences and carryforwards which give rise to deferred tax assets and liabilities from continuing operations are as follows (in thousands): Years Ended December 31, 2022 2021 Deferred tax assets: Net operating loss and other carryforwards $ 19,513 $ 28,393 Tax credit carryforwards 4,222 2,801 Accrued expenses 10,702 12,548 Allowance for bad debt 1,445 2,116 Share-based compensation expense 3,885 3,545 Operating lease liabilities 16,756 21,771 Basis difference in fixed assets 14,642 — Deferred revenue 2,994 4,331 State taxes 4,447 3,771 Other 3,920 4,351 82,526 83,627 Less: valuation allowance (1,699) (1,812) Total deferred tax assets $ 80,827 $ 81,815 Deferred tax liabilities: Basis difference in property and equipment $ — $ (8,337) Operating lease right-of-use assets (14,008) (16,696) Basis difference in intangible assets (101,797) (117,244) Unrealized gains on investments (24,123) (11,291) Prepaid insurance (2,744) (3,121) Convertible debt — (21,972) Other (8,639) (6,219) Total deferred tax liabilities (151,311) (184,880) Net deferred tax liabilities $ (70,484) $ (103,065) |
Reconciliation of Unrecognized Tax Benefits | The aggregate changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for 2022, 2021 and 2020, is as follows (in thousands): Year ended December 31, 2022 2021 2020 Beginning balance $ 39,527 $ 46,032 $ 43,687 Increases related to tax positions during a prior year — 3,448 3,953 Decreases related to tax positions taken during a prior year (2,816) (5,511) (244) Increases related to tax positions taken in the current year 819 4,675 4,264 Settlements — — (5,628) Decreases related to expiration of statute of limitations (3,322) (9,117) — Ending balance $ 34,208 $ 39,527 $ 46,032 |
Summary of Valuation Allowance on Deferred Tax Assets From Continuing Operations | The rollforward of the valuation allowance on the deferred tax assets from continuing operations is as follows (in thousands): Year ended December 31, 2022 2021 2020 Beginning balance $ 1,812 $ 8,262 $ 563 Charges to costs and expenses — 178 9,456 Write-offs and recoveries (113) (6,628) (1,757) Ending balance $ 1,699 $ 1,812 $ 8,262 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Options Activity | Stock option activity for the years ended December 31, 2022, 2021 and 2020 is summarized as follows: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value Options outstanding at January 1, 2020 518,341 $ 65.77 Granted — — Exercised (42,740) 23.11 Canceled — — Options outstanding at December 31, 2020 475,601 $ 69.61 Granted — — Exercised (70,776) 41.63 Canceled — — Adjustment due to Consensus Separation (1) 35,749 $ 68.25 Options outstanding at December 31, 2021 440,574 $ 68.45 Granted — $ — Exercised (5,439) $ 27.15 Canceled — $ — Options outstanding at December 31, 2022 435,135 $ 68.97 5.0 $ 4,407,918 Exercisable at December 31, 2022 217,567 $ 68.97 5.0 $ 2,203,954 Vested and expected to vest at December 31, 2022 396,185 $ 68.97 5.0 $ 4,013,353 |
Summarized Information Concerning Outstanding and Exercisable Options | The following table summarizes information concerning outstanding and exercisable options as of December 31, 2022: Options Outstanding Exercisable Options Exercise Price Number Outstanding December 31, 2022 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable December 31, 2022 Weighted Average Exercise Price $ 68.97 435,135 5.0 years $ 68.97 217,567 $ 68.97 |
Valuation Assumptions of Market-based Restricted Stock Awards Granted | The weighted-average fair values of market-based restricted stock units granted have been estimated utilizing the following assumptions: December 31, 2022 2021 2020 Underlying stock price at valuation date $ 99.32 $ 113.27 $ 91.17 Expected volatility 36.7 % 30.3 % 27.0 % Risk-free interest rate 1.8 % 1.3 % 0.7 % |
Restricted Stock and Restricted Stock Unit Award Activity | Restricted stock activity for the years ended December 31, 2022, 2021 and 2020 is set forth below: Shares Weighted-Average Nonvested at January 1, 2020 1,105,059 $ 64.76 Granted 1,268 98.63 Vested (264,172) 70.25 Canceled (21,589) 79.34 Nonvested at December 31, 2020 820,566 $ 62.66 Granted — — Vested (435,529) 60.52 Canceled (33,194) 83.23 Adjustment due to Consensus Separation (1) 32,120 74.62 Nonvested at December 31, 2021 383,963 $ 62.66 Granted — — Vested (67,762) 80.64 Canceled (4,920) 84.77 Nonvested at December 31, 2022 311,281 $ 59.90 (1) As noted above, in connection with the Consensus separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each restricted stock award outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the market condition stock price target for marked-based restricted stock awards was also adjusted. Restricted stock unit activity for the years ended December 31, 2022, 2021 and 2020 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2020 20,874 Granted 210,630 Vested (9,029) Canceled (12,691) Outstanding at December 31, 2020 209,784 Granted 319,345 Vested (124,761) Canceled (60,201) Adjustment due to Consensus Separation (1) 16,576 Outstanding at December 31, 2021 360,743 Granted 254,215 Vested (115,523) Canceled (35,081) Outstanding at December 31, 2022 464,354 2.61 $ 36,730,401 Vested and expected to vest at December 31, 2022 334,674 2.12 $ 26,472,675 |
Valuation Assumptions of Stock Options Granted | The compensation expense related to the Purchase Plan has been estimated utilizing the following weighted average assumptions: December 31, 2022 2021 2020 Risk-free interest rate 1.17% 0.05% 0.73% Expected term (in years) 0.5 0.5 0.5 Dividend yield 0.0% 0.0% 0.0% Expected volatility 40.7% 35.0% 25.3% |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share Reconciliation [Abstract] | |
Components of Basic and Diluted Earnings Per Share | The components of basic and diluted earnings per share from continuing operations are as follows (in thousands, except share and per share data): Year ended December 31, 2022 2021 2020 Numerator for basic and diluted net income per common share: Net income from continuing operations $ 65,466 $ 401,395 $ 28,660 Net income available to participating securities (1) (20) (326) (120) 1.75% Convertible Notes interest expense (after-tax) (2) — — — Net income available to the Company’s common shareholders from continuing operations $ 65,446 $ 401,069 $ 28,540 Denominator: Basic weighted-average outstanding shares of common stock 46,954,558 45,893,928 46,308,825 Effect of dilution: Equity incentive plans 71,291 311,585 7,537 Convertible debt (2) — 1,657,232 799,247 Diluted weighted-average outstanding shares of common stock 47,025,849 47,862,745 47,115,609 Net income per share from continuing operations: Basic $ 1.39 $ 8.74 $ 0.62 Diluted $ 1.39 $ 8.38 $ 0.61 Weighted-average shares excluded from diluted weighted-average shares outstanding: Anti-dilutive stock options and restricted stock — — — Anti-dilutive convertible debt 5,158,071 — — (1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). (2) Under the modified retrospective method of adoption of ASU 2020-06, the dilutive impact of convertible debt was calculated using the if-converted method for the year ended December 31, 2022. The dilutive impact of convertible debt was calculated using the treasury stock method for the years ended December 31, 2021 and 2020 (see Note 10 - Debt ). |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Reconciliation of Total Segment Operating Income to Consolidated Operating Income | Information on reportable segments and reconciliation to income from operations is as follows (in thousands): Years Ended December 31, 2022 2021 2020 Revenue by reportable segment: Digital Media $ 1,079,172 $ 1,069,300 $ 811,360 Cybersecurity and Martech 312,626 348,611 347,697 Elimination of inter-segment revenues (801) (1,189) (229) Total segment revenues 1,390,997 1,416,722 1,158,828 Corporate (1) — — 1 Total revenues $ 1,390,997 $ 1,416,722 $ 1,158,829 Operating costs and expenses by reportable segment (2) : Digital Media 880,240 851,807 672,280 Cybersecurity and Martech (3) 262,426 338,464 294,765 Elimination of inter-segment operating expenses (801) (1,189) (229) Total segment operating expenses 1,141,865 1,189,082 966,816 Corporate (1)(3) 50,191 60,300 53,673 Total operating costs and expenses 1,192,056 1,249,382 1,020,489 Operating income by reportable segment: Digital Media operating income $ 198,932 $ 217,493 $ 139,080 Cybersecurity and Martech operating income (3) 50,200 10,147 52,932 Total segment operating income 249,132 227,640 192,012 Corporate (1)(3) (50,191) (60,300) (53,672) Income from operations $ 198,941 $ 167,340 $ 138,340 (1) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment. (2) Operating expenses for each segment include cost of sales and other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses. For the twelve months ended December 31, 2021, goodwill impairment related to our B2B Backup business is also included within operating costs and expenses for Cybersecurity and Martech. For the twelve months ended December 31, 2022, the Company had an impairment to goodwill within operating costs and expenses for Digital Media. (3) For the year ended December 31, 2021, approximately $19.2 million of general and administrative costs were reflected as Corporate operating costs and expenses in the Company’s December 31, 2021 Form 10-K, however, should have been reflected as an operating cost for the Cybersecurity and Martech reportable segment. The Company reclassified these costs in the table above as an operating cost for the Cybersecurity and Martech reportable segment and as a reduction of operating costs for Corporate, as well as the resulting impact in operating income (loss) for Cybersecurity and Martech and Corporate. The reclassification has no impact on consolidated operating income (loss) from continuing operations for the year ended December 31, 2021. |
Total Assets, Capital Expenditures, Depreciation and Amortization | The CODM does not use Balance Sheet information in connection with operating and investment decisions and as such that information is not presented. The CODM does use capital expenditures by reportable segment in connection with operating and investment decisions. Accordingly, the following segment information is presented for Digital Media and Cybersecurity and Martech. Year ended December 31, 2022 2021 2020 Capital expenditures: Digital Media $ 85,049 $ 80,877 $ 59,693 Cybersecurity and Martech 21,094 17,611 16,622 Total from reportable segments 106,143 98,488 76,315 Corporate 11 — — Capital expenditures of discontinued operations — 15,252 16,237 Total capital expenditures $ 106,154 $ 113,740 $ 92,552 Depreciation and amortization: Digital Media $ 184,658 $ 193,661 $ 145,321 Cybersecurity and Martech 48,714 55,344 56,999 Total from reportable segments 233,372 249,005 202,320 Corporate 28 288 3,658 Depreciation and amortization of — 9,010 22,759 Total depreciation and amortization $ 233,400 $ 258,303 $ 228,737 |
Revenues and Long-lived Assets by Geographic Information | The Company maintains operations in the U.S., Canada, Ireland, the United Kingdom, India and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on jurisdictions where revenues are reported (in thousands). Year ended December 31, 2022 2021 2020 Revenues: United States $ 1,181,936 $ 1,187,207 $ 958,833 All other countries 209,061 229,515 199,996 Total $ 1,390,997 $ 1,416,722 $ 1,158,829 Long-lived assets, excluding goodwill and other intangible assets are as follows (in thousands): December 31, 2022 2021 Long-lived assets: United States $ 171,957 $ 170,490 All other countries 46,867 46,336 Total $ 218,824 $ 216,826 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Non-cash Investing and Financing Activities | Non-cash investing and financing activities were as follows (in thousands): Year ended December 31, 2022 2021 (1) 2020 (1) Non-cash investing activity: Property and equipment, accrued but unpaid $ 150 $ 50 $ 3,154 Right-of-use assets acquired in exchange for operating lease obligations $ 4,130 $ 9,850 $ 31,148 Exchange of corporate debt securities (2) $ — $ — $ 18,326 Disposition of Investment in Consensus (3) $ 112,286 $ — $ — Non-cash financing activity: Debt principal settled in exchange for Investment in Consensus (3) $ 112,286 $ — $ — Debt principal settled in exchange for Consensus senior notes due 2028 $ — $ 485,000 $ — Conversion shares issued as extinguishment cost to redeem 3.25% Convertible Notes $ — $ 431,952 $ — Reacquisition of 3.25% Convertible Notes, net of tax $ — $ 390,526 $ — (1) Combines continuing and discontinued operations. (2) During the year ended December 31, 2020, the Company exchanged shares of redeemable preferred stock that were previously classified as available-for-sale corporate debt securities for a new series of preferred stock, classified as equity securities without a readily determinable fair value. Refer to Note 5 - Investments for additional details. (3) During the year ended December 31, 2022, the Company disposed $160.1 million of its Investment in Consensus in exchange for $112.3 million of debt and recorded $47.8 million of loss on investment, net. |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental data (in thousands): Year ended December 31, 2022 2021 2020 Interest paid $ 36,168 $ 54,479 $ 105,962 Income taxes paid, net of refunds $ 59,543 $ 61,162 $ 45,046 |
Cash Flow, Operating Capital | Operating cash outflows related to lease liabilities were as follows (in thousands): Year ended December 31, 2022 2021 2020 Operating cash outflows related to lease liabilities $ 26,921 $ 27,798 $ 27,402 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Reclassification out of Accumulated Other Comprehensive Loss (Income) | The following table summarizes the changes in accumulated balances of other comprehensive loss (income), net of tax, for the years ended December 31, 2022, 2021, and 2020 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Balance as of January 1, 2020 $ (275) $ (46,187) $ (46,462) Other comprehensive income (loss) before reclassifications 558 (8,902) (8,344) Net current period other comprehensive income (loss) 558 (8,902) (8,344) Balance as of December 31, 2020 $ 283 $ (55,089) $ (54,806) Other comprehensive income (loss) before reclassifications (114) (21,268) (21,382) Consensus separation — 18,966 18,966 Net current period other comprehensive income (loss) (114) (2,302) (2,416) Balance as of December 31, 2021 $ 169 $ (57,391) $ (57,222) Other comprehensive loss before reclassifications 272 (32,479) (32,207) Consensus separation adjustment — 4,056 4,056 Net current period other comprehensive loss 272 (28,423) (28,151) Balance as of December 31, 2022 $ 441 $ (85,814) $ (85,373) |
Reclassification out of Accumulated Other Comprehensive Loss | The following table provides details about reclassifications out of accumulated other comprehensive loss for the years ended December 31, 2022, 2021, and 2020. Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Statements of Operations For the year ending December 31, 2022 2021 2020 Unrealized loss on available-for-sale investments $ — $ (151) $ 698 Loss on investments, net — (151) 698 Income before income taxes — — — Income tax expense Total reclassifications for the period $ — $ (151) $ 698 Net income |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||||||||||
Oct. 07, 2021 USD ($) | Nov. 15, 2019 shares | Sep. 30, 2022 shares | Jun. 30, 2022 shares | Dec. 31, 2022 USD ($) subsidiary $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares | Jan. 01, 2022 USD ($) | Oct. 08, 2021 | Dec. 31, 2019 USD ($) | Jun. 10, 2014 | ||
Percentage of Consensus stock distributed | 80.10% | |||||||||||
Spinoff, stock received, ratio | 0.3333 | |||||||||||
Restructuring and related activities, proceeds from spinoff | $ 259,100,000 | |||||||||||
Issuance of senior notes | $ 500,000,000 | |||||||||||
Debt conversion, converted instrument, shares issued | shares | 500,000 | 2,300,000 | ||||||||||
Aggregate purchase price | $ 112,300,000 | |||||||||||
Equity securities, shares owned | shares | 1,100,000 | 4,000,000 | ||||||||||
Net translation foreign currency translation (loss)/gain | $ 32,479,000 | $ 21,268,000 | $ 8,902,000 | |||||||||
Foreign exchange realized gains (losses) | 8,200,000 | 2,000,000 | (3,100,000) | |||||||||
Goodwill impairment on business | (27,369,000) | (32,629,000) | 0 | |||||||||
Impairment of intangible assets | 0 | 0 | ||||||||||
Research, development and engineering | [1] | $ 74,093,000 | 78,874,000 | 57,148,000 | ||||||||
Number of reportable segments | subsidiary | 2 | |||||||||||
Advertising costs incurred | $ 128,800,000 | $ 143,500,000 | 96,000,000 | |||||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 [Member] | |||||||||||
Stockholders' equity attributable to parent | 1,892,611,000 | $ 1,967,732,000 | $ 1,211,018,000 | $ 1,311,192,000 | ||||||||
Net deferred tax liabilities | $ (79,007,000) | $ (108,982,000) | ||||||||||
Basic (in dollars per share) | $ / shares | $ 1.39 | $ 8.74 | $ 0.62 | |||||||||
Diluted (in dollars per share) | $ / shares | $ 1.39 | $ 8.38 | $ 0.61 | |||||||||
Public Stock Offering | ||||||||||||
Debt conversion, converted instrument, shares issued | shares | 2,800,000 | |||||||||||
Retained earnings | ||||||||||||
Stockholders' equity attributable to parent | $ 1,537,830,000 | $ 1,515,358,000 | $ 809,107,000 | 891,526,000 | ||||||||
Additional paid-in capital | ||||||||||||
Stockholders' equity attributable to parent | $ 439,681,000 | 509,122,000 | $ 456,274,000 | $ 465,652,000 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||||
Convertible debt | $ 85,900,000 | |||||||||||
Stockholders' equity attributable to parent | (64,701,000) | |||||||||||
Net deferred tax liabilities | 21,200,000 | |||||||||||
Basic (in dollars per share) | $ / shares | $ 0.25 | |||||||||||
Diluted (in dollars per share) | $ / shares | $ 0.25 | |||||||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | ||||||||||||
Stockholders' equity attributable to parent | 23,436,000 | 23,400,000 | ||||||||||
Cumulative Effect, Period of Adoption, Adjustment | Additional paid-in capital | ||||||||||||
Stockholders' equity attributable to parent | $ (88,137,000) | $ (88,100,000) | ||||||||||
Consensus Cloud Solutions | ||||||||||||
Noncontrolling interest, ownership percentage by parent | 19.90% | |||||||||||
Minimum | ||||||||||||
Weighted-Average Amortization Period | 1 year | |||||||||||
Maximum | ||||||||||||
Weighted-Average Amortization Period | 20 years | |||||||||||
Equipment | Minimum | ||||||||||||
Estimated useful lives of property and equipment | 1 year | |||||||||||
Equipment | Maximum | ||||||||||||
Estimated useful lives of property and equipment | 10 years | |||||||||||
Software and Software Development Costs | ||||||||||||
Estimated useful lives of property and equipment | 3 years | |||||||||||
3.25% Convertible Notes | Convertible Debt | ||||||||||||
Stated interest rate | 3.25% | |||||||||||
1.75% Convertible Notes | Convertible Debt | ||||||||||||
Debt conversion, converted instrument, shares issued | shares | 5,158,071 | |||||||||||
Stated interest rate | 1.75% | |||||||||||
Revolving Credit Facility | Secured Debt | ||||||||||||
Aggregate purchase price | $ 112,300,000 | |||||||||||
[1] (1) Includes share-based compensation expense as follows: Cost of revenues $ 341 $ 306 $ 332 Sales and marketing 3,083 1,288 1,011 Research, development and engineering 2,503 1,984 1,396 General and administrative 20,674 20,551 19,781 Total $ 26,601 $ 24,129 $ 22,520 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Credit Losses on Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 9,811 | $ 11,552 | $ 8,480 |
(Decreases) increases to bad debt expense | (255) | 3,107 | 5,315 |
Write-offs, net of recoveries | (2,688) | (4,848) | (2,243) |
Ending balance | $ 6,868 | $ 9,811 | $ 11,552 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 1,390,997 | $ 1,416,722 | $ 1,158,829 |
Contract liability, revenue recognized | 174,700 | 153,000 | |
Revenue, remaining performance obligation, amount | $ 21,200 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, remaining performance obligation, percentage | 93% | ||
Performance obligation, expected duration | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, remaining performance obligation, percentage | 7% | ||
Performance obligation, expected duration | 12 months | ||
Fiscal 2022 Acquisitions | |||
Disaggregation of Revenue [Line Items] | |||
Deferred revenue acquired | $ 21,474 | ||
Fiscal 2021 Acquisitions | |||
Disaggregation of Revenue [Line Items] | |||
Deferred revenue acquired | 9,491 | ||
Point in time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 46,770 | 42,276 | 27,685 |
Over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,344,227 | 1,374,446 | 1,131,144 |
Reportable segments | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,390,997 | 1,416,722 | 1,158,828 |
Reportable segments | Digital Media | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,079,172 | 1,069,300 | 811,360 |
Reportable segments | Digital Media | Advertising | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 788,135 | 838,075 | 627,198 |
Reportable segments | Digital Media | Subscription | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 244,694 | 197,354 | 166,219 |
Reportable segments | Digital Media | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 46,343 | 33,871 | 17,943 |
Reportable segments | Cybersecurity and Martech | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 312,626 | 348,611 | 347,697 |
Reportable segments | Cybersecurity and Martech | Subscription | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 312,626 | 348,611 | 347,697 |
Corporate, Non-Segment | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 0 | 1 |
Intersegment Eliminations | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ (801) | $ (1,189) | $ (229) |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) $ in Thousands | 12 Months Ended | ||||
Jun. 04, 2021 USD ($) | Oct. 28, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) subsidiary | Dec. 31, 2020 USD ($) | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,591,474 | $ 1,531,455 | $ 1,525,000 | ||
Increase (decrease) in goodwill from adjustment under purchase accounting | 4,338 | (932) | |||
Change in amount of contingent consideration, asset | $ 3,200 | ||||
Business combination, contingent consideration arrangement, recognition period | 3 years | ||||
Goodwill acquired | $ 95,737 | 97,032 | |||
Lifecycle Marketing Group Limited | |||||
Business Acquisition [Line Items] | |||||
Equity interest acquired (percentage) | 100% | ||||
FitNow, Inc. | |||||
Business Acquisition [Line Items] | |||||
Equity interest acquired (percentage) | 100% | ||||
Fiscal 2022 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Revenue of acquiree since acquisition date, | 33,000 | ||||
Total consideration of transactions | $ 121,700 | ||||
Fair value of assets | $ 7,400 | ||||
Goodwill | 95,737 | ||||
Expected income tax deductible amount | 1,200 | ||||
Fiscal 2022 Acquisitions | Cybersecurity and Martech | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | (100) | ||||
Fiscal 2022 Acquisitions | Digital Media | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | $ 4,500 | ||||
Series of Individually Immaterial Business Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Number of immaterial acquisitions | subsidiary | 4 | ||||
Fiscal 2021 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Total consideration of transactions | $ 160,400 | ||||
Fair value of assets | 9,500 | ||||
Amount expected to be uncollectible | 400 | ||||
Goodwill | 97,032 | ||||
Expected income tax deductible amount | 42,100 | ||||
Revenues contributed through acquisitions | 39,900 | ||||
Gross amount due under contracts | 9,900 | ||||
SEOmoz Acquisition | |||||
Business Acquisition [Line Items] | |||||
Total consideration of transactions | $ 67,000 | ||||
Amount expected to be uncollectible | 300 | ||||
Goodwill | 41,329 | 41,300 | |||
Expected income tax deductible amount | 0 | ||||
Revenues contributed through acquisitions | 25,600 | ||||
Gross amount due under contracts | $ 3,600 | ||||
SEOmoz Acquisition | Cybersecurity and Martech | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | 500 | ||||
SEOmoz Acquisition | Digital Media | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | $ (1,400) | ||||
Fiscal 2020 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Total consideration of transactions | 472,800 | ||||
Fair value of assets | 46,100 | ||||
Amount expected to be uncollectible | 6,900 | ||||
Goodwill | 202,901 | ||||
Expected income tax deductible amount | 55,000 | ||||
Revenues contributed through acquisitions | 54,600 | ||||
Gross amount due under contracts | 53,000 | ||||
Goodwill acquired | 202,900 | ||||
Pro forma net income for existing line of business | 100 | ||||
Pro forma net income for assets sold | 8,400 | ||||
Fiscal 2020 Acquisitions | Cybersecurity and Martech | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | (2,100) | ||||
Fiscal 2020 Acquisitions | Digital Media | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in goodwill from adjustment under purchase accounting | 9,700 | ||||
RetailMeNot, Inc. | |||||
Business Acquisition [Line Items] | |||||
Total consideration of transactions | $ 414,400 | ||||
Fair value of assets | 40,500 | ||||
Amount expected to be uncollectible | 6,700 | ||||
Goodwill | 169,581 | ||||
Expected income tax deductible amount | 36,600 | ||||
Revenues contributed through acquisitions | 47,600 | ||||
Gross amount due under contracts | $ 47,200 | ||||
Goodwill acquired | $ 169,600 |
Business Acquisitions - Allocat
Business Acquisitions - Allocation of Aggregate Purchase Consideration (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 04, 2021 | Dec. 31, 2020 | Oct. 28, 2020 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 1,591,474 | $ 1,531,455 | $ 1,525,000 | ||
Fiscal 2022 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | 7,433 | ||||
Prepaid expenses and other current assets | 4,915 | ||||
Property and equipment | 369 | ||||
Operating lease right of use asset | 545 | ||||
Goodwill | 95,737 | ||||
Other long-term assets | 11 | ||||
Accounts payable and accrued expenses | (6,221) | ||||
Deferred revenue | (21,474) | ||||
Deferred tax liability | (10,140) | ||||
Other long-term liabilities | (516) | ||||
Total | 121,704 | ||||
Fiscal 2022 Acquisitions | Trade names | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 12,839 | ||||
Fiscal 2022 Acquisitions | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 20,040 | ||||
Fiscal 2022 Acquisitions | Other intangibles | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 18,166 | ||||
Fiscal 2021 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | 9,513 | ||||
Prepaid expenses and other current assets | 1,655 | ||||
Property and equipment | 2,188 | ||||
Operating lease right of use asset | 5,888 | ||||
Goodwill | 97,032 | ||||
Other long-term assets | 62 | ||||
Deferred tax asset | 230 | ||||
Accounts payable and accrued expenses | (5,863) | ||||
Deferred revenue | (9,491) | ||||
Operating lease liabilities, current | (7,191) | ||||
Other current liabilities | (14) | ||||
Deferred tax liability | (9,237) | ||||
Other long-term liabilities | (1,511) | ||||
Total | 160,449 | ||||
Fiscal 2021 Acquisitions | Trade names | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 16,349 | ||||
Fiscal 2021 Acquisitions | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 21,945 | ||||
Fiscal 2021 Acquisitions | Other intangibles | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 38,894 | ||||
SEOmoz Acquisition | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | $ 3,278 | ||||
Prepaid expenses and other current assets | 1,547 | ||||
Property and equipment | 1,845 | ||||
Operating lease right of use asset | 5,888 | ||||
Goodwill | $ 41,300 | 41,329 | |||
Other long-term assets | 62 | ||||
Accounts payable and accrued expenses | (2,655) | ||||
Deferred revenue | (6,398) | ||||
Operating lease liabilities, current | (7,191) | ||||
Other current liabilities | (14) | ||||
Deferred tax liability | (5,327) | ||||
Other long-term liabilities | (550) | ||||
Total | 66,997 | ||||
SEOmoz Acquisition | Trade names | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 7,406 | ||||
SEOmoz Acquisition | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 5,000 | ||||
SEOmoz Acquisition | Other intangibles | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 22,777 | ||||
Fiscal 2020 Acquisitions | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | 46,138 | ||||
Prepaid expenses and other current assets | 9,105 | ||||
Property and equipment | 2,204 | ||||
Operating lease right of use asset | 10,644 | ||||
Goodwill | 202,901 | ||||
Other long-term assets | 685 | ||||
Deferred tax asset | 992 | ||||
Accounts payable and accrued expenses | (28,979) | ||||
Deferred revenue | (21,918) | ||||
Operating lease liabilities, current | (4,520) | ||||
Long-term debt | (910) | ||||
Operating lease liabilities, noncurrent | (13,104) | ||||
Income taxes payable | (3,297) | ||||
Liability for uncertain tax positions | (1,576) | ||||
Deferred tax liability | (53,870) | ||||
Other long-term liabilities | (9,269) | ||||
Total | 472,760 | ||||
Fiscal 2020 Acquisitions | Trade names | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 66,763 | ||||
Fiscal 2020 Acquisitions | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 214,347 | ||||
Fiscal 2020 Acquisitions | Other intangibles | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 56,424 | ||||
RetailMeNot, Inc. | |||||
Business Acquisition [Line Items] | |||||
Accounts receivable | $ 40,525 | ||||
Prepaid expenses and other current assets | 7,367 | ||||
Property and equipment | 587 | ||||
Operating lease right of use asset | 10,313 | ||||
Goodwill | 169,581 | ||||
Other long-term assets | 494 | ||||
Deferred tax asset | 605 | ||||
Accounts payable and accrued expenses | (24,526) | ||||
Deferred revenue | (11,175) | ||||
Operating lease liabilities, current | (4,029) | ||||
Operating lease liabilities, noncurrent | (13,085) | ||||
Income taxes payable | (3,308) | ||||
Liability for uncertain tax positions | (1,576) | ||||
Deferred tax liability | (52,504) | ||||
Other long-term liabilities | (9,275) | ||||
Total | 414,384 | ||||
RetailMeNot, Inc. | Trade names | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 62,940 | ||||
RetailMeNot, Inc. | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 198,840 | ||||
RetailMeNot, Inc. | Other intangibles | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $ 42,610 |
Business Acquisitions - Supplem
Business Acquisitions - Supplementary Information on Unaudited Pro Forma Financial Basis (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fiscal 2022 Acquisitions | |||
Revenues | $ 1,407,300 | $ 1,461,178 | |
Net income from continuing operations | $ 64,877 | $ 398,201 | |
EPS - Basic (in usd per share) | $ 1.38 | $ 8.67 | |
EPS - Diluted (in usd per share) | $ 1.38 | $ 8.31 | |
Fiscal 2021 Acquisitions | |||
Revenues | $ 1,482,323 | $ 1,267,280 | |
Net income from continuing operations | $ 416,348 | $ 33,351 | |
EPS - Basic (in usd per share) | $ 9.06 | $ 0.72 | |
EPS - Diluted (in usd per share) | $ 8.69 | $ 0.71 | |
SEOmoz Acquisition | |||
Revenues | $ 1,438,099 | $ 1,207,910 | |
Net income from continuing operations | $ 406,281 | $ 29,382 | |
EPS - Basic (in usd per share) | $ 8.84 | $ 0.63 | |
EPS - Diluted (in usd per share) | $ 8.48 | $ 0.62 | |
Fiscal 2020 Acquisitions | |||
Revenues | $ 1,339,927 | ||
Net income from continuing operations | $ 21,450 | ||
EPS - Basic (in usd per share) | $ 0.46 | ||
EPS - Diluted (in usd per share) | $ 0.45 | ||
RetailMeNot, Inc. | |||
Revenues | $ 1,308,731 | ||
Net income from continuing operations | $ 23,395 | ||
EPS - Basic (in usd per share) | $ 0.50 | ||
EPS - Diluted (in usd per share) | $ 0.49 |
Business Acquisitions - Contrac
Business Acquisitions - Contractual Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
2023 | $ 19,208 |
2024 | 7,359 |
Contractual obligation | $ 26,567 |
Investments - Narrative (Detail
Investments - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Sep. 25, 2017 USD ($) | Sep. 30, 2022 shares | Jun. 30, 2022 shares | Mar. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) investment shares | Dec. 31, 2021 USD ($) investment shares | Dec. 31, 2020 USD ($) investment | Apr. 12, 2022 USD ($) | |
Unusual or Infrequent Item, or Both [Line Items] | ||||||||
Debt conversion, converted instrument, shares issued | shares | 500,000 | 2,300,000 | ||||||
Aggregate purchase price | $ 112,300,000 | |||||||
Common stock, shares outstanding (in shares) | shares | 47,269,446 | 47,440,137 | ||||||
Equity securities, shares owned | shares | 1,100,000 | 4,000,000 | ||||||
Investment in Consensus | $ 58,400,000 | $ 229,200,000 | ||||||
Exchange of available-for-sale debt securities | $ 18,300,000 | 0 | 0 | $ 18,326,000 | ||||
Loss on investments, net | $ 4,400,000 | 46,743,000 | 16,677,000 | 20,991,000 | ||||
Impairment loss on equity securities without readily determinable fair value | 16,677,000 | 19,605,000 | ||||||
Proceeds from sale of equity securities without readily determinable fair value | 14,300,000 | |||||||
Realized loss on securities | 300,000 | |||||||
Equity securities, cumulative impairment loss | 40,500,000 | 23,800,000 | ||||||
Fair Value | $ 15,586,000 | $ 0 | 663,000 | |||||
Number of investments in an unrealized loss position | investment | 0 | 0 | ||||||
Other-than-temporary impairment losses recognized on debt securities | $ 0 | $ 0 | 0 | |||||
Variable interest entity, amount committed to invest | $ 200,000,000 | |||||||
Variable interest entity, ownership percentage | 76.60% | |||||||
Annual management fee percentage | 2% | |||||||
Entitled carried interest percentage | 20% | |||||||
Fund investment period | 6 years | |||||||
Equity method investment | 112,285,000 | 122,593,000 | ||||||
Variable interest entity, amount of capital call notices received | 0 | 22,200,000 | 32,900,000 | |||||
Variable interest entity, amount paid | 22,200,000 | 31,900,000 | ||||||
Distribution from equity method investment | 0 | 15,327,000 | 0 | |||||
(Loss) income from equity method investment, net of income taxes | (7,730,000) | 35,845,000 | (11,338,000) | |||||
Management fees recognized | 1,500,000 | $ 3,000,000 | 3,000,000 | |||||
COVID-19 | ||||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||||
(Loss) income from equity method investment, net of income taxes | $ (4,300,000) | |||||||
Number of investments impaired | investment | 2 | |||||||
Equity method investment, impairment | $ 7,000,000 | |||||||
Fund | ||||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||||
Equity method investment | $ 128,800,000 | |||||||
Investment in corporate debt securities | ||||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||||
Available for sale, debt securities, coupon rate | 4% | |||||||
Fair Value | $ 15,000,000 | |||||||
Secured Debt | Revolving Credit Facility | ||||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||||
Aggregate purchase price | $ 112,300,000 | |||||||
Public Stock Offering | ||||||||
Unusual or Infrequent Item, or Both [Line Items] | ||||||||
Debt conversion, converted instrument, shares issued | shares | 2,800,000 | |||||||
Number of shares issued in transaction (in shares) | shares | 73,919 |
Investments - Gains (Losses) on
Investments - Gains (Losses) on Equity Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Net (losses) gains during the period | $ (53,888) | $ 298,490 | |
Less: losses on securities sold during the period | (46,743) | 0 | |
Unrealized (losses) gains recognized during the period on short-term investments held at the reporting date | $ (7,145) | $ 298,490 | $ 0 |
Investments - Gross Unrealized
Investments - Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Cost | $ 17,156 | $ 50,384 |
Impairment | (16,677) | (19,605) |
Adjustments | (479) | (479) |
Reported amount | $ 0 | $ 30,300 |
Investments - Carrying Amount f
Investments - Carrying Amount for Equity Method Investment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | |||
Investment in corporate debt securities | $ 15,000 | $ 0 | $ 511 |
Maximum exposure | 112,285 | $ 122,593 | |
Investment in corporate debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investment in corporate debt securities | 15,586 | ||
Maximum exposure | $ 15,586 |
Investments - Summary of Availa
Investments - Summary of Available-for-sale Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | |||
Amortized Cost | $ 15,000 | $ 0 | $ 511 |
Gross Unrealized Gains | 586 | 0 | 152 |
Gross Unrealized Losses | 0 | 0 | 0 |
Fair Value | $ 15,586 | $ 0 | $ 663 |
Investments - Available-for-Sal
Investments - Available-for-Sale Securities Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Due within 1 year | $ 0 | $ 0 |
Due within more than 1 year but less than 5 years | 15,586 | 0 |
Due within more than 5 years but less than 10 years | 0 | 0 |
Due 10 years or after | 0 | 0 |
Total | $ 15,586 | $ 0 |
Investments - Carrying Amount_2
Investments - Carrying Amount for Equity Method Investment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Equity method investment | $ 112,285 | $ 122,593 |
Maximum exposure | $ 112,285 | $ 122,593 |
Discontinued Operations and D_3
Discontinued Operations and Dispositions - Consensus Spin-Off (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Oct. 07, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restructuring and related activities, proceeds from spinoff | $ 259,100 | |||
Issuance of senior notes | $ 500,000 | |||
(Gain) loss on extinguishment of debt | $ (11,505) | $ 5,274 | $ 0 | |
Bridge Loan | Bridge Loan | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
(Gain) loss on extinguishment of debt | 8,800 | 8,800 | ||
J2 Global | Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
(Gain) loss on extinguishment of debt | 8,750 | 37,969 | ||
Net reimbursement for Consensus | 11,600 | |||
Income tax expense | $ 1,709 | $ 30,694 | $ 30,043 |
Discontinued Operations and D_4
Discontinued Operations and Dispositions - Key Components Of Cash Flows From 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] | |||
(Gain) loss on extinguishment of debt | $ (11,505) | $ 5,274 | $ 0 |
Amortization of financing costs and discounts | 2,692 | 26,090 | 28,476 |
Deferred taxes | $ (12,991) | (21,447) | 307 |
Discontinued Operations | J2 Global | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Capital expenditures | 15,252 | 16,237 | |
Depreciation and amortization | 9,010 | 22,759 | |
(Gain) loss on extinguishment of debt | 8,750 | 37,969 | |
Amortization of financing costs and discounts | 0 | 1,171 | |
Foreign currency remeasurement gain | 0 | 31,537 | |
Deferred taxes | $ 8,015 | $ 5,534 |
Discontinued Operations and D_5
Discontinued Operations and Dispositions - Key Components of Income From Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 07, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
(Loss) income from discontinued operations, net of income taxes | $ (1,709) | $ 95,319 | $ 122,008 | |
6.0% Senior Notes | Senior Notes | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Stated interest rate | 6% | |||
Discontinued Operations | J2 Global | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | 0 | 270,248 | 330,764 | |
Cost of revenues | 0 | (44,306) | (53,379) | |
Sales and marketing | 0 | (40,980) | (47,116) | |
Research, development and engineering | 0 | (5,814) | (7,146) | |
General and administrative | 0 | (39,279) | (26,852) | |
Interest expense and other | 0 | (13,856) | (44,220) | |
Income before income taxes | 0 | 126,013 | 152,051 | |
Income tax expense | (1,709) | (30,694) | (30,043) | |
(Loss) income from discontinued operations, net of income taxes | $ (1,709) | $ 95,319 | $ 122,008 |
Discontinued Operations and D_6
Discontinued Operations and Dispositions B2B Backup and Voice Asset Sales (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] | |||
(Loss) gain on sale of businesses | $ 0 | $ (21,798) | $ 17,122 |
Goodwill impairment on business | $ 27,369 | 32,629 | 0 |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration] | (Loss) gain on sale of businesses | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | B2B Backup Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Goodwill impairment on business | 32,600 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain (loss) on disposal | $ 17,100 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Voice Assets | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
(Loss) gain on sale of businesses | 2,800 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | B2B Backup Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
(Loss) gain on sale of businesses | (24,600) | ||
Goodwill impairment on business | $ 27,400 | $ 32,600 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) factor | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Oct. 07, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Unrealized (loss) gain on short-term investments held at the reporting date, net | $ (7,100) | $ 298,500 | ||
Short-term investments | $ 58,421 | 229,200 | ||
Discount rate | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Measurement input | factor | 0.13 | |||
Measurement Input, Conversion Term | Minimum | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Measurement input | factor | 0.8 | |||
Measurement Input, Conversion Term | Maximum | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Measurement input | factor | 1.3 | |||
4.625% Senior Notes Due in 2030 | Senior Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Stated interest rate | 4.625% | |||
Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value, measurement with unobservable inputs reconciliation | $ 555 | 5,775 | $ 5,022 | |
Contingent consideration payments | 3,200 | 2,050 | ||
Other Business Acquisitions | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
High-end of potential contingent consideration | 600 | |||
Contingent consideration payments | $ 3,200 | $ 2,100 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurement Inputs and Valuation Techniques (Details) - Option-Based Model | Dec. 31, 2022 |
Risk free rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.019 |
Risk free rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.022 |
Risk free rate | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.020 |
Debt spread | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0 |
Debt spread | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.747 |
Debt spread | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.136 |
Probabilities | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.100 |
Probabilities | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 1 |
Probabilities | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.805 |
Present value factor | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.022 |
Present value factor | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.269 |
Present value factor | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.190 |
Discount rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.273 |
Discount rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.380 |
Discount rate | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent Consideration | 0.307 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Values of Financial Instruments Measured On Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Apr. 12, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in corporate debt securities | $ 15,586 | $ 0 | $ 663 | |
Investment in Consensus | 58,400 | 229,200 | ||
Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in corporate debt securities | 15,586 | |||
Investment in Consensus | 58,421 | |||
Total assets measured at fair value | 386,017 | 373,455 | ||
Contingent consideration | 555 | 5,775 | ||
Debt | 939,319 | 1,345,311 | ||
Total liabilities measured at fair value | 939,874 | 1,351,086 | ||
Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in corporate debt securities | 15,586 | |||
Investment in Consensus | 58,421 | |||
Total assets measured at fair value | 386,017 | 373,455 | ||
Contingent consideration | 555 | 5,775 | ||
Debt | 999,053 | 1,090,627 | ||
Total liabilities measured at fair value | 999,608 | 1,096,402 | ||
Money market and other funds | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Money market and other funds | 312,010 | 144,255 | ||
Money market and other funds | Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Money market and other funds | 312,010 | 144,255 | ||
Investment in Consensus | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in corporate debt securities | $ 15,000 | |||
Investment in Consensus | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in Consensus | 229,200 | |||
Investment in Consensus | Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in Consensus | 229,200 | |||
Level 1 | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in corporate debt securities | 0 | |||
Investment in Consensus | 58,421 | |||
Total assets measured at fair value | 370,431 | 373,455 | ||
Contingent consideration | 0 | 0 | ||
Debt | 939,319 | 1,345,311 | ||
Total liabilities measured at fair value | 939,319 | 1,345,311 | ||
Level 1 | Money market and other funds | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Money market and other funds | 312,010 | 144,255 | ||
Level 1 | Investment in Consensus | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in Consensus | 229,200 | |||
Level 2 | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in corporate debt securities | 0 | |||
Investment in Consensus | 0 | |||
Total assets measured at fair value | 0 | 0 | ||
Contingent consideration | 0 | 0 | ||
Debt | 0 | 0 | ||
Total liabilities measured at fair value | 0 | 0 | ||
Level 2 | Money market and other funds | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Money market and other funds | 0 | 0 | ||
Level 2 | Investment in Consensus | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in Consensus | 0 | |||
Level 3 | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in corporate debt securities | 15,586 | |||
Investment in Consensus | 0 | |||
Total assets measured at fair value | 15,586 | 0 | ||
Contingent consideration | 555 | 5,775 | ||
Debt | 0 | 0 | ||
Total liabilities measured at fair value | 555 | 5,775 | ||
Level 3 | Money market and other funds | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Money market and other funds | $ 0 | 0 | ||
Level 3 | Investment in Consensus | Estimate of Fair Value Measurement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in Consensus | $ 0 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of the Company’s Level 3 Financial Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance as of January 1, 2022 | $ 0 |
Investment in corporate debt securities | 15,586 |
Balance as of December 31, 2022 | $ 15,586 |
Fair Value Measurements - Rec_2
Fair Value Measurements - Reconciliation of Level 3 Financial Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, liability, recurring basis, unobservable input reconciliation, gain (loss), statement of income or comprehensive income [Extensible Enumeration] | General and Administrative Expense | General and Administrative Expense |
Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 5,775 | $ 5,022 |
Contingent consideration | 555 | 4,713 |
Total fair value adjustments reported in earnings | (2,575) | (1,910) |
Contingent consideration payments | (3,200) | (2,050) |
Ending balance | $ 555 | $ 5,775 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 433,770 | $ 352,322 |
Less: Accumulated depreciation and amortization | (255,586) | (191,113) |
Total property and equipment, net | 178,184 | 161,209 |
Computer hardware, software and related equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 424,275 | 343,101 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 881 | 934 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 8,614 | $ 8,287 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property And Equipment [Abstract] | |||
Depreciation and amortization expense | $ 76.7 | $ 63.6 | $ 60.6 |
Disposals of long-lived assets | $ 0.2 | $ 11 | $ 0.9 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) reportingUnit | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment on business | $ 27,369 | $ 32,629 | $ 0 |
Goodwill | 1,591,474 | 1,531,455 | 1,525,000 |
Amortization expense | $ 156,700 | 185,700 | 156,400 |
Reportable segments | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment on business | 32,629 | ||
Digital Media | |||
Finite-Lived Intangible Assets [Line Items] | |||
Number of reporting units | reportingUnit | 7 | ||
Digital Media | Reportable segments | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment on business | $ 27,369 | 0 | |
Goodwill | $ 1,065,989 | 996,659 | 942,934 |
Digital Media | Reportable segments | Digital Media Subsegment | |||
Finite-Lived Intangible Assets [Line Items] | |||
Number of reporting units | reportingUnit | 2 | ||
Goodwill | $ 86,900 | ||
Cybersecurity and Martech | |||
Finite-Lived Intangible Assets [Line Items] | |||
Number of reporting units | reportingUnit | 2 | ||
Cybersecurity and Martech | Reportable segments | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment on business | $ 0 | 32,629 | |
Goodwill | $ 525,485 | $ 534,796 | $ 582,066 |
Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 1 year | ||
Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 20 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Changes in Carrying Amounts of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Sep. 17, 2021 | Feb. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||||
Beginning balance | $ 1,531,455 | $ 1,525,000 | |||
Goodwill acquired | 95,737 | 97,032 | |||
Goodwill removed due to sale of a businesses | (50,277) | ||||
Goodwill impairment | (27,369) | (32,629) | $ 0 | ||
Purchase accounting adjustments | 4,338 | (932) | |||
Foreign exchange translation | (12,687) | (6,739) | |||
Ending balance | 1,591,474 | 1,531,455 | 1,525,000 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | B2B Backup Business | |||||
Goodwill [Line Items] | |||||
Goodwill removed due to sale of a businesses | $ (49,000) | ||||
Goodwill impairment | (27,400) | (32,600) | |||
Voice, Backup, Security and CPP Segment | |||||
Goodwill [Line Items] | |||||
Goodwill removed due to sale of a businesses | $ (1,300) | ||||
Reportable segments | |||||
Goodwill [Line Items] | |||||
Goodwill impairment | (32,629) | ||||
Reportable segments | Digital Media | |||||
Goodwill [Line Items] | |||||
Beginning balance | 996,659 | 942,934 | |||
Goodwill acquired | 95,737 | 55,704 | |||
Goodwill removed due to sale of a businesses | 0 | ||||
Goodwill impairment | (27,369) | 0 | |||
Purchase accounting adjustments | 4,475 | (1,437) | |||
Foreign exchange translation | (3,513) | (542) | |||
Ending balance | 1,065,989 | 996,659 | 942,934 | ||
Reportable segments | Cybersecurity and Martech | |||||
Goodwill [Line Items] | |||||
Beginning balance | 534,796 | 582,066 | |||
Goodwill acquired | 0 | 41,328 | |||
Goodwill removed due to sale of a businesses | (50,277) | ||||
Goodwill impairment | 0 | (32,629) | |||
Purchase accounting adjustments | (137) | 505 | |||
Foreign exchange translation | (9,174) | (6,197) | |||
Ending balance | $ 525,485 | $ 534,796 | $ 582,066 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Historical Cost | $ 1,431,385 | $ 1,391,293 |
Accumulated Amortization | 968,570 | 818,568 |
Net | $ 462,815 | $ 572,725 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 1 year | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 20 years | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 10 years | 9 years 8 months 12 days |
Historical Cost | $ 261,614 | $ 250,418 |
Accumulated Amortization | 125,422 | 102,657 |
Net | $ 136,192 | $ 147,761 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 7 years 10 months 24 days | 8 years 1 month 6 days |
Historical Cost | $ 687,798 | $ 673,847 |
Accumulated Amortization | 479,741 | 398,396 |
Net | $ 208,057 | $ 275,451 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 4 years | 4 years |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 5 years | 5 years |
Other purchased intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 8 years 3 months 18 days | 9 years 3 months 18 days |
Historical Cost | $ 481,973 | $ 467,028 |
Accumulated Amortization | 363,407 | 317,515 |
Net | $ 118,566 | $ 149,513 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Finite Lived Intangibles Acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Series of Individually Immaterial Business Acquisitions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Carrying Value | $ 48,704 | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 10 years | 9 years 8 months 12 days |
Trade names | Series of Individually Immaterial Business Acquisitions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 9 years 7 months 6 days | |
Carrying Value | $ 12,423 | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 7 years 10 months 24 days | 8 years 1 month 6 days |
Customer relationships | Series of Individually Immaterial Business Acquisitions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 7 years 3 months 18 days | |
Carrying Value | $ 18,714 | |
Other purchased intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 8 years 3 months 18 days | 9 years 3 months 18 days |
Other purchased intangibles | Series of Individually Immaterial Business Acquisitions | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 2 years 4 months 24 days | |
Carrying Value | $ 17,567 |
Goodwill And Intangible Asset_6
Goodwill And Intangible Assets - Expected Amortization Expenses for Intangible Assets Subject To Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 139,975 | |
2024 | 99,158 | |
2025 | 76,614 | |
2026 | 68,813 | |
2027 | 29,467 | |
Thereafter | 48,788 | |
Net | $ 462,815 | $ 572,725 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 07, 2020 | Nov. 15, 2019 |
Debt Instrument [Line Items] | ||||
Less: Unamortized discount | $ (2,764) | $ (91,593) | ||
Deferred issuance costs | (8,221) | (9,056) | ||
Total debt | 999,053 | 1,090,627 | ||
Less: current portion | 0 | (54,609) | ||
Long-term debt | 999,053 | 1,036,018 | ||
Senior Notes | 4.625% Senior Notes Due in 2030 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 4.625% | |||
Gross long-term debt | 460,038 | 641,276 | $ 750,000 | |
Less: Unamortized discount | (2,764) | (4,259) | ||
Deferred issuance costs | (874) | (1,339) | ||
Total debt | 456,400 | 635,678 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Gross long-term debt | 1,010,038 | 1,191,276 | ||
Convertible Debt | 1.75% Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 1.75% | |||
Gross long-term debt | 550,000 | 550,000 | ||
Less: Unamortized discount | 0 | (87,334) | ||
Deferred issuance costs | (7,347) | (7,717) | $ (2,800) | |
Total debt | $ 542,653 | $ 454,949 |
Debt - Future Principal Payment
Debt - Future Principal Payments for Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Principal | |
2023 | $ 0 |
2024 | 0 |
2025 | 0 |
2026 | 550,000 |
2027 | 0 |
Thereafter | 460,038 |
Total principal | 1,010,038 |
Interest | |
2023 | 30,902 |
2024 | 30,902 |
2025 | 30,902 |
2026 | 30,902 |
2027 | 21,276 |
Thereafter | 63,830 |
Total interest | $ 208,714 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 10, 2022 USD ($) | Oct. 08, 2021 USD ($) | Oct. 07, 2021 USD ($) $ / shares | Oct. 06, 2021 | Sep. 16, 2021 USD ($) extension | Apr. 07, 2021 USD ($) | Oct. 07, 2020 USD ($) fiscalQuarterPeriod | Nov. 15, 2019 USD ($) tradingDay $ / shares shares | Jun. 27, 2017 USD ($) | Jun. 10, 2014 USD ($) | Sep. 30, 2022 USD ($) shares | Jun. 30, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Sep. 15, 2022 USD ($) | Jan. 01, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||||||||
Total interest expense related to 4.625% Senior Notes | $ 37,100,000 | $ 79,600,000 | $ 58,100,000 | ||||||||||||||||
Redemption premium | 756,000 | 1,096,000 | 29,250,000 | ||||||||||||||||
(Gain) loss on extinguishment of debt | (11,505,000) | 5,274,000 | 0 | ||||||||||||||||
Aggregate purchase price | 112,300,000 | ||||||||||||||||||
Repayments of long-term debt | 166,904,000 | 512,388,000 | 650,000,000 | ||||||||||||||||
Consensus separation adjustment | 0 | 390,526,000 | 0 | ||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 500,000 | 2,300,000 | |||||||||||||||||
Debt instrument, unamortized discount | $ 91,593,000 | 2,764,000 | 91,593,000 | ||||||||||||||||
Debt issuance costs | 9,056,000 | 8,221,000 | 9,056,000 | ||||||||||||||||
Issuance of senior notes | $ 500,000,000 | ||||||||||||||||||
Proceeds from bridge loan | 0 | 485,000,000 | 0 | ||||||||||||||||
Revolving Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | ||||||||||||||||||
Increases in commitment | 250,000,000 | ||||||||||||||||||
Total aggregate commitment | $ 350,000,000 | ||||||||||||||||||
Bridge Loan | Base Rate | Minimum | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||||||||||||||
Bridge Loan | Base Rate | Maximum | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, basis spread on variable rate | 1.25% | ||||||||||||||||||
Bridge Loan | London Interbank Offered Rate (LIBOR) | Minimum | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, basis spread on variable rate | 1.50% | ||||||||||||||||||
Bridge Loan | London Interbank Offered Rate (LIBOR) | Maximum | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, basis spread on variable rate | 2.25% | ||||||||||||||||||
Revolving Credit Facility | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
(Gain) loss on extinguishment of debt | 600,000 | ||||||||||||||||||
Aggregate purchase price | 112,300,000 | ||||||||||||||||||
Senior Notes | 6.0% Senior Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Stated interest rate | 6% | ||||||||||||||||||
Face amount | $ 650,000,000 | ||||||||||||||||||
Proceeds from debt, net of issuance costs | $ 636,500,000 | ||||||||||||||||||
Redemption payment of senior notes | $ 694,600,000 | ||||||||||||||||||
Redemption premium | 29,200,000 | ||||||||||||||||||
Payments of interest | 15,400,000 | ||||||||||||||||||
(Gain) loss on extinguishment of debt | $ 38,000,000 | ||||||||||||||||||
Senior Notes | 4.625% Senior Notes Due in 2030 | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Stated interest rate | 4.625% | ||||||||||||||||||
Face amount | $ 750,000,000 | ||||||||||||||||||
Proceeds from debt, net of issuance costs | 742,700,000 | ||||||||||||||||||
(Gain) loss on extinguishment of debt | 7,400,000 | ||||||||||||||||||
Gross long-term debt | $ 750,000,000 | 641,276,000 | 460,038,000 | 641,276,000 | |||||||||||||||
Percentage principal outstanding to be eligible for redemption | 50% | ||||||||||||||||||
Covenant, leverage ratio, minimum | 3.5 | ||||||||||||||||||
Covenant restricted payment threshold | $ 250,000,000 | ||||||||||||||||||
Covenant, EBITDA minimum | 50% | ||||||||||||||||||
Covenant, EBITDA minimum, fiscal quarter period | fiscalQuarterPeriod | 4 | ||||||||||||||||||
Principal repurchased | $ 83,300,000 | 181,238,000 | 25,391,000 | ||||||||||||||||
Extinguishment of debt, aggregate purchase price | $ 90,000,000 | ||||||||||||||||||
Aggregate purchase price | 167,661,000 | 26,035,000 | |||||||||||||||||
Fair value of senior notes | 659,900,000 | 390,900,000 | 659,900,000 | ||||||||||||||||
Debt instrument, unamortized discount | 4,259,000 | 2,764,000 | 4,259,000 | ||||||||||||||||
Effective interest rate | 4.70% | ||||||||||||||||||
Debt issuance costs | 1,339,000 | 874,000 | 1,339,000 | ||||||||||||||||
Senior Notes | 4.625% Senior Notes Due in 2030 | Debt Instrument, Redemption, Period One | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Percentage of principal amount redeemed | 40% | ||||||||||||||||||
Redemption price, percentage | 104.625% | ||||||||||||||||||
Senior Notes | 4.625% Senior Notes Due in 2030 | Debt Instrument, Redemption, Period Two | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Redemption price, percentage | 100% | ||||||||||||||||||
Convertible Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Gross long-term debt | 1,191,276,000 | 1,010,038,000 | 1,191,276,000 | ||||||||||||||||
Convertible Debt | 3.25% Convertible Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total interest expense related to 4.625% Senior Notes | 11,494,000 | 24,546,000 | |||||||||||||||||
Stated interest rate | 3.25% | ||||||||||||||||||
Face amount | $ 402,500,000 | ||||||||||||||||||
(Gain) loss on extinguishment of debt | $ (2,800,000) | ||||||||||||||||||
Contingent interest payment period | 6 months | ||||||||||||||||||
Trading period | 5 days | ||||||||||||||||||
Contingent interest, minimum trading price per principal amount | $ 1,300 | ||||||||||||||||||
Conversion shares issued as extinguishment cost on 3.25% convertible notes (in shares) | shares | 3,050,850 | ||||||||||||||||||
Repayments of long-term debt | $ 402,400,000 | ||||||||||||||||||
Convertible Debt | 1.75% Convertible Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total interest expense related to 4.625% Senior Notes | 11,634,000 | 26,136,000 | $ 25,314,000 | ||||||||||||||||
Stated interest rate | 1.75% | ||||||||||||||||||
Face amount | $ 550,000,000 | ||||||||||||||||||
Proceeds from debt, net of issuance costs | $ 537,100,000 | ||||||||||||||||||
Gross long-term debt | 550,000,000 | 550,000,000 | 550,000,000 | ||||||||||||||||
Fair value of senior notes | 685,400,000 | 548,400,000 | 685,400,000 | ||||||||||||||||
Convertible debt conversion ratio | 0.0093783 | 0.0079864 | |||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 5,158,071 | ||||||||||||||||||
Convertible debt conversion price (in usd per share) | $ / shares | $ 106.63 | $ 125.21 | |||||||||||||||||
Debt instrument, unamortized discount | 87,334,000 | 0 | 87,334,000 | ||||||||||||||||
Gross debt issuance costs | $ 12,900,000 | ||||||||||||||||||
Accumulated amortization of debt issuance costs | $ 10,100,000 | ||||||||||||||||||
Effective interest rate | 5.50% | ||||||||||||||||||
Debt issuance costs | $ 2,800,000 | 7,717,000 | 7,347,000 | 7,717,000 | |||||||||||||||
Convertible Debt | 1.75% Convertible Notes | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, unamortized discount | $ 87,300,000 | ||||||||||||||||||
Convertible Debt | 1.75% Convertible Notes | Debt Instrument, Redemption, Period One | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Convertible debt threshold trading days | tradingDay | 20 | ||||||||||||||||||
Convertible debt threshold consecutive trading days | tradingDay | 30 | ||||||||||||||||||
Convertible debt conversion ratio | 1.30 | ||||||||||||||||||
Convertible Debt | 1.75% Convertible Notes | Debt Instrument, Redemption, Period Two | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Convertible debt threshold trading days | tradingDay | 5 | ||||||||||||||||||
Convertible debt threshold consecutive trading days | tradingDay | 10 | ||||||||||||||||||
Convertible debt conversion ratio | 0.98 | ||||||||||||||||||
Bridge Loan | Bridge Loan | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
(Gain) loss on extinguishment of debt | $ 8,800,000 | 8,800,000 | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 485,000,000 | ||||||||||||||||||
Number of extensions | extension | 2 | ||||||||||||||||||
Debt instrument, duration fee percentage | 0.25% | ||||||||||||||||||
Debt instrument, funding fee percentage | 0.50% | ||||||||||||||||||
Costs and interest incurred | $ 1,100,000 | $ 5,200,000 | $ 6,300,000 | ||||||||||||||||
Bridge Loan | Bridge Loan | Base Rate | Initial Funding | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 2% | ||||||||||||||||||
Bridge Loan | Bridge Loan | Base Rate | Six To Twelve Months After Funding Member | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 2.50% | ||||||||||||||||||
Bridge Loan | Bridge Loan | Base Rate | Twelve Months After Funding Until Repayment | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 3% | ||||||||||||||||||
Bridge Loan | Bridge Loan | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 1% | ||||||||||||||||||
Basis spread on variable rate | 1 | ||||||||||||||||||
Bridge Loan | Bridge Loan | London Interbank Offered Rate (LIBOR) | Initial Funding | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 3% | ||||||||||||||||||
Bridge Loan | Bridge Loan | London Interbank Offered Rate (LIBOR) | Six To Twelve Months After Funding Member | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 3.50% | ||||||||||||||||||
Bridge Loan | Bridge Loan | London Interbank Offered Rate (LIBOR) | Twelve Months After Funding Until Repayment | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 4% | ||||||||||||||||||
Bridge Loan | Bridge Loan | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||||||||||||||
Line of Credit | Credit Agreement | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, leverage ratio, maximum | 4 | ||||||||||||||||||
Debt instrument, interest coverage ratio, minimum | 3 | ||||||||||||||||||
Line of Credit | Credit Agreement | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Face amount | $ 90,000,000 | $ 22,300,000 | |||||||||||||||||
Aggregate purchase price | $ 22,300,000 | ||||||||||||||||||
Maturity date, period after funding date | 60 days | ||||||||||||||||||
Proceeds from bridge loan | $ 22,300,000 | $ 90,000,000 | |||||||||||||||||
Line of Credit | Credit Agreement | Secured Debt | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 1% | ||||||||||||||||||
Line of Credit | Credit Agreement | Secured Debt | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Derivative variable rate | 0.50% |
Debt - Repurchases (Details)
Debt - Repurchases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 08, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Aggregate purchase price | $ 112,300 | ||
4.625% Senior Notes Due in 2030 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal repurchased | $ 83,300 | 181,238 | $ 25,391 |
Aggregate purchase price | 167,661 | 26,035 | |
(Gain) Loss on repurchase | $ (12,060) | $ 644 |
Debt - Additional Information R
Debt - Additional Information Related to Senior Notes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 07, 2020 |
Debt Instrument [Line Items] | |||
Less: Unamortized discount | $ (2,764) | $ (91,593) | |
Less: Debt issuance costs | (8,221) | (9,056) | |
Total debt | 999,053 | 1,090,627 | |
4.625% Senior Notes Due in 2030 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal amount of $4.625% Senior Notes | 460,038 | 641,276 | $ 750,000 |
Less: Unamortized discount | (2,764) | (4,259) | |
Less: Debt issuance costs | (874) | (1,339) | |
Total debt | $ 456,400 | $ 635,678 |
Debt - Components of Interest E
Debt - Components of Interest Expense for Senior Notes (Details) - 4.625% Senior Notes Due in 2030 - Senior Notes - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 07, 2020 | |
Debt Instrument [Line Items] | ||||
Stated interest rate | 4.625% | |||
Coupon interest expense | $ 24,500 | $ 33,899 | $ 8,094 | |
Non-cash amortization of discount on convertible notes | 333 | 529 | 103 | |
Amortization of debt issuance costs | 109 | 66 | 29 | |
Total interest expense | $ 24,942 | $ 34,494 | $ 8,226 |
Debt - Additional Information_2
Debt - Additional Information Related to Convertible Notes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 15, 2019 |
Debt Instrument [Line Items] | |||
Additional paid-in capital | $ 439,681 | $ 509,122 | |
Less: Unamortized discount | (2,764) | (91,593) | |
Deferred issuance costs | (8,221) | (9,056) | |
Long-term debt | 999,053 | 1,090,627 | |
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Principal amount of 1.75% Convertible Notes | 1,010,038 | 1,191,276 | |
1.75% Convertible Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Additional paid-in capital | 0 | 88,137 | |
Stated interest rate | 1.75% | ||
Principal amount of 1.75% Convertible Notes | 550,000 | 550,000 | |
Less: Unamortized discount | 0 | (87,334) | |
Deferred issuance costs | (7,347) | (7,717) | $ (2,800) |
Long-term debt | $ 542,653 | $ 454,949 |
Debt - Components of Interest_2
Debt - Components of Interest Expense Related to Convertible Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||
Total interest expense | $ 37,100 | $ 79,600 | $ 58,100 |
3.25% Convertible Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Coupon interest expense | 5,994 | 13,080 | |
Non-cash amortization of discount on convertible notes | 4,645 | 9,717 | |
Amortization of debt issuance costs | 855 | 1,749 | |
Total interest expense | 11,494 | 24,546 | |
1.75% Convertible Notes | Convertible Debt | |||
Debt Instrument [Line Items] | |||
Coupon interest expense | 9,776 | 9,625 | 9,653 |
Non-cash amortization of discount on convertible notes | 0 | 15,338 | 14,563 |
Amortization of debt issuance costs | 1,858 | 1,173 | 1,098 |
Total interest expense | $ 11,634 | $ 26,136 | $ 25,314 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease renewal term | 5 years | ||
Operating lease, impairment loss | $ 1 | $ 12.7 | $ 12.1 |
Impairment charge | 3.6 | ||
Sublease income | 6.8 | $ 2 | 2.6 |
Future minimum payments due | $ 11.9 | ||
COVID-19 | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, impairment loss | $ 2.1 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease terms | 3 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease terms | 5 years |
Leases - Balance Sheet and Othe
Leases - Balance Sheet and Other Supplemental Operating Lease Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 40,640 | $ 55,617 |
Operating lease liabilities, current | 22,153 | 27,156 |
Operating lease liabilities, noncurrent | 33,996 | 53,708 |
Total operating lease liabilities | $ 56,149 | $ 80,864 |
Weighted average remaining lease term | 3 years 3 months 18 days | 3 years 10 months 24 days |
Weighted average discount rate | 3.08% | 3.48% |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 17,656 | $ 31,396 |
Short-term lease cost | 1,127 | 2,754 |
Total lease cost | $ 18,783 | $ 34,150 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 23,000 | |
2024 | 17,453 | |
2025 | 8,527 | |
2026 | 5,470 | |
2027 | 2,443 | |
Thereafter | 2,445 | |
Total lease payments | 59,338 | |
Less: Imputed interest | 3,189 | |
Present value of operating lease liabilities | $ 56,149 | $ 80,864 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Estimate of possible loss | $ 25.5 | $ 24 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ (42,698) | $ 8,435 | $ (15,112) |
State | (12,184) | 248 | (4,300) |
Foreign | (16,066) | (15,931) | (18,631) |
Total current | (70,948) | (7,248) | (38,043) |
Deferred: | |||
Federal | 12,667 | 17,132 | 6,022 |
State | (1,577) | 5,044 | 67 |
Foreign | 1,901 | (729) | (6,396) |
Total deferred | 12,991 | 21,447 | (307) |
Income tax (expense) benefit from continuing operations | $ (57,957) | $ 14,199 | $ (38,350) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes [Line Items] | ||||
Tax expense recognized from deferred tax liability | $ 13,400,000 | |||
Effective income tax rate reconciliation, tax exempt income, amount | $ 298,500,000 | |||
Total deferred tax assets | 80,827,000 | 81,815,000 | ||
Valuation allowance | 1,699,000 | 1,812,000 | $ 8,262,000 | $ 563,000 |
Decrease in valuation allowance | 100,000 | |||
Deferred tax asset, interest carryforward | 6,400,000 | 23,300,000 | ||
Undistributed earnings from foreign subsidiaries | 307,800,000 | |||
Prepaid tax payments | 3,200,000 | 800,000 | ||
Income before income taxes, domestic operations | 71,800,000 | 279,700,000 | (2,000,000) | |
Income before income taxes, foreign operations | 59,400,000 | 71,700,000 | 80,400,000 | |
Unrecognized tax benefits | 34,208,000 | 39,527,000 | 46,032,000 | $ 43,687,000 |
Unrecognized tax benefits, if recognized, would affect the Company’s effective tax rat | 32,700,000 | 35,600,000 | 44,900,000 | |
Unrecognized tax benefits, interest and penalties accrued | 6,300,000 | 5,700,000 | 7,200,000 | |
Unrecognized tax benefits, interest and penalty expense (benefit) | 700,000 | (1,500,000) | 2,800,000 | |
Domestic Tax Authority | Capital Loss Carryforward | ||||
Income Taxes [Line Items] | ||||
Tax credit carryforward, amount | 28,700,000 | 24,100,000 | ||
State and Local Jurisdiction | Research Tax Credit Carryforward | ||||
Income Taxes [Line Items] | ||||
Tax credit carryforward, amount | 3,500,000 | 5,100,000 | ||
Foreign Tax Authority | ||||
Income Taxes [Line Items] | ||||
Tax credit carryforward, amount | $ 0 | $ 0 | ||
Domestic Tax Authority | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforwards (“NOLs”) | 22,800,000 | |||
NOLs subject to expiration | 20,700,000 | |||
NOLs not subject to expiration | $ 2,100,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Rate with Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 21% | 21% | 21% |
State income taxes, net | 5% | (1.30%) | 1.80% |
Foreign rate differential | 1% | (0.30%) | 2.80% |
Foreign income inclusion | 5.40% | 0.70% | 5.20% |
Foreign tax credit | (5.10%) | (0.80%) | (4.30%) |
Reserve for uncertain tax positions | (3.20%) | (2.40%) | 11.50% |
Valuation allowance | 0% | (1.70%) | 9.90% |
Impact on deferred taxes of enacted tax law and rate changes | 1.40% | (0.50%) | 3.30% |
Tax credits and incentives | (5.00%) | (1.50%) | (7.20%) |
Mark-to market on investment in Consensus | 22.10% | (18.00%) | 0% |
Return to provision adjustments | 1.10% | 0.50% | 2.40% |
Executive compensation | 1.50% | 0.70% | 2.70% |
Other | (1.00%) | (0.40%) | (0.20%) |
Effective tax rates | 44.20% | (4.00%) | 48.90% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||||
Net operating loss and other carryforwards | $ 19,513 | $ 28,393 | ||
Tax credit carryforwards | 4,222 | 2,801 | ||
Accrued expenses | 10,702 | 12,548 | ||
Allowance for bad debt | 1,445 | 2,116 | ||
Share-based compensation expense | 3,885 | 3,545 | ||
Operating lease liabilities | 16,756 | 21,771 | ||
Basis difference in fixed assets | 14,642 | 0 | ||
Deferred revenue | 2,994 | 4,331 | ||
State taxes | 4,447 | 3,771 | ||
Other | 3,920 | 4,351 | ||
Deferred tax assets, gross | 82,526 | 83,627 | ||
Less: valuation allowance | (1,699) | (1,812) | $ (8,262) | $ (563) |
Total deferred tax assets | 80,827 | 81,815 | ||
Deferred tax liabilities: | ||||
Basis difference in property and equipment | 0 | (8,337) | ||
Operating lease right-of-use assets | (14,008) | (16,696) | ||
Basis difference in intangible assets | (101,797) | (117,244) | ||
Unrealized gains on investments | (24,123) | (11,291) | ||
Prepaid insurance | (2,744) | (3,121) | ||
Convertible debt | 0 | (21,972) | ||
Other | (8,639) | (6,219) | ||
Total deferred tax liabilities | (151,311) | (184,880) | ||
Net deferred tax liabilities | $ (70,484) | $ (103,065) |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - 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] | |||
Beginning balance | $ 39,527 | $ 46,032 | $ 43,687 |
Increases related to tax positions during a prior year | 0 | 3,448 | 3,953 |
Decreases related to tax positions taken during a prior year | (2,816) | (5,511) | (244) |
Increases related to tax positions taken in the current year | 819 | 4,675 | 4,264 |
Settlements | 0 | 0 | (5,628) |
Decreases related to expiration of statute of limitations | (3,322) | (9,117) | 0 |
Ending balance | $ 34,208 | $ 39,527 | $ 46,032 |
Income Taxes - Schedule of Valu
Income Taxes - Schedule of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |||
Beginning balance | $ 1,812 | $ 8,262 | $ 563 |
Charges to costs and expenses | 0 | 178 | 9,456 |
Write-offs and recoveries | (113) | (6,628) | (1,757) |
Ending balance | $ 1,699 | $ 1,812 | $ 8,262 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | 29 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Aug. 06, 2020 | Jun. 10, 2014 | Feb. 29, 2012 | |
Class of Stock [Line Items] | |||||||
Repurchases of shares of stock | $ 71,337 | $ 47,741 | |||||
Number of shares purchased from plan participants (in shares) | 72,886 | 251,946 | 111,451 | ||||
Decrease for tax withholding obligation | $ 7,000 | $ 30,600 | $ 10,400 | ||||
3.25% Convertible Notes | Convertible Debt | |||||||
Class of Stock [Line Items] | |||||||
Stated interest rate | 3.25% | ||||||
Conversion shares issued as extinguishment cost on 3.25% convertible notes (in shares) | 3,050,850 | ||||||
2012 Repurchase Program | |||||||
Class of Stock [Line Items] | |||||||
Maximum number of shares authorized to be repurchased (in shares) | 5,000,000 | ||||||
Shares repurchased under the program (in shares) | 1,140,819 | ||||||
Repurchases of shares of stock | $ 87,500 | ||||||
2020 Repurchase Program | |||||||
Class of Stock [Line Items] | |||||||
Maximum number of shares authorized to be repurchased (in shares) | 10,000,000 | ||||||
Shares repurchased under the program (in shares) | 736,536 | 445,711 | 2,490,599 | 3,672,846 | |||
Repurchases of shares of stock | $ 71,300 | $ 47,700 | $ 177,800 | ||||
Value of shares repurchased | $ 296,900 | ||||||
Number of remaining shares available for purchase (in shares) | 6,327,154 | 6,327,154 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
May 01, 2018 | Feb. 02, 2018 | May 31, 2001 | Dec. 31, 2022 USD ($) factor $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Dec. 31, 2019 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options outstanding (in shares) | 435,135 | 440,574 | 475,601 | 518,341 | |||
Options exercisable (in shares) | 217,567 | 168,614 | 175,601 | ||||
Options exercisable (in usd per share) | $ / shares | $ 68.97 | $ 67.62 | $ 60.35 | ||||
Total intrinsic values of options exercised in period | $ | $ 400 | $ 5,800 | $ 3,000 | ||||
Total fair value of options vested | $ | 1,100 | 1,000 | 1,000 | ||||
Proceeds from exercise of stock options | $ | 148 | 2,939 | 1,619 | ||||
Tax benefit realized for the tax deductions from option exercises | $ | $ 300 | $ 1,900 | $ 700 | ||||
Estimated forfeiture rates | 13% | 12.40% | 13% | ||||
Issuance of common stock under employee stock purchase plan | $ | $ 9,431 | $ 9,231 | $ 7,382 | ||||
Share-based Payment Arrangement, Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Incremental award ratio | factor | 1.09 | ||||||
Terms of award | 10 years | ||||||
Award vesting periods | 5 years | ||||||
Unrecognized compensation cost related to non-vested awards granted | $ | $ 3,900 | ||||||
Weighted-average period to recognize compensation cost (in years) | 3 years | ||||||
Restricted Stock and Restricted Stock Unit | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock and restricted units granted (in shares) | 154,022 | 246,251 | 129,786 | ||||
Restricted Stock and Restricted Stock Unit | Board of Directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting periods | 1 year | ||||||
Restricted Stock and Restricted Stock Unit | Chief Executive Officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting periods | 8 years | ||||||
Market-based Restricted Stock Awards | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted-average period to recognize compensation cost (in years) | 2 years 9 months 18 days | ||||||
Restricted stock and restricted units granted (in shares) | 100,193 | 73,094 | 82,112 | ||||
Weighted-average grant-date fair values of restricted stock awards granted (in usd per share) | $ / shares | $ 87.11 | $ 94.40 | $ 70.99 | ||||
Restricted Stock and Restricted Stock Unit, Market-based Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Tax benefit realized for the tax deductions from option exercises | $ | $ 2,800 | $ 9,500 | $ 2,100 | ||||
Unrecognized compensation cost related to non-vested awards granted | $ | 40,100 | ||||||
Total fair value of restricted stock and restricted stock units vested | $ | $ 12,400 | $ 68,100 | $ 18,600 | ||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number | 464,354 | 360,743 | 209,784 | 20,874 | |||
Share-based payment arrangement, price target, increase (decrease) | $ / shares | $ 21.41 | ||||||
Weighted-average period to recognize compensation cost (in years) | 3 years 4 months 24 days | ||||||
Restricted stock and restricted units granted (in shares) | 254,215 | 319,345 | 210,630 | ||||
Minimum | Restricted Stock and Restricted Stock Unit | Senior Staff | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting periods | 4 years | ||||||
Maximum | Restricted Stock and Restricted Stock Unit | Senior Staff | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting periods | 5 years | ||||||
2015 Stock Option Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Maximum issuance of common stock (in shares) | 4,200,000 | ||||||
Number of shares available for issuance (in shares) | 1,496,619 | ||||||
2015 Stock Option Plan | Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number | 464,354 | ||||||
2015 Stock Option Plan | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Market value of common stock on the date of grant for incentive stock options | 100% | ||||||
Employee Stock Purchase Plan | Common stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Maximum issuance of common stock (in shares) | 2,000,000 | ||||||
Market value of common stock on the date of grant for incentive stock options | 85% | 95% | 85% | ||||
Number of shares available for issuance (in shares) | 1,155,699 | ||||||
Estimated forfeiture rates | 11.83% | 11.15% | 11.15% | ||||
Maximum earnings withheld by the employees | 15% | ||||||
Offering period for incentive stock options | 6 months | 3 months | |||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 139,992 | 109,248 | 118,629 | ||||
Employee Stock Purchase Plan | Minimum | Employee Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Purchase price under the Purchase Plan (in usd per share) | $ / shares | $ 66.33 | ||||||
Employee Stock Purchase Plan | Maximum | Employee Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Purchase price under the Purchase Plan (in usd per share) | $ / shares | $ 68.22 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock Option Activity (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) factor $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 $ / shares shares | |
Number of Shares | |||
Beginning balance (in shares) | shares | 440,574 | 475,601 | 518,341 |
Granted (in shares) | shares | 0 | 0 | 0 |
Exercised (in shares) | shares | (5,439) | (70,776) | (42,740) |
Canceled (in shares) | shares | 0 | 0 | 0 |
Adjustment due to Consensus Separation (in shares) | shares | 35,749 | ||
Ending balance (in shares) | shares | 435,135 | 440,574 | 475,601 |
Options exercisable (in shares) | shares | 217,567 | 168,614 | 175,601 |
Vested and expected to vest (in shares) | shares | 396,185 | ||
Weighted-Average Exercise Price | |||
Beginning balance (in usd per share) | $ / shares | $ 68.45 | $ 69.61 | $ 65.77 |
Granted (in usd per share) | $ / shares | 0 | 0 | 0 |
Exercised (in usd per share) | $ / shares | 27.15 | 41.63 | 23.11 |
Canceled (in usd per share) | $ / shares | 0 | 0 | 0 |
Adjustment due to consensus separation (in usd per share) | $ / shares | 68.25 | ||
Ending balance (in usd per share) | $ / shares | 68.97 | 68.45 | 69.61 |
Options exercisable (in usd per share) | $ / shares | 68.97 | $ 67.62 | $ 60.35 |
Vested and expected to vest (in usd per share) | $ / shares | $ 68.97 | ||
Weighted-Average Remaining Contractual Life (In Years) | |||
Options outstanding at December 31, 2022 | 5 years | ||
Exercisable at December 31, 2022 | 5 years | ||
Vested and expected to vest at December 31, 2022 | 5 years | ||
Aggregate Intrinsic Value | |||
Options outstanding at December 31, 2022 | $ | $ 4,407,918 | ||
Exercisable at December 31, 2022 | $ | 2,203,954 | ||
Vested and expected to vest at December 31, 2022 | $ | $ 4,013,353 | ||
Share-based Payment Arrangement, Option | |||
Aggregate Intrinsic Value | |||
Incremental award ratio | factor | 1.09 | ||
Share-based Payment Arrangement | |||
Aggregate Intrinsic Value | |||
Incremental award ratio | factor | 1.09 |
Stock Based Compensation - Summ
Stock Based Compensation - Summarized Information Concerning Outstanding and Exercisable Options (Details) - Range One | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of exercise price (in usd per share) | $ 68.97 |
Number outstanding (in shares) | shares | 435,135 |
Weighted average remaining contractual life | 5 years |
Options outstanding, weighted average exercise price (in usd per share) | $ 68.97 |
Number exercisable (in shares) | shares | 217,567 |
Exercisable options, weighted average exercise price (in usd per share) | $ 68.97 |
Stock Based Compensation - Valu
Stock Based Compensation - Valuation Assumptions of Stock Options and Market-based Restricted Stock Awards Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Market-based Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Underlying stock price at valuation date (in usd per share) | $ 99.32 | $ 113.27 | $ 91.17 |
Expected volatility | 36.70% | 30.30% | 27% |
Risk-free interest rate | 1.80% | 1.30% | 0.70% |
Share-based Payment Arrangement, Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 40.70% | 35% | 25.30% |
Risk-free interest rate | 1.17% | 0.05% | 0.73% |
Expected term (in years) | 6 months | 6 months | 6 months |
Dividend yield | 0% | 0% | 0% |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted Stock and Restricted Stock Unit Award Activity (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) factor $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 $ / shares shares | |
Shares | |||
Adjustment due to Consensus Separation (in shares) | 35,749 | ||
Weighted-Average Grant-Date Fair Value | |||
Adjustment due to consensus separation (in usd per share) | $ / shares | $ 68.25 | ||
Number of Shares | |||
Adjustment due to Consensus Separation (in shares) | 35,749 | ||
Restricted Stock | |||
Shares | |||
Beginning balance (in shares) | 383,963 | 820,566 | 1,105,059 |
Granted (in shares) | 0 | 0 | 1,268 |
Vested (in shares) | (67,762) | (435,529) | (264,172) |
Canceled (in shares) | (4,920) | (33,194) | (21,589) |
Adjustment due to Consensus Separation (in shares) | 32,120 | ||
Ending balance (in shares) | 311,281 | 383,963 | 820,566 |
Weighted-Average Grant-Date Fair Value | |||
Beginning balance (in usd per share) | $ / shares | $ 62.66 | $ 62.66 | $ 64.76 |
Granted (in usd per share) | $ / shares | 0 | 0 | 98.63 |
Vested (in usd per share) | $ / shares | 80.64 | 60.52 | 70.25 |
Canceled (in usd per share) | $ / shares | 84.77 | 83.23 | 79.34 |
Adjustment due to consensus separation (in usd per share) | $ / shares | 74.62 | ||
Ending balance (in usd per share) | $ / shares | $ 59.90 | $ 62.66 | $ 62.66 |
Number of Shares | |||
Granted (in shares) | 0 | 0 | 1,268 |
Vested (in shares) | (67,762) | (435,529) | (264,172) |
Canceled (in shares) | (4,920) | (33,194) | (21,589) |
Adjustment due to Consensus Separation (in shares) | 32,120 | ||
Restricted Stock Units (RSUs) | |||
Shares | |||
Granted (in shares) | 254,215 | 319,345 | 210,630 |
Vested (in shares) | (115,523) | (124,761) | (9,029) |
Canceled (in shares) | (35,081) | (60,201) | (12,691) |
Adjustment due to Consensus Separation (in shares) | 16,576 | ||
Number of Shares | |||
Beginning balance (in shares) | 360,743 | 209,784 | 20,874 |
Granted (in shares) | 254,215 | 319,345 | 210,630 |
Vested (in shares) | (115,523) | (124,761) | (9,029) |
Canceled (in shares) | (35,081) | (60,201) | (12,691) |
Adjustment due to Consensus Separation (in shares) | 16,576 | ||
Ending balance (in shares) | 464,354 | 360,743 | 209,784 |
Vested and expected to vest (in shares) | 334,674 | ||
Weighted-Average Remaining Contractual Life (in Years) | |||
Outstanding weighted average remaining contractual life (in years) | 2 years 7 months 9 days | ||
Vested and expected to vest weighted average remaining contractual life (in years) | 2 years 1 month 13 days | ||
Aggregate Intrinsic Value | |||
Outstanding at December 31, 2022 | $ | $ 36,730,401 | ||
Vested and expected to vest at December 31, 2022 | $ | $ 26,472,675 | ||
Share-based Payment Arrangement, Option | |||
Aggregate Intrinsic Value | |||
Incremental award ratio | factor | 1.09 |
Defined Contribution 401(k) S_2
Defined Contribution 401(k) Savings Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Expenses incurred for contributions | $ 5.1 | $ 4.8 | $ 3.3 |
Earnings Per Share - Components
Earnings Per Share - Components of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 15, 2019 | |
Numerator for basic and diluted net income per common share: | ||||
Net income (loss) from continuing operations | $ 65,466 | $ 401,395 | $ 28,660 | |
Net income available to participating securities | (20) | (326) | (120) | |
Convertible notes interest expense | 0 | 0 | 0 | |
Net income available to the Company’s common shareholders from continuing operations | $ 65,446 | $ 401,069 | $ 28,540 | |
Denominator: | ||||
Basic (in shares) | 46,954,558 | 45,893,928 | 46,308,825 | |
Effect of dilution: | ||||
Equity incentive plans | 71,291 | 311,585 | 7,537 | |
Convertible debt (in shares) | 0 | 1,657,232 | 799,247 | |
Diluted weighted average number of shares outstanding (in shares) | 47,025,849 | 47,862,745 | 47,115,609 | |
Net income per share from continuing operations: | ||||
Basic (in dollars per share) | $ 1.39 | $ 8.74 | $ 0.62 | |
Diluted (in dollars per share) | $ 1.39 | $ 8.38 | $ 0.61 | |
1.75% Convertible Notes | Convertible Debt | ||||
Net income per share from continuing operations: | ||||
Stated interest rate | 1.75% | |||
Anti-dilutive stock options and restricted stock | ||||
Net income per share from continuing operations: | ||||
Weighted-average shares excluded from diluted weighted-average shares outstanding: | 0 | 0 | 0 | |
Anti-dilutive convertible debt | ||||
Net income per share from continuing operations: | ||||
Weighted-average shares excluded from diluted weighted-average shares outstanding: | 5,158,071 | 0 | 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 business | |
Segment Reporting [Abstract] | |
Number of businesses | 2 |
Segment Information - Reconcili
Segment Information - Reconciliation of Total Segment Operating Income to Consolidated Operating Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 1,390,997 | $ 1,416,722 | $ 1,158,829 |
Total operating costs and expenses | 1,192,056 | 1,249,382 | 1,020,489 |
Income from operations | 198,941 | 167,340 | 138,340 |
Reportable segments | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 1,390,997 | 1,416,722 | 1,158,828 |
Total operating costs and expenses | 1,141,865 | 1,189,082 | 966,816 |
Income from operations | 249,132 | 227,640 | 192,012 |
Intersegment Eliminations | |||
Segment Reporting Information [Line Items] | |||
Total revenues | (801) | (1,189) | (229) |
Total operating costs and expenses | (801) | (1,189) | (229) |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 0 | 0 | 1 |
Total operating costs and expenses | 50,191 | 60,300 | 53,673 |
Income from operations | (50,191) | (60,300) | (53,672) |
Digital Media | Reportable segments | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 1,079,172 | 1,069,300 | 811,360 |
Total operating costs and expenses | 880,240 | 851,807 | 672,280 |
Income from operations | 198,932 | 217,493 | 139,080 |
Cybersecurity and Martech | Reportable segments | |||
Segment Reporting Information [Line Items] | |||
Total revenues | 312,626 | 348,611 | 347,697 |
Total operating costs and expenses | 262,426 | 338,464 | 294,765 |
Income from operations | $ 50,200 | 10,147 | $ 52,932 |
Cybersecurity and Martech | Reportable segments | Revision of Prior Period, Adjustment | |||
Segment Reporting Information [Line Items] | |||
Total operating costs and expenses | $ 19,200 |
Segment Information - Total Cap
Segment Information - Total Capital Expenditures, Depreciation and Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total capital expenditures | $ 106,154 | $ 113,740 | $ 92,552 |
Total depreciation and amortization | 233,400 | 258,303 | 228,737 |
Reportable segments | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total capital expenditures | 106,143 | 98,488 | 76,315 |
Total depreciation and amortization | 233,372 | 249,005 | 202,320 |
Corporate, Non-Segment | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total capital expenditures | 11 | 0 | 0 |
Total depreciation and amortization | 28 | 288 | 3,658 |
Segment Reconciling Items | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total capital expenditures | 0 | 15,252 | 16,237 |
Total depreciation and amortization | 0 | 9,010 | 22,759 |
Digital Media | Reportable segments | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total capital expenditures | 85,049 | 80,877 | 59,693 |
Total depreciation and amortization | 184,658 | 193,661 | 145,321 |
Cybersecurity and Martech | Reportable segments | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total capital expenditures | 21,094 | 17,611 | 16,622 |
Total depreciation and amortization | $ 48,714 | $ 55,344 | $ 56,999 |
Segment Information - Revenues
Segment Information - Revenues and Long-lived Assets by Geographic Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues | $ 1,390,997 | $ 1,416,722 | $ 1,158,829 |
Long-lived assets | 218,824 | 216,826 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues | 1,181,936 | 1,187,207 | 958,833 |
Long-lived assets | 171,957 | 170,490 | |
All other countries | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total revenues | 209,061 | 229,515 | $ 199,996 |
Long-lived assets | $ 46,867 | $ 46,336 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Non-Cash (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 15, 2019 | Jun. 10, 2014 | |
Non-cash investing activity: | ||||||
Property and equipment, accrued but unpaid | $ 150 | $ 50 | $ 3,154 | |||
Right-of-use assets acquired in exchange for operating lease obligations | 4,130,000 | 9,850 | 31,148 | |||
Exchange of corporate debt securities | $ 18,300 | 0 | 0 | 18,326 | ||
Disposition of investment in Consensus | 112,286 | 0 | 0 | |||
Non-cash financing activity: | ||||||
Conversion shares issued as extinguishment cost to redeem 3.25% Convertible Notes | 0 | 431,952 | 0 | |||
Reacquisition of 3.25% Convertible Notes, net of tax | 0 | 390,526 | 0 | |||
Disposition of investment | 160,100 | |||||
Aggregate purchase price | 112,300 | |||||
Loss on sale on investments | (47,800) | |||||
1.75% Convertible Notes | ||||||
Non-cash financing activity: | ||||||
Repayments of Debt | 112,286 | 0 | 0 | |||
1.75% Convertible Notes | Convertible Debt | ||||||
Non-cash financing activity: | ||||||
Stated interest rate | 1.75% | |||||
4.625% Senior Notes Due in 2030 | ||||||
Non-cash financing activity: | ||||||
Repayments of Debt | $ 0 | $ 485,000 | $ 0 | |||
3.25% Convertible Notes | Convertible Debt | ||||||
Non-cash financing activity: | ||||||
Stated interest rate | 3.25% |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Supplemental Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |||
Interest paid | $ 36,168 | $ 54,479 | $ 105,962 |
Income taxes paid, net of refunds | $ 59,543 | $ 61,162 | $ 45,046 |
Supplemental Cash Flow Inform_5
Supplemental Cash Flow Information - Operating Cash Outflows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |||
Operating cash outflows related to lease liabilities | $ 26,921 | $ 27,798 | $ 27,402 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Summary of Changes in Accumulated Balances of Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,967,732 | $ 1,211,018 | $ 1,311,192 |
Net current period other comprehensive loss | (28,151) | (2,416) | (8,344) |
Consensus Separation | 280,360 | ||
Ending balance | 1,892,611 | 1,967,732 | 1,211,018 |
Accumulated other comprehensive income (loss) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (57,222) | (54,806) | (46,462) |
Other comprehensive loss before reclassifications | (32,207) | (21,382) | (8,344) |
Consensus Separation | 4,056 | 18,966 | |
Ending balance | (85,373) | (57,222) | (54,806) |
Unrealized Gains (Losses) on Investments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 169 | 283 | (275) |
Other comprehensive loss before reclassifications | 272 | (114) | 558 |
Net current period other comprehensive loss | 272 | (114) | 558 |
Consensus Separation | 0 | 0 | |
Ending balance | 441 | 169 | 283 |
Foreign Currency Translation | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (57,391) | (55,089) | (46,187) |
Other comprehensive loss before reclassifications | (32,479) | (21,268) | (8,902) |
Net current period other comprehensive loss | (28,423) | (2,302) | (8,902) |
Consensus Separation | 4,056 | 18,966 | |
Ending balance | $ (85,814) | $ (57,391) | $ (55,089) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Reclassification out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Loss on investments, net | $ (4,400) | $ (46,743) | $ (16,677) | $ (20,991) |
Income tax expense | 57,957 | (14,199) | 38,350 | |
Net income | 0 | (151) | 698 | |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Loss on investments, net | 0 | (151) | 698 | |
Income before income taxes | 0 | (151) | 698 | |
Income tax expense | $ 0 | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) shares in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||
Equity securities, shares owned | 4 | 1.1 | 4 | |
Due from related parties | $ 7,500 | $ 0 | $ 7,500 | $ 0 |
Management fees recognized | 1,500,000 | 3,000,000 | 3,000,000 | |
Variable interest entity, amount of capital call notices received | 0 | 22,200,000 | 32,900,000 | |
Variable interest entity, amount paid | 22,200,000 | 31,900,000 | ||
Distribution from equity method investment | 0 | 15,327,000 | $ 0 | |
Discontinued Operations | J2 Global | ||||
Related Party Transaction [Line Items] | ||||
Net reimbursement for Consensus | $ 11,600,000 | |||
Consensus Cloud Solutions | Separation Transaction | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 5% | |||
Expenses from transactions with related party | $ 23,300,000 | |||
Reimbursements from related party | 11,700,000 | |||
Gain from reimbursement of costs | 7,500,000 | |||
Revenue from related parties | 8,500,000 | |||
Consensus Cloud Solutions | Various Agreements | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Expenses from transactions with related party | 1,200,000 | 2,100,000 | ||
Offset to lease expense | 1,500,000 | 500,000 | ||
Due from related parties | 9,300,000 | 9,300,000 | 9,300,000 | |
Consensus Cloud Solutions | Services Provided Under Transition Services Agreement | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Due from related parties | 2,100,000 | 2,100,000 | 2,100,000 | |
Consensus Cloud Solutions | Reimbursement Of Certain Transaction Related Costs And Other Reimbursements | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Due from related parties | $ 7,200,000 | $ 7,200,000 | $ 7,200,000 |