Cotiviti (COTV) 10-Q 26 Jul 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	6 Months Ended
	Jun. 30, 2018shares
Document and Entity Information
Entity Registrant Name	Cotiviti Holdings, Inc.
Entity Central Index Key	1,657,197
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	93,275,782
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 223,927	$ 165,518
Restricted cash	12,031	11,383
Accounts receivable, net of allowance for doubtful accounts of $29 and $176 at June 30, 2018 and December 31, 2017, respectively; and net of estimated allowance for refunds and appeals of $43,062 and $35,434 at June 30, 2018 and December 31, 2017, respectively	74,574	83,756
Prepaid expenses and other current assets	24,805	15,314
Total current assets	335,337	275,971
Property and equipment, net	82,549	77,340
Goodwill	1,252,306	1,251,364
Intangible assets, net	463,223	492,040
Other long-term assets	3,374	2,514
TOTAL ASSETS	2,136,789	2,099,229
Current liabilities:
Current maturities of long-term debt	21,125	18,000
Customer deposits	12,031	11,383
Accounts payable and accrued other expenses	27,143	25,906
Accrued compensation costs	33,217	42,725
Estimated liability for refunds and appeals	4,885	61,607
Total current liabilities	98,401	159,621
Long-term liabilities:
Long-term debt	738,528	749,618
Other long-term liabilities	6,492	5,474
Deferred tax liabilities	92,469	83,048
Total long-term liabilities	837,489	838,140
Total liabilities	935,890	997,761
Commitments and contingencies
Stockholders' equity:
Common stock ($0.001 par value; 600,000,000 shares authorized, 93,275,782 and 92,299,294 issued and outstanding at June 30, 2018 and December 31, 2017, respectively)	93	92
Additional paid-in capital	961,055	933,710
Retained earnings	243,172	172,120
Accumulated other comprehensive loss	(3,421)	(4,454)
Total stockholders' equity	1,200,899	1,101,468
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,136,789	$ 2,099,229

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Consolidated Balance Sheets
Allowance for doubtful accounts	$ 29	$ 176
Estimated allowance for refunds and appeals	$ 43,062	$ 35,434
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	93,275,782	92,299,294
Common stock, shares outstanding	93,275,782	92,299,294

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Consolidated Statements of Comprehensive Income
Net revenue	$ 177,453	$ 167,611	$ 396,487	$ 327,744
Cost of revenue (exclusive of depreciation and amortization, stated separately below):
Compensation	57,135	58,870	115,227	115,158
Other costs of revenue	7,626	6,123	14,099	12,809
Total cost of revenue	64,761	64,993	129,326	127,967
Selling, general and administrative expenses (exclusive of depreciation and amortization, stated separately below):
Compensation	32,500	25,564	67,680	50,257
Other selling, general and administrative expenses	18,005	15,300	36,771	32,179
Total selling, general and administrative expenses	50,505	40,864	104,451	82,436
Depreciation and amortization of property and equipment	7,200	5,896	14,442	11,471
Amortization of intangible assets	14,397	15,201	28,793	30,400
Transaction-related expenses	7,193	661	7,407	1,392
Total operating expenses	144,056	127,615	284,419	253,666
Operating income	33,397	39,996	112,068	74,078
Other expense (income):
Interest expense	10,174	8,538	19,351	16,959
Loss on extinguishment of debt		3,183		3,183
Other non-operating (income) expense	(305)	(556)	(640)	(1,009)
Total other expense (income)	9,869	11,165	18,711	19,133
Income before income taxes	23,528	28,831	93,357	54,945
Income tax expense	6,953	7,743	22,855	6,882
Net income	16,575	21,088	70,502	48,063
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	402	452	610	509
Change in fair value of derivative instruments	423	193	423	131
Total other comprehensive income (loss)	825	645	1,033	640
Comprehensive income	$ 17,400	$ 21,733	$ 71,535	$ 48,703
Earnings per share:
Basic (in dollars per share)	$ 0.18	$ 0.23	$ 0.76	$ 0.52
Diluted (in dollars per share)	$ 0.17	$ 0.22	$ 0.74	$ 0.51

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 70,502	$ 48,063
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	8,915	2,588
Depreciation and amortization	43,235	41,871
Stock-based compensation expense	17,387	4,538
Amortization of debt issuance costs	1,035	1,494
Accretion of asset retirement obligations	106	98
Loss on extinguishment of debt		3,183
Changes in operating assets and liabilities:
Accounts receivable	9,182	(19,480)
Other assets	(10,382)	(14,471)
Accrued compensation	(9,508)	(20,622)
Accounts payable and accrued other expenses	3,092	(194)
Estimated liability for refunds and appeals	(56,722)	(4,904)
Other long-term liabilities	1,309	372
Other	563	(236)
Net cash provided by operating activities	78,714	42,300
Cash flows from investing activities:
Expenditures for property and equipment	(21,213)	(16,593)
Net cash used in investing activities	(21,213)	(16,593)
Cash flows from financing activities:
Proceeds from issuance of common stock under equity plans	9,990	10,546
Payment of debt issuance costs		(661)
Repayment of debt	(9,000)	(9,000)
Net cash provided by financing activities	990	885
Effect of foreign exchanges on cash and cash equivalents	(82)	199
Net increase in cash, cash equivalents and restricted cash	58,409	26,791
Cash, cash equivalents and restricted cash at beginning of period	165,518	110,635
Cash, cash equivalents and restricted cash at end of the period	223,927	137,426
Supplemental disclosures of cash flow information:
Cash paid for income taxes	21,464	16,977
Cash paid for interest	16,908	14,343
Noncash investing activities (accrued property and equipment purchases)	$ 4,200	$ 9,340

Description of Business

Description of Business	6 Months Ended
	Jun. 30, 2018
Description of Business
Description of Business	Note 1. Description of Business Cotiviti Holdings, Inc. (collectively with its subsidiaries, “we,” “our,” “Cotiviti” or the “Company”) is a leading provider of payment accuracy and analytics-driven solutions that help payers, other risk-bearing healthcare organizations and retailers achieve their business objectives. Through a combination of analytics, technology and deep industry expertise, our solutions create insights that unlock value from the complex interactions between clients and their stakeholders. We serve a majority of the top 25 U.S. healthcare payers and a majority of the top ten U.S. retailers.

Proposed Verscend Merger

Proposed Verscend Merger	6 Months Ended
	Jun. 30, 2018
Proposed Verscend Merger
Proposed Verscend Merger	Note 2. Proposed Verscend Merger On June 19, 2018, we entered into the Verscend Merger Agreement. The Verscend Merger Agreement provides that, upon the terms and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Cotiviti, with Cotiviti continuing as the surviving corporation and a wholly owned subsidiary of Verscend. The board of directors of Cotiviti has unanimously determined that the Verscend Merger Agreement and the transactions contemplated thereby, including the Verscend Merger, are advisable, fair to and in the best interests of Cotiviti and its stockholders, and directed that the Verscend Merger Agreement be submitted to the stockholders of Cotiviti for their adoption. Under the terms of the Verscend Merger Agreement, Cotiviti stockholders will receive $44.75 in cash per share of Cotiviti common stock, without interest and less any applicable withholding taxes, and Verscend will pay all of Cotiviti’s outstanding net indebtedness, resulting in an enterprise value of approximately $4.9 billion. If the Verscend Merger is consummated, Cotiviti will cease to be a publicly traded company and will become a wholly owned subsidiary of Verscend, and our common stock will be delisted from the NYSE and deregistered under the Exchange Act. The consummation of the Verscend Merger is subject to customary closing conditions, including, among others, the following conditions to the obligations of the parties: (i) the adoption of the Verscend Merger Agreement by the holders of a majority of Cotiviti’s common stock outstanding and entitled to vote; (ii) any applicable waiting period under the HSR Act having expired or having been terminated; (iii) the Verscend Merger having not then been enjoined, made illegal or otherwise prohibited by any applicable law or any order, judgment, decree, injunction or ruling (whether temporary, preliminary or permanent) of any governmental authority (each, a “Governmental Order”) or by any proceeding then pending by a governmental authority seeking any Governmental Order that would enjoin, make illegal or otherwise prohibit the consummation of the Verscend Merger; (iv) the truth and accuracy of the parties’ representations and warranties in the Verscend Merger Agreement, subject in certain cases to a de minimis, materiality or material adverse effect standard (each as described in the Verscend Merger Agreement); (v) with respect to Verscend’s obligations, a material adverse effect (as described in the Verscend Merger Agreement) having not occurred; and (vi) the compliance with or performance, in all material respects, of the parties’ covenants and obligations in the Verscend Merger Agreement required to be performed at or prior to the consummation of the Verscend Merger. On July 13, 2018, the U.S. Federal Trade Commission granted early termination of the waiting period under the HSR Act with respect to the Verscend Merger, thereby satisfying one of the conditions to the closing of the Verscend Merger. If the proposed Verscend Merger is not approved by Cotiviti stockholders or if the Verscend Merger is not consummated for any other reason, Cotiviti stockholders will continue to hold their shares of common stock and will not receive any payment for such shares. Instead, Cotiviti will remain a public company, our common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act, and we will continue to file periodic reports with the SEC. Under specified circumstances, upon termination of the Verscend Merger Agreement, Cotiviti may be required to pay Verscend a termination fee of $100,000, or Verscend may be required to pay Cotiviti a termination fee of $217,500. We recorded approximately $7,400 of transaction costs primarily related to professional services associated with the proposed Verscend Merger as transaction-related expenses within our Consolidated Statements of Comprehensive Income during the six months ended June 30, 2018.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 3. Summary of Significant Accounting Policies Basis of Presentation Our accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements are unaudited and have been prepared by us following the rules and regulations of the SEC. In our opinion they reflect all adjustments, including normal recurring items, that are necessary to present fairly the results of interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for other interim periods or the entire fiscal year. Certain prior year amounts have been reclassified to conform to the current year presentation. Restricted Cash In connection with providing services to certain clients, we maintain a series of lockbox accounts with certain financial institutions. These lockbox accounts exist to receive funds we collect on behalf of our clients resulting from services provided. When client funds are received and deposited into the lockbox accounts, we record a corresponding customer deposit liability. These funds are included as both restricted cash in current assets and customer deposits in current liabilities on our Consolidated Balance Sheets and are included in beginning and ending cash, cash equivalents and restricted cash on our Consolidated Statements of Cash Flows. The following table reconciles cash, cash equivalents and restricted cash per the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets. June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 Cash and cash equivalents $ $ $ $ Restricted cash Customer deposits (12,031) (11,383) (8,548) (9,103) Total cash, cash equivalents and restricted cash $ $ $ $ Recently Issued Accounting Standards In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. We early adopted the provisions of ASU 2018-02 during the first quarter 2018 and as a result, we reclassified $550 from accumulated other comprehensive loss to retained earnings in the Consolidated Balance Sheets. In November 2016, the FASB issued ASU 2016-18, Restricted Cash (“ASU 2016-18”), which requires that restricted cash be included with cash and cash equivalents when reconciling the beginning and end of period total amounts shown on the statement of cash flows. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. We retrospectively adopted the provisions of ASU 2016-18 effective January 1, 2018. This guidance did not have a significant impact on our consolidated financial statements. Refer to “Restricted Cash” above for further information. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which changes the accounting recognition, measurement and disclosure for leases in order to increase transparency. ASU 2016-02 requires lease assets and liabilities to be recognized on the balance sheet and key information about leasing arrangements to be disclosed. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We have formed an internal team to evaluate and quantify the impact of this new lease guidance. As of the date of this filing, we are in process of completing our review of lease contracts and quantifying the impact under the new guidance. We are also in process of evaluating changes required to our business processes, systems and controls to support recognition and disclosure of leases. We are currently planning to elect the package of practical expedients which allows a company to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. We will provide additional information about the impact of this new guidance in future filings. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), which supersedes existing revenue recognition guidance and provides clarification of principles for recognizing revenue from contracts with customers. ASC 606 sets forth a five-step model for determining when and how revenue is recognized. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Additional disclosures will be required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The two permitted transition methods under ASC 606 are the full retrospective method, in which case the new guidance would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of the initial application. The guidance is effective for public companies with annual periods beginning after December 15, 2017, including interim periods within that reporting period. We adopted the provisions of ASC 606 and related amendments as of January 1, 2018 using the modified retrospective method. The adoption of ASC 606 did not result in any significant changes to the timing of revenue recognition in prior, current or future periods therefore there was no cumulative adjustment as a result of adoption. Refer to Note 4 for more information on revenue recognition.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jun. 30, 2018
Revenue Recognition
Revenue Recognition	Note 4. Revenue Recognition Revenue Revenue is comprised of services we provide in our Healthcare and Global Retail and Other operating segments under contracts that contain various fee structures, including performance fee based contracts and fixed fee arrangements. We account for revenue in accordance with ASC 606. Through our Healthcare segment, we offer prospective and retrospective claims accuracy solutions to healthcare payers in the United States. We also provide a network efficiency solution to payers and providers as well as, on a limited basis, certain analytics-based solutions unrelated to our healthcare payment accuracy solutions in the United States. Through our Global Retail and Other segment, we provide retrospective claims accuracy solutions to retailers primarily in the United States, with additional clients in Canada and the United Kingdom. Net revenue generated in the United States accounted for approximately 99% of total net revenue for each of the three and six months ended June 30, 2018 and 2017. During the Three Months Ended June 30, Six Months Ended June 30, 2018 % 2017 % 2018 % 2017 % (unaudited) (unaudited) Healthcare Retrospective claims accuracy $ 93,529 52.7 $ 86,627 51.7 $ 227,452 57.4 $ 164,143 50.1 Prospective claims accuracy 62,745 35.4 62,020 37.0 121,030 30.5 121,737 37.1 Other 5,431 3.0 2,912 1.7 13,594 3.4 5,482 1.7 Total Healthcare 161,705 91.1 151,559 90.4 362,076 91.3 291,362 88.9 Global Retail and Other Retrospective claims accuracy 15,748 8.9 15,385 9.2 34,411 8.7 35,059 10.7 Other — — 667 0.4 — — 1,323 0.4 Total Global Retail and Other 15,748 8.9 16,052 9.6 34,411 8.7 36,382 11.1 Consolidated net revenue $ 177,453 100.0 $ 167,611 100.0 $ 396,487 100.0 $ 327,744 100.0 Performance obligations – The unit of measure under ASC 606 is a performance obligation, which is a promise in a contract to transfer a distinct or series of distinct goods or services to the client. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our contracts have either a single performance obligation as the promise to transfer services is not separately identifiable from other promises in the contracts and is, therefore, not distinct, or have multiple performance obligations, most commonly due to the contract covering multiple service offerings. For contracts with multiple performance obligations, the contract’s transaction price can generally be readily allocated to each performance obligation based upon the selling price of each distinct service in the contract. In cases where estimates are needed to allocate the transaction price, we use historical experience and projections based on currently available information. Retrospective and Prospective claims accuracy – Performance obligations for our retrospective and prospective claims accuracy solutions are satisfied at a point in time when our clients realize the economic benefits from our services. Our clients realize economic benefits when they take credits against their existing accounts payable based on when we identify cost savings, when they receive refunds based on overpayments, or when they acknowledge payment reductions based on cost savings. Clients pay for our services once they realize the economic benefit. Other – Performance obligations for our other healthcare solutions are generally satisfied over time as the services are delivered. Clients generally pay once the services have been rendered, although certain clients, on a limited basis, pay in advance of the services being rendered in which case we record cash received as deferred revenue and recognize upon satisfaction of the performance obligation. Estimated Liability for Refunds and Appeals Historically, there has been a certain amount of revenue with respect to which, even though we had met the requirements for revenue recognition, a claim is ultimately rejected. In such cases, our clients may request a refund or offset if their providers or vendors ultimately reject the payment inaccuracies we find or if our clients determine not to pursue reimbursement from their providers or vendors even though we may have collected fees. We record an estimate for refund liabilities as a reduction of revenue based on actual historical refund data by client type. We satisfy such refund liabilities either by offsets to accounts receivable or by cash payments to clients. We also calculate client specific refund liabilities in excess of the estimated historical refund liabilities when we determine additional amounts may ultimately be required to be returned to the client. Under the Medicare Recovery Audit Program, in which we are one of the Medicare RACs for CMS, healthcare providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. We currently have Medicare RAC contracts related to CMS Regions 2 and 3; our original Medicare RAC contract was related to the former CMS Region C. We accrue an estimated liability for appeals based on the amount of fees that are subject to appeals, closures or other adjustments and those which we estimate are probable of being returned to CMS following a successful appeal by the providers. Our estimates are based on our historical experience with the Medicare RAC appeal process. The liability is included in the estimated liability for refunds and appeals on our Consolidated Balance Sheets. Our original Medicare RAC contract with CMS expired on January 31, 2018. In connection with the expiration of the contract, we determined that we have no obligation to CMS with respect to any appeals resolved in the providers’ favor after the expiration date and, in addition, we have no obligation to CMS in connection with the hospital settlement processes as initiated by CMS. Refer to Note 7 of the Notes to Consolidated Financial Statements included in our 2017 Annual Report on Form 10-K for further details on the hospital settlement processes. Accordingly, we released $600 and $47,156 of the total $56,089 liability to revenue during the three and six months ended June 30, 2018, respectively. The remaining estimated liability for refunds and appeals related to the original Medicare RAC contract of approximately $3,600 as of June 30, 2018 represents management’s best estimate of any appeals overturned prior to the expiration of the contract term. For all refund and appeals liabilities, to the extent the amount to be returned to providers following a successful appeal process exceeds or is less than the amount recorded, revenue in the applicable period would be reduced or increased, respectively, by such amount. Any future changes to any of our client contracts may require different assumptions to be applied that could materially affect our revenue and estimated liability for refunds and appeals in future periods. We record periodic changes in refund liabilities as adjustments to revenue. The estimated liability for refunds and appeals representing our estimate of claims that may be overturned related to revenue which has already been received is included in the estimated liability for refunds and appeals in current liabilities on our Consolidated Balance Sheets. The estimated allowance for refunds and appeals representing our estimate of claims that may be overturned related to amounts in accounts receivable is included in accounts receivable on our Consolidated Balance Sheets. The table below presents the activity of the estimated liability for refunds and appeals. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Balance at beginning of period Estimated allowance for refunds and appeals $ 43,690 $ 35,518 $ 35,434 $ 41,020 Estimated liability for refunds and appeals 9,367 61,766 61,607 62,539 Total balance at beginning of period 53,057 97,284 97,041 103,559 Provision 29,223 23,857 61,816 42,933 Refunds settled with client (32,919) (27,698) (61,672) (49,740) Refunds recovered (814) (3,160) (2,082) (6,469) Original Medicare RAC contract release of liability (600) - (47,156) - Total balance at end of period $ 47,947 $ 90,283 $ 47,947 $ 90,283 Less: estimated allowance for refunds and appeals 43,062 32,648 43,062 32,648 Estimated liability for refunds and appeals $ 4,885 $ 57,635 $ 4,885 $ 57,635 Costs to obtain and/or fulfill a contract Incremental costs of obtaining a contract include costs incurred by an entity to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. A select group of employees are eligible for sales commissions, which are directly related to obtaining certain client contracts. We have recorded an asset related to the amount of commissions to be paid to employees in the future and a corresponding liability. The asset is amortized to compensation expense over the life of the underlying contract and the liability is relieved as payments are made to the employees. As of June 30, 2018, there is approximately $473 included in prepaid expenses and other current assets, $368 included in other long-term assets and $724 included in accrued compensation costs on our Consolidated Balance Sheets. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We accrue an allowance against accounts receivable related to fees yet to be collected, based on historical losses adjusted for current market conditions, our clients’ financial condition, the amount of any receivables in dispute, the current receivables aging and current payment patterns. We record changes in our estimate to the allowance for doubtful accounts through bad debt expense and relieve the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Write-offs for all periods presented have not been significant. Unbilled receivables represent revenue recognized related to claims for which clients have received economic value that were not invoiced at the balance sheet date. Unbilled receivables were approximately $63,926 and $62,294 as of June 30, 2018 and December 31, 2017, respectively, and are included in accounts receivable on our Consolidated Balance Sheets. We record any periodic changes in unbilled receivables as adjustments to revenue. Certain unbilled receivables arise when a portion of our earned fee is deferred at the time of the initial invoice. At a later date (which can be up to a year after original invoice, and at other times during the year after completion of the audit period based on contractual terms or as agreed with our client), we invoice the unbilled receivable amount. Notwithstanding the deferred due date, our clients acknowledge we have earned this unbilled receivable at the time of the original invoice, but we have agreed to defer billing the client for the related services. Unbilled receivables of this nature were approximately $3,760 and $4,958 as of June 30, 2018 and December 31, 2017, respectively, and are included in accounts receivable on our Consolidated Balance Sheets.

RowdMap Acquisition

RowdMap Acquisition	6 Months Ended
	Jun. 30, 2018
RowdMap Acquisition
RowdMap Acquisition	Note 5. RowdMap Acquisition On July 14, 2017, we acquired all of the outstanding equity of RowdMap. Based in Louisville, Kentucky, RowdMap is a payer-provider, value-based analytics company that helps health plans and providers identify and reduce low-value care from inefficient and unnecessary services. We paid approximately $74,000 in cash, subject to certain adjustments and funded entirely with available liquidity. We also issued an aggregate of 768,021 shares of restricted common stock to certain employees of RowdMap in connection with their continued employment with us. Half of these shares were subject to continued employment and performance-based vesting requirements. In accordance with these vesting requirements, in July 2018 we issued 350,569 shares of common stock. The remaining 33,440 shares of restricted stock were cancelled as they did not meet the vesting requirements. The other half are subject to continued employment, with one-third vesting on each of the first three anniversaries of the closing of the acquisition. We record stock-based compensation expense related to this restricted stock ratably over the vesting period or as achievement of the performance criteria becomes probable. This stock-based compensation expense will not be deductible for income tax purposes. As part of the RowdMap Acquisition, we allocated the purchase price to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on the estimated fair values at the date of acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities was recorded as goodwill. Goodwill represents the value of acquired assembled workforce, specialized processes and procedures and operating synergies, none of which qualify as separate intangible assets. We believe these specialized processes and procedures will enhance our long history of innovation and help expand our solution offerings. We determined the estimated fair values of intangible assets acquired using estimates of future discounted cash flows to be generated by the business over the estimated duration of those cash flows. We based the estimated cash flows on our projections of future revenue, operating expenses, capital expenditures, working capital needs and tax rates. We estimated the duration of the cash flows based on the projected useful lives of the assets acquired. The discount rate was determined based on specific business risk, cost of capital and other factors. The initial purchase price allocation was preliminary and subject to change up to one year after the date of acquisition. The final allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the date of the acquisition was as follows: July 14, 2017 Cash $ 4,107 Accounts receivable 2,526 Prepaid expenses and other assets 1,212 Other long-term assets 12 Property and equipment 263 Intangible assets 19,510 Total identifiable assets acquired 27,630 Accounts payable and accrued liabilities 4,491 Deferred tax liabilities 3,882 Total liabilities assumed 8,373 Net identifiable assets acquired 19,257 Goodwill 54,867 Net assets acquired $ 74,124 The $19,510 of acquired intangible assets include acquired software of $6,310 (5 year useful life) and customer relationships of $13,200 (5 year useful life). For federal income tax purposes, the RowdMap Acquisition was treated as a stock acquisition. The goodwill and the intangible assets recognized are not deductible for income tax purposes. In connection with the RowdMap Acquisition, a liability of $1,066 is included in accounts payable and accrued other expenses on the Consolidated Balance Sheets as of June 30, 2018, for payments due to the former stockholders of RowdMap, some of whom are now our employees. We recorded approximately $700 of transaction costs primarily related to professional services associated with the acquisition as transaction-related expenses within our Consolidated Statements of Comprehensive Income during the year ended December 31, 2017. The acquisition was not significant to our consolidated financial statements, therefore, pro forma results of operations related to this business acquisition have not been presented. The financial results of RowdMap have been included in our consolidated financial statements since the date of the acquisition.

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2018
Property and Equipment
Property and Equipment	Note 6. Property and Equipment Property and equipment by major asset class for the periods presented consisted of the following: June 30, December 31, 2018 2017 Computer equipment $ 48,223 $ 46,731 Software 74,647 67,511 Furniture and fixtures 12,776 9,199 Leasehold improvements 11,094 5,256 Projects in progress 7,445 10,295 Property and equipment, gross $ 154,185 $ 138,992 Less: accumulated depreciation and amortization 71,636 61,652 Property and equipment, net $ 82,549 $ 77,340 In December 2015, we purchased a perpetual software license, which is included in the software total above. We paid for this software over a two year period ended in January 2018. As such, there is approximately $3,351 included in accounts payable and accrued other expenses on our Consolidated Balance Sheets as of December 31, 2017. Total depreciation and amortization expense related to property and equipment, including capitalized software costs, was $7,200 and $5,896 for the three months ended June 30, 2018 and 2017, respectively, and $14,442 and $11,471 for the six months ended June 30, 2018 and 2017, respectively.

Intangible Assets

Intangible Assets	6 Months Ended
	Jun. 30, 2018
Intangible Assets
Intangible Assets	Note 7. Intangible Assets Intangible asset balances by major asset class for the periods presented were as follows: Weighted Gross Net Average Carrying Accumulated Carrying Amortization Amount Amortization Impairment Amount Period June 30, 2018: Customer relationships $ 650,903 $ 216,608 $ — $ 434,295 13.5 years Acquired software 54,210 29,482 — 24,728 6.8 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 709,313 $ 246,090 $ — $ 463,223 13.0 years December 31, 2017: Customer relationships $ 650,954 $ 190,572 $ 1,322 $ 459,060 13.5 years Acquired software 54,210 25,430 — 28,780 6.8 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 709,364 $ 216,002 $ 1,322 $ 492,040 13.0 years Amortization expense was $14,397 and $15,201 for the three months ended June 30, 2018 and 2017, respectively, and $28,793 and $30,400 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 amortization expense for the next 5 years is expected to be: Remainder of 2018 $ 28,791 2019 57,583 2020 57,583 2021 53,260 2022 48,952

Goodwill

Goodwill	6 Months Ended
	Jun. 30, 2018
Goodwill
Goodwill	Note 8. Goodwill Total goodwill on our Consolidated Balance Sheets was $1,252,306 and $1,251,364 as of June 30, 2018 and December 31, 2017, respectively. Changes in the carrying amount of goodwill by our Healthcare and Global Retail and Other segments for the six months ended June 30, 2018 were as follows: Global Retail Healthcare and Other December 31, 2017 $ 1,202,444 $ 48,920 Measurement period adjustments 194 — Foreign currency translation — 748 June 30, 2018 $ 1,202,638 $ 49,668 There was no impairment related to goodwill for any period presented.

Long-term Debt

Long-term Debt	6 Months Ended
	Jun. 30, 2018
Long-term Debt
Long-term Debt	Note 9. Long‑term Debt In April 2017, we entered into and executed the First Amendment Agreement to the then outstanding Restated Credit Agreement, which, among other things, provided for a 25 basis point reduction in applicable interest rate spread over LIBOR associated with the First Lien Term B Loans. As a result, we recognized a loss on extinguishment of $3,183 during the three and six months ended June 30, 2017, which consists of fees paid and write-offs of unamortized debt issuance costs and original issue discount. Long‑term debt for the periods presented was as follows: June 30, December 31, 2018 2017 First Lien Term A Loans $ 228,007 $ 234,237 First Lien Term B Loans 538,060 540,585 Revolver — — Total debt 766,067 774,822 Less: debt issuance costs 6,414 7,204 Less: current portion 21,125 18,000 Total long-term debt $ 738,528 $ 749,618 The Restated Credit Agreement includes certain binding affirmative and negative covenants, including delivery of financial statements and other reports, maintenance of existence and transactions with affiliates. The negative covenants restrict our ability, among other things, to incur indebtedness, grant liens, make investments, sell or otherwise dispose of assets or enter into a merger, pay dividends or repurchase stock. There is a required financial covenant applicable only to the Revolver and the First Lien Term A Loans, pursuant to which we agree not to permit our Secured Leverage Ratio (as defined in the Restated Credit Agreement) to exceed 5.50:1.00 through September 2018, 5.25:1.00 through September 2019 and 5.00:1.00 through June 2021. In addition, the Restated Credit Agreement includes certain events of default including payment defaults, failure to perform affirmative covenants, failure to refrain from actions or omissions prohibited by negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults and a change of control default. We were in compliance with all such covenants as of June 30, 2018 and December 31, 2017, respectively. The Restated Credit Agreement requires mandatory prepayments based upon our leverage ratio at the time payment is required and an annual excess cash flow calculation commencing with the year ended December 31, 2017. The mandatory prepayment is contingently payable in the second quarter of each year based on an annual excess cash flow calculation for the preceding year as defined within the Restated Credit Agreement. We were not required to make a mandatory prepayment during 2018. As of June 30, 2018, the aggregate maturities of long‑term debt (excluding any amounts that may become payable with respect to the aforementioned mandatory prepayment provision for annual excess cash flows) for each of the next five years are expected to be $9,000 for the remainder of 2018, $24,250 in 2019, $30,500 in 2020, $183,625 in 2021 and $5,500 in 2022.

Derivative Instruments

Derivative Instruments	6 Months Ended
	Jun. 30, 2018
Derivative Instruments
Derivative Instruments	Note 10. Derivative Instruments We are exposed to fluctuations in interest rates on our long‑term debt. We manage our exposure to fluctuations in the 3‑month LIBOR through the use of interest rate cap agreements designated as cash flow hedges. We are meeting our objective by hedging the risk of changes in cash flows related to changes in LIBOR by capping the interest on our floating rate debt linked to LIBOR to approximately 3%. We do not utilize derivatives for speculative or trading purposes. As of June 30, 2018 and December 31, 2017, we had $435,000 in notional debt outstanding related to these interest rate caps, which cover quarterly interest payments through September 2019. The notional amount decreases over time. Refer to Note 9 for more information regarding the debt outstanding related to these agreements. All of our outstanding interest rate cap contracts qualify for cash flow hedge accounting treatment in accordance with ASC 815, Derivatives and Hedging . Cash flow hedge accounting treatment allows for gains and losses on the effective portion of qualifying hedges to be deferred in accumulated other comprehensive income (loss) until the underlying transaction occurs, rather than recognizing the gains and losses on these instruments in earnings during each period they are outstanding. When the actual interest payments are made on our variable rate debt as described in Note 9 and the related derivative contract settles, any effective portion of realized interest rate hedging derivative gains and losses previously recorded in accumulated other comprehensive income (loss) is recognized in interest expense. All cash flows related to our interest rate cap agreements are classified as operating cash flows. The table below reflects the effect of our derivative instruments on our Consolidated Statements of Comprehensive Income: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Interest expense $ 644 $ 398 $ 1,256 $ 599 Any outstanding derivative instruments expose us to credit loss in the event of nonperformance by the counterparties to the agreements, but we do not expect that the counterparty will fail to meet their obligations. The amount of such credit exposure is generally the positive fair value of our outstanding contracts. To manage credit risks, we select counterparties based on credit assessments, limit our overall exposure to any single counterparty and monitor the market position of any counterparty. The table below reflects quantitative information related to the fair value of our derivative instruments and where these amounts are recorded in our consolidated financial statements as of the period presented: June 30, December 31, 2018 2017 Liability fair value recorded in other long-term liabilities $ 401 $ 951 Liability fair value recorded in accounts payable and accrued other expenses 836 979 Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months (2,306) (2,440) We record deferred hedge premiums which are being paid over the life of the hedge in accumulated other comprehensive income (loss) until the related hedge ultimately settles and interest payments are made on the underlying debt. As of June 30, 2018, we have made payments of $4,689 related to these deferred premiums. We expect to pay an additional $1,705 in deferred premiums through 2019 related to our outstanding interest rate cap agreements which is reflected in the fair value of these derivatives in the table above. Comprehensive income includes changes in the fair value of our interest rate cap agreements which qualify for hedge accounting. Changes in other comprehensive income (loss) for the periods presented related to derivative instruments classified as cash flow hedges were as follows: Three Months Ended June 30, 2018 2017 Balance at beginning of period, April 1 $ (2,556) $ (3,396) Reclassifications in earnings, net of tax of $157 and $150, respectively 487 249 Change in fair value of derivative instrument, net of tax of $20 and $35, respectively (64) (56) Balance at end of period, June 30 $ (2,133) $ (3,203) Six Months Ended June 30, 2018 2017 Balance at beginning of period, January 1 $ (2,556) $ (3,334) Reclassifications in earnings, net of tax of $306 and $225, respectively 950 374 Change in fair value of derivative instrument, net of tax of $8 and $150, respectively 23 (243) Reclassification of stranded tax effect to retained earnings upon adoption of ASU 2018-02 (550) — Balance at end of period, June 30 $ (2,133) $ (3,203)

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2018
Fair Value Measurements
Fair Value Measurements	Note 11. Fair Value Measurements We measure assets and liabilities at fair value based on assumptions market participants would use in pricing an asset or liability in the principal or most advantageous market. Authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value whereby inputs are assigned a hierarchical level. The hierarchical levels are: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2: Observable prices, other than quoted prices included in Level 1 inputs for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The following table summarizes our financial instruments measured at fair value within the Consolidated Balance Sheets: June 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: Long-term debt $ — $ — $ 766,067 $ — $ — $ 774,822 Interest rate cap agreements — 1,237 — — 1,930 — Total $ — $ 1,237 $ 766,067 $ — $ 1,930 $ 774,822 The fair value of our private debt is determined based on fluctuations in current interest rates, the trends in market yields of debt instruments with similar credit ratings, general economic conditions and other quantitative and qualitative factors. The carrying value of our debt approximates its fair value. Refer to Note 9 for more information on our long-term debt. The fair value of the interest rate cap agreements is determined using the market standard methodology of discounting the future expected variable cash receipts that would occur if interest rates rose above the strike rate of the caps. The analysis reflects the contractual terms of the derivatives, including period to maturity and remaining deferred premium payments, and uses observable market‑based inputs, including interest rates and implied volatilities. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rates. As such, the estimated fair values of these liabilities are classified as Level 2 in the fair value hierarchy. Refer to Note 10 for more information on our interest rate cap agreements.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Taxes
Income Taxes	Note 12. Income Taxes The following table presents our income tax provision and effective income tax rate: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Income tax expense $ 6,953 $ 7,743 $ 22,855 $ 6,882 Effective income tax rate 29.5 % 26.9 % 24.5 % 12.5 % Our effective income tax rate was 29.5% and 26.9% for the three months ended June 30, 2018 and 2017, respectively. The decrease in income tax expense of $790 was primarily the result of a reduction of the federal tax rate to 21% due to the Tax Act, a $1,277 tax benefit related to stock option exercises and vesting of restricted stock units, partially offset by additional expense of $1,940 related to nondeductible transaction-related expenses in connection with the proposed Verscend Merger. The impact of these items relative to the pre-tax income for the three months ended June 30, 2018 resulted in the increase to the effective tax rate. During the three months ended June 30, 2017, we recorded a $2,619 tax benefit related to stock option exercises and vesting of restricted stock units and a $660 tax benefit related to the filing of amended state tax returns as a result of certain tax planning. The effective tax rate for the three months ended June 30, 2017 was impacted by this tax benefit relative to the pre-tax income for the three months ended June 30, 2017. Our effective income tax rate was 24.5% and 12.5% for the six months ended June 30, 2018 and 2017, respectively. The increase in income tax expense of $15,973 was primarily the result of an increase in pre-tax income for the six months ended June 30, 2018 and additional expense of $1,940 related to nondeductible transaction-related expenses. In addition, a valuation allowance of $191 was recorded to reflect the portion of the deferred tax asset on state tax credits that is more likely than not to be realized offset by a $3,877 tax benefit related to stock option exercises and vesting of restricted stock units. The impact of these items relative to the pre-tax income for the six months ended June 30, 2018 resulted in the increase to the effective tax rate. During the six months ended June 30, 2017, we recorded a $13,041 tax benefit related to stock option exercises and vesting of restricted stock units, a tax benefit of $337 related to the settlement of an uncertain tax position due to the closure of our audit with the Internal Revenue Service, as well as a tax benefit of $660 related to the filing of amended state tax returns as a result of certain tax planning. The effective tax rate for the six months ended June 30, 2017 was impacted by these tax benefits relative to the pre-tax income for the six months ended June 30, 2017. On December 22, 2017, the U.S. government enacted the Tax Act, which reduced the federal tax rate on U.S. earnings to 21%, effective January 1, 2018, and moves from a global taxation regime to a modified territorial regime. We recognized the provisional tax impacts associated with the revaluation of our net deferred tax liabilities and one-time transition tax on our unremitted foreign earnings and profits during the year ended December 31, 2017. As of June 30, 2018, we have not made any additional adjustments related to these items. Given the significant complexity of the Tax Act, anticipated guidance from the U.S. Treasury about implementing the Tax Act, and the potential for additional guidance from the SEC or the FASB related to the Tax Act, we will continue to evaluate the accounting for the tax effects related to the enactment of the Tax Act. Upon completion of our 2017 U.S. tax return, we will be able to conclude whether any further adjustments are required to our deferred tax liabilities, as well as the liability associated with the one-time mandatory tax. Any adjustments to these provisional amounts will be reported as a component of tax expense in the reporting period in which any such adjustments are determined, which will be no later than the fourth quarter of 2018. We file income taxes with the U.S. federal government and various states and foreign jurisdictions. We operate in a number of state and local jurisdictions and as such are subject to state and local income tax examinations based upon various statutes of limitations in each jurisdiction.

Earnings per Share

Earnings per Share	6 Months Ended
	Jun. 30, 2018
Earnings per Share
Earnings per Share	Note 13. Earnings per Share Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. For all periods presented, potentially dilutive outstanding shares consisted of equity incentive awards. Restricted stock issued in connection with the RowdMap Acquisition was also included in the calculation of dilutive potential common shares for each of the three and six months ended June 30, 2018. Our potential common shares consist of the incremental common shares issuable upon the exercise of stock options or vesting of RSUs and restricted stock. The dilutive effect of outstanding equity incentive awards is reflected in diluted earnings per share by application of the treasury stock method. For all periods presented, all outstanding common stock consisted of a single class. Basic and diluted earnings per share are computed as follows: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Net income available to common stockholders $ 16,575 $ 21,088 $ 70,502 $ 48,063 Weighted average outstanding shares of common stock 93,077,095 92,017,662 92,823,977 91,580,438 Dilutive effect of stock-based awards and restricted stock 2,628,803 3,237,257 2,753,912 3,510,428 Adjusted weighted average outstanding and assumed conversions for diluted EPS 95,705,898 95,254,919 95,577,889 95,090,866 Earnings per share: Basic $ 0.18 $ 0.23 $ 0.76 $ 0.52 Diluted 0.17 0.22 0.74 0.51 Employee stock options, RSUs and restricted stock that were excluded from the calculation of diluted earnings per share because their effect is anti‑dilutive for the periods presented were as follows: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Employee stock-based awards and restricted stock 1,086,664 572,623 999,705 467,677 Performance-based restricted stock of 32,160 shares were not included in the calculation of diluted earnings per share for each of the three and six months ended June 30, 2018 as the vesting conditions were not probable of occurring.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2018
Stock-Based Compensation
Stock-Based Compensation	N ote 14. S tock ‑B ased C ompensation S tock O ptions T he following is a summary of stock option activity under the Equity Plans : Weighted Weighted Average Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value Options Per Share (Years) (in thousands) Outstanding at December 31, 2017 4,574,607 $ 13.89 6.65 $ 85,138 Granted 601,597 34.70 Forfeited (165,427) 19.90 Exercised (894,119) 10.97 Expired (481) 34.39 Outstanding at June 30, 2018 4,116,177 $ 17.33 6.59 $ 110,332 Vested and exercisable at June 30, 2018 2,412,227 $ 11.59 5.47 $ 78,499 A ggregate intrinsic value represents the difference between our estimated fair value of common stock and the exercise price of outstanding in‑the‑money options . T he fair value per share of common stock was $44.13 as of June 30, 2018 based upon the closing price of our common stock on the NYSE . T he total intrinsic value of stock options exercised was $7,232 and $8,409 for the three months ended June 30, 2018 and 2017, respectively, and $21,896 and $41,891 for the six months ended June 30, 2018 and 2017, respectively. R estricted S tock U nits T he following is a summary of RSU activity under the 2016 Plan: Weighted Average Grant Date Fair Value Number of Awards Per Share Nonvested at December 31, 2017 379,274 $ 33.56 Granted 471,355 34.65 Forfeited (34,237) 34.98 Vested and converted to shares (81,279) 34.38 Nonvested at June 30, 2018 735,113 $ 34.09 Expected to vest at June 30, 2018 735,113 $ 34.09 E mployee S tock P urchase P lan W e have an ESPP, which became effective January 1, 2017, for U.S. and non-U.S. employees , both of which have a series of six month offering periods, with a new offering period beginning on the first day of J anuary and J uly each year . T he ESPP was adopted by our Board of Directors in August 2016 and approved by shareholders in M ay 2017. E mployees may contribute up to 10% of their pay towards the purchase of common stock via payroll deductions to a maximum of $10 per year, or $5 per offering period . P urchase dates occur on the last business day of J une and D ecember of each year and shares are purchased at a 10% discount off the closing price on the NYSE on the date of purchase. Employees must hold the shares purchased for a minimum of 90 days. The ESPP had 1,260,000 shares of our common stock initially reserved for issuance upon its inception. The reserve automatically increases each January by an amount equal to the lesser of 1,260,000 or approximately 1.5% of total common shares outstanding on the first day of January. A summary of ESPP share reserve activity for the six months ended June 30, 2018 is as follows: Shares Weighted Average Price Available for future purchases, beginning of period 1,197,306 Shares reserved for issuance 1,260,000 Common stock purchased (22,066) $ 39.72 Available for future purchases, end of period 2,435,240 S tock C ompensation E xpense W e used the weighted average assumptions to estimate the fair value of stock options granted for the periods presented as follows: Six Months Ended June 30, Expected term (years) 6.25 Expected volatility 40.00 % Expected dividend yield 0.00 % Weighted average risk-free interest rate 2.56 % Weighted average grant date fair value $ 14.99 Total fair market value related to the restricted stock issued in connection with the RowdMap Acquisition is $31,785 based on the closing price of our common stock on the date of grant. For the time-based shares, stock-based compensation expense is being recorded ratably over the three year vesting period. For the performance-based shares, stock-based compensation expense will be recorded over the one year vesting period to the extent it is probable the performance criteria will be achieved. We recorded approximately $4,061 and $8,465 in stock-based compensation expense for the three and six months ended June 30, 2018, respectively, related to the performance awards that we estimate are probable of achieving the performance criteria. We recorded total stock‑based compensation expense of $8,741 and $2,455 for the three months ended June 30, 2018 and 2017, respectively, and $17,387 and $4,538 for the six months ended June 30, 2018 and 2017, respectively. A s of June 30, 2018, we had total unrecognized compensation cost related to 3,173,644 unvested service-based awards of $50,525 which we expect to recognize over the next 2.4 years.

Segment Information

Segment Information	6 Months Ended
	Jun. 30, 2018
Segment Information
Segment Information	Note 15. Segment Information Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by our Chief Operating Decision Maker in deciding how to allocate resources and in assessing financial performance. We conduct our business through two reportable business segments: Healthcare and Global Retail and Other. We evaluate the performance of each segment based on segment net revenue and segment operating income. Operating income is calculated as net revenue less operating expenses and is not affected by other expense (income) or by income taxes. Indirect costs are generally allocated to the segments based on the segments’ proportionate share of revenue and expenses directly related to the operation of the segment. We do not allocate interest expense, other non-operating (income) expense or the provision for income taxes, since these items are not considered in evaluating the segment’s overall operating performance. Our Chief Operating Decision Maker does not receive or utilize asset information to evaluate performance of operating segments. Accordingly, asset related information has not been presented. Refer to Note 4 for operating segment net revenue by product type. Our operating segment results for the periods presented were as follows: Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 (unaudited) (unaudited) Net Revenue Healthcare $ 161,705 $ 151,559 $ 362,076 $ 291,362 Global Retail and Other 15,748 16,052 34,411 36,382 Consolidated net revenue $ 177,453 $ 167,611 $ 396,487 $ 327,744 Operating Income Healthcare $ 32,090 $ 38,689 $ 106,864 $ 69,850 Global Retail and Other 1,307 1,307 5,204 4,228 Consolidated operating income $ 33,397 $ 39,996 $ 112,068 $ 74,078

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation Our accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. These consolidated financial statements are unaudited and have been prepared by us following the rules and regulations of the SEC. In our opinion they reflect all adjustments, including normal recurring items, that are necessary to present fairly the results of interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for other interim periods or the entire fiscal year. Certain prior year amounts have been reclassified to conform to the current year presentation.
Restricted Cash	Restricted Cash In connection with providing services to certain clients, we maintain a series of lockbox accounts with certain financial institutions. These lockbox accounts exist to receive funds we collect on behalf of our clients resulting from services provided. When client funds are received and deposited into the lockbox accounts, we record a corresponding customer deposit liability. These funds are included as both restricted cash in current assets and customer deposits in current liabilities on our Consolidated Balance Sheets and are included in beginning and ending cash, cash equivalents and restricted cash on our Consolidated Statements of Cash Flows. The following table reconciles cash, cash equivalents and restricted cash per the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets. June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 Cash and cash equivalents $ $ $ $ Restricted cash Customer deposits (12,031) (11,383) (8,548) (9,103) Total cash, cash equivalents and restricted cash $ $ $ $
Recently Issued Accounting Standards	Recently Issued Accounting Standards In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. We early adopted the provisions of ASU 2018-02 during the first quarter 2018 and as a result, we reclassified $550 from accumulated other comprehensive loss to retained earnings in the Consolidated Balance Sheets. In November 2016, the FASB issued ASU 2016-18, Restricted Cash (“ASU 2016-18”), which requires that restricted cash be included with cash and cash equivalents when reconciling the beginning and end of period total amounts shown on the statement of cash flows. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. We retrospectively adopted the provisions of ASU 2016-18 effective January 1, 2018. This guidance did not have a significant impact on our consolidated financial statements. Refer to “Restricted Cash” above for further information. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which changes the accounting recognition, measurement and disclosure for leases in order to increase transparency. ASU 2016-02 requires lease assets and liabilities to be recognized on the balance sheet and key information about leasing arrangements to be disclosed. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We have formed an internal team to evaluate and quantify the impact of this new lease guidance. As of the date of this filing, we are in process of completing our review of lease contracts and quantifying the impact under the new guidance. We are also in process of evaluating changes required to our business processes, systems and controls to support recognition and disclosure of leases. We are currently planning to elect the package of practical expedients which allows a company to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. We will provide additional information about the impact of this new guidance in future filings. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), which supersedes existing revenue recognition guidance and provides clarification of principles for recognizing revenue from contracts with customers. ASC 606 sets forth a five-step model for determining when and how revenue is recognized. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Additional disclosures will be required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The two permitted transition methods under ASC 606 are the full retrospective method, in which case the new guidance would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of the initial application. The guidance is effective for public companies with annual periods beginning after December 15, 2017, including interim periods within that reporting period. We adopted the provisions of ASC 606 and related amendments as of January 1, 2018 using the modified retrospective method. The adoption of ASC 606 did not result in any significant changes to the timing of revenue recognition in prior, current or future periods therefore there was no cumulative adjustment as a result of adoption. Refer to Note 4 for more information on revenue recognition.

Summary of Significant Accoun22

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Reconciliation of cash, cash equivalents and restricted cash	June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 Cash and cash equivalents $ $ $ $ Restricted cash Customer deposits (12,031) (11,383) (8,548) (9,103) Total cash, cash equivalents and restricted cash $ $ $ $

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2018
Revenue Recognition
Schedule of disaggregation of revenue	Three Months Ended June 30, Six Months Ended June 30, 2018 % 2017 % 2018 % 2017 % (unaudited) (unaudited) Healthcare Retrospective claims accuracy $ 93,529 52.7 $ 86,627 51.7 $ 227,452 57.4 $ 164,143 50.1 Prospective claims accuracy 62,745 35.4 62,020 37.0 121,030 30.5 121,737 37.1 Other 5,431 3.0 2,912 1.7 13,594 3.4 5,482 1.7 Total Healthcare 161,705 91.1 151,559 90.4 362,076 91.3 291,362 88.9 Global Retail and Other Retrospective claims accuracy 15,748 8.9 15,385 9.2 34,411 8.7 35,059 10.7 Other — — 667 0.4 — — 1,323 0.4 Total Global Retail and Other 15,748 8.9 16,052 9.6 34,411 8.7 36,382 11.1 Consolidated net revenue $ 177,453 100.0 $ 167,611 100.0 $ 396,487 100.0 $ 327,744 100.0
Schedule of estimated liability for refunds and appeals	Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Balance at beginning of period Estimated allowance for refunds and appeals $ 43,690 $ 35,518 $ 35,434 $ 41,020 Estimated liability for refunds and appeals 9,367 61,766 61,607 62,539 Total balance at beginning of period 53,057 97,284 97,041 103,559 Provision 29,223 23,857 61,816 42,933 Refunds settled with client (32,919) (27,698) (61,672) (49,740) Refunds recovered (814) (3,160) (2,082) (6,469) Original Medicare RAC contract release of liability (600) - (47,156) - Total balance at end of period $ 47,947 $ 90,283 $ 47,947 $ 90,283 Less: estimated allowance for refunds and appeals 43,062 32,648 43,062 32,648 Estimated liability for refunds and appeals $ 4,885 $ 57,635 $ 4,885 $ 57,635

RowdMap Acquisition (Tables)

RowdMap Acquisition (Tables)	6 Months Ended
	Jun. 30, 2018
RowdMap Acquisition
Schedule of estimated fair values of the assets acquired and liabilities assumed	July 14, 2017 Cash $ 4,107 Accounts receivable 2,526 Prepaid expenses and other assets 1,212 Other long-term assets 12 Property and equipment 263 Intangible assets 19,510 Total identifiable assets acquired 27,630 Accounts payable and accrued liabilities 4,491 Deferred tax liabilities 3,882 Total liabilities assumed 8,373 Net identifiable assets acquired 19,257 Goodwill 54,867 Net assets acquired $ 74,124

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2018
Property and Equipment
Schedule of property and equipment by major asset class	June 30, December 31, 2018 2017 Computer equipment $ 48,223 $ 46,731 Software 74,647 67,511 Furniture and fixtures 12,776 9,199 Leasehold improvements 11,094 5,256 Projects in progress 7,445 10,295 Property and equipment, gross $ 154,185 $ 138,992 Less: accumulated depreciation and amortization 71,636 61,652 Property and equipment, net $ 82,549 $ 77,340

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2018
Intangible Assets
Intangible asset balances by major asset class	Weighted Gross Net Average Carrying Accumulated Carrying Amortization Amount Amortization Impairment Amount Period June 30, 2018: Customer relationships $ 650,903 $ 216,608 $ — $ 434,295 13.5 years Acquired software 54,210 29,482 — 24,728 6.8 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 709,313 $ 246,090 $ — $ 463,223 13.0 years December 31, 2017: Customer relationships $ 650,954 $ 190,572 $ 1,322 $ 459,060 13.5 years Acquired software 54,210 25,430 — 28,780 6.8 years Connolly trademark 4,200 — — 4,200 indefinite-lived Total $ 709,364 $ 216,002 $ 1,322 $ 492,040 13.0 years
Schedule of intangible asset amortization expense	Remainder of 2018 $ 28,791 2019 57,583 2020 57,583 2021 53,260 2022 48,952

Goodwill (Tables)

Goodwill (Tables)	6 Months Ended
	Jun. 30, 2018
Goodwill
Schedule of changes in the carrying amount of goodwill by segment	Global Retail Healthcare and Other December 31, 2017 $ 1,202,444 $ 48,920 Measurement period adjustments 194 — Foreign currency translation — 748 June 30, 2018 $ 1,202,638 $ 49,668

Long-term Debt (Tables)

Long-term Debt (Tables)	6 Months Ended
	Jun. 30, 2018
Long-term Debt
Schedule of long-term debt	June 30, December 31, 2018 2017 First Lien Term A Loans $ 228,007 $ 234,237 First Lien Term B Loans 538,060 540,585 Revolver — — Total debt 766,067 774,822 Less: debt issuance costs 6,414 7,204 Less: current portion 21,125 18,000 Total long-term debt $ 738,528 $ 749,618

Derivative Instruments (Tables)

Derivative Instruments (Tables)	6 Months Ended
	Jun. 30, 2018
Derivative Instruments
Schedule of derivative instruments	Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Interest expense $ 644 $ 398 $ 1,256 $ 599
Schedule of fair value and location of derivative instruments	June 30, December 31, 2018 2017 Liability fair value recorded in other long-term liabilities $ 401 $ 951 Liability fair value recorded in accounts payable and accrued other expenses 836 979 Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months (2,306) (2,440)
Schedule of changes in other comprehensive income related to derivative instruments classified as cash flow hedges	Three Months Ended June 30, 2018 2017 Balance at beginning of period, April 1 $ (2,556) $ (3,396) Reclassifications in earnings, net of tax of $157 and $150, respectively 487 249 Change in fair value of derivative instrument, net of tax of $20 and $35, respectively (64) (56) Balance at end of period, June 30 $ (2,133) $ (3,203) Six Months Ended June 30, 2018 2017 Balance at beginning of period, January 1 $ (2,556) $ (3,334) Reclassifications in earnings, net of tax of $306 and $225, respectively 950 374 Change in fair value of derivative instrument, net of tax of $8 and $150, respectively 23 (243) Reclassification of stranded tax effect to retained earnings upon adoption of ASU 2018-02 (550) — Balance at end of period, June 30 $ (2,133) $ (3,203)

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2018
Fair Value Measurements
Summary of financial instruments measured at fair value	June 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: Long-term debt $ — $ — $ 766,067 $ — $ — $ 774,822 Interest rate cap agreements — 1,237 — — 1,930 — Total $ — $ 1,237 $ 766,067 $ — $ 1,930 $ 774,822

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2018
Income Taxes
Schedule of income tax (benefit) expense from continuing operations	Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Income tax expense $ 6,953 $ 7,743 $ 22,855 $ 6,882 Effective income tax rate 29.5 % 26.9 % 24.5 % 12.5 %

Earnings per Share (Tables)

Earnings per Share (Tables)	6 Months Ended
	Jun. 30, 2018
Earnings per Share
Schedule of computation of basic and diluted earnings per share	Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Net income available to common stockholders $ 16,575 $ 21,088 $ 70,502 $ 48,063 Weighted average outstanding shares of common stock 93,077,095 92,017,662 92,823,977 91,580,438 Dilutive effect of stock-based awards and restricted stock 2,628,803 3,237,257 2,753,912 3,510,428 Adjusted weighted average outstanding and assumed conversions for diluted EPS 95,705,898 95,254,919 95,577,889 95,090,866 Earnings per share: Basic $ 0.18 $ 0.23 $ 0.76 $ 0.52 Diluted 0.17 0.22 0.74 0.51
Schedule of antidilutive securities excluded from earnings per share	Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Employee stock-based awards and restricted stock 1,086,664 572,623 999,705 467,677

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2018
Stock-Based Compensation
Summary of stock options outstanding, vested and exercisable	Weighted Weighted Average Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value Options Per Share (Years) (in thousands) Outstanding at December 31, 2017 4,574,607 $ 13.89 6.65 $ 85,138 Granted 601,597 34.70 Forfeited (165,427) 19.90 Exercised (894,119) 10.97 Expired (481) 34.39 Outstanding at June 30, 2018 4,116,177 $ 17.33 6.59 $ 110,332 Vested and exercisable at June 30, 2018 2,412,227 $ 11.59 5.47 $ 78,499
Summary of restricted stock units activity	Weighted Average Grant Date Fair Value Number of Awards Per Share Nonvested at December 31, 2017 379,274 $ 33.56 Granted 471,355 34.65 Forfeited (34,237) 34.98 Vested and converted to shares (81,279) 34.38 Nonvested at June 30, 2018 735,113 $ 34.09 Expected to vest at June 30, 2018 735,113 $ 34.09
Summary of ESPP share reserve activity	Shares Weighted Average Price Available for future purchases, beginning of period 1,197,306 Shares reserved for issuance 1,260,000 Common stock purchased (22,066) $ 39.72 Available for future purchases, end of period 2,435,240
Schedule of weighted average assumptions to estimate the fair value of stock options granted	Six Months Ended June 30, Expected term (years) 6.25 Expected volatility 40.00 % Expected dividend yield 0.00 % Weighted average risk-free interest rate 2.56 % Weighted average grant date fair value $ 14.99

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jun. 30, 2018
Segment Information
Schedule of operating segment results	Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 (unaudited) (unaudited) Net Revenue Healthcare $ 161,705 $ 151,559 $ 362,076 $ 291,362 Global Retail and Other 15,748 16,052 34,411 36,382 Consolidated net revenue $ 177,453 $ 167,611 $ 396,487 $ 327,744 Operating Income Healthcare $ 32,090 $ 38,689 $ 106,864 $ 69,850 Global Retail and Other 1,307 1,307 5,204 4,228 Consolidated operating income $ 33,397 $ 39,996 $ 112,068 $ 74,078

Proposed Verscend Merger - (Det

Proposed Verscend Merger - (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 19, 2018
Business Acquisition [Line Items]
Transaction costs primarily related to professional services associated with the proposed Verscend Merger	$ 7,193,000	$ 661,000	$ 7,407,000	$ 1,392,000
Merger agreement | Verscend
Business Acquisition [Line Items]
Cash consideration per share					$ 44.75
Enterprise value					$ 4,900,000,000
Termination fee					100,000
Reverse termination fee					$ 217,500

Summary of Significant Accoun36

Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies
Cash and cash equivalents	$ 223,927	$ 165,518	$ 137,426	$ 110,635
Restricted cash	12,031	11,383	8,548	9,103
Customer deposits	(12,031)	(11,383)	(8,548)	(9,103)
Total cash, cash equivalents and restricted cash	$ 223,927	$ 165,518	$ 137,426	$ 110,635

Summary of Significant Accoun37

Summary of Significant Accounting Policies - Recently Issued Accounting Standards - ASU 2014-09 (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)
2018-02 | Early adoption
New Accounting Pronouncement, Early Adoption [Line Items]
Reclassification from AOCI	$ 550

Revenue Recognition - (Details)

Revenue Recognition - (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 177,453	$ 167,611	$ 396,487	$ 327,744
Estimated Liability for Refunds and Appeals
Total liability expected to be released	56,089		56,089
Remaining estimated liability for refunds and appeals, Medicare RAC contract	3,600		3,600
Estimated allowance for refunds and appeals at beginning of period	43,690	35,518	35,434	41,020
Estimated liability for refunds and appeals at beginning of period	9,367	61,766	61,607	62,539
Total balance at beginning of period	53,057	97,284	97,041	103,559
Provision	29,223	23,857	61,816	42,933
Refunds settled with client	(32,919)	(27,698)	(61,672)	(49,740)
Refunds recovered	(814)	(3,160)	(2,082)	(6,469)
Original Medicare RAC contract release of liability	(600)		(47,156)
Total balance at end of period	47,947	90,283	47,947	90,283
Less: estimated allowance for refunds and appeals at end of period	43,062	32,648	43,062	32,648
Estimated liability for refunds and appeals at end of period	4,885	57,635	4,885	57,635
Prepaid expenses and other current assets
Estimated Liability for Refunds and Appeals
Capitalized contract cost, current included in prepaid expenses and other current assets	473		473
Other long-term assets
Estimated Liability for Refunds and Appeals
Capitalized contract cost, noncurrent included in other long-term assets	368		368
Accrued compensation cost
Estimated Liability for Refunds and Appeals
Liability	724		724
Accounts receivable
Estimated Liability for Refunds and Appeals
Unbilled receivables	63,926		63,926		$ 62,294
Unbilled receivables arising from deferred billing	3,760		3,760		$ 4,958
Product | Total net revenue
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 177,453	$ 167,611	$ 396,487	$ 327,744
Proportionate share of total (as a percent)	100.00%	100.00%	100.00%	100.00%
Product | Total net revenue | United States
Disaggregation of Revenue [Line Items]
Proportionate share of total (as a percent)	99.00%	99.00%	99.00%	99.00%
Healthcare
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 161,705	$ 151,559	$ 362,076	$ 291,362
Healthcare | Product | Total net revenue
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 161,705	$ 151,559	$ 362,076	$ 291,362
Proportionate share of total (as a percent)	91.10%	90.40%	91.30%	88.90%
Global Retail and Other
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 15,748	$ 16,052	$ 34,411	$ 36,382
Global Retail and Other | Product | Total net revenue
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 15,748	$ 16,052	$ 34,411	$ 36,382
Proportionate share of total (as a percent)	8.90%	9.60%	8.70%	11.10%
Retrospective claims accuracy | Healthcare | Product | Total net revenue
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 93,529	$ 86,627	$ 227,452	$ 164,143
Proportionate share of total (as a percent)	52.70%	51.70%	57.40%	50.10%
Retrospective claims accuracy | Global Retail and Other | Product | Total net revenue
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 15,748	$ 15,385	$ 34,411	$ 35,059
Proportionate share of total (as a percent)	8.90%	9.20%	8.70%	10.70%
Prospective claims accuracy | Healthcare | Product | Total net revenue
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 62,745	$ 62,020	$ 121,030	$ 121,737
Proportionate share of total (as a percent)	35.40%	37.00%	30.50%	37.10%
Other | Healthcare | Product | Total net revenue
Disaggregation of Revenue [Line Items]
Consolidated net revenue	$ 5,431	$ 2,912	$ 13,594	$ 5,482
Proportionate share of total (as a percent)	3.00%	1.70%	3.40%	1.70%
Other | Global Retail and Other | Product | Total net revenue
Disaggregation of Revenue [Line Items]
Consolidated net revenue		$ 667		$ 1,323
Proportionate share of total (as a percent)		0.40%		0.40%

RowdMap Acquisition - Considera

RowdMap Acquisition - Consideration Transferred (Details) - RowdMap - USD ($) $ in Thousands	Jul. 14, 2017	Jul. 31, 2018
Consideration transferred
Cash paid	$ 74,000
Common stock | Restricted Stock
Consideration transferred
Shares issued (in shares)	768,021
Common stock | Restricted stock, performance-based
Consideration transferred
Percentage of total shares awarded	50.00%
Common stock | Restricted stock, time-based
Consideration transferred
Percentage of total shares awarded	50.00%
Percentage vesting each anniversary	33.30%
Vesting period (in years)	3 years
Subsequent Events
Consideration transferred
Issued (in shares)		350,569
Subsequent Events | Restricted Stock
Consideration transferred
Cancelled (in shares)		33,440

RowdMap Acquisition - Net Asset

RowdMap Acquisition - Net Assets Acquired (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jul. 14, 2017
Preliminary allocation of the purchase price
Goodwill	$ 1,252,306	$ 1,251,364
RowdMap
Preliminary allocation of the purchase price
Cash			$ 4,107
Accounts receivable			2,526
Prepaid expenses and other assets			1,212
Other long-term assets			12
Property and equipment			263
Intangible assets			19,510
Total identifiable assets acquired			27,630
Accounts payable and accrued liabilities			4,491
Deferred tax liabilities			3,882
Total liabilities assumed			8,373
Net identifiable assets acquired			19,257
Goodwill			54,867
Net assets acquired			$ 74,124

RowdMap Acquisition - Acquired

RowdMap Acquisition - Acquired Intangible Assets (Details) - RowdMap $ in Thousands	Jul. 14, 2017USD ($)
Finite-Lived Intangible Assets
Finite-lived intangible assets acquired	$ 19,510
Goodwill acquired, tax deductible amount	0
Acquired software
Finite-Lived Intangible Assets
Finite-lived intangible assets acquired	$ 6,310
Weighted-average useful life of acquired intangible assets	5 years
Customer relationships
Finite-Lived Intangible Assets
Finite-lived intangible assets acquired	$ 13,200
Weighted-average useful life of acquired intangible assets	5 years

RowdMap Acquisition - Other Acq

RowdMap Acquisition - Other Acquisition Related Disclosures (Details) - RowdMap - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Acquisition
Transaction costs		$ 700
Accounts payable and accrued other expenses | Former stockholders
Acquisition
Payable to related parties	$ 1,066

Property and Equipment - Balanc

Property and Equipment - Balances by Major Asset Class (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property and equipment
Property and equipment, gross	$ 154,185	$ 138,992
Less: Accumulated depreciation and amortization	71,636	61,652
Property and equipment, net	82,549	77,340
Computer equipment
Property and equipment
Property and equipment, gross	48,223	46,731
Software
Property and equipment
Property and equipment, gross	74,647	67,511
Furniture and fixtures
Property and equipment
Property and equipment, gross	12,776	9,199
Leasehold improvements
Property and equipment
Property and equipment, gross	11,094	5,256
Projects in progress
Property and equipment
Property and equipment, gross	$ 7,445	$ 10,295

Property and Equipment - Perpet

Property and Equipment - Perpetual Software License (Details) - Perpetual software license - USD ($) $ in Thousands	1 Months Ended
	Dec. 31, 2015	Dec. 31, 2017
Recorded obligation
Remaining payment period	2 years
Accounts payable and accrued other expenses
Recorded obligation
License obligation		$ 3,351

Property and Equipment - Deprec

Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Property and Equipment
Depreciation and amortization expense related to property and equipment	$ 7,200	$ 5,896	$ 14,442	$ 11,471

Intangible Assets - Intangible

Intangible Assets - Intangible Asset Balances by Major Asset Class (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Intangible assets with finite lives
Accumulated Amortization	$ 246,090	$ 216,002
Impairment		1,322
Intangible assets with indefinite lives
Total intangible assets, gross	709,313	709,364
Net carrying amount	463,223	492,040
Connolly Trademark
Intangible assets with indefinite lives
Gross Carrying Amount	4,200	4,200
Net carrying amount	$ 4,200	$ 4,200
Weighted average
Intangible assets with indefinite lives
Amortization period	13 years	13 years
Customer relationships
Intangible assets with finite lives
Gross Carrying Amount	$ 650,903	$ 650,954
Accumulated Amortization	216,608	190,572
Impairment		1,322
Net carrying amount	$ 434,295	$ 459,060
Customer relationships | Weighted average
Intangible assets with indefinite lives
Amortization period	13 years 6 months	13 years 6 months
Acquired software
Intangible assets with finite lives
Gross Carrying Amount	$ 54,210	$ 54,210
Accumulated Amortization	29,482	25,430
Net carrying amount	$ 24,728	$ 28,780
Acquired software | Weighted average
Intangible assets with indefinite lives
Amortization period	6 years 9 months 18 days	6 years 9 months 18 days

Intangible Assets - Amortizatio

Intangible Assets - Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Intangible assets, net
Amortization expense	$ 14,397	$ 15,201	$ 28,793	$ 30,400

Intangible Assets - Future Amor

Intangible Assets - Future Amortization (Details) $ in Thousands	Jun. 30, 2018USD ($)
Amortization expense for the next 5 years
Remainder of 2018	$ 28,791
2,019	57,583
2,020	57,583
2,021	53,260
2,022	$ 48,952

Goodwill - Changes in carrying

Goodwill - Changes in carrying amount (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
Changes in the carrying amount of goodwill
Beginning balance	$ 1,251,364
Ending balance	1,252,306
Healthcare
Changes in the carrying amount of goodwill
Beginning balance	1,202,444
Measurement period adjustments	194
Ending balance	1,202,638
Global Retail and Other
Changes in the carrying amount of goodwill
Beginning balance	48,920
Foreign currency translation and other	748
Ending balance	$ 49,668

Goodwill - Impairment (Details)

Goodwill - Impairment (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Goodwill
Impairment related to goodwill	$ 0	$ 0

Long-term Debt - Summary of Com

Long-term Debt - Summary of Components (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2018	Dec. 31, 2017
Long-term debt
Loss on extinguishment of debt	$ 3,183	$ 3,183
Long-term debt components
Total debt			$ 766,067	$ 774,822
Less: debt issuance costs			6,414	7,204
Less: current portion			21,125	18,000
Total long-term debt			738,528	749,618
First Lien Term A Loans | Restated Credit Agreement
Long-term debt components
Total debt			228,007	234,237
First Lien Term B Loans | First Amendment Agreement
Long-term debt
Loss on extinguishment of debt	$ 3,183	$ 3,183
First Lien Term B Loans | Restated Credit Agreement
Long-term debt components
Total debt			$ 538,060	$ 540,585

Long-term Debt - Other Covenant

Long-term Debt - Other Covenant Terms (Details) - Restated Credit Agreement - Maximum	6 Months Ended
	Jun. 30, 2018
First Lien Term A Loans
Ratio requirements
Secured Leverage Ratio covenant, through September 2018	5.50
Secured Leverage Ratio covenant, through September 2019	5.25
Secured Leverage Ratio covenant, through June 2021	5
Revolver
Ratio requirements
Secured Leverage Ratio covenant, through September 2018	5.50
Secured Leverage Ratio covenant, through September 2019	5.25
Secured Leverage Ratio covenant, through June 2021	5

Long-term Debt - Aggregate Matu

Long-term Debt - Aggregate Maturities (Details) $ in Thousands	Jun. 30, 2018USD ($)
Aggregate maturities of long term debt
Remainder of 2018	$ 9,000
2,019	24,250
2,020	30,500
2,021	183,625
2,022	$ 5,500

Derivative Instruments - Intere

Derivative Instruments - Interest Rate Cap Contracts (Details) - Interest rate cap agreements - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Interest expenses | Cash flow hedge
Cash flow hedge activity
Expense recognized	$ 644	$ 398	$ 1,256	$ 599
Designated as Hedge
Interest rate derivatives
Notional amount	$ 435,000		$ 435,000
Designated as Hedge | LIBOR
Interest rate derivatives
Interest rate cap on floating rate debt (as a percent)	3.00%		3.00%

Derivative Instruments - Quanti

Derivative Instruments - Quantitative Information Related to Fair Value (Details) - Interest rate cap agreements - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Interest rate cash flow hedges
Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months	$ (2,306)	$ (2,440)
Deferred hedge premiums paid and recorded in accumulated other comprehensive (loss) income	4,689
Expected additional payments of deferred premiums	1,705
Designated as Hedge | Other long-term liabilities
Interest rate cash flow hedges
Derivative liability	401	951
Designated as Hedge | Accounts payable and accrued other expenses
Interest rate cash flow hedges
Derivative liability	$ 836	$ 979

Derivative Instruments - Change

Derivative Instruments - Changes in Other Comprehensive Income Related to Cash Flow Hedges (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Changes in other comprehensive income related to derivative instruments classified as cash flow hedges
Balance at beginning of period		$ 1,101,468		$ 1,101,468
Balance at end of period	$ 1,200,899			1,200,899
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member]
Changes in other comprehensive income related to derivative instruments classified as cash flow hedges
Balance at beginning of period	(2,556)	(2,556)	$ (3,396)	(2,556)	$ (3,334)
Reclassifications in earnings, net of tax of $157 and $150 for the three months ended June 30, 2018 and 2017, and $306 and $225 for the six months ended June 30, 2018 and 2017, respectively	487		249	950	374
Change in fair value of derivative instrument, net of tax of $20 and $35 for the three months ended June 30, 2018 and 2017, and $8 and $150 for the six months ended June 30, 2018 and 2017, respectively	(64)		(56)	23	(243)
Reclassification of stranded tax effect to retained earnings upon adoption of ASU 2018-02				(550)
Balance at end of period	(2,133)	$ (2,556)	(3,203)	(2,133)	(3,203)
Other comprehensive income, tax effect
Reclassifications in earnings, tax	157		150	306	225
Change in fair value of derivative instrument, tax	$ 20		$ 35	$ 8	$ 150

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Level 2
Liabilities
Interest rate cap agreements	$ 1,237	$ 1,930
Total	1,237	1,930
Level 3
Liabilities
Long-term debt	766,067	774,822
Total	$ 766,067	$ 774,822

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	Jan. 01, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income tax provision and effective tax rate
Income tax expense		$ 6,953	$ 7,743	$ 22,855	$ 6,882
Effective income tax rate (as a percent)		29.50%	26.90%	24.50%	12.50%
Other information
Increase (decrease) in income tax expense		$ 790		$ 15,973
Tax benefit related to stock option exercises and vesting of restricted stock		1,277	$ 2,619	3,877	$ 13,041
Deferred tax asset valuation allowance		191		$ 191
Federal tax rate (as a percent)	21.00%
Decrease related to settlement with taxing authorities					337
Decrease in effective tax rate due to settlement of prior period tax positions			$ 660		$ 660
Merger agreement
Other information
Nondeductible transaction-related expenses		$ 1,940

Earnings per Share - Basic and

Earnings per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Basic and diluted earnings per share computation
Net income available to common stockholders	$ 16,575	$ 21,088	$ 70,502	$ 48,063
Weighted average outstanding shares of common stock	93,077,095	92,017,662	92,823,977	91,580,438
Dilutive effect of stock-based awards and restricted stock	2,628,803	3,237,257	2,753,912	3,510,428
Adjusted weighted average outstanding and assumed conversions for diluted EPS	95,705,898	95,254,919	95,577,889	95,090,866
Earnings per share:
Basic (in dollars per share)	$ 0.18	$ 0.23	$ 0.76	$ 0.52
Diluted (in dollars per share)	$ 0.17	$ 0.22	$ 0.74	$ 0.51

Earnings per Share - Awards Exc

Earnings per Share - Awards Excluded from Diluted Calculation (Details) - Employee stock-based awards and restricted stock - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Anti-dilutive securities and other information
Stock-based awards excluded from calculation of diluted earnings per share (in shares)	1,086,664	572,623	999,705	467,677
Restricted stock, performance-based
Anti-dilutive securities and other information
Share-based awards excluded because vesting conditions not satisfied	32,160		32,160

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Shares
Outstanding at beginning of period (in shares)			4,574,607
Granted (in shares)			601,597
Forfeited (in shares)			(165,427)
Exercised (in shares)			(894,119)
Expired (in shares)			(481)
Outstanding at end of period (in shares)	4,116,177		4,116,177		4,574,607
Vested and exercisable at end of period, exercisable (in shares)	2,412,227		2,412,227
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)			$ 13.89
Granted (in dollars per share)			34.70
Forfeited (in dollars per share)			19.90
Exercised (in dollars per share)			10.97
Expired (in dollars per share)			34.39
Outstanding at end of period (in dollars per share)	$ 17.33		17.33		$ 13.89
Vested and exercisable (in dollars per share)	$ 11.59		$ 11.59
Weighted Average Remaining Contractual Term
Outstanding			6 years 7 months 2 days		6 years 7 months 24 days
Vested and exercisable at end of period, exercisable (in years)			5 years 5 months 19 days
Aggregate Intrinsic Value
Outstanding	$ 110,332		$ 110,332		$ 85,138
Vested and exercisable at end of period, exercisable	78,499		78,499
Total intrinsic value of options exercised	$ 7,232	$ 8,409	$ 21,896	$ 41,891
Common stock
Aggregate Intrinsic Value
Fair value per share (in dollars per share)	$ 44.13		$ 44.13

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Units Vesting and Activity (Details) - 2016 Plan - Restricted stock units	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Shares
Nonvested at beginning of period (in shares) | shares	379,274
Granted (in shares) | shares	471,355
Forfeited (in shares) | shares	(34,237)
Vested and converted to shares (in shares) | shares	(81,279)
Nonvested at end of period (in shares) | shares	735,113
Expected to vest at June 30, 2018 (in shares) | shares	735,113
Weighted Average Grant Date Fair Value
Nonvested at beginning of period (in dollars per share) | $ / shares	$ 33.56
Granted (in dollars per share) | $ / shares	34.65
Forfeited (in dollars per share) | $ / shares	34.98
Vested and converted to shares (in dollars per share) | $ / shares	34.38
Nonvested at end of period (in dollars per share) | $ / shares	34.09
Expected to vest at June 30, 2018 (in dollars per share) | $ / shares	$ 34.09

Stock-Based Compensation - Empl

Stock-Based Compensation - Employee Stock Purchase Plan (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)$ / sharesshares
Weighted average
Employee Stock Purchase Plan
Price per share (in dollars per share) | $ / shares	$ 39.72
Employee Stock Purchase Plan
Employee Stock Purchase Plan
Offering period	6 months
Contribution maximum percentage of pay	10.00%
Contribution maximum amount per year | $	$ 10
Contribution maximum amount per offering period | $	$ 5
Discount applied to closing price, percentage	10.00%
Holding period (in days)	90 days
Available for future purchases, beginning of year (in shares)	1,197,306
Shares reserved for issuance	1,260,000
Common stock purchased	(22,066)
Available for future purchases, end of year (in shares)	2,435,240
Employee Stock Purchase Plan | Minimum
Employee Stock Purchase Plan
Threshold increase in number of shares reserved for issuance	1,260,000
Percentage of total common shares outstanding used as determination of threshold for increase in shares reserved for issuance	1.50%

Stock-Based Compensation - Weig

Stock-Based Compensation - Weighted Average Assumptions to Estimate Fair Value of Stock Options (Details) - Stock options - Weighted average	6 Months Ended
	Jun. 30, 2018$ / shares
Assumptions used to estimate fair value of stock options granted
Expected term (years)	6 years 3 months
Expected volatility (as a percent)	40.00%
Expected dividend yield (as a percent)	0.00%
Weighted average risk-free interest rate	2.56%
Weighted average grant date fair value (in dollars per share)	$ 14.99

Stock-Based Compensation - Expe

Stock-Based Compensation - Expense Recorded (Details) - USD ($) $ in Thousands	Jul. 14, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Stock-based compensation expense
Stock-based compensation expense		$ 8,741	$ 2,455	$ 17,387	$ 4,538
Employee stock-based awards and restricted stock
Stock-based compensation expense
Period of recognition of unrecognized compensation cost				2 years 4 months 24 days
Restricted Stock
Stock-based compensation expense
Unrecognized compensation cost		$ 50,525		$ 50,525
Stock options
Stock-based compensation expense
Unvested service-based stock options and RSU awards (in shares)		3,173,644		3,173,644
RowdMap | Restricted Stock
Stock-based compensation expense
Fair value of equity interests issued	$ 31,785
RowdMap | Restricted stock, time-based
Stock-based compensation expense
Vesting period	3 years
RowdMap | Restricted stock, performance-based
Stock-based compensation expense
Vesting period	1 year
Stock-based compensation expense		$ 4,061		$ 8,465

Segment Information - Operating

Segment Information - Operating Segment Results (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)segment	Jun. 30, 2017USD ($)
Segment information
Number of reportable segments | segment			2
Net revenue	$ 177,453	$ 167,611	$ 396,487	$ 327,744
Operating Income	33,397	39,996	112,068	74,078
Healthcare
Segment information
Net revenue	161,705	151,559	362,076	291,362
Operating Income	32,090	38,689	106,864	69,850
Global Retail and Other
Segment information
Net revenue	15,748	16,052	34,411	36,382
Operating Income	$ 1,307	$ 1,307	$ 5,204	$ 4,228