Cover page
Cover page - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-39310 | |
Entity Registrant Name | ZoomInfo Technologies Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-3037521 | |
Entity Address, Address Line One | 805 Broadway Street | |
Entity Address, Address Line Two | Suite 900 | |
Entity Address, City or Town | Vancouver | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98660 | |
City Area Code | 800 | |
Local Phone Number | 914-1220 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | ZI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 373,918,562 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001794515 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 405.9 | $ 447.1 |
Short-term investments | 34.3 | 82.2 |
Restricted cash, current | 0 | 0.2 |
Accounts receivable, net | 223.5 | 272 |
Prepaid expenses and other current assets | 72.1 | 59.6 |
Income tax receivable | 4.4 | 3.2 |
Total current assets | 740.2 | 864.3 |
Restricted cash, non-current | 8.9 | 8.9 |
Property and equipment, net | 74.6 | 65.1 |
Operating lease right-of-use assets, net | 106.8 | 80.7 |
Intangible assets, net | 319.8 | 334.6 |
Goodwill | 1,692.7 | 1,692.7 |
Deferred tax assets | 3,694.3 | 3,707.1 |
Deferred costs and other assets, net of current portion | 116.6 | 114.9 |
Total assets | 6,753.9 | 6,868.3 |
Current liabilities: | ||
Accounts payable | 18 | 34.4 |
Accrued expenses and other current liabilities | 123.1 | 113.8 |
Unearned revenue, current portion | 443 | 439.6 |
Income taxes payable | 1.5 | 2 |
Current portion of tax receivable agreements liability | 60.4 | 31.4 |
Current portion of operating lease liabilities | 12.1 | 11.2 |
Current portion of long-term debt | 6 | 6 |
Total current liabilities | 664.1 | 638.4 |
Unearned revenue, net of current portion | 1.3 | 2.3 |
Tax receivable agreements liability, net of current portion | 2,735.6 | 2,786.6 |
Operating lease liabilities, net of current portion | 115.4 | 89.9 |
Long-term debt, net of current portion | 1,225.4 | 1,226.4 |
Deferred tax liabilities | 2.1 | 1.9 |
Other long-term liabilities | 4.1 | 3.5 |
Total liabilities | 4,748 | 4,749 |
Commitments and Contingencies (Note 9) | ||
Stockholders' Equity: | ||
Common stock, par value $0.01; 3,300,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 376,156,650 and 384,830,529 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 3.7 | 3.8 |
Preferred stock, par value $0.01; 200,000,000 shares authorized as of March 31, 2024 and December 31, 2023; zero issued and outstanding as of March 31, 2024 and December 31, 2023 | 0 | 0 |
Additional paid-in capital | 1,676.3 | 1,804.9 |
Accumulated other comprehensive income | 27.5 | 27.3 |
Retained earnings | 298.4 | 283.3 |
Total stockholders' equity | 2,005.9 | 2,119.3 |
Total liabilities and stockholders' equity | $ 6,753.9 | $ 6,868.3 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 3,300,000,000 | 3,300,000,000 |
Common stock, shares issued (in shares) | 376,156,650 | 384,830,529 |
Common stock, shares outstanding (in shares) | 376,156,650 | 384,830,529 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Preferred stock, shares issued (in shares) | 0 | |
Preferred stock, shares outstanding (in shares) | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Income Statement [Abstract] | |||
Revenue | $ 310.1 | $ 300.7 | |
Cost of service: | |||
Cost of service [Extensible List] | Service [Member] | Service [Member] | |
Cost of service | [1] | $ 33.9 | $ 35 |
Amortization of acquired technology | 9.5 | 10.5 | |
Gross profit | 266.7 | 255.2 | |
Operating expenses: | |||
Sales and marketing | [1] | 99.4 | 103.2 |
Research and development | [1] | 43.7 | 42.3 |
General and administrative | [1] | 75.1 | 37.7 |
Amortization of other acquired intangibles | 5.3 | 5.6 | |
Restructuring and transaction-related expenses | 0.2 | 0.1 | |
Total operating expenses | 223.7 | 188.9 | |
Income from operations | 43 | 66.3 | |
Interest expense, net | 10.1 | 9.9 | |
Loss on debt modification and extinguishment | 0 | 2.2 | |
Other loss (income), net | 3.4 | (14) | |
Income before income taxes | 29.5 | 68.2 | |
Provision for income taxes | 14.4 | 23.7 | |
Net income | $ 15.1 | $ 44.5 | |
Net income per share of common stock: | |||
Basic (in dollars per share) | $ 0.04 | $ 0.11 | |
Diluted (in dollars per share) | $ 0.04 | $ 0.11 | |
[1] Amounts include equity-based compensation expense, as follows: Three Months Ended March 31, 2024 2023 Cost of service $ 2.5 $ 4.1 Sales and marketing 11.8 19.5 Research and development 8.8 6.9 General and administrative 8.1 7.2 Total equity-based compensation expense $ 31.2 $ 37.7 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total equity-based compensation expense | $ 31.2 | $ 37.7 |
Cost of service | ||
Total equity-based compensation expense | 2.5 | 4.1 |
Sales and marketing | ||
Total equity-based compensation expense | 11.8 | 19.5 |
Research and development | ||
Total equity-based compensation expense | 8.8 | 6.9 |
General and administrative | ||
Total equity-based compensation expense | $ 8.1 | $ 7.2 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 15.1 | $ 44.5 |
Other comprehensive income (loss), net of tax: | ||
Unrealized gain (loss) on cash flow hedges | 6.9 | (3.4) |
Realized gain on settlement of cash flow hedges | (6.7) | (5.4) |
Amortization of deferred losses related to the dedesignated Interest Rate Swap | 0.1 | 0.1 |
Other comprehensive income (loss) before tax | 0.3 | (8.7) |
Tax effect | (0.1) | 2.2 |
Other comprehensive income (loss), net of tax | 0.2 | (6.5) |
Comprehensive income | $ 15.3 | $ 38 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Total | Common Stock | Additional paid-in capital | Accumulated other comprehensive income | Retained earnings |
Beginning balance, Stockholders' Equity (in shares) at Dec. 31, 2022 | 404,083,262 | ||||
Beginning balance, Stockholders' Equity at Dec. 31, 2022 | $ 2,271.8 | $ 4 | $ 2,052.1 | $ 39.7 | $ 176 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon vesting of RSUs (in shares) | 648,570 | ||||
Shares withheld related to net share settlement and other (in shares) | (163,965) | ||||
Shares withheld related to net share settlement and other | (4.1) | (4.1) | |||
Exercise of stock options (in shares) | 11,236 | ||||
Exercise of stock options | 0.2 | 0.2 | |||
Forfeitures / cancellations (in shares) | (6,733) | ||||
Repurchase of common stock (in shares) | (1,058,291) | ||||
Repurchase of common stock | (24.3) | (24.3) | |||
Net income | 44.5 | 44.5 | |||
Other comprehensive income (loss) | (6.5) | (6.5) | |||
Equity-based compensation | 37.7 | 37.7 | |||
Ending balance, Stockholders' Equity (in shares) at Mar. 31, 2023 | 403,514,079 | ||||
Ending balance, Stockholders' Equity at Mar. 31, 2023 | $ 2,319.3 | $ 4 | 2,061.6 | 33.2 | 220.5 |
Beginning balance, Stockholders' Equity (in shares) at Dec. 31, 2023 | 384,830,529 | 384,830,529 | |||
Beginning balance, Stockholders' Equity at Dec. 31, 2023 | $ 2,119.3 | $ 3.8 | 1,804.9 | 27.3 | 283.3 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon vesting of RSUs (in shares) | 1,359,913 | ||||
Shares withheld related to net share settlement and other (in shares) | (410,537) | ||||
Shares withheld related to net share settlement and other | (7) | (7) | |||
Repurchase of common stock (in shares) | (9,623,255) | ||||
Repurchase of common stock | (154.4) | $ (0.1) | (154.3) | ||
Net income | 15.1 | 15.1 | |||
Other comprehensive income (loss) | 0.2 | 0 | 0.2 | ||
Equity-based compensation | $ 32.7 | 32.7 | |||
Ending balance, Stockholders' Equity (in shares) at Mar. 31, 2024 | 376,156,650 | 376,156,650 | |||
Ending balance, Stockholders' Equity at Mar. 31, 2024 | $ 2,005.9 | $ 3.7 | $ 1,676.3 | $ 27.5 | $ 298.4 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net income | $ 15,100,000 | $ 44,500,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 20,000,000 | 20,900,000 |
Amortization of debt discounts and issuance costs | 500,000 | 700,000 |
Amortization of deferred commissions costs | 17,400,000 | 18,800,000 |
Loss on debt modification and extinguishment | 0 | 2,200,000 |
Equity-based compensation expense | 31,200,000 | 37,700,000 |
Deferred income taxes | 13,200,000 | 27,900,000 |
Tax receivable agreement remeasurement | 9,600,000 | (10,100,000) |
Provision for bad debt expense | 9,200,000 | 6,100,000 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable, net | 39,300,000 | 1,300,000 |
Prepaid expenses and other current assets | (11,900,000) | (9,900,000) |
Deferred costs and other assets, net of current portion | (17,600,000) | (16,400,000) |
Income tax receivable | (1,200,000) | (2,300,000) |
Accounts payable | (16,900,000) | (10,300,000) |
Accrued expenses and other liabilities | 5,500,000 | (34,000,000) |
Unearned revenue | 2,500,000 | 31,500,000 |
Net cash provided by operating activities | 115,900,000 | 108,600,000 |
Investing activities: | ||
Purchases of short-term investments | 0 | (63,600,000) |
Maturities of short-term investments | 48,200,000 | 50,400,000 |
Purchases of property and equipment and other assets | (12,800,000) | (6,400,000) |
Net cash provided by (used in) investing activities | 35,400,000 | (19,600,000) |
Financing activities: | ||
Payments of deferred consideration | (700,000) | 0 |
Repayment of debt | (1,500,000) | (1,500,000) |
Payments of debt issuance and modification costs | (800,000) | (2,000,000) |
Proceeds from exercise of stock options | 0 | 200,000 |
Taxes paid related to net share settlement of equity awards | (7,100,000) | (4,100,000) |
Tax receivable agreement payments | (31,600,000) | 0 |
Repurchase of common stock | (151,000,000) | (21,900,000) |
Net cash used in financing activities | (192,700,000) | (29,300,000) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (41,400,000) | 59,700,000 |
Cash, cash equivalents, and restricted cash at beginning of period | 456,200,000 | 424,100,000 |
Cash, cash equivalents, and restricted cash at end of period | 414,800,000 | 483,800,000 |
Cash, cash equivalents, and restricted cash at end of period: | ||
Cash and cash equivalents | 405,900,000 | 474,000,000 |
Restricted cash, non-current | 8,900,000 | 9,800,000 |
Total cash, cash equivalents, and restricted cash | 414,800,000 | 483,800,000 |
Supplemental disclosures of cash flow information | ||
Interest paid in cash | 17,700,000 | 18,700,000 |
Cash paid for taxes | 3,300,000 | 1,700,000 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Property and equipment included in accounts payable and accrued expenses and other current liabilities | 2,100,000 | 800,000 |
Equity-based compensation included in capitalized software | $ 1,500,000 | $ 0 |
Business, Basis of Presentation
Business, Basis of Presentation, and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 1 - Business, Basis of Presentation, and Summary of Significant Accounting Policies Business ZoomInfo Technologies Inc., through its operating subsidiaries, (the “Company”, “we”, “us”, “our”, and “ZoomInfo”) provides a go-to-market intelligence and engagement platform for sales and marketing teams. The Company’s cloud-based platform provides workflow tools with integrated, accurate, and comprehensive information on organizations and professionals to help users identify target customers and decision makers, obtain continually updated predictive lead and company scoring, monitor buying signals and other attributes of target companies, craft messages, engage via automated sales tools, and track progress through the deal cycle. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Certain information in footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) has been condensed or omitted pursuant to those rules and regulations. The financial statements included in this report should be read in conjunction with the Company’s 2023 Form 10-K. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2024 or any future period. The accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair statement of financial position as of March 31, 2024, and results of operations for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. We base these estimates on historical and anticipated results, trends, and other assumptions with respect to future events that we believe are reasonable and evaluate our estimates on an ongoing basis. Given that estimates and judgments are required, actual results may differ from our estimates and such differences could be material to our consolidated financial position and results of operations. Principles of Consolidation The consolidated financial statements include the accounts of ZoomInfo Technologies Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Revenue Recognition The Company derives revenue primarily from subscription services. Our subscription services consist of our SaaS applications and related access to our platform. Subscription contracts are generally based on the number of users that access our applications, the level of functionality that they can access, and the amount of data that a customer integrates with their systems. Our subscription contracts typically have a term of one The Company accounts for revenue contracts with customers through the following steps: (1) Identify the contract with a customer; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price; and (5) Recognize revenue when or as the Company satisfies a performance obligation. We recognize revenue for subscription contracts on a ratable basis over the contract term based on the number of calendar days in each period, beginning on the date that our service is made available to the customer. Unearned revenue results from revenue amounts billed to customers in advance or cash received from customers in advance of the satisfaction of performance obligations. Determining the transaction price often involves judgment and making estimates that can have a significant impact on the timing and amount of revenue reported. At times, the Company may adjust billing under a contract based on the addition of services or other circumstances, which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and adjusts revenue recognized. Cash, Cash Equivalents, and Short-term Investments Cash equivalents consist of highly liquid marketable debt securities with remaining maturities of three months or less at the date of purchase. We classify our investments in marketable securities as “available-for-sale.” We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses, net of taxes, are included in Accumulated other comprehensive income , which is reflected as a separate component of stockholders’ equity on our Consolidated Balance Sheets. Gains and losses are determined using the specific identification method and recognized when realized on our Consolidated Statements of Operations. If we were to determine that an other-than-temporary decline in fair value has occurred, the amount of the decline related to a credit loss will be recognized in income. Fair Value Measurements The Company measures assets and liabilities at fair value based on an expected exit price, which represents the amount that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: Level 1 - Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities Level 2 - Other inputs that are directly or indirectly observable in the marketplace Level 3 - Unobservable inputs that are supported by little or no market activity, including the Company’s own assumptions in determining fair value The inputs or methodology used for valuing financial assets and liabilities are not necessarily an indication of the risk associated with investing in them. Concentrations of Credit Risk and Significant Customers Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments, and accounts receivable. The Company holds cash at major financial institutions that often exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits. The Company manages its credit risk associated with cash concentrations by concentrating its cash deposits in high-quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The carrying value of cash approximates fair value. Our investment portfolio is comprised of highly rated securities with a weighted-average maturity of less than 12 months in accordance with our investment policy which seeks to preserve principal and maintain a high degree of liquidity. Historically, the Company has not experienced any losses due to such cash concentrations. The Company does not have any off-balance-sheet credit exposure related to its customers. Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base. We do not require collateral from clients. We maintain an allowance for credit losses based upon the expected collectability of accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses, which, when realized, have been within the range of management’s expectations. No single customer accounted for 10% or more of our revenue for the three months ended March 31, 2024 and 2023, or accounted for more than 10% of accounts receivable as of March 31, 2024 and December 31, 2023. Accounts Receivable and Contract Assets Accounts receivable is comprised of invoices of revenue, net of allowance for expected credit losses, and does not bear interest. We consider receivables past due based on the contractual payment terms. Management’s evaluation of the adequacy of the allowance for credit losses considers historical collection experience, changes in customer payment profiles, the aging of receivable balances, as well as current economic conditions, all of which may impact a customer’s ability to pay. Account balances are written-off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of March 31, 2024 and December 31, 2023, the allowance for expected credit losses was not significant to the accompanying consolidated financial statements. The assessment of variable consideration to be constrained is based on estimates, and actual consideration may vary from current estimates. As adjustments to these estimates become necessary, they are reported in earnings in the periods in which they become known. Changes in variable consideration are recorded as a component of net revenue. Contract assets represent a contractual right to consideration in the future. Contract assets are generated when contractual billing schedules differ from revenue recognition timing. Property and Equipment, Net Property and equipment is stated at cost, net of accumulated depreciation and amortization. All repairs and maintenance costs are expensed as incurred. Depreciation and amortization costs are expensed on a straight-line basis over the lesser of the estimated useful life of the asset or the remainder of the lease term for leasehold improvements. Qualifying internal use software costs incurred during the application development stage, which consist primarily of internal product development costs, outside services, personnel costs (including equity-based compensation), and purchased software license costs, are capitalized and amortized over the estimated useful life of the asset. Estimated useful lives range from three Deferred Commissions Certain sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These sales commissions for initial contracts are capitalized and included in Deferred costs and other assets, net of current portion on our Consolidated Balance Sheets. Deferred sales commissions are amortized on a straight-line basis over the estimated period of benefit from the customer relationship which we have determined to be one Sales and marketing on our Consolidated Statements of Operations. Commissions payable at March 31, 2024 were $32.3 million, of which the current portion of $29.0 million was included in Accrued expenses and other current liabilities on our Consolidated Balance Sheets, and the long-term portion of $3.3 million was included in Other long-term liabilities on our Consolidated Balance Sheets. Commissions payable at December 31, 2023 were $37.7 million, of which the current portion of $34.4 million was included in Accrued expenses and other current liabilities on our Consolidated Balance Sheets, and the long-term portion of $3.3 million was included in Other long-term liabilities on our Consolidated Balance Sheets. Certain commissions are not capitalized as they do not represent incremental costs of obtaining a contract. Such commissions are expensed as incurred. Advertising and Promotional Expenses The Company expenses advertising costs as incurred. Advertising expenses of $10.4 million and $8.5 million were recorded for the three months ended March 31, 2024 and 2023, respectively. Advertising expenses are included in Sales and marketing on our Consolidated Statements of Operations. Research and Development Research and development expenses consist primarily of compensation expense for our employees, including employee benefits, certain IT program expenses, facilities and related overhead costs. We continue to focus our research and development efforts on developing new products, adding new features and services, integrating acquired technologies, and increasing functionality. Expenditures for software developed or obtained for internal use are capitalized and amortized over a four-year period on a straight-line basis. Restructuring and Transaction-Related Expenses The Company defines restructuring and transaction-related expenses as costs directly associated with restructuring, acquisition, or disposal activities. Such costs include employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records involuntary employee-related exit and disposal costs when there is a substantive plan for employee severance and related costs that are probable and estimable. For one-time termination benefits for key members of management (i.e., no substantive plan) expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated. Transaction-related bonuses and related employee retention costs are recognized over the relevant service period. Contract termination fees and penalties and other exit and disposal costs are generally recorded when incurred. Business Combinations We allocate purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The purchase price is determined based on the fair value of the assets transferred, liabilities assumed and equity interests issued, after considering any transactions that are separate from the business combination. The fair value of equity issued as part of a business combination is determined based on grant date stock price of the Company. The excess of fair value of purchase consideration over the fair values of the identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets and contingent liabilities. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer bases, acquired technology and acquired trade names, useful lives, royalty rates, and discount rates. The estimates are inherently uncertain and subject to revision as additional information is obtained during the measurement period for an acquisition, which may last up to one year from the acquisition date. During the measurement period, we may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, with a corresponding offset to goodwill. After the conclusion of the measurement period or the final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to earnings. In addition, uncertain tax positions and tax-related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We re-evaluate these items based upon the facts and circumstances that existed as of the acquisition date, with any revisions to our preliminary estimates being recorded to goodwill, provided that the timing is within the measurement period. Subsequent to the measurement period, changes to uncertain tax positions and tax-related valuation allowances will be recorded to earnings. Goodwill and Acquired Intangible Assets Goodwill is calculated as the excess of the purchase consideration paid in a business combination over the fair value of the assets acquired less liabilities assumed. Goodwill is not amortized and is tested for impairment at least annually during the fourth quarter of our fiscal year or when events and circumstances indicate that the fair value of a reporting unit may be below its carrying value. The company has one reporting unit. We first assess qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount or elect to bypass such assessment. If it is determined that it is more likely than not that the fair value of the reporting unit is less than its carrying value, or we elect to bypass the qualitative assessment, we perform a quantitative test by determining the fair value of the reporting unit. If the carrying value of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference. Acquired technology, customer relationships, trade names or brand portfolios, and other intangible assets are related to historical acquisitions (refer to Note 5 - Goodwill and Acquired Intangible Assets). Acquired intangible assets are amortized on a straight-line basis over the estimated period over which we expect to realize economic value related to the intangible asset. The amortization periods range from 2 years to 15 years. Any costs incurred to renew or extend the life of an intangible or long-lived asset are reviewed for capitalization. Indefinite-lived intangible assets consist of brand portfolios acquired from Pre-Acquisition ZI and represent costs paid to legally register phrases and graphic designs that identify and distinguish products sold by the Company. Indefinite-lived intangible assets are not subject to amortization. Instead, they are subject to an annual assessment for potential impairment, or more frequently upon the occurrence of a triggering event when circumstances indicate that the book value is greater than its fair value. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than the carrying value as a basis to determine whether further impairment testing is necessary. The Company conducts its impairment assessment during the fourth quarter of each fiscal year. No impairment charges relating to acquired goodwill or indefinite lived intangible assets were recorded for the three month periods ended March 31, 2024 and 2023. Impairment of Long-lived Assets Long-lived assets, such as property and equipment, acquired intangible assets, and right-of-use assets, are reviewed for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset or group of assets. If the carrying amount of the asset exceeds the estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated future cash flows of the asset. The estimated future cash flows associated with the right-of-use assets under Accounting Standards Codification (“ASC”) 842 were developed by incorporating current market data and forecasts provided by reputable external real estate brokers and data sources. These projections consider prevailing rental rates, anticipated lease renewals, expected vacancy periods, and other relevant market factors that contribute to the estimation of recoverable cash flows for the impaired office spaces we do not intend to occupy. No impairment charges were recorded for the three month periods ended March 31, 2024 and 2023. Long-lived Assets Long-lived assets by geographical region are based on the location of the legal entity that owns the assets, which includes property and equipment, net and operating lease right-of-use assets, net. As of March 31, 2024, long-lived assets held in the United States and Israel were $151.5 million and $24.1 million, respectively, representing approximately 97% of the consolidated total. As of December 31, 2023, long-lived assets held in the United States and Israel were $120.2 million and $20.2 million, respectively, representing approximately 96% of the consolidated total. Leases We determine if an arrangement is or contains a lease at contract inception. For these arrangements, primarily those related to our data center arrangements, there is judgment in evaluating if the arrangement involves an identified asset that is physically distinct or whether we have the right to substantially all of the capacity of an identified asset that is not physically distinct. In arrangements that involve an identified asset, there is also judgment in evaluating if we have the right to direct the use of that asset. We do not have any finance leases. Operating leases are recorded on our Consolidated Balance Sheets. Right-of-use assets and lease liabilities are measured at the lease commencement date based on the present value of the fixed minimum remaining lease payments over the lease term, determined using the discount rate for the lease at the commencement date. Because the rates implicit in our leases are not readily determinable, we use our incremental borrowing rate as the discount rate for each respective lease, which approximates the interest rate at which we could borrow on a collateralized basis with similar terms and payments and in similar economic environments. Some leases include options to extend or options to terminate the lease prior to the stated lease expiration. Optional periods to extend a lease, including by not exercising a termination option, are included in the lease term when it is reasonably certain that the option will be exercised (or not exercised in the case of termination options). Operating lease expense is recognized on a straight-line basis over the lease term. We account for lease and non-lease components, principally common area maintenance and related taxes for our facilities leases, as a single lease component. Short-term leases, defined as leases having an original lease term less than or equal to one year, are excluded from our right-of-use assets and lease liabilities. Derivative Instruments and Hedging Activities FASB’s ASC 815—Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives as either assets or liabilities on our Consolidated Balance Sheets and measures them at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. Unearned Revenue Unearned revenue consists of customer payments and billings in advance of revenue being recognized from our subscription services. Unearned revenue that is anticipated to be recognized within the next 12 months is recorded as Unearned revenue, current portion and the remaining portion is included in Unearned revenue, net of current portion on our Consolidated Balance Sheets. Debt Issuance Costs Costs incurred in connection with the issuance of long-term debt are deferred and amortized as interest expense over the terms of the related debt using the effective interest method for term debt and on a straight-line basis for revolving debt. Debt issuance costs are generally presented on our Consolidated Balance Sheets as a direct deduction from the carrying amount of the outstanding borrowings, consistent with debt discounts. However, the Company classifies the debt issuance costs related to its first lien revolving credit facility within Deferred costs and other assets, net of current portion on our Consolidated Balance Sheets regardless of whether the Company has any outstanding borrowings on our first lien revolving credit facility. Upon a refinancing or amendment, the Company evaluates the modified debt instrument in accordance with ASC 470-50-40-10. When the present value of the cash flows under the modified debt instrument has changed by greater than 10 percent from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounts for the amendment as a debt extinguishment and all previously-capitalized debt issuance costs are expensed and included in Loss on debt modification and extinguishment . If the change in the present value of cash flows is less than 10 percent, any previously-capitalized debt issuance costs are amortized as interest expense over the term of the new debt instrument. The Company performs assessments of debt modifications at a lender-specific level for all syndicated financing arrangements. Tax Receivable Agreements In connection with our initial public offering, we entered into two Tax Receivable Agreements ("TRA" or “TRAs”) with certain non-controlling interest owners (the “TRA Holders”). The TRAs generally provide for payment by the Company to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes or is deemed to realize in certain circumstances. The Company will retain the benefit of the remaining 15% of these net cash savings. We account for amounts payable under the TRA in accordance with ASC Topic 450, Contingencies . Amounts payable under the TRA are accrued by a charge to income when it is probable that a liability has been incurred and the amount is estimable. TRA related liabilities are classified as current or noncurrent based on the expected date of payment and are included on our Consolidated Balance Sheets under the captions Current portion of tax receivable agreements liability and Tax receivable agreements liability, net of current portion, respectively. Subsequent changes to the measurement of the TRA liability are recognized on our Consolidated Statements of Operations as a component of Other loss (income), net . Refer to Note 13 - Tax Receivable Agreements for further details on the TRA liability. Income Taxes The Company recognizes deferred tax assets and liabilities based on temporary differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax law is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. The need for valuation allowances is regularly evaluated for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies and results of recent operations. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, solely based on its technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits within Provision for income taxes on the Consolidated Statements of Operations. Equity-Based Compensation Expense The Company periodically grants incentive awards to employees and non-employees, which generally vest over periods of up to four years. Incentive awards may be in the form of various equity-based awards such as restricted stock and restricted stock units, and common stock options. Compensation expense for incentive awards is measured at the estimated fair value of the incentive units and is included as compensation expense over the vesting period during which an employee provides service in exchange for the award. Compensation expense for performance-based restricted stock units is measured at the estimated fair value of the units and is recognized using the accelerated attribution method over the service period when it is probable that the performance condition will be satisfied. The Company uses a Black-Scholes option pricing model to determine the fair value of stock options and profits interests, as profits interests have certain economic similarities to options. The Black-Scholes option pricing model includes various assumptions, including the expected term of incentive units, the expected volatility, and the expected risk-free interest rate. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside the control of the Company. As a result, if other assumptions are used, compensation cost could differ. Compensation expense related to the Company’s Employee Stock Purchase Plan is measured at the estimated fair value using the Black-Scholes option pricing model using the estimated number of awards as of the beginning of the offering period. The Company measures employee, non-employee, and board of director equity-based compensation on the grant date fair value basis. Equity-based compensation expense is recognized over the requisite service period of the awards. For equity awards that have a performance condition, the Company recognizes compensation expense based on its assessment of the probability that the performance condition will be achieved. The Company has elected to account for forfeitures as they occur. The Company classifies equity-based compensation expense on our Consolidated Statements of Operations in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. Share Repurchase Program In March 2023, the Board authorized a program to repurchase the Company’s common stock (the “Share Repurchase Program”). The total authorization in 2023 and |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Note 2 - Revenue from Contracts with Customers Revenue comprised the following service offerings: Three Months Ended March 31, (in millions) 2024 2023 Subscription $ 306.8 $ 297.4 Usage-based 2.3 2.4 Other 1.0 0.9 Total revenue $ 310.1 $ 300.7 Go-To-Market business intelligence tools are subscription services that allow customers access to our SaaS tools to support sales and marketing processes, which include data, analytics, and insights to provide accurate and comprehensive intelligence on organizations and professionals. Our customers use our platform to identify target customers and decision makers, obtain continually updated predictive lead and company scoring, monitor buying signals and other attributes of target companies, craft messages, engage via automated sales tools, and track progress through the deal cycle. Usage-based revenue is comprised largely of email verification and facilitation of online advertisements, which are charged to our customers on a per unit basis based on their usage. We regularly observe that customers integrate our usage-based services into their internal workflows and use our services on an ongoing basis. We recognize usage-based revenue at the point in time the services are consumed by the customer, thereby satisfying our performance obligation. Other revenue is comprised largely of implementation and professional services fees. We recognize other revenue as services are delivered. Of the total revenue recognized in the three months ended March 31, 2024, $245.2 million was included in the unearned revenue balance as of December 31, 2023. Of the total revenue recognized in the three months ended March 31, 2023, $213.3 million was included in the unearned revenue balance as of December 31, 2022. Revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods was not material. Revenues derived from customers and partners located outside the United States, as determined based on the address provided by our customers and partners, accounted for approximately 12% and 13% of our total revenues for the three months ended March 31, 2024 and 2023, respectively. Contracts denominated in currencies other than U.S. Dollar were not material for the three months ended March 31, 2024 and 2023. Contract Assets and Unearned Revenue The Company’s standard billing terms typically require payment at the beginning of each annual, semi-annual, or quarterly period. Subscription revenue is generally recognized ratably over the contract term starting with when our service is made available to the customer. Usage-based revenue is recognized in the period services are utilized by our customers. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these services. The Company records a contract asset when revenue recognized on a contract exceeds the billings to date for that contract. Unearned revenue results from cash received or amounts billed to customers in advance of revenue recognized upon the satisfaction of performance obligations. The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, dollar size, and new business timing within the quarter. The unearned revenue balance does not represent the total contract value of annual or multi-year, non-cancelable subscription agreements. As of March 31, 2024 and December 31, 2023, the Company had contract assets of $9.8 million and $5.9 million, respectively, which are recorded within Prepaid expenses and other current assets on our Consolidated Balance Sheets. As of March 31, 2024 and December 31, 2023, the Company had unearned revenue of $444.3 million and $441.9 million, respectively. ASC 606 requires the allocation of the transaction price to the remaining performance obligations of a contract. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to remaining performance obligations is influenced by several factors, including seasonality, the timing of renewals, and disparate contract terms. Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and backlog. The Company's backlog represents installment billings for periods beyond the current billing cycle. The majority of the Company’s noncurrent remaining performance obligations will be recognized in the next 13 to 36 months. The remaining performance obligations consisted of the following: (in millions) Recognized within one Noncurrent Total As of March 31, 2024 $ 837.8 $ 295.6 $ 1,133.4 As of December 31, 2023 856.4 296.5 1,152.9 |
Cash, Cash Equivalents, and Sho
Cash, Cash Equivalents, and Short-term Investments | 3 Months Ended |
Mar. 31, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Short-term Investments | Note 3 - Cash, Cash Equivalents, and Short-term Investments Cash, cash equivalents, and short-term investments consisted of the following as of March 31, 2024: (in millions) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 153.0 $ — $ — $ 153.0 Cash equivalents: Money market mutual funds 252.9 — — 252.9 Total cash and cash equivalents $ 405.9 $ — $ — $ 405.9 Short-term investments: Corporate debt securities $ 18.4 $ — $ — $ 18.4 Securities guaranteed by U.S. government 4.7 — — 4.7 Certificates of deposit 11.2 — — 11.2 Total short-term investments $ 34.3 $ — $ — $ 34.3 Total cash, cash equivalents, and short-term investments $ 440.2 $ — $ — $ 440.2 Cash, cash equivalents, and short-term investments consisted of the following as of December 31, 2023: (in millions) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 201.9 $ — $ — $ 201.9 Cash equivalents: Money market mutual funds 245.2 — — 245.2 Total cash and cash equivalents $ 447.1 $ — $ — $ 447.1 Short-term investments: Corporate debt securities $ 37.4 $ — $ — $ 37.4 Securities guaranteed by U.S. government 26.7 — — 26.7 Other government securities 18.1 — — 18.1 Total short-term investments $ 82.2 $ — $ — $ 82.2 Total cash, cash equivalents, and short-term investments $ 529.3 $ — $ — $ 529.3 Refer to Note 8 - Fair Value for further information regarding the fair value of our financial instruments. Gross unrealized losses on our available-for sale securities were immaterial at March 31, 2024 and December 31, 2023. The following table summarizes the cost and estimated fair value of the securities classified as short-term investments based on stated effective maturities as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 (in millions) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due within one year $ 34.3 $ 34.3 $ 82.2 $ 82.2 Total $ 34.3 $ 34.3 $ 82.2 $ 82.2 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4 - Property and Equipment The Company’s property and equipment consist of the following: March 31, December 31, (in millions) 2024 2023 Computer equipment $ 15.1 $ 17.1 Furniture and fixtures 3.7 3.7 Leasehold improvements 20.4 13.1 Internal use developed software 90.5 84.0 Construction in progress 11.0 7.8 Property and equipment, gross $ 140.7 $ 125.7 Less: accumulated depreciation (66.1) (60.6) Property and equipment, net $ 74.6 $ 65.1 Depreciation expense was $5.2 million and $4.8 million for the three months ended March 31, 2024 and 2023, respectively. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | Note 5 - Goodwill and Acquired Intangible Assets Intangible assets, other than goodwill, consisted of the following as of March 31, 2024 and December 31, 2023, respectively: (in millions) Gross Carrying Amount Accumulated Amortization Net Weighted Average Amortization Period in Years Intangible assets subject to amortization: Customer relationships $ 287.6 $ (117.5) $ 170.1 14.5 Acquired technology 330.8 (217.9) 112.9 6.3 Brand portfolio 11.5 (7.7) 3.8 7.8 Total intangible assets subject to amortization $ 629.9 $ (343.1) $ 286.8 Intangible assets not subject to amortization Pre-Acquisition ZI brand portfolio $ 33.0 $ — $ 33.0 Total intangible assets not subject to amortization $ 33.0 $ — $ 33.0 Total intangible assets $ 662.9 $ (343.1) $ 319.8 (in millions) Gross Carrying Amount Accumulated Amortization Net Weighted Average Amortization Period in Years Intangible assets subject to amortization: Customer relationships $ 287.6 $ (112.5) $ 175.1 14.5 Acquired technology 330.8 (208.4) 122.4 6.3 Brand portfolio 11.5 (7.4) 4.1 7.9 Total intangible assets subject to amortization $ 629.9 $ (328.3) $ 301.6 Intangible assets not subject to amortization: Pre-Acquisition ZI brand portfolio $ 33.0 $ — $ 33.0 Total intangible assets not subject to amortization $ 33.0 $ — $ 33.0 Total intangible assets $ 662.9 $ (328.3) $ 334.6 Amortization expense was $14.8 million and $16.1 million for the three months ended March 31, 2024 and 2023, respectively. Goodwill was $1,692.7 million as of March 31, 2024 and December 31, 2023. There were no events or circumstances indicating that goodwill might be impaired as of March 31, 2024. |
Financing Arrangements
Financing Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 6 - Financing Arrangements As of March 31, 2024 and December 31, 2023, the carrying values of the Company’s borrowings were as follows (in millions): Instrument Date of Issuance Maturity Date Elected Interest Rate March 31, 2024 December 31, 2023 First Lien Term Loan February 1, 2019 February 28, 2030 SOFR + 2.25% $ 589.4 $ 590.7 First Lien Revolver February 1, 2019 February 28, 2028 SOFR + 2.10% — — Senior Notes February 2, 2021 February 1, 2029 3.875% 642.0 641.7 Total Debt $ 1,231.4 $ 1,232.4 Less: current portion (6.0) (6.0) Total Long-term debt, net of current portion $ 1,225.4 $ 1,226.4 First Lien Credit Agreement Performance of obligations under the First Lien Credit Agreement is secured by substantially all the productive assets of the Company. The First Lien Credit Agreement contains a number of covenants that restrict, subject to certain exceptions, the Company’s ability to, among other things: • Incur additional indebtedness; • Create or incur liens; • Engage in certain fundamental changes, including mergers or consolidations; • Sell or transfer assets; • Pay dividends and distributions on our subsidiaries’ capital stock; • Make acquisitions, investments, loans or advances; • Engage in certain transactions with affiliates; and • Enter into negative pledge clauses and clauses restricting subsidiary distributions. If the Company draws more than $87.5 million of the revolving credit loan, the revolving credit loan is subject to a springing financial covenant pursuant to which the consolidated first lien net leverage ratio must not exceed 5.00 to 1.00. The credit agreements also contain certain customary affirmative covenants and events of default, including a change of control. If an event of default occurs, the lenders under the credit agreements will be entitled to take various actions, including the acceleration of amounts due under the credit agreements and all actions permitted to be taken by a secured creditor. First Lien Term Loan In December 2023, we entered into an amendment to our existing First Lien Credit Agreement (the "Sixth Amendment"), pursuant to which the Company completed a repricing of its First Lien Term Loan Facility, which decreased the applicable rate for Base Rate loans from 1.75% to 1.25% and SOFR based loans from 2.85% to 2.25%, and included the removal of the 0.1% credit spread adjustment. In February 2023, we entered into an amendment to our existing First Lien Credit Agreement (the “Fifth Amendment”), pursuant to which the Company completed a repricing of its First Lien Term Loan Facility, which provided for an extension of the maturity date to February 28, 2030. The first lien term debt had a variable interest rate whereby the Company can elect to use a Base Rate or SOFR plus an applicable rate. Pursuant to the Fifth Amendment, the applicable rate decreased for Base Rate loans from 2.00% to 1.75% and from 3.10% to 2.85% for SOFR based loans. Under the terms of the Fifth Amendment, the Company is obligated to make principal payments in the amount of 0.25% of the aggregate initial outstanding amount. The Company recognized an immaterial loss in connection with the repricing in the fiscal year ending December 31, 2023 within Loss on debt modification and extinguishment on the Consolidated Statements of Operations. The effective interest rate on the first lien debt was 7.81% and 7.83% as of March 31, 2024 and December 31, 2023, respectively. First Lien Revolving Credit Facility Pursuant to the Fifth Amendment, the Company also extended the maturity date of $213.0 million of our $250.0 million existing commitments of the first lien revolving credit facility to February 28, 2028. Pursuant to the Sixth Amendment, $26.0 million of the non-extended commitments were extended to February 28, 2028. With respect to the $11.0 million commitments which were not extended, the maturity date is November 2, 2025. Debt issuance costs were incurred in connection with the repricing of the revolving credit facility. These debt issuance costs are amortized into interest expense over the expected life of the arrangement. Unamortized debt issuance costs are immaterial and included in Deferred costs and other assets, net of current portion on our Consolidated Balance Sheets. The first lien revolving debt has a variable interest rate whereby the Company can elect to use a Base Rate or SOFR, plus an applicable rate. The applicable margin is 1.00% to 1.25% for Base Rate loans. The applicable margin for SOFR loans is 2.10% to 2.35%, which includes the credit spread adjustment of 0.1%, depending on the Company’s Consolidated First Lien Net Leverage Ratio. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Note 7 - Derivatives and Hedging Activities Interest Rate Hedges We are exposed to risks from changes in interest rates related to the first lien term loan (See Note 6 - Financing Arrangements). The Company uses derivative financial instruments, specifically, interest rate swap contracts, in order to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Our primary objective in holding derivatives is to reduce the volatility of cash flows associated with changes in interest rates. The Company does not enter into derivative transactions for speculative or trading purposes. As of March 31, 2024, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in millions): Interest Rate Derivatives (Level 2) Number of Instruments Notional Aggregate Principal Amount Interest Cap / Swap Rate Maturity Date Interest rate cap contract One $ 100.0 3.500 % April 30, 2024 Interest rate swap contracts Two 500.0 0.370 % January 30, 2026 The derivative interest rate swaps are designated and qualify as cash flow hedges. Consequently, the change in the estimated fair value of the effective portion of the derivative is recognized in Accumulated other comprehensive income on our Consolidated Balance Sheets and reclassified to Interest expense, net , when the underlying transaction has an impact on earnings. The Company expects to recognize approximately $22.5 million of net pre-tax gains from accumulated other comprehensive income as a reduction of interest expense in the next twelve months associated with its interest rate swap. Refer to the Company’s Consolidated Statements of Comprehensive Income for amounts reclassified from Accumulated other comprehensive income into earnings related to the Company’s Derivative Instruments designated as cash flow hedging instruments for each of the reporting periods. Foreign Currency Hedges We are exposed to changes in currency exchange rates, primarily relating to changes in the Israeli shekel. Consequently, from time to time, we may use foreign exchange forward contracts or other financial instruments to manage our exposure to foreign exchange rate movements. Our primary objective in holding derivatives is to reduce the volatility of cash flows associated with changes in foreign exchange rates. We do not enter into derivative transactions for speculative or trading purposes. The derivative foreign currency forward contracts are designated and qualify as cash flow hedges. Consequently, the change in the estimated fair value of the effective portion of the derivative is recognized in Accumulated other comprehensive income on our Consolidated Balance Sheets and reclassified to revenue or operating expenses depending on the nature of the underlying transaction, when the underlying transaction has an impact on earnings. Impacts on Cash and cash equivalents are presented as operating cash flows on our Consolidated Statements of Cash Flows in the period contracts are settled. During the three months ended March 31, 2024, the Company did not have any outstanding foreign currency derivatives designated as cash flow hedges. The following table summarizes the fair value and presentation on our Consolidated Balance Sheets for derivatives as of March 31, 2024 and December 31, 2023 (in millions): March 31, 2024 December 31, 2023 Instrument Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities Derivatives designated as hedging instruments: Interest rate cap contract (1) $ 0.1 $ — $ 0.6 $ — Interest rate swap contracts (1) 22.5 — 21.2 — Interest rate swap contracts (2) 14.3 — 15.0 — Total designated derivative fair value $ 36.9 $ — $ 36.8 $ — __________________ (1) Included in Prepaid expenses and other current assets on our Consolidated Balance Sheets. (2) Included in Deferred costs and other assets, net of current portion on our Consolidated Balance Sheets. Refer to the Company’s Consolidated Statements of Comprehensive Income for amounts reclassified from Accumulated other comprehensive income into earnings related to the Company’s Derivative Instruments designated as cash flow hedging instruments for each of the reporting periods. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note 8 - Fair Value The Company's financial instruments consist principally of cash and cash equivalents, short-term investments, prepaid expenses and other current assets, accounts receivable, and accounts payable, accrued expenses, and long-term debt. The carrying value of cash and cash equivalents, prepaid expenses and other current assets, accounts receivable, accounts payable, and accrued expenses approximate fair value, primarily due to short maturities. We classify our money market mutual funds as Level 1 within the fair value hierarchy. We classify our corporate debt securities, securities guaranteed by the U.S. government and other governmental securities as Level 2 within the fair value hierarchy. The fair value of our first term lien debt and Senior Notes was $591.8 million and $583.4 million as of March 31, 2024, and $595.5 million and $588.3 million as of December 31, 2023, respectively, based on observable market prices in less active markets and categorized as Level 2 within the fair value measurement framework. The Company has elected to use the income approach to value the interest rate derivatives using observable Level 2 market expectations at measurement date and standard valuation techniques to convert future amounts to a single present amount (discounted) reflecting current market expectations about those future amounts. Level 2 inputs for the derivative valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically futures contracts) and inputs other than quoted prices that are observable for the asset or liability (specifically SOFR cash and swap rates, implied volatility for options, caps and floors, basis swap adjustments, overnight indexed swap (“OIS”) short term rates and OIS swap rates, when applicable, and credit risk at commonly quoted intervals). Mid-market pricing is used as a practical expedient for most fair value measurements. Key inputs, including the cash rates for very short-term, futures rates and swap rates beyond the derivative maturity, are interpolated to provide spot rates at resets specified by each derivative (reset rates are then further adjusted by the basis swap, if necessary). Derivatives are discounted to present value at the measurement date at SOFR rates unless they are fully collateralized. Fully collateralized derivatives are discounted to present value at the measurement date at OIS rates (short-term OIS rates and long-term OIS swap rates). Inputs are collected from SuperDerivatives, an independent third-party derivative pricing data provider, as of the close on the last day of the period. The valuation of the interest rate swaps also take into consideration estimates of our own, as well as our counterparty’s, risk of non-performance under the contract. We estimate the value of other long-lived assets that are recorded at fair value on a non-recurring basis based on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. Real estate appraisers’ and brokers’ valuations are typically developed using one or more valuation techniques including market, income, and replacement cost approaches. Because these valuations contain unobservable inputs, we classify the measurement of fair value of long-lived assets as Level 3. The fair value of our financial assets was determined using the following inputs (in millions): Fair Value at March 31, 2024 Level 1 Level 2 Level 3 Measured on a recurring basis: Cash equivalents: Money market mutual funds $ 252.9 $ — $ — Short-term investments: Corporate debt securities $ — $ 18.4 $ — Securities guaranteed by U.S. government — 4.7 — Certificates of deposit — 11.2 — Prepaid expenses and other current assets: Interest rate cap contract $ — $ 0.1 $ — Interest rate swap contracts — 22.5 — Deferred costs and other assets, net of current portion: Interest rate swap contracts $ — $ 14.3 $ — Total $ 252.9 $ 71.2 $ — Fair Value at December 31, 2023 Level 1 Level 2 Level 3 Measured on a recurring basis: Cash equivalents: Money market mutual funds $ 245.2 $ — $ — Short-term investments: Corporate debt securities $ — $ 37.4 $ — Securities guaranteed by U.S. government — 26.7 — Other governmental securities — 18.1 — Prepaid expenses and other current assets: Interest rate cap contract $ — $ 0.6 $ — Interest rate swap contracts — 21.2 — Deferred costs and other assets, net of current portion Interest rate swap contracts $ — $ 15.0 $ — Measured on a non-recurring basis: Impaired lease-related assets $ — $ — $ 13.6 Total $ 245.2 $ 119.0 $ 13.6 There were no transfers between fair value measurements levels during the three months ended March 31, 2024. Refer to Note 3 - Cash, Cash Equivalents, and Short-term Investments for further information regarding the fair value of our financial instruments. Refer to Note 7 - Derivatives and Hedging Activities for further information regarding the fair value of our derivative instruments. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 - Commitments and Contingencies Non-cancelable purchase obligations For information related to outstanding non-cancelable purchase obligations, refer to the amount disclosed in the audited financial statements in our 2023 Form 10-K. Amounts mainly relate to third-party cloud hosting and software-as-a-service arrangements. For information regarding financing-related obligations, refer to Note 6 - Financing Arrangements. For information regarding lease-related obligations, refer to Note 11 - Leases. Contingent earnout payments In connection with the acquisition of Dogpatch Advisors, LLC in April 2022, the Company could be required to issue equity awards up to $2.6 million. As of March 31, 2024, the Company has paid $0.3 million. Refer to Note 4 - Business Combinations in our 2023 Form 10-K for additional information. Deferred acquisition-related payments In connection with the acquisition of Insent, the Company paid $2.0 million during the three months ended March 31, 2024 of which $0.7 million represents deferred consideration. Refer to Note 4 - Business Combinations in our 2023 Form 10-K for additional information. Legal matters We are subject to various legal proceedings, claims, and governmental inspections, audits, or investigations that arise in the ordinary course of our business. There are inherent uncertainties in these matters, some of which are beyond management’s control, making the ultimate outcomes difficult to predict. Moreover, management’s views and estimates related to these matters may change in the future, as new events and circumstances arise and the matters continue to develop. Based on the information known by the Company as of the date of this filing, except where otherwise indicated, it is not possible to provide an estimated amount of any loss or range of loss that may occur with respect to these matters, including without limitation the matters described below. On April 15, 2021, a putative class action lawsuit was filed against ZoomInfo Technologies LLC in the United States District Court for the Northern District of Illinois (Eastern Division) alleging ZoomInfo’s use of Illinois residents’ names in public-facing web pages violates the Illinois Right of Publicity Act, and seeking statutory, compensatory and punitive damages, costs, and attorneys’ fees. Additionally, on September 30, 2021, a putative class action lawsuit was filed against ZoomInfo Technologies Inc. in the United States District Court for the Western District of Washington alleging ZoomInfo’s use of California residents’ names in public-facing web pages violates California statutory and common law regarding the right of publicity as well as misappropriation, and seeking compensatory and punitive damages, restitution, injunctive relief, declaratory relief, costs, and attorneys’ fees. Effective March 27, 2024, ZoomInfo entered into a settlement agreement with plaintiffs in the Illinois class action that, if approved, will resolve the Illinois class action, the California class action and similar, unfiled claims in the states of Indiana and Nevada (the “Class Actions”). Under the terms of settlement, ZoomInfo has agreed to pay an amount equal to 3% of the statutory damages to each eligible class member in the states of California, Illinois, Indiana, and Nevada. The estimated total settlement amount is approximately $29.5 million, based on the estimated size of each state’s settlement class, and the total settlement amount will be finalized based on confirmatory discovery, to be completed on or before May 24, 2024. The proposed settlement is subject to final approval by the Illinois District Court and certain other conditions. If approved, the settlement would release all claims by any class member against ZoomInfo based on the alleged use of such class member’s identity, persona, name, image, likeness, or personal information for any commercial purpose without consent, including any claims alleging a violation of any right of publicity law. The settlement is not an admission of fault or wrongdoing by ZoomInfo. However, it believes that a resolution of these claims at this time is in the best interest of the Company given the costs and risks inherent in litigation. During the three months ended March 31, 2024, the Company incurred charges of $30.2 million, which includes both the estimated settlement amount and other legal costs, of which $0.2 million of legal costs has been paid. The remaining accrual of $30.0 million as of March 31, 2024 is included in Accrued expenses and other current liabilities on our Consolidated Balance Sheets. Subsequent charges to settle the Class Actions, if any, will be recorded during the second quarter of 2024 following the confirmatory discovery. The total charges that the Company expects to incur are subject to a number of assumptions, including the number of class members in each state, and actual expenses may differ materially from the estimates disclosed. On February 10, 2023, a putative class action lawsuit was filed against Datanyze, LLC, one of the Company’s subsidiaries, in the Circuit Court of Cook County, Illinois alleging Datanyze's use of Illinois residents’ names in a free trial violates the Illinois Right of Publicity Act, and seeking statutory, compensatory and punitive damages, costs, and attorneys’ fees. The case is pending in the United States District Court for the Northern District of Illinois (Eastern Division). The Company intends to vigorously defend against this lawsuit. On March 8, 2023, a putative class action lawsuit was filed against Datanyze, LLC in the United States District Court for the Northern District of Ohio alleging Datanyze's use of Ohio residents names in a free trial violates the Ohio Right of Publicity Statute, and seeking statutory damages, costs, and attorneys’ fees. On November 17, 2023, the court dismissed the plaintiffs’ claims with prejudice, and the plaintiffs have since appealed the dismissal. The Company intends to continue to vigorously defend against this lawsuit. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 10 - Earnings Per Share The following table sets forth the computation of basic and diluted net income per share of common stock : Three Months Ended March 31, (in millions, except shares and per share amounts) 2024 2023 Basic net income per share attributable to common stockholders Numerator: Net income $ 15.1 $ 44.5 Denominator: Weighted average number of shares of common stock outstanding 378,967,201 403,408,487 Basic net income per share attributable to common stockholders $ 0.04 $ 0.11 Diluted net income per share attributable to common stockholders Numerator: Allocation of undistributed earnings $ 15.1 $ 44.5 Denominator: Number of shares used in basic computation 378,967,201 403,408,487 Add: weighted-average effect of dilutive securities exchangeable for common stock: Restricted stock awards 145,210 446,843 Exercise of common stock options — 66,687 Employee Stock Purchase Plan 195,072 195,611 Weighted average shares of common stock outstanding used to calculate diluted net income per share 379,307,483 404,117,628 Diluted net income per share attributable to common stockholders $ 0.04 $ 0.11 The following weighted-average potentially dilutive securities were evaluated under the treasury stock method for potentially dilutive effects and have been excluded from diluted net income per share in the periods presented due to their anti-dilutive effect: Three Months Ended March 31, 2024 2023 Restricted stock units 15,474,470 13,267,434 Exercise of common stock options 76,261 — Total anti-dilutive securities 15,550,731 13,267,434 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Note 11 - Leases The Company has operating leases for corporate offices under non-cancelable agreements with various expiration dates. Our leases do not have significant rent escalation, holidays, concessions, material residual value guarantees, material restrictive covenants, or contingent rent provisions. Our leases include both lease (e.g., fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g., common-area or other maintenance costs) which are accounted for as a single lease component. In addition, we have elected the practical expedient to exclude short-term leases, which have an original lease term of one year or less, from our right-of-use assets and lease liabilities as well as the package of practical expedients relating to adoption of Topic 842. The Company subleases two offices. The subleases have remaining lease terms of less than seven years. Sublease income, which is recorded as a reduction of rent expense and allocated to the appropriate financial statement line items to arrive at Income from operations on our Consolidated Statements of Operations, was immaterial for the three months ended March 31, 2024 and 2023. The following are additional details related to operating leases recorded on our Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023: March 31, December 31, (in millions) 2024 2023 Assets Operating lease right-of-use assets, net $ 106.8 $ 80.7 Liabilities Current portion of operating lease liabilities $ 12.1 $ 11.2 Operating lease liabilities, net of current portion 115.4 89.9 Total lease liabilities $ 127.5 $ 101.1 Rent expense was $5.6 million and $4.0 million for the three months ended March 31, 2024 and 2023, respectively. Other information related to leases was as follows: Three Months Ended March 31, (in millions) 2024 2023 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of operating lease liabilities $ 2.9 $ 2.3 Cash received for tenant incentive reimbursement 0.3 — Lease liabilities arising from obtaining right-of-use assets From new and existing lease agreements and modifications $ 28.4 $ — As of March 31, 2024 December 31, 2023 Weighted average remaining lease term (in years) 11.7 10.3 Weighted average discount rate 6.6 % 6.2 % The table below reconciles the undiscounted future minimum lease payments under non-cancelable leases to the total lease liabilities recognized as of March 31, 2024 (in millions): Year Ending December 31, Operating Leases 2024 (excluding three months ended March 31, 2024) $ (8.5) 2025 21.5 2026 28.5 2027 19.5 2028 18.6 Thereafter 105.5 Total future minimum lease payments 185.1 Less: Effects of discounting 57.6 Total lease liabilities $ 127.5 The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced. Included in the undiscounted future minimum lease payments for the year ended December 31, 2024 are future tenant improvement allowance reimbursements related to our Ra’anana, Israel, new Vancouver, Washington, and Waltham, Massachusetts leases. Expense associated with short term leases and variable lease costs were immaterial for the three months ended March 31, 2024 and 2023. The expense related to short-term leases reasonably reflected our short-term lease commitments. Undiscounted lease payments under all leases executed and not yet commenced are anticipated to be $228.1 million, of which $157.9 million relate to leases expected to commence in the three months ended June 30, 2024 and $200.6 million relate to leases expected to commence in 2024 (excluding the three months ended March 31, 2024). These payments are not included in the tabular disclosure of undiscounted future minimum lease payments under non-cancelable leases above. Recent Leasing Activity Relating to our new corporate headquarters in Vancouver, Washington, the first and second phase of the lease commenced in March 2024. The commencement of these phases resulted in additional lease liabilities arising from obtaining right-of-use assets of $12.5 million and $15.0 million, respectively. As the commencement of the remaining subsequent phases of this lease are expected to occur between April and October 2024, the Company has not recorded operating lease right-of-use assets or lease liabilities for these phases as of March 31, 2024. |
Equity-based Compensation
Equity-based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-based Compensation | Note 12 - Equity-based Compensation 2020 Omnibus Incentive Plan - On May 26, 2020, the Board adopted the Omnibus Plan. The Omnibus Plan provides for potential grants of the following awards with respect to shares of the Company’s common stock or securities valued by reference to, or otherwise determined by reference to or based on, shares of common stock: (i) incentive stock options qualified as such under U.S. federal income tax laws; (ii) non-qualified stock options or any other form of stock options; (iii) stock appreciation rights; (iv) restricted stock; (v) restricted stock units; (vi) interests in a limited liability company that is a subsidiary of the Company, and (vii) other equity-based and cash-based incentive awards as determined by the compensation committee of the Board or any properly delegated subcommittee. The maximum aggregate number of shares of common stock that could be issued pursuant to awards under the Omnibus Plan was 18,650,000 shares (including other securities which have been issued under the plan and were converted into awards based on shares of common stock) (the “Plan Share Reserve”). The Omnibus Plan also contains a provision that will add an additional number of shares of common stock to the Plan Share Reserve on the first day of each year starting with January 1, 2021, equal to the lesser of (i) the positive difference between (x) 5% of the number of shares of common stock outstanding on the last day of the immediately preceding year, and (y) the Plan Share Reserve on the last day of the immediately preceding year, and (ii) a lower number of shares of common stock as may be determined by the Board. The Company currently has equity-based compensation awards outstanding as follows: restricted stock units, common stock options, and restricted stock. In addition, the Company recognizes equity-based compensation expense from awards granted to employees as further described below under HSKB Phantom Units. Except where indicated otherwise, the equity-based compensation awards described below are subject to time-based service requirements. For all grants issued, the service vesting condition is generally four years with 25% vesting on the one-year anniversary of the grant date of the award and 6.25% vesting quarterly thereafter; or three years with 33% vesting on the one During the year ended December 31, 2023, the Company issued PRSUs, which were recommended by the Compensation Committee of the Board and approved by the full Board. The service vesting condition for one of the issued awards is one year. Each of the remaining PRSUs will vest in annual tranches over a three-year service period. Total PRSUs earned for grants made in 2023 may vary between 0% and 200% of the PRSUs granted based on the attainment of company-specific performance targets during the related performance period and continued service. All of the PRSUs earned will be settled through the issuance of an equivalent number of shares of the Company’s common stock based on the payout level achieved. Certain additional grants have other vesting periods approved by the Compensation Committee of the Board. Restricted Stock Units Restricted stock unit activity was as follows during the periods indicated: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Unvested at beginning of period 12,636,460 $ 29.23 10,377,568 Granted 5,543,344 15.51 4,452,672 Vested (1,359,913) 38.24 (633,337) Forfeited (1,345,421) 30.19 (929,469) Unvested at end of period 15,474,470 23.44 13,267,434 Restricted Stock Restricted stock activity was as follows during the periods indicated: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Restricted Stock Weighted Average Grant Date Fair Value Restricted Stock Unvested at beginning of period 347,976 $ 34.55 858,560 Vested (225,560) 46.61 (242,680) Forfeited — — (6,733) Unvested at end of period 122,416 12.32 609,147 Common Stock Options Options activity was as follows during the period indicated: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Options Weighted Average Exercise Price Options Outstanding at beginning of period 279,553 $ 21.00 323,002 Exercised — — (11,236) Expired (6,474) 21.00 (10,095) Forfeited — — (3,106) Outstanding at end of period 273,079 21.00 298,565 Options have a maximum contractual term of ten years. The aggregate intrinsic value and weighted average remaining contractual terms of Options outstanding and Options exercisable were as follows as of March 31, 2024: March 31, 2024 Aggregate intrinsic value (in millions) (1) Options outstanding $ — Options exercisable — Weighted average remaining contractual term (in years) Options outstanding 6.0 years Options exercisable 6.0 years ________________ (1) The aggregate intrinsic value of options outstanding and exercisable is zero, as all options are out of the money. Employee Stock Purchase Plan On June 3, 2020, the Board adopted the ZoomInfo Technologies Inc. 2020 Employee Stock Purchase Plan (the “ESPP”) that allows eligible employees to purchase shares of the Company's common stock at a discounted price, through payroll deductions of up to 15% of their eligible compensation and the IRS allowable limit per calendar year. The Compensation Committee of the Board administers the ESPP, including with respect to the frequency and duration of offering periods, the maximum number of shares that an eligible employee may purchase during an offering period, and, subject to certain limitations set forth in the ESPP, the per-share purchase price. Currently, the maximum number of shares that can be purchased by an eligible employee under the ESPP is 1,500 shares per offering period and there are two six-month offering periods that begin in the second and fourth quarter of each fiscal year. The purchase price for one share of common stock under the ESPP is currently equal to 90% of the fair market value of one share of common stock on the first trading day of the offering period or the purchase date, whichever is lower. The maximum aggregate number of shares of the common stock that may be issued under the ESPP is no more than 7,500,000 shares (the “ESPP Plan Share Reserve”). The ESPP plan also contains a provision that will add an additional number of shares of common stock to the ESPP Plan Reserve on the first day of each year starting with January 1, 2021, equal to the lesser of (i) the positive difference between (x) 1% of the number of shares of common stock outstanding on the last day of the immediately preceding fiscal year, and (y) the ESPP Plan Share Reserve on the last day of the immediately preceding fiscal year, and (ii) a lower number of shares of common stock as may be determined by the Board. The fair value of the ESPP purchase was determined using the Black-Scholes option pricing model. The expected term for the purchases was based on the six-month offering period. We estimate the future stock price volatility based on the historical volatility of the Company with a lookback period commensurate with the expected term of the ESPP purchases. The risk-free rate is the implied yield available on U.S. Treasury zero-coupon bonds issued with a remaining term equal to the expected term. The Company withheld $2.1 million and $3.0 million worth of ESPP contributions for the three months ended March 31, 2024 and 2023, respectively, on behalf of participating employees through payroll deductions included in Accrued expenses and other current liabilities on our Consolidated Balance Sheets. No shares of common stock were purchased under the ESPP for the three months ended March 31, 2024 and 2023, respectively. The Company recognized $0.8 million and $1.2 million of equity-based compensation expense related to the ESPP for the three months ended March 31, 2024 and 2023, respectively. HSKB Phantom Units For information related to the HSKB Phantom Units, refer to Note 15 — Equity-based Compensation in our 2023 Form 10-K. Unamortized Equity-based Compensation As of March 31, 2024, unamortized equity-based compensation costs related to each equity-based incentive award described above is the following: (in millions) Amount Weighted Average Remaining Service Period (in years) Restricted stock units $ 314.7 2.7 Restricted stock 0.3 0.4 HSKB Phantom Units 12.4 2.6 Employee Stock Purchase Plan 0.5 0.2 Total unamortized equity-based compensation cost $ 327.9 2.7 |
Tax Receivable Agreements
Tax Receivable Agreements | 3 Months Ended |
Mar. 31, 2024 | |
Tax Receivable Agreements [Abstract] | |
Tax Receivable Agreements | Note 13 - Tax Receivable Agreements For information related to our TRAs, refer to Note 17 - Tax Receivable Agreements in our 2023 Form 10-K. As of March 31, 2024 and December 31, 2023, the Company had a liability of $2,796.0 million and $2,818.0 million, respectively, related to its projected obligations under the TRAs. This liability, or a portion thereof, becomes payable once the tax attributes under the TRAs reduce the Company’s current income tax liability which would have been otherwise due absent such tax attributes. The liability will be reduced to the extent the tax attributes are expected to expire or otherwise cannot be applied to reduce the Company’s tax liabilities. The liability is classified as current or noncurrent based on the expected date of payment and are included on our Consolidated Balance Sheets under the captions Current portion of tax receivable agreements liability and Tax receivable agreements liability, net of current portion , respectively. During the three months ended March 31, 2024, $31.6 million was paid to TRA holders pursuant to the TRA. No payment was made during the three months ended March 31, 2023. During the three months ended March 31, 2024, we recognized a TRA measurement loss of $9.6 million, principally due to revaluation for the blended state tax rate applied to the current portion of TRA liability and an increase to the cumulative liability due to TRA Holders resulting from a reduction in the management allocation percent withheld, within Other loss (income), net on our Consolidated Statements of Operations. During the three months ended March 31, 2023, we recognized a TRA measurement gain of $10.1 million, principally due to updates to tax attributes as well as movements in our blended state tax rate resulting from legislation enacted in the first quarter of 2023 and changes in the apportionment of payroll, property and sales in the states in which we operate, within Other loss (income), net on our Consolidated Statements of Operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14 - Income Taxes The Company’s provision for income taxes for the three months ended March 31, 2024 and March 31, 2023 was based on our projected annual effective tax rate for fiscal year 2024 and 2023, adjusted for specific items that are required to be recognized in the period in which they occur. The effective tax rate, inclusive of items specific to the period, for the three months ended March 31, 2024 and 2023 was 48.8% and 34.8% respectively. The Company recorded income tax expense of $14.4 million and $23.7 million for the three months ended March 31, 2024 and 2023, respectively. The Company’s projected 2024 annual effective tax rate differed from the U.S. federal statutory rate of 21.0% due to U.S. state taxes, foreign taxes and non-deductible equity compensation expense, offset by research and development credits. Further, the Company’s annual effective tax rate included period specific costs associated with non-deductible executive compensation and shortfalls in tax-deductible equity compensation compared to amounts recognized in our financial accounts. The gross liabilities for unrecognized tax benefits, which is reflected as a reduction of deferred tax assets, were $12.9 million and $12.6 million as of March 31, 2024 and December 31, 2023, respectively. No interest or penalties are accrued with respect to the unrecognized tax benefits. If the unrecognized tax benefits as of March 31, 2024 were recognized, the entire balance would impact the effective tax rate. It is not anticipated any of the unrecognized tax benefit will be recognized within the next twelve months. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 - Subsequent Events Management has evaluated subsequent events from March 31, 2024 through the date the financial statement was available to be issued and has determined there are no material subsequent events that require disclosure other than those below. Share Repurchase Program Subsequent to March 31, 2024 and up through May 3, 2024, the Company repurchased and subsequently retired approximately 3,249,791 shares of the Company’s common stock in the open market at a cost of approximately $51.5 million, for an average price of $15.86 per share, under the Share Repurchase Program described further in Note 1 - Business, Basis of Presentation, and Summary of Significant Accounting Policies to the consolidated financial statements. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 15.1 | $ 44.5 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Peter Cameron Hyzer [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 14, 2024, Peter Cameron Hyzer, the Chief Financial Officer of the Company, adopted a Rule 10b5-1 trading arrangement. The duration of the trading arrangement begins on June 13, 2024, and ends on May 15, 2025. The volume of sales will be determined, in part, based on pricing triggers outlined in the trading arrangement, with a maximum potential sale under the plan of 330,000 shares of common stock. Mr. Hyzer's trading arrangement was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and the Company’s policies regarding insider transactions. |
Name | Peter Cameron Hyzer |
Title | Chief Financial Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 14, 2024 |
Arrangement Duration | 336 days |
Aggregate Available | 330,000 |
Mark Mader [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 14, 2024, Mark Mader, a Director of the Company, adopted a Rule 10b5-1 trading arrangement. The duration of the trading arrangement begins on June 13, 2024, and ends on May 31, 2025. The volume of sales will be determined, in part, based on pricing triggers outlined in the trading arrangement, with a maximum potential sale under the plan of 3,112 shares of common stock. Mr. Mader's trading arrangement was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and the Company’s policies regarding insider transactions. |
Name | Mark Mader |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 14, 2024 |
Arrangement Duration | 336 days |
Aggregate Available | 3,112 |
Business, Basis of Presentati_2
Business, Basis of Presentation, and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Certain information in footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) has been condensed or omitted pursuant to those rules and regulations. The financial statements included in this report should be read in conjunction with the Company’s 2023 Form 10-K. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2024 or any future period. The accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair statement of financial position as of March 31, 2024, and results of operations for the three months ended March 31, 2024 and 2023, and cash flows for the three months ended March 31, 2024 and 2023. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. We base these estimates on historical and anticipated results, trends, and other assumptions with respect to future events that we believe are reasonable and evaluate our estimates on an ongoing basis. Given that estimates and judgments are required, actual results may differ from our estimates and such differences could be material to our consolidated financial position and results of operations. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of ZoomInfo Technologies Inc. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
Revenue Recognition, Deferred Commissions, Unearned Revenue | Revenue Recognition The Company derives revenue primarily from subscription services. Our subscription services consist of our SaaS applications and related access to our platform. Subscription contracts are generally based on the number of users that access our applications, the level of functionality that they can access, and the amount of data that a customer integrates with their systems. Our subscription contracts typically have a term of one The Company accounts for revenue contracts with customers through the following steps: (1) Identify the contract with a customer; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price; and (5) Recognize revenue when or as the Company satisfies a performance obligation. We recognize revenue for subscription contracts on a ratable basis over the contract term based on the number of calendar days in each period, beginning on the date that our service is made available to the customer. Unearned revenue results from revenue amounts billed to customers in advance or cash received from customers in advance of the satisfaction of performance obligations. Determining the transaction price often involves judgment and making estimates that can have a significant impact on the timing and amount of revenue reported. At times, the Company may adjust billing under a contract based on the addition of services or other circumstances, which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and adjusts revenue recognized. Deferred Commissions Certain sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These sales commissions for initial contracts are capitalized and included in Deferred costs and other assets, net of current portion on our Consolidated Balance Sheets. Deferred sales commissions are amortized on a straight-line basis over the estimated period of benefit from the customer relationship which we have determined to be one Sales and marketing on our Consolidated Statements of Operations. Commissions payable at March 31, 2024 were $32.3 million, of which the current portion of $29.0 million was included in Accrued expenses and other current liabilities on our Consolidated Balance Sheets, and the long-term portion of $3.3 million was included in Other long-term liabilities on our Consolidated Balance Sheets. Commissions payable at December 31, 2023 were $37.7 million, of which the current portion of $34.4 million was included in Accrued expenses and other current liabilities on our Consolidated Balance Sheets, and the long-term portion of $3.3 million was included in Other long-term liabilities on our Consolidated Balance Sheets. Certain commissions are not capitalized as they do not represent incremental costs of obtaining a contract. Such commissions are expensed as incurred. Unearned Revenue Unearned revenue consists of customer payments and billings in advance of revenue being recognized from our subscription services. Unearned revenue that is anticipated to be recognized within the next 12 months is recorded as Unearned revenue, current portion and the remaining portion is included in Unearned revenue, net of current portion on our Consolidated Balance Sheets. |
Cash and Cash Equivalents | Cash equivalents consist of highly liquid marketable debt securities with remaining maturities of three months or less at the date of purchase. |
Short-term Investments | We classify our investments in marketable securities as “available-for-sale.” We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses, net of taxes, are included in Accumulated other comprehensive income , which is reflected as a separate component of stockholders’ equity on our Consolidated Balance Sheets. Gains and losses are determined using the specific identification method and recognized when realized on our Consolidated Statements of Operations. If we were to determine that an other-than-temporary decline in fair value has occurred, the amount of the decline related to a credit loss will be recognized in income. |
Fair Value Measurements | Fair Value Measurements The Company measures assets and liabilities at fair value based on an expected exit price, which represents the amount that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value: Level 1 - Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities Level 2 - Other inputs that are directly or indirectly observable in the marketplace Level 3 - Unobservable inputs that are supported by little or no market activity, including the Company’s own assumptions in determining fair value The inputs or methodology used for valuing financial assets and liabilities are not necessarily an indication of the risk associated with investing in them. |
Concentrations of Credit Risk and Significant Customers | Concentrations of Credit Risk and Significant Customers |
Accounts Receivable and Contract Assets | Accounts Receivable and Contract Assets Accounts receivable is comprised of invoices of revenue, net of allowance for expected credit losses, and does not bear interest. We consider receivables past due based on the contractual payment terms. Management’s evaluation of the adequacy of the allowance for credit losses considers historical collection experience, changes in customer payment profiles, the aging of receivable balances, as well as current economic conditions, all of which may impact a customer’s ability to pay. Account balances are written-off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of March 31, 2024 and December 31, 2023, the allowance for expected credit losses was not significant to the accompanying consolidated financial statements. The assessment of variable consideration to be constrained is based on estimates, and actual consideration may vary from current estimates. As adjustments to these estimates become necessary, they are reported in earnings in the periods in which they become known. Changes in variable consideration are recorded as a component of net revenue. Contract assets represent a contractual right to consideration in the future. Contract assets are generated when contractual billing schedules differ from revenue recognition timing. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment is stated at cost, net of accumulated depreciation and amortization. All repairs and maintenance costs are expensed as incurred. Depreciation and amortization costs are expensed on a straight-line basis over the lesser of the estimated useful life of the asset or the remainder of the lease term for leasehold improvements. Qualifying internal use software costs incurred during the application development stage, which consist primarily of internal product development costs, outside services, personnel costs (including equity-based compensation), and purchased software license costs, are capitalized and amortized over the estimated useful life of the asset. Estimated useful lives range from three |
Advertising and Promotional Expenses | Advertising and Promotional Expenses The Company expenses advertising costs as incurred. Advertising expenses of $10.4 million and $8.5 million were recorded for the three months ended March 31, 2024 and 2023, respectively. Advertising expenses are included in Sales and marketing on our Consolidated Statements of Operations. |
Research and Development | Research and Development Research and development expenses consist primarily of compensation expense for our employees, including employee benefits, certain IT program expenses, facilities and related overhead costs. We continue to focus our research and development efforts on developing new products, adding new features and services, integrating acquired technologies, and increasing functionality. Expenditures for software developed or obtained for internal use are capitalized and amortized over a four-year period on a straight-line basis. |
Restructuring and Transaction-Related Expenses | Restructuring and Transaction-Related Expenses The Company defines restructuring and transaction-related expenses as costs directly associated with restructuring, acquisition, or disposal activities. Such costs include employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records involuntary employee-related exit and disposal costs when there is a substantive plan for employee severance and related costs that are probable and estimable. For one-time termination benefits for key members of management (i.e., no substantive plan) expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated. Transaction-related bonuses and related employee retention costs are recognized over the relevant service period. Contract termination fees and penalties and other exit and disposal costs are generally recorded when incurred. |
Business Combinations | Business Combinations We allocate purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The purchase price is determined based on the fair value of the assets transferred, liabilities assumed and equity interests issued, after considering any transactions that are separate from the business combination. The fair value of equity issued as part of a business combination is determined based on grant date stock price of the Company. The excess of fair value of purchase consideration over the fair values of the identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets and contingent liabilities. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer bases, acquired technology and acquired trade names, useful lives, royalty rates, and discount rates. The estimates are inherently uncertain and subject to revision as additional information is obtained during the measurement period for an acquisition, which may last up to one year from the acquisition date. During the measurement period, we may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, with a corresponding offset to goodwill. After the conclusion of the measurement period or the final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to earnings. In addition, uncertain tax positions and tax-related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We re-evaluate these items based upon the facts and circumstances that existed as of the acquisition date, with any revisions to our preliminary estimates being recorded to goodwill, provided that the timing is within the measurement period. Subsequent to the measurement period, changes to uncertain tax positions and tax-related valuation allowances will be recorded to earnings. |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill is calculated as the excess of the purchase consideration paid in a business combination over the fair value of the assets acquired less liabilities assumed. Goodwill is not amortized and is tested for impairment at least annually during the fourth quarter of our fiscal year or when events and circumstances indicate that the fair value of a reporting unit may be below its carrying value. The company has one reporting unit. We first assess qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount or elect to bypass such assessment. If it is determined that it is more likely than not that the fair value of the reporting unit is less than its carrying value, or we elect to bypass the qualitative assessment, we perform a quantitative test by determining the fair value of the reporting unit. If the carrying value of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference. Acquired technology, customer relationships, trade names or brand portfolios, and other intangible assets are related to historical acquisitions (refer to Note 5 - Goodwill and Acquired Intangible Assets). Acquired intangible assets are amortized on a straight-line basis over the estimated period over which we expect to realize economic value related to the intangible asset. The amortization periods range from 2 years to 15 years. Any costs incurred to renew or extend the life of an intangible or long-lived asset are reviewed for capitalization. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived Assets |
Leases | Leases We determine if an arrangement is or contains a lease at contract inception. For these arrangements, primarily those related to our data center arrangements, there is judgment in evaluating if the arrangement involves an identified asset that is physically distinct or whether we have the right to substantially all of the capacity of an identified asset that is not physically distinct. In arrangements that involve an identified asset, there is also judgment in evaluating if we have the right to direct the use of that asset. We do not have any finance leases. Operating leases are recorded on our Consolidated Balance Sheets. Right-of-use assets and lease liabilities are measured at the lease commencement date based on the present value of the fixed minimum remaining lease payments over the lease term, determined using the discount rate for the lease at the commencement date. Because the rates implicit in our leases are not readily determinable, we use our incremental borrowing rate as the discount rate for each respective lease, which approximates the interest rate at which we could borrow on a collateralized basis with similar terms and payments and in similar economic environments. Some leases include options to extend or options to terminate the lease prior to the stated lease expiration. Optional periods to extend a lease, including by not exercising a termination option, are included in the lease term when it is reasonably certain that the option will be exercised (or not exercised in the case of termination options). Operating lease expense is recognized on a straight-line basis over the lease term. We account for lease and non-lease components, principally common area maintenance and related taxes for our facilities leases, as a single lease component. Short-term leases, defined as leases having an original lease term less than or equal to one year, are excluded from our right-of-use assets and lease liabilities. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities FASB’s ASC 815—Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives as either assets or liabilities on our Consolidated Balance Sheets and measures them at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. |
Debt Issuance Costs | Debt Issuance Costs Costs incurred in connection with the issuance of long-term debt are deferred and amortized as interest expense over the terms of the related debt using the effective interest method for term debt and on a straight-line basis for revolving debt. Debt issuance costs are generally presented on our Consolidated Balance Sheets as a direct deduction from the carrying amount of the outstanding borrowings, consistent with debt discounts. However, the Company classifies the debt issuance costs related to its first lien revolving credit facility within Deferred costs and other assets, net of current portion on our Consolidated Balance Sheets regardless of whether the Company has any outstanding borrowings on our first lien revolving credit facility. Upon a refinancing or amendment, the Company evaluates the modified debt instrument in accordance with ASC 470-50-40-10. When the present value of the cash flows under the modified debt instrument has changed by greater than 10 percent from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounts for the amendment as a debt extinguishment and all previously-capitalized debt issuance costs are expensed and included in Loss on debt modification and extinguishment . If the change in the present value of cash flows is less than 10 percent, any previously-capitalized debt issuance costs are amortized as interest expense over the term of the new debt instrument. The Company performs assessments of debt modifications at a lender-specific level for all syndicated financing arrangements. |
Tax Receivable Agreements | Tax Receivable Agreements In connection with our initial public offering, we entered into two Tax Receivable Agreements ("TRA" or “TRAs”) with certain non-controlling interest owners (the “TRA Holders”). The TRAs generally provide for payment by the Company to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes or is deemed to realize in certain circumstances. The Company will retain the benefit of the remaining 15% of these net cash savings. We account for amounts payable under the TRA in accordance with ASC Topic 450, Contingencies . Amounts payable under the TRA are accrued by a charge to income when it is probable that a liability has been incurred and the amount is estimable. TRA related liabilities are classified as current or noncurrent based on the expected date of payment and are included on our Consolidated Balance Sheets under the captions Current portion of tax receivable agreements liability and Tax receivable agreements liability, net of current portion, respectively. Subsequent changes to the measurement of the TRA liability are recognized on our Consolidated Statements of Operations as a component of Other loss (income), net . Refer to Note 13 - Tax Receivable Agreements for further details on the TRA liability. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities based on temporary differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax law is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. The need for valuation allowances is regularly evaluated for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies and results of recent operations. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, solely based on its technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits within Provision for income taxes on the Consolidated Statements of Operations. |
Equity-Based Compensation Expense | Equity-Based Compensation Expense The Company periodically grants incentive awards to employees and non-employees, which generally vest over periods of up to four years. Incentive awards may be in the form of various equity-based awards such as restricted stock and restricted stock units, and common stock options. Compensation expense for incentive awards is measured at the estimated fair value of the incentive units and is included as compensation expense over the vesting period during which an employee provides service in exchange for the award. Compensation expense for performance-based restricted stock units is measured at the estimated fair value of the units and is recognized using the accelerated attribution method over the service period when it is probable that the performance condition will be satisfied. The Company uses a Black-Scholes option pricing model to determine the fair value of stock options and profits interests, as profits interests have certain economic similarities to options. The Black-Scholes option pricing model includes various assumptions, including the expected term of incentive units, the expected volatility, and the expected risk-free interest rate. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside the control of the Company. As a result, if other assumptions are used, compensation cost could differ. Compensation expense related to the Company’s Employee Stock Purchase Plan is measured at the estimated fair value using the Black-Scholes option pricing model using the estimated number of awards as of the beginning of the offering period. The Company measures employee, non-employee, and board of director equity-based compensation on the grant date fair value basis. Equity-based compensation expense is recognized over the requisite service period of the awards. For equity awards that have a performance condition, the Company recognizes compensation expense based on its assessment of the probability that the performance condition will be achieved. The Company has elected to account for forfeitures as they occur. The Company classifies equity-based compensation expense on our Consolidated Statements of Operations in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. |
Share Repurchase Program | Share Repurchase Program In March 2023, the Board authorized a program to repurchase the Company’s common stock (the “Share Repurchase Program”). The total authorization in 2023 and 2024 was $600.0 million and $500.0 million, respectively, of which $546.8 million remained available and authorized for repurchases as of March 31, 2024. Shares of common stock may be repurchased under the Share Repurchase Program from time to time through open market purchases, block trades, private transactions or accelerated or other structured share repurchase programs. The extent to which the Company repurchases shares of common stock, and the timing of such purchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by the Company. The Share Repurchase Program may be suspended or discontinued at any time. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The amendments in this ASU are intended to increase transparency through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This standard is effective for annual periods beginning after December 15, 2024 (i.e., a January 1, 2025 effective date), with early adoption permitted. The Company is currently evaluating the disclosure impacts of ASU 2023-09 on its consolidated financial statements as well as the impacts to its financial reporting process and related internal controls. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative . The amendments in this ASU incorporate into the FASB’s ASC certain SEC disclosure requirements that were referred to the FASB and overlap with, but require incremental information to, U.S. GAAP. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited, and applied prospectively. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from FASB’s ASC and will not become effective for any entity. The Company does not expect this ASU to have a material impact on its consolidated financial statements. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . The amendments in this ASU are intended to improve reportable segment disclosure primarily through enhanced disclosures about significant segment expenses. This standard is effective for fiscal years beginning after December 15, 2023 (i.e., a January 1, 2024 effective date), and interim periods within fiscal years beginning after December 15, 2024 (i.e., the first quarter of 2025). The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company adopted this standard beginning in 2024 and expects to provide incremental qualitative segment-related disclosures beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. However, there was no impact to the consolidated financial statements upon adoption. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Service Offering | Revenue comprised the following service offerings: Three Months Ended March 31, (in millions) 2024 2023 Subscription $ 306.8 $ 297.4 Usage-based 2.3 2.4 Other 1.0 0.9 Total revenue $ 310.1 $ 300.7 |
Schedule of Remaining Performance Obligations | The remaining performance obligations consisted of the following: (in millions) Recognized within one Noncurrent Total As of March 31, 2024 $ 837.8 $ 295.6 $ 1,133.4 As of December 31, 2023 856.4 296.5 1,152.9 |
Cash, Cash Equivalents, and S_2
Cash, Cash Equivalents, and Short-term Investments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash, cash equivalents, and short-term investments consisted of the following as of March 31, 2024: (in millions) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 153.0 $ — $ — $ 153.0 Cash equivalents: Money market mutual funds 252.9 — — 252.9 Total cash and cash equivalents $ 405.9 $ — $ — $ 405.9 Short-term investments: Corporate debt securities $ 18.4 $ — $ — $ 18.4 Securities guaranteed by U.S. government 4.7 — — 4.7 Certificates of deposit 11.2 — — 11.2 Total short-term investments $ 34.3 $ — $ — $ 34.3 Total cash, cash equivalents, and short-term investments $ 440.2 $ — $ — $ 440.2 Cash, cash equivalents, and short-term investments consisted of the following as of December 31, 2023: (in millions) Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 201.9 $ — $ — $ 201.9 Cash equivalents: Money market mutual funds 245.2 — — 245.2 Total cash and cash equivalents $ 447.1 $ — $ — $ 447.1 Short-term investments: Corporate debt securities $ 37.4 $ — $ — $ 37.4 Securities guaranteed by U.S. government 26.7 — — 26.7 Other government securities 18.1 — — 18.1 Total short-term investments $ 82.2 $ — $ — $ 82.2 Total cash, cash equivalents, and short-term investments $ 529.3 $ — $ — $ 529.3 |
Schedule of Short-term Securities | The following table summarizes the cost and estimated fair value of the securities classified as short-term investments based on stated effective maturities as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 (in millions) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due within one year $ 34.3 $ 34.3 $ 82.2 $ 82.2 Total $ 34.3 $ 34.3 $ 82.2 $ 82.2 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The Company’s property and equipment consist of the following: March 31, December 31, (in millions) 2024 2023 Computer equipment $ 15.1 $ 17.1 Furniture and fixtures 3.7 3.7 Leasehold improvements 20.4 13.1 Internal use developed software 90.5 84.0 Construction in progress 11.0 7.8 Property and equipment, gross $ 140.7 $ 125.7 Less: accumulated depreciation (66.1) (60.6) Property and equipment, net $ 74.6 $ 65.1 |
Goodwill and Acquired Intangi_2
Goodwill and Acquired Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets, other than goodwill, consisted of the following as of March 31, 2024 and December 31, 2023, respectively: (in millions) Gross Carrying Amount Accumulated Amortization Net Weighted Average Amortization Period in Years Intangible assets subject to amortization: Customer relationships $ 287.6 $ (117.5) $ 170.1 14.5 Acquired technology 330.8 (217.9) 112.9 6.3 Brand portfolio 11.5 (7.7) 3.8 7.8 Total intangible assets subject to amortization $ 629.9 $ (343.1) $ 286.8 Intangible assets not subject to amortization Pre-Acquisition ZI brand portfolio $ 33.0 $ — $ 33.0 Total intangible assets not subject to amortization $ 33.0 $ — $ 33.0 Total intangible assets $ 662.9 $ (343.1) $ 319.8 (in millions) Gross Carrying Amount Accumulated Amortization Net Weighted Average Amortization Period in Years Intangible assets subject to amortization: Customer relationships $ 287.6 $ (112.5) $ 175.1 14.5 Acquired technology 330.8 (208.4) 122.4 6.3 Brand portfolio 11.5 (7.4) 4.1 7.9 Total intangible assets subject to amortization $ 629.9 $ (328.3) $ 301.6 Intangible assets not subject to amortization: Pre-Acquisition ZI brand portfolio $ 33.0 $ — $ 33.0 Total intangible assets not subject to amortization $ 33.0 $ — $ 33.0 Total intangible assets $ 662.9 $ (328.3) $ 334.6 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values of Borrowings | As of March 31, 2024 and December 31, 2023, the carrying values of the Company’s borrowings were as follows (in millions): Instrument Date of Issuance Maturity Date Elected Interest Rate March 31, 2024 December 31, 2023 First Lien Term Loan February 1, 2019 February 28, 2030 SOFR + 2.25% $ 589.4 $ 590.7 First Lien Revolver February 1, 2019 February 28, 2028 SOFR + 2.10% — — Senior Notes February 2, 2021 February 1, 2029 3.875% 642.0 641.7 Total Debt $ 1,231.4 $ 1,232.4 Less: current portion (6.0) (6.0) Total Long-term debt, net of current portion $ 1,225.4 $ 1,226.4 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk | As of March 31, 2024, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in millions): Interest Rate Derivatives (Level 2) Number of Instruments Notional Aggregate Principal Amount Interest Cap / Swap Rate Maturity Date Interest rate cap contract One $ 100.0 3.500 % April 30, 2024 Interest rate swap contracts Two 500.0 0.370 % January 30, 2026 |
Schedule of Fair Value and Presentation in the Consolidated Balance Sheets for Derivatives | The following table summarizes the fair value and presentation on our Consolidated Balance Sheets for derivatives as of March 31, 2024 and December 31, 2023 (in millions): March 31, 2024 December 31, 2023 Instrument Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities Derivatives designated as hedging instruments: Interest rate cap contract (1) $ 0.1 $ — $ 0.6 $ — Interest rate swap contracts (1) 22.5 — 21.2 — Interest rate swap contracts (2) 14.3 — 15.0 — Total designated derivative fair value $ 36.9 $ — $ 36.8 $ — __________________ (1) Included in Prepaid expenses and other current assets on our Consolidated Balance Sheets. (2) Included in Deferred costs and other assets, net of current portion on our Consolidated Balance Sheets. |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and (Liabilities) Measured at Fair Value | The fair value of our financial assets was determined using the following inputs (in millions): Fair Value at March 31, 2024 Level 1 Level 2 Level 3 Measured on a recurring basis: Cash equivalents: Money market mutual funds $ 252.9 $ — $ — Short-term investments: Corporate debt securities $ — $ 18.4 $ — Securities guaranteed by U.S. government — 4.7 — Certificates of deposit — 11.2 — Prepaid expenses and other current assets: Interest rate cap contract $ — $ 0.1 $ — Interest rate swap contracts — 22.5 — Deferred costs and other assets, net of current portion: Interest rate swap contracts $ — $ 14.3 $ — Total $ 252.9 $ 71.2 $ — Fair Value at December 31, 2023 Level 1 Level 2 Level 3 Measured on a recurring basis: Cash equivalents: Money market mutual funds $ 245.2 $ — $ — Short-term investments: Corporate debt securities $ — $ 37.4 $ — Securities guaranteed by U.S. government — 26.7 — Other governmental securities — 18.1 — Prepaid expenses and other current assets: Interest rate cap contract $ — $ 0.6 $ — Interest rate swap contracts — 21.2 — Deferred costs and other assets, net of current portion Interest rate swap contracts $ — $ 15.0 $ — Measured on a non-recurring basis: Impaired lease-related assets $ — $ — $ 13.6 Total $ 245.2 $ 119.0 $ 13.6 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income Per Share | The following table sets forth the computation of basic and diluted net income per share of common stock : Three Months Ended March 31, (in millions, except shares and per share amounts) 2024 2023 Basic net income per share attributable to common stockholders Numerator: Net income $ 15.1 $ 44.5 Denominator: Weighted average number of shares of common stock outstanding 378,967,201 403,408,487 Basic net income per share attributable to common stockholders $ 0.04 $ 0.11 Diluted net income per share attributable to common stockholders Numerator: Allocation of undistributed earnings $ 15.1 $ 44.5 Denominator: Number of shares used in basic computation 378,967,201 403,408,487 Add: weighted-average effect of dilutive securities exchangeable for common stock: Restricted stock awards 145,210 446,843 Exercise of common stock options — 66,687 Employee Stock Purchase Plan 195,072 195,611 Weighted average shares of common stock outstanding used to calculate diluted net income per share 379,307,483 404,117,628 Diluted net income per share attributable to common stockholders $ 0.04 $ 0.11 |
Schedule of Potential Common Stock Equivalents Excluded from Calculation of Diluted Net Income Per Share | The following weighted-average potentially dilutive securities were evaluated under the treasury stock method for potentially dilutive effects and have been excluded from diluted net income per share in the periods presented due to their anti-dilutive effect: Three Months Ended March 31, 2024 2023 Restricted stock units 15,474,470 13,267,434 Exercise of common stock options 76,261 — Total anti-dilutive securities 15,550,731 13,267,434 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of Additional Details Related to Leases Recorded on the Balance Sheet | The following are additional details related to operating leases recorded on our Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023: March 31, December 31, (in millions) 2024 2023 Assets Operating lease right-of-use assets, net $ 106.8 $ 80.7 Liabilities Current portion of operating lease liabilities $ 12.1 $ 11.2 Operating lease liabilities, net of current portion 115.4 89.9 Total lease liabilities $ 127.5 $ 101.1 |
Schedule of Other Information Related to Leases | Other information related to leases was as follows: Three Months Ended March 31, (in millions) 2024 2023 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of operating lease liabilities $ 2.9 $ 2.3 Cash received for tenant incentive reimbursement 0.3 — Lease liabilities arising from obtaining right-of-use assets From new and existing lease agreements and modifications $ 28.4 $ — As of March 31, 2024 December 31, 2023 Weighted average remaining lease term (in years) 11.7 10.3 Weighted average discount rate 6.6 % 6.2 % |
Schedule of Undiscounted Future Minimum Lease Payments Under Non-Cancelable Leases | The table below reconciles the undiscounted future minimum lease payments under non-cancelable leases to the total lease liabilities recognized as of March 31, 2024 (in millions): Year Ending December 31, Operating Leases 2024 (excluding three months ended March 31, 2024) $ (8.5) 2025 21.5 2026 28.5 2027 19.5 2028 18.6 Thereafter 105.5 Total future minimum lease payments 185.1 Less: Effects of discounting 57.6 Total lease liabilities $ 127.5 |
Equity-based Compensation (Tabl
Equity-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Unit Activity | Restricted stock unit activity was as follows during the periods indicated: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Unvested at beginning of period 12,636,460 $ 29.23 10,377,568 Granted 5,543,344 15.51 4,452,672 Vested (1,359,913) 38.24 (633,337) Forfeited (1,345,421) 30.19 (929,469) Unvested at end of period 15,474,470 23.44 13,267,434 Restricted stock activity was as follows during the periods indicated: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Restricted Stock Weighted Average Grant Date Fair Value Restricted Stock Unvested at beginning of period 347,976 $ 34.55 858,560 Vested (225,560) 46.61 (242,680) Forfeited — — (6,733) Unvested at end of period 122,416 12.32 609,147 |
Schedule of Unvested Options Activity | Options activity was as follows during the period indicated: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Options Weighted Average Exercise Price Options Outstanding at beginning of period 279,553 $ 21.00 323,002 Exercised — — (11,236) Expired (6,474) 21.00 (10,095) Forfeited — — (3,106) Outstanding at end of period 273,079 21.00 298,565 Options have a maximum contractual term of ten years. The aggregate intrinsic value and weighted average remaining contractual terms of Options outstanding and Options exercisable were as follows as of March 31, 2024: March 31, 2024 Aggregate intrinsic value (in millions) (1) Options outstanding $ — Options exercisable — Weighted average remaining contractual term (in years) Options outstanding 6.0 years Options exercisable 6.0 years ________________ (1) |
Schedule of Unamortized Equity-Based Compensation Costs | As of March 31, 2024, unamortized equity-based compensation costs related to each equity-based incentive award described above is the following: (in millions) Amount Weighted Average Remaining Service Period (in years) Restricted stock units $ 314.7 2.7 Restricted stock 0.3 0.4 HSKB Phantom Units 12.4 2.6 Employee Stock Purchase Plan 0.5 0.2 Total unamortized equity-based compensation cost $ 327.9 2.7 |
Business, Basis of Presentati_3
Business, Basis of Presentation, and Summary of Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | ||
Jun. 08, 2020 agreement | Mar. 31, 2024 USD ($) reporting_unit $ / shares shares | Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Commissions payable | $ 32,300,000 | $ 37,700,000 | ||
Advertising expenses | $ 10,400,000 | $ 8,500,000 | ||
Number of reporting units (segment) | reporting_unit | 1 | |||
Impairment of goodwill | $ 0 | 0 | ||
Impairment of long-lived assets | $ 0 | 0 | ||
Number of tax receivable agreements | agreement | 2 | |||
Payment provided as percent of net cash savings | 85% | |||
Benefit retained as percent of net cash savings | 15% | |||
Award vesting period | 4 years | |||
Stock repurchase program, authorized amount | $ 500,000,000 | $ 600,000,000 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 546,800,000 | |||
Stock repurchased and retired shares (in shares) | shares | 9,623,255 | 1,058,291 | ||
Treasury stock acquired, average cost per share (in dollars per share) | $ / shares | $ 15.90 | $ 22.99 | ||
Stock repurchased and retired value | $ 153,100,000 | $ 24,300,000 | ||
U.S. | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Long-lived assets held | 151,500,000 | 120,200,000 | ||
Israel | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Long-lived assets held | $ 24,100,000 | $ 20,200,000 | ||
United States And Israel | Assets, Total | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk (as a percent) | 97% | 96% | ||
Internal use developed software | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Amortization period | 4 years | |||
Accrued Liabilities | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Commissions payable, current | $ 29,000,000 | $ 34,400,000 | ||
Other Long-term Liabilities | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Commissions payable, non-current | $ 3,300,000 | $ 3,300,000 | ||
Minimum | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Subscription contract, term | 1 year | |||
Estimated useful life | 3 years | |||
Deferred commissions, amortization period | 1 year | |||
Amortization period | 2 years | |||
Maximum | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Subscription contract, term | 3 years | |||
Estimated useful life | 10 years | |||
Deferred commissions, amortization period | 3 years | |||
Amortization period | 15 years |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Revenue Disaggregated by Service Offering (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 310.1 | $ 300.7 |
Subscription | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 306.8 | 297.4 |
Usage-based | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2.3 | 2.4 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 1 | $ 0.9 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Disaggregation of Revenue [Line Items] | |||
Revenue recognized | $ 245.2 | $ 213.3 | |
Contract assets recorded within Prepaid expenses and other current assets | 9.8 | $ 5.9 | |
Unearned revenue | $ 444.3 | $ 441.9 | |
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | Outside the United States | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk (as a percent) | 12% | 13% |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Remaining Performance Obligations (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, amount | $ 1,133.4 | $ 1,152.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, period | 1 year | |
Remaining performance obligations, amount | $ 856.4 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, period | 1 year | |
Remaining performance obligations, amount | $ 837.8 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, period | 13 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, period | 36 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, period | ||
Remaining performance obligations, amount | $ 296.5 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations, period | ||
Remaining performance obligations, amount | $ 295.6 |
Cash, Cash Equivalents, and S_3
Cash, Cash Equivalents, and Short-term Investments - Components (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Current assets: | |||
Cash | $ 153 | $ 201.9 | |
Cash equivalents: | |||
Unrealized Losses | 0 | 0 | |
Amortized Cost | 405.9 | 447.1 | |
Total cash and cash equivalents | 405.9 | 447.1 | $ 474 |
Short-term investments: | |||
Amortized Cost | 34.3 | 82.2 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | 0 | 0 | |
Estimated Fair Value | 34.3 | 82.2 | |
Cash, cash equivalents, and short-term investments, amortized cost | 440.2 | 529.3 | |
Cash, cash equivalents, and short-term investments, unrealized losses | 0 | 0 | |
Total cash, cash equivalents, and short-term investments | 440.2 | 529.3 | |
Money market mutual funds | |||
Cash equivalents: | |||
Amortized Cost | 252.9 | 245.2 | |
Unrealized Losses | 0 | 0 | |
Total cash equivalents | 252.9 | 245.2 | |
Corporate debt securities | |||
Short-term investments: | |||
Amortized Cost | 18.4 | 37.4 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | 0 | 0 | |
Estimated Fair Value | 18.4 | 37.4 | |
Securities guaranteed by U.S. government | |||
Short-term investments: | |||
Amortized Cost | 4.7 | 26.7 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | 0 | 0 | |
Estimated Fair Value | 4.7 | 26.7 | |
Certificates of deposit | |||
Short-term investments: | |||
Amortized Cost | 11.2 | ||
Unrealized Gains | 0 | ||
Unrealized Losses | 0 | ||
Estimated Fair Value | $ 11.2 | ||
Other government securities | |||
Short-term investments: | |||
Amortized Cost | 18.1 | ||
Unrealized Gains | 0 | ||
Unrealized Losses | 0 | ||
Estimated Fair Value | $ 18.1 |
Cash, Cash Equivalents, and S_4
Cash, Cash Equivalents, and Short-term Investments - Cost and Estimated Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Cash and Cash Equivalents [Abstract] | ||
Amortized Cost | $ 34.3 | $ 82.2 |
Estimated Fair Value | $ 34.3 | $ 82.2 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 140.7 | $ 125.7 | |
Less: accumulated depreciation | (66.1) | (60.6) | |
Property and equipment, net | 74.6 | 65.1 | |
Depreciation expense | 5.2 | $ 4.8 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 15.1 | 17.1 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 3.7 | 3.7 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 20.4 | 13.1 | |
Internal use developed software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 90.5 | 84 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 11 | $ 7.8 |
Goodwill and Acquired Intangi_3
Goodwill and Acquired Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 629.9 | $ 629.9 |
Accumulated Amortization | (343.1) | (328.3) |
Net | 286.8 | 301.6 |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets not subject to amortization | 33 | 33 |
Total intangible assets | 662.9 | 662.9 |
Total intangible assets | 319.8 | 334.6 |
Pre-Acquisition ZI brand portfolio | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets not subject to amortization | 33 | 33 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 287.6 | 287.6 |
Accumulated Amortization | (117.5) | (112.5) |
Net | $ 170.1 | $ 175.1 |
Weighted Average Amortization Period in Years | 14 years 6 months | 14 years 6 months |
Acquired technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 330.8 | $ 330.8 |
Accumulated Amortization | (217.9) | (208.4) |
Net | $ 112.9 | $ 122.4 |
Weighted Average Amortization Period in Years | 6 years 3 months 18 days | 6 years 3 months 18 days |
Brand portfolio | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 11.5 | $ 11.5 |
Accumulated Amortization | (7.7) | (7.4) |
Net | $ 3.8 | $ 4.1 |
Weighted Average Amortization Period in Years | 7 years 9 months 18 days | 7 years 10 months 24 days |
Goodwill and Acquired Intangi_4
Goodwill and Acquired Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 14,800,000 | $ 16,100,000 | |
Goodwill | 1,692,700,000 | $ 1,692,700,000 | |
Impairment of goodwill | $ 0 | $ 0 |
Financing Arrangements - Carryi
Financing Arrangements - Carrying Values of Borrowings (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2023 | Dec. 31, 2023 | Feb. 28, 2023 | Mar. 31, 2024 | |
Debt Instrument [Line Items] | ||||
Total Debt | $ 1,232.4 | $ 1,231.4 | ||
Less: current portion | (6) | (6) | ||
Total Long-term debt, net of current portion | 1,226.4 | 1,225.4 | ||
First Lien Revolver | ||||
Debt Instrument [Line Items] | ||||
First Lien Revolver | 0 | $ 0 | ||
First Lien Revolver | SOFR | ||||
Debt Instrument [Line Items] | ||||
Elected Interest Rate | 2.10% | |||
Term Loan | First Lien Term Loan | ||||
Debt Instrument [Line Items] | ||||
Total Debt | $ 590.7 | $ 589.4 | ||
Term Loan | First Lien Term Loan | SOFR | ||||
Debt Instrument [Line Items] | ||||
Elected Interest Rate | 3.10% | 2.25% | 2.85% | 2.25% |
Senior Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.875% | |||
Total Debt | $ 641.7 | $ 642 |
Financing Arrangements - First
Financing Arrangements - First Lien (Details) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2023 | Dec. 31, 2023 USD ($) | Feb. 28, 2023 USD ($) | Mar. 31, 2024 USD ($) | |
First Lien Term Loan | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Net leverage ratio (not to exceed) | 5 | |||
Debt instrument, periodic payment, percentage of principal | 0.25% | |||
Effective interest rate | 7.83% | 7.81% | ||
First Lien Term Loan | Term Loan | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2% | 1.25% | 1.75% | |
First Lien Term Loan | Term Loan | Base Rate | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1% | |||
First Lien Term Loan | Term Loan | Base Rate | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.25% | |||
First Lien Term Loan | Term Loan | SOFR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.10% | 2.25% | 2.85% | 2.25% |
First Lien Term Loan | Term Loan | SOFR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.10% | |||
First Lien Term Loan | Term Loan | SOFR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.35% | |||
First Lien Credit Agreement, Amendment | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, credit spread adjustment | 0.10% | |||
First Lien Term Loan Maturing February 2028 | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 213,000,000 | $ 250,000,000 | ||
Credit facility, increase (decrease), net | $ 26,000,000 | |||
First Lien Term Loan Maturing November 2025 | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 11,000,000 | |||
First Lien Revolver | ||||
Debt Instrument [Line Items] | ||||
Draws on revolving credit loan which trigger springing financial covenant (more than) | $ 87,500,000 | |||
First Lien Revolver | SOFR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.10% |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities - Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges of Interest Rate Risk (Details) - Designated as Hedging Instrument - Cash Flow Hedging $ in Millions | Mar. 31, 2024 USD ($) instrument |
Interest rate cap contract | |
Derivatives, Fair Value [Line Items] | |
Number of Instruments | instrument | 1 |
Notional Aggregate Principal Amount | $ | $ 100 |
Interest cap (as a percent) | 3.50% |
Interest rate swap contracts | |
Derivatives, Fair Value [Line Items] | |
Number of Instruments | instrument | 2 |
Notional Aggregate Principal Amount | $ | $ 500 |
Swap rate (as a percent) | 0.37% |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities - Fair Value and Presentation in the Consolidated Balance Sheets for Derivatives (Details) - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 36.9 | $ 36.8 |
Derivative Liabilities | 0 | 0 |
Prepaid Expenses and Other Current Assets | Interest rate cap contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0.1 | 0.6 |
Derivative Liabilities | 0 | 0 |
Prepaid Expenses and Other Current Assets | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 22.5 | 21.2 |
Derivative Liabilities | 0 | 0 |
Deferred Costs and Other Assets, Net of Current Portion | Interest rate swap contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 14.3 | 15 |
Derivative Liabilities | $ 0 | $ 0 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities - Narrative (Details) $ in Millions | Mar. 31, 2024 USD ($) |
First Lien Term Loan | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Changes in fair value included in AOCI expected to be reclassified over the next 12 months | $ 22.5 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - Level 2 - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
First Lien Term Loan | First lien term loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument fair value | $ 591.8 | $ 595.5 |
Senior Notes | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instrument fair value | $ 583.4 | $ 588.3 |
Fair Value - Financial Assets (
Fair Value - Financial Assets (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 34.3 | $ 82.2 |
Prepaid expenses and other current assets | 72.1 | 59.6 |
Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 252.9 | 245.2 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 252.9 | 245.2 |
Level 1 | Measured on a recurring basis | Interest rate cap contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepaid expenses and other current assets | 0 | 0 |
Level 1 | Measured on a recurring basis | Interest rate swap contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepaid expenses and other current assets | 0 | 0 |
Deferred costs and other assets, net of current portion: | 0 | 0 |
Level 1 | Measured on a recurring basis | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 252.9 | 245.2 |
Level 1 | Measured on a recurring basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 1 | Measured on a recurring basis | Securities guaranteed by U.S. government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 1 | Measured on a recurring basis | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | |
Level 1 | Measured on a recurring basis | Other government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | |
Level 1 | Measured on a non-recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired lease-related assets | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 71.2 | 119 |
Level 2 | Measured on a recurring basis | Interest rate cap contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepaid expenses and other current assets | 0.1 | 0.6 |
Level 2 | Measured on a recurring basis | Interest rate swap contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepaid expenses and other current assets | 22.5 | 21.2 |
Deferred costs and other assets, net of current portion: | 14.3 | 15 |
Level 2 | Measured on a recurring basis | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 2 | Measured on a recurring basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 18.4 | 37.4 |
Level 2 | Measured on a recurring basis | Securities guaranteed by U.S. government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 4.7 | 26.7 |
Level 2 | Measured on a recurring basis | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 11.2 | |
Level 2 | Measured on a recurring basis | Other government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 18.1 | |
Level 2 | Measured on a non-recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired lease-related assets | 0 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets | 0 | 13.6 |
Level 3 | Measured on a recurring basis | Interest rate cap contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepaid expenses and other current assets | 0 | 0 |
Level 3 | Measured on a recurring basis | Interest rate swap contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Prepaid expenses and other current assets | 0 | 0 |
Deferred costs and other assets, net of current portion: | 0 | 0 |
Level 3 | Measured on a recurring basis | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level 3 | Measured on a recurring basis | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 3 | Measured on a recurring basis | Securities guaranteed by U.S. government | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Level 3 | Measured on a recurring basis | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 0 | |
Level 3 | Measured on a recurring basis | Other government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | |
Level 3 | Measured on a non-recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired lease-related assets | $ 13.6 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Feb. 24, 2024 | Mar. 31, 2024 | |
Recorded Unconditional Purchase Obligation [Line Items] | ||
Amount awarded to other party as a percentage of statutory damages | 3% | |
Litigation settlement amount | $ 29.5 | |
Litigation charges incurred | $ 30.2 | |
Litigation settlement expense | 0.2 | |
Legal settlements accrual | 30 | |
Dogpatch Advisors, LLC | ||
Recorded Unconditional Purchase Obligation [Line Items] | ||
Business combination, contingent consideration, equity awards | 2.6 | |
Business combination, additional consideration transferred | 0.3 | |
Insent | ||
Recorded Unconditional Purchase Obligation [Line Items] | ||
Business combination, additional consideration transferred | 2 | |
Deferred consideration | $ 0.7 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Basic net income per share attributable to common stockholders | ||
Basic net income per share attributable to common stockholders (in dollars per share) | $ 0.04 | $ 0.11 |
Diluted net income per share attributable to common stockholders | ||
Diluted net income per share attributable to common stockholders (in dollars per share) | $ 0.04 | $ 0.11 |
Common Stock | ||
Basic net income per share attributable to common stockholders | ||
Net income | $ 15.1 | $ 44.5 |
Weighted average number of shares of common stock outstanding (in shares) | 378,967,201 | 403,408,487 |
Basic net income per share attributable to common stockholders (in dollars per share) | $ 0.04 | $ 0.11 |
Diluted net income per share attributable to common stockholders | ||
Allocation of undistributed earnings | $ 15.1 | $ 44.5 |
Number of shares used in basic computation (in shares) | 378,967,201 | 403,408,487 |
Weighted average shares of common stock outstanding used to calculate diluted net income per share (in shares) | 379,307,483 | 404,117,628 |
Diluted net income per share attributable to common stockholders (in dollars per share) | $ 0.04 | $ 0.11 |
Common Stock | Restricted stock awards | ||
Diluted net income per share attributable to common stockholders | ||
Units exchangeable for common stock (in shares) | 145,210 | 446,843 |
Common Stock | Exercise of common stock options | ||
Diluted net income per share attributable to common stockholders | ||
Units exchangeable for common stock (in shares) | 0 | 66,687 |
Common Stock | Employee Stock Purchase Plan | ||
Diluted net income per share attributable to common stockholders | ||
Units exchangeable for common stock (in shares) | 195,072 | 195,611 |
Earnings Per Share - Potential
Earnings Per Share - Potential Common Stock Equivalents Excluded from Calculation of Diluted Net Income Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 15,550,731 | 13,267,434 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 15,474,470 | 13,267,434 |
Exercise of common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 76,261 | 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2024 USD ($) office | Mar. 31, 2023 USD ($) | Dec. 31, 2024 USD ($) | Jun. 30, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Lessor, Lease, Description [Line Items] | |||||
Number of offices subleased | office | 2 | ||||
Sublease, remaining lease term (less than) | 7 years | ||||
Rent expense | $ 5.6 | $ 4 | |||
Operating lease, lease not yet commenced, undiscounted amount | 228.1 | ||||
Lease liabilities | 127.5 | $ 101.1 | |||
Forecast | Commencing In Next Three Months | |||||
Lessor, Lease, Description [Line Items] | |||||
Operating lease, lease not yet commenced, undiscounted amount | $ 157.9 | ||||
Forecast | Commencing In Next Nine Months | |||||
Lessor, Lease, Description [Line Items] | |||||
Operating lease, lease not yet commenced, undiscounted amount | $ 200.6 | ||||
Vancouver, Washington, First Phase | |||||
Lessor, Lease, Description [Line Items] | |||||
Lease liabilities | 12.5 | ||||
Vancouver, Washington, First Two | |||||
Lessor, Lease, Description [Line Items] | |||||
Lease liabilities | $ 15 |
Leases - Additional Details Rel
Leases - Additional Details Related to Leases Recorded on the Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Assets | ||
Operating lease right-of-use assets, net | $ 106.8 | $ 80.7 |
Liabilities | ||
Current portion of operating lease liabilities | 12.1 | 11.2 |
Operating lease liabilities, net of current portion | 115.4 | 89.9 |
Total lease liabilities | $ 127.5 | $ 101.1 |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | |||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 2.9 | $ 2.3 | |
Cash received for tenant incentive reimbursement | $ 0.3 | 0 | |
Weighted average remaining lease term (in years) | 11 years 8 months 12 days | 10 years 3 months 18 days | |
Weighted average discount rate | 6.60% | 6.20% | |
From new and existing lease agreements and modifications | |||
Business Acquisition [Line Items] | |||
Lease liabilities arising from obtaining right-of-use assets | $ 28.4 | $ 0 |
Leases - Future Minimum Payment
Leases - Future Minimum Payments Under Non-Cancelable Leases (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Leases [Abstract] | ||
2024 (excluding three months ended March 31, 2024) | $ (8.5) | |
2025 | 21.5 | |
2026 | 28.5 | |
2027 | 19.5 | |
2028 | 18.6 | |
Thereafter | 105.5 | |
Total future minimum lease payments | 185.1 | |
Less: Effects of discounting | 57.6 | |
Total lease liabilities | $ 127.5 | $ 101.1 |
Equity-based Compensation - Nar
Equity-based Compensation - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jan. 01, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2024 USD ($) shares | Mar. 31, 2023 USD ($) shares | Dec. 31, 2023 | Jun. 03, 2020 instrument shares | May 26, 2020 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 4 years | |||||||
Unit options outstanding, aggregate intrinsic value | $ 0 | |||||||
Unit options exercisable, aggregate intrinsic value | 0 | |||||||
Total equity-based compensation expense | $ 31.2 | $ 37.7 | ||||||
Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unit options outstanding, weighted average remaining term | 10 years | |||||||
Service Vesting Condition One | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 4 years | |||||||
Service Vesting Condition One | Tranche One | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 1 year | |||||||
Award vesting percentage | 25% | |||||||
Service Vesting Condition One | Quarterly Vesting | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 6.25% | |||||||
Service Vesting Condition Two | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Service Vesting Condition Two | Tranche One | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 1 year | |||||||
Award vesting percentage | 33% | |||||||
Service Vesting Condition Two | Quarterly Vesting | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 8.375% | |||||||
Performance Based Restricted Stock Unit | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 1 year | |||||||
Performance Based Restricted Stock Unit | Annual Tranches | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Performance Based Restricted Stock Unit | Annual Tranches | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 0% | |||||||
Performance Based Restricted Stock Unit | Annual Tranches | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting percentage | 200% | |||||||
2020 Omnibus Incentive Plan | Common Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Increase to authorized plan shares based on stock outstanding, percentage | 5% | |||||||
2020 Omnibus Incentive Plan | 2023 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of units authorized (in shares) | shares | 18,650,000 | |||||||
Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share based compensation arrangement maximum employee subscription rate | 15% | |||||||
Number of purchase periods permitted under the ESPP | instrument | 2 | |||||||
Duration of each purchase period under the ESPP | 6 months | |||||||
Percentage of purchase price for common stock | 90% | |||||||
Shares withheld for future ESPP purchase (in shares) | shares | 7,500,000 | |||||||
Shares withheld for future ESPP purchase | $ 2.1 | $ 3 | ||||||
Stock issued during period shares employee stock purchase plans (in shares) | shares | 0 | 0 | ||||||
Total equity-based compensation expense | $ 0.8 | $ 1.2 | ||||||
Employee Stock Purchase Plan | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum shares purchased (in shares) | shares | 1,500 | |||||||
Employee Stock Purchase Plan | Common Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Increase to authorized plan shares based on stock outstanding, percentage | 1% |
Equity-based Compensation - Res
Equity-based Compensation - Restricted Stock Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Restricted stock units | ||
Shares | ||
Beginning balance (in shares) | 12,636,460 | 10,377,568 |
Granted (in shares) | 5,543,344 | 4,452,672 |
Vested (in shares) | (1,359,913) | (633,337) |
Forfeited (in shares) | (1,345,421) | (929,469) |
Ending balance (in shares) | 15,474,470 | 13,267,434 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 29.23 | |
Granted (in dollars per share) | 15.51 | |
Vested (in dollars per share) | 38.24 | |
Forfeited (in dollars per share) | 30.19 | |
Ending balance (in dollars per share) | $ 23.44 | |
Restricted stock awards | ||
Shares | ||
Beginning balance (in shares) | 347,976 | 858,560 |
Vested (in shares) | (225,560) | (242,680) |
Forfeited (in shares) | 0 | (6,733) |
Ending balance (in shares) | 122,416 | 609,147 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 34.55 | |
Vested (in dollars per share) | 46.61 | |
Forfeited (in dollars per share) | 0 | |
Ending balance (in dollars per share) | $ 12.32 |
Equity-based Compensation - Com
Equity-based Compensation - Common Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Weighted Average Exercise Price | ||||
Options outstanding, aggregate intrinsic value | $ 0 | |||
Options exercisable, aggregate intrinsic value | $ 0 | |||
Exercise of common stock options | ||||
Options | ||||
Outstanding at beginning of period (in shares) | 273,079 | 298,565 | 279,553 | 323,002 |
Exercised (in shares) | 0 | (11,236) | ||
Expired (in shares) | (6,474) | (10,095) | ||
Forfeited (in shares) | 0 | (3,106) | ||
Outstanding at end of period (in shares) | 273,079 | 298,565 | ||
Weighted Average Exercise Price | ||||
Beginning balance (in dollars per share) | $ 21 | |||
Exercised (in dollars per share) | 0 | |||
Expired (in dollars per share) | 21 | |||
Forfeited (in dollars per share) | 0 | |||
Ending balance (in dollars per share) | $ 21 | |||
Options outstanding, aggregate intrinsic value | $ 0 | |||
Options exercisable, aggregate intrinsic value | $ 0 | |||
Options outstanding, weighted average remaining term | 6 years | |||
Options exercisable, weighted average remaining term | 6 years |
Equity-based Compensation - Una
Equity-based Compensation - Unamortized Equity-based Compensation Costs (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unamortized equity-based compensation cost | $ 327.9 |
Weighted Average Remaining Service Period (in years) | 2 years 8 months 12 days |
Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized equity-based compensation cost, excluding options | $ 0.5 |
Weighted Average Remaining Service Period (in years) | 2 months 12 days |
Restricted stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized equity-based compensation cost, excluding options | $ 314.7 |
Weighted Average Remaining Service Period (in years) | 2 years 8 months 12 days |
Restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized equity-based compensation cost, excluding options | $ 0.3 |
Weighted Average Remaining Service Period (in years) | 4 months 24 days |
HSKB Phantom Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized equity-based compensation cost, excluding options | $ 12.4 |
Weighted Average Remaining Service Period (in years) | 2 years 7 months 6 days |
Tax Receivable Agreements (Deta
Tax Receivable Agreements (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Tax Receivable Agreements [Abstract] | |||
Tax receivable agreement liability | $ 2,796,000,000 | $ 2,818,000,000 | |
Payments for tax receivable agreement | 31,600,000 | $ 0 | |
Tax receivable agreement remeasurement | $ (9,600,000) | $ 10,100,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 48.80% | 34.80% | |
Income tax expense | $ 14.4 | $ 23.7 | |
Effective tax rate differs from the statutory rate | 21% | ||
Unrecognized tax benefits, deferred tax assets | $ 12.9 | $ 12.6 | |
Penalties and interest accrued | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |
May 03, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Subsequent Event [Line Items] | |||
Stock repurchased and retired shares (in shares) | 9,623,255 | 1,058,291 | |
Treasury stock acquired, average cost per share (in dollars per share) | $ 15.90 | $ 22.99 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Stock repurchased and retired shares (in shares) | 3,249,791 | ||
Treasury stock acquired, average cost per share (in dollars per share) | $ 15.86 | ||
Shares repurchased and retired | $ 51.5 |