Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Document Information: | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-39413 | |
Entity Registrant Name | Vertex, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 23-2081753 | |
Entity Address, Address Line One | 2301 Renaissance Blvd | |
Entity Address, City or Town | King of Prussia | |
Entity Address State Or Province | PA | |
Entity Address, Postal Zip Code | 19406 | |
City Area Code | 800 | |
Local Phone Number | 355-3500 | |
Title of 12(b) Security | Class A Common Stock, Par Value $0.001 Per Share | |
Trading Symbol | VERX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001806837 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A | ||
Document Information: | ||
Entity Common Stock, Shares Outstanding | 64,952,704 | |
Class B | ||
Document Information: | ||
Entity Common Stock, Shares Outstanding | 90,161,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 56,134 | $ 68,175 |
Funds held for customers | 36,546 | 20,976 |
Accounts receivable, net of allowance of $20,241 and $16,272, respectively | 133,149 | 141,752 |
Prepaid expenses and other current assets | 31,906 | 26,173 |
Investment securities available-for-sale, at fair value (amortized cost of $9,123 and $9,550, respectively) | 9,101 | 9,545 |
Total current assets | 266,836 | 266,621 |
Property and equipment, net of accumulated depreciation | 100,594 | 100,734 |
Capitalized software, net of accumulated amortization | 38,532 | 38,771 |
Goodwill and other intangible assets | 255,681 | 260,238 |
Deferred commissions | 21,301 | 21,237 |
Deferred income tax asset | 44,311 | 41,708 |
Operating lease right-of-use assets | 13,773 | 14,605 |
Other assets | 14,774 | 16,013 |
Total assets | 755,802 | 759,927 |
Current liabilities: | ||
Current portion of long-term debt | 2,500 | 2,500 |
Accounts payable | 22,431 | 23,596 |
Accrued expenses | 36,754 | 44,735 |
Customer funds obligations | 33,670 | 17,731 |
Accrued salaries and benefits | 18,659 | 12,277 |
Accrued variable compensation | 14,562 | 34,105 |
Deferred revenue, current | 296,845 | 290,143 |
Current portion of operating lease liabilities | 3,633 | 3,717 |
Current portion of finance lease liabilities | 60 | 74 |
Purchase commitment and contingent consideration liabilities, current | 13,390 | 11,901 |
Total current liabilities | 442,504 | 440,779 |
Deferred revenue, net of current portion | 4,146 | 2,577 |
Debt, net of current portion | 43,458 | 44,059 |
Operating lease liabilities, net of current portion | 15,523 | 16,567 |
Finance lease liabilities, net of current portion | 41 | 51 |
Purchase commitment and contingent consideration liabilities, net of current portion | 2,600 | |
Deferred other liabilities | 313 | |
Total liabilities | 505,672 | 506,946 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred shares, $0.001 par value, 30,000 shares authorized; no shares issued and outstanding | ||
Additional paid in capital | 273,647 | 275,155 |
Retained Earnings (Accumulated deficit) | 2,098 | (586) |
Accumulated other comprehensive loss | (25,770) | (21,742) |
Total stockholders' equity | 250,130 | 252,981 |
Total liabilities and stockholders' equity | 755,802 | 759,927 |
Class A | ||
Stockholders' equity: | ||
Common stock | 62 | 61 |
Class B | ||
Stockholders' equity: | ||
Common stock | $ 93 | $ 93 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Allowance for accounts receivable | $ 20,241 | $ 16,272 |
Amortized cost | $ 9,123 | $ 9,550 |
Preferred stock par value (per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 30,000 | 30,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A | ||
Common stock par value (per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000 | 300,000 |
Common stock, shares issued (in shares) | 62,316 | 60,989 |
Common stock, shares outstanding (in shares) | 62,316 | 60,989 |
Class B | ||
Common stock par value (per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000 | 150,000 |
Common stock, shares issued (in shares) | 92,661 | 92,661 |
Common stock, shares outstanding (in shares) | 92,661 | 92,661 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Total revenues | $ 156,781 | $ 132,751 |
Cost of revenues: | ||
Total cost of revenues | 60,989 | 51,747 |
Gross profit | 95,792 | 81,004 |
Operating expenses: | ||
Research and development | 16,845 | 15,862 |
Selling and marketing | 40,491 | 35,736 |
General and administrative | 35,542 | 34,310 |
Depreciation and amortization | 5,006 | 3,741 |
Other operating expense (income), net | (527) | 284 |
Total operating expenses | 97,357 | 89,933 |
Loss from operations | (1,565) | (8,929) |
Interest expense (income), net | 286 | (350) |
Loss before income taxes | (1,851) | (8,579) |
Income tax (benefit) expense | (4,535) | 9,553 |
Net income (loss) | 2,684 | (18,132) |
Other comprehensive (income) loss: | ||
Foreign currency translation adjustments, net of tax | 4,011 | (3,122) |
Unrealized (gain) loss on investments, net of tax | 17 | (13) |
Total other comprehensive (income) loss, net of tax | 4,028 | (3,135) |
Total comprehensive loss | (1,344) | (14,997) |
Software subscriptions | ||
Revenues: | ||
Total revenues | 131,830 | 111,014 |
Cost of revenues: | ||
Total cost of revenues | 45,128 | 37,403 |
Services | ||
Revenues: | ||
Total revenues | 24,951 | 21,737 |
Cost of revenues: | ||
Total cost of revenues | 15,861 | 14,344 |
Class A | ||
Other comprehensive (income) loss: | ||
Net income (loss) attributable to stockholders, basic | $ 1,071 | $ (6,072) |
Net income (loss) per share, basic (in dollars per share) | $ 0.02 | $ (0.12) |
Weighted average common stock, basic (in shares) | 61,560 | 50,456 |
Net income (loss) attributable to stockholders, diluted | $ 1,135 | $ (6,072) |
Net income (loss) per share, diluted (in dollars per share) | $ 0.02 | $ (0.12) |
Weighted average common stock, diluted (in shares) | 67,921 | 50,456 |
Class B | ||
Other comprehensive (income) loss: | ||
Net income (loss) attributable to stockholders, basic | $ 1,613 | $ (12,060) |
Net income (loss) per share, basic (in dollars per share) | $ 0.02 | $ (0.12) |
Weighted average common stock, basic (in shares) | 92,661 | 100,221 |
Net income (loss) attributable to stockholders, diluted | $ 1,549 | $ (12,060) |
Net income (loss) per share, diluted (in dollars per share) | $ 0.02 | $ (0.12) |
Weighted average common stock, diluted (in shares) | 92,661 | 100,221 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock Class A | Common Stock Class B | Additional Paid In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Class A | Class B | Total |
Balance at Dec. 31, 2022 | $ 50 | $ 100 | $ 244,820 | $ 12,507 | $ (27,752) | $ 229,725 | ||
Balance (in shares) at Dec. 31, 2022 | 50,014 | 100,307 | ||||||
Exercise of stock options, net | $ 1 | 1,279 | 1,280 | |||||
Exercise of stock options, net (in shares) | 592 | 592 | ||||||
Shares issued upon vesting of Restricted Stock Units, net | (3,471) | (3,471) | ||||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 391 | |||||||
Stock-based compensation expense | 10,938 | 10,938 | ||||||
Class B shares exchanged for Class A shares | $ 2 | $ (2) | ||||||
Class B shares exchanged for Class A shares (in shares) | 2,589 | (2,589) | ||||||
Foreign currency translation adjustments and revaluations, net of tax | 3,122 | 3,122 | ||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | 13 | 13 | ||||||
Net income (loss) | (18,132) | (18,132) | ||||||
Balance at Mar. 31, 2023 | $ 53 | $ 98 | 253,566 | (5,625) | (24,617) | 223,475 | ||
Balance (in shares) at Mar. 31, 2023 | 53,586 | 97,718 | ||||||
Balance at Dec. 31, 2023 | $ 61 | $ 93 | 275,155 | (586) | (21,742) | 252,981 | ||
Balance (in shares) at Dec. 31, 2023 | 60,989 | 92,661 | 60,989 | 92,661 | ||||
Exercise of stock options, net | (5,454) | (5,454) | ||||||
Exercise of stock options, net (in shares) | 653 | 653 | ||||||
Shares issued upon vesting of Restricted Stock Units, net | $ 1 | (10,899) | (10,898) | |||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 674 | |||||||
Stock-based compensation expense | 14,845 | 14,845 | ||||||
Foreign currency translation adjustments and revaluations, net of tax | (4,011) | (4,011) | ||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | (17) | (17) | ||||||
Net income (loss) | 2,684 | 2,684 | ||||||
Balance at Mar. 31, 2024 | $ 62 | $ 93 | $ 273,647 | $ 2,098 | $ (25,770) | $ 250,130 | ||
Balance (in shares) at Mar. 31, 2024 | 62,316 | 92,661 | 62,316 | 92,661 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 2,684 | $ (18,132) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 20,948 | 16,942 |
Amortization of cloud computing implementation costs | 994 | |
Provision for subscription cancellations and non-renewals | 1,082 | 697 |
Amortization of deferred financing costs | 146 | 63 |
Change in fair value of contingent consideration liabilities | (800) | 200 |
Stock-based compensation expense | 16,324 | 11,434 |
Deferred income tax benefit | (2,588) | (12,984) |
Non-cash operating lease costs | 828 | 726 |
Other | (106) | (4) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,478 | (795) |
Prepaid expenses and other current assets | (7,335) | (3,740) |
Deferred commissions | (64) | (459) |
Accounts payable | (1,153) | 3,065 |
Accrued expenses | (8,486) | 17,578 |
Accrued and deferred compensation | (14,515) | (12,452) |
Deferred revenue | 11,177 | 4,352 |
Operating lease liabilities | (1,125) | (1,309) |
Other | 2,077 | (1,691) |
Net cash provided by operating activities | 24,566 | 3,491 |
Cash flows from investing activities: | ||
Property and equipment additions | (14,449) | (10,049) |
Capitalized software additions | (5,615) | (4,007) |
Purchase of investment securities, available-for-sale | (4,271) | (3,491) |
Proceeds from sales and maturities of investment securities, available-for-sale | 4,800 | 3,250 |
Net cash used in investing activities | (19,535) | (14,297) |
Cash flows from financing activities: | ||
Net increase in customer funds obligations | 15,939 | 10,989 |
Principal payments on long-term debt | (625) | (313) |
Payments for deferred financing costs | (89) | |
Payments for taxes related to net share settlement of stock-based awards | (17,862) | (3,681) |
Proceeds from exercise of stock options | 1,510 | 1,490 |
Payments of finance lease liabilities | (26) | (16) |
Payments for deferred purchase commitments | (10,000) | |
Net cash used in financing activities | (1,153) | (1,531) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (349) | 204 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 3,529 | (12,133) |
Cash, cash equivalents and restricted cash, beginning of period | 89,151 | 106,748 |
Cash, cash equivalents and restricted cash, end of period | $ 92,680 | $ 94,615 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Mar. 31, 2023 |
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets, end of period: | ||
Cash and cash equivalents | $ 56,134 | $ 68,643 |
Restricted cash-funds held for customers | 36,546 | 25,972 |
Total cash, cash equivalents and restricted cash, end of period | $ 92,680 | $ 94,615 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Vertex, Inc. (“Vertex”) and its consolidated subsidiaries and variable interest entities (“VIE”) (collectively, the “Company”) operate as solutions providers of state, local, and value added tax calculation, compliance, and analytics, offering software products that are sold through software license and software as a service (“cloud”) subscriptions. The Company also provides implementation and training services in connection with its software license and cloud subscriptions, transaction tax returns outsourcing, and other tax-related services. The Company sells to customers located throughout the United States of America (“U.S.”) and internationally. Basis of Consolidation The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the accounts of the Company. All intercompany transactions have been eliminated in consolidation. The Company has an 80% controlling equity interest in Systax Sistemas Fiscais LTDA (“Systax”), a provider of Brazilian transaction tax content and software. Systax was determined to be a VIE and the accounts are included in the condensed consolidated financial statements. Vertex does not have full decision-making authority over Systax; however, Vertex is the entity that most significantly participates in the variability of the fair value of Systax’s net assets and is considered the entity most closely associated to Systax. As such, Vertex is deemed the primary beneficiary of Systax and consolidates Systax into its condensed consolidated financial statements. Unaudited Interim Financial Information The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and include the accounts of the Company. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”) filed with the SEC on February 29, 2024. The condensed consolidated balance sheet as of December 31, 2023 has been derived from audited financial statements included in the 2023 Annual Report. The accompanying interim condensed consolidated balance sheet as of March 31, 2024, the interim condensed consolidated statements of comprehensive income (loss) and changes in stockholders’ equity for the three months ended March 31, 2024 and 2023, and the interim condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the annual audited consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items necessary for the fair presentation of the condensed consolidated financial statements. The operating results for the three months ended March 31, 2024 are not necessarily indicative of the results expected for the full year ending December 31, 2024. Segments The Company operates its business as one operating segment. For both the three months ended March 31, 2024 and March 31, 2023, approximately 7% of the Company’s revenues were generated from customers located outside the U.S. As of March 31, 2024 and December 31, 2023, $527 and $633, respectively, of the Company’s property and equipment assets were held outside the U.S. Use of Estimates The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues, and expenses during the reporting period. Significant estimates used in preparing these condensed consolidated financial statements include: (i) the estimated allowance for subscription cancellations; (ii) expected credit losses associated with the allowance for doubtful accounts; (iii) allowance for credit losses on available-for-sale debt securities; (iv) the reserve for self-insurance; (v) assumptions related to achievement of technological feasibility for software developed for sale; (vi) product life cycles; (vii) estimated useful lives and potential impairment of long-lived assets, intangible assets, and capitalized cloud computing arrangement (“CCA”) software implementation costs; (viii) potential impairment of goodwill; (ix) determination of the fair value of tangible and intangible assets acquired, liabilities assumed, and consideration transferred in acquisitions; (x) amortization period of deferred commissions; (xi) Black-Scholes-Merton option pricing model (“Black-Scholes model”) input assumptions used to determine the fair value of certain stock-based compensation awards and Employee Stock Purchase Plan (“ESPP”) purchase rights; (xii) measurement of future purchase commitment, contingent consideration liabilities, and deferred purchase consideration liabilities associated with acquisitions; and (xiii) the potential outcome of future tax consequences of events that have been recognized in the condensed consolidated financial statements or tax returns. Actual results may differ from these estimates. Software Development Costs Cloud Computing Software Implementation Costs The Company follows Accounting Standards Codification (“ASC”) 350-40, Goodwill and Other, Internal-Use Software, two Amortization expense for capitalized cloud computing implementation costs for the three months ended March 31, 2024 was $994 and is included in general and administrative expense in the condensed consolidated statements of comprehensive Supplemental Balance Sheet Disclosures Supplemental balance sheet disclosures are as follows for the respective periods: As of March 31, As of December 31, 2024 2023 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 12,694 $ 11,558 Unamortized cloud computing implementation costs 3,995 3,995 Prepaid insurance 1,002 521 Prepaid licenses and support 14,215 10,099 Prepaid expenses and other current assets $ 31,906 $ 26,173 Other assets: Unamortized cloud computing implementation costs $ 11,480 $ 12,475 Other assets 3,294 3,538 Total other assets $ 14,774 $ 16,013 Accrued expenses: Accrued general expenses $ 17,362 $ 25,998 Accrued contract labor and professional fees 13,914 13,372 Accrued income and other taxes 5,478 5,365 Accrued expenses $ 36,754 $ 44,735 Recently Issued or Adopted Accounting Pronouncements Segment Reporting Income Tax Disclosures interim periods for fiscal years beginning after December 15, 2025. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively, and early adoption is permitted. The Company is continuing to assess the potential impacts of the standard, and it does not expect this pronouncement to have a material effect on its financial statements, other than the required changes to the income tax disclosures. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2024 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 2. REVENUE RECOGNITION Disaggregation of revenue The table reflects revenue by major source for the following periods: Three months ended March 31, 2024 2023 (unaudited) Software subscriptions: Software licenses $ 69,994 $ 62,808 Cloud subscriptions 61,836 48,206 Software subscriptions 131,830 111,014 Services 24,951 21,737 Total revenues $ 156,781 $ 132,751 Contract balances Timing of revenue recognition may differ from the timing of invoicing customers. A receivable is recorded in the condensed consolidated balance sheets when customers are billed related to revenue to be collected and recognized for subscription agreements as there is an unconditional right to invoice and receive payment in the future related to these subscriptions. A receivable and related revenue may also be recorded in advance of billings to the extent services have been performed and the Company has a right under the contract to bill and collect for such performance. Subscription-based customers are generally invoiced annually at the beginning of each annual subscription period. Accounts receivable is presented net of an allowance for potentially uncollectible accounts and estimated cancellations of software license and cloud-based subscriptions (the “allowance”) of $20,241 and $16,272 at March 31, 2024 and December 31, 2023, respectively. The allowance for potentially uncollectible accounts represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations. The beginning and ending balances of accounts receivable, net of allowance, are as follows: For the three months ended March 31, 2024 For the year ended December 31, 2023 (unaudited) Balance, beginning of period $ 141,752 $ 102,885 Balance, end of period 133,149 141,752 Increase (decrease), net $ (8,603) $ 38,867 A contract liability is recorded as deferred revenue on the condensed consolidated balance sheets when customers are billed in advance of performance obligations being satisfied, and revenue is recognized after invoicing ratably over the subscription period. Deferred revenue is reflected net of a related deferred allowance for subscription cancellations (the “deferred allowance”) of $14,634 and $11,741 at March 31, 2024 and December 31, 2023, respectively. The deferred allowance represents the portion of the allowance for subscription cancellations associated with deferred revenue. The beginning and ending balances of and changes to the allowance and the deferred allowance are as follows: For the three months ended March 31, 2024 2023 Balance Net Change Balance Net Change (unaudited) Allowance balance, January 1, $ (16,272) $ (9,554) Allowance balance, March 31, (20,241) (10,641) Change in allowance $ 3,969 $ 1,087 Deferred allowance balance, January 1, 11,741 7,133 Deferred allowance balance, March 31, 14,634 7,516 Change in deferred allowance (2,893) (383) Net amount charged to revenues $ 1,076 $ 704 The portion of deferred revenue expected to be recognized in revenue beyond one year is included in deferred revenue, net of current portion in the condensed consolidated balance sheets. The following table provides information about the balances of and changes to deferred revenue for the following periods: For the three months ended March 31, 2024 2023 (unaudited) Changes to deferred revenue: Beginning balance $ 292,720 $ 279,136 Additional amounts deferred 165,052 136,731 Revenues recognized (156,781) (132,751) Ending balance $ 300,991 $ 283,116 Contract costs Deferred sales commissions earned by the Company’s sales force and certain sales incentive programs and vendor referral agreements are considered incremental and recoverable costs of obtaining a contract with a customer. An asset is recognized for these incremental contract costs and reflected as deferred commissions in the condensed consolidated balance sheets. These contract costs are amortized on a straight-line basis over a period consistent with the transfer of the associated product and services to the customer, which is generally three years. Amortization of these costs are included in selling and marketing expense in the condensed consolidated statements of comprehensive income (loss). The Company periodically reviews these contract assets to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these assets. There were no impairment losses recorded for the periods presented. The changes to contract cost balances as of and for the following periods are: For the three months ended March 31, 2024 2023 (unaudited) Deferred commissions: Beginning balance $ 21,237 $ 15,463 Additions 3,984 2,851 Amortization (3,920) (2,393) Ending balance $ 21,301 $ 15,921 |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 3. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes the Company’s fair value for its financial assets and liabilities measured at fair value on a recurring basis: Fair Value Measurements Using As of March 31, 2024 (unaudited) Fair Value Prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Money Market Funds $ 42,763 $ 42,763 — — Commercial Paper 6,158 — 6,158 — U.S. Treasury Securities 4,430 — 4,430 — Tellutax Contingent Consideration 4,100 — — 4,100 Foreign Currency Forward Contracts 677 — 677 — Fair Value Measurements Using As of December 31, 2023 Fair Value Prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Money Market Funds $ 53,049 $ 53,049 $ — $ — Commercial Paper 7,168 — 7,168 — U.S. Treasury Securities 3,621 — 3,621 — Tellutax Contingent Consideration 4,900 — — 4,900 Foreign Currency Forward Contracts 849 — 849 — The Company has investments in high quality, short-term money market instruments, which are issued and payable in U.S. dollars (“Money Market Funds”) and included in cash and cash equivalents on the condensed consolidated balance sheets. Fair value inputs for these investments are considered Level 1 measurements within the fair value hierarchy since Money Market Fund fair values are known and observable through daily published floating net asset values. Securities classified as available-for-sale are reported at fair value using Level 2 inputs. The Company has investments in bank and corporate issued commercial paper (“Commercial Paper”) and U.S. treasury securities (“U.S. Treasury Securities”). The Company believes that Level 2 designation is appropriate for Commercial Paper and U.S. Treasury Securities under ASC 820-10, Fair Value Measurements and Disclosures In connection with the January 2021 Tellutax LLC (“Tellutax”) acquisition, the sellers are entitled to contingent consideration if sales targets are met during a period of time following the acquisition (the “Tellutax Contingent Consideration”). The Tellutax Contingent Consideration is based on three potential earn-out payments determined by periodic revenue achievements over a thirty-month period. Such estimate represents a recurring fair value measurement with significant unobservable inputs, which management considers to be Level 3 measurements under the Fair Value Hierarchy. The significant assumptions used in these calculations included forecasted results and the estimated likelihood for each performance scenario. The fair value of Tellutax Contingent Consideration is estimated using a Monte Carlo Simulation to compute the expected cash flows from the payments specified in the purchase agreement. Such payments have no maximum limit, but if certain targets are not met, there will be no payment for the applicable measurement period. A fair value adjustment of $(800) was recorded in other operating expense (income), net for the three months ended March 31, 2024. A fair value adjustment of $200 was recorded in other operating expense (income), net for the three months ended March 31, 2023. At March 31, 2024, the Tellutax Contingent Consideration of $4,100 is included in purchase commitment and contingent consideration liabilities, current in the condensed consolidated balance sheets. At December 31, 2023, the Tellutax Contingent Consideration of $2,300 and $2,600 is included in purchase commitment and contingent consideration liabilities, current, and purchase commitment and contingent consideration liabilities, net of current portion, respectively, in the condensed consolidated balance sheets. Tellutax Contingent Consideration fair value as of March 31, 2024 and December 31, 2023 and unobservable inputs used for the Monte Carlo Simulation valuation were as follows: March 31, 2024 (unaudited) Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 4,100 Monte Carlo Simulation Revenue volatility 60.0 % Revenue discount rate 20.7 % Term (in years) 1.1 December 31, 2023 Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 4,900 Monte Carlo Simulation Revenue volatility 60.0 % Revenue discount rate 20.8 % Term (in years) 1.3 Changes in the fair value of Tellutax Contingent Consideration during the three months ended March 31, 2024 were as follows: Tellutax Contingent Consideration (unaudited) Balance, January 1, 2024 $ 4,900 Fair value adjustments (800) Balance, March 31, 2024 $ 4,100 Assets and Liabilities for Which Fair Value is Only Disclosed The carrying amounts of cash and cash equivalents and the carrying amount of funds held for customers were the same as their respective fair values and are considered Level 1 measurements. The carrying amount of our bank debt approximates fair value as the variable rates on the debt approximate those commercially available in the market, and is considered a Level 3 measurement. Non-recurring Fair Value Measurements The Tellutax acquisition on January 25, 2021 and the Systax acquisition on January 10, 2020 were accounted for as business combinations, and the total purchase price for each acquisition was allocated to the net assets acquired and liabilities assumed based on their estimated fair values. The Company has a contractual commitment to acquire the remaining equity interest from the original Systax Quotaholders incrementally through 2024. Future purchase commitment payments for these incremental acquisition amounts are based on a multiple of Systax revenue and earnings before interest, depreciation, amortization, and income taxes (“EBITDA”) performance at the end of 2023 and 2022, whereby the Company will have full ownership after the final transaction in 2024. Management determined these future purchase commitments to be a forward contract, resulting in the Company being required to estimate and record an estimated future purchase commitment amount (the “Purchase Commitment Liability”) in connection with recording the initial purchase. The fair value of the Purchase Commitment Liability at the acquisition date was finalized to be $12,592. This amount will fluctuate as a result of changes in foreign currency exchange rates and is reflected in purchase commitment and contingent consideration liabilities in the condensed consolidated balance sheets, with such changes in exchange rates being reflected in other comprehensive loss or income in the condensed consolidated statements of comprehensive income (loss). Adjustments to the settlement date value that arise as a result of remeasurement at future balance sheet dates will be recorded as interest expense related to financing costs in the condensed consolidated statements of comprehensive The remaining Purchase Commitment Liability at March 31, 2024 was $9,290, and is included in purchase commitment and contingent consideration liabilities, current, in the condensed consolidated balance sheet. The Purchase Commitment Liability included in purchase commitment and contingent consideration liabilities, current in the condensed consolidated balance sheet on December 31, 2023 was $9,601. The carrying amounts of the Purchase Commitment Liability discussed above approximated their respective fair values at such dates and are considered Level 3 non-recurring fair value measurements. Derivative Instruments The Company may periodically enter into derivative contracts to reduce our exposure to foreign currency exchange rates. Historically, the Company has not designated derivative contracts as hedges. Such derivative contracts are typically designed to manage specific risks according to our strategies, which may change from time to time. The Company entered into a series of foreign currency forward contracts to reduce our exposure to adverse fluctuations in the Brazilian Real associated with a portion of the Purchase Commitment Liability. Such forward contracts have not been designated as a hedge, do not qualify for hedge accounting and are not material to our condensed consolidated financial statements. These forward contacts are remeasured at fair value on a recurring basis and are included in other assets in our condensed consolidated balance sheets with changes in their estimated fair value recognized as interest expense in our condensed consolidated statements of comprehensive |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT The major components of property and equipment are as follows: As of March 31, As of December 31, 2024 2023 (unaudited) Leasehold improvements $ 20,658 $ 20,662 Equipment 20,239 22,012 Computer software purchased 2,388 2,690 Internal-use software developed: Cloud-based customer solutions 157,931 142,302 Internal systems and tools 58,250 39,430 Furniture and fixtures 7,668 7,669 In-process internal-use software 8,006 28,883 Property and equipment 275,140 263,648 Less accumulated depreciation and amortization (174,546) (162,914) Property and equipment, net $ 100,594 $ 100,734 Depreciation expense for property and equipment, excluding all internal-use software developed and finance leases, was $1,245 and $1,517 for the three months ended March 31, 2024 and 2023, respectively, and is reflected in depreciation and amortization in the condensed consolidated statements of comprehensive income (loss). Finance lease amortization was $22 Assets under finance leases of $297 and $297, net of accumulated amortization of $211 and $190, respectively, at March 31, 2024 and December 31, 2023, respectively, are included in property and equipment in the condensed consolidated balance sheets. The major components of internal-use software developed are as follows: As of March 31, As of December 31, 2024 2023 (unaudited) Internal-use software developed $ 216,181 $ 181,732 Less accumulated depreciation (134,073) (121,646) Internal-use software developed, net of accumulated depreciation 82,108 60,086 In-process internal-use software 8,006 28,883 Internal-use software developed, net $ 90,114 $ 88,969 Amounts included in property and equipment additions related to capitalized internal-use software on the condensed consolidated statements of cash flows are as follows: For the three months ended March 31, 2024 2023 (unaudited) Cloud-based customer solutions $ 9,687 $ 6,182 Internal systems and tools 4,762 3,594 Total $ 14,449 $ 9,776 In-process internal-use software developed is not depreciated until it is available for its intended use. Depreciation expense for internal-use software developed for cloud-based customer solutions for the three months ended March 31, 2024 and 2023 was $9,432 and $8,148, respectively, and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive income (loss). Depreciation expense for internal-use software developed for internal systems and tools for the three months ended March 31, 2024 and 2023 was $3,739 and $1,945, respectively, and is included in depreciation and amortization in the condensed consolidated statements of comprehensive income (loss). |
CAPITALIZED SOFTWARE
CAPITALIZED SOFTWARE | 3 Months Ended |
Mar. 31, 2024 | |
CAPITALIZED SOFTWARE | |
CAPITALIZED SOFTWARE | 5. CAPITALIZED SOFTWARE Capitalized software includes acquired software and direct labor and related expenses for software developed for sale for new products and enhancements to existing products. The major components of capitalized software are as follows: As of March 31, As of December 31, 2024 2023 (unaudited) Capitalized software $ 124,937 $ 115,152 Less accumulated amortization (87,264) (81,410) Capitalized software, net of accumulated depreciation 37,673 33,742 In-process capitalized software 859 5,029 Capitalized software, net $ 38,532 $ 38,771 Software development costs capitalized for the three months ended March 31, 2024 and 2023, excluding acquisitions, were $5,615 and $4,007, respectively. Capitalized software amortization expense, including amortization of acquired technology, was $5,854 and $4,229 for the three months ended March 31, 2024 and 2023, respectively, and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive income (loss). |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangible assets are as follows for the periods presented: As of March 31, As of December 31, 2024 2023 (unaudited) Goodwill $ 253,966 $ 257,842 Other intangible assets, net 1,715 2,396 Total $ 255,681 $ 260,238 The Company has recognized various amortizable other intangible assets in connection with acquisitions related to customer relationships, technology, and tradenames. The following tables provide additional information for other intangible assets, which are individually not material to the condensed consolidated financial statements, for the periods presented: As of March 31, As of December 31, 2024 2023 (unaudited) Weighted average amortization period (years) 3.5 3.5 Gross value $ 10,830 $ 10,960 Accumulated amortization (9,115) (8,564) Carrying value $ 1,715 $ 2,396 The following table presents amortization of other intangible assets: For the three months ended March 31, Cost of Revenues, Software Subscriptions Selling and Marketing Expense Total Expense 2024 $ 61 $ 595 $ 656 2023 58 766 824 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2024 | |
DEBT | |
DEBT | 7. Credit Agreement The Company has a credit agreement (“Credit Agreement”) with a banking syndicate, which provides (i) a term loan in the aggregate amount of $50,000 (the “Term Loan”); and (ii) a $200,000 revolving facility (the “Line of Credit”). Our indebtedness at March 31, 2024 and December 31, 2023 was as follows: As of March 31, As of December 31, 2024 2023 (unaudited) Term Loan $ 2,500 $ 2,500 Current portion of long-term debt 2,500 2,500 Term Loan 43,750 44,375 Deferred financing costs (292) (316) Debt, net of current portion $ 43,458 $ 44,059 Total debt $ 45,958 $ 46,559 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 8 . Common Stock During the three months ended March 31, 2024 and 2023, the Company issued 653 and 592 shares of Class A common stock, respectively, related to the exercise of options, net of 265 and 17 shares, respectively, returned to the Company in lieu of payment of the exercise price and taxes due on these exercises. During the three months ended March 31, 2024 and 2023, the Company issued 674 and 391 shares of Class A common stock, respectively, in connection with the vesting of Restricted Stock Units (“RSUs”), net of 417 and 231 shares, respectively, returned to the Company in lieu of payment of taxes due on the vesting of these RSUs. During the three months ended March 31, 2023, a stockholder exchanged 2,589 shares of Class B common stock for an equivalent number of shares of Class A common stock. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 9. EARNINGS PER SHARE The tables below illustrate the calculation of basic and diluted net loss per common share for the Class A common stock and Class B common stock for the periods reflected below. For the three months ended March 31, Class A common stock: 2024 2023 (unaudited) Numerator, basic: Net income (loss) attributable to all stockholders $ 2,684 $ (18,132) Class A common stock as a percentage of total shares outstanding, basic 39.92 % 33.49 % Net income (loss) attributable to Class A stockholders, basic $ 1,071 $ (6,072) Numerator, diluted: Net income (loss) attributable to all stockholders $ 2,684 $ (18,132) Class A common stock as a percentage of total shares outstanding, diluted 42.30 % 33.49 % Net income (loss) attributable to Class A stockholders, diluted $ 1,135 $ (6,072) Denominator, basic and diluted: Weighted average Class A common stock, basic 61,560 50,456 Dilutive effect of common stock equivalents (1) 6,361 — Weighted average Class A common stock, diluted 67,921 50,456 Net income (loss) per Class A share, basic $ 0.02 $ (0.12) Net income (loss) per Class A share, diluted $ 0.02 $ (0.12) (1) For the three months ended March 31, 2023 , the following weighted-average outstanding shares of common stock equivalents by award type were excluded from the computation of diluted net loss per share attributable to Class A stockholders, as the impact of including them would have been anti-dilutive: 8,335 options (including 705 out-of-the-money options), 235 restricted stock awards (“RSAs”), 3,141 RSUs, and 45 shares under the ESPP. For the three months ended March 31, Class B common stock: 2024 2023 (unaudited) Numerator, basic: Net income (loss) attributable to all stockholders $ 2,684 $ (18,132) Class B common stock as a percentage of total shares outstanding, basic 60.08 % 66.51 % Net income (loss) attributable to Class B stockholders, basic $ 1,613 $ (12,060) Numerator, diluted: Net income (loss) attributable to all stockholders $ 2,684 $ (18,132) Class B common stock as a percentage of total shares outstanding, diluted 57.70 % 66.51 % Net income (loss) attributable to Class B stockholders, diluted $ 1,549 $ (12,060) Denominator, basic and diluted: Weighted average Class B common stock, basic 92,661 100,221 Dilutive effect of common stock equivalents — — Weighted average Class B common stock, diluted 92,661 100,221 Net income (loss) per Class B share, basic $ 0.02 $ (0.12) Net income (loss) per Class B share, diluted $ 0.02 $ (0.12) |
STOCK-BASED AWARD PLANS
STOCK-BASED AWARD PLANS | 3 Months Ended |
Mar. 31, 2024 | |
STOCK-BASED AWARD PLANS | |
STOCK-BASED AWARD PLANS | 10. STOCK-BASED AWARD PLANS The 2020 Incentive Award Plan (the “2020 Plan”) Options The following table summarizes activity for options outstanding under the 2020 Plan for the three months ended March 31, 2024: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic 2020 Plan Option Activity Units Price Life (Years) Value (unaudited) Outstanding at January 1, 2024 5,692 $ 5.32 4.7 $ 124,327 Exercised (918) $ 2.98 2020 Plan options outstanding at March 31, 2024 4,774 $ 5.77 4.8 124,161 2020 Plan options exercisable at March 31, 2024 3,582 $ 5.07 4.2 95,703 The detail of options outstanding, vested, and exercisable under the 2020 Plan as of March 31, 2024 is as follows: Options Outstanding Options Vested and Exercisable Weighted Weighted Average Average Exercise Prices Units Life (Years) Units Life (Years) (unaudited) $0.15 to $0.71 769 * 769 * $2.15 60 0.9 60 0.9 $2.50 1,211 2.4 1,211 2.4 $3.17 323 4.0 323 4.0 $3.73 1,155 5.6 563 5.4 $4.70 566 5.9 225 5.9 $18.47 213 7.7 107 7.7 $18.96 185 7.4 120 7.4 $19.00 50 7.5 17 7.5 $32.16 242 6.9 187 6.9 4,774 3,582 *These options have indefinite contractual lives. The Board of Directors (the “Board”) intends all options granted to be exercisable at a price per share not less than the per share fair market value of the Company’s Class A common stock underlying the options on the date of grant. Compensation expense for option awards are measured based on the grant date fair value of the awards and recognized in the condensed consolidated statements of comprehensive income (loss) over the period during which the participant is required to perform the requisite services. The vesting period is generally one There were no options issued under the 2020 Plan during the three months ended March 31, 2024 or 2023. At March 31, 2024, $3,628 of unrecognized compensation expense associated with options is expected to be recognized over a weighted average period of approximately 1.0 years. Restricted Stock Units The following table summarizes RSU activity for the three months ended March 31, 2024: Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2024 4,171 $ 16.11 Granted 1,672 25.17 Vested (1,091) 16.15 Forfeited (88) 15.77 Outstanding at March 31, 2024 4,664 $ 19.35 Stock-based compensation cost for RSUs is measured based on the fair value of the Company’s underlying common stock on the date of grant and is recognized on a straight-line basis in the condensed consolidated statements of comprehensive one Restricted Stock Awards The following table summarizes RSA activity for the three months ended March 31, 2024: Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2024 91 $ 21.50 Outstanding at March 31, 2024 91 $ 21.50 Stock-based compensation cost for RSAs is measured based on the fair value of the Company’s underlying common stock on the date of grant and is recognized on a straight-line basis in the condensed consolidated statements of comprehensive one Employee Stock Purchase Plan The ESPP provides eligible employees with rights during each six-month ESPP offering period to purchase shares of the Company’s Class A common stock through payroll deductions of up to a specified percentage of their eligible compensation. The purchase price of the shares, in the absence of a contrary designation, is 85% of the lower of the fair value of the Class A common stock on the first or last day of the ESPP offering period. Amounts withheld from participants are reflected in accrued salaries and benefits in the condensed consolidated balance sheets until such shares are purchased. Amounts withheld from participants for the offering period ending May 31, 2024 aggregated $1,135 as of March 31, 2024. As of March 31, 2024, 6,451 shares of Class A common stock were available for issuance under the ESPP. As of March 31, 2024, there was approximately $150 of unrecognized ESPP stock-based compensation cost expected to be recognized on a straight-line basis over the remaining term of the six-month offering period ending May 31, 2024. At March 31, 2024 and 2023, there were two ESPP offering periods open that end May 31, 2024 and 2023, respectively. The fair value of ESPP purchase rights for the offering periods is comprised of the value of the 15% ESPP discount and the value associated with the call or put over the respective ESPP offering period. ESPP offering periods reflected in the March 31, 2024 and 2023 financial statements include the periods noted below in the table. The value of the call or put was estimated using the Black-Scholes model with the following assumptions: Offering Period Ending 5/31/2024 5/31/2023 Fair market value of common stock $ 27.82 $ 17.21 Volatility 36.6 % 46.4 % Expected term (years) 0.5 0.5 Expected dividend yield - % - % Risk-free interest rate 5.3 % 4.7 % Stock-Based Compensation The Company recognized total stock-based compensation cost related to incentive awards, net of forfeitures, as follows: For the three months ended March 31, 2024 2023 (unaudited) Stock-based compensation expense: Stock options $ 2,606 $ 2,171 RSUs 13,003 8,345 RSAs 490 727 ESPP 225 191 Total stock-based compensation expense $ 16,324 $ 11,434 The Company recognized stock-based compensation cost in the condensed consolidated statements of comprehensive income (loss) as follows: For the three months ended March 31, 2024 2023 (unaudited) Stock-based compensation expense: Cost of revenues, software subscriptions $ 1,590 $ 996 Cost of revenues, services 1,006 836 Research and development 3,373 2,234 Selling and marketing 4,222 2,898 General and administrative 6,133 4,470 Total stock-based compensation expense $ 16,324 $ 11,434 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES In January 2022, the Company filed a complaint against a competitor alleging claims of unfair competition, intentional interference with contractual relations, and trade secret misappropriation. The outcome of the case is subject to a number of uncertainties; therefore, the Company has not recognized any potential impact to the condensed consolidated financial statements. The Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. The Company is not aware of any such legal proceedings or claims that management believes will have a material adverse effect on its business, financial condition, or operating results. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES The Company reported income tax (benefit) expense of $(4,535) and $9,553 for the three months ended March 31, 2024 and 2023, respectively. The effective income tax rate ("ETR") was 245.0% for the three months ended March 31, 2024, compared to (111.4)% for the three months ended March 31, 2023. In determining interim provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date loss, adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to state taxes, foreign taxes, limitations on deductions of certain employees’ compensation under Internal Revenue Code Section 162(m), tax benefits on the exercises and vesting of stock awards, tax credits, and fluctuations in valuation allowances on certain foreign deferred tax assets. The income tax benefit for the three months ended March 31, 2024 was primarily attributable to tax benefits from stock-based awards exercised or vested during the quarter, net of the impact from limitations on deductions of certain employees’ compensation. The income tax expense for the three months ended March 31, 2023 was primarily attributable to differences in tax rates on foreign jurisdiction income or loss, limitations on deductions of certain employees’ compensation, fluctuations in valuation allowances on certain foreign deferred tax assets, and income tax expense on income allocated to state jurisdictions. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS Credit Agreement On April 19, 2024, the Company entered into the Fourth Amendment to the Credit Agreement (the “Fourth Amendment”) with a banking syndicate, which amended the Credit Agreement, dated as of March 31, 2020, providing for, among other things, amendments of certain definitions. Indenture and Notes On April 26, 2024, the Company closed its private offering of $345,000 aggregate principal amount of 0.750% Convertible Senior Notes due 2029 (the “Notes”). The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”) between the Company and U.S. Bank Trust Company, National Association, as trustee. The Notes issued on April 26, 2024 include an additional $45,000 aggregate principal amount of Notes, issued pursuant to the full exercise by the initial purchasers of the Notes of their option to purchase additional Notes. The Notes are the senior, unsecured obligations of the Company and are (i) ranked equal in right of payment with the Company’s senior unsecured indebtedness, (ii) senior in right of payment to the Company’s indebtedness that is expressly subordinated to the Notes, (iii) effectively subordinated to the Company’s senior secured indebtedness, to the extent of the value of the collateral securing that indebtedness, and (iv) structurally subordinated to all indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. The Notes bear interest at a rate of 0.750% per annum on the principal amount thereof, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2024. The Notes will mature on May 1, 2029 (the “maturity date”), unless earlier repurchased, redeemed or converted in accordance with their terms. Before November 1, 2028, holders have the right to convert their Notes only upon the occurrence of certain events. On November 1, 2028, and thereafter, holders may convert their Notes anytime at their election, until the close of business on the second scheduled trading day immediately before the maturity date. Upon conversion, the Company will pay or deliver, as applicable, cash, shares of Class A common stock or a combination of cash and shares of Class A common stock at the Company’s election. The initial conversion rate for the Notes is 27.5315 shares of Class A common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $36.32 per share of Class A common stock, and is subject to adjustment upon the occurrence of certain specified events as set forth in the Indenture. The net proceeds from the offering of the Notes were $333,650, after deducting the initial purchasers’ discount and commissions, and the estimated offering expenses payable by the Company. The Company used $42,366 of the net proceeds from this offering to fund the cost of the Capped Call Transactions (as defined below) and intends to use the remainder for working capital or other general corporate expenses, which may include capital expenditures, potential acquisitions, and strategic transactions. However, the Company has not designated any specific uses and has no current agreements with respect to any acquisition or strategic transaction. Capped Call Transactions In connection with the pricing of the Notes on April 23, 2024, the Company entered into privately negotiated capped call transactions (together, the “Base Capped Call Transactions”) with certain financial institutions (together, the “Option Counterparties”). In connection with the exercise of the option to purchase the additional Notes in full, the Company entered into additional capped call transactions with the Option Counterparties (together, the “Additional Capped Call Transactions” and, together with the Base Capped Call Transactions, the “Capped Call Transactions”). The cap price of the Capped Call Transactions will initially be $55.88 per share of Class A common stock, and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions are expected generally to reduce the potential dilution to the Class A common stock upon any conversion of the Notes and/or to offset any cash payments the Company is required to make in excess of the principal amount of the converted Notes, as the case may be, upon any conversion of the Notes. The cost of the Capped Call Transactions was $42,366. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Business | Nature of Business Vertex, Inc. (“Vertex”) and its consolidated subsidiaries and variable interest entities (“VIE”) (collectively, the “Company”) operate as solutions providers of state, local, and value added tax calculation, compliance, and analytics, offering software products that are sold through software license and software as a service (“cloud”) subscriptions. The Company also provides implementation and training services in connection with its software license and cloud subscriptions, transaction tax returns outsourcing, and other tax-related services. The Company sells to customers located throughout the United States of America (“U.S.”) and internationally. |
Basis of Consolidation | Basis of Consolidation The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the accounts of the Company. All intercompany transactions have been eliminated in consolidation. The Company has an 80% controlling equity interest in Systax Sistemas Fiscais LTDA (“Systax”), a provider of Brazilian transaction tax content and software. Systax was determined to be a VIE and the accounts are included in the condensed consolidated financial statements. Vertex does not have full decision-making authority over Systax; however, Vertex is the entity that most significantly participates in the variability of the fair value of Systax’s net assets and is considered the entity most closely associated to Systax. As such, Vertex is deemed the primary beneficiary of Systax and consolidates Systax into its condensed consolidated financial statements. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and include the accounts of the Company. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”) filed with the SEC on February 29, 2024. The condensed consolidated balance sheet as of December 31, 2023 has been derived from audited financial statements included in the 2023 Annual Report. The accompanying interim condensed consolidated balance sheet as of March 31, 2024, the interim condensed consolidated statements of comprehensive income (loss) and changes in stockholders’ equity for the three months ended March 31, 2024 and 2023, and the interim condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the annual audited consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items necessary for the fair presentation of the condensed consolidated financial statements. The operating results for the three months ended March 31, 2024 are not necessarily indicative of the results expected for the full year ending December 31, 2024. |
Segments | Segments The Company operates its business as one operating segment. For both the three months ended March 31, 2024 and March 31, 2023, approximately 7% of the Company’s revenues were generated from customers located outside the U.S. As of March 31, 2024 and December 31, 2023, $527 and $633, respectively, of the Company’s property and equipment assets were held outside the U.S. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues, and expenses during the reporting period. Significant estimates used in preparing these condensed consolidated financial statements include: (i) the estimated allowance for subscription cancellations; (ii) expected credit losses associated with the allowance for doubtful accounts; (iii) allowance for credit losses on available-for-sale debt securities; (iv) the reserve for self-insurance; (v) assumptions related to achievement of technological feasibility for software developed for sale; (vi) product life cycles; (vii) estimated useful lives and potential impairment of long-lived assets, intangible assets, and capitalized cloud computing arrangement (“CCA”) software implementation costs; (viii) potential impairment of goodwill; (ix) determination of the fair value of tangible and intangible assets acquired, liabilities assumed, and consideration transferred in acquisitions; (x) amortization period of deferred commissions; (xi) Black-Scholes-Merton option pricing model (“Black-Scholes model”) input assumptions used to determine the fair value of certain stock-based compensation awards and Employee Stock Purchase Plan (“ESPP”) purchase rights; (xii) measurement of future purchase commitment, contingent consideration liabilities, and deferred purchase consideration liabilities associated with acquisitions; and (xiii) the potential outcome of future tax consequences of events that have been recognized in the condensed consolidated financial statements or tax returns. Actual results may differ from these estimates. |
Software Development Costs | Software Development Costs Cloud Computing Software Implementation Costs The Company follows Accounting Standards Codification (“ASC”) 350-40, Goodwill and Other, Internal-Use Software, two |
Capitalized Cloud Implementation Costs | Amortization expense for capitalized cloud computing implementation costs for the three months ended March 31, 2024 was $994 and is included in general and administrative expense in the condensed consolidated statements of comprehensive |
Supplemental Balance Sheet Disclosures | Supplemental Balance Sheet Disclosures Supplemental balance sheet disclosures are as follows for the respective periods: As of March 31, As of December 31, 2024 2023 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 12,694 $ 11,558 Unamortized cloud computing implementation costs 3,995 3,995 Prepaid insurance 1,002 521 Prepaid licenses and support 14,215 10,099 Prepaid expenses and other current assets $ 31,906 $ 26,173 Other assets: Unamortized cloud computing implementation costs $ 11,480 $ 12,475 Other assets 3,294 3,538 Total other assets $ 14,774 $ 16,013 Accrued expenses: Accrued general expenses $ 17,362 $ 25,998 Accrued contract labor and professional fees 13,914 13,372 Accrued income and other taxes 5,478 5,365 Accrued expenses $ 36,754 $ 44,735 |
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements Segment Reporting Income Tax Disclosures interim periods for fiscal years beginning after December 15, 2025. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively, and early adoption is permitted. The Company is continuing to assess the potential impacts of the standard, and it does not expect this pronouncement to have a material effect on its financial statements, other than the required changes to the income tax disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of supplemental balance sheet information | As of March 31, As of December 31, 2024 2023 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 12,694 $ 11,558 Unamortized cloud computing implementation costs 3,995 3,995 Prepaid insurance 1,002 521 Prepaid licenses and support 14,215 10,099 Prepaid expenses and other current assets $ 31,906 $ 26,173 Other assets: Unamortized cloud computing implementation costs $ 11,480 $ 12,475 Other assets 3,294 3,538 Total other assets $ 14,774 $ 16,013 Accrued expenses: Accrued general expenses $ 17,362 $ 25,998 Accrued contract labor and professional fees 13,914 13,372 Accrued income and other taxes 5,478 5,365 Accrued expenses $ 36,754 $ 44,735 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue | Three months ended March 31, 2024 2023 (unaudited) Software subscriptions: Software licenses $ 69,994 $ 62,808 Cloud subscriptions 61,836 48,206 Software subscriptions 131,830 111,014 Services 24,951 21,737 Total revenues $ 156,781 $ 132,751 |
Schedule of beginning and ending balances of accounts receivable, net of allowance | For the three months ended March 31, 2024 For the year ended December 31, 2023 (unaudited) Balance, beginning of period $ 141,752 $ 102,885 Balance, end of period 133,149 141,752 Increase (decrease), net $ (8,603) $ 38,867 |
Schedule of beginning and ending balances of and changes to the allowance and the deferred allowance | For the three months ended March 31, 2024 2023 Balance Net Change Balance Net Change (unaudited) Allowance balance, January 1, $ (16,272) $ (9,554) Allowance balance, March 31, (20,241) (10,641) Change in allowance $ 3,969 $ 1,087 Deferred allowance balance, January 1, 11,741 7,133 Deferred allowance balance, March 31, 14,634 7,516 Change in deferred allowance (2,893) (383) Net amount charged to revenues $ 1,076 $ 704 |
Schedule of information about the balances of and changes to deferred revenue | For the three months ended March 31, 2024 2023 (unaudited) Changes to deferred revenue: Beginning balance $ 292,720 $ 279,136 Additional amounts deferred 165,052 136,731 Revenues recognized (156,781) (132,751) Ending balance $ 300,991 $ 283,116 |
Schedule of information about the changes to contract cost balances | For the three months ended March 31, 2024 2023 (unaudited) Deferred commissions: Beginning balance $ 21,237 $ 15,463 Additions 3,984 2,851 Amortization (3,920) (2,393) Ending balance $ 21,301 $ 15,921 |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements Using As of March 31, 2024 (unaudited) Fair Value Prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Money Market Funds $ 42,763 $ 42,763 — — Commercial Paper 6,158 — 6,158 — U.S. Treasury Securities 4,430 — 4,430 — Tellutax Contingent Consideration 4,100 — — 4,100 Foreign Currency Forward Contracts 677 — 677 — Fair Value Measurements Using As of December 31, 2023 Fair Value Prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Money Market Funds $ 53,049 $ 53,049 $ — $ — Commercial Paper 7,168 — 7,168 — U.S. Treasury Securities 3,621 — 3,621 — Tellutax Contingent Consideration 4,900 — — 4,900 Foreign Currency Forward Contracts 849 — 849 — |
Summary of estimated fair value of Tellutax contingent consideration | March 31, 2024 (unaudited) Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 4,100 Monte Carlo Simulation Revenue volatility 60.0 % Revenue discount rate 20.7 % Term (in years) 1.1 December 31, 2023 Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 4,900 Monte Carlo Simulation Revenue volatility 60.0 % Revenue discount rate 20.8 % Term (in years) 1.3 |
Changes in fair value of Tellutax contingent consideration | Tellutax Contingent Consideration (unaudited) Balance, January 1, 2024 $ 4,900 Fair value adjustments (800) Balance, March 31, 2024 $ 4,100 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
PROPERTY AND EQUIPMENT | |
Schedule of major components of property and equipment | As of March 31, As of December 31, 2024 2023 (unaudited) Leasehold improvements $ 20,658 $ 20,662 Equipment 20,239 22,012 Computer software purchased 2,388 2,690 Internal-use software developed: Cloud-based customer solutions 157,931 142,302 Internal systems and tools 58,250 39,430 Furniture and fixtures 7,668 7,669 In-process internal-use software 8,006 28,883 Property and equipment 275,140 263,648 Less accumulated depreciation and amortization (174,546) (162,914) Property and equipment, net $ 100,594 $ 100,734 |
Schedule of major components of internal-use software | As of March 31, As of December 31, 2024 2023 (unaudited) Internal-use software developed $ 216,181 $ 181,732 Less accumulated depreciation (134,073) (121,646) Internal-use software developed, net of accumulated depreciation 82,108 60,086 In-process internal-use software 8,006 28,883 Internal-use software developed, net $ 90,114 $ 88,969 |
Schedule of amounts capitalized for internal-use software and included in property and equipment additions on the consolidated statements of cash flows | For the three months ended March 31, 2024 2023 (unaudited) Cloud-based customer solutions $ 9,687 $ 6,182 Internal systems and tools 4,762 3,594 Total $ 14,449 $ 9,776 |
CAPITALIZED SOFTWARE (Tables)
CAPITALIZED SOFTWARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
CAPITALIZED SOFTWARE | |
Schedule of major components of capitalized software | As of March 31, As of December 31, 2024 2023 (unaudited) Capitalized software $ 124,937 $ 115,152 Less accumulated amortization (87,264) (81,410) Capitalized software, net of accumulated depreciation 37,673 33,742 In-process capitalized software 859 5,029 Capitalized software, net $ 38,532 $ 38,771 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Changes in the carrying amount of goodwill | As of March 31, As of December 31, 2024 2023 (unaudited) Goodwill $ 253,966 $ 257,842 Other intangible assets, net 1,715 2,396 Total $ 255,681 $ 260,238 |
Schedule of other acquired intangible assets | As of March 31, As of December 31, 2024 2023 (unaudited) Weighted average amortization period (years) 3.5 3.5 Gross value $ 10,830 $ 10,960 Accumulated amortization (9,115) (8,564) Carrying value $ 1,715 $ 2,396 |
Schedule of acquired intangible assets | For the three months ended March 31, Cost of Revenues, Software Subscriptions Selling and Marketing Expense Total Expense 2024 $ 61 $ 595 $ 656 2023 58 766 824 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
DEBT | |
Schedule of Debt | As of March 31, As of December 31, 2024 2023 (unaudited) Term Loan $ 2,500 $ 2,500 Current portion of long-term debt 2,500 2,500 Term Loan 43,750 44,375 Deferred financing costs (292) (316) Debt, net of current portion $ 43,458 $ 44,059 Total debt $ 45,958 $ 46,559 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Class A | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Schedule of earnings per share basic and diluted | For the three months ended March 31, Class A common stock: 2024 2023 (unaudited) Numerator, basic: Net income (loss) attributable to all stockholders $ 2,684 $ (18,132) Class A common stock as a percentage of total shares outstanding, basic 39.92 % 33.49 % Net income (loss) attributable to Class A stockholders, basic $ 1,071 $ (6,072) Numerator, diluted: Net income (loss) attributable to all stockholders $ 2,684 $ (18,132) Class A common stock as a percentage of total shares outstanding, diluted 42.30 % 33.49 % Net income (loss) attributable to Class A stockholders, diluted $ 1,135 $ (6,072) Denominator, basic and diluted: Weighted average Class A common stock, basic 61,560 50,456 Dilutive effect of common stock equivalents (1) 6,361 — Weighted average Class A common stock, diluted 67,921 50,456 Net income (loss) per Class A share, basic $ 0.02 $ (0.12) Net income (loss) per Class A share, diluted $ 0.02 $ (0.12) (1) For the three months ended March 31, 2023 , the following weighted-average outstanding shares of common stock equivalents by award type were excluded from the computation of diluted net loss per share attributable to Class A stockholders, as the impact of including them would have been anti-dilutive: 8,335 options (including 705 out-of-the-money options), 235 restricted stock awards (“RSAs”), 3,141 RSUs, and 45 shares under the ESPP. |
Class B | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Schedule of earnings per share basic and diluted | For the three months ended March 31, Class B common stock: 2024 2023 (unaudited) Numerator, basic: Net income (loss) attributable to all stockholders $ 2,684 $ (18,132) Class B common stock as a percentage of total shares outstanding, basic 60.08 % 66.51 % Net income (loss) attributable to Class B stockholders, basic $ 1,613 $ (12,060) Numerator, diluted: Net income (loss) attributable to all stockholders $ 2,684 $ (18,132) Class B common stock as a percentage of total shares outstanding, diluted 57.70 % 66.51 % Net income (loss) attributable to Class B stockholders, diluted $ 1,549 $ (12,060) Denominator, basic and diluted: Weighted average Class B common stock, basic 92,661 100,221 Dilutive effect of common stock equivalents — — Weighted average Class B common stock, diluted 92,661 100,221 Net income (loss) per Class B share, basic $ 0.02 $ (0.12) Net income (loss) per Class B share, diluted $ 0.02 $ (0.12) |
STOCK-BASED AWARD PLANS (Tables
STOCK-BASED AWARD PLANS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Compensation plans: | |
Schedule of ESPP valuation assumptions | Offering Period Ending 5/31/2024 5/31/2023 Fair market value of common stock $ 27.82 $ 17.21 Volatility 36.6 % 46.4 % Expected term (years) 0.5 0.5 Expected dividend yield - % - % Risk-free interest rate 5.3 % 4.7 % |
Schedule of stock-based compensation cost related to incentive awards | For the three months ended March 31, 2024 2023 (unaudited) Stock-based compensation expense: Stock options $ 2,606 $ 2,171 RSUs 13,003 8,345 RSAs 490 727 ESPP 225 191 Total stock-based compensation expense $ 16,324 $ 11,434 |
Schedule of stock based compensation cost in consolidated statement of operations | For the three months ended March 31, 2024 2023 (unaudited) Stock-based compensation expense: Cost of revenues, software subscriptions $ 1,590 $ 996 Cost of revenues, services 1,006 836 Research and development 3,373 2,234 Selling and marketing 4,222 2,898 General and administrative 6,133 4,470 Total stock-based compensation expense $ 16,324 $ 11,434 |
Employee Stock Option | |
Compensation plans: | |
Schedule of Option activity | Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic 2020 Plan Option Activity Units Price Life (Years) Value (unaudited) Outstanding at January 1, 2024 5,692 $ 5.32 4.7 $ 124,327 Exercised (918) $ 2.98 2020 Plan options outstanding at March 31, 2024 4,774 $ 5.77 4.8 124,161 2020 Plan options exercisable at March 31, 2024 3,582 $ 5.07 4.2 95,703 |
Schedule of outstanding, vested and exercisable | Options Outstanding Options Vested and Exercisable Weighted Weighted Average Average Exercise Prices Units Life (Years) Units Life (Years) (unaudited) $0.15 to $0.71 769 * 769 * $2.15 60 0.9 60 0.9 $2.50 1,211 2.4 1,211 2.4 $3.17 323 4.0 323 4.0 $3.73 1,155 5.6 563 5.4 $4.70 566 5.9 225 5.9 $18.47 213 7.7 107 7.7 $18.96 185 7.4 120 7.4 $19.00 50 7.5 17 7.5 $32.16 242 6.9 187 6.9 4,774 3,582 *These options have indefinite contractual lives. |
Restricted Stock Units | |
Compensation plans: | |
Schedule of Option activity | Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2024 4,171 $ 16.11 Granted 1,672 25.17 Vested (1,091) 16.15 Forfeited (88) 15.77 Outstanding at March 31, 2024 4,664 $ 19.35 |
Restricted Stock Awards | |
Compensation plans: | |
Schedule of restricted activity | Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2024 91 $ 21.50 Outstanding at March 31, 2024 91 $ 21.50 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Mar. 31, 2024 |
Systax - VIE | Systax | |
Accounting policies: | |
Ownership (as a percent) | 80% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Credit Risk (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 | Dec. 31, 2023 USD ($) | |
Segment information: | |||
Operating segments | segment | 1 | ||
Property and equipment | $ 100,594 | $ 100,734 | |
Outside United States | |||
Segment information: | |||
Property and equipment | $ 527 | $ 633 | |
Revenue | Geographic Concentration Risk | Outside United States | |||
Segment information: | |||
Risk percentage | 7% | 7% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Software Development Costs and Supplemental Balance Sheet Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Cloud computing implementation costs | |||
Amortization of cloud computing implementation costs | $ 994 | $ 0 | |
Prepaid expenses and other current assets: | |||
Prepaid expenses | 12,694 | $ 11,558 | |
Unamortized cloud computing implementation costs | 3,995 | 3,995 | |
Prepaid Insurance | 1,002 | 521 | |
Prepaid licenses and support | 14,215 | 10,099 | |
Prepaid expenses and other current assets | 31,906 | 26,173 | |
Other assets: | |||
Unamortized cloud computing implementation costs | 11,480 | 12,475 | |
Other assets | 3,294 | 3,538 | |
Total other assets | 14,774 | 16,013 | |
Accrued expenses: | |||
Accrued general expenses | 17,362 | 25,998 | |
Accrued contract labor and professional fees | 13,914 | 13,372 | |
Accrued income and other taxes | 5,478 | 5,365 | |
Accrued expenses | $ 36,754 | $ 44,735 | |
Minimum | |||
Cloud computing implementation costs | |||
Capitalized software development cost amortization extension term | 2 years | ||
Maximum | |||
Cloud computing implementation costs | |||
Capitalized software development cost amortization extension term | 5 years |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of revenue: | ||
Total revenues | $ 156,781 | $ 132,751 |
Software subscriptions | ||
Disaggregation of revenue: | ||
Total revenues | 131,830 | 111,014 |
Software licenses | ||
Disaggregation of revenue: | ||
Total revenues | 69,994 | 62,808 |
Cloud subscriptions | ||
Disaggregation of revenue: | ||
Total revenues | 61,836 | 48,206 |
Services | ||
Disaggregation of revenue: | ||
Total revenues | $ 24,951 | $ 21,737 |
REVENUE RECOGNITION - Accounts
REVENUE RECOGNITION - Accounts receivable, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
REVENUE RECOGNITION | ||||
Allowance for accounts receivable | $ 20,241 | $ 16,272 | $ 10,641 | $ 9,554 |
Allowance for credit loss | ||||
Balance, beginning of period | 141,752 | 102,885 | ||
Balance, end of period | 133,149 | 141,752 | ||
Increase (decrease), net | $ (8,603) | $ 38,867 |
REVENUE RECOGNITION - Allowance
REVENUE RECOGNITION - Allowance and deferred allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Allowance for credit loss | ||
Beginning balance | $ (16,272) | $ (9,554) |
Ending balance | (20,241) | (10,641) |
Change in allowance | 3,969 | 1,087 |
Deferred beginning balance | 11,741 | 7,133 |
Deferred ending balance | 14,634 | 7,516 |
Change in deferred allowance | (2,893) | (383) |
Net amount charged to revenues | 1,076 | $ 704 |
Software subscriptions | ||
Allowance for credit loss | ||
Beginning balance | (16,272) | |
Ending balance | (20,241) | |
Deferred beginning balance | 11,741 | |
Deferred ending balance | $ 14,634 |
REVENUE RECOGNITION - Changes t
REVENUE RECOGNITION - Changes to deferred revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
REVENUE RECOGNITION | ||
Beginning balance | $ 292,720 | $ 279,136 |
Additional amounts deferred | 165,052 | 136,731 |
Revenues recognized | (156,781) | (132,751) |
Ending balance | $ 300,991 | $ 283,116 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract cost balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Deferred commissions: | ||
Beginning balance | $ 21,237 | $ 15,463 |
Additions | 3,984 | 2,851 |
Amortization | (3,920) | (2,393) |
Ending balance | $ 21,301 | $ 15,921 |
Contract costs, amortization period | 3 years | |
Impairment loss | $ 0 |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details) $ in Thousands | 1 Months Ended | ||
Jan. 31, 2021 USD ($) payment | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Forward foreign current contract, asset | $ 677 | $ 849 | |
Significant other observable inputs (Level 2) | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Forward foreign current contract, asset | 677 | 849 | |
Money Market Funds | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 42,763 | 53,049 | |
Money Market Funds | Prices in active markets for identical assets (Level 1) | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 42,763 | 53,049 | |
Commercial Paper | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 6,158 | 7,168 | |
Commercial Paper | Significant other observable inputs (Level 2) | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 6,158 | 7,168 | |
U.S. Treasury Securities | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 4,430 | 3,621 | |
U.S. Treasury Securities | Significant other observable inputs (Level 2) | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 4,430 | 3,621 | |
Tellutax | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Tellutax Contingent Consideration | 4,100 | 4,900 | |
Number of potential earnout payments | payment | 3 | ||
Revenue achievement period | 30 months | ||
Maximum limit on earnout payments | $ 0 | ||
Earn out payment for applicable measurement period | $ 0 | ||
Tellutax | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Tellutax Contingent Consideration | 4,100 | 4,900 | |
Tellutax | Significant unobservable inputs (Level 3) | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Tellutax Contingent Consideration | $ 4,100 | $ 4,900 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Estimated fair values of Tellutax contingent consideration (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) Y | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) Y | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value adjustments to contingent consideration | $ (800) | $ 200 | |
Purchase commitment and contingent consideration liabilities, current | 13,390 | $ 11,901 | |
Purchase commitment and contingent consideration liabilities, net of current portion | 2,600 | ||
Tellutax | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Tellutax Contingent Consideration | 4,100 | 4,900 | |
Fair value adjustments to contingent consideration | (800) | $ 200 | |
Purchase commitment and contingent consideration liabilities, current | $ 4,100 | 2,300 | |
Purchase commitment and contingent consideration liabilities, net of current portion | $ 2,600 | ||
Tellutax | Revenue volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration measurement input | 60 | 60 | |
Tellutax | Revenue discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration measurement input | 20.7 | 20.8 | |
Tellutax | Term (in years) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration measurement input | Y | 1.1 | 1.3 |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Changes in fair value of Tellutax contingent consideration (Details) - Contingent Consideration $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 4,900 |
Fair value adjustments | (800) |
Ending balance | $ 4,100 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Non-recurring Fair Value Measurements (Details) - Systax - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Purchase commitment liability | $ 12,592 | ||
Adjustment due to currency exchange rates fluctuation | 0 | $ 0 | |
Minimum Purchase Commitment liability | $ 9,290 | $ 9,601 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property and equipment | ||
Property and equipment | $ 275,140 | $ 263,648 |
Less accumulated depreciation | (174,546) | (162,914) |
Property and equipment, net | 100,594 | 100,734 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment | 20,658 | 20,662 |
Equipment | ||
Property and equipment | ||
Property and equipment | 20,239 | 22,012 |
Computer software purchased | ||
Property and equipment | ||
Property and equipment | 2,388 | 2,690 |
Internal-use software | ||
Property and equipment | ||
Property and equipment | 216,181 | 181,732 |
Less accumulated depreciation | (134,073) | (121,646) |
Property and equipment, net | 90,114 | 88,969 |
Cloud-Based Customer Solutions | ||
Property and equipment | ||
Property and equipment | 157,931 | 142,302 |
Internal Systems and Tools | ||
Property and equipment | ||
Property and equipment | 58,250 | 39,430 |
Furniture and fixtures | ||
Property and equipment | ||
Property and equipment | 7,668 | 7,669 |
In-process internal-use software | ||
Property and equipment | ||
Property and equipment | $ 8,006 | $ 28,883 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property and equipment | |||
Finance lease amortization | $ 22 | $ 279 | |
Property and equipment, gross | 275,140 | $ 263,648 | |
Property and equipment, net of accumulated depreciation | 100,594 | 100,734 | |
Accumulated amortization | 174,546 | 162,914 | |
Excluding internal-use software and capital leases | |||
Property and equipment | |||
Depreciation expense | 1,245 | 1,517 | |
Assets under finance leases | |||
Property and equipment | |||
Property and equipment, gross | 297 | 297 | |
Accumulated amortization | 211 | 190 | |
Internal-use software | |||
Property and equipment | |||
Property and equipment, gross | 216,181 | 181,732 | |
Property and equipment, net of accumulated depreciation | 90,114 | 88,969 | |
Accumulated amortization | 134,073 | 121,646 | |
Depreciation expense | 9,432 | 8,148 | |
Internal Systems and Tools | |||
Property and equipment | |||
Property and equipment, gross | 58,250 | $ 39,430 | |
Depreciation expense | $ 3,739 | $ 1,945 |
PROPERTY AND EQUIPMENT - Major
PROPERTY AND EQUIPMENT - Major components of internal-use software (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property and equipment | ||
Property and equipment, gross | $ 275,140 | $ 263,648 |
Less accumulated depreciation | (174,546) | (162,914) |
Property and equipment | 100,594 | 100,734 |
Internal-use software | ||
Property and equipment | ||
Property and equipment, gross | 216,181 | 181,732 |
Less accumulated depreciation | (134,073) | (121,646) |
Internal-use software developed, net of accumulated depreciation | 82,108 | 60,086 |
Property and equipment | 90,114 | 88,969 |
In-process internal-use software | ||
Property and equipment | ||
Property and equipment, gross | $ 8,006 | $ 28,883 |
PROPERTY AND EQUIPMENT - Amount
PROPERTY AND EQUIPMENT - Amounts included in property and equipment additions related to capitalized internal-use software (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cloud-Based Customer Solutions | ||
Property and equipment | ||
Total | $ 9,687 | $ 6,182 |
Internal Systems and Tools | ||
Property and equipment | ||
Total | 4,762 | 3,594 |
Internal-use software | ||
Property and equipment | ||
Total | $ 14,449 | $ 9,776 |
CAPITALIZED SOFTWARE (Details)
CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Capitalized software, movement | |||
Capitalized software, net | $ 38,532 | $ 38,771 | |
Capitalized software amortization expense | 5,854 | $ 4,229 | |
Software | |||
Capitalized software, movement | |||
Capitalized software, gross | 124,937 | 115,152 | |
Less accumulated amortization | (87,264) | (81,410) | |
Capitalized software, net | 37,673 | 33,742 | |
Capitalized development costs | 5,615 | $ 4,007 | |
In-process internal-use software | |||
Capitalized software, movement | |||
Capitalized software, gross | $ 859 | $ 5,029 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill. | $ 253,966 | $ 257,842 |
Goodwill and other intangible assets | 255,681 | 260,238 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | $ 1,715 | $ 2,396 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Amortization of acquired intangible assets | |||
Amortization | $ 656 | $ 824 | |
Cost of Revenues | |||
Amortization of acquired intangible assets | |||
Amortization | 61 | 58 | |
Selling and marketing | |||
Amortization of acquired intangible assets | |||
Amortization | $ 595 | $ 766 | |
Other intangible assets | |||
Other intangible assets | |||
Weighted average amortization period (years) | 3 years 6 months | 3 years 6 months | |
Gross Value | $ 10,830 | $ 10,960 | |
Accumulated amortization | (9,115) | (8,564) | |
Carrying Value | $ 1,715 | $ 2,396 |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Line of Credit | |
Debt | |
Line of credit, capacity | $ 200,000 |
New Term Loan | |
Debt | |
Principal amount | $ 50,000 |
DEBT - Indebtness (Details)
DEBT - Indebtness (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt | ||
Current portion of long-term debt | $ 2,500 | $ 2,500 |
Deferred financing costs | (292) | (316) |
Total debt, net of current portion | 43,458 | 44,059 |
Total Debt | 45,958 | 46,559 |
Term Loan | ||
Debt | ||
Current portion of long-term debt | 2,500 | 2,500 |
Debt, net of current portion | $ 43,750 | $ 44,375 |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Class A | ||
Common Stock | ||
Exercise of stock options, net (in shares) | 653 | 592 |
Shares exchanged | 265 | 17 |
Class A | Restricted Stock Units | ||
Common Stock | ||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 674 | 391 |
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 417 | 231 |
Class B | ||
Common Stock | ||
Exchange of shares | 2,589 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net Income (Loss) | $ 2,684 | $ (18,132) |
Class A | ||
Numerator: | ||
Common stock as a percentage of total shares outstanding, basic | 39.92% | 33.49% |
Net income (loss) attributable to stockholders, basic | $ 1,071 | $ (6,072) |
Common stock as a percentage of total shares outstanding, diluted | 42.30% | 33.49% |
Net income (loss) attributable to stockholders, diluted | $ 1,135 | $ (6,072) |
Denominator: | ||
Weighted average common stock, basic (in shares) | 61,560,000 | 50,456,000 |
Dilutive effect of common stock equivalents | 6,361,000 | |
Weighted average common stock, diluted (in shares) | 67,921,000 | 50,456,000 |
Net income (loss) per share, basic (in dollars per share) | $ 0.02 | $ (0.12) |
Net income (loss) per share, diluted (in dollars per share) | $ 0.02 | $ (0.12) |
Class A | Amended Options | ||
Denominator: | ||
Anti-dilutive shares | 8,335 | |
Class A | Out-of-the-money options | ||
Denominator: | ||
Anti-dilutive shares | 705 | |
Class A | Restricted Stock Awards | ||
Denominator: | ||
Anti-dilutive shares | 235 | |
Class A | Restricted Stock Units | ||
Denominator: | ||
Anti-dilutive shares | 3,141 | |
Class A | ESPP | ||
Denominator: | ||
Anti-dilutive shares | 45 | |
Class B | ||
Numerator: | ||
Common stock as a percentage of total shares outstanding, basic | 60.08% | 66.51% |
Net income (loss) attributable to stockholders, basic | $ 1,613 | $ (12,060) |
Common stock as a percentage of total shares outstanding, diluted | 57.70% | 66.51% |
Net income (loss) attributable to stockholders, diluted | $ 1,549 | $ (12,060) |
Denominator: | ||
Weighted average common stock, basic (in shares) | 92,661,000 | 100,221,000 |
Weighted average common stock, diluted (in shares) | 92,661,000 | 100,221,000 |
Net income (loss) per share, basic (in dollars per share) | $ 0.02 | $ (0.12) |
Net income (loss) per share, diluted (in dollars per share) | $ 0.02 | $ (0.12) |
STOCK-BASED AWARD PLANS - 2020
STOCK-BASED AWARD PLANS - 2020 Plan (Details) shares in Thousands | Mar. 31, 2024 shares |
Employee Stock Option | |
Compensation plans: | |
Shares authorized | 20,921 |
STOCK-BASED AWARD PLANS - Optio
STOCK-BASED AWARD PLANS - Options under 2020 Plan (Details) - Employee Stock Option - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Units | |||
Beginning, balance | 5,692 | ||
Granted | 0 | 0 | |
Exercised | (918) | ||
Ending balance | 4,774 | 5,692 | |
Exercisable | 3,582 | ||
Weighted Average Per Share | |||
Beginning balance | $ 5.32 | ||
Exercised | 2.98 | ||
Ending Balance | 5.77 | $ 5.32 | |
Exercisable | $ 5.07 | ||
Remaining contractual life, outstanding | 4 years 9 months 18 days | 4 years 8 months 12 days | |
Remaining contractual life, exercisable | 4 years 2 months 12 days | ||
Intrinsic value, outstanding | $ 124,161 | $ 124,327 | |
Intrinsic value, exercisable | 95,703 | ||
Unrecognized compensation cost | $ 3,628 | ||
Unrecognized compensation expense period | 1 year | ||
Minimum | |||
Weighted Average Per Share | |||
Vesting period | 1 year | ||
Maximum | |||
Weighted Average Per Share | |||
Vesting period | 4 years |
STOCK-BASED AWARD PLANS - Opt_2
STOCK-BASED AWARD PLANS - Options under 2020 Plan Price Range (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
$0.15 to $0.71 | |
Options outstanding, vested and exercisable: | |
Exercise prices, lower range | $ / shares | $ 0.15 |
Exercise prices, upper range | $ / shares | $ 0.71 |
Employee Stock Option | |
Options outstanding, vested and exercisable: | |
Options outstanding | 4,774 |
Options outstanding, life | 0 years |
Options vested and exercisable | 3,582 |
Options vested and exercisable, life | 0 years |
Employee Stock Option | $0.15 to $0.71 | |
Options outstanding, vested and exercisable: | |
Options outstanding | 769 |
Options vested and exercisable | 769 |
Employee Stock Option | $2.15 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 2.15 |
Options outstanding | 60 |
Options outstanding, life | 10 months 24 days |
Options vested and exercisable | 60 |
Options vested and exercisable, life | 10 months 24 days |
Employee Stock Option | $2.50 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 2.50 |
Options outstanding | 1,211 |
Options outstanding, life | 2 years 4 months 24 days |
Options vested and exercisable | 1,211 |
Options vested and exercisable, life | 2 years 4 months 24 days |
Employee Stock Option | $3.17 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 3.17 |
Options outstanding | 323 |
Options outstanding, life | 4 years |
Options vested and exercisable | 323 |
Options vested and exercisable, life | 4 years |
Employee Stock Option | $3.73 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 3.73 |
Options outstanding | 1,155 |
Options outstanding, life | 5 years 7 months 6 days |
Options vested and exercisable | 563 |
Options vested and exercisable, life | 5 years 4 months 24 days |
Employee Stock Option | $4.70 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 4.70 |
Options outstanding | 566 |
Options outstanding, life | 5 years 10 months 24 days |
Options vested and exercisable | 225 |
Options vested and exercisable, life | 5 years 10 months 24 days |
Employee Stock Option | $18.47 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 18.47 |
Options outstanding | 213 |
Options outstanding, life | 7 years 8 months 12 days |
Options vested and exercisable | 107 |
Options vested and exercisable, life | 7 years 8 months 12 days |
Employee Stock Option | $18.96 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 18.96 |
Options outstanding | 185 |
Options outstanding, life | 7 years 4 months 24 days |
Options vested and exercisable | 120 |
Options vested and exercisable, life | 7 years 4 months 24 days |
Employee Stock Option | $19.00 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 19 |
Options outstanding | 50 |
Options outstanding, life | 7 years 6 months |
Options vested and exercisable | 17 |
Options vested and exercisable, life | 7 years 6 months |
Employee Stock Option | $32.16 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 32.16 |
Options outstanding | 242 |
Options outstanding, life | 6 years 10 months 24 days |
Options vested and exercisable | 187 |
Options vested and exercisable, life | 6 years 10 months 24 days |
STOCK-BASED AWARD PLANS - Restr
STOCK-BASED AWARD PLANS - Restricted Stock Units (Details) - Restricted Stock Units $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
Units | |
Beginning balance (in units) | shares | 4,171 |
Granted (in units) | shares | 1,672 |
Vested (in units) | shares | (1,091) |
Forfeited (in units) | shares | (88) |
Ending balance (in units) | shares | 4,664 |
Weighted Average Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 16.11 |
Granted (in dollars per share) | $ / shares | 25.17 |
Vested (in dollars per share) | $ / shares | 16.15 |
Forfeited (in dollars per share) | $ / shares | 15.77 |
Ending balance (in dollars per share) | $ / shares | $ 19.35 |
Unrecognized compensation cost | $ | $ 73,843 |
Unrecognized compensation expense period | 2 years 9 months 18 days |
Minimum | |
Compensation plans: | |
Service requirement (in years) | 1 year |
Maximum | |
Compensation plans: | |
Service requirement (in years) | 4 years |
STOCK-BASED AWARD PLANS - Res_2
STOCK-BASED AWARD PLANS - Restricted Stock Awards (Details) - Restricted Stock Awards $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
Units | |
Beginning balance (in units) | shares | 91 |
Ending balance (in units) | shares | 91 |
Weighted Average Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 21.50 |
Ending balance (in dollars per share) | $ / shares | $ 21.50 |
Unrecognized compensation cost | $ | $ 459 |
Unrecognized compensation expense period | 3 months 18 days |
Minimum | |
Compensation plans: | |
Service requirement (in years) | 1 year |
Maximum | |
Compensation plans: | |
Service requirement (in years) | 4 years |
STOCK-BASED AWARD PLANS - Emplo
STOCK-BASED AWARD PLANS - Employee Stock Purchase Plan (Details) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) period shares | Mar. 31, 2023 period | |
Class A | ||
Compensation plans: | ||
Purchase price as a percent of fair value | 85% | |
ESPP | ||
Compensation plans: | ||
Reserved for issuance | shares | 6,451 | |
Amounts withheld from participants | $ 1,135 | |
Unrecognized compensation cost | $ 150 | |
Number of offering periods | period | 2 | 2 |
ESPP offering period | 6 months | |
Discount | 15% | 15% |
STOCK-BASED AWARD PLANS - ESPP
STOCK-BASED AWARD PLANS - ESPP - Option-pricing model key input assumptions (Details) - Initial Public Offering - ESPP - $ / shares | 1 Months Ended | |
May 31, 2024 | May 31, 2023 | |
Fair Value Assumptions and Methodology | ||
Fair market value of common stock | $ 27.82 | $ 17.21 |
Volatility | 36.60% | 46.40% |
Expected term (in years) | 6 months | 6 months |
Risk-free interest rate | 5.30% | 4.70% |
STOCK-BASED AWARD PLANS - Stock
STOCK-BASED AWARD PLANS - Stock based compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Allocation of costs | ||
Compensation expense | $ 16,324 | $ 11,434 |
Employee Stock Option | ||
Allocation of costs | ||
Compensation expense | 2,606 | 2,171 |
Restricted Stock Units | ||
Allocation of costs | ||
Compensation expense | 13,003 | 8,345 |
Restricted Stock Awards | ||
Allocation of costs | ||
Compensation expense | 490 | 727 |
ESPP | ||
Allocation of costs | ||
Compensation expense | $ 225 | $ 191 |
STOCK-BASED AWARD PLANS - Sto_2
STOCK-BASED AWARD PLANS - Stock based compensation, comprehensive loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Allocation of costs | ||
Compensation expense | $ 16,324 | $ 11,434 |
Software subscriptions | ||
Allocation of costs | ||
Compensation expense | 1,590 | 996 |
Services | ||
Allocation of costs | ||
Compensation expense | 1,006 | 836 |
Research and development | ||
Allocation of costs | ||
Compensation expense | 3,373 | 2,234 |
Selling and marketing | ||
Allocation of costs | ||
Compensation expense | 4,222 | 2,898 |
General and administrative | ||
Allocation of costs | ||
Compensation expense | $ 6,133 | $ 4,470 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
INCOME TAXES | |||
Income tax expense (benefit) | $ (4,535) | $ 9,553 | |
Effective tax rate (as a percent) | 245% | (111.40%) | |
U.S. federal statutory income tax rate | 21% | 21% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event $ / shares in Units, $ in Thousands | Apr. 26, 2024 USD ($) $ / shares | Apr. 23, 2024 USD ($) $ / shares |
SUBSEQUENT EVENTS | ||
Share price | $ / shares | $ 55.88 | |
Cost of capped call transactions | $ 42,366 | |
Convertible Senior Notes 7.50 Percent, Due 2029 [Member] | ||
SUBSEQUENT EVENTS | ||
Principal amount | $ 345,000 | |
Debt instrument interest rate percentage | 0.75% | |
Additional principal amount | $ 45,000 | |
Conversion rate | 27.5315 | |
Conversion price | $ / shares | $ 36.32 | |
Proceeds from convertible debt | $ 333,650 | |
Cost of capped call transactions | $ 42,366 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 2,684 | $ (18,132) |
Insider Trading Arrangements
Insider Trading Arrangements - Eric Andersen [Member] | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 4, 2024 , Eric Andersen , Director , terminated a Rule 10b5-1 trading arrangement dated August 18, 2023 , which was intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 80,000 shares of Class A common stock. Other than this termination, during the three months ended March 31, 2024, no other director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation S-K. |
Name | Eric Andersen |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | August 18, 2023 |
Rule 10b5-1 Arrangement Terminated | true |
Termination Date | March 4, 2024 |
Aggregate Available | 80,000 |