Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38993 | |
Entity Registrant Name | HEALTH CATALYST, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-3337483 | |
Entity Address, Address Line One | 10897 South River Front Parkway #300 | |
Entity Address, City or Town | South Jordan | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84095 | |
City Area Code | 801 | |
Local Phone Number | 708-6800 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | HCAT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,723,376 | |
Entity Central Index Key | 0001636422 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 176,983 | $ 193,227 |
Short-term investments | 226,365 | 251,754 |
Accounts receivable, net | 47,752 | 48,801 |
Prepaid expenses and other assets | 14,270 | 14,609 |
Total current assets | 465,370 | 508,391 |
Property and equipment, net | 26,527 | 23,316 |
Intangible assets, net | 109,508 | 104,788 |
Operating lease right-of-use assets | 20,228 | 21,133 |
Goodwill | 185,982 | 169,972 |
Other assets | 3,724 | 4,496 |
Total assets | 811,339 | 832,096 |
Current liabilities: | ||
Accounts payable | 5,691 | 4,693 |
Accrued liabilities | 18,612 | 23,725 |
Deferred revenue | 60,883 | 56,632 |
Operating lease liabilities | 3,498 | 3,425 |
Contingent consideration liabilities | 1,625 | 4,576 |
Total current liabilities | 90,309 | 93,051 |
Convertible senior notes | 225,772 | 180,942 |
Deferred revenue, net of current portion | 553 | 929 |
Operating lease liabilities, net of current portion | 19,142 | 20,244 |
Contingent consideration liabilities, net of current portion | 6,390 | 14,719 |
Other liabilities | 118 | 113 |
Total liabilities | 342,284 | 309,998 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value per share; 25,000,000 shares authorized as of June 30, 2022 and December 31, 2021; no shares issued and outstanding as of June 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.001 par value per share; 500,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 54,053,379 and 52,622,080 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 54 | 53 |
Additional paid-in capital | 1,386,946 | 1,400,972 |
Accumulated deficit | (917,506) | (878,860) |
Accumulated other comprehensive loss | (439) | (67) |
Total stockholders’ equity | 469,055 | 522,098 |
Total liabilities and stockholders’ equity | $ 811,339 | $ 832,096 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 54,053,379 | 52,622,080 |
Common stock, shares outstanding (in shares) | 54,053,379 | 52,622,080 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Revenue: | |||||
Revenue | [1] | $ 70,633 | $ 59,627 | $ 138,720 | $ 115,473 |
Cost of revenue, excluding depreciation and amortization: | |||||
Total cost of revenue, excluding depreciation and amortization | 34,607 | 30,053 | 68,603 | 57,391 | |
Operating expenses: | |||||
Sales and marketing | 20,922 | 16,705 | 41,740 | 32,356 | |
Research and development | 18,148 | 14,524 | 35,296 | 28,869 | |
General and administrative | 17,536 | 22,525 | 26,359 | 37,540 | |
Depreciation and amortization | 12,612 | 8,139 | 24,261 | 15,953 | |
Total operating expenses | 69,218 | 61,893 | 127,656 | 114,718 | |
Loss from operations | (33,192) | (32,319) | (57,539) | (56,636) | |
Interest and other expense, net | (1,180) | (3,707) | (2,842) | (7,659) | |
Loss before income taxes | (34,372) | (36,026) | (60,381) | (64,295) | |
Income tax benefit | (944) | (192) | (4,495) | (91) | |
Net loss | $ (33,428) | $ (35,834) | $ (55,886) | $ (64,204) | |
Net loss per share, basic (in USD per share) | $ (0.62) | $ (0.80) | $ (1.05) | $ (1.45) | |
Net loss per share, diluted (in USD per share) | $ (0.62) | $ (0.80) | $ (1.15) | $ (1.45) | |
Weighted-average number of shares used in calculating net loss per share, basic (in shares) | 53,675,377 | 44,886,489 | 53,342,887 | 44,381,196 | |
Weighted-average shares outstanding used in calculating net loss per share, diluted (in shares) | 53,675,377 | 44,886,489 | 53,804,441 | 44,381,196 | |
Technology | |||||
Revenue: | |||||
Revenue | [1] | $ 45,397 | $ 35,529 | $ 87,627 | $ 69,368 |
Cost of revenue, excluding depreciation and amortization: | |||||
Total cost of revenue, excluding depreciation and amortization | 13,996 | 11,847 | 27,323 | 22,672 | |
Professional services | |||||
Revenue: | |||||
Revenue | [1] | 25,236 | 24,098 | 51,093 | 46,105 |
Cost of revenue, excluding depreciation and amortization: | |||||
Total cost of revenue, excluding depreciation and amortization | $ 20,611 | $ 18,206 | $ 41,280 | $ 34,719 | |
[1]Includes amounts attributable to related party transactions. See Note 16 for further details. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (33,428) | $ (35,834) | $ (55,886) | $ (64,204) |
Other comprehensive income (loss): | ||||
Change in net unrealized gains (losses) on available for sale investments | (147) | 4 | (265) | 15 |
Change in foreign currency translation adjustment | (29) | (3) | (107) | (44) |
Comprehensive loss | $ (33,604) | $ (35,833) | $ (56,258) | $ (64,233) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2020 | 43,376,848 | ||||
Beginning balance at Dec. 31, 2020 | $ 276,099 | $ 43 | $ 1,001,645 | $ (725,650) | $ 61 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units (in shares) | 620,758 | ||||
Vesting of restricted stock units | 1 | $ 1 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 70,239 | ||||
Issuance of common stock under employee stock purchase plan | 2,609 | 2,609 | |||
Exercise of stock options (in shares) | 1,212,594 | ||||
Exercise of stock options | 14,076 | $ 2 | 14,074 | ||
Stock-based compensation | 31,471 | 31,471 | |||
Issuance of common stock for settlement of contingent consideration (in shares) | 330,786 | ||||
Issuance of common stock related to acquisitions | 15,881 | 15,881 | |||
Common stock issued in connection with acquisitions | 0 | ||||
Net loss | (64,204) | (64,204) | |||
Other comprehensive income (loss) | (29) | (29) | |||
Ending balance (in shares) at Jun. 30, 2021 | 45,611,225 | ||||
Ending balance at Jun. 30, 2021 | $ 275,904 | $ 46 | 1,065,680 | (789,854) | 32 |
Accounting standards update [Extensible List] | Accounting Standards Update 2020-06 | ||||
Beginning balance (in shares) at Dec. 31, 2020 | 43,376,848 | ||||
Beginning balance at Dec. 31, 2020 | $ 276,099 | $ 43 | 1,001,645 | (725,650) | 61 |
Ending balance (in shares) at Dec. 31, 2021 | 52,690,019 | 52,622,080 | |||
Ending balance at Dec. 31, 2021 | $ 522,098 | $ 53 | 1,400,972 | (878,860) | (67) |
Ending balance (Accounting Standards Update 2020-06) at Dec. 31, 2021 | (43,973) | (61,213) | 17,240 | ||
Beginning balance (in shares) at Mar. 31, 2021 | 44,340,036 | ||||
Beginning balance at Mar. 31, 2021 | 268,836 | $ 44 | 1,022,781 | (754,020) | 31 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units (in shares) | 216,787 | ||||
Vesting of restricted stock units | 1 | $ 1 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 70,239 | ||||
Issuance of common stock under employee stock purchase plan | 2,609 | 2,609 | |||
Exercise of stock options (in shares) | 674,705 | ||||
Exercise of stock options | 7,588 | $ 1 | 7,587 | ||
Stock-based compensation | 17,831 | 17,831 | |||
Issuance of common stock for settlement of contingent consideration (in shares) | 309,458 | ||||
Issuance of common stock related to acquisitions | 14,872 | 14,872 | |||
Net loss | (35,834) | (35,834) | |||
Other comprehensive income (loss) | 1 | 1 | |||
Ending balance (in shares) at Jun. 30, 2021 | 45,611,225 | ||||
Ending balance at Jun. 30, 2021 | $ 275,904 | $ 46 | 1,065,680 | (789,854) | 32 |
Beginning balance (in shares) at Dec. 31, 2021 | 52,690,019 | 52,622,080 | |||
Beginning balance at Dec. 31, 2021 | $ 522,098 | $ 53 | 1,400,972 | (878,860) | (67) |
Ending balance (in shares) at Mar. 31, 2022 | 53,493,683 | ||||
Ending balance at Mar. 31, 2022 | $ 480,909 | $ 53 | 1,365,197 | (884,078) | (263) |
Beginning balance (in shares) at Dec. 31, 2021 | 52,690,019 | 52,622,080 | |||
Beginning balance at Dec. 31, 2021 | $ 522,098 | $ 53 | 1,400,972 | (878,860) | (67) |
Beginning balance (Accounting Standards Update 2020-06) at Dec. 31, 2021 | (43,973) | (61,213) | 17,240 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units (in shares) | 788,125 | ||||
Vesting of restricted stock units | 1 | $ 1 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 124,151 | ||||
Issuance of common stock under employee stock purchase plan | $ 1,531 | 1,531 | |||
Exercise of stock options (in shares) | 327,389 | 327,389 | |||
Exercise of stock options | $ 3,688 | 3,688 | |||
Stock-based compensation | 36,656 | 36,656 | |||
Issuance of common stock for settlement of contingent consideration (in shares) | 78,248 | ||||
Issuance of common stock related to acquisitions | 2,306 | 2,306 | |||
Issuance of common stock for acquisition consideration (in shares) | 113,386 | ||||
Common stock issued in connection with acquisitions | 3,006 | 3,006 | |||
Net loss | (55,886) | (55,886) | |||
Other comprehensive income (loss) | $ (372) | (372) | |||
Ending balance (in shares) at Jun. 30, 2022 | 54,713,567 | 54,053,379 | |||
Ending balance at Jun. 30, 2022 | $ 469,055 | $ 54 | 1,386,946 | (917,506) | (439) |
Beginning balance (in shares) at Mar. 31, 2022 | 53,493,683 | ||||
Beginning balance at Mar. 31, 2022 | 480,909 | $ 53 | 1,365,197 | (884,078) | (263) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units (in shares) | 254,088 | ||||
Vesting of restricted stock units | 1 | $ 1 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 124,151 | ||||
Issuance of common stock under employee stock purchase plan | 1,531 | 1,531 | |||
Exercise of stock options (in shares) | 174,168 | ||||
Exercise of stock options | 1,879 | 1,879 | |||
Stock-based compensation | 18,218 | 18,218 | |||
Issuance of common stock for settlement of contingent consideration (in shares) | 7,289 | ||||
Issuance of common stock related to acquisitions | 121 | 121 | |||
Net loss | (33,428) | (33,428) | |||
Other comprehensive income (loss) | $ (176) | (176) | |||
Ending balance (in shares) at Jun. 30, 2022 | 54,713,567 | 54,053,379 | |||
Ending balance at Jun. 30, 2022 | $ 469,055 | $ 54 | $ 1,386,946 | $ (917,506) | $ (439) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (55,886) | $ (64,204) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 36,052 | 31,237 |
Depreciation and amortization | 24,261 | 15,953 |
Non-cash operating lease expense | 1,660 | 1,926 |
Amortization of debt discount and issuance costs | 749 | 5,817 |
Amortization of investment discount and premium | 403 | 569 |
Provision for expected credit losses | 400 | 398 |
Deferred tax provision (benefit) | (4,529) | 4 |
Change in fair value of contingent consideration liabilities | (7,303) | 9,064 |
Other | (78) | (25) |
Change in operating assets and liabilities: | ||
Accounts receivable, net | 1,294 | 927 |
Prepaid expenses and other assets | 1,584 | (1,548) |
Accounts payable, accrued liabilities, and other liabilities | (4,886) | (2,439) |
Deferred revenue | 374 | 7,465 |
Contingent consideration liabilities | (741) | (11,025) |
Operating lease liabilities | (1,772) | (2,107) |
Net cash used in operating activities | (8,418) | (7,988) |
Cash flows from investing activities | ||
Proceeds from the sale and maturity of short-term investments | 185,171 | 174,293 |
Purchase of short-term investments | (160,548) | (53,686) |
Acquisition of business, net of cash acquired | (27,846) | 0 |
Capitalization of internal-use software | (7,026) | (1,912) |
Purchase of intangible assets | (1,298) | (770) |
Purchases of property and equipment | (558) | (8,138) |
Proceeds from the sale of property and equipment | 10 | 12 |
Net cash (used in) provided by investing activities | (12,095) | 109,799 |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 3,688 | 14,076 |
Proceeds from employee stock purchase plan | 1,531 | 2,619 |
Payments of acquisition-related consideration | (930) | (5,360) |
Net cash provided by financing activities | 4,289 | 11,335 |
Effect of exchange rate changes on cash and cash equivalents | (20) | (5) |
Net (decrease) increase in cash and cash equivalents | (16,244) | 113,141 |
Cash and cash equivalents at beginning of period | 193,227 | 91,954 |
Cash and cash equivalents at end of period | 176,983 | 205,095 |
Supplemental disclosures of non-cash investing and financing information | ||
Common stock issued in connection with acquisitions | 3,006 | 0 |
Common stock issued for settlement of contingent consideration | 2,306 | 15,881 |
Purchase of intangible assets included in accounts payable and accrued liabilities | 905 | 1,075 |
Stock-based compensation capitalized as internal-use software | 604 | 234 |
Purchase of property and equipment included in accounts payable and accrued liabilities | 459 | 1,149 |
Operating lease right-of-use assets obtained in exchange for operating lease obligations | 169 | 0 |
Capitalized internal-use software included in accounts payable and accrued liabilities | $ 97 | $ 0 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Nature of operations Health Catalyst, Inc. (Health Catalyst) was incorporated under the laws of Delaware in September 2011. We are a leading provider of data and analytics technology and services to healthcare organizations. Our Solution comprises a cloud-based data platform, analytics software, and professional services expertise. Our customers, which are primarily healthcare providers, use our Solution to manage their data, derive analytical insights to operate their organization, and produce measurable clinical, financial, and operational improvements. Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the applicable regulations of the U.S. Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2021 included in our Annual Report on Form 10-K. Interim unaudited condensed consolidated financial statements The accompanying interim condensed consolidated balance sheet as of June 30, 2022, the interim condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021, our interim condensed consolidated statements of stockholders' equity for the three and six months ended June 30, 2022 and 2021, and our interim condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021 are unaudited. Our condensed consolidated balance sheet as of December 31, 2021 was derived from audited financial statements, but does not include all disclosures required by GAAP. Our interim unaudited condensed consolidated financial statements have been prepared on a basis consistent with our annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company's financial position, its operations and cash flows for the periods presented. The historical results are not necessarily indicative of future results, and the results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the full year or any other period. Principles of consolidation The condensed consolidated financial statements include the accounts of Health Catalyst and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. Use of estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, provisions for expected credit losses, useful lives of property and equipment, capitalization and estimated useful life of internal-use software and other intangible assets, fair value of financial instruments, deferred tax assets, stock-based compensation, contingent consideration, the period of benefit for deferred contract acquisition costs, the incremental borrowing rate used for operating leases, and tax uncertainties. Actual results could significantly differ from those estimates. Segment reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is evaluated by the chief operating decision maker (the CODM) in assessing performance and making decisions regarding resource allocation. We operate our business in two operating segments that also represent our reportable segments. Our segments are (1) technology and (2) professional services. The CODM uses Adjusted Gross Profit (defined as revenue less cost of revenue that excludes depreciation, amortization, stock-based compensation expense, and certain other operating expenses) as the measure of our profit. Net loss per share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding. Diluted net loss per share is calculated by giving effect to all potentially dilutive common stock equivalents outstanding for the period, including shares issuable as acquisition-related contingent consideration when dilutive. For purposes of this calculation, stock options, restricted stock units (RSUs), performance-based restricted stock units (PRSUs), convertible senior notes, restricted shares, and purchase rights committed under the employee stock purchase plan are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as the effect is antidilutive. Revenue recognition We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) . We derive our revenues primarily from technology subscriptions and professional services. We determine revenue recognition by applying the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, we satisfy the performance obligation. We recognize revenue net of any taxes collected from customers and subsequently remitted to governmental authorities. Technology revenue Technology revenue primarily consists of subscription fees charged to customers for access to use our technology. We provide customers access to our technology through either an all-access or limited-access, modular subscription. The majority of our subscription arrangements are cloud-based and do not provide customers the right to take possession of the technology or contain a significant penalty if the customer were to take possession of the technology. Revenue from cloud-based subscriptions is recognized ratably over the contract term beginning on the date that the service is made available to the customer. Our subscription contracts generally have a three Subscriptions that allow the customer to take software on-premise without significant penalty are treated as time-based licenses. These arrangements generally include access to technology, access to unspecified future products, and maintenance and support. Revenue for upfront access to our technology library is recognized at a point in time when the technology is made available to the customer. Revenue for access to unspecified future products included in time-based license subscriptions is recognized ratably over the contract term beginning on the date that the access is made available to the customer. We also have certain perpetual license arrangements. Revenue from these arrangements is recognized at a point in time upon delivery of the software. Technology revenue also includes maintenance and support revenue which generally includes bug fixes, updates, and support services. Revenue related to maintenance and support is recognized over the contract term beginning on the date that the service is made available to the customer. Professional services revenue Professional services revenue primarily includes data and analytics services, domain expertise services, outsourcing services, and implementation services. Professional services arrangements typically include a fee for making full-time equivalent (FTE) services available to our customers on a monthly basis. FTE services generally consist of a blend of analytic engineers, analysts, and data scientists based on the domain expertise needed to best serve our customers. Professional services are typically considered distinct from the technology offerings and revenue is generally recognized as the service is provided using the “right to invoice” practical expedient. Contracts with multiple performance obligations Many of our contracts include multiple performance obligations. We account for performance obligations separately if they are capable of being distinct within the context of the contract. In these circumstances, the transaction price is allocated to separate performance obligations on a relative standalone selling price basis. We determine standalone selling prices based on the observable price a good or service is sold for separately when available. In cases where standalone selling prices are not directly observable, based on information available, we utilize the expected cost plus a margin, adjusted market assessment, or residual estimation method. We consider all information available including our overall pricing objectives, market conditions, and other factors, which may include customer demographics and the types of users. Standalone selling prices are not directly observable for our all-access and limited-access technology arrangements, which are composed of cloud-based subscriptions, time-based licenses, and perpetual licenses. For these technology arrangements, we generally use the residual estimation method due to a limited number of standalone transactions and/or prices that are highly variable. Variable consideration We have also entered into at-risk and shared savings arrangements with certain customers whereby we receive variable consideration based on the achievement of measurable improvements which may include cost savings or performance against metrics. For these arrangements, we estimate revenue using the most likely amount that we will receive. Estimates are based on our historical experience and best judgment at the time to the extent it is probable that a significant reversal of revenue recognized will not occur. Due to the nature of our arrangements, certain estimates may be constrained until the uncertainty is further resolved. Contract balances Contract assets resulting from services performed prior to invoicing customers are recorded as unbilled accounts receivable and are presented on our condensed consolidated balance sheets in aggregate with accounts receivable. Unbilled accounts receivable generally become billable at contractually specified dates or upon the attainment of contractually defined milestones. As of June 30, 2022 and December 31, 2021, the unbilled accounts receivable included in accounts receivable on our condensed consolidated balance sheets was $0.5 million and $0.8 million, respectively. We record contract liabilities as deferred revenue when cash payments are received or due in advance of performance. Deferred revenue primarily relates to the advance consideration received from the customer. As of June 30, 2022 and December 31, 2021, the total of current and non-current deferred revenue on our condensed consolidated balance sheets was $61.4 million and $57.6 million, respectively. Deferred costs We capitalize sales commissions and associated fringe costs, such as benefits and payroll taxes, paid to direct sales personnel and other incremental costs of obtaining contracts with customers, provided we expect to recover those costs. We determine that costs should be deferred based on our sales compensation plans when the commissions are incremental and would not have occurred absent the customer contract. As of June 30, 2022 and December 31, 2021, $1.2 million and $1.4 million, respectively, of deferred contract acquisition costs are expected to be amortized within the next 12 months and are included in prepaid expenses and other assets on the consolidated balance sheets. As of June 30, 2022 and December 31, 2021, the remaining $2.2 million and $3.0 million, respectively, of deferred contract acquisition costs are included in non-current other assets. Commissions paid upon the initial acquisition of a contract are amortized on a straight-line basis over an estimated period of benefit of four years. Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition. The period of benefit was estimated by considering factors such as estimated average customer life, the rate of technological change in our subscription service, and the impact of competition in our industry. As our average customer life significantly exceeded the rate of change in our technology, we concluded that the rate of change in the technology underlying our subscription service was the most significant factor in determining the period of benefit for which the asset relates. In evaluating the rate of change in our technology, we considered the competition in our industry, our commitment to continuous innovation, and the frequency of product, platform, and technology updates. We determined that the impact of competition in our industry is reflected in the period of benefit through the rate of technological change. Amortization of deferred contract acquisition costs is included within sales and marketing expense in the condensed consolidated statements of operations. We defer certain costs to fulfill a contract when the costs are expected to be recovered, are directly related to in-process contracts, and enhance resources that will be used in satisfying performance obligations in the future. These deferred fulfillment costs primarily consist of employee compensation incurred as part of the implementation of new contracts. We periodically review these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented. Cost of revenue, excluding depreciation and amortization Cost of technology revenue primarily consists of costs associated with hosting and supporting our technology, including third-party cloud computing and hosting costs, contractor costs, and salary and related personnel costs for our cloud services and support teams. Cost of professional services revenue primarily consists of salary and related personnel costs, travel-related costs, and independent contractor costs. Cost of revenue excludes costs related to depreciation and amortization. Cash and cash equivalents We consider all highly liquid investments purchased with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. Short-term investments Our investment policy limits investments to highly-rated instruments. We classify and account for our short-term investments as available for sale securities as we may sell these securities at any time for use in our current operations or for other purposes, even prior to maturity. As a result, we classify our short-term investments, including securities with contractual maturities beyond twelve months, within current assets in the condensed consolidated balance sheets. Accounts receivable Accounts receivable are non-interest bearing and are recorded at the original invoiced amount less an allowance for credit losses based on the probability of future collections. Our allowance is based on our estimate of expected credit losses for outstanding trade accounts receivables and unbilled receivables. We determine expected credit losses based on historical write-off experience, an analysis of the aging of outstanding receivables, customer payment patterns, the establishment of specific reserves for customers in an adverse financial condition, and our expectations of changes in macro-economic conditions, including the ongoing COVID-19 pandemic and recently high inflationary environment, that may impact the collectability of outstanding receivables. We reassess the adequacy of the allowance for credit losses each reporting period. The following table presents a rollforward of the allowance for credit losses (in thousands): Allowance for Credit Losses on Accounts Receivable (unaudited) Balance at January 1, 2022 $ 1,600 Current period provision for expected credit losses 400 Balance at June 30, 2022 $ 2,000 Property and equipment Property and equipment are stated at historical cost less accumulated depreciation. Repairs and maintenance costs that do not extend the useful life or improve the related assets are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful life of each asset category is as follows: Computer equipment 2-3 years Furniture and fixtures 3-5 years Leasehold improvements Lesser of lease term or estimated useful life Computer software 2-5 years Capitalized internal-use software costs 2-3 years When there are indicators of potential impairment, we evaluate the recoverability of the carrying values by comparing the carrying amount of the applicable asset group to the estimated undiscounted future cash flows expected to be generated by the asset group over the remaining useful life of the primary asset in the asset group. If the carrying amount of the asset group exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized based on the amount by which the carrying value of the long-lived assets exceeds the fair value of the assets. We did not incur any long-lived impairment charges for the three and six months ended June 30, 2022 and 2021. Intangible assets Intangible assets include developed technologies, customer relationships, customer contracts, and trademarks that were acquired in business combinations and asset acquisitions. Intangible assets also include the purchase of third-party computer software. The intangible assets are amortized using the straight-line method over the assets’ estimated useful lives. The estimated useful life of each asset category is as follows: Developed technologies 3-10 years Customer relationships and contract backlog 2-7 years Computer software licenses 1-5 years Trademarks 1-5 years Goodwill We record goodwill as the difference between the aggregate consideration paid for a business combination and the fair value of the identifiable net tangible and intangible assets acquired. Goodwill includes the know-how of the assembled workforce, the ability of the workforce to further improve technology and product offerings, customer relationships, and the expected cash flows resulting from these efforts. Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations. Goodwill is assessed for impairment annually or more frequently if indicators of impairment are present or circumstances suggest that impairment may exist. Our first step in the goodwill impairment test is a qualitative analysis of factors that could be indicators of potential impairment. Next, if a quantitative analysis is necessary, we compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired. If the carrying amount of the reporting unit exceeds its fair value, we would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. There was no impairment of goodwill for the three and six months ended June 30, 2022 and 2021. Business combinations The results of businesses acquired in a business combination are included in our condensed consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair value on the acquisition date. Any excess consideration over the fair value of the identifiable assets acquired and liabilities assumed is recognized as goodwill. We perform valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination in order to record the tangible and intangible assets acquired and liabilities assumed based on our best estimate of fair value. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. Significant estimation is required in determining the fair value of the customer-related intangible assets and technology-related intangible assets. The significant estimation is primarily due to the judgmental nature of the inputs to the valuation models used to measure the fair value of these intangible assets, as well as the sensitivity of the respective fair values to the underlying significant assumptions. We typically use the income approach or cost approach to measure the fair value of intangible assets. The significant assumptions used to form the basis of the estimates included the number of engineer hours required to develop technology, expected revenue including revenue growth rates, rate and timing of obsolescence, royalty rates and earnings before interest, taxes, depreciation and amortization (EBITDA) margin used in the estimate for customer relationships, and backlog. Many of these significant assumptions were forward-looking and could be affected by future economic and market conditions. We engage the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of material assets acquired and liabilities assumed in a business combination. We expensed $1.2 million and $1.2 million of transaction costs associated with business combinations during the three months ended June 30, 2022 and 2021, respectively, and $2.9 million and $1.2 million for the six months ended June 30, 2022 and 2021, respectively. The costs were expensed as incurred and are included in general and administrative expense in our condensed consolidated statements of operations. Contingent consideration liabilities Our acquisition consideration in business combinations may include an estimate for contingent consideration that will be paid if certain earn-out performance targets are met. The resulting contingent consideration liabilities are categorized as a Level 3 fair value measurement because we estimate projections during the earn-out period utilizing unobservable inputs, including various potential pay-out scenarios based on billings and revenue-related earn-out targets. Changes to the unobservable inputs could have a material impact on our condensed consolidated financial statements. We generally value the expected contingent consideration and the corresponding liabilities using a probability model such as the Monte Carlo method based on estimates of potential payment scenarios. Probabilities are applied to each potential scenario and the resulting values are discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn-out itself, the related projections, projected payment dates, and volatility in the fair value of our common stock. The fair value of the contingent consideration is remeasured each reporting period. The portion of the contingent consideration liabilities that will be settled in shares of our common stock is classified as a component of non-current liabilities in our condensed consolidated balance sheets, while the portion to be paid in cash is classified as a component of current liabilities. Changes to the contingent consideration liabilities are reflected as part of general and administrative expense in our condensed consolidated statements of operations. Advertising costs All advertising costs are expensed as incurred. For the three months ended June 30, 2022 and 2021, we incurred $0.4 million and $0.4 million of advertising costs, respectively, and $1.3 million and $0.7 million for the six months ended June 30, 2022 and 2021, respectively. Development costs and internal-use software For technology products that are developed to be sold externally, we determined that technological feasibility is reached shortly before the products are ready for general release. Any costs associated with software development between the time technological feasibility is reached and general release are inconsequential. We capitalize certain development costs incurred in connection with our internal-use software. These capitalized costs are primarily related to the software platforms that are hosted by us and accessed by our customers on a subscription basis. Costs incurred in the preliminary stages of development are expensed as incurred as research and development costs. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized costs are recorded as part of property and equipment. Maintenance and training costs are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life with amortization included in depreciation and amortization expense in our condensed consolidated statements of operations. Stock-based compensation Stock-based awards, including stock options, restricted stock units, performance-based restricted stock units, and restricted shares are measured and recognized in our condensed consolidated financial statements based on the fair value of the award on the grant date. The grant date fair value of our stock-based awards is typically determined using the market closing price of our common stock on the date of grant; however, we also consider whether any adjustments are required when the market closing price does not reflect certain material non-public information that we know but is unavailable to marketplace participants on the date of grant. We record forfeitures of stock-based awards as the actual forfeitures occur. For awards subject to performance conditions, we record expense when the performance condition becomes probable. Each reporting period, we evaluate the probability of achieving the performance criteria, estimate the number of shares that are expected to vest, and adjust the related compensation expense accordingly. Stock-based compensation expense related to purchase rights issued under the 2019 Health Catalyst Employee Stock Purchase Plan (ESPP) is based on the Black-Scholes option-pricing model fair value of the estimated number of awards as of the beginning of the offering period. Stock-based compensation expense is recognized using the straight-line method over the offering period. The measurement date for non-employee awards is the date of grant. The compensation expense for non-employees is recognized, without changes in the fair value of the award, in the same period and in the same manner as though we had paid cash for the services, which is typically the vesting period of the respective award. Income taxes Deferred income tax balances are accounted for using the asset and liability method and reflect the effects of temporary differences between the financial reporting and tax bases of our assets and liabilities using enacted tax rates expected to apply when taxes are actually paid or recovered. In addition, deferred tax assets and liabilities are recorded for net operating loss (NOL) and tax credit carryforwards. A valuation allowance is provided against deferred tax assets unless it is more likely than not that they will be realized based on all available positive and negative evidence. Such evidence includes, but is not limited to, recent cumulative earnings or losses, expectations of future taxable income by taxing jurisdiction, and the carry-forward periods available for the utilization of deferred tax assets. We use a two-step approach to recognize and measure uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained upon audit. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. We do not currently accrue interest and penalties related to unrecognized tax benefits within the provision for income taxes because the impact would be immaterial due to our net operating losses and tax credit carryforwards. Significant judgment is required to evaluate uncertain tax positions. Although we believe that we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters will not be materially different. We evaluate our uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit, and effective settlement of audit issues. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations. Fair value of financial instruments The carrying amounts reported in our condensed consolidated balance sheets for cash, receivables, accounts payable, and current accrued expenses approximate fair values because of the immediate or short-term maturity of these financial instruments. The carrying value of contingent consideration liabilities, operating lease liabilities, and convertible senior notes approximate fair value based on interest rates available for debt with similar terms at June 30, 2022 and December 31, 2021. Money market funds and short-term investments are measured at fair value on a recurring basis. Our contingent consideration liabilities are measured at fair value on a recurring basis based primarily on significant inputs not observable in the market. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1- Quoted prices in active markets for identical assets or liabilities. • Level 2- Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3- Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. All of our financial instruments are valued using quoted prices in active markets or based on other observable inputs. For Level 2 securities, we use a third-party pricing service which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application, and corroborative information. Our contingent consideration liabilities are categorized as a Level 3 fair value measurement because we estimate projections during the earn out period utilizing various potential pay-out scenarios. Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets, operating lease liabilities, and operating lease liabilities, net of current portion in our condensed consolidated balance sheets. We have adopted the short-term lease recognition exemption policy. All of our leasing commitments are classified either as operating leases or otherwise qualify as short-term |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations The business acquisitions discussed below are included in our results of operations from their respective dates of acquisition . 2022 acquisitions ARMUS Corporation On April 29, 2022, we acquired ARMUS Corporation (ARMUS) , a clinical registry development and data management technology company based in Foster City, California. We accounted for the acquisition of ARMUS as a business combination. ARMUS provides data abstraction, data validation, data management, data submission, and data reporting services to support participation in clinical quality registries for healthcare institutions around the world, including health systems, payers, medical device companies, and premier medical societies. The acquisition consideration transferred was $9.4 million and was comprised of net cash consideration of $9.3 million and Health Catalyst common shares with a fair value of $0.1 million. The purchase resulted in Health Catalyst acquiring 100% ownership in ARMUS. An additional 235,330 shares of our common stock subject to a restriction agreement (restricted shares) were issued pursuant to the terms of the acquisition agreement. The value of these restricted shares is recognized as post-combination stock-based compensation expense on a straight-line basis over the vesting term. Refer to Note 12 for additional details related to our stock-based compensation. The following table summarizes the preliminary acquisition-date fair value of consideration transferred and the identifiable assets purchased and liabilities assumed as part of our acquisition of ARMUS (in thousands): Assets acquired: Accounts receivable $ 601 Prepaid expenses and other assets 104 ROU lease asset 169 Developed technologies 4,600 Customer relationships 2,200 Trademarks 200 Total assets acquired 7,874 Less liabilities assumed: Accounts payable 119 Accrued and other current liabilities 196 Deferred revenue 2,740 Lease liability 157 Net deferred tax liabilities 933 Total liabilities assumed 4,145 Total assets acquired, net 3,729 Goodwill 5,645 Total consideration transferred, net of cash acquired $ 9,374 The acquired intangible assets were valued utilizing either an income approach or a cost approach as deemed most applicable, and include developed technology, customer relationships, and trademarks that will be amortized on a straight-line basis over their estimated useful lives of four years, six years, and three years, respectively. The resulting goodwill from the ARMUS acquisition was fully allocated to the technology reporting unit and is not deductible for income tax purposes. The preliminary allocation of the consideration transferred is subject to potential adjustments. Balances subject to adjustment are primarily tax-related matters, including the tax basis of acquired assets and liabilities, and the settlement of net working capital. During the measurement period, we may record adjustments to the provisional amounts recognized in our initial accounting for the acquisition. We expect the allocation of the consideration transferred to be final within the measurement period (up to one year from the acquisition date). There were no measurement period adjustments recorded during the three months ended June 30, 2022. Pro forma financial information has not been presented for the ARMUS acquisition as the impact to our condensed consolidated financial statements was not material. The amount of revenue attributable to the acquired business of ARMUS was not material to our condensed consolidated statement of operations for the three and six months ended June 30, 2022. Income (loss) information for ARMUS after the acquisition date through June 30, 2022 is not presented as the ARMUS business was integrated into our operations immediately following the acquisition and is impracticable to quantify. In addition to the purchase price, we agreed to make cash retention payments in an aggregate amount of $5.0 million to continuing ARMUS team members. The retention payments are generally subject to vesting based upon continued employment over a required service period of three years. Any forfeited retention payments are reallocated to remaining ARMUS team members until the aggregate amount of $5.0 million is fully paid. Such amounts are recorded as post-combination compensation expense and recognized on a straight-line basis over the relevant vesting terms. During the three months ended June 30, 2022, we recognized compensation expense of $1.2 million related to these retention payments. As of June 30, 2022, there is an additional $3.8 million of unrecognized compensation expense related to these retention payments expected to be recognized over a weighted-average period of 2.8 years. KPI Ninja, Inc. On February 24, 2022, we acquired KPI Ninja, Inc. (KPI Ninja) , a leading provider of interoperability, enterprise analytics, and value-based care solutions based in Lincoln, Nebraska. We accounted for the acquisition of KPI Ninja as a business combination. KPI Ninja is known for its powerful capabilities, flexible configurations, and comprehensive applications designed to fulfill the promise of data-driven health care. The acquisition consideration transferred was $21.4 million and was comprised of net cash consideration of $18.5 million and Health Catalyst common shares with a fair value of $2.9 million. The purchase resulted in Health Catalyst acquiring 100% ownership in KPI Ninja. An additional 356,919 shares of our common stock subject to a restriction agreement (restricted shares) were issued pursuant to the terms of the acquisition agreement. The value of these restricted shares is recognized as post-combination stock-based compensation expense on a straight-line basis over the vesting term. Refer to Note 12 for additional details related to our stock-based compensation. The following table summarizes the preliminary acquisition-date fair value of consideration transferred and the identifiable assets purchased and liabilities assumed as part of our acquisition of KPI Ninja (in thousands): Assets acquired: Accounts receivable $ 45 Prepaid expenses and other assets 198 Property and equipment, net 15 Developed technologies 13,500 Customer relationships 1,100 Trademarks 800 Total assets acquired 15,658 Less liabilities assumed: Accounts payable and other current liabilities 266 Deferred revenue 763 Net deferred tax liabilities 3,600 Total liabilities assumed 4,629 Total assets acquired, net 11,029 Goodwill 10,364 Total consideration transferred, net of cash acquired $ 21,393 The acquired intangible assets were valued utilizing either an income approach or a cost approach as deemed most applicable, and include developed technology, customer relationships, and trademarks that will be amortized on a straight-line basis over their estimated useful lives of four years, six years, and five years, respectively. The resulting goodwill from the KPI Ninja acquisition was fully allocated to the technology reporting unit and is not deductible for income tax purposes. The preliminary allocation of the consideration transferred is subject to potential adjustments. Balances subject to adjustment are primarily tax-related matters, including the tax basis of acquired assets and liabilities. During the measurement period, we may record adjustments to the provisional amounts recognized in our initial accounting for the acquisition. We expect the allocation of the consideration transferred to be final within the measurement period (up to one year from the acquisition date). There were no measurement period adjustments recorded during the three and six months ended June 30, 2022. The amount of revenue attributable to the acquired business of KPI Ninja was not material to our condensed consolidated statement of operations for the three and six months ended June 30, 2022. Income (loss) information for KPI Ninja after the acquisition date through June 30, 2022 is not presented as the KPI Ninja business was integrated into our operations immediately following the acquisition and is impracticable to quantify. Pro forma financial information has not been presented for the KPI Ninja acquisition as the impact to our condensed consolidated financial statements was not material. In addition to the purchase price, we agreed to make cash retention payments in an aggregate amount of $3.0 million to continuing KPI Ninja team members. The retention payments are subject to vesting based upon continued employment over a required service period of four years. Any forfeited retention payments are reallocated to remaining KPI Ninja team members until the aggregate amount of $3.0 million is fully paid. Such amounts are recorded as post-combination compensation expense and recognized on a straight-line basis over the relevant vesting terms. During the three and six months ended June 30, 2022, we recognized compensation expense of $0.2 million and $0.6 million, respectively, related to these retention payments. As of June 30, 2022, there was an additional $2.4 million of unrecognized compensation expense related to these retention payments expected to be recognized over a weighted-average period of 3.7 years. 2021 acquisition Twistle, Inc. On July 1, 2021, we acquired Twistle, Inc. (Twistle) , a healthcare patient engagement SaaS technology company that, among other things, helps automate patient-centered, personalized, multi-channel communication between care teams and patients that aims to transform the patient experience, drive better care outcomes, and reduce healthcare costs. We accounted for the acquisition of Twistle as a business combination . The acquisition consideration transferred was $91.9 million and was comprised of net cash consideration of $46.7 million , Health Catalyst common shares with a fair value of $43.1 million , and contingent consideration based on certain earn-out performance targets for Twistle during an earn-out period that ends on June 30, 2022, with an initial fair value of $2.1 million . The purchase resulted in Health Catalyst acquiring 100% ownership in Twistle. An additional 67,939 restricted shares were issued pursuant to the terms of the acquisition agreement. The value of these restricted shares is recognized as post-combination stock-based compensation expense on a straight-line basis over the vesting term. Refer to Note 12 for additional details related to our stock-based compensation. The following table summarizes the acquisition-date fair value of consideration transferred and the identifiable assets purchased and liabilities assumed as part of our acquisition of Twistle (in thousands): Assets acquired: Accounts receivable $ 1,106 Prepaid expenses and other assets 98 Property and equipment, net 57 Developed technologies 13,000 Customer relationships 23,700 Trademarks 20 Total assets acquired 37,981 Less liabilities assumed: Accounts payable and other current liabilities 161 Deferred revenue 900 Net deferred tax liabilities 7,142 Total liabilities assumed 8,203 Total assets acquired, net 29,778 Goodwill 62,150 Total consideration transferred, net of cash acquired $ 91,928 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The following table represents Health Catalyst’s revenue disaggregated by type of arrangement (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Recurring technology $ 45,397 $ 35,529 $ 87,147 $ 69,096 One-time technology (i.e., perpetual license) — — 480 272 Professional services 25,236 24,098 51,093 46,105 Total revenue $ 70,633 $ 59,627 $ 138,720 $ 115,473 Revenue related to contracts with customers located in the United States was 96.0% and 99.1%, respectively, for the three months ended June 30, 2022 and 2021 and 97.5% and 99.5% for the six months ended June 30, 2022 and 2021, respectively. Deferred revenue includes advance customer payments and billings in excess of revenue recognized. For the three months ended June 30, 2022 and 2021, 47% and 45%, respectively, of the revenue recognized was included in deferred revenue at the beginning of the period. For the six months ended June 30, 2022 and 2021, 34% and 29%, respectively, of the revenue recognized was included in deferred revenue at the beginning of the period. Transaction price allocated to the remaining performance obligations |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets We operate our business in two operating segments that also represent our reporting units. Our reporting units are organized based on our technology and professional services. We have not incurred any goodwill impairment charges. Goodwill by reporting unit is as follows (in thousands): As of As of 2022 2021 (unaudited) Technology $ 185,200 $ 169,190 Professional services 782 782 Total goodwill $ 185,982 $ 169,972 As of June 30, 2022, intangible assets consisted of the following (in thousands): Gross Accumulated Amortization Net (unaudited) Developed technologies $ 100,829 $ (51,144) $ 49,685 Customer relationships and contracts 84,764 (28,756) 56,008 Computer software licenses 10,036 (7,703) 2,333 Trademarks 2,720 (1,238) 1,482 Total intangible assets $ 198,349 $ (88,841) $ 109,508 Amortization expense of acquired intangible assets was $10.0 million and $7.0 million for the three months ended June 30, 2022 and 2021, respectively, and $19.3 million and $14.1 million for the six months ended June 30, 2022 and 2021, respectively. Amortization expense for intangible assets is included in depreciation and amortization in our condensed consolidated statements of operations. As of December 31, 2021, intangible assets consisted of the following (in thousands): Gross Accumulated Amortization Net Developed technologies $ 82,729 $ (40,988) $ 41,741 Customer relationships and contracts 81,464 (21,078) 60,386 Computer software licenses 8,392 (6,590) 1,802 Trademarks 1,720 (861) 859 Total intangible assets $ 174,305 $ (69,517) $ 104,788 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and Equipment Property and equipment consisted of the following (in thousands): As of As of 2022 2021 (unaudited) Computer equipment $ 9,455 $ 9,235 Leasehold improvements 10,832 10,832 Furniture and fixtures 3,731 3,715 Capitalized internal-use software costs 18,136 10,769 Computer software 198 198 Total property and equipment 42,352 34,749 Less: accumulated depreciation (15,825) (11,433) Property and equipment, net $ 26,527 $ 23,316 Our long-lived assets are located in the United States. Depreciation expense totaled $2.6 million and $1.1 million for the three months ended June 30, 2022 and 2021, respectively, and $4.9 million and $1.8 million for the six months ended June 30, 2022 and 2021, respectively. Depreciation expense includes amortization of assets recorded under a capital lease and the amortization of capitalized internal-use software costs. |
Short-term Investments
Short-term Investments | 6 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term Investments | Short-term Investments We classify our short-term investments as available for sale. Available-for-sale securities are recorded on our condensed consolidated balance sheets at fair market value and any unrealized gains or losses are reported as part of other comprehensive loss on our condensed consolidated statements of comprehensive loss. We determine realized gains or losses on the sales of investments through the specific identification method and record such gains or losses as part of interest and other expense, net on our condensed consolidated statements of operations. We did not have any material realized gains or losses on investments during the three and six months ended June 30, 2022 and 2021. We measure the fair value of investments on a recurring basis. The following table summarizes, by major security type, our cash equivalents and short-term investments that are measured at fair value on a recurring basis (in thousands) as of June 30, 2022: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents Short-term Investments (unaudited) Money market funds $ 161,634 $ — $ — $ 161,634 $ 161,634 $ — U.S. Treasury notes 44,877 — (222) 44,655 — 44,655 Commercial paper 138,244 — — 138,244 — 138,244 Corporate bonds 23,571 — (106) 23,465 — 23,465 Asset-backed securities 20,026 — (25) 20,001 — 20,001 Total $ 388,352 $ — $ (353) $ 387,999 $ 161,634 $ 226,365 The following table summarizes, by major security type, our cash equivalents and short-term investments that are measured at fair value on a recurring basis (in thousands) as of December 31, 2021: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents Short-term Investments Money market funds $ 173,475 $ — $ — $ 173,475 $ 173,475 $ — Commercial paper 153,498 — — 153,498 — 153,498 Corporate bonds 71,259 — (45) 71,214 4,424 66,790 Asset-backed securities 31,509 — (43) 31,466 — 31,466 Total $ 429,741 $ — $ (88) $ 429,653 $ 177,899 $ 251,754 The following table presents the contractual maturities of our short-term investments as of June 30, 2022 and December 31, 2021 (in thousands): As of June 30, 2022 As of December 31, 2021 Amortized Cost Fair Value Amortized Cost Fair Value (unaudited) Due within one year $ 226,718 $ 226,365 $ 230,429 $ 230,372 Due between one and five years — — 21,411 21,382 Total $ 226,718 $ 226,365 $ 251,840 $ 251,754 Accrued interest receivables related to our available-for-sale securities of $0.4 million and $0.8 million as of June 30, 2022 and December 31, 2021 were included within prepaid expenses and other assets on our condensed consolidated balance sheets. On a quarterly basis we evaluate unrealized losses on our available-for-sale debt securities and the related accrued interest receivables to determine whether a decline in the fair value below the amortized cost basis is due to credit-related factors or noncredit-related factors. We do not intend to sell investments that are in an unrealized loss position and it is not likely that we will be required to sell any investments before recovery of their amortized cost basis. As of June 30, 2022 and December 31, 2021, there were no material unrealized losses due to expected credit loss-related factors. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 were as follows (in thousands): June 30, 2022 Level 1 Level 2 Level 3 Total (unaudited) Money market funds $ 161,634 $ — $ — $ 161,634 U.S. Treasury notes 44,655 — — 44,655 Commercial paper — 138,244 — 138,244 Corporate bonds — 23,465 — 23,465 Asset-backed securities — 20,001 — 20,001 Contingent consideration liabilities — — (8,015) (8,015) Total $ 206,289 $ 181,710 $ (8,015) $ 379,984 Assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 were as follows (in thousands): December 31, 2021 Level 1 Level 2 Level 3 Total Money market funds $ 173,475 $ — $ — $ 173,475 U.S. Treasury notes — — — — Commercial paper — 153,498 — 153,498 Corporate bonds — 71,214 — 71,214 Asset-backed securities — 31,466 — 31,466 Contingent consideration liabilities — — (19,295) (19,295) Total $ 173,475 $ 256,178 $ (19,295) $ 410,358 There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the three and six months ended June 30, 2022 and 2021. Convertible senior notes As of June 30, 2022, the estimated fair value of our convertible senior notes, with aggregate principal totaling $230.0 million, was $206.6 million. We estimate the fair value based on quoted market prices in an inactive market on the last trading day of the reporting period (Level 2). These convertible senior notes are recorded at face value less unamortized debt discount and transaction costs on our consolidated balance sheets. Refer to Note 9 —Convertible Senior Notes for further information. Level 3 fair value measurements The Healthfinch acquisition consideration included an initial estimate for contingent consideration based on certain revenue-based earn-out performance targets for Healthfinch during an earn-out period that ended on July 31, 2021. The first half of the Healthfinch earn-out contingent consideration liability was settled during 2021 for cash consideration of $1.7 million and the issuance of 78,243 shares of our common stock. The remaining Healthfinch contingent consideration liability was fully settled during the three months ended March 31, 2022 for cash consideration of $1.7 million and the issuance of 78,248 shares of our common stock. The Twistle acquisition consideration included an initial estimate for contingent consideration based on certain revenue-based earn-out performance targets for Twistle during an earn-out period that ended on June 30, 2022. The Twistle contingent consideration is capped at $65.0 million and will be paid in a combination of approximately 20% cash and 80% in shares of our common stock. We expect to finalize and settle this contingent consideration liability during the third quarter of 2022. The outstanding contingent consideration liabilities are categorized as Level 3 fair value measurements and are remeasured as of each reporting period. As of June 30, 2022, the estimated fair value of the Twistle revenue-based earn-out contingent consideration liability is approximately $8.0 million based on a point estimate of the ultimate earn-out that will be agreed upon and settled and the closing price per share of our common stock. The following table sets forth a summary of the changes in the estimated fair value of the contingent consideration liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (unaudited) Balance as of December 31, 2021 $ 19,295 Settlement of contingent consideration (3,977) Change in fair value of contingent consideration liabilities (7,303) Balance as of June 30, 2022 $ 8,015 |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities As of June 30, 2022 and December 31, 2021, accrued liabilities consisted of the following (in thousands): As of As of 2022 2021 (unaudited) Accrued compensation and benefit expenses $ 10,915 $ 17,430 Other accrued liabilities 7,697 6,295 Total accrued liabilities $ 18,612 $ 23,725 |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes Convertible senior notes On April 14, 2020, we issued $230.0 million in aggregate principal amount of 2.50% Convertible Senior Notes due 2025 (the Notes), in a private placement to qualified institutional buyers exempt from registration under the Securities Act (the Note Offering). The net proceeds from the issuance of the Notes were approximately $222.5 million, after deducting the initial purchasers’ discounts and offering expenses payable by us. The Notes are governed by an indenture (the Indenture) between us, as the issuer, and U.S. Bank National Association, as trustee. The Notes are our senior, unsecured obligations and accrue interest payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2020, at a rate of 2.50% per year. The Notes will mature on April 15, 2025, unless earlier converted, redeemed, or repurchased. The Indenture does not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by us or any of our subsidiaries. We may not redeem the Notes prior to April 20, 2023. On or after April 20, 2023, we may redeem, for cash, all or a portion of the Notes, at our option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes. The Notes have an initial conversion rate of 32.6797 shares of our common stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $30.60 per share of our common stock). Following certain corporate events that occur prior to the maturity date, we will increase the conversion rate for a holder who elects to convert its Notes in connection with such corporate event. Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” per the Indenture, holders of the Notes may require the Company to repurchase for cash all or a portion of their Notes at a purchase price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest. Holders of the Notes may convert all or any portion of their Notes at any time prior to the close of business on October 14, 2024, in integral multiples of $1,000 principal amount, only under the following circumstances: • During any calendar quarter commencing after the calendar quarter ended on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • During the five business day period after any five consecutive trading day period (the measurement period) in which the trading price as defined in the Indenture per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; • If we call such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or • Upon the occurrence of specified corporate events described in the Indenture. On or after October 15, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at the conversion rate at any time irrespective of the foregoing circumstances. Upon conversion, holders will receive cash, shares of our common stock or a combination of cash and shares of common stock, at our election. As of June 30, 2022, the conditions allowing holders of the Notes to convert were not met. The Notes are therefore not currently convertible and are classified as non-current. The interest expense recognized related to the Notes was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Contractual interest expense $ 1,434 $ 1,438 $ 2,865 $ 2,875 Amortization of debt issuance costs and discount (1) 375 2,947 749 5,817 Total $ 1,809 $ 4,385 $ 3,614 $ 8,692 _________________________ (1) Amortization of debt issuance costs and discount for the three and six months ended June 30, 2022 no longer includes amortization of the debt discount due to the adoption of ASU 2020-06 using a modified retrospective approach. Refer to Note 1 for more information. The net carrying value of the liability component of the Notes was as follows (in thousands): June 30, 2022 (unaudited) Principal $ 230,000 Less: Unamortized issuance costs (4,228) Net carrying amount $ 225,772 Based on the closing price of our common stock of $14.49 on June 30, 2022, the if-converted value of the Notes was less than their respective principal amounts. Capped calls On April 8, 2020, concurrently with the pricing of the Notes, we entered into privately negotiated capped call transactions (Base Capped Calls) with certain option counterparties. In addition, in connection with the initial purchasers’ exercise in full of their option to purchase additional Notes, on April 9, 2020, we entered into additional capped call transactions (together with the Base Capped Calls, the Capped Calls) with each of the option counterparties. We used approximately $21.7 million of the net proceeds from the Note Offering to pay the cost of the Capped Calls and allocated issuance costs. The Capped Calls have initial cap prices of $42.00 per share, subject to certain adjustments. The Capped Calls are expected generally to reduce the potential dilution to our common stock upon any conversion of Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to the cap price. |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Preferred stock Our board of directors has the authority, without further action by our stockholders, to issue up to 25,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, and privileges thereof, including voting rights. As of June 30, 2022 and December 31, 2021, no shares of this preferred stock were issued and outstanding. Common stock We had 500,000,000 shares of $0.001 par value common stock authorized, of which 54,713,567 and 52,690,019 shares were legally issued and outstanding as of June 30, 2022 and December 31, 2021, respectively. The shares legally issued and outstanding as of June 30, 2022 and December 31, 2021 included 660,188 shares and 67,939 shares, respectively, issued pursuant acquisition agreements, which are subject to a restriction agreement and were unvested, and as such, for accounting purposes they were not considered to be outstanding common stock shares. Each share of common stock has the right to one vote on all matters submitted to a vote of stockholders. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared or paid on our common stock through June 30, 2022. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Net less per share, basic Numerator: Net loss $ (33,428) $ (35,834) $ (55,886) $ (64,204) Denominator: Weighted-average number of shares used in calculating net loss per share, basic 53,675,377 44,886,489 53,342,887 44,381,196 Net loss per share, basic $ (0.62) $ (0.80) $ (1.05) $ (1.45) Net less per share, basic Numerator: Net loss $ (33,428) $ (35,834) $ (55,886) $ (64,204) Dilutive change in fair value of shares issuable as contingent consideration — — (6,023) — Net loss for diluted calculation $ (33,428) $ (35,834) $ (61,909) $ (64,204) Denominator: Weighted-average number of shares used in calculating net loss per share, basic 53,675,377 44,886,489 53,342,887 44,381,196 Dilutive effect of shares issuable as acquisition-related contingent consideration — — 461,554 — Weighted-average number of shares used in calculating net loss per share, diluted 53,675,377 44,886,489 53,804,441 44,381,196 Net loss per share, diluted $ (0.62) $ (0.80) $ (1.15) $ (1.45) During the three and six months ended June 30, 2022 and 2021, we incurred net losses and, therefore, the effect of our stock options, restricted stock units, performance-based restricted stock units, convertible senior notes, and restricted shares were not included in the calculation of diluted net loss per share as the effect would be anti-dilutive. The calculation of diluted net loss per share does not include the effect of the following potentially outstanding shares of common stock. The effects of these potentially outstanding shares were not included in the calculation of diluted net loss per share because the effect would have been anti-dilutive: As of June 30, 2022 2021 (unaudited) Common stock options 1,781,952 2,660,759 Restricted stock units 4,018,450 2,813,051 Performance-based restricted stock units 581,597 318,737 Shares related to convertible senior notes 7,516,331 3,198,928 Shares issuable as acquisition-related contingent consideration (1) 440,966 93,100 Restricted shares 660,188 76,497 Total potentially dilutive securities 14,999,484 9,161,072 _________________________ (1) The effect of shares issuable as acquisition-related contingent consideration were dilutive during the six months ended June 30, 2022, but anti-dilutive during the three months ended June 30, 2022 and the three and six months ended June 30, 2021. The anti-dilutive shares issuable as acquisition-related contingent consideration in the table above are calculated based on the earn-out achieved and the estimated number of shares that would be issuable if the outstanding acquisition-related contingent consideration liabilities were to be settled as of the respective dates. On January 1, 2022, we adopted ASU 2020-06 using the modified retrospective method. Following this adoption, we utilize the if-converted method for our calculation of potentially dilutive shares related to our convertible senior notes. Prior to the adoption, we applied the treasury stock method as we have the intent and ability to settle the principal amount of the convertible senior notes in cash. As such, the adoption of ASU 2020-06 resulted in a significant increase in the potentially dilutive securities disclosed in the table above as of June 30, 2022 compared to June 30, 2021. Refer to Note 1 for further details. In connection with the offering of our convertible senior notes, we entered into Capped Calls with initial caps on the conversion price of $42.00 per share, which are excluded from the calculation of diluted earnings per share, as they would be antidilutive. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-Based Compensation In 2011, our board of directors adopted the Health Catalyst, Inc. 2011 Stock Incentive Plan (2011 Plan), which provided for the direct award, sale of shares, and granting of RSUs and options for our common stock to our directors, team members, or consultants. In connection with our initial public offering (IPO), our board of directors adopted the 2019 Stock Option and Incentive Plan (2019 Plan). The 2019 Plan provides flexibility to our compensation committee to use various equity-based incentive awards as compensation tools to motivate our workforce, including the grant of incentive and non-statutory stock options, restricted and unrestricted stock, RSUs, and stock appreciation rights to our directors, team members, or consultants. We initially reserved 2,500,000 shares under the 2019 Plan and 256,607 shares under the 2011 Plan that were available immediately prior to the IPO registration date. The 2019 Plan provides that the number of shares reserved available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2020, by 5% of the outstanding number of shares of our common stock on the immediately preceding December 31, or such lesser number of shares as determined by our compensation committee. As of January 1, 2022, there were an additional 2,634,500 shares reserved for issuance under the 2019 Plan. As of June 30, 2022 and December 31, 2021, there were 17,929,420 and 15,294,920 shares authorized for grant, respectively, and 2,814,905 and 2,969,638 shares available for grant, respectively, under the 2019 Plan and 2011 Plan. The following two tables summarize our total stock-based compensation expense by award type and where the stock-based compensation expense was recorded in our consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Options $ 752 $ 1,721 $ 1,656 $ 3,115 Restricted stock units 13,836 10,460 25,884 18,462 Performance-based restricted stock units 340 3,519 3,636 4,848 Employee stock purchase plan 395 393 842 810 Restricted shares 2,609 1,634 4,034 4,002 Total stock-based compensation $ 17,932 $ 17,727 $ 36,052 $ 31,237 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Cost of revenue $ 2,404 $ 2,856 $ 5,160 $ 4,665 Sales and marketing 6,875 5,932 13,888 10,750 Research and development 3,163 2,676 6,253 4,933 General and administrative 5,490 6,263 10,751 10,889 Total stock-based compensation $ 17,932 $ 17,727 $ 36,052 $ 31,237 Stock options There were no stock options granted during the six months ended June 30, 2022 or 2021. A summary of the share option activity under the 2019 Plan for the six months ended June 30, 2022, is as follows: Time-Based Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value (unaudited) Outstanding at January 1, 2022 2,115,484 $ 11.45 Options exercised (327,389) 11.20 Options cancelled/forfeited (6,143) 12.07 Outstanding at June 30, 2022 1,781,952 $ 11.49 5.4 $ 5,920,221 Vested and expected to vest as of June 30, 2022 1,781,952 $ 11.49 5.4 $ 5,920,221 Vested and exercisable as of June 30, 2022 1,447,146 $ 10.98 5.2 $ 5,380,840 The aggregate intrinsic value of stock options exercised was $3.8 million for the six months ended June 30, 2022. The total grant-date fair value of stock options vested during the six months ended June 30, 2022 was $3.1 million. As of June 30, 2022, approximately $1.0 million of unrecognized compensation expense related to our stock options is expected to be recognized over a remaining weighted-average period of 0.5 years. Restricted stock units (RSUs) The service-based condition for restricted stock units (RSUs) is generally satisfied over four years with a cliff vesting period of one year and quarterly vesting thereafter. The following table sets forth the outstanding RSUs and related activity for the six months ended June 30, 2022: Restricted Stock Units Weighted Average Grant Date Fair Value (unaudited) Unvested and outstanding at January 1, 2022 2,273,354 $ 43.84 RSUs granted 2,378,404 26.41 RSUs vested (534,003) 41.61 RSUs forfeited (99,305) 36.25 Unvested and outstanding at June 30, 2022 4,018,450 $ 34.00 As of June 30, 2022, we had $124.9 million of unrecognized stock-based compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of 2.7 years. Performance-based restricted stock units (PRSUs) During the six months ended June 30, 2022, we granted PRSUs to all employees that included both service conditions and performance conditions related to company-wide goals. These PRSUs will vest to the extent the applicable performance conditions are achieved for the year ended December 31, 2022, and if the individual employee continues to provide services to us through the vesting date of March 1, 2023. The number of PRSUs that will ultimately vest from the 2022 PRSU grants can range from 0% to 100% of the original amount granted depending on our performance during 2022 against the pre-established targets. We also granted additional executive PRSUs based on the same performance conditions described above, but with an extended four-year service condition whereby one quarter of such shares will vest on March 1, 2023, and the remainder in quarterly installments thereafter. The following table sets forth the outstanding PRSUs, including executive PRSUs, and related activity for the six months ended June 30, 2022: Performance-based Restricted Stock Units Weighted Average Grant Date Fair Value (unaudited) Unvested and outstanding at January 1, 2022 319,442 $ 50.28 PRSUs granted 589,994 26.45 PRSUs vested (254,122) 50.18 PRSUs forfeited (73,717) 44.17 Unvested and outstanding at June 30, 2022 581,597 $ 26.90 As of June 30, 2022, we had $3.5 million of unrecognized stock-based compensation expense related to outstanding PRSUs expected to be recognized over a remaining weighted-average period of 1 year. Employee stock purchase plan In connection with our IPO in July 2019, our board of directors adopted the ESPP and a total of 750,000 shares of common stock were initially reserved for issuance under the ESPP. The number of shares of common stock available for issuance under the ESPP will be increased on the first day of each calendar year beginning January 1, 2020 and each year thereafter until the ESPP terminates. The number of shares of common stock reserved and available for issuance under the ESPP shall be cumulatively increased by the least of (i) 750,000 shares, (ii) one percent of the number of shares of common stock issued and outstanding on the immediately preceding December 31, and (iii) such lesser number of shares of common stock as determined by the ESPP Administrator. As of January 1, 2022, the number of shares of common stock available for issuance under the ESPP increased by 526,900 shares. The ESPP generally provides for six-month offering periods. The offering periods generally start on the first trading day after June 30 and December 31 of each year. The ESPP permits participants to elect to purchase shares of common stock through fixed percentage contributions from eligible compensation during each offering period, not to exceed 15% of the eligible compensation a participant receives during an offering period or accrue at a rate which exceeds $25,000 of the fair value of the stock (determined on the option grant date(s)) for each calendar year. A participant may purchase the lowest of (i) a number of shares of common stock determined by dividing such participant’s accumulated payroll deductions on the exercise date by the option price, (ii) 2,500 shares; or (iii) such other lesser maximum number of shares as shall have been established by the ESPP Administrator in advance of the offering period. Amounts deducted and accumulated by the participant will be used to purchase shares of common stock at the end of each offering period. The purchase price of the shares will be 85% of the lower of the fair value of common stock on the first trading day of each offering period or on the purchase date. Participants may end their participation at any time during an offering period and will be paid their accumulated contributions that have not been used to purchase shares of common stock. Participation ends automatically upon termination of employment. The fair value of the purchase right for the ESPP option component is estimated on the date of grant using the Black-Scholes model with the following assumptions for the six months ended June 30, 2022 and 2021: Six Months Ended June 30, 2022 2021 (unaudited) Expected volatility 37.5% 40.4% Expected term (in months) 6 6 Risk-free interest rate 0.22% 0.09% Expected dividends — — During the six months ended June 30, 2022, we issued 124,151 shares under the ESPP, with a weighted-average purchase price per share of $12.32. Total cash proceeds from the purchase of shares under the ESPP during the six months ended June 30, 2022 were $1.5 million. As of June 30, 2022, 1,511,723 shares were available for future issuance under the ESPP. Restricted shares As part of the Twistle acquisition that closed on July 1, 2021, 67,939 shares of our common stock were issued pursuant to the terms of the acquisition agreement and are considered a stock-based compensation arrangement subject to a restriction agreement. The vesting of those shares is subject to one year of continuous service and shall be released on the eighteen-month anniversary of the acquisition closing date. As part of the KPI Ninja acquisition that closed on February 24, 2022, 356,919 shares of our common stock were issued pursuant to the terms of the acquisition agreement and are considered a stock-based compensation arrangement subject to a restriction agreement. The vesting of those shares is subject to continuous service with 25% vesting upon each six-month anniversary of the acquisition close date. As part of the ARMUS acquisition that closed on April 29, 2022, 235,330 shares of our common stock were issued pursuant to the terms of the acquisition agreement and are considered a stock-based compensation arrangement subject to a restriction agreement. The vesting of those shares is subject to eighteen months of continuous service with cliff vesting upon the eighteen-month anniversary of the acquisition close date. As of June 30, 2022, we had $11.5 million of unrecognized stock-based compensation expense related to outstanding restricted shares expected to be recognized over a weighted-average period of 1.6 years. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, we update our estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, we make a cumulative adjustment in such period. The quarterly tax provision and the estimate of our annual effective tax rate are subject to variation due to several factors, including variability in our loss before income taxes, the mix of jurisdictions to which such income or loss relates, changes in how we conduct business, and tax law developments. Our estimated effective tax rate was 2.8% and 0.5% for the three months ended June 30, 2022 and 2021, respectively, and 7.4% and 0.1% for the six months ended June 30, 2022 and 2021, respectively. The variations between our estimated effective tax rate and the U.S. statutory rate are primarily due to our full valuation allowance. We consider all available evidence to evaluate the recovery of deferred tax assets, including historical levels of income, legislative developments, and risks associated with estimates of future taxable income. We have provided a full valuation allowance for our net deferred tax assets as of June 30, 2022 and December 31, 2021, due to the uncertainty surrounding the future realization of such assets and the cumulative losses we have generated. The income tax benefit of $4.5 million recorded for the six months ended June 30, 2022 is primarily related to the discrete deferred tax benefit attributable to the release of a portion of the valuation allowance during the period. The release of valuation allowance is attributable to the acquisitions of KPI Ninja and ARMUS, which resulted in deferred tax liabilities that, upon acquisition, allowed us to recognize certain deferred tax assets of $4.5 million that had previously been offset by a valuation allowance. As we have a full valuation allowance on net deferred tax assets, our income tax provision for the six months ended June 30, 2021 consisted primarily of minimal state and foreign income taxes. We recognize tax benefits from uncertain tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. We believe that we have provided adequate reserves for income tax uncertainties in all open tax years. We do not anticipate material changes in the total amount of our unrecognized tax benefits within 12 months of the reporting date. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was enacted and signed into U.S. law to provide additional economic stimulus and tax credits. Changes in tax laws or rates are accounted for in the period of enactment. We are continuing to analyze these legislative developments and believe that the income tax provisions of the CARES Act and ARPA do not have a significant impact on our current taxes, deferred taxes, or uncertain tax positions. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. We are involved in legal proceedings from time to time that arise in the normal course of business. As of June 30, 2022 and December 31, 2021, there were no significant outstanding claims against us. |
Deferred Revenue and Performanc
Deferred Revenue and Performance Obligations | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue and Performance Obligations | Revenue The following table represents Health Catalyst’s revenue disaggregated by type of arrangement (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Recurring technology $ 45,397 $ 35,529 $ 87,147 $ 69,096 One-time technology (i.e., perpetual license) — — 480 272 Professional services 25,236 24,098 51,093 46,105 Total revenue $ 70,633 $ 59,627 $ 138,720 $ 115,473 Revenue related to contracts with customers located in the United States was 96.0% and 99.1%, respectively, for the three months ended June 30, 2022 and 2021 and 97.5% and 99.5% for the six months ended June 30, 2022 and 2021, respectively. Deferred revenue includes advance customer payments and billings in excess of revenue recognized. For the three months ended June 30, 2022 and 2021, 47% and 45%, respectively, of the revenue recognized was included in deferred revenue at the beginning of the period. For the six months ended June 30, 2022 and 2021, 34% and 29%, respectively, of the revenue recognized was included in deferred revenue at the beginning of the period. Transaction price allocated to the remaining performance obligations |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties We did not have any material related party transactions during the six months ended June 30, 2022 and we did not have any receivables or deferred revenue from related parties as of June 30, 2022 and December 31, 2021. We have revenue arrangements with customers that are also our investors. None of these customers hold a significant amount of ownership in our equity interests. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segments | Segments We operate our business in two operating segments that also represent our reportable segments. Our business is organized based on our technology offerings and professional services. Accordingly, our segments are: • Technology - Our technology segment (Technology) includes our data platform, analytics applications and support services and generates revenues primarily from contracts that are cloud-based subscription arrangements, time-based license arrangements, and maintenance and support fees; and • Professional Services - Our professional services segment (Professional Services) is generally the combination of analytics, implementation, strategic advisory, outsource, and improvement services to deliver expertise to our customers to more fully configure and utilize the benefits of our Technology offerings. Revenues and cost of revenues generally are directly attributed to our segments. All segment revenues are from our external customers. Asset and other balance sheet information at the segment level is not reported to our Chief Operating Decision Maker. Segment revenue and Adjusted Gross Profit for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Revenue Technology $ 45,397 $ 35,529 $ 87,627 $ 69,368 Professional Services 25,236 24,098 51,093 46,105 Total $ 70,633 $ 59,627 $ 138,720 $ 115,473 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Adjusted Gross Profit Technology $ 31,968 $ 24,256 $ 61,566 $ 47,644 Professional Services 6,696 8,174 14,270 15,103 Total reportable segments Adjusted Gross Profit 38,664 32,430 75,836 62,747 Less Adjusted Gross Profit reconciling items: Stock-based compensation (2,404) (2,856) (5,160) (4,665) Acquisition-related costs, net (1) (234) — (559) — Less other reconciling items: Sales and marketing (20,922) (16,705) (41,740) (32,356) Research and development (18,148) (14,524) (35,296) (28,869) General and administrative (17,536) (22,525) (26,359) (37,540) Depreciation and amortization (12,612) (8,139) (24,261) (15,953) Interest and other expense, net (1,180) (3,707) (2,842) (7,659) Loss before income taxes $ (34,372) $ (36,026) $ (60,381) $ (64,295) ____________________ (1) Acquisition-related costs, net include deferred retention expenses following the ARMUS, KPI Ninja, and Twistle acquisitions. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsShare repurchase planOn August 2, 2022, our Board of Directors authorized a share repurchase program to repurchase up to $40.0 million of our outstanding shares of common stock. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and the applicable regulations of the U.S. Securities and Exchange Commission (SEC) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2021 included in our Annual Report on Form 10-K. |
Principles of consolidation | Principles of consolidation The condensed consolidated financial statements include the accounts of Health Catalyst and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, provisions for expected credit losses, useful lives of property and equipment, capitalization and estimated useful life of internal-use software and other intangible assets, fair value of financial instruments, deferred tax assets, stock-based compensation, contingent consideration, the period of benefit for deferred contract acquisition costs, the incremental borrowing rate used for operating leases, and tax uncertainties. Actual results could significantly differ from those estimates. |
Segment reporting | Segment reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is evaluated by the chief operating decision maker (the CODM) in assessing performance and making decisions regarding resource allocation. We operate our business in two operating segments that also represent our reportable segments. Our segments are (1) technology and (2) professional services. The CODM uses Adjusted Gross Profit (defined as revenue less cost of revenue that excludes depreciation, amortization, stock-based compensation expense, and certain other operating expenses) as the measure of our profit. |
Net loss per share | Net loss per share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding. Diluted net loss per share is calculated by giving effect to all potentially dilutive common stock equivalents outstanding for the period, including shares issuable as acquisition-related contingent consideration when dilutive. For purposes of this calculation, stock options, restricted stock units (RSUs), performance-based restricted stock units (PRSUs), convertible senior notes, restricted shares, and purchase rights committed under the employee stock purchase plan are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as the effect is antidilutive. |
Revenue recognition | Revenue recognition We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) . We derive our revenues primarily from technology subscriptions and professional services. We determine revenue recognition by applying the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, we satisfy the performance obligation. We recognize revenue net of any taxes collected from customers and subsequently remitted to governmental authorities. Technology revenue Technology revenue primarily consists of subscription fees charged to customers for access to use our technology. We provide customers access to our technology through either an all-access or limited-access, modular subscription. The majority of our subscription arrangements are cloud-based and do not provide customers the right to take possession of the technology or contain a significant penalty if the customer were to take possession of the technology. Revenue from cloud-based subscriptions is recognized ratably over the contract term beginning on the date that the service is made available to the customer. Our subscription contracts generally have a three Subscriptions that allow the customer to take software on-premise without significant penalty are treated as time-based licenses. These arrangements generally include access to technology, access to unspecified future products, and maintenance and support. Revenue for upfront access to our technology library is recognized at a point in time when the technology is made available to the customer. Revenue for access to unspecified future products included in time-based license subscriptions is recognized ratably over the contract term beginning on the date that the access is made available to the customer. We also have certain perpetual license arrangements. Revenue from these arrangements is recognized at a point in time upon delivery of the software. Technology revenue also includes maintenance and support revenue which generally includes bug fixes, updates, and support services. Revenue related to maintenance and support is recognized over the contract term beginning on the date that the service is made available to the customer. Professional services revenue Professional services revenue primarily includes data and analytics services, domain expertise services, outsourcing services, and implementation services. Professional services arrangements typically include a fee for making full-time equivalent (FTE) services available to our customers on a monthly basis. FTE services generally consist of a blend of analytic engineers, analysts, and data scientists based on the domain expertise needed to best serve our customers. Professional services are typically considered distinct from the technology offerings and revenue is generally recognized as the service is provided using the “right to invoice” practical expedient. Contracts with multiple performance obligations Many of our contracts include multiple performance obligations. We account for performance obligations separately if they are capable of being distinct within the context of the contract. In these circumstances, the transaction price is allocated to separate performance obligations on a relative standalone selling price basis. We determine standalone selling prices based on the observable price a good or service is sold for separately when available. In cases where standalone selling prices are not directly observable, based on information available, we utilize the expected cost plus a margin, adjusted market assessment, or residual estimation method. We consider all information available including our overall pricing objectives, market conditions, and other factors, which may include customer demographics and the types of users. Standalone selling prices are not directly observable for our all-access and limited-access technology arrangements, which are composed of cloud-based subscriptions, time-based licenses, and perpetual licenses. For these technology arrangements, we generally use the residual estimation method due to a limited number of standalone transactions and/or prices that are highly variable. Variable consideration We have also entered into at-risk and shared savings arrangements with certain customers whereby we receive variable consideration based on the achievement of measurable improvements which may include cost savings or performance against metrics. For these arrangements, we estimate revenue using the most likely amount that we will receive. Estimates are based on our historical experience and best judgment at the time to the extent it is probable that a significant reversal of revenue recognized will not occur. Due to the nature of our arrangements, certain estimates may be constrained until the uncertainty is further resolved. Contract balances Contract assets resulting from services performed prior to invoicing customers are recorded as unbilled accounts receivable and are presented on our condensed consolidated balance sheets in aggregate with accounts receivable. Unbilled accounts receivable generally become billable at contractually specified dates or upon the attainment of contractually defined milestones. As of June 30, 2022 and December 31, 2021, the unbilled accounts receivable included in accounts receivable on our condensed consolidated balance sheets was $0.5 million and $0.8 million, respectively. We record contract liabilities as deferred revenue when cash payments are received or due in advance of performance. Deferred revenue primarily relates to the advance consideration received from the customer. As of June 30, 2022 and December 31, 2021, the total of current and non-current deferred revenue on our condensed consolidated balance sheets was $61.4 million and $57.6 million, respectively. Deferred costs We capitalize sales commissions and associated fringe costs, such as benefits and payroll taxes, paid to direct sales personnel and other incremental costs of obtaining contracts with customers, provided we expect to recover those costs. We determine that costs should be deferred based on our sales compensation plans when the commissions are incremental and would not have occurred absent the customer contract. As of June 30, 2022 and December 31, 2021, $1.2 million and $1.4 million, respectively, of deferred contract acquisition costs are expected to be amortized within the next 12 months and are included in prepaid expenses and other assets on the consolidated balance sheets. As of June 30, 2022 and December 31, 2021, the remaining $2.2 million and $3.0 million, respectively, of deferred contract acquisition costs are included in non-current other assets. Commissions paid upon the initial acquisition of a contract are amortized on a straight-line basis over an estimated period of benefit of four years. Amortization is recognized on a straight-line basis commensurate with the pattern of revenue recognition. The period of benefit was estimated by considering factors such as estimated average customer life, the rate of technological change in our subscription service, and the impact of competition in our industry. As our average customer life significantly exceeded the rate of change in our technology, we concluded that the rate of change in the technology underlying our subscription service was the most significant factor in determining the period of benefit for which the asset relates. In evaluating the rate of change in our technology, we considered the competition in our industry, our commitment to continuous innovation, and the frequency of product, platform, and technology updates. We determined that the impact of competition in our industry is reflected in the period of benefit through the rate of technological change. Amortization of deferred contract acquisition costs is included within sales and marketing expense in the condensed consolidated statements of operations. We defer certain costs to fulfill a contract when the costs are expected to be recovered, are directly related to in-process contracts, and enhance resources that will be used in satisfying performance obligations in the future. These deferred fulfillment costs primarily consist of employee compensation incurred as part of the implementation of new contracts. We periodically review these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented. Cost of revenue, excluding depreciation and amortization Cost of technology revenue primarily consists of costs associated with hosting and supporting our technology, including third-party cloud computing and hosting costs, contractor costs, and salary and related personnel costs for our cloud services and support teams. Cost of professional services revenue primarily consists of salary and related personnel costs, travel-related costs, and independent contractor costs. Cost of revenue excludes costs related to depreciation and amortization. |
Cash and cash equivalents | Cash and cash equivalents We consider all highly liquid investments purchased with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. |
Short-term investments | Short-term investmentsOur investment policy limits investments to highly-rated instruments. We classify and account for our short-term investments as available for sale securities as we may sell these securities at any time for use in our current operations or for other purposes, even prior to maturity. As a result, we classify our short-term investments, including securities with contractual maturities beyond twelve months, within current assets in the condensed consolidated balance sheets. |
Accounts receivable | Accounts receivableAccounts receivable are non-interest bearing and are recorded at the original invoiced amount less an allowance for credit losses based on the probability of future collections. Our allowance is based on our estimate of expected credit losses for outstanding trade accounts receivables and unbilled receivables. We determine expected credit losses based on historical write-off experience, an analysis of the aging of outstanding receivables, customer payment patterns, the establishment of specific reserves for customers in an adverse financial condition, and our expectations of changes in macro-economic conditions, including the ongoing COVID-19 pandemic and recently high inflationary environment, that may impact the collectability of outstanding receivables. |
Property and equipment | Property and equipment Property and equipment are stated at historical cost less accumulated depreciation. Repairs and maintenance costs that do not extend the useful life or improve the related assets are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful life of each asset category is as follows: Computer equipment 2-3 years Furniture and fixtures 3-5 years Leasehold improvements Lesser of lease term or estimated useful life Computer software 2-5 years Capitalized internal-use software costs 2-3 years |
Intangible assets | Intangible assets Intangible assets include developed technologies, customer relationships, customer contracts, and trademarks that were acquired in business combinations and asset acquisitions. Intangible assets also include the purchase of third-party computer software. The intangible assets are amortized using the straight-line method over the assets’ estimated useful lives. The estimated useful life of each asset category is as follows: Developed technologies 3-10 years Customer relationships and contract backlog 2-7 years Computer software licenses 1-5 years Trademarks 1-5 years |
Goodwill | Goodwill We record goodwill as the difference between the aggregate consideration paid for a business combination and the fair value of the identifiable net tangible and intangible assets acquired. Goodwill includes the know-how of the assembled workforce, the ability of the workforce to further improve technology and product offerings, customer relationships, and the expected cash flows resulting from these efforts. Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations. Goodwill is assessed for impairment annually or more frequently if indicators of impairment are present or circumstances suggest that impairment may exist. |
Business combinations | Business combinations The results of businesses acquired in a business combination are included in our condensed consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair value on the acquisition date. Any excess consideration over the fair value of the identifiable assets acquired and liabilities assumed is recognized as goodwill. We perform valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination in order to record the tangible and intangible assets acquired and liabilities assumed based on our best estimate of fair value. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies. Significant estimation is required in determining the fair value of the customer-related intangible assets and technology-related intangible assets. The significant estimation is primarily due to the judgmental nature of the inputs to the valuation models used to measure the fair value of these intangible assets, as well as the sensitivity of the respective fair values to the underlying significant assumptions. We typically use the income approach or cost approach to measure the fair value of intangible assets. The significant assumptions used to form the basis of the estimates included the number of engineer hours required to develop technology, expected revenue including revenue growth rates, rate and timing of obsolescence, royalty rates and earnings before interest, taxes, depreciation and amortization (EBITDA) margin used in the estimate for customer relationships, and backlog. Many of these significant assumptions were forward-looking and could be affected by future economic and market conditions. We engage the assistance of valuation specialists in concluding on fair value measurements in connection with determining fair values of material assets acquired and liabilities assumed in a business combination. We expensed $1.2 million and $1.2 million of transaction costs associated with business combinations during the three months ended June 30, 2022 and 2021, respectively, and $2.9 million and $1.2 million for the six months ended June 30, 2022 and 2021, respectively. The costs were expensed as incurred and are included in general and administrative expense in our condensed consolidated statements of operations. Contingent consideration liabilities Our acquisition consideration in business combinations may include an estimate for contingent consideration that will be paid if certain earn-out performance targets are met. The resulting contingent consideration liabilities are categorized as a Level 3 fair value measurement because we estimate projections during the earn-out period utilizing unobservable inputs, including various potential pay-out scenarios based on billings and revenue-related earn-out targets. Changes to the unobservable inputs could have a material impact on our condensed consolidated financial statements. |
Advertising costs | Advertising costs |
Development costs and internal-use software | Development costs and internal-use software For technology products that are developed to be sold externally, we determined that technological feasibility is reached shortly before the products are ready for general release. Any costs associated with software development between the time technological feasibility is reached and general release are inconsequential. |
Stock-based compensation | Stock-based compensation Stock-based awards, including stock options, restricted stock units, performance-based restricted stock units, and restricted shares are measured and recognized in our condensed consolidated financial statements based on the fair value of the award on the grant date. The grant date fair value of our stock-based awards is typically determined using the market closing price of our common stock on the date of grant; however, we also consider whether any adjustments are required when the market closing price does not reflect certain material non-public information that we know but is unavailable to marketplace participants on the date of grant. We record forfeitures of stock-based awards as the actual forfeitures occur. For awards subject to performance conditions, we record expense when the performance condition becomes probable. Each reporting period, we evaluate the probability of achieving the performance criteria, estimate the number of shares that are expected to vest, and adjust the related compensation expense accordingly. Stock-based compensation expense related to purchase rights issued under the 2019 Health Catalyst Employee Stock Purchase Plan (ESPP) is based on the Black-Scholes option-pricing model fair value of the estimated number of awards as of the beginning of the offering period. Stock-based compensation expense is recognized using the straight-line method over the offering period. |
Income taxes | Income taxes Deferred income tax balances are accounted for using the asset and liability method and reflect the effects of temporary differences between the financial reporting and tax bases of our assets and liabilities using enacted tax rates expected to apply when taxes are actually paid or recovered. In addition, deferred tax assets and liabilities are recorded for net operating loss (NOL) and tax credit carryforwards. A valuation allowance is provided against deferred tax assets unless it is more likely than not that they will be realized based on all available positive and negative evidence. Such evidence includes, but is not limited to, recent cumulative earnings or losses, expectations of future taxable income by taxing jurisdiction, and the carry-forward periods available for the utilization of deferred tax assets. We use a two-step approach to recognize and measure uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained upon audit. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. We do not currently accrue interest and penalties related to unrecognized tax benefits within the provision for income taxes because the impact would be immaterial due to our net operating losses and tax credit carryforwards. Significant judgment is required to evaluate uncertain tax positions. Although we believe that we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters will not be materially different. We evaluate our uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit, and effective settlement of audit issues. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations. |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts reported in our condensed consolidated balance sheets for cash, receivables, accounts payable, and current accrued expenses approximate fair values because of the immediate or short-term maturity of these financial instruments. The carrying value of contingent consideration liabilities, operating lease liabilities, and convertible senior notes approximate fair value based on interest rates available for debt with similar terms at June 30, 2022 and December 31, 2021. Money market funds and short-term investments are measured at fair value on a recurring basis. Our contingent consideration liabilities are measured at fair value on a recurring basis based primarily on significant inputs not observable in the market. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1- Quoted prices in active markets for identical assets or liabilities. • Level 2- Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3- Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets, operating lease liabilities, and operating lease liabilities, net of current portion in our condensed consolidated balance sheets. We have adopted the short-term lease recognition exemption policy. All of our leasing commitments are classified either as operating leases or otherwise qualify as short-term leases with lease terms of 12 months or less. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at their commencement date based on the present value of lease payments over the lease term. As our lease contracts do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease executory costs. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise the applicable option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We do not have lease agreements that contain non-lease components. |
Foreign currency | Foreign currency The functional currency of our international subsidiaries is generally their local currency. We translate these subsidiaries’ financial statements into U.S. dollars using month-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. We record translation gains and losses in accumulated other comprehensive loss in stockholders’ equity. We record foreign exchange gains and losses in interest and other expense, net. Our net foreign exchange gains and losses were not material for the periods presented. |
Accounting pronouncements adopted and Recent accounting pronouncements not yet adopted | Accounting pronouncements adopted Accounting for convertible instruments In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity's Own Equity . The new standard simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments are reported as a single liability instrument with no separate accounting for embedded conversion features. The new standard also simplifies the diluted net income per share calculation, including a requirement to apply the if-converted method when calculating the potentially dilutive impact of convertible instruments. ASU 2020-06 is effective for annual and interim periods beginning after December 15, 2021 and we adopted this standard using the modified retrospective approach as of January 1, 2022. Adoption of the new standard resulted in significant classification changes to our condensed consolidated balance sheet as of January 1, 2022, including a decrease to Accumulated deficit of $17.2 million and a decrease to Additional paid-in capital of $61.2 million related to amounts attributable to the conversion premium that had previously been recorded in equity. We also recorded a net increase to the convertible senior notes balance of $44.0 million due to the reclassification of the conversion premium from equity to debt. The adoption of this standard reduced our reported non-cash interest expense as we no longer record amortization of the debt discount. As we expect continued net losses in the near term, we do not expect significant changes to our diluted net loss per share calculation presented in our condensed consolidated statements of operations. However, applying the if-converted method instead of the net share settlement or treasury stock method, which was being applied prior to January 1, 2022, resulted in a significant increase in the potentially dilutive securities related to convertible senior notes disclosed in the notes to the condensed consolidated financial statements after adopting the new standard. There was no other significant impact to our condensed consolidated financial statements and related disclosures as a result of the adoption of this standard. Accounting for business combinations In October 2021, the FASB issued ASU 2021-08 , Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customer s. ASU 2021-08 requires that an entity (acquirer) recognize and measure contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination in accordance with Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. We early adopted ASU 2021-08 and have applied that ASU prospectively to business combinations occurring on or after January 1, 2022. Prior to the adoption of the new standard, we recognized assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. Recent accounting pronouncements not yet adopted There have been no recent accounting pronouncements issued which are expected to have a material effect on our condensed consolidated financial statements. Management continues to monitor and review recently issued accounting guidance upon issuance. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of allowance for accounts receivable | We reassess the adequacy of the allowance for credit losses each reporting period. The following table presents a rollforward of the allowance for credit losses (in thousands): Allowance for Credit Losses on Accounts Receivable (unaudited) Balance at January 1, 2022 $ 1,600 Current period provision for expected credit losses 400 Balance at June 30, 2022 $ 2,000 |
Schedule of property and equipment, useful life | The estimated useful life of each asset category is as follows: Computer equipment 2-3 years Furniture and fixtures 3-5 years Leasehold improvements Lesser of lease term or estimated useful life Computer software 2-5 years Capitalized internal-use software costs 2-3 years Property and equipment consisted of the following (in thousands): As of As of 2022 2021 (unaudited) Computer equipment $ 9,455 $ 9,235 Leasehold improvements 10,832 10,832 Furniture and fixtures 3,731 3,715 Capitalized internal-use software costs 18,136 10,769 Computer software 198 198 Total property and equipment 42,352 34,749 Less: accumulated depreciation (15,825) (11,433) Property and equipment, net $ 26,527 $ 23,316 |
Schedule of intangible asset, useful life | The estimated useful life of each asset category is as follows: Developed technologies 3-10 years Customer relationships and contract backlog 2-7 years Computer software licenses 1-5 years Trademarks 1-5 years As of June 30, 2022, intangible assets consisted of the following (in thousands): Gross Accumulated Amortization Net (unaudited) Developed technologies $ 100,829 $ (51,144) $ 49,685 Customer relationships and contracts 84,764 (28,756) 56,008 Computer software licenses 10,036 (7,703) 2,333 Trademarks 2,720 (1,238) 1,482 Total intangible assets $ 198,349 $ (88,841) $ 109,508 As of December 31, 2021, intangible assets consisted of the following (in thousands): Gross Accumulated Amortization Net Developed technologies $ 82,729 $ (40,988) $ 41,741 Customer relationships and contracts 81,464 (21,078) 60,386 Computer software licenses 8,392 (6,590) 1,802 Trademarks 1,720 (861) 859 Total intangible assets $ 174,305 $ (69,517) $ 104,788 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of recognized identified assets acquired and liabilities assumed | The following table summarizes the preliminary acquisition-date fair value of consideration transferred and the identifiable assets purchased and liabilities assumed as part of our acquisition of ARMUS (in thousands): Assets acquired: Accounts receivable $ 601 Prepaid expenses and other assets 104 ROU lease asset 169 Developed technologies 4,600 Customer relationships 2,200 Trademarks 200 Total assets acquired 7,874 Less liabilities assumed: Accounts payable 119 Accrued and other current liabilities 196 Deferred revenue 2,740 Lease liability 157 Net deferred tax liabilities 933 Total liabilities assumed 4,145 Total assets acquired, net 3,729 Goodwill 5,645 Total consideration transferred, net of cash acquired $ 9,374 The following table summarizes the preliminary acquisition-date fair value of consideration transferred and the identifiable assets purchased and liabilities assumed as part of our acquisition of KPI Ninja (in thousands): Assets acquired: Accounts receivable $ 45 Prepaid expenses and other assets 198 Property and equipment, net 15 Developed technologies 13,500 Customer relationships 1,100 Trademarks 800 Total assets acquired 15,658 Less liabilities assumed: Accounts payable and other current liabilities 266 Deferred revenue 763 Net deferred tax liabilities 3,600 Total liabilities assumed 4,629 Total assets acquired, net 11,029 Goodwill 10,364 Total consideration transferred, net of cash acquired $ 21,393 The following table summarizes the acquisition-date fair value of consideration transferred and the identifiable assets purchased and liabilities assumed as part of our acquisition of Twistle (in thousands): Assets acquired: Accounts receivable $ 1,106 Prepaid expenses and other assets 98 Property and equipment, net 57 Developed technologies 13,000 Customer relationships 23,700 Trademarks 20 Total assets acquired 37,981 Less liabilities assumed: Accounts payable and other current liabilities 161 Deferred revenue 900 Net deferred tax liabilities 7,142 Total liabilities assumed 8,203 Total assets acquired, net 29,778 Goodwill 62,150 Total consideration transferred, net of cash acquired $ 91,928 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue disaggregated by type of arrangement | The following table represents Health Catalyst’s revenue disaggregated by type of arrangement (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Recurring technology $ 45,397 $ 35,529 $ 87,147 $ 69,096 One-time technology (i.e., perpetual license) — — 480 272 Professional services 25,236 24,098 51,093 46,105 Total revenue $ 70,633 $ 59,627 $ 138,720 $ 115,473 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by reporting unit | Goodwill by reporting unit is as follows (in thousands): As of As of 2022 2021 (unaudited) Technology $ 185,200 $ 169,190 Professional services 782 782 Total goodwill $ 185,982 $ 169,972 |
Schedule of intangible assets | The estimated useful life of each asset category is as follows: Developed technologies 3-10 years Customer relationships and contract backlog 2-7 years Computer software licenses 1-5 years Trademarks 1-5 years As of June 30, 2022, intangible assets consisted of the following (in thousands): Gross Accumulated Amortization Net (unaudited) Developed technologies $ 100,829 $ (51,144) $ 49,685 Customer relationships and contracts 84,764 (28,756) 56,008 Computer software licenses 10,036 (7,703) 2,333 Trademarks 2,720 (1,238) 1,482 Total intangible assets $ 198,349 $ (88,841) $ 109,508 As of December 31, 2021, intangible assets consisted of the following (in thousands): Gross Accumulated Amortization Net Developed technologies $ 82,729 $ (40,988) $ 41,741 Customer relationships and contracts 81,464 (21,078) 60,386 Computer software licenses 8,392 (6,590) 1,802 Trademarks 1,720 (861) 859 Total intangible assets $ 174,305 $ (69,517) $ 104,788 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | The estimated useful life of each asset category is as follows: Computer equipment 2-3 years Furniture and fixtures 3-5 years Leasehold improvements Lesser of lease term or estimated useful life Computer software 2-5 years Capitalized internal-use software costs 2-3 years Property and equipment consisted of the following (in thousands): As of As of 2022 2021 (unaudited) Computer equipment $ 9,455 $ 9,235 Leasehold improvements 10,832 10,832 Furniture and fixtures 3,731 3,715 Capitalized internal-use software costs 18,136 10,769 Computer software 198 198 Total property and equipment 42,352 34,749 Less: accumulated depreciation (15,825) (11,433) Property and equipment, net $ 26,527 $ 23,316 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cash equivalents and short-term investments measured at fair value | The following table summarizes, by major security type, our cash equivalents and short-term investments that are measured at fair value on a recurring basis (in thousands) as of June 30, 2022: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents Short-term Investments (unaudited) Money market funds $ 161,634 $ — $ — $ 161,634 $ 161,634 $ — U.S. Treasury notes 44,877 — (222) 44,655 — 44,655 Commercial paper 138,244 — — 138,244 — 138,244 Corporate bonds 23,571 — (106) 23,465 — 23,465 Asset-backed securities 20,026 — (25) 20,001 — 20,001 Total $ 388,352 $ — $ (353) $ 387,999 $ 161,634 $ 226,365 The following table summarizes, by major security type, our cash equivalents and short-term investments that are measured at fair value on a recurring basis (in thousands) as of December 31, 2021: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash equivalents Short-term Investments Money market funds $ 173,475 $ — $ — $ 173,475 $ 173,475 $ — Commercial paper 153,498 — — 153,498 — 153,498 Corporate bonds 71,259 — (45) 71,214 4,424 66,790 Asset-backed securities 31,509 — (43) 31,466 — 31,466 Total $ 429,741 $ — $ (88) $ 429,653 $ 177,899 $ 251,754 The following table presents the contractual maturities of our short-term investments as of June 30, 2022 and December 31, 2021 (in thousands): As of June 30, 2022 As of December 31, 2021 Amortized Cost Fair Value Amortized Cost Fair Value (unaudited) Due within one year $ 226,718 $ 226,365 $ 230,429 $ 230,372 Due between one and five years — — 21,411 21,382 Total $ 226,718 $ 226,365 $ 251,840 $ 251,754 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets measured on recurring basis | Assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 were as follows (in thousands): June 30, 2022 Level 1 Level 2 Level 3 Total (unaudited) Money market funds $ 161,634 $ — $ — $ 161,634 U.S. Treasury notes 44,655 — — 44,655 Commercial paper — 138,244 — 138,244 Corporate bonds — 23,465 — 23,465 Asset-backed securities — 20,001 — 20,001 Contingent consideration liabilities — — (8,015) (8,015) Total $ 206,289 $ 181,710 $ (8,015) $ 379,984 Assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 were as follows (in thousands): December 31, 2021 Level 1 Level 2 Level 3 Total Money market funds $ 173,475 $ — $ — $ 173,475 U.S. Treasury notes — — — — Commercial paper — 153,498 — 153,498 Corporate bonds — 71,214 — 71,214 Asset-backed securities — 31,466 — 31,466 Contingent consideration liabilities — — (19,295) (19,295) Total $ 173,475 $ 256,178 $ (19,295) $ 410,358 |
Schedule of liabilities measured on recurring basis, unobservable input reconciliation | The following table sets forth a summary of the changes in the estimated fair value of the contingent consideration liabilities, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (unaudited) Balance as of December 31, 2021 $ 19,295 Settlement of contingent consideration (3,977) Change in fair value of contingent consideration liabilities (7,303) Balance as of June 30, 2022 $ 8,015 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | As of June 30, 2022 and December 31, 2021, accrued liabilities consisted of the following (in thousands): As of As of 2022 2021 (unaudited) Accrued compensation and benefit expenses $ 10,915 $ 17,430 Other accrued liabilities 7,697 6,295 Total accrued liabilities $ 18,612 $ 23,725 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of convertible debt | The interest expense recognized related to the Notes was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Contractual interest expense $ 1,434 $ 1,438 $ 2,865 $ 2,875 Amortization of debt issuance costs and discount (1) 375 2,947 749 5,817 Total $ 1,809 $ 4,385 $ 3,614 $ 8,692 _________________________ (1) Amortization of debt issuance costs and discount for the three and six months ended June 30, 2022 no longer includes amortization of the debt discount due to the adoption of ASU 2020-06 using a modified retrospective approach. Refer to Note 1 for more information. The net carrying value of the liability component of the Notes was as follows (in thousands): June 30, 2022 (unaudited) Principal $ 230,000 Less: Unamortized issuance costs (4,228) Net carrying amount $ 225,772 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of the calculation of basic and diluted net loss per share attributable to common stockholders | The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Net less per share, basic Numerator: Net loss $ (33,428) $ (35,834) $ (55,886) $ (64,204) Denominator: Weighted-average number of shares used in calculating net loss per share, basic 53,675,377 44,886,489 53,342,887 44,381,196 Net loss per share, basic $ (0.62) $ (0.80) $ (1.05) $ (1.45) Net less per share, basic Numerator: Net loss $ (33,428) $ (35,834) $ (55,886) $ (64,204) Dilutive change in fair value of shares issuable as contingent consideration — — (6,023) — Net loss for diluted calculation $ (33,428) $ (35,834) $ (61,909) $ (64,204) Denominator: Weighted-average number of shares used in calculating net loss per share, basic 53,675,377 44,886,489 53,342,887 44,381,196 Dilutive effect of shares issuable as acquisition-related contingent consideration — — 461,554 — Weighted-average number of shares used in calculating net loss per share, diluted 53,675,377 44,886,489 53,804,441 44,381,196 Net loss per share, diluted $ (0.62) $ (0.80) $ (1.15) $ (1.45) |
Schedule of share totals with a potentially dilutive impact | The calculation of diluted net loss per share does not include the effect of the following potentially outstanding shares of common stock. The effects of these potentially outstanding shares were not included in the calculation of diluted net loss per share because the effect would have been anti-dilutive: As of June 30, 2022 2021 (unaudited) Common stock options 1,781,952 2,660,759 Restricted stock units 4,018,450 2,813,051 Performance-based restricted stock units 581,597 318,737 Shares related to convertible senior notes 7,516,331 3,198,928 Shares issuable as acquisition-related contingent consideration (1) 440,966 93,100 Restricted shares 660,188 76,497 Total potentially dilutive securities 14,999,484 9,161,072 _________________________ (1) The effect of shares issuable as acquisition-related contingent consideration were dilutive during the six months ended June 30, 2022, but anti-dilutive during the three months ended June 30, 2022 and the three and six months ended June 30, 2021. The anti-dilutive shares issuable as acquisition-related contingent consideration in the table above are calculated based on the earn-out achieved and the estimated number of shares that would be issuable if the outstanding acquisition-related contingent consideration liabilities were to be settled as of the respective dates. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | The following two tables summarize our total stock-based compensation expense by award type and where the stock-based compensation expense was recorded in our consolidated statements of operations (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Options $ 752 $ 1,721 $ 1,656 $ 3,115 Restricted stock units 13,836 10,460 25,884 18,462 Performance-based restricted stock units 340 3,519 3,636 4,848 Employee stock purchase plan 395 393 842 810 Restricted shares 2,609 1,634 4,034 4,002 Total stock-based compensation $ 17,932 $ 17,727 $ 36,052 $ 31,237 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Cost of revenue $ 2,404 $ 2,856 $ 5,160 $ 4,665 Sales and marketing 6,875 5,932 13,888 10,750 Research and development 3,163 2,676 6,253 4,933 General and administrative 5,490 6,263 10,751 10,889 Total stock-based compensation $ 17,932 $ 17,727 $ 36,052 $ 31,237 |
Schedule of information related to stock options | A summary of the share option activity under the 2019 Plan for the six months ended June 30, 2022, is as follows: Time-Based Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value (unaudited) Outstanding at January 1, 2022 2,115,484 $ 11.45 Options exercised (327,389) 11.20 Options cancelled/forfeited (6,143) 12.07 Outstanding at June 30, 2022 1,781,952 $ 11.49 5.4 $ 5,920,221 Vested and expected to vest as of June 30, 2022 1,781,952 $ 11.49 5.4 $ 5,920,221 Vested and exercisable as of June 30, 2022 1,447,146 $ 10.98 5.2 $ 5,380,840 |
Schedule of outstanding RSUs and related activity | The following table sets forth the outstanding RSUs and related activity for the six months ended June 30, 2022: Restricted Stock Units Weighted Average Grant Date Fair Value (unaudited) Unvested and outstanding at January 1, 2022 2,273,354 $ 43.84 RSUs granted 2,378,404 26.41 RSUs vested (534,003) 41.61 RSUs forfeited (99,305) 36.25 Unvested and outstanding at June 30, 2022 4,018,450 $ 34.00 The following table sets forth the outstanding PRSUs, including executive PRSUs, and related activity for the six months ended June 30, 2022: Performance-based Restricted Stock Units Weighted Average Grant Date Fair Value (unaudited) Unvested and outstanding at January 1, 2022 319,442 $ 50.28 PRSUs granted 589,994 26.45 PRSUs vested (254,122) 50.18 PRSUs forfeited (73,717) 44.17 Unvested and outstanding at June 30, 2022 581,597 $ 26.90 |
Schedule of the purchase right for the ESPP option assumptions | The fair value of the purchase right for the ESPP option component is estimated on the date of grant using the Black-Scholes model with the following assumptions for the six months ended June 30, 2022 and 2021: Six Months Ended June 30, 2022 2021 (unaudited) Expected volatility 37.5% 40.4% Expected term (in months) 6 6 Risk-free interest rate 0.22% 0.09% Expected dividends — — |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment revenue | Segment revenue and Adjusted Gross Profit for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Revenue Technology $ 45,397 $ 35,529 $ 87,627 $ 69,368 Professional Services 25,236 24,098 51,093 46,105 Total $ 70,633 $ 59,627 $ 138,720 $ 115,473 |
Schedule of segment adjusted gross profit | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) Adjusted Gross Profit Technology $ 31,968 $ 24,256 $ 61,566 $ 47,644 Professional Services 6,696 8,174 14,270 15,103 Total reportable segments Adjusted Gross Profit 38,664 32,430 75,836 62,747 Less Adjusted Gross Profit reconciling items: Stock-based compensation (2,404) (2,856) (5,160) (4,665) Acquisition-related costs, net (1) (234) — (559) — Less other reconciling items: Sales and marketing (20,922) (16,705) (41,740) (32,356) Research and development (18,148) (14,524) (35,296) (28,869) General and administrative (17,536) (22,525) (26,359) (37,540) Depreciation and amortization (12,612) (8,139) (24,261) (15,953) Interest and other expense, net (1,180) (3,707) (2,842) (7,659) Loss before income taxes $ (34,372) $ (36,026) $ (60,381) $ (64,295) ____________________ (1) Acquisition-related costs, net include deferred retention expenses following the ARMUS, KPI Ninja, and Twistle acquisitions. |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) segment | Jun. 30, 2021 USD ($) | Jan. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Property, Plant and Equipment [Line Items] | ||||||
Number of operating segments | segment | 2 | |||||
Number of reportable segments | segment | 2 | |||||
Subscription contracts, terminable period | 1 year | |||||
Subscription contracts, days notice of termination | 90 days | |||||
Unbilled accounts receivable | $ 500,000 | $ 500,000 | $ 800,000 | |||
Deferred Revenue | 61,400,000 | 61,400,000 | 57,600,000 | |||
Capitalized contract cost, net, current | $ 1,200,000 | $ 1,200,000 | 1,400,000 | |||
Capitalized contract cost, amortization period | 12 months | 12 months | ||||
Capitalized contract cost, net, noncurrent | $ 2,200,000 | $ 2,200,000 | 3,000,000 | |||
Estimated period of benefit | 4 years | |||||
Long lived impairment charges | 0 | $ 0 | $ 0 | $ 0 | ||
Goodwill impairment | 0 | 0 | 0 | 0 | ||
Acquisition transaction costs | 1,200,000 | 1,200,000 | 2,900,000 | 1,200,000 | ||
Advertising expense | 400,000 | $ 400,000 | 1,300,000 | $ 700,000 | ||
Accumulated deficit | 917,506,000 | 917,506,000 | 878,860,000 | |||
Additional paid-in capital | $ (1,386,946,000) | $ (1,386,946,000) | $ (1,400,972,000) | |||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Accumulated deficit | $ 17,200,000 | |||||
Additional paid-in capital | (61,200,000) | |||||
Convertible debt | $ 44,000,000 | |||||
Minimum | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subscription contract, term | 3 years | |||||
Maximum | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subscription contract, term | 5 years |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Allowance For Credit Losses (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Beginning balance | $ 1,600 |
Current period provision for expected credit losses | 400 |
Ending balance | $ 2,000 |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Schedule of Property and Equipment Useful Life (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Computer equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Computer software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Computer software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Capitalized internal-use software costs | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Capitalized internal-use software costs | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Description of Business and S_7
Description of Business and Summary of Significant Accounting Policies - Schedule of Intangible Assets Useful Life (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Developed technologies | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 3 years |
Developed technologies | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
Customer relationships and contract backlog | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 2 years |
Customer relationships and contract backlog | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 7 years |
Computer software licenses | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 1 year |
Computer software licenses | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Trademarks | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 1 year |
Trademarks | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Apr. 29, 2022 | Feb. 24, 2022 | Jul. 01, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | ||||||
Acquisition of business, net of cash acquired | $ 27,846 | $ 0 | ||||
Restricted shares | ||||||
Business Acquisition [Line Items] | ||||||
Nonvested awards, period for recognition | 1 year 7 months 6 days | |||||
ARMUS | ||||||
Business Acquisition [Line Items] | ||||||
Consideration | $ 9,400 | |||||
Acquisition of business, net of cash acquired | 9,300 | |||||
Contingent consideration liabilities | $ 100 | |||||
Interest acquired | 100% | |||||
Number of restricted shares issued (in shares) | 235,330 | |||||
Cash retention payments | $ 5,000 | |||||
Service period (in years) | 3 years | |||||
Share based compensation retention bonus | $ 1,200 | |||||
Stock compensation expected to be recognized | 3,800 | $ 3,800 | ||||
ARMUS | Restricted shares | ||||||
Business Acquisition [Line Items] | ||||||
Number of restricted shares issued (in shares) | 235,330 | |||||
Service period (in years) | 18 months | |||||
Nonvested awards, period for recognition | 2 years 9 months 18 days | |||||
KPI Ninja | ||||||
Business Acquisition [Line Items] | ||||||
Consideration | $ 21,400 | |||||
Acquisition of business, net of cash acquired | 18,500 | |||||
Contingent consideration liabilities | $ 2,900 | |||||
Interest acquired | 100% | |||||
Number of restricted shares issued (in shares) | 356,919 | |||||
Cash retention payments | $ 3,000 | |||||
Service period (in years) | 4 years | |||||
Share based compensation retention bonus | 200 | $ 600 | ||||
Stock compensation expected to be recognized | 2,400 | $ 2,400 | ||||
Nonvested awards, period for recognition | 3 years 8 months 12 days | |||||
KPI Ninja | Restricted shares | ||||||
Business Acquisition [Line Items] | ||||||
Number of restricted shares issued (in shares) | 356,919 | |||||
Twistle Inc | ||||||
Business Acquisition [Line Items] | ||||||
Consideration | $ 91,900 | |||||
Acquisition of business, net of cash acquired | 46,700 | |||||
Common shares issued in acquisition, at fair value | 43,100 | |||||
Contingent consideration liabilities | $ 2,100 | |||||
Interest acquired | 100% | |||||
Twistle Inc | Restricted shares | ||||||
Business Acquisition [Line Items] | ||||||
Number of restricted shares issued (in shares) | 67,939 | |||||
Service period (in years) | 1 year | |||||
Twistle Inc | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Service period (in years) | 12 months | |||||
Twistle Inc | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Service period (in years) | 18 months | |||||
Developed technologies | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 3 years | |||||
Developed technologies | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 10 years | |||||
Developed technologies | ARMUS | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 4 years | |||||
Developed technologies | KPI Ninja | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 4 years | |||||
Developed technologies | Twistle Inc | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 3 years | |||||
Nonvested awards, period for recognition | 6 months | |||||
Customer relationships | ARMUS | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 6 years | |||||
Customer relationships | KPI Ninja | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 6 years | |||||
Customer relationships | Twistle Inc | ||||||
Business Acquisition [Line Items] | ||||||
Number of restricted shares issued (in shares) | 67,939 | |||||
Estimated useful life | 7 years | |||||
Trademarks | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 1 year | |||||
Trademarks | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 5 years | |||||
Trademarks | ARMUS | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 3 years | |||||
Trademarks | KPI Ninja | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 5 years | |||||
Trademarks | Twistle Inc | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 1 year | |||||
Trademarks | Twistle Inc | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Share based compensation retention bonus | 1,700 | $ 3,300 | ||||
Contract backlogs | Twistle Inc | ||||||
Business Acquisition [Line Items] | ||||||
Stock compensation expected to be recognized | $ 2,800 | $ 2,800 |
Business Combinations - Schedul
Business Combinations - Schedule of Recognized Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Apr. 29, 2022 | Feb. 24, 2022 | Dec. 31, 2021 | Jul. 01, 2021 |
Less liabilities assumed: | |||||
Goodwill | $ 185,982 | $ 169,972 | |||
ARMUS | |||||
Assets acquired: | |||||
Accounts receivable | $ 601 | ||||
Prepaid expenses and other assets | 104 | ||||
ROU lease asset | 169 | ||||
Total assets acquired | 7,874 | ||||
Less liabilities assumed: | |||||
Accounts payable | 119 | ||||
Accrued and other current liabilities | 196 | ||||
Deferred revenue | 2,740 | ||||
Lease liability | 157 | ||||
Net deferred tax liabilities | 933 | ||||
Total liabilities assumed | 4,145 | ||||
Total assets acquired, net | 3,729 | ||||
Goodwill | 5,645 | ||||
Total consideration transferred, net of cash acquired | 9,374 | ||||
ARMUS | Developed technologies | |||||
Assets acquired: | |||||
Intangible assets | 4,600 | ||||
ARMUS | Customer relationships | |||||
Assets acquired: | |||||
Intangible assets | 2,200 | ||||
ARMUS | Trademarks | |||||
Assets acquired: | |||||
Intangible assets | $ 200 | ||||
KPI Ninja | |||||
Assets acquired: | |||||
Accounts receivable | $ 45 | ||||
Prepaid expenses and other assets | 198 | ||||
Property and equipment, net | 15 | ||||
Total assets acquired | 15,658 | ||||
Less liabilities assumed: | |||||
Accounts payable | 266 | ||||
Deferred revenue | 763 | ||||
Net deferred tax liabilities | 3,600 | ||||
Total liabilities assumed | 4,629 | ||||
Total assets acquired, net | 11,029 | ||||
Goodwill | 10,364 | ||||
Total consideration transferred, net of cash acquired | 21,393 | ||||
KPI Ninja | Developed technologies | |||||
Assets acquired: | |||||
Intangible assets | 13,500 | ||||
KPI Ninja | Customer relationships | |||||
Assets acquired: | |||||
Intangible assets | 1,100 | ||||
KPI Ninja | Trademarks | |||||
Assets acquired: | |||||
Intangible assets | $ 800 | ||||
Twistle Inc | |||||
Assets acquired: | |||||
Accounts receivable | $ 1,106 | ||||
Prepaid expenses and other assets | 98 | ||||
Property and equipment, net | 57 | ||||
Total assets acquired | 37,981 | ||||
Less liabilities assumed: | |||||
Accounts payable | 161 | ||||
Deferred revenue | 900 | ||||
Net deferred tax liabilities | 7,142 | ||||
Total liabilities assumed | 8,203 | ||||
Total assets acquired, net | 29,778 | ||||
Goodwill | 62,150 | ||||
Total consideration transferred, net of cash acquired | 91,928 | ||||
Twistle Inc | Developed technologies | |||||
Assets acquired: | |||||
Intangible assets | 13,000 | ||||
Twistle Inc | Customer relationships | |||||
Assets acquired: | |||||
Intangible assets | 23,700 | ||||
Twistle Inc | Trademarks | |||||
Assets acquired: | |||||
Intangible assets | $ 20 |
Revenue - Schedule of Revenue D
Revenue - Schedule of Revenue Disaggregated by Type of Arrangement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | $ 70,633 | $ 59,627 | $ 138,720 | $ 115,473 |
Recurring technology | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 45,397 | 35,529 | 87,147 | 69,096 | |
One-time technology (i.e., perpetual license) | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 0 | 0 | 480 | 272 | |
Professional services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | $ 25,236 | $ 24,098 | $ 51,093 | $ 46,105 |
[1]Includes amounts attributable to related party transactions. See Note 16 for further details. |
Revenue - Narrative (Details)
Revenue - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue related to contracts with customers (percentage) | 96% | 99.10% | 97.50% | 99.50% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) segment | Jun. 30, 2021 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Number of operating segments | 2 | |||
Number of reporting units | 2 | |||
Amortization of intangible assets | $ | $ 10 | $ 7 | $ 19.3 | $ 14.1 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill by Reporting Unit (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Goodwill [Line Items] | ||
Goodwill | $ 185,982 | $ 169,972 |
Technology | ||
Goodwill [Line Items] | ||
Goodwill | 185,200 | 169,190 |
Professional Services | ||
Goodwill [Line Items] | ||
Goodwill | $ 782 | $ 782 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 198,349 | $ 174,305 |
Accumulated Amortization | (88,841) | (69,517) |
Net | 109,508 | 104,788 |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 100,829 | 82,729 |
Accumulated Amortization | (51,144) | (40,988) |
Net | 49,685 | 41,741 |
Customer relationships and contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 84,764 | 81,464 |
Accumulated Amortization | (28,756) | (21,078) |
Net | 56,008 | 60,386 |
Computer software licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 10,036 | 8,392 |
Accumulated Amortization | (7,703) | (6,590) |
Net | 2,333 | 1,802 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 2,720 | 1,720 |
Accumulated Amortization | (1,238) | (861) |
Net | $ 1,482 | $ 859 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 42,352 | $ 34,749 |
Less: accumulated depreciation | (15,825) | (11,433) |
Property and equipment, net | 26,527 | 23,316 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 9,455 | 9,235 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 10,832 | 10,832 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 3,731 | 3,715 |
Capitalized internal-use software costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 18,136 | 10,769 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 198 | $ 198 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 2.6 | $ 1.1 | $ 4.9 | $ 1.8 |
Capitalized computer software, net | 3.6 | 1.1 | 7.4 | 2.1 |
Capitalized computer software, amortization | $ 1.6 | $ 0.5 | $ 2.8 | $ 0.8 |
Short-term Investments - Cash E
Short-term Investments - Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 388,352 | $ 429,741 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (353) | (88) |
Fair Value | 387,999 | 429,653 |
Cash equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 161,634 | 177,899 |
Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 226,718 | 251,840 |
Fair Value | 226,365 | 251,754 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 161,634 | 173,475 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 161,634 | 173,475 |
Money market funds | Cash equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 161,634 | 173,475 |
Money market funds | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 0 |
U.S. Treasury notes | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 44,877 | |
Unrealized Gains | 0 | |
Unrealized Losses | (222) | |
Fair Value | 44,655 | |
U.S. Treasury notes | Cash equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | |
U.S. Treasury notes | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 44,655 | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 138,244 | 153,498 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 138,244 | 153,498 |
Commercial paper | Cash equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 0 |
Commercial paper | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 138,244 | 153,498 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23,571 | 71,259 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (106) | (45) |
Fair Value | 23,465 | 71,214 |
Corporate bonds | Cash equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 4,424 |
Corporate bonds | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 23,465 | 66,790 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 20,026 | 31,509 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (25) | (43) |
Fair Value | 20,001 | 31,466 |
Asset-backed securities | Cash equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | 0 | 0 |
Asset-backed securities | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 20,001 | $ 31,466 |
Short-term Investments - Short-
Short-term Investments - Short-Term Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Amortized Cost | $ 388,352 | $ 429,741 |
Fair Value | ||
Fair Value | 387,999 | 429,653 |
Short-term Investments | ||
Amortized Cost | ||
Amortized cost, due within one year | 226,718 | 230,429 |
Amortized cost, due between one and five years | 0 | 21,411 |
Amortized Cost | 226,718 | 251,840 |
Fair Value | ||
Fair value, due within one year | 226,365 | 230,372 |
Fair value, due between one and five years | 0 | 21,382 |
Fair Value | $ 226,365 | $ 251,754 |
Short-term Investments - Narrat
Short-term Investments - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Interest receivable | $ 0.4 | $ 0.8 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | $ 387,999 | $ 429,653 |
Money market funds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 161,634 | 173,475 |
U.S. Treasury notes | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 44,655 | |
Commercial paper | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 138,244 | 153,498 |
Corporate bonds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 23,465 | 71,214 |
Asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 20,001 | 31,466 |
Fair value, recurring | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration liabilities | (8,015) | (19,295) |
Total | 379,984 | 410,358 |
Fair value, recurring | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration liabilities | 0 | 0 |
Total | 206,289 | 173,475 |
Fair value, recurring | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration liabilities | 0 | 0 |
Total | 181,710 | 256,178 |
Fair value, recurring | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration liabilities | (8,015) | (19,295) |
Total | (8,015) | (19,295) |
Fair value, recurring | Money market funds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Money market funds | 161,634 | 173,475 |
Fair value, recurring | Money market funds | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Money market funds | 161,634 | 173,475 |
Fair value, recurring | Money market funds | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Money market funds | 0 | 0 |
Fair value, recurring | Money market funds | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Money market funds | 0 | 0 |
Fair value, recurring | U.S. Treasury notes | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 44,655 | 0 |
Fair value, recurring | U.S. Treasury notes | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 44,655 | 0 |
Fair value, recurring | U.S. Treasury notes | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 0 | 0 |
Fair value, recurring | U.S. Treasury notes | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 0 | 0 |
Fair value, recurring | Commercial paper | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 138,244 | 153,498 |
Fair value, recurring | Commercial paper | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 0 | 0 |
Fair value, recurring | Commercial paper | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 138,244 | 153,498 |
Fair value, recurring | Commercial paper | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 0 | 0 |
Fair value, recurring | Corporate bonds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 23,465 | 71,214 |
Fair value, recurring | Corporate bonds | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 0 | 0 |
Fair value, recurring | Corporate bonds | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 23,465 | 71,214 |
Fair value, recurring | Corporate bonds | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value | 0 | 0 |
Fair value, recurring | Asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Asset-backed securities | 20,001 | 31,466 |
Fair value, recurring | Asset-backed securities | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Asset-backed securities | 0 | 0 |
Fair value, recurring | Asset-backed securities | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Asset-backed securities | 20,001 | 31,466 |
Fair value, recurring | Asset-backed securities | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Asset-backed securities | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Apr. 14, 2020 | |
Twistle Inc | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Shares issuable, contingent consideration (in shares) | 65,000,000 | |||
Contingent consideration paid in a combination cash | 20% | |||
Contingent consideration paid in a combination shares | 80% | |||
Healthfinch Inc | Revenue-Based Earn-Out Performance Targets | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Payment for contingent consideration liability, investing activities | $ 1,700,000 | $ 1,700,000 | ||
Issuance of common stock for acquisition consideration (in shares) | 78,248 | 78,243 | ||
Level 3 | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Fair value | $ 8,000,000 | |||
Senior Notes Due 2025 | Convertible Notes Payable | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Principal | 230,000,000 | |||
Amount borrowed | $ 206,600,000 | $ 230,000,000 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Schedule of Contingent Consideration (Details) - Shares issuable as acquisition-related contingent consideration $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |
Balance as of December 31, 2021 | $ 19,295 |
Settlement of contingent consideration | (3,977) |
Change in fair value of contingent consideration liabilities | (7,303) |
Balance as of June 30, 2022 | $ 8,015 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued compensation and benefit expenses | $ 10,915 | $ 17,430 |
Other accrued liabilities | 7,697 | 6,295 |
Total accrued liabilities | $ 18,612 | $ 23,725 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) | 6 Months Ended | |||
Apr. 14, 2020 USD ($) d $ / shares | Apr. 09, 2020 USD ($) | Jun. 30, 2022 USD ($) $ / shares shares | Apr. 08, 2020 $ / instrument | |
Line of Credit Facility [Line Items] | ||||
Share price (in USD per share) | $ / shares | $ 14.49 | |||
Cash Flow Hedging | Capped Call | Designated as Hedging Instrument | ||||
Line of Credit Facility [Line Items] | ||||
Derivative, cost of hedge | $ | $ 21,700,000 | |||
Cap price (in USD per share) | $ / instrument | 42 | |||
Senior Notes Due 2025 | Convertible Notes Payable | ||||
Line of Credit Facility [Line Items] | ||||
Amount borrowed | $ | $ 230,000,000 | $ 206,600,000 | ||
Basis rate (in percentage) | 2.50% | |||
Proceeds from issuance of debt | $ | $ 222,500,000 | |||
Debt instrument, convertible, threshold percentage of stock price trigger | 130% | |||
Threshold trading days | d | 20 | |||
Threshold consecutive trading days | d | 30 | |||
Redemption price, percentage | 100% | |||
Number of shares issued in conversion (in shares) | shares | 0.03267970 | |||
Conversion price (in USD per share) | $ / shares | $ 30.60 | |||
Senior Notes Due 2025 | Convertible Notes Payable | Debt Instrument Convertible Sale Price Of Stock Threshold | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, convertible, threshold percentage of stock price trigger | 98% | |||
Threshold trading days | d | 5 |
Convertible Senior Notes - Inte
Convertible Senior Notes - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Line of Credit Facility [Line Items] | ||||
Amortization of debt discount and issuance costs | $ 749 | $ 5,817 | ||
Senior Notes Due 2025 | Convertible Notes Payable | ||||
Line of Credit Facility [Line Items] | ||||
Contractual interest expense | $ 1,434 | $ 1,438 | 2,865 | 2,875 |
Amortization of debt discount and issuance costs | 375 | 2,947 | 749 | 5,817 |
Total | $ 1,809 | $ 4,385 | $ 3,614 | $ 8,692 |
Convertible Senior Notes - Net
Convertible Senior Notes - Net Carrying Value Of the Liability (Details) - Senior Notes Due 2025 - Convertible Notes Payable $ in Thousands | Jun. 30, 2022 USD ($) |
Line of Credit Facility [Line Items] | |
Principal | $ 230,000 |
Less: Unamortized issuance costs | (4,228) |
Net carrying amount | $ 225,772 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) | 6 Months Ended | |
Jun. 30, 2022 USD ($) vote $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Schedule of the Effects of the Tender Offer Repurchase Price Over the Estimated Fair Value of the Common Stock Redeemed [Line Items] | ||
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 52,690,019 | 54,713,567 |
Shares outstanding (in shares) | 54,713,567 | 52,690,019 |
Stockholders vote | vote | 1 | |
Dividends | $ | $ 0 | |
Vitalware L L C | Able Health Inc | ||
Schedule of the Effects of the Tender Offer Repurchase Price Over the Estimated Fair Value of the Common Stock Redeemed [Line Items] | ||
Preferred stock, shares issued (in shares) | 67,939 | 660,188 |
Shares outstanding (in shares) | 660,188 | 67,939 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of the Calculation of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net loss | $ (33,428) | $ (35,834) | $ (55,886) | $ (64,204) |
Change in fair value of shares issuable as contingent consideration | 0 | 0 | (6,023) | 0 |
Net loss for diluted calculation | $ (33,428) | $ (35,834) | $ (61,909) | $ (64,204) |
Denominator: | ||||
Weighted-average number of shares used in calculating net loss per share, basic (in shares) | 53,675,377 | 44,886,489 | 53,342,887 | 44,381,196 |
Net loss per share, basic (in USD per share) | $ (0.62) | $ (0.80) | $ (1.05) | $ (1.45) |
Dilutive effect of shares issuable as acquisition-related contingent consideration (in shares) | 0 | 0 | 461,554 | 0 |
Weighted-average number of shares used in calculating net loss per share, diluted (in shares) | 53,675,377 | 44,886,489 | 53,804,441 | 44,381,196 |
Net loss per share, diluted (in USD per share) | $ (0.62) | $ (0.80) | $ (1.15) | $ (1.45) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Share Totals with a Potentially Dilutive Impact (Details) | 6 Months Ended | |
Jun. 30, 2022 $ / instrument shares | Jun. 30, 2021 shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares with a potentially dilutive impact (in shares) | 14,999,484 | 9,161,072 |
Capped Call | Cash Flow Hedging | Designated as Hedging Instrument | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Cap price (in USD per share) | $ / instrument | 42 | |
Common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares with a potentially dilutive impact (in shares) | 1,781,952 | 2,660,759 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares with a potentially dilutive impact (in shares) | 4,018,450 | 2,813,051 |
Performance-based restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares with a potentially dilutive impact (in shares) | 581,597 | 318,737 |
Shares related to convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares with a potentially dilutive impact (in shares) | 7,516,331 | 3,198,928 |
Shares issuable as acquisition-related contingent consideration | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares with a potentially dilutive impact (in shares) | 440,966 | 93,100 |
Restricted shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares with a potentially dilutive impact (in shares) | 660,188 | 76,497 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | ||||||
Apr. 29, 2022 | Feb. 24, 2022 | Jul. 01, 2021 | Jul. 31, 2019 | Jun. 30, 2022 | Jun. 30, 2021 | Jan. 01, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Options granted (in shares) | 0 | 0 | ||||||
Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares exercised in period | $ 3,800 | |||||||
Total grant-date fair value of stock options vested | 3,100 | |||||||
Nonvested award options, unrecognized compensation expense | $ 1,000 | |||||||
Nonvested awards, period for recognition | 6 months | |||||||
Restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested awards, period for recognition | 2 years 8 months 12 days | |||||||
Cliff vesting period | 4 years | |||||||
Unrecognized stock-based compensation expense related to RSUs | $ 124,900 | |||||||
Restricted stock units | Vest in year one | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Cliff vesting period | 1 year | |||||||
Performance-based restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested awards, period for recognition | 1 year | |||||||
Unrecognized stock-based compensation expense related to RSUs | $ 3,500 | |||||||
Service period (in years) | 4 years | |||||||
Performance-based restricted stock units | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percent | 0% | |||||||
Performance-based restricted stock units | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting percent | 100% | |||||||
Employee stock purchase plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized (in shares) | 750,000 | |||||||
Percentage increase of the number of common stock shares (in percentage) | 1% | |||||||
Shares available for grant (in shares) | 1,511,723 | 526,900 | ||||||
Total grant-date fair value of stock options vested | $ 1,500 | |||||||
ESPP share increase in period (in shares) | 750,000 | |||||||
Employee stock purchase plan period | 6 months | |||||||
Maximum employee subscription rate | 15% | |||||||
Maximum purchase value during offering period | $ 25,000 | |||||||
Denominator of lowest purchase of a participant (in shares) | 2,500 | |||||||
Purchase price of common stock (in percentage) | 85% | |||||||
Share-based payment award, shares issued in period (in shares) | 124,151 | |||||||
Share-based payment award, per share weighted average price of shares purchased (in USD per share) | $ 12.32 | |||||||
Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested awards, period for recognition | 1 year 7 months 6 days | |||||||
Unrecognized stock-based compensation expense related to RSUs | $ 11,500 | |||||||
Twistle Inc | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Service period (in years) | 12 months | |||||||
Twistle Inc | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Service period (in years) | 18 months | |||||||
Twistle Inc | Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Service period (in years) | 1 year | |||||||
Number of restricted shares issued (in shares) | 67,939 | |||||||
Release of shares, period | 18 months | |||||||
KPI Ninja | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested awards, period for recognition | 3 years 8 months 12 days | |||||||
Service period (in years) | 4 years | |||||||
Number of restricted shares issued (in shares) | 356,919 | |||||||
KPI Ninja | Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Cliff vesting period | 6 months | |||||||
Vesting percent | 25% | |||||||
Number of restricted shares issued (in shares) | 356,919 | |||||||
ARMUS | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Service period (in years) | 3 years | |||||||
Number of restricted shares issued (in shares) | 235,330 | |||||||
ARMUS | Restricted shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Nonvested awards, period for recognition | 2 years 9 months 18 days | |||||||
Service period (in years) | 18 months | |||||||
Number of restricted shares issued (in shares) | 235,330 | |||||||
Release of shares, period | 18 months | |||||||
2019 Stock Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized (in shares) | 2,500,000 | 2,634,500 | ||||||
2011 Stock Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of additional shares authorized (in shares) | 256,607 | |||||||
Percentage increase of the number of common stock shares (in percentage) | 5% | |||||||
Stock Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares authorized (in shares) | 17,929,420 | 15,294,920 | ||||||
Shares available for grant (in shares) | 2,814,905 | 2,969,638 |
Stock-Based Compensation - Effe
Stock-Based Compensation - Effect of Stock-based Compensation Expense on Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 17,932 | $ 17,727 | $ 36,052 | $ 31,237 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 2,404 | 2,856 | 5,160 | 4,665 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 6,875 | 5,932 | 13,888 | 10,750 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 3,163 | 2,676 | 6,253 | 4,933 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 5,490 | 6,263 | 10,751 | 10,889 |
Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 752 | 1,721 | 1,656 | 3,115 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 13,836 | 10,460 | 25,884 | 18,462 |
Performance-based restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 340 | 3,519 | 3,636 | 4,848 |
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 395 | 393 | 842 | 810 |
Restricted shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 2,609 | $ 1,634 | $ 4,034 | $ 4,002 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) | 6 Months Ended |
Jun. 30, 2022 | |
Time-Based Option Shares | |
Outstanding, beginning (in shares) | 2,115,484 |
Options exercised (in shares) | (327,389) |
Options cancelled/forfeited (in shares) | (6,143) |
Outstanding, ending (in shares) | 1,781,952 |
Vested and expected to vest, outstanding (in shares) | 1,781,952 |
Share-based payment award, options, exercisable (in shares) | 1,447,146 |
Weighted Average Exercise Price | |
Outstanding, beginning balance (in USD per share) | $ 11.45 |
Options exercised (in USD per share) | 11.20 |
Options cancelled/forfeited (in USD per share) | 12.07 |
Outstanding, ending balance (in USD per share) | 11.49 |
Vested and expected to vest (in USD per share) | 11.49 |
Vested and exercisable (in USD per share) | $ 10.98 |
Option shares outstanding, weighted average remaining contractual life in years | 5 years 4 months 24 days |
Vested and expected to vest, weighted average remaining contractual life in years | 5 years 4 months 24 days |
Vested and exercisable, weighted average remaining contractual life in years | 5 years 2 months 12 days |
Option shares outstanding, aggregate intrinsic value | $ 5,920,221 |
Option shares vested and expected to vest, aggregate intrinsic value | 5,920,221 |
Option shares vested and exercisable, aggregate intrinsic value | $ 5,380,840 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Restricted stock units | |
Restricted Stock Units | |
Unvested and outstanding, beginning balance (in shares) | shares | 2,273,354 |
RSUs granted (in shares) | shares | 2,378,404 |
RSUs vested (in shares) | shares | (534,003) |
RSUs forfeited (in shares) | shares | (99,305) |
Unvested and outstanding, ending balance (in shares) | shares | 4,018,450 |
Weighted Average Grant Date Fair Value | |
Unvested and outstanding, beginning balance, grant date fair value (in USD per share) | $ / shares | $ 43.84 |
RSUs granted (in USD per share) | $ / shares | 26.41 |
RSUs vested (in USD per share) | $ / shares | 41.61 |
RSUs forfeited (in USD per share) | $ / shares | 36.25 |
Unvested and outstanding, ending balance, grant date fair value (in USD per share) | $ / shares | $ 34 |
Performance-based restricted stock units | |
Restricted Stock Units | |
Unvested and outstanding, beginning balance (in shares) | shares | 319,442 |
RSUs granted (in shares) | shares | 589,994 |
RSUs vested (in shares) | shares | (254,122) |
RSUs forfeited (in shares) | shares | (73,717) |
Unvested and outstanding, ending balance (in shares) | shares | 581,597 |
Weighted Average Grant Date Fair Value | |
Unvested and outstanding, beginning balance, grant date fair value (in USD per share) | $ / shares | $ 50.28 |
RSUs granted (in USD per share) | $ / shares | 26.45 |
RSUs vested (in USD per share) | $ / shares | 50.18 |
RSUs forfeited (in USD per share) | $ / shares | 44.17 |
Unvested and outstanding, ending balance, grant date fair value (in USD per share) | $ / shares | $ 26.90 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of the Purchase Right for the ESPP Option Assumptions (Details) - Employee stock purchase plan - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 37.50% | 40.40% |
Expected term (in months) | 6 months | 6 months |
Risk-free interest rate | 0.22% | 0.09% |
Expected dividends | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 2.80% | 0.50% | 7.40% | 0.10% |
Income tax benefit | $ 944 | $ 192 | $ 4,495 | $ 91 |
Change in valuation allowance | $ 4,500 |
Deferred Revenue and Performa_2
Deferred Revenue and Performance Obligations - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Product Information [Line Items] | ||||
Percentage of revenue recognized was included in deferred revenue (in percentage) | 47% | 45% | 34% | 29% |
Revenue remaining performance obligation amount | $ 106 | $ 106 | ||
Technology and professional services | ||||
Product Information [Line Items] | ||||
Service contract term | 3 years | |||
Allowed termination period | 1 year | |||
Notice required for termination | 90 days |
Deferred Revenue and Performa_3
Deferred Revenue and Performance Obligations - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | Jun. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation (in percentage) | 70% |
Remaining performance obligation, period | 24 months |
Related Parties (Details)
Related Parties (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021 USD ($) | |
Board member | |
Related Party Transaction [Line Items] | |
Revenue recognized from related party | $ 0.9 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Segments - Scheduled of Segment
Segments - Scheduled of Segment Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | [1] | $ 70,633 | $ 59,627 | $ 138,720 | $ 115,473 |
Technology | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | 45,397 | 35,529 | 87,627 | 69,368 | |
Professional Services | |||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||
Revenue | $ 25,236 | $ 24,098 | $ 51,093 | $ 46,105 | |
[1]Includes amounts attributable to related party transactions. See Note 16 for further details. |
Segments - Schedule of Segment
Segments - Schedule of Segment Adjusted Gross Profit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Less Adjusted Gross Profit reconciling items: | ||||
Stock-based compensation | $ (17,932) | $ (17,727) | $ (36,052) | $ (31,237) |
Less other reconciling items: | ||||
Sales and marketing | (20,922) | (16,705) | (41,740) | (32,356) |
Research and development | (18,148) | (14,524) | (35,296) | (28,869) |
General and administrative | (17,536) | (22,525) | (26,359) | (37,540) |
Depreciation and amortization | (12,612) | (8,139) | (24,261) | (15,953) |
Interest and other expense, net | (1,180) | (3,707) | (2,842) | (7,659) |
Loss before income taxes | (34,372) | (36,026) | (60,381) | (64,295) |
Operating segments | ||||
Adjusted Gross Profit | ||||
Gross profit | 38,664 | 32,430 | 75,836 | 62,747 |
Operating segments | Technology | ||||
Adjusted Gross Profit | ||||
Gross profit | 31,968 | 24,256 | 61,566 | 47,644 |
Operating segments | Professional Services | ||||
Adjusted Gross Profit | ||||
Gross profit | 6,696 | 8,174 | 14,270 | 15,103 |
Segment reconciling items | ||||
Less Adjusted Gross Profit reconciling items: | ||||
Stock-based compensation | (2,404) | (2,856) | (5,160) | (4,665) |
Acquisition-related costs, net | (234) | 0 | (559) | 0 |
Less other reconciling items: | ||||
Sales and marketing | (20,922) | (16,705) | (41,740) | (32,356) |
Research and development | (18,148) | (14,524) | (35,296) | (28,869) |
General and administrative | (17,536) | (22,525) | (26,359) | (37,540) |
Depreciation and amortization | (12,612) | (8,139) | (24,261) | (15,953) |
Interest and other expense, net | $ (1,180) | $ (3,707) | $ (2,842) | $ (7,659) |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Aug. 02, 2022 USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Share repurchase plan, authorized amount | $ 40 |