Cover
Cover - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Oct. 30, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37397 | |
Entity Registrant Name | Rimini Street, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4880301 | |
Entity Address, Address Line One | 1700 S. Pavilion Center Drive | |
Entity Address, Address Line Two | Suite 330 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89135 | |
City Area Code | (702) | |
Local Phone Number | 839-9671 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 89,389 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001635282 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock, par value $0.0001 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | RMNI | |
Security Exchange Name | NASDAQ |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 108,233 | $ 109,008 |
Restricted cash | 427 | 426 |
Accounts receivable, net of allowance of $860 and $723, respectively | 61,191 | 116,093 |
Deferred contract costs, current | 17,641 | 17,218 |
Short-term investments | 19,914 | 20,115 |
Prepaid expenses and other | 24,678 | 18,846 |
Total current assets | 232,084 | 281,706 |
Long-term assets: | ||
Property and equipment, net of accumulated depreciation and amortization of $17,320 and $15,441, respectively | 8,488 | 6,113 |
Operating lease right-of-use assets | 6,339 | 7,142 |
Deferred contract costs, noncurrent | 22,412 | 23,508 |
Deposits and other | 6,643 | 7,057 |
Deferred income taxes, net | 59,009 | 65,515 |
Total assets | 334,975 | 391,041 |
Current liabilities: | ||
Current maturities of long-term debt | 5,912 | 4,789 |
Accounts payable | 6,139 | 8,040 |
Accrued compensation, benefits and commissions | 35,782 | 37,459 |
Other accrued liabilities | 22,718 | 32,676 |
Operating lease liabilities, current | 4,175 | 4,223 |
Deferred revenue, current | 214,073 | 265,840 |
Total current liabilities | 288,799 | 353,027 |
Long-term liabilities: | ||
Long-term debt, net of current maturities | 65,671 | 70,003 |
Deferred revenue, noncurrent | 24,326 | 34,081 |
Operating lease liabilities, noncurrent | 7,511 | 9,094 |
Other long-term liabilities | 1,718 | 2,006 |
Total liabilities | 388,025 | 468,211 |
Commitments and contingencies (Note 8) | ||
Stockholders’ deficit: | ||
Preferred stock; $0.0001 par value. Authorized 99,820 (excluding 180 shares of Series A Preferred Stock) no other series has been designated | 0 | 0 |
Common stock; $0.0001 par value. Authorized 1,000,000 shares; issued and outstanding 89,323 and 88,517 shares, respectively | 9 | 9 |
Additional paid-in capital | 164,522 | 156,401 |
Accumulated other comprehensive loss | (4,904) | (4,195) |
Accumulated deficit | (211,561) | (228,269) |
Treasury stock, at cost | (1,116) | (1,116) |
Total stockholders' deficit | (53,050) | (77,170) |
Total liabilities and stockholders' deficit | $ 334,975 | $ 391,041 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 860 | $ 723 |
Accumulated depreciation and amortization | $ 17,320 | $ 15,441 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (shares) | 99,820,000 | 99,820,000 |
Series A preferred stock, shares authorized (shares) | 180,000 | 180,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (shares) | 89,323,000 | 88,517,000 |
Common stock, shares outstanding (shares) | 89,323,000 | 88,517,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 107,453 | $ 101,931 | $ 319,386 | $ 301,041 |
Cost of revenue | 40,110 | 39,271 | 118,802 | 113,822 |
Gross profit | 67,343 | 62,660 | 200,584 | 187,219 |
Operating expenses: | ||||
Sales and marketing | 35,593 | 35,934 | 107,356 | 103,840 |
General and administrative | 18,384 | 18,454 | 55,475 | 57,267 |
Reorganization costs | 0 | 0 | 59 | 0 |
Litigation costs and related recoveries: | ||||
Professional fees and other costs of litigation | 2,127 | 6,145 | 5,475 | 12,837 |
Insurance costs and recoveries, net | 0 | 92 | 0 | (389) |
Litigation costs and related recoveries, net | 2,127 | 6,237 | 5,475 | 12,448 |
Total operating expenses | 56,104 | 60,625 | 168,365 | 173,555 |
Operating income | 11,239 | 2,035 | 32,219 | 13,664 |
Non-operating income and (expenses): | ||||
Interest expense | (1,413) | (1,167) | (4,139) | (2,974) |
Other income (expenses), net | 990 | (1,329) | 1,799 | (2,696) |
Income (loss) before income taxes | 10,816 | (461) | 29,879 | 7,994 |
Income taxes | (4,015) | 56 | (13,171) | (5,202) |
Net income (loss) | 6,801 | (405) | 16,708 | 2,792 |
Other comprehensive income | ||||
Foreign currency translation loss | (1,061) | (1,667) | (1,011) | (3,878) |
Derivative instrument and other adjustments, net of tax | 140 | 1,220 | 302 | 1,220 |
Comprehensive income (loss) | 5,880 | (852) | 15,999 | 134 |
Net income (loss) attributable to common stockholders | $ 6,801 | $ (405) | $ 16,708 | $ 2,792 |
Net income (loss) per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.08 | $ 0 | $ 0.19 | $ 0.03 |
Diluted (in dollars per share) | $ 0.08 | $ 0 | $ 0.19 | $ 0.03 |
Weighted average number of shares of Common Stock outstanding: | ||||
Weighted average number of shares outstanding, basic (shares) | 89,228 | 87,965 | 88,942 | 87,441 |
Weighted average number of shares outstanding, diluted (shares) | 89,357 | 87,965 | 89,322 | 89,054 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock |
Beginning balance (shares) at Dec. 31, 2021 | 87,107 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options for cash (shares) | 518 | |||||
Restricted stock units vested (shares) | 1,391 | |||||
Issuance of Common Stock (shares) | 60 | |||||
Retired shares of Common Stock (shares) | (853) | |||||
Ending balance (shares) at Sep. 30, 2022 | 88,223 | |||||
Stockholders' deficit, beginning of period at Dec. 31, 2021 | $ (80,386) | $ 9 | $ 149,234 | $ (2,724) | $ (225,789) | $ (1,116) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation expense | 8,653 | |||||
Exercise of stock options for cash | 0 | 964 | ||||
Restricted stock units vested | 0 | 0 | ||||
Retired shares of Common Stock | 0 | (4,740) | ||||
Other comprehensive loss | (2,658) | |||||
Net income (loss) | 2,792 | 2,792 | ||||
Stockholders' deficit, end of period at Sep. 30, 2022 | (75,375) | $ 9 | 154,111 | (5,382) | (222,997) | (1,116) |
Beginning balance (shares) at Jun. 30, 2022 | 87,529 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options for cash (shares) | 193 | |||||
Restricted stock units vested (shares) | 701 | |||||
Issuance of Common Stock (shares) | 0 | |||||
Retired shares of Common Stock (shares) | (200) | |||||
Ending balance (shares) at Sep. 30, 2022 | 88,223 | |||||
Stockholders' deficit, beginning of period at Jun. 30, 2022 | (76,487) | $ 9 | 152,147 | (4,935) | (222,592) | (1,116) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation expense | 2,443 | |||||
Exercise of stock options for cash | 0 | 513 | ||||
Restricted stock units vested | 0 | 0 | ||||
Retired shares of Common Stock | 0 | (992) | ||||
Other comprehensive loss | (447) | |||||
Net income (loss) | (405) | (405) | ||||
Stockholders' deficit, end of period at Sep. 30, 2022 | $ (75,375) | $ 9 | 154,111 | (5,382) | (222,997) | (1,116) |
Beginning balance (shares) at Dec. 31, 2022 | 88,517 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options for cash (shares) | 57 | |||||
Restricted stock units vested (shares) | 922 | |||||
Issuance of Common Stock (shares) | 75 | 75 | ||||
Retired shares of Common Stock (shares) | (248) | |||||
Ending balance (shares) at Sep. 30, 2023 | 89,323 | |||||
Stockholders' deficit, beginning of period at Dec. 31, 2022 | $ (77,170) | $ 9 | 156,401 | (4,195) | (228,269) | (1,116) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation expense | 9,056 | |||||
Exercise of stock options for cash | 0 | 79 | ||||
Restricted stock units vested | 0 | 0 | ||||
Retired shares of Common Stock | 0 | (1,014) | ||||
Other comprehensive loss | (709) | |||||
Net income (loss) | 16,708 | 16,708 | ||||
Stockholders' deficit, end of period at Sep. 30, 2023 | (53,050) | $ 9 | 164,522 | (4,904) | (211,561) | (1,116) |
Beginning balance (shares) at Jun. 30, 2023 | 89,085 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options for cash (shares) | 0 | |||||
Restricted stock units vested (shares) | 238 | |||||
Issuance of Common Stock (shares) | 0 | |||||
Retired shares of Common Stock (shares) | 0 | |||||
Ending balance (shares) at Sep. 30, 2023 | 89,323 | |||||
Stockholders' deficit, beginning of period at Jun. 30, 2023 | (62,061) | $ 9 | 161,391 | (3,983) | (218,362) | (1,116) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock based compensation expense | 3,131 | |||||
Exercise of stock options for cash | 0 | 0 | ||||
Restricted stock units vested | 0 | 0 | ||||
Retired shares of Common Stock | 0 | 0 | ||||
Other comprehensive loss | (921) | |||||
Net income (loss) | 6,801 | 6,801 | ||||
Stockholders' deficit, end of period at Sep. 30, 2023 | $ (53,050) | $ 9 | $ 164,522 | $ (4,904) | $ (211,561) | $ (1,116) |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 16,708 | $ 2,792 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock-based compensation expense | 9,056 | 8,653 |
Depreciation and amortization | 2,001 | 1,871 |
Accretion and amortization of debt discount and issuance costs | 728 | 728 |
Deferred income taxes | 6,263 | 327 |
Amortization and accretion related to operating right of use assets | 3,347 | 4,140 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 54,112 | 75,068 |
Prepaid expenses, deposits and other | (4,339) | (6,417) |
Deferred contract costs | 674 | (2,412) |
Accounts payable | (2,551) | 2,710 |
Accrued compensation, benefits, commissions and other liabilities | (14,702) | (3,842) |
Deferred revenue | (57,684) | (46,861) |
Net cash provided by operating activities | 13,613 | 36,757 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||
Capital expenditures | (3,654) | (3,144) |
Payment for purchases of investments | (24,118) | (11,148) |
Proceeds from sale of investments | 23,614 | 0 |
Net cash used in investing activities | (4,158) | (14,292) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments of professional fees related to March 2021 Common Stock offering | 0 | (27) |
Principal payments on the Credit Facility | (3,938) | (8,375) |
Payments to repurchase and retire Common Stock | (1,014) | (4,740) |
Principal payments on capital leases | (247) | (235) |
Proceeds from exercise of employee stock options | 79 | 965 |
Net cash used in financing activities | (5,120) | (12,412) |
Effect of foreign currency translation changes | (5,109) | (11,050) |
Net change in cash, cash equivalents and restricted cash | (774) | (997) |
Cash, cash equivalents and restricted cash at beginning of period | 109,434 | 119,990 |
Cash, cash equivalents and restricted cash at end of period | 108,660 | 118,993 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 3,409 | 2,195 |
Cash paid for income taxes | 4,164 | 1,886 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Increase (decrease) in payables for capital expenditures | $ 669 | $ (2) |
NATURE OF BUSINESS AND BASIS OF
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | NATURE OF BUSINESS AND BASIS OF PRESENTATION Nature of Business Rimini Street, Inc. (the “Company”) is a global provider of end-to-end enterprise software support, products and services. The Company offers a comprehensive family of unified solutions to run, manage, support, customize, configure, connect, protect, monitor, and optimize clients’ enterprise application, database, and technology software platforms. Basis of Presentation and Consolidation The Unaudited Condensed Consolidated Financial Statements, which include the accounts of the Company and its wholly-owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, certain information and footnote disclosures required by U.S. GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Unaudited Condensed Consolidated Financial Statements have been included. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Audited Consolidated Financial Statements for the year ended December 31, 2022, included in the Company’s 2022 Annual Report on Form 10-K as filed with the SEC on March 1, 2023 (the “2022 Form 10-K”). The accompanying Unaudited Condensed Consolidated Balance Sheet and related disclosures as of December 31, 2022 have been derived from the Company’s audited financial statements. The Company’s financial condition as of September 30, 2023, and operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the year ending December 31, 2023. |
LIQUIDITY AND SIGNIFICANT ACCOU
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES | LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES Liquidity As of September 30, 2023, the Company’s current liabilities exceeded its current assets by $56.7 million, and the Company recorded net income of $6.8 million for the three months ended September 30, 2023. As of September 30, 2023, the Company had available cash, cash equivalents and restricted cash of $108.7 million and short-term investments of $19.9 million. As of September 30, 2023, the Company’s current liabilities included $214.1 million of deferred revenue whereby the historical costs of fulfilling the Company's commitments to provide services to its clients was approximately 37% of the related deferred revenue for the three months ended September 30, 2023. On July 20, 2021, the Company entered into a five-year term loan of $90 million (the “Credit Facility”). Annual minimum principal payments over the five-year term for the Credit Facility are 5%, 5%, 7.5%, 7.5% and 10%, respectively, with the remaining balance due at the end of the term. See Note 5 for further information regarding the Company's Credit Facility. Additionally, the Company is obligated to make operating and financing lease payments that are due within the next 12 months in the aggregate amount of $5.6 million. During the third quarter of 2023, the global economy continued to experience interest rate and inflationary pressures, geopolitical conflicts, global supply chain issues, a rise in energy prices and the continuing effects of fiscal and monetary policies adopted by governments in response to and following the global outbreak of the coronavirus (“COVID-19”). Assuming the Company’s ability to operate continues not to be significantly adversely impacted by the related changes in the macroeconomic environment, geopolitical pressures, or the litigation matters described in Note 8, the Company believes that current cash, cash equivalents, restricted cash, and future cash flow from operating activities will be sufficient to meet the Company’s anticipated cash needs, including Credit Facility repayments, working capital needs, capital expenditures and other contractual obligations for at least 12 months from the issuance date of these financial statements. Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s accounting estimates include, but are not necessarily limited to, valuation of accounts receivable, valuation assumptions for stock options and leases, deferred income taxes and the related valuation allowances, and the evaluation and measurement of contingencies. To the extent there are material differences between the Company’s estimates and actual results, the Company’s future consolidated results of operations may be affected. Recent Accounting Pronouncements Recently Adopted Standards. The following accounting standards were adopted during fiscal year 2023: 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, and amended in December 2022 with ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. ASU 2020-04 provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying U.S. GAAP to contracts, hedging relationships and other transactions impacted by reference rate reform. The provisions apply only to those transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-04 are optional and are effective from March 12, 2020 through December 31, 2024, as amended by ASU 2022-06. During the three months ended March 31, 2023, the Company adopted the optional relief guidance provided under ASU 2020-04 after modifying its interest rate swap agreement in connection with the amendment of the Credit Facility to implement certain changes in the reference rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”). The application of this expedient preserves the presentation of the derivative consistent with past presentation and did not have a material impact on our Unaudited Condensed Consolidated Financial Statements. |
DEFERRED CONTRACT COSTS AND DEF
DEFERRED CONTRACT COSTS AND DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
DEFERRED CONTRACT COSTS AND DEFERRED REVENUE | DEFERRED CONTRACT COSTS AND DEFERRED REVENUE Activity for deferred contract costs consisted of the following (in thousands): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Deferred contract costs, current and noncurrent, as of the beginning of period $ 40,106 $ 39,709 $ 40,726 $ 36,509 Capitalized commissions during the period 4,913 3,817 13,630 15,620 Amortized deferred contract costs during the period (4,966) (4,606) (14,303) (13,209) Deferred contract costs, current and noncurrent, as of the end of period $ 40,053 $ 38,920 $ 40,053 $ 38,920 Deferred revenue activity consisted of the following (in thousands): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Deferred revenue, current and noncurrent, as of the beginning of period $ 285,324 $ 300,387 $ 299,921 $ 300,268 Billings, net 60,528 49,731 257,864 248,960 Revenue recognized (107,453) (101,931) (319,386) (301,041) Deferred revenue, current and noncurrent, as of the end of period $ 238,399 $ 248,187 $ 238,399 $ 248,187 The Company’s remaining performance obligations represent all future non-cancellable revenue under contract that has not yet been recognized as revenue and includes deferred revenue and unbilled amounts. As of September 30, 2023, remaining performance obligations amounted to $550.1 million, of which $238.4 million was billed and recorded as deferred revenue. As of September 30, 2022, remaining performance obligations amounted to $532.3 million, of which $248.2 million was billed and recorded as deferred revenue. |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL INFORMATION | OTHER FINANCIAL INFORMATION Other Accrued Liabilities Other accrued liabilities consisted of the following (in thousands): September 30, December 31, 2023 2022 Accrued sales and other taxes $ 5,760 $ 6,878 Accrued professional fees 4,078 9,184 Accrued reorganization costs — 2,526 Current maturities of capital lease obligations 353 333 Income taxes payable 1,285 2,229 Accrued litigation settlement costs 6,982 6,979 Other accrued expenses 4,260 4,547 Total other accrued liabilities $ 22,718 $ 32,676 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Debt is presented net of debt discounts and issuance costs in the Company's balance sheets and consisted of the following (in thousands): September 30, December 31, 2023 2022 Credit Facility $ 71,583 $ 74,792 Less current maturities 5,912 4,789 Long-term debt, net of current maturities $ 65,671 $ 70,003 On February 22, 2023, the Company amended its Credit Facility. The amendment implemented, among other things, certain changes in the reference rate from LIBOR to the SOFR. Effective February 28, 2023, the Company has a choice of interest rates between (a) Adjusted Term SOFR and (b) Base Rate (as defined in the Credit Facility), in each case plus an applicable margin. The applicable margin remains the same as the existing Credit Agreement and is based on the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and whether the Company elects Adjusted Term SOFR (ranging from 1.75 to 2.50%) or Base Rate (ranging from 0.75 to 1.50%). In addition, the amendment adjusted the definition of Consolidated EBITDA to provide an addback solely for the fourth fiscal quarter of 2022, and any period including such quarter, that costs and legal fees and expenses incurred by the Company in connection with its ongoing litigation with Oracle up to $10.0 million can be added back and included in the applicable calculation of Consolidated EBITDA. Based on voluntary prepayments made to date under the Credit Facility, the Company currently has available $40.0 million in incremental borrowings available for future use, subject to the terms of the Credit Facility. On May 31, 2022, the Company amended the Credit Facility to increase the aggregate value of the shares of Common Stock that can be repurchased by the Company to $50 million during the term of the Credit Facility. On September 30, 2023, June 30, 2023 and March 31, 2023, the Company made its required principal payments under the Credit Facility of $1.7 million, $1.1 million, and $1.1 million, respectively. On September 30, 2022, June 30, 2022 and March 31, 2022, the Company also made its required three principal payments of $1.1 million, respectively. On May 31, 2022, the Company prepaid $5.0 million of indebtedness outstanding under its Credit Facility with no prepayment penalty. Effective July 20, 2021, the Company received $89.3 million of net proceeds pursuant to the Credit Facility. The borrowings under the Credit Facility were incurred with an original discount of 0.375%. As part of the transaction, the Company incurred issuance costs of $4.2 million, which were capitalized and are being amortized over the term of the Credit Facility. The Credit Facility originally bore interest at LIBOR, plus a margin ranging from 1.75% to 2.50% through February 28, 2023. Subsequently, the Credit Facility was amended to bear interest at SOFR as noted above. For the three months ended September 30, 2023 and 2022, the average interest rate on the Credit Facility was 7.12% and 3.94%, respectively. For the nine months ended September 30, 2023 and 2022, the average interest rate on the Credit Facility was 6.76% and 3.06%, respectively. On May 18, 2022, the Company entered into an interest rate swap agreement with a notional value of $40.0 million, with a fixed payer LIBOR rate of 2.9935% and an initial floating LIBOR rate of 0.93557%. The floating rate is reset at each month end and had an embedded floor rate of 0.0%. The term of the interest rate swap agreement coincides with that of the Credit Facility. See Note 11 for further information regarding the fair value accounting for the interest rate swap agreement. Effective February 28, 2023, the interest rate swap agreement was amended in connection with the amendment of the Credit Facility to implement certain changes in the reference rate from LIBOR to SOFR. The fair value of the Credit Facility was $74.9 million (Level 2 inputs) as of September 30, 2023 compared to the carrying value of $73.9 million as of September 30, 2023. The fair value of the Credit Facility was $78.8 million (Level 2 inputs) as of December 31, 2022 compared to the carrying value of $77.8 million as of December 31, 2022. The Credit Facility contains certain financial covenants, including a minimum fixed charge coverage ratio greater than 1.25, a total leverage ratio less than 3.75, and a minimum liquidity balance of at least $20 million in U.S. cash. Annual minimum principal payments over the five-year term for the Credit Facility are 5%, 5%, 7.5%, 7.5%, and 10%, respectively, with the remaining balance due at the end of the term. Pursuant to a Guaranty and Security Agreement, dated July 2, 2021 (the “Guaranty and Security Agreement”), among the Credit Parties and Capital One, National Association, as agent, the obligations under the Credit Facility are guaranteed by certain of the Company’s subsidiaries (the Company and the guarantors, collectively, the “Credit Parties”) and are secured, subject to customary permitted liens and exceptions, by a lien on substantially all assets of the Credit Parties. The components of interest expense are presented below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Credit Facility: Interest expense $ 1,147 $ 897 $ 3,351 $ 2,174 Accretion expense related to discount and issuance costs 245 245 728 728 Interest on finance leases 21 25 60 72 $ 1,413 $ 1,167 $ 4,139 $ 2,974 |
COMMON STOCK OFFERING, RESTRICT
COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS | COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS Common Stock Retired On May 28, 2022, the Board of Directors authorized an increase to the Company’s previously announced Common Stock repurchase program to increase the value of the shares that could be acquired by the Company from up to $15.0 million over two years to up to $50.0 million over four years, subject to compliance with the Company’s Credit Facility, provided that all other applicable conditions and legal requirements are satisfied. On February 27, 2022, the Board of Directors approved the adoption of a stock repurchase program to acquire up to $15.0 million of the Company’s Common Stock both on the open market and in privately negotiated transactions, including through Rule 10b5-1 plans, through March 4, 2024, subject to compliance with the Company's Credit Facility, which was amended effective January 14, 2022 to increase the aggregate value of the shares of Common Stock that could be acquired by the Company to no greater than $15.0 million during the term of the Credit Facility, provided that all other applicable conditions and legal requirements are satisfied. During the three months ended September 30, 2023, the Company did not acquire any shares of its Common Stock on the open market. For the nine months ended September 30, 2023, the Company acquired 0.2 million shares of its Common Stock on the open market at a cost of $1.0 million. For the three months ended September 30, 2022, the Company acquired 0.2 million shares of its Common Stock on the open market at a cost of $1.0 million. For the nine months ended September 30, 2022, the Company acquired an aggregate 0.9 million shares of Common Stock on the open market at a total cost of $4.7 million. Upon completion of all repurchase transactions, the associated shares of Common Stock were retired. Stock Plans The Company’s stock plans consist of the 2007 Stock Plan (the “2007 Plan”) and the 2013 Equity Incentive Plan, as amended and restated in July 2017 (the “2013 Plan”). The 2007 Plan and the 2013 Plan are collectively referred to as the “Stock Plans”. On February 23, 2023, pursuant to the “evergreen” provisions of the 2013 Plan, the Board of Directors authorized an increase of approximately 3.5 million shares available for grant under the 2013 Plan. For additional information about the Stock Plans, please refer to Note 8 to the Company’s Consolidated Financial Statements for the year ended December 31, 2022, included in Part II, Item 8 of the 2022 Form 10-K. The information presented below provides an update for activity under the Stock Plans for the three and nine months ended September 30, 2023. On March 31, 2023, the Company’s Board of Directors, approved the Company’s 2023 Long-Term Incentive Plan (the “2023 LTI Plan”), consisting of awards of performance units (“PSUs”), restricted stock units (“RSUs”) and stock options to purchase shares of the Company’s Common Stock under the terms of the Company’s 2013 Equity Incentive Plan (the “2013 Equity Plan”), as amended, effective as of April 3, 2023. Performance Units The PSUs awarded under the 2023 LTI Plan (the “Target PSUs”) will be measured over a performance period beginning on January 1, 2023 and ending on December 31, 2023 (the “Performance Period”), but will remain subject to a continued service-based vesting requirement. Half of the PSUs awarded will be eligible to vest based on the Company’s achievement against a target adjusted EBITDA goal for fiscal year 2023, and the remaining half of the PSUs awarded will be eligible to vest based on the Company’s achievement against a target total revenue goal for fiscal year 2023. The ultimate number of PSUs that may vest (as calculated, the “Earned PSUs”) range from zero to 200% of the Target PSUs. Under the terms of the 2023 LTI Plan, the Earned PSUs will vest in equal annual installments on the first, second and third anniversaries of the Date of Grant, generally subject to the awardee continuing to be a Service Provider through the applicable vesting date. The Company granted 0.6 million PSUs on April 3, 2023 at a grant price of $3.93. The Company recognized compensation expense related to PSUs of $0.4 million and $0.7 million for the three and nine ended September 30, 2023, respectively. Restricted Stock Units For the nine months ended September 30, 2023, the Board of Directors granted RSUs under the 2013 Plan to employees and to non-employee members of the Board of Directors for an aggregate of approximately 1.4 million shares of Common Stock. RSU grants vest over periods generally ranging from 12 to 36 months from the respective grant dates and the awards are subject to forfeiture upon termination of employment or service on the Board of Directors, as applicable. Based on the weighted average fair market value of the Common Stock on the date of grant of $4.16 per share, the aggregate fair value for the shares underlying the RSUs amounted to $5.6 million as of the grant date that will be recognized as compensation cost over the vesting period. For the three months ended September 30, 2023 and 2022, the Company recognized compensation expense related to RSUs of approximately $1.8 million and $1.8 million, respectively. For the nine months ended September 30, 2023 and 2022, the Company recognized expense of $5.7 million and $6.6 million, respectively. As of September 30, 2023, the unrecognized expense of $7.0 million net of forfeitures is expected to be charged to expense on a straight-line basis as the RSUs vest over a weighted-average period of approximately 1.6 years. Stock Options For the nine months ended September 30, 2023, the Board of Directors granted stock options for the purchase of an aggregate of approximately 1.9 million shares of Common Stock at exercise prices that were equal to the fair market value of the Common Stock on the date of grant. Options granted to employees generally vest as to one-third of the shares subject to the award on each anniversary of the designated vesting commencement date, which may precede the grant date of such award, and expire ten years after the grant date. The following table sets forth a summary of stock option activity under the Stock Plans for the nine months ended September 30, 2023 (shares in thousands): Shares Price (1) Term (2) Outstanding, December 31, 2022 6,994 $ 6.17 5.5 Granted 1,912 4.20 Forfeited (288) 5.95 Expired (213) 6.64 Exercised (57) 1.38 Outstanding, September 30, 2023 (3)(4) 8,348 5.75 5.8 Vested, September 30, 2023 (3) 5,106 6.22 3.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire in years. (3) As of September 30, 2023, there was no aggregate intrinsic value of all stock options outstanding. As of September 30, 2023, there was no aggregate intrinsic value of vested stock options. (4) The number of outstanding stock options that are not expected to ultimately vest due to forfeiture amounted to 0.4 million shares as of September 30, 2023. The following table presents activity affecting the total number of shares available for grant under the Stock Plans for the nine months ended September 30, 2023 (in thousands): Available, December 31, 2022 7,543 Newly authorized by Board of Directors 3,541 Stock options granted (1,912) RSUs and PSUs granted (1,960) Expired options under Stock Plans 213 Forfeited options under Stock Plans 288 Forfeited RSUs under Stock Plans 177 Repurchased shares of Common Stock 248 Issuance of Common Stock (75) Available, September 30, 2023 8,063 The aggregate fair value of approximately 1.9 million stock options granted for the nine months ended September 30, 2023 amounted to $4.5 million, or $2.33 per stock option as of the grant date utilizing the Black-Scholes-Merton (“BSM”) method. The fair valued derived under the BSM method will result in the recognition of compensation cost over the vesting period of the stock options. For the nine months ended September 30, 2023, the fair value of each stock option grant under the Stock Plans was estimated on the date of grant using the BSM option-pricing model, with the following weighted-average assumptions: Expected life (in years) 6.0 Volatility 55% Dividend yield 0% Risk-free interest rate 3.75% Fair value per share of Common Stock on date of grant $4.20 As of September 30, 2023 and December 31, 2022, total unrecognized compensation costs related to unvested stock options, net of estimated forfeitures, was $5.3 million and $4.1 million, respectively. As of September 30, 2023, the unrecognized costs are expected to be charged to expense on a straight-line basis over a weighted-average vesting period of approximately 2.0 years. Stock-Based Compensation Expense Stock-based compensation expense attributable to RSUs and stock options is classified as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Cost of revenue $ 503 $ 535 $ 1,423 $ 1,616 Sales and marketing 817 787 2,067 2,467 General and administrative 1,811 1,121 5,566 4,570 Total $ 3,131 $ 2,443 $ 9,056 $ 8,653 Warrants |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into law. The IRA includes a 15% corporate alternative minimum tax for companies that report over $1 billion in U.S. profits to shareholders and a 1% excise tax on stock buy backs. The Company does not expect the IRA to have a material tax impact. For the three months ended September 30, 2023 and 2022, the Company’s effective tax rate was 37.1% and 12.1%, respectively. For the nine months ended September 30, 2023 and 2022, the Company’s effective tax rate was 44.1% and 65.1%, respectively. The Company’s income tax expense was primarily attributable to earnings in the United States and foreign jurisdictions subject to income taxes and foreign withholding taxes. The Company did not have any material changes to its conclusions regarding valuation allowances for deferred income tax assets or uncertain tax positions for the three and nine months ended September 30, 2023 and 2022. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Retirement Plan The Company has defined contribution plans for both its U.S. and foreign employees. For certain of these plans, employees may contribute up to the statutory maximum, which is set by law each year. The plans also provide for employer contributions. For the three months ended September 30, 2023 and 2022, the Company’s matching contributions to these plans totaled $1.0 million and $0.8 million, respectively. For the nine months ended September 30, 2023 and 2022, the Company’s matching contributions to these plans totaled $2.6 million and $2.7 million, respectively. Rimini I Litigation In January 2010, certain subsidiaries of Oracle Corporation (together with its subsidiaries individually and collectively, “Oracle”) filed a lawsuit, Oracle USA, Inc. et al. v. Rimini Street, Inc. et al. (United States District Court for the District of Nevada) (the “District Court”) (“Rimini I”), against the Company and its Chief Executive Officer, Chairman of the Board and President, Seth Ravin, alleging that certain of the Company’s processes (Process 1.0) violated Oracle’s license agreements with its customers and that the Company committed acts of copyright infringement and violated other federal and state laws. The litigation involved the Company’s business processes and the manner in which the Company provided services to its clients. After completion of a jury trial in 2015 and subsequent appeals, the final outcome of Rimini I was that Mr. Ravin was found not liable for any claims and the Company was found liable for only one claim: “innocent infringement,” a jury finding that the Company did not know and had no reason to know that its former support processes were infringing. The jury also found that the infringement did not cause Oracle to suffer lost profits. The Company was ordered to pay a judgment of $124.4 million in 2016, which the Company promptly paid and then pursued appeals. With interest, attorneys’ fees and costs, the total judgment paid by the Company to Oracle after the completion of all appeals was approximately $89.9 million. A portion of such judgment was paid by the Company’s insurance carriers. Rimini I Injunction Proceedings Since November 2018, the Company has been subject to a permanent injunction (the “Rimini I Injunction”) prohibiting it from using certain support processes that had been found in Rimini I to “innocently” infringe certain Oracle copyrights. The Rimini I Injunction does not prohibit the Company’s provision of support services for any Oracle product lines, but rather defines the manner in which the Company can provide support services for certain Oracle product lines. In July 2020, Oracle filed a motion to show cause contending that the Company was in violation of the Rimini I Injunction, and the Company opposed this motion, disputing Oracle’s claims. In January 2022, the District Court issued its findings and order following an evidentiary hearing held in September 2021 regarding whether the Company (i) violated the Rimini I Injunction for certain accused conduct and (ii) should be held in contempt in those instances where the District Court found a violation of the Rimini I Injunction, and what sanctions, if any, were appropriate. In the order, the District Court ruled in favor of the Company with respect to five of the items. With respect to the other five items, the District Court found the Company violated the Rimini I Injunction, awarded sanctions to Oracle of $0.6 million and ordered that certain computer files be quarantined from use and notice and proof of such quarantining be provided to Oracle. The District Court also ruled that Oracle may recover its reasonable attorneys’ fees and costs. The Company reserved all rights, including appellate rights, with respect to the District Court rulings. In February 2022, the Company filed a notice of appeal in the District Court, commencing an appeal of the District Court’s January 2022 decision to the Ninth Circuit Court of Appeals (“Court of Appeals”). Shortly thereafter, the District Court stayed the briefing on Oracle’s bill of attorneys’ fees and costs until the Company’s appeal was resolved. Following oral argument on the appeal held in February 2023, on August 24, 2023, the Court of Appeals issued its decision on the Company’s appeal of the five items for which the District Court held the Company in contempt. The Court of Appeals affirmed the District Court’s contempt findings on four of the five items and reversed the District Court’s finding of contempt on the fifth item, holding that the District Court had abused its discretion in holding the Company in contempt. In addition, the Court of Appeals vacated the District Court’s order to the extent that it read the Rimini I Injunction to prohibit “de minimis” copying, as well as vacated and remanded the sanctions award to the District Court for recalculation in light of its reversal of the contempt finding on the fifth item. On September 6, 2023, the Company filed a petition for panel rehearing and rehearing en banc of the Court of Appeals’ ruling that the District Court was permitted to use the Copyright Act’s damages framework to measure the original award of $0.6 million in sanctions to Oracle. On October 12, 2023, the Court of Appeals denied the Company’s petition. On October 25, 2023, the District Court filed an order imposing a recalculated award against the Company, reducing the sanctions originally awarded to Oracle by $0.1 million and reimposing the remaining $0.5 million sanctions award, which amount was previously paid by the Company to Oracle, as described below. At this time, the Company believes that it is in substantial compliance with the Rimini I Injunction and has complied with the order regarding the quarantining of certain computer files. As of September 30, 2023 and December 31, 2022, the Company had accrued $6.9 million, respectively, as an estimate related to Oracle’s reasonable attorneys’ fees and costs relating to this matter. During the nine months ended September 30, 2022, the Company paid $0.6 million to Oracle for the sanctions award. Regarding the Company’s estimate for reasonable attorneys’ fees and costs, significant judgment is required to determine the amount of loss related to this matter as the outcome is inherently unpredictable and subject to uncertainties. Per order of the District Court, the deadline for Oracle to file its proposed bill of reasonable fees and costs is November 24, 2023. The Company’s response is due sixty (60) days after Oracle’s filing, and Oracle’s reply is due twenty (20) days after the Company’s response. The Company reserves all rights, including appellate rights, with respect to the District Court’s rulings in the contempt matter, including any award of attorneys’ fees and costs. An adverse outcome regarding Oracle’s motion for attorneys’ fees and costs could have a material adverse impact on the Company’s financial position, results of operations and cash flows. Rimini II Litigation In October 2014, the Company filed a separate lawsuit, Rimini Street Inc. v. Oracle Int’l Corp. , in the District Court against Oracle seeking a declaratory judgment that the Company’s revised “Process 2.0” support practices, in use since at least July 2014, did not infringe certain Oracle copyrights (“Rimini II”). The Company’s operative complaint asserted declaratory judgment, tort, and statutory claims, including a request for injunctive relief against Oracle for unfair competition in violation of the California Unfair Competition Law. Oracle asserted counterclaims including copyright infringement claims, violations of the Digital Millennium Copyright Act (“DMCA”) and Lanham Act, breach of contract and business tort violations with respect to PeopleSoft and other Oracle-branded products, including J.D. Edwards, Siebel, Oracle Database and Oracle E-Business Suite (“EBS”). In mid-October 2022, on the eve of the Rimini II jury trial, Oracle withdrew all of its monetary damages claims against the Company and the Company’s Chief Executive Officer, Chairman of the Board and President, Mr. Ravin in Rimini II and moved to proceed with a bench trial instead of a jury trial for its claims for equitable relief. The District Court entered an order on October 24, 2022, dismissing with prejudice Oracle’s claims in Rimini II “for monetary relief of any kind under any legal theory[,] including but not limited to claims for damages, restitution, unjust enrichment, and engorgement. . . .” In addition, Oracle’s claims for breach of contract, inducing breach of contract and an accounting, were dismissed with prejudice, meaning that the claims (including for monetary damages) have been dismissed on their merits and that the judgment rendered is final. Prior to the date of the District Court’s order dismissing with prejudice all of Oracle’s claims for monetary relief, no damages of any kind were awarded by the District Court in Rimini II. The parties each reserved the right to seek or object to any attorneys’ fees and/or costs to the extent permissible by law. The Rimini II bench trial began in Las Vegas on November 29, 2022 and concluded on December 15, 2022. The parties submitted their proposed findings of fact and conclusions of law to the District Court in February 2023. On July 24, 2023, the District Court issued its findings of fact and conclusions of law in Rimini II, accompanied by a permanent injunction against the Company (the “Rimini II Injunction”) which, as set forth in detail below, is subject to an administrative stay and is not currently effective. The District Court found infringement as to Oracle’s PeopleSoft and Oracle Database products but did not find infringement as to Oracle’s EBS, Siebel and J.D. Edwards products, further ordering that the Company was entitled to a declaration of non-infringement for Oracle’s EBS product. The District Court also found in favor of Oracle on its DMCA and Lanham Act claims, enjoining the Company from making certain statements and prohibiting certain actions in connection with the manner of marketing, selling and providing services to clients of the Oracle products in question as further described below, and on indirect and vicarious copyright infringement claims against the Company’s Chief Executive Officer, Chairman of the Board and President, Mr. Ravin. The District Court denied the Company’s California Unfair Competition Law claim and other declaratory judgment claims. On July 25, 2023, the Company filed a notice of appeal in the District Court, commencing an appeal of the District Court’s July 24, 2023 Rimini II judgment and Injunction. On July 28, 2023, the Company filed an emergency motion with the District Court to stay enforcement of the Rimini II Injunction pending the Company’s appeal of the Rimini II judgment and Injunction. On August 15, 2023, the District Court issued an order denying the Company’s emergency motion to stay the Rimini II Injunction pending the Company’s appeal with the Court of Appeals, but it granted an administrative stay of the Rimini II Injunction pending the outcome of a motion to stay to be filed by the Company with the Court of Appeals. On August 22, 2023, the Company filed the separate motion to stay the Rimini II Injunction with the Court of Appeals, asserting that certain provisions of the Rimini II Injunction are vague and overbroad, that the District Court committed legal error, that certain provisions would require the Company to commit criminal acts to comply with its terms, and that the Rimini II Injunction would cause the Company and third parties “irreparable harm,” among other grounds. As of the date of this Report, the Court of Appeals has not issued a decision on the Company’s motion to stay the Rimini II Injunction. As of the date of this Report, the Rimini II Injunction, as issued by the District Court, is currently stayed by the District Court, meaning that it is not currently effective. The Rimini II Injunction is primarily directed at Oracle’s PeopleSoft software product and, if effective, would limit, but not fully prohibit, the support services the Company can provide its clients using Oracle’s PeopleSoft software product. Among other things, the Rimini II Injunction requires the Company to immediately and permanently delete certain PeopleSoft software environments, files and updates identified in the Rimini II Injunction, as well as to delete and immediately and permanently discontinue use of certain Company-created automated tools. The Rimini II Injunction also prohibits using, distributing, copying, or making derivative works from certain files, and it prohibits the transfer or copying of PeopleSoft files, updates, and modifications, and portions of PeopleSoft software that are developed, tested, or exist in one client’s systems to the Company’s systems or another client’s systems. The Rimini II Injunction also specifies that the Company shall not remove, alter or omit any Oracle copyright notices or other Oracle copyright management information from any file that contains an Oracle copyright notice and prohibits the Company from publicly making statements or statements substantially similar to those the District Court found to be “false and misleading,” which are listed in the Rimini II Injunction. On August 21, 2023, Oracle filed a motion to amend the District Court’s judgment in Rimini II regarding an update, technical specification and tool related to Oracle’s EBS software product. As of the date of this Report, the District Court has not issued a decision on Oracle’s motion to amend. On September 12, 2023, the Court of Appeals issued an order holding the Company’s appeal of the District Court’s decision in Rimini II in abeyance pending the District Court’s resolution of Oracle’s above-described motion to amend the Rimini II judgment. Accordingly, as of the date of this Report, the briefing schedule for the Company’s appeal of the Rimini II decision has been stayed. While the Company plans to continue to vigorously pursue a stay of the Rimini II Injunction pending appeal and its appeal of the Rimini II judgment and Injunction, it is unable to predict the timing or outcome of these matters. No assurance is or can be given that the Company will succeed in its efforts to stay the Rimini II Injunction in full or in part pending appeal or prevail in all or part of its Rimini II appeal. There were no monetary damages included in the District Court’s judgment in Rimini II. The deadline for the parties to file motions for attorneys’ fees and costs is November 6, 2023, and oppositions to such motions are due February 20, 2024. As of the date of this Report, no party has filed such a motion with the District Court. A decision about whether to award any attorneys’ fees and/or costs, and if so, the amounts, will be made by the District Court. Accordingly, at this time the Company does not believe that any award of attorneys’ fees and costs are probable or estimatable. An adverse outcome regarding any Oracle motion for attorneys’ fees and costs could have a material adverse impact on the Company’s financial position, results of operations and cash flows. The Rimini II Injunction, if reinstated, would affect certain support services delivered by the Company to clients receiving support for Oracle’s PeopleSoft products and is expected to result in additional future period costs, among other potential impacts. However, these costs are not currently estimatable and are not required to be recorded as of September 30, 2023. Accordingly, the Company has made no associated accrual as of September 30, 2023. Any required changes to how support services are delivered to the Company’s PeopleSoft clients could have a material adverse impact on the Company’s financial position, results of operations and cash flows. The percentage of revenue derived from services the Company provides solely for Oracle’s PeopleSoft software product was approximately 8% and 9% of the Company’s total revenue for the three and nine months ended September 30, 2023, respectively. The Company reserves all rights, including appellate rights, with respect to the District Court’s rulings in Rimini II and the Rimini II Injunction, including any award of attorneys’ fees and costs to Oracle. Other Litigation From time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of judgment, defense and settlement costs, diversion of management resources and other factors. At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimatable under ASC 450, Contingencies . Legal fees are expensed as incurred. Liquidated Damages The Company enters into agreements with clients that contain provisions related to liquidated damages that would be triggered in the event that the Company is no longer able to provide services to these clients. The maximum cash payments related to these liquidated damages is approximately $12.6 million and $8.1 million as of September 30, 2023 and December 31, 2022, respectively. To date, the Company has not incurred any costs as a result of such provisions and has not accrued any liabilities related to such provisions in these Unaudited Condensed Consolidated Financial Statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS An affiliate of Adams Street Partners and its affiliates (collectively referred to as “ASP”) is a member of the Company’s Board of Directors. As of September 30, 2023, ASP owned approximately 26.4% of the Company’s issued and outstanding shares of Common Stock. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings per share of Common Stock is computed by dividing net income attributable to common stockholders by the weighted average number of shares of basic Common Stock outstanding. Diluted earnings per share of Common Stock is calculated by adjusting the basic earnings per share of Common Stock for the effects of potential dilutive Common Stock shares outstanding such as stock options, restricted stock units and warrants. For both the three and nine months ended September 30, 2023 and 2022, basic and diluted net earnings per share of Common Stock were computed by dividing the net income attributable to common stockholders by the weighted average number of common shares outstanding during the respective periods. The following tables set forth the computation of basic and diluted net income attributable to common stockholders (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Income (loss) attributable to common stockholders: Net income (loss) $ 6,801 $ (405) $ 16,708 $ 2,792 Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Weighted average number of shares of Common Stock outstanding: Basic 89,228 87,965 88,942 87,441 Warrants — — — — Stock options — — 18 543 RSUs 129 — 362 1,070 Diluted 89,357 87,965 89,322 89,054 Net income (loss) per share attributable to common stockholders: Basic $ 0.08 $ — $ 0.19 $ 0.03 Diluted $ 0.08 $ — $ 0.19 $ 0.03 The following potential Common Stock equivalents were excluded from the computation of diluted net income per share for the respective periods ending on these dates, since the impact of inclusion was anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 RSUs and PSUs 2,767 1,243 1,270 460 Stock options 8,358 4,914 7,830 4,161 Warrants 3,440 18,128 3,440 18,128 Total 14,565 24,285 12,540 22,749 |
FINANCIAL INSTRUMENTS AND SIGNI
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. Additional information on fair value measurements is included in Note 13 to the Company’s Consolidated Financial Statements for the year ended December 31, 2022, included in Part II, Item 8 of the 2022 Form 10-K. The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. Investments During September 2022, the Company invested $20 million of its cash and cash equivalents into U.S. Federal agency bonds, U.S. government bonds, U.S. treasury notes and other securities. We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Debt investments are classified as available-for-sale and gains and losses are recorded using the specific identification method. Changes in fair value are recorded in the operating statement. Fair value is calculated based on publicly available market information. Listed below are the cash equivalent and investment balances as of September 30, 2023 (in thousands): Fair Value Level Cost Basis Unrealized Gains (Losses) Recorded Basis Cash Equivalents Short-term Investments Long-term Investments Federal Agency Bonds Level 2 $ 14,895 $ 165 $ 15,060 $ 195 $ 14,160 $ 705 US Treasury notes Level 2 5,716 38 5,754 — 5,754 — $ 20,611 $ 203 $ 20,814 $ 195 $ 19,914 $ 705 Derivatives On May 18, 2022, the Company entered into an interest rate swap agreement for a notional value of $40.0 million. The derivative was recognized in the accompanying Unaudited Condensed Consolidated Balance Sheets at its estimated fair value as of September 30, 2023. The Company uses derivatives to manage the risk associated with changes in interest rates. The Company does not enter into derivatives for speculative purposes. To estimate fair value for the Company's interest rate swap agreement as of September 30, 2023, the Company utilized a present value of future cash flows, leveraging a model-derived valuation that uses Level 2 observable inputs such as interest rate yield curves. The Company estimated the fair value of the interest rate swap agreement to be $1.8 million as of September 30, 2023. Changes in the fair value of the derivatives that qualify as cash flow hedges are recorded in Accumulated other comprehensive loss in the accompanying Unaudited Condensed Consolidated Balance Sheets until earnings are affected by the variability of the cash flows. The Company received interest swap payments of $0.2 million and $0.6 million during the three and nine months ended September 30, 2023, respectively, which were recorded as a reduction to interest expense. The Company incurred interest payments of $0.1 million and $0.2 million during the three and nine months ended September 30, 2022, respectively, which were recorded as interest expense. The amounts recorded for the interest rate swap agreement are described below (in thousands): Derivative Instrument Balance Sheet Classification September 30, 2023 December 31, 2022 Interest rate swap Deposits and other $ 1,797 $ 1,402 Accumulated other comprehensive loss 1,408 1,107 Three Months Ended September 30, Nine Months Ended September 30, Derivative Instrument Income Statement Classification 2023 2022 2023 2022 Interest rate swap Interest expense (benefit) $ (235) $ 81 $ (600) $ 224 Significant Concentrations The Company attributes revenues to geographic regions based on the location of its clients’ contracting entities. The following table shows revenues by geographic region (in thousands): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 United States of America $ 55,740 $ 53,423 $ 163,146 $ 159,616 International 51,713 48,508 156,240 141,425 Total $ 107,453 $ 101,931 $ 319,386 $ 301,041 No clients represented more than 10% of revenue for both the three and nine months ended September 30, 2023 and 2022. As of September 30, 2023 and December 31, 2022, no clients accounted for more than 10% of total net accounts receivable. The Company tracks its assets by physical location. As of September 30, 2023 and December 31, 2022, the net carrying value of the Company’s property and equipment located outside of the United States amounted to approximately $2.5 million and $1.8 million respectively. As of September 30, 2023, the Company had operating lease right-of-use assets of $3.3 million, $2.4 million and $0.7 million in the United States, India and the rest of the world, respectively. As of December 31, 2022, the Company had operating lease right-of-use assets of $2.6 million, $3.4 million and $1.2 million in the United States, India and the rest of the world, respectively. Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. The Company maintains its cash, cash equivalents and restricted cash at high-quality financial institutions, primarily in the United States. Deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. As of September 30, 2023 and December 31, 2022, the Company had cash, cash equivalents and restricted cash with a single financial institution for an aggregate of $32.5 million and $44.9 million, respectively. In addition, as of September 30, 2023, the Company had cash and cash equivalents with three other single financial institutions of $61.2 million. As of September 30, 2023 and December 31, 2022, the Company had restricted cash of $0.4 million. The Company has never experienced any losses related to these balances. Generally, credit risk with respect to accounts receivable is diversified due to the number of entities comprising the Company’s client base and their dispersion across different geographies and industries. The Company performs ongoing credit evaluations on certain clients and generally does not require collateral on accounts receivable. The Company maintains reserves for potential bad debts and historically such losses are generally not significant. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
LEASES | LEASES Effective at the start of fiscal 2020, the Company adopted the provisions and expanded disclosure requirements described in Accounting Standards Codification (ASC) Topic 842, Lease s. The Company adopted the standard using the prospective method. The Company has operating leases for real estate and equipment with an option to renew the leases for up to one month to five years. Some of the leases include the option to terminate the leases upon 30-days’ notice with a penalty. The Company’s leases have various remaining lease terms ranging from July 2023 to December 2028. The Company’s lease agreements may include renewal or termination options for varying periods that are generally at the Company's discretion. The Company’s lease terms only include those periods related to renewal options the Company believes are reasonably certain to exercise. The Company generally does not include these renewal options as it is not reasonably certain to renew at the lease commencement date. This determination is based on consideration of certain economic, strategic and other factors that the Company evaluates at lease commencement date and reevaluates throughout the lease term. Some leases also include options to terminate the leases and the Company only includes those periods beyond the termination date if it is reasonably certain not to exercise the termination option. The Company uses a discount rate to calculate the right of use (“ROU”) asset and lease liability. When the implicit rate is known or provided in the lease documents, the Company is required to use this rate. In cases in which the implicit rate is not known, the Company uses an estimated incremental borrowing rate. Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance and tax payments. The variable portion of lease payments is not included in the Company’s ROU assets or lease liabilities. Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred and are included in lease expenses recorded in selling and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income. The Company has lease agreements with both lease and non-lease components that are treated as a single lease component for all underlying asset classes. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses. The Company has elected to apply the short-term lease exception for all underlying asset classes. That is, leases with a term of 12 months or less are not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term. The Company’s leases do not include significant restrictions or covenants, and residual value guarantees are generally not included within its operating leases. As of September 30, 2023, the Company has one additional operating lease with a net present value of $0.5 million in Tokyo, Japan that will commence on October 1, 2023. The components of lease expense and supplemental balance sheet information were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease expense related to ROU assets and liabilities $ 1,109 $ 1,360 $ 3,347 $ 4,140 Other lease expense 318 229 491 633 Total lease expense $ 1,427 $ 1,589 $ 3,838 $ 4,773 Other information related to leases was as follows (in thousands): Supplemental Balance Sheet Information September 30, 2023 December 31, 2022 Operating lease right-of-use assets, noncurrent $ 6,339 $ 7,142 September 30, 2023 December 31, 2022 Operating lease liabilities, current $ 4,175 $ 4,223 Operating lease liabilities, noncurrent 7,511 9,094 Total operating lease liabilities $ 11,686 $ 13,317 Weighted Average Remaining Lease Term Years Operating leases 3 Weighted Average Discount Rate Operating leases 10.0 % Maturities of operating lease liabilities as of September 30, 2023 were as follows (in thousands): Year Ending September 30, 2024 $ 5,078 2025 3,956 2026 2,806 2027 1,187 2028 366 Thereafter 94 Total future undiscounted lease payments 13,487 Less imputed interest (1,801) Total $ 11,686 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income | $ 6,801 | $ (405) | $ 16,708 | $ 2,792 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
LIQUIDITY AND SIGNIFICANT ACC_2
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Unaudited Condensed Consolidated Financial Statements, which include the accounts of the Company and its wholly-owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, certain information and footnote disclosures required by U.S. GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Unaudited Condensed Consolidated Financial Statements have been included. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Audited Consolidated Financial Statements for the year ended December 31, 2022, included in the Company’s 2022 Annual Report on Form 10-K as filed with the SEC on March 1, 2023 (the “2022 Form 10-K”). The accompanying Unaudited Condensed Consolidated Balance Sheet and related disclosures as of December 31, 2022 have been derived from the Company’s audited financial statements. The Company’s financial condition as of September 30, 2023, and operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the year ending December 31, 2023. |
Use of Estimates | Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Standards. The following accounting standards were adopted during fiscal year 2023: 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, and amended in December 2022 with ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. ASU 2020-04 provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying U.S. GAAP to contracts, hedging relationships and other transactions impacted by reference rate reform. The provisions apply only to those transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-04 are optional and are effective from March 12, 2020 through December 31, 2024, as amended by ASU 2022-06. During the three months ended March 31, 2023, the Company adopted the optional relief guidance provided under ASU 2020-04 after modifying its interest rate swap agreement in connection with the amendment of the Credit Facility to implement certain changes in the reference rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”). The application of this expedient preserves the presentation of the derivative consistent with past presentation and did not have a material impact on our Unaudited Condensed Consolidated Financial Statements. |
Earnings Per Share | The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings per share of Common Stock is computed by dividing net income attributable to common stockholders by the weighted average number of shares of basic Common Stock outstanding. Diluted earnings per share of Common Stock is calculated by adjusting the basic earnings per share of Common Stock for the effects of potential dilutive Common Stock shares outstanding such as stock options, restricted stock units and warrants. |
DEFERRED CONTRACT COSTS AND D_2
DEFERRED CONTRACT COSTS AND DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Revenue | Activity for deferred contract costs consisted of the following (in thousands): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Deferred contract costs, current and noncurrent, as of the beginning of period $ 40,106 $ 39,709 $ 40,726 $ 36,509 Capitalized commissions during the period 4,913 3,817 13,630 15,620 Amortized deferred contract costs during the period (4,966) (4,606) (14,303) (13,209) Deferred contract costs, current and noncurrent, as of the end of period $ 40,053 $ 38,920 $ 40,053 $ 38,920 Deferred revenue activity consisted of the following (in thousands): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Deferred revenue, current and noncurrent, as of the beginning of period $ 285,324 $ 300,387 $ 299,921 $ 300,268 Billings, net 60,528 49,731 257,864 248,960 Revenue recognized (107,453) (101,931) (319,386) (301,041) Deferred revenue, current and noncurrent, as of the end of period $ 238,399 $ 248,187 $ 238,399 $ 248,187 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities consisted of the following (in thousands): September 30, December 31, 2023 2022 Accrued sales and other taxes $ 5,760 $ 6,878 Accrued professional fees 4,078 9,184 Accrued reorganization costs — 2,526 Current maturities of capital lease obligations 353 333 Income taxes payable 1,285 2,229 Accrued litigation settlement costs 6,982 6,979 Other accrued expenses 4,260 4,547 Total other accrued liabilities $ 22,718 $ 32,676 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Debt | Debt is presented net of debt discounts and issuance costs in the Company's balance sheets and consisted of the following (in thousands): September 30, December 31, 2023 2022 Credit Facility $ 71,583 $ 74,792 Less current maturities 5,912 4,789 Long-term debt, net of current maturities $ 65,671 $ 70,003 |
Schedule of Interest Expense | The components of interest expense are presented below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Credit Facility: Interest expense $ 1,147 $ 897 $ 3,351 $ 2,174 Accretion expense related to discount and issuance costs 245 245 728 728 Interest on finance leases 21 25 60 72 $ 1,413 $ 1,167 $ 4,139 $ 2,974 |
COMMON STOCK OFFERING, RESTRI_2
COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table sets forth a summary of stock option activity under the Stock Plans for the nine months ended September 30, 2023 (shares in thousands): Shares Price (1) Term (2) Outstanding, December 31, 2022 6,994 $ 6.17 5.5 Granted 1,912 4.20 Forfeited (288) 5.95 Expired (213) 6.64 Exercised (57) 1.38 Outstanding, September 30, 2023 (3)(4) 8,348 5.75 5.8 Vested, September 30, 2023 (3) 5,106 6.22 3.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire in years. (3) As of September 30, 2023, there was no aggregate intrinsic value of all stock options outstanding. As of September 30, 2023, there was no aggregate intrinsic value of vested stock options. (4) The number of outstanding stock options that are not expected to ultimately vest due to forfeiture amounted to 0.4 million shares as of September 30, 2023. |
Schedule of Stockholders Equity | The following table presents activity affecting the total number of shares available for grant under the Stock Plans for the nine months ended September 30, 2023 (in thousands): Available, December 31, 2022 7,543 Newly authorized by Board of Directors 3,541 Stock options granted (1,912) RSUs and PSUs granted (1,960) Expired options under Stock Plans 213 Forfeited options under Stock Plans 288 Forfeited RSUs under Stock Plans 177 Repurchased shares of Common Stock 248 Issuance of Common Stock (75) Available, September 30, 2023 8,063 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | For the nine months ended September 30, 2023, the fair value of each stock option grant under the Stock Plans was estimated on the date of grant using the BSM option-pricing model, with the following weighted-average assumptions: Expected life (in years) 6.0 Volatility 55% Dividend yield 0% Risk-free interest rate 3.75% Fair value per share of Common Stock on date of grant $4.20 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense attributable to RSUs and stock options is classified as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Cost of revenue $ 503 $ 535 $ 1,423 $ 1,616 Sales and marketing 817 787 2,067 2,467 General and administrative 1,811 1,121 5,566 4,570 Total $ 3,131 $ 2,443 $ 9,056 $ 8,653 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following tables set forth the computation of basic and diluted net income attributable to common stockholders (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Income (loss) attributable to common stockholders: Net income (loss) $ 6,801 $ (405) $ 16,708 $ 2,792 Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 Weighted average number of shares of Common Stock outstanding: Basic 89,228 87,965 88,942 87,441 Warrants — — — — Stock options — — 18 543 RSUs 129 — 362 1,070 Diluted 89,357 87,965 89,322 89,054 Net income (loss) per share attributable to common stockholders: Basic $ 0.08 $ — $ 0.19 $ 0.03 Diluted $ 0.08 $ — $ 0.19 $ 0.03 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential Common Stock equivalents were excluded from the computation of diluted net income per share for the respective periods ending on these dates, since the impact of inclusion was anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 RSUs and PSUs 2,767 1,243 1,270 460 Stock options 8,358 4,914 7,830 4,161 Warrants 3,440 18,128 3,440 18,128 Total 14,565 24,285 12,540 22,749 |
FINANCIAL INSTRUMENTS AND SIG_2
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, All Other Investments [Abstract] | |
Schedule of Cash Equivalent And Short-Term Investment Balances | Listed below are the cash equivalent and investment balances as of September 30, 2023 (in thousands): Fair Value Level Cost Basis Unrealized Gains (Losses) Recorded Basis Cash Equivalents Short-term Investments Long-term Investments Federal Agency Bonds Level 2 $ 14,895 $ 165 $ 15,060 $ 195 $ 14,160 $ 705 US Treasury notes Level 2 5,716 38 5,754 — 5,754 — $ 20,611 $ 203 $ 20,814 $ 195 $ 19,914 $ 705 |
Schedule of Amounts Recorded For Interest Rate Swap Agreements | The amounts recorded for the interest rate swap agreement are described below (in thousands): Derivative Instrument Balance Sheet Classification September 30, 2023 December 31, 2022 Interest rate swap Deposits and other $ 1,797 $ 1,402 Accumulated other comprehensive loss 1,408 1,107 Three Months Ended September 30, Nine Months Ended September 30, Derivative Instrument Income Statement Classification 2023 2022 2023 2022 Interest rate swap Interest expense (benefit) $ (235) $ 81 $ (600) $ 224 |
Schedule of Revenues by Geographic Regions | The following table shows revenues by geographic region (in thousands): Three Months Ended Nine Months Ended September 30, 2023 2022 2023 2022 United States of America $ 55,740 $ 53,423 $ 163,146 $ 159,616 International 51,713 48,508 156,240 141,425 Total $ 107,453 $ 101,931 $ 319,386 $ 301,041 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense and supplemental balance sheet information were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease expense related to ROU assets and liabilities $ 1,109 $ 1,360 $ 3,347 $ 4,140 Other lease expense 318 229 491 633 Total lease expense $ 1,427 $ 1,589 $ 3,838 $ 4,773 Other information related to leases was as follows (in thousands): Supplemental Balance Sheet Information September 30, 2023 December 31, 2022 Operating lease right-of-use assets, noncurrent $ 6,339 $ 7,142 September 30, 2023 December 31, 2022 Operating lease liabilities, current $ 4,175 $ 4,223 Operating lease liabilities, noncurrent 7,511 9,094 Total operating lease liabilities $ 11,686 $ 13,317 Weighted Average Remaining Lease Term Years Operating leases 3 Weighted Average Discount Rate Operating leases 10.0 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of September 30, 2023 were as follows (in thousands): Year Ending September 30, 2024 $ 5,078 2025 3,956 2026 2,806 2027 1,187 2028 366 Thereafter 94 Total future undiscounted lease payments 13,487 Less imputed interest (1,801) Total $ 11,686 |
LIQUIDITY AND SIGNIFICANT ACC_3
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Jul. 20, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||||||
Working capital deficit | $ 56,700,000 | ||||||
Net income | $ 6,801,000 | $ (405,000) | 16,708,000 | $ 2,792,000 | |||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 108,660,000 | $ 118,993,000 | 108,660,000 | $ 118,993,000 | $ 109,434,000 | $ 119,990,000 | |
Short-term investments | 19,914,000 | 19,914,000 | $ 20,115,000 | ||||
Deferred revenue, current | $ 214,100,000 | 214,100,000 | |||||
Cost of goods and services sold (as percentage of revenue) | 37% | ||||||
Consulting agreement, term (in years) | 5 years | ||||||
Face amount of debt | $ 90,000,000 | ||||||
Annual minimum principal payments year one | 5% | ||||||
Annual minimum principal payments year two | 5% | ||||||
Annual minimum principal payments year three | 7.50% | ||||||
Annual minimum principal payments year four | 7.50% | ||||||
Annual minimum principal payments year five | 10% | ||||||
Operating and capital lease payments due within next twelve months | $ 5,600,000 | $ 5,600,000 |
DEFERRED CONTRACT COSTS AND D_3
DEFERRED CONTRACT COSTS AND DEFERRED REVENUE - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Capitalized Contract Cost, Net [Abstract] | ||||
Deferred contract costs, current and noncurrent, as of the beginning of period | $ 40,106 | $ 39,709 | $ 40,726 | $ 36,509 |
Capitalized commissions during the period | 4,913 | 3,817 | 13,630 | 15,620 |
Amortized deferred contract costs during the period | (4,966) | (4,606) | (14,303) | (13,209) |
Deferred contract costs, current and noncurrent, as of the end of period | 40,053 | 38,920 | 40,053 | 38,920 |
Change in Contract with Customer, Liability [Abstract] | ||||
Deferred revenue, current and noncurrent, as of the beginning of period | 285,324 | 300,387 | 299,921 | 300,268 |
Billings, net | 60,528 | 49,731 | 257,864 | 248,960 |
Revenue recognized | (107,453) | (101,931) | (319,386) | (301,041) |
Deferred revenue, current and noncurrent, as of the end of period | $ 238,399 | $ 248,187 | $ 238,399 | $ 248,187 |
DEFERRED CONTRACT COSTS AND D_4
DEFERRED CONTRACT COSTS AND DEFERRED REVENUE- Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Revenue Recognition and Deferred Revenue [Abstract] | ||||||
Performance obligation | $ 550,100 | $ 532,300 | ||||
Contract with customer, liability | 238,399 | $ 285,324 | $ 299,921 | $ 248,187 | $ 300,387 | $ 300,268 |
Deferred revenue, current | $ 214,073 | $ 265,840 |
OTHER FINANCIAL INFORMATION (De
OTHER FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued sales and other taxes | $ 5,760 | $ 6,878 |
Accrued professional fees | 4,078 | 9,184 |
Accrued reorganization costs | 0 | 2,526 |
Current maturities of capital lease obligations | 353 | 333 |
Income taxes payable | 1,285 | 2,229 |
Accrued litigation settlement costs | 6,982 | 6,979 |
Other accrued expenses | 4,260 | 4,547 |
Total other accrued liabilities | $ 22,718 | $ 32,676 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total other accrued liabilities | Total other accrued liabilities |
DEBT - Schedule of Carrying Val
DEBT - Schedule of Carrying Value of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Less current maturities | $ 5,912 | $ 4,789 |
Long-term debt, net of current maturities | 65,671 | 70,003 |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Credit Facility | 71,583 | 74,792 |
Less current maturities | 5,912 | 4,789 |
Long-term debt, net of current maturities | $ 65,671 | $ 70,003 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||||||||||||||||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Feb. 28, 2023 | Feb. 22, 2023 USD ($) | May 31, 2022 USD ($) | Jul. 20, 2021 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) payment | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) payment | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) payment | May 28, 2022 USD ($) | May 27, 2022 USD ($) | May 18, 2022 USD ($) | Mar. 31, 2022 USD ($) payment | Feb. 27, 2022 USD ($) | Jan. 14, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||||||||
Value of shares authorized to be repurchased | $ 50,000,000 | $ 50,000,000 | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | ||||||||||||||
Consulting agreement, term (in years) | 5 years | ||||||||||||||||||
Annual minimum principal payments year one | 5% | ||||||||||||||||||
Annual minimum principal payments year two | 5% | ||||||||||||||||||
Annual minimum principal payments year three | 7.50% | ||||||||||||||||||
Annual minimum principal payments year four | 7.50% | ||||||||||||||||||
Annual minimum principal payments year five | 10% | ||||||||||||||||||
Proceeds from interest received | $ 200,000 | $ 600,000 | |||||||||||||||||
Interest rate swap agreement | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Notional amount | $ 40,000,000 | ||||||||||||||||||
Fixed payer LIBOR Rate (percent) | 2.9935% | ||||||||||||||||||
Initial floating LIBOR rate (percent) | 0.93557% | ||||||||||||||||||
Embedded floor (percent) | 0% | ||||||||||||||||||
Proceeds from interest received | 200,000 | 600,000 | |||||||||||||||||
Line of Credit | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Minimum fixed charge ratio | 1.25 | ||||||||||||||||||
Debt instrument, leverage ratio | 3.75 | ||||||||||||||||||
Consulting agreement, term (in years) | 5 years | ||||||||||||||||||
Annual minimum principal payments year one | 5% | ||||||||||||||||||
Annual minimum principal payments year two | 5% | ||||||||||||||||||
Annual minimum principal payments year three | 7.50% | ||||||||||||||||||
Annual minimum principal payments year four | 7.50% | ||||||||||||||||||
Annual minimum principal payments year five | 10% | ||||||||||||||||||
Line of Credit | 2023 Amended Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Litigation liability limit | $ 10,000,000 | ||||||||||||||||||
Incremental borrowings available | $ 40,000,000 | $ 40,000,000 | $ 40,000,000 | ||||||||||||||||
Periodic payment amount of principal | 1,700,000 | $ 1,100,000 | $ 1,100,000 | ||||||||||||||||
Number of required principal payments | payment | 3 | 3 | 3 | 3 | |||||||||||||||
Principal payment | $ 1,100,000 | $ 1,100,000 | $ 1,100,000 | $ 1,100,000 | |||||||||||||||
Prepaid indebtedness | 5,000,000 | ||||||||||||||||||
Prepayment penalty | $ 0 | ||||||||||||||||||
Line of Credit | July 2021 Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Proceeds from credit facility | $ 89,300,000 | ||||||||||||||||||
Issuance costs discount (percent) | 0.375% | ||||||||||||||||||
Incurred issuance costs | $ 4,200,000 | ||||||||||||||||||
Line of credit facility, interest rate | 7.12% | 3.94% | 6.76% | 3.06% | |||||||||||||||
Fair value of the carrying amount | 73,900,000 | $ 73,900,000 | $ 73,900,000 | $ 77,800,000 | |||||||||||||||
Line of Credit | Level 2 | July 2021 Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Fair value of the credit facility | $ 74,900,000 | $ 74,900,000 | $ 74,900,000 | $ 78,800,000 | |||||||||||||||
Line of Credit | Minimum | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Financial covenants, minimum liquidity | $ 20,000,000 | ||||||||||||||||||
Line of Credit | Adjusted Term SOFR | Minimum | 2023 Amended Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, interest rate spread (percent) | 1.75% | ||||||||||||||||||
Line of Credit | Adjusted Term SOFR | Maximum | 2023 Amended Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, interest rate spread (percent) | 2.50% | ||||||||||||||||||
Line of Credit | Base Rate | Minimum | 2023 Amended Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, interest rate spread (percent) | 0.75% | ||||||||||||||||||
Line of Credit | Base Rate | Maximum | 2023 Amended Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, interest rate spread (percent) | 1.50% | ||||||||||||||||||
Line of Credit | LIBOR | Minimum | July 2021 Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, interest rate spread (percent) | 1.75% | ||||||||||||||||||
Line of Credit | LIBOR | Maximum | July 2021 Credit Facility | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, interest rate spread (percent) | 2.50% |
DEBT - Schedule of Interest Exp
DEBT - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Interest on finance leases | $ 21 | $ 25 | $ 60 | $ 72 |
Interest expense | 1,413 | 1,167 | 4,139 | 2,974 |
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 1,147 | 897 | 3,351 | 2,174 |
Accretion expense related to discount and issuance costs | $ 245 | $ 245 | $ 728 | $ 728 |
COMMON STOCK OFFERING, RESTRI_3
COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||
Apr. 03, 2023 | Feb. 23, 2023 | May 28, 2022 | May 27, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | May 31, 2022 | Feb. 27, 2022 | Jan. 14, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Value of shares authorized to be repurchased | $ 50,000 | $ 15,000 | $ 50,000 | $ 15,000 | $ 15,000 | |||||||
Stock repurchase program, period | 4 years | 2 years | ||||||||||
Stock reacquired and retired (shares) | 0 | 200 | 248 | 900 | ||||||||
Stock reacquired and retired | $ 1,000 | $ 1,000 | $ 4,700 | |||||||||
Stock Plans | ||||||||||||
Stock available for grant newly authorized by Board of Directors (shares) | 3,500 | 3,541 | ||||||||||
Performance Units | ||||||||||||
Performance units (shares) | 1,960 | |||||||||||
Stock-based compensation expense | $ 3,131 | 2,443 | $ 9,056 | 8,653 | ||||||||
Restricted Stock Units | ||||||||||||
Restricted stock units granted in period (shares) | 1,960 | |||||||||||
Stock-based compensation expense | $ 3,131 | 2,443 | $ 9,056 | 8,653 | ||||||||
Stock Options | ||||||||||||
Stock options granted in period (shares) | 1,912 | |||||||||||
Warrants | ||||||||||||
Warrants outstanding (shares) | 3,400 | 3,400 | ||||||||||
Exercise price of warrants (in USD per share) | $ 5.64 | $ 5.64 | ||||||||||
Stock options | ||||||||||||
Restricted Stock Units | ||||||||||||
Period for recognition of compensation costs not yet recognized related to nonvested awards | 2 years | |||||||||||
Stock Options | ||||||||||||
Stock options granted in period (shares) | 1,900 | |||||||||||
Fair value of stock options granted | $ 4,500 | |||||||||||
Weighted-average grant date fair value per share of options granted in period (usd per share) | $ 2.33 | |||||||||||
Unrecognized compensation costs | $ 5,300 | $ 5,300 | $ 4,100 | |||||||||
Period for recognition of compensation costs not yet recognized related to nonvested awards | 2 years | |||||||||||
Performance Units PSUs | ||||||||||||
Performance Units | ||||||||||||
Award vesting rights (percentage) | 33.33% | |||||||||||
Performance units (shares) | 600 | |||||||||||
Performance units grant of price (USD per share) | $ 3.93 | |||||||||||
Stock-based compensation expense | 400 | $ 700 | ||||||||||
Restricted Stock Units | ||||||||||||
Restricted stock units granted in period (shares) | 600 | |||||||||||
Share price of common stock on date of grant of RSUs (USD per share) | $ 3.93 | |||||||||||
Stock-based compensation expense | 400 | $ 700 | ||||||||||
Stock Options | ||||||||||||
Award vesting rights (percentage) | 33.33% | |||||||||||
2013 Plan | RSUs and PSUs | ||||||||||||
Performance Units | ||||||||||||
Performance units (shares) | 1,400 | |||||||||||
Performance units grant of price (USD per share) | $ 4.16 | |||||||||||
Stock-based compensation expense | 1,800 | 1,800 | $ 5,700 | 6,600 | ||||||||
Restricted Stock Units | ||||||||||||
Restricted stock units granted in period (shares) | 1,400 | |||||||||||
Share price of common stock on date of grant of RSUs (USD per share) | $ 4.16 | |||||||||||
Aggregate fair value of shares underlying RSU's | $ 5,600 | |||||||||||
Stock-based compensation expense | 1,800 | $ 1,800 | 5,700 | $ 6,600 | ||||||||
Compensation costs not yet recognized of nonvested awards | $ 7,000 | $ 7,000 | ||||||||||
Period for recognition of compensation costs not yet recognized related to nonvested awards | 1 year 7 months 6 days | |||||||||||
Stock Options | ||||||||||||
Period for recognition of compensation costs not yet recognized related to nonvested awards | 1 year 7 months 6 days | |||||||||||
2013 Plan | Stock options | ||||||||||||
Performance Units | ||||||||||||
Award vesting rights (percentage) | 33.33% | |||||||||||
Stock Options | ||||||||||||
Award vesting rights (percentage) | 33.33% | |||||||||||
Stock Plans | Stock options | ||||||||||||
Stock Options | ||||||||||||
Term of vested options (years) | 10 years | |||||||||||
Vesting eligibility target - adjusted EBITDA goal | Performance Units PSUs | ||||||||||||
Performance Units | ||||||||||||
Vesting eligibility (percent) | 50% | 50% | ||||||||||
Vesting eligibility target - total revenue goal | Performance Units PSUs | ||||||||||||
Performance Units | ||||||||||||
Vesting eligibility (percent) | 50% | 50% | ||||||||||
Minimum | Performance Units PSUs | ||||||||||||
Performance Units | ||||||||||||
Ultimate number of PSU's that may vest as a percentage of the target PSUs (percent) | 0% | 0% | ||||||||||
Minimum | 2013 Plan | RSUs and PSUs | ||||||||||||
Restricted Stock Units | ||||||||||||
Award vesting period | 12 months | |||||||||||
Maximum | Performance Units PSUs | ||||||||||||
Performance Units | ||||||||||||
Ultimate number of PSU's that may vest as a percentage of the target PSUs (percent) | 200% | 200% | ||||||||||
Maximum | 2013 Plan | RSUs and PSUs | ||||||||||||
Restricted Stock Units | ||||||||||||
Award vesting period | 36 months |
COMMON STOCK OFFERING, RESTRI_4
COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Schedule of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended |
Mar. 31, 2023 $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | |
Shares | ||
Granted (shares) | 1,912 | |
Forfeited (shares) | (288) | |
Expired (shares) | (213) | |
Stock Options Plans | ||
Shares | ||
Outstanding at beginning of period (shares) | 6,994 | 6,994 |
Granted (shares) | 1,912 | |
Forfeited (shares) | (288) | |
Expired (shares) | (213) | |
Exercised (shares) | (57) | |
Outstanding at end of period (shares) | 8,348 | |
Vested at end of period (shares) | 5,106 | |
Price | ||
Outstanding at beginning of period (USD per share) | $ / shares | $ 6.17 | $ 6.17 |
Granted (USD per share) | $ / shares | 4.20 | |
Forfeited (USD per share) | $ / shares | 5.95 | |
Expired (USD per share) | $ / shares | 6.64 | |
Exercised (USD per share) | $ / shares | 1.38 | |
Outstanding at end of period (USD per share) | $ / shares | 5.75 | |
Vested (USD per share) | $ / shares | $ 6.22 | |
Term | ||
Term of outstanding options | 5 years 6 months | 5 years 9 months 18 days |
Term of vested options (years) | 3 years 9 months 18 days | |
Aggregate intrinsic value of stock options outstanding | $ | $ 0 | |
Aggregate intrinsic value of vested stock options | $ | $ 0 | |
Outstanding stock options not expected to vest (in shares) | 400 |
COMMON STOCK OFFERING, RESTRI_5
COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Schedule of Stockholders Equity (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 23, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Shares Available for Grant [Roll Forward] | |||||
Available at beginning of period (shares) | 7,543 | ||||
Newly authorized by Board of Directors (shares) | 3,500 | 3,541 | |||
Stock options granted (shares) | (1,912) | ||||
RSUs and PSUs granted (shares) | (1,960) | ||||
Expired options under Stock Plans (shares) | 213 | ||||
Forfeited options under Stock Plans (shares) | 288 | ||||
Forfeited RSUs under Stock Plans (shares) | 177 | ||||
Repurchased shares of Common Stock (shares) | 0 | 200 | 248 | 900 | |
Issuance of Common Stock (shares) | (75) | ||||
Available at end of period (shares) | 8,063 | 8,063 |
COMMON STOCK OFFERING, RESTRI_6
COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares | |
Share-Based Payment Arrangement [Abstract] | |
Expected life (in years) | 6 years |
Volatility (as a percent) | 55% |
Dividend yield (as a percent) | 0% |
Risk-free interest rate (as a percent) | 3.75% |
Fair value per common share on date of grant (USD per share) | $ 4.20 |
COMMON STOCK OFFERING, RESTRI_7
COMMON STOCK OFFERING, RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 3,131 | $ 2,443 | $ 9,056 | $ 8,653 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 503 | 535 | 1,423 | 1,616 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 817 | 787 | 2,067 | 2,467 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,811 | $ 1,121 | $ 5,566 | $ 4,570 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory income tax rate (as a percent) | 37.10% | 12.10% | 44.10% | 65.10% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | |||||
Oct. 25, 2023 USD ($) | Aug. 24, 2023 claim | Jan. 31, 2022 USD ($) claim | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2016 USD ($) | Dec. 31, 2016 claim | Dec. 31, 2022 USD ($) | |
Loss Contingencies [Line Items] | ||||||||||
Employer contribution | $ 1 | $ 0.8 | $ 2.6 | $ 2.7 | ||||||
Current carrying value of guarantor obligations | $ 12.6 | $ 12.6 | $ 8.1 | |||||||
PeopleSoft Software Services | Revenue Benchmark | Product Concentration | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Revenue derived from support services provided (percent) | 8% | 9% | ||||||||
Oracle Litigation | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of claim found liable | claim | 1 | |||||||||
Damages awarded | $ 124.4 | |||||||||
Payments for judgement ordered after fees and costs | $ 89.9 | |||||||||
Rimini I Injunction Proceedings | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Damages awarded | $ 0.6 | |||||||||
Number of claims ruled in favor of defendant | claim | 5 | |||||||||
Number of claims ruled in favor of plaintiff | claim | 5 | |||||||||
Number of claim items affirmed from prior court ruling | claim | 4 | |||||||||
Accrued expense | $ 6.9 | $ 6.9 | $ 6.9 | |||||||
Amount awarded to other party | $ 0.6 | |||||||||
Rimini I Injunction Proceedings | Subsequent Event | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Damages awarded | $ 0.5 | |||||||||
Reduction in sanctions awarded to plaintiff | $ 0.1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Adams Street Partners | Related Party | Rimini Street, Inc. | |
Related Party Transaction [Line Items] | |
Ownership of common stock outstanding (as a percent) | 26.40% |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Net income (loss) | $ 6,801 | $ (405) | $ 16,708 | $ 2,792 |
Weighted average number of shares outstanding, basic (shares) | 89,228 | 87,965 | 88,942 | 87,441 |
Weighted average number of shares outstanding, diluted (shares) | 89,357 | 87,965 | 89,322 | 89,054 |
Basic (in dollars per share) | $ 0.08 | $ 0 | $ 0.19 | $ 0.03 |
Diluted (in dollars per share) | $ 0.08 | $ 0 | $ 0.19 | $ 0.03 |
Warrants | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect of securities (shares) | 0 | 0 | 0 | 0 |
Stock options | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect of securities (shares) | 0 | 0 | 18 | 543 |
RSUs and PSUs | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect of securities (shares) | 129 | 0 | 362 | 1,070 |
EARNINGS PER SHARE - Schedule_2
EARNINGS PER SHARE - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings (in shares) | 14,565 | 24,285 | 12,540 | 22,749 |
RSUs and PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings (in shares) | 2,767 | 1,243 | 1,270 | 460 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings (in shares) | 8,358 | 4,914 | 7,830 | 4,161 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings (in shares) | 3,440 | 18,128 | 3,440 | 18,128 |
FINANCIAL INSTRUMENTS AND SIG_3
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) institution | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) institution | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | May 18, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Concentration Risk [Line Items] | |||||||
Investment of cash, and cash equivalents | $ 20,000 | $ 20,000 | |||||
Proceeds from interest received | $ 200 | $ 600 | |||||
Cash paid for interest | 3,409 | 2,195 | |||||
Operating lease right-of-use assets | 6,339 | 6,339 | $ 7,142 | ||||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 108,660 | 118,993 | 108,660 | 118,993 | 109,434 | $ 119,990 | |
Cash and cash equivalents | 108,233 | 108,233 | 109,008 | ||||
Interest rate swap agreement | |||||||
Concentration Risk [Line Items] | |||||||
Notional amount | $ 40,000 | ||||||
Proceeds from interest received | 200 | 600 | |||||
Cash paid for interest | $ 100 | $ 200 | |||||
Single Financial Institution | |||||||
Concentration Risk [Line Items] | |||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 32,500 | 32,500 | 44,900 | ||||
Current restricted cash | $ 400 | $ 400 | 400 | ||||
Three Financial Institutions | |||||||
Concentration Risk [Line Items] | |||||||
Number of financial institutions | institution | 3 | 3 | |||||
Cash and cash equivalents | $ 61,200 | $ 61,200 | |||||
Non-US | |||||||
Concentration Risk [Line Items] | |||||||
Property and equipment, net | 2,500 | 2,500 | 1,800 | ||||
UNITED STATES | |||||||
Concentration Risk [Line Items] | |||||||
Operating lease right-of-use assets | 3,300 | 3,300 | 2,600 | ||||
INDIA | |||||||
Concentration Risk [Line Items] | |||||||
Operating lease right-of-use assets | 2,400 | 2,400 | 3,400 | ||||
Rest of the world | |||||||
Concentration Risk [Line Items] | |||||||
Operating lease right-of-use assets | $ 700 | $ 700 | $ 1,200 |
FINANCIAL INSTRUMENTS AND SIG_4
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Schedule of Cash Equivalent And Short-Term Investment Balances (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Securities, Available-for-Sale [Line Items] | |
Cost Basis | $ 20,611 |
Unrealized Gains (Losses) | 203 |
Recorded Basis | 20,814 |
Cash Equivalents | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | 195 |
Short-term Investments | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | 19,914 |
Long-term Investments | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | 705 |
Federal Agency Bonds | Level 2 | |
Debt Securities, Available-for-Sale [Line Items] | |
Cost Basis | 14,895 |
Unrealized Gains (Losses) | 165 |
Recorded Basis | 15,060 |
Federal Agency Bonds | Cash Equivalents | Level 2 | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | 195 |
Federal Agency Bonds | Short-term Investments | Level 2 | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | 14,160 |
Federal Agency Bonds | Long-term Investments | Level 2 | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | 705 |
US Treasury notes | Level 2 | |
Debt Securities, Available-for-Sale [Line Items] | |
Cost Basis | 5,716 |
Unrealized Gains (Losses) | 38 |
Recorded Basis | 5,754 |
US Treasury notes | Cash Equivalents | Level 2 | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | 0 |
US Treasury notes | Short-term Investments | Level 2 | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | 5,754 |
US Treasury notes | Long-term Investments | Level 2 | |
Debt Securities, Available-for-Sale [Line Items] | |
Recorded Basis | $ 0 |
FINANCIAL INSTRUMENTS AND SIG_5
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Schedule of Amounts Recorded For Interest Rate Swap Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Derivatives, Fair Value [Line Items] | |||||
Interest expense (benefit) | $ 1,413 | $ 1,167 | $ 4,139 | $ 2,974 | |
Deposits and other | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate swap | 1,797 | 1,797 | $ 1,402 | ||
Accumulated other comprehensive loss | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate swap | 1,408 | 1,408 | $ 1,107 | ||
Interest rate swap agreement | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest expense (benefit) | $ (235) | $ 81 | $ (600) | $ 224 |
FINANCIAL INSTRUMENTS AND SIG_6
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Schedule of Revenues by Geographic Regions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 107,453 | $ 101,931 | $ 319,386 | $ 301,041 |
United States of America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 55,740 | 53,423 | 163,146 | 159,616 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 51,713 | $ 48,508 | $ 156,240 | $ 141,425 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) lease day | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) lease day | Sep. 30, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Days notice required to terminate (days) | day | 30 | 30 | ||
Operating lease payments | $ 1.3 | $ 1.4 | $ 4.2 | $ 4.1 |
Number of additional leases not yet commenced | lease | 1 | 1 | ||
Net present value of lease not yet commenced | $ 0.5 | $ 0.5 | ||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease renewal term (years) | 1 month | 1 month | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease renewal term (years) | 5 years | 5 years |
LEASES - Schedule of Components
LEASES - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease expense related to ROU assets and liabilities | $ 1,109 | $ 1,360 | $ 3,347 | $ 4,140 |
Other lease expense | 318 | 229 | 491 | 633 |
Total lease expense | $ 1,427 | $ 1,589 | $ 3,838 | $ 4,773 |
LEASES - Schedule of Supplement
LEASES - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use assets, noncurrent | $ 6,339 | $ 7,142 |
Operating lease liabilities, current | 4,175 | 4,223 |
Operating lease liabilities, noncurrent | 7,511 | 9,094 |
Total operating lease liabilities | $ 11,686 | $ 13,317 |
Weighted average remaining lease term, operating leases (years) | 3 years | |
Weighted average discount rate, operating leases (as a percent) | 10% |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Lease Liability (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 5,078 | |
2025 | 3,956 | |
2026 | 2,806 | |
2027 | 1,187 | |
2028 | 366 | |
Thereafter | 94 | |
Total future undiscounted lease payments | 13,487 | |
Less imputed interest | (1,801) | |
Total | $ 11,686 | $ 13,317 |