Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document Information: | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2023 | |
Document Quarterly Report | true | |
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 $0.001 Per Share | |
Trading Symbol | VERX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001806837 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A | ||
Document Information: | ||
Entity Common Stock, Shares Outstanding | 53,860,965 | |
Class B | ||
Document Information: | ||
Entity Common Stock, Shares Outstanding | 97,718,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 68,643 | $ 91,803 |
Funds held for customers | 25,972 | 14,945 |
Accounts receivable, net of allowance of $10,641 and $9,554, respectively | 102,760 | 102,885 |
Prepaid expenses and other current assets | 22,536 | 20,383 |
Investment securities available-for-sale, current, at fair value (amortized cost of $11,552 and $11,220, respectively) | 11,524 | 11,173 |
Total current assets | 231,435 | 241,189 |
Property and equipment, net of accumulated depreciation | 117,444 | 115,768 |
Capitalized software, net of accumulated amortization | 38,790 | 39,012 |
Goodwill and other intangible assets | 259,303 | 257,023 |
Deferred commissions | 15,921 | 15,463 |
Deferred income tax asset | 43,542 | 30,938 |
Operating lease right-of-use assets | 16,462 | 17,187 |
Other assets | 2,621 | 2,612 |
Total assets | 725,518 | 719,192 |
Current liabilities: | ||
Current portion of long-term debt | 2,500 | 2,188 |
Accounts payable | 17,420 | 14,329 |
Accrued expenses | 55,896 | 38,234 |
Customer funds obligations | 23,110 | 12,121 |
Accrued salaries and benefits | 15,142 | 10,790 |
Accrued variable compensation | 8,045 | 23,729 |
Deferred compensation, current | 2,352 | 2,809 |
Deferred revenue, current | 276,004 | 268,847 |
Current portion of operating lease liabilities | 3,141 | 4,086 |
Current portion of finance lease liabilities | 75 | 103 |
Deferred purchase consideration, current | 9,924 | 19,824 |
Purchase commitment and contingent consideration liabilities, current | 8,340 | 6,149 |
Total current liabilities | 421,949 | 403,209 |
Deferred revenue, net of current portion | 7,112 | 10,289 |
Debt, net of current portion | 46,093 | 46,709 |
Operating lease liabilities, net of current portion | 20,057 | 20,421 |
Finance lease liabilities, net of current portion | 10 | |
Purchase commitment and contingent consideration liabilities, net of current portion | 6,813 | 8,412 |
Deferred other liabilities | 19 | 417 |
Total liabilities | 502,043 | 489,467 |
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 | 253,566 | 244,820 |
(Accumulated deficit) retained earnings | (5,625) | 12,507 |
Accumulated other comprehensive loss | (24,617) | (27,752) |
Total stockholders' equity | 223,475 | 229,725 |
Total liabilities and stockholders' equity | 725,518 | 719,192 |
Class A | ||
Stockholders' equity: | ||
Common stock | 53 | 50 |
Class B | ||
Stockholders' equity: | ||
Common stock | $ 98 | $ 100 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Allowance for accounts receivable | $ 10,641 | $ 9,554 |
Amortized cost | $ 11,552 | $ 11,220 |
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) | 53,586 | 50,014 |
Common stock, shares outstanding (in shares) | 53,586 | 50,014 |
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) | 97,718 | 100,307 |
Common stock, shares outstanding (in shares) | 97,718 | 100,307 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Total revenues | $ 132,751 | $ 114,984 |
Cost of revenues: | ||
Total cost of revenues | 51,747 | 44,866 |
Gross profit | 81,004 | 70,118 |
Operating expenses: | ||
Research and development | 15,862 | 9,633 |
Selling and marketing | 35,736 | 27,452 |
General and administrative | 34,310 | 28,757 |
Depreciation and amortization | 3,741 | 2,960 |
Other operating expense, net | 284 | 848 |
Total operating expenses | 89,933 | 69,650 |
(Loss) income from operations | (8,929) | 468 |
Interest expense, net | (350) | (6) |
(Loss) income before income taxes | (8,579) | 474 |
Income tax expense | 9,553 | 808 |
Net loss | (18,132) | (334) |
Other comprehensive (income) loss: | ||
Foreign currency translation adjustments and revaluations, net of tax | (3,122) | 2,049 |
Unrealized gain on investments, net of tax | (13) | |
Total other comprehensive (income) loss, net of tax | (3,135) | 2,049 |
Total comprehensive loss | (14,997) | (2,383) |
Software subscriptions | ||
Revenues: | ||
Total revenues | 111,014 | 97,131 |
Cost of revenues: | ||
Total cost of revenues | 37,403 | 32,913 |
Services | ||
Revenues: | ||
Total revenues | 21,737 | 17,853 |
Cost of revenues: | ||
Total cost of revenues | 14,344 | 11,953 |
Class A | ||
Other comprehensive (income) loss: | ||
Net loss attributable to stockholders, basic | $ (6,072) | $ (95) |
Net loss per share, basic (in dollars per share) | $ (0.12) | $ 0 |
Weighted average common stock, basic (in shares) | 50,456 | 42,349 |
Net loss attributable to stockholders, diluted | $ (6,072) | $ (95) |
Net loss per share, diluted (in dollars per share) | $ (0.12) | $ 0 |
Weighted average common stock, diluted (in shares) | 50,456 | 42,349 |
Class B | ||
Other comprehensive (income) loss: | ||
Net loss attributable to stockholders, basic | $ (12,060) | $ (239) |
Net loss per share, basic (in dollars per share) | $ (0.12) | $ 0 |
Weighted average common stock, basic (in shares) | 100,221 | 106,807 |
Net loss attributable to stockholders, diluted | $ (12,060) | $ (239) |
Net loss per share, diluted (in dollars per share) | $ (0.12) | $ 0 |
Weighted average common stock, diluted (in shares) | 100,221 | 106,807 |
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 Other Comprehensive Loss | Class A | Class B | Total |
Balance at Dec. 31, 2021 | $ 42 | $ 107 | $ 222,621 | $ 24,811 | $ (17,497) | $ 230,084 | ||
Balance (in shares) at Dec. 31, 2021 | 42,286 | 106,807 | ||||||
Exercise of stock options, net | 278 | 278 | ||||||
Exercise of stock options, net (in shares) | 272 | 272 | ||||||
Shares issued upon vesting of Restricted Stock Units, net | (15) | (15) | ||||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 3 | |||||||
Stock-based compensation expense | 4,867 | 4,867 | ||||||
Foreign currency translation adjustments and revaluations, net of tax | (2,049) | (2,049) | ||||||
Net loss | (334) | (334) | ||||||
Balance at Mar. 31, 2022 | $ 42 | $ 107 | 227,751 | 24,477 | (19,546) | 232,831 | ||
Balance (in shares) at Mar. 31, 2022 | 42,561 | 106,807 | ||||||
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 | 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 from available-for-sale investments, net of tax | 13 | 13 | ||||||
Net 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 | 53,586 | 97,718 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (18,132) | $ (334) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 16,942 | 12,906 |
Provision for subscription cancellations and non-renewals, net of deferred allowance | 697 | (279) |
Amortization of deferred financing costs | 63 | 53 |
Change in fair value of contingent consideration liability | 200 | 700 |
Write-off of deferred financing costs | 372 | |
Stock-based compensation expense | 11,434 | 4,933 |
Deferred income tax (benefit) expense | (12,984) | 62 |
Non-cash operating lease costs | 726 | 622 |
Other | (4) | 412 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (795) | 2,688 |
Prepaid expenses and other current assets | (2,109) | (1,091) |
Deferred commissions | (459) | 875 |
Accounts payable | 3,065 | 1,555 |
Accrued expenses | 17,578 | 3,806 |
Accrued and deferred compensation | (12,452) | (19,254) |
Deferred revenue | 4,352 | (3,718) |
Operating lease liabilities | (1,309) | (763) |
Other | (58) | (950) |
Net cash provided by operating activities | 6,755 | 2,595 |
Cash flows from investing activities: | ||
Acquisition of business, net of cash acquired | (474) | |
Property and equipment additions | (13,313) | (13,873) |
Capitalized software additions | (4,007) | (2,912) |
Purchase of investment securities, available-for-sale | (3,491) | |
Proceeds from maturities of investment securities, available-for-sale | 3,250 | |
Net cash used in investing activities | (17,561) | (17,259) |
Cash flows from financing activities: | ||
Net increase in customer funds obligations | 10,989 | 1,046 |
Proceeds from term loan | 50,000 | |
Principal payments on long-term debt | (313) | |
Payments for deferred financing costs | (993) | |
Payments for taxes related to net share settlement of stock-based awards | (3,681) | (337) |
Proceeds from exercise of stock options | 1,490 | 600 |
Distributions under Tax Sharing Agreement | (536) | |
Payments of finance lease liabilities | (16) | |
Payments for deferred purchase commitments | (10,000) | (10,000) |
Net cash (used in) provided by financing activities | (1,531) | 39,780 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 204 | (83) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (12,133) | 25,033 |
Cash, cash equivalents and restricted cash, beginning of period | 106,748 | 98,206 |
Cash, cash equivalents and restricted cash, end of period | $ 94,615 | $ 123,239 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets, end of period: | ||
Cash and cash equivalents | $ 68,643 | $ 97,340 |
Restricted cash-funds held for customers | 25,972 | 25,899 |
Total cash, cash equivalents and restricted cash, end of period | $ 94,615 | $ 123,239 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
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 which 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 a 65% 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 condensed 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, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”) filed with the SEC on March 10, 2023. The condensed consolidated balance sheet as of December 31, 2022 has been derived from audited financial statements included in the 2022 Annual Report. The accompanying interim condensed consolidated balance sheet as of March 31, 2023, the interim condensed consolidated statements of comprehensive loss for the three months ended March 31, 2023 and 2022, and the interim condensed consolidated statements of changes in stockholders’ equity and the interim condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022 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, 2023 are not necessarily indicative of the results expected for the full year ending December 31, 2023. Segments The Company operates its business as one operating segment. For the three months ended March 31, 2023 and 2022, approximately 7% and 5%, respectively, of the Company’s revenues were generated from customers located outside the U.S. As of March 31, 2023 and December 31, 2022, $895 and $827, 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 and intangible assets, (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 material rights and 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. Supplemental Balance Sheet Disclosures Supplemental balance sheet disclosures are as follows for the respective periods: March 31, December 31, 2023 2022 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 9,244 $ 5,875 Prepaid insurance 1,469 2,291 Prepaid licenses and support 11,823 12,217 Prepaid expenses and other current assets $ 22,536 $ 20,383 Accrued expenses: Accrued general expenses $ 17,599 $ 18,485 Accrued contract labor and professional fees 14,579 17,421 Accrued income and other taxes 23,718 2,328 Accrued expenses $ 55,896 $ 38,234 Recently Issued or Adopted Accounting Pronouncements As an “emerging growth company,” the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to delay adoption of certain new or revised accounting standards. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. Deferred Revenue In October 2021, the Financial Accounting Standard Board issued ASU No. 2021-08, Business Combinations (“ASU 2021-08”). ASU 2021-08 provides specific guidance on how to recognize and measure contract assets and contract liabilities related to revenue contracts with customers acquired in a business combination. This will align the accounting for these acquired contracts to the accounting for revenue contracts originated by the acquirer and will provide more comparable information to investors and other financial statement users seeking to better understand the financial impact of these acquisitions. The Company adopted this standard effective January 1, 2023 on a prospective basis for business combinations occurring on or after this date. Although this standard does not have a material impact on the Company’s current condensed consolidated financial statements, adoption could have a material impact on the accounting for future acquisitions reflected in the Company’s condensed consolidated financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 2022 (unaudited) Software subscriptions: Software licenses $ 62,808 $ 58,857 Cloud subscriptions 48,206 38,274 Software subscriptions 111,014 97,131 Services 21,737 17,853 Total revenues $ 132,751 $ 114,984 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 $10,641 and $9,554 at March 31, 2023 and December 31, 2022, 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, 2023 For the year ended December 31, 2022 (unaudited) Balance, beginning of period $ 102,885 $ 76,929 Balance, end of period 102,760 102,885 Increase (decrease), net $ (125) $ 25,956 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 or over the amortization period of material rights. Deferred revenue is reflected net of a related deferred allowance for subscription cancellations (the “deferred allowance”) of $7,516 and $7,133 at March 31, 2023 and December 31, 2022, 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, 2023 2022 Balance Net Change Balance Net Change (unaudited) Allowance balance, January 1, $ (9,554) $ (9,151) Allowance balance, March 31, (10,641) (8,450) Change in allowance $ 1,087 $ (701) Deferred allowance balance, January 1, 7,133 6,537 Deferred allowance balance, March 31, 7,516 6,098 Change in deferred allowance (383) 439 Net amount charged to revenues $ 704 $ (262) 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 tables provide information about the balances of and changes to deferred revenue for the following periods: As of March 31, As of December 31, 2023 2022 (unaudited) Balances: Deferred revenue, current $ 276,004 $ 268,847 Deferred revenue, non-current 7,112 10,289 Total deferred revenue $ 283,116 $ 279,136 For the three months ended March 31, 2023 2022 (unaudited) Changes to deferred revenue: Beginning balance $ 279,136 $ 249,010 Additional amounts deferred 136,731 111,689 Revenues recognized (132,751) (114,984) Ending balance $ 283,116 $ 245,715 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 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, 2023 2022 (unaudited) Deferred commissions: Beginning balance $ 15,463 $ 12,555 Additions 2,851 1,750 Amortization (2,393) (2,626) Ending balance $ 15,921 $ 11,679 |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 (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 $ 46,617 $ 46,617 $ — $ — Commercial Paper 9,722 — 9,722 — U.S. Treasury Securities 5,338 — 5,338 — Tellutax Contingent Consideration 5,000 — — 5,000 Foreign Currency Forward Contracts 817 — 817 — Fair Value Measurements Using As of December 31, 2022 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 $ 67,430 $ 67,430 $ — $ — Commercial Paper 9,660 — 9,660 — U.S. Treasury Securities 5,203 — 5,203 — Tellutax Contingent Consideration 4,800 — — 4,800 Foreign Currency Forward Contracts 569 — 569 — The Company has investments in high quality, short-term money market instruments which are issued and payable in U.S. dollars (“Money Market Funds”), which are 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 under Accounting Standards Codification, (“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 $200 and $700 was recorded in other operating expense, net for the three months ended March 31, 2023 and 2022, respectively. At March 31, 2023, the Tellutax Contingent Consideration of $3,400 and $1,600 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. At December 31, 2022, the Tellutax Contingent Consideration of $1,400 and $3,400 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, 2023 and December 31, 2022 and unobservable inputs used for the Monte Carlo Simulation valuation were as follows: March 31, 2023 (unaudited) Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 5,000 Monte Carlo Simulation Revenue volatility 70.0 % Revenue discount rate 22.1 % Term (in years) 2.1 December 31, 2022 Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 4,800 Monte Carlo Simulation Revenue volatility 75.0 % Revenue discount rate 22.4 % Term (in years) 2.4 Changes in the fair value of Tellutax Contingent Consideration during the three months ended March 31, 2023 were as follows: Tellutax Contingent Consideration (unaudited) Balance, January 1, 2023 $ 4,800 Fair value adjustments 200 Balance, March 31, 2023 $ 5,000 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 LCR-Dixon Corporation (“LCR-Dixon”) acquisition on September 22, 2021, the acquisition of EVAT Solutions Limited (“EVAT”) and its wholly owned subsidiaries (collectively, “Taxamo”) on May 12, 2021, 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. Deferred purchase consideration associated with the LCR-Dixon acquisition was $9,924 and $19,824 at March 31, 2023 and December 31, 2022, respectively. 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 2022 and 2023, 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 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 income (loss) in the period the change is identified. No such adjustments have been recorded for the three months ended March 31, 2023 or 2022. The Purchase Commitment Liability included in purchase commitment and contingent consideration liabilities, current and purchase commitment and contingent liabilities, net of current portion in the condensed consolidated balance sheet at March 31, 2023 was $4,940 and $5,213 respectively. The Purchase Commitment Liability included in purchase commitment and contingent consideration liabilities, current and purchase commitment and contingent consideration liabilities, net of current portion in the consolidated balance sheets on December 31, 2022 was $4,749 and $5,012, respectively. The carrying amounts of both the LCR-Dixon deferred purchase consideration and the Systax Purchase Commitment Liability amounts 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 Systax 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 loss. Our fair value determinations are based on foreign currency exchange rates in active markets, which are considered to be Level 2 measurements within the Fair Value Hierarchy. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 2022 (unaudited) Leasehold improvements $ 20,935 $ 20,929 Equipment 39,530 39,238 Computer software purchased 11,903 11,892 Internal-use software developed: Cloud-based customer solutions 149,851 142,980 Internal systems and tools 47,846 42,035 Furniture and fixtures 7,667 7,665 In-process internal-use software 33,843 32,878 Property and equipment 311,575 297,617 Less accumulated depreciation and amortization (194,131) (181,849) Property and equipment, net $ 117,444 $ 115,768 Depreciation expense for property and equipment, excluding all internal-use software developed and finance leases, was $1,517 and $1,718 for the three months ended March 31, 2023 and 2022, respectively, and is reflected in depreciation and amortization in the condensed consolidated statements of comprehensive loss. Finance lease amortization was $279 and $235 for the three months ended March 31, 2023 and 2022, respectively, and is included in depreciation and amortization expense in the condensed consolidated statements of comprehensive loss. Assets under finance leases of $1,461 and $1,461, net of accumulated amortization of $1,140 and $861, respectively, at March 31, 2023 and December 31, 2022, respectively, are included in property and equipment in the condensed consolidated balance sheets. The major components of internal-use software are as follows: As of March 31, As of December 31, 2023 2022 (unaudited) Internal-use software developed $ 197,697 $ 185,015 Less accumulated depreciation (130,062) (119,603) Internal-use software developed, net of accumulated depreciation 67,635 65,412 In-process internal-use software 33,843 32,878 Internal-use software developed, net $ 101,478 $ 98,290 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, 2023 2022 (unaudited) Cloud-based customer solutions $ 6,182 $ 7,400 Internal systems and tools 6,858 4,848 Total $ 13,040 $ 12,248 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, 2023 and 2022, was $8,148 and $6,331, respectively, and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive loss. Depreciation expense for internal-use software developed for internal systems and tools for the three months ended March 31, 2023 and 2022 was $1,945 and $1,007, respectively, and is included in depreciation and amortization in the condensed consolidated statements of comprehensive loss. |
CAPITALIZED SOFTWARE
CAPITALIZED SOFTWARE | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 2022 (unaudited) Capitalized software $ 99,286 $ 96,577 Less accumulated amortization (66,426) (62,197) Capitalized software, net of accumulated depreciation 32,860 34,380 In-process capitalized software 5,930 4,632 Capitalized software, net $ 38,790 $ 39,012 Software development costs capitalized for the three months ended March 31, 2023 and 2022, excluding acquisitions, were $4,007 and $2,912, respectively. Capitalized software amortization expense, including amortization of acquired technology, was $4,229 and $3,301 for the three months ended March 31, 2023 and 2022, respectively, and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive loss. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 2022 (unaudited) Goodwill $ 254,897 $ 251,842 Other intangible assets, net 4,406 5,181 Total $ 259,303 $ 257,023 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, 2023 2022 (unaudited) Weighted average amortization period (years) 3.5 3.5 Gross value $ 10,802 $ 10,667 Accumulated amortization (6,396) (5,486) Carrying value $ 4,406 $ 5,181 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 2023 $ 58 $ 766 $ 824 2022 65 249 314 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2023 | |
DEBT | |
DEBT | 7. Credit Agreement On March 8, 2022, the Company entered into the Second Amendment to the 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, 2023 and December 31, 2022 was as follows: As of March 31, As of December 31, 2023 2022 (unaudited) Term Loan $ 2,500 $ 2,188 2,500 2,188 Term Loan 46,250 46,875 Deferred financing costs (157) (166) Debt, net of current portion $ 46,093 $ 46,709 Total debt, net of financing costs $ 48,593 $ 48,897 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 8. STOCKHOLDERS’ EQUITY Common Stock During the three months ended March 31, 2023 and 2022, the Company issued 592 and 272 shares of Class A common stock (“Class A”), respectively, related to the exercise of options, net of 17 and 47 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, 2023 and 2022, the Company issued 391 and 3 shares of Class A common stock, respectively, in connection with the vesting of Restricted Stock Units (“RSUs”), net of 231 and 1 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. Tax Sharing Agreement Payments In connection with termination of the Company’s S-Corporation election effective July 27, 2020, the Company entered into a tax sharing agreement (“Tax Sharing Agreement”) with the former S-Corporation shareholders. All obligations of the Company under the Tax Sharing Agreement are satisfied by adjustments of additional paid in capital. During the three months ended March 31, 2022, the Company distributed $536 to the former S-Corporation shareholders under the Tax Sharing Agreement to settle the Company’s obligation for income taxes related to the allocation of taxable income to the S-Corporation short tax period ended July 26, 2020. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
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 and Class B common for the periods reflected below. For the three months ended March 31, Class A common stock: 2023 2022 (unaudited) Numerator, basic: Net loss attributable to all stockholders $ (18,132) $ (334) Class A common stock as a percentage of total shares outstanding, basic 33.49 % 28.39 % Net loss attributable to Class A stockholders, basic $ (6,072) $ (95) Numerator, diluted: Net loss attributable to all stockholders $ (18,132) $ (334) Class A common stock as a percentage of total shares outstanding, diluted 33.49 % 28.39 % Net loss attributable to Class A stockholders, diluted $ (6,072) $ (95) Denominator, basic and diluted: Weighted average Class A common stock, basic 50,456 42,349 Dilutive effect of common stock equivalents (1) (2) — — Weighted average Class A common stock, diluted 50,456 42,349 Net loss per Class A share, basic $ (0.12) $ (0.00) Net loss per Class A share, diluted $ (0.12) $ (0.00) (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 (“RSA’s”), 3,141 RSU’s and 45 shares under the ESPP. (2) For the three months ended March 31, 2022, 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: 9,430 options (including 768 out-of-themoney options), 326 RSA’s, 1,547 RSUs and 41 shares under the ESPP. For the three months ended March 31, Class B common stock: 2023 2022 (unaudited) Numerator, basic: Net loss attributable to all stockholders $ (18,132) $ (334) Class B common stock as a percentage of total shares outstanding, basic 66.51 % 71.61 % Net loss attributable to Class B stockholders, basic $ (12,060) $ (239) Numerator, diluted: Net loss attributable to all stockholders $ (18,132) $ (334) Class B common stock as a percentage of total shares outstanding, diluted 66.51 % 71.61 % Net loss attributable to Class B stockholders, diluted $ (12,060) $ (239) Denominator, basic and diluted: Weighted average Class B common stock, basic 100,221 106,807 Dilutive effect of common stock equivalents — — Weighted average Class B common stock, diluted 100,221 106,807 Net loss per Class B share, basic $ (0.12) $ (0.00) Net loss per Class B share, diluted $ (0.12) $ (0.00) |
STOCK-BASED AWARD PLANS
STOCK-BASED AWARD PLANS | 3 Months Ended |
Mar. 31, 2023 | |
STOCK-BASED AWARD PLANS | |
STOCK-BASED AWARD PLANS | 10. STOCK-BASED AWARD PLANS The 2020 Plan provides the ability to grant cash and equity-based incentive awards to eligible employees, directors and service providers in order to attract, retain and motivate those that make important contributions to the Company. The Company issued stock options, RSAs, and RSUs under the 2020 Plan. As of March 31, 2023, 14,786 shares of Class A common were available for issuance under the 2020 Plan. Options The following table summarizes activity for options outstanding under the 2020 Plan for the three months ended March 31, 2023: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic 2020 Plan Option Activity Units Price Life (Years) Value (unaudited) Outstanding at January 1, 2023 8,508 $ 4.34 4.3 $ 86,514 Exercised (609) $ 2.61 2020 Plan options outstanding at March 31, 2023 7,899 $ 4.47 4.1 128,086 2020 Plan options excercisable at March 31, 2023 5,983 $ 3.30 3.3 104,037 *Amended Options have indefinite contractual lives The detail of options outstanding, vested and exercisable under the 2020 Plan as of March 31, 2023 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 1,656 — 1,656 — $2.15 229 1.7 229 1.7 $2.50 2,126 3.3 2,126 3.3 $2.67 172 3.9 172 3.9 $3.17 836 5.1 491 4.9 $3.73 1,463 6.6 686 6.6 $4.70 658 6.9 316 6.9 $18.47 213 8.7 53 8.7 $18.96 235 8.4 105 8.4 $19.00 66 8.5 17 8.5 $32.16 245 7.9 132 7.5 7,899 5,983 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 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, 2023 or 2022. At March 31, 2023, $8,755 of unrecognized compensation expense associated with options is expected to be recognized over a weighted average period of approximately 1.8 years. Restricted Stock Units The following table summarizes RSU activity for the three months ended March 31, 2023: Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2023 2,562 $ 15.90 Granted 2,139 15.41 Vested (622) 17.51 Forfeited (70) 14.82 Outstanding at March 31, 2023 4,009 $ 15.40 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 loss over the period during which the participant is required to perform services in exchange for the award, which is generally one In connection with the Taxamo acquisition, certain continuing employees of Taxamo received RSUs with service and performance conditions (“PSUs”). At March 31, 2023, there are 895 shares of our Class A common stock with an aggregate grant date fair value of $15,803 that will be accounted for as post-acquisition compensation expense over the vesting period if targets are achieved. The performance-based condition will be satisfied upon meeting certain performance targets for the year ended 2023. As of March 31, 2023, it is not probable that these targets will be met, thus no compensation expense has been recorded to date related to these PSUs. Restricted Stock Awards The following table summarizes RSA activity for the three months ended March 31, 2023: Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2023 235 $ 14.91 Outstanding at March 31, 2023 235 $ 14.91 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 loss over the period during which the participants are required to perform services in exchange for the award, which is generally 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 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, 2023 aggregated $937 as of March 31, 2023. As of March 31, 2023, 5,065 shares of Class A common stock were available for issuance under the ESPP. As of March 31, 2023 there was approximately $131 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, 2023. At March 31, 2023 and 2022, there were two ESPP offering periods open that end May 31, 2023 and 2022, 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, 2023 and 2022 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 5/31/2023 11/30/2022 5/31/2022 11/30/2021 Fair market value of common stock $ 17.21 $ 11.16 $ 17.38 $ 19.89 Volatility 46.4 % 35.4 % 37.3 % 35.1 % Expected term (years) 0.5 0.5 0.5 0.5 Expected dividend yield - % - % - % - % Risk-free interest rate 4.7 % 1.6 % 0.1 % 0.1 % Volatility is representative of expected stock price volatility over the offering period. Effective with the offering period beginning December 1, 2022, the Company’s volatility was applied and will be applied to future offering periods. Prior to this offering period, volatility was based on the historical and implied volatility of comparable publicly traded companies over a similar expected term for the respective offering periods. The expected term represents the term of the ESPP offering period, which is generally six months. The Company does not expect to pay dividends after the Offering. The risk-free interest rate was based on the rate for a U.S. Treasury zero-coupon issue with a term that closely approximates the expected term of the award at the date nearest the offering term. 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, 2023 2022 (unaudited) Stock-based compensation expense: Stock options $ 2,171 $ 2,281 RSUs 8,345 1,779 RSAs 727 734 ESPP 191 139 Total stock-based compensation expense $ 11,434 $ 4,933 The Company recognized stock-based compensation cost in the condensed consolidated statements of comprehensive loss as follows: For the three months ended March 31, 2023 2022 (unaudited) Stock-based compensation expense: Cost of revenues, software subscriptions $ 996 $ 446 Cost of revenues, services 836 406 Research and development 2,234 114 Selling and marketing 2,898 1,572 General and administrative 4,470 2,395 Total stock-based compensation expense $ 11,434 $ 4,933 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES The Company reported income tax expense of $9,553 and $808 for the three months ended March 31, 2023, and 2022, respectively. The effective income tax rate ("ETR") was an expense of 111.4% for the three months ended March 31, 2023, compared to an expense of 170.5% for the three months ended March 31, 2022. The ETR for the three months ended March 31, 2023 and 2022 differ from the U.S. federal statutory income tax rate of 21% primarily due to income tax expense on income allocated to state jurisdictions, differences in tax rates on foreign jurisdiction income or loss, and limitations on deductions of certain employees’ compensation under Internal Revenue Code Section 162(m). In addition, the ETR for March 31, 2023 includes a valuation allowance recorded on certain foreign deferred tax assets. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
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 which 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 a 65% 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 condensed 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, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”) filed with the SEC on March 10, 2023. The condensed consolidated balance sheet as of December 31, 2022 has been derived from audited financial statements included in the 2022 Annual Report. The accompanying interim condensed consolidated balance sheet as of March 31, 2023, the interim condensed consolidated statements of comprehensive loss for the three months ended March 31, 2023 and 2022, and the interim condensed consolidated statements of changes in stockholders’ equity and the interim condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022 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, 2023 are not necessarily indicative of the results expected for the full year ending December 31, 2023. |
Segments | Segments The Company operates its business as one operating segment. For the three months ended March 31, 2023 and 2022, approximately 7% and 5%, respectively, of the Company’s revenues were generated from customers located outside the U.S. As of March 31, 2023 and December 31, 2022, $895 and $827, 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 and intangible assets, (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 material rights and 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. |
Supplemental Balance Sheet Disclosures | Supplemental Balance Sheet Disclosures Supplemental balance sheet disclosures are as follows for the respective periods: March 31, December 31, 2023 2022 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 9,244 $ 5,875 Prepaid insurance 1,469 2,291 Prepaid licenses and support 11,823 12,217 Prepaid expenses and other current assets $ 22,536 $ 20,383 Accrued expenses: Accrued general expenses $ 17,599 $ 18,485 Accrued contract labor and professional fees 14,579 17,421 Accrued income and other taxes 23,718 2,328 Accrued expenses $ 55,896 $ 38,234 |
Recently Issued Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements As an “emerging growth company,” the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to delay adoption of certain new or revised accounting standards. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies. Deferred Revenue In October 2021, the Financial Accounting Standard Board issued ASU No. 2021-08, Business Combinations (“ASU 2021-08”). ASU 2021-08 provides specific guidance on how to recognize and measure contract assets and contract liabilities related to revenue contracts with customers acquired in a business combination. This will align the accounting for these acquired contracts to the accounting for revenue contracts originated by the acquirer and will provide more comparable information to investors and other financial statement users seeking to better understand the financial impact of these acquisitions. The Company adopted this standard effective January 1, 2023 on a prospective basis for business combinations occurring on or after this date. Although this standard does not have a material impact on the Company’s current condensed consolidated financial statements, adoption could have a material impact on the accounting for future acquisitions reflected in the Company’s condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of supplemental balance sheet information | March 31, December 31, 2023 2022 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 9,244 $ 5,875 Prepaid insurance 1,469 2,291 Prepaid licenses and support 11,823 12,217 Prepaid expenses and other current assets $ 22,536 $ 20,383 Accrued expenses: Accrued general expenses $ 17,599 $ 18,485 Accrued contract labor and professional fees 14,579 17,421 Accrued income and other taxes 23,718 2,328 Accrued expenses $ 55,896 $ 38,234 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue | Three months ended March 31, 2023 2022 (unaudited) Software subscriptions: Software licenses $ 62,808 $ 58,857 Cloud subscriptions 48,206 38,274 Software subscriptions 111,014 97,131 Services 21,737 17,853 Total revenues $ 132,751 $ 114,984 |
Schedule of beginning and ending balances of accounts receivable, net of allowance | For the three months ended March 31, 2023 For the year ended December 31, 2022 (unaudited) Balance, beginning of period $ 102,885 $ 76,929 Balance, end of period 102,760 102,885 Increase (decrease), net $ (125) $ 25,956 |
Schedule of beginning and ending balances of and changes to the allowance and the deferred allowance | For the three months ended March 31, 2023 2022 Balance Net Change Balance Net Change (unaudited) Allowance balance, January 1, $ (9,554) $ (9,151) Allowance balance, March 31, (10,641) (8,450) Change in allowance $ 1,087 $ (701) Deferred allowance balance, January 1, 7,133 6,537 Deferred allowance balance, March 31, 7,516 6,098 Change in deferred allowance (383) 439 Net amount charged to revenues $ 704 $ (262) |
Schedule of information about the balances of and changes to deferred revenue | As of March 31, As of December 31, 2023 2022 (unaudited) Balances: Deferred revenue, current $ 276,004 $ 268,847 Deferred revenue, non-current 7,112 10,289 Total deferred revenue $ 283,116 $ 279,136 For the three months ended March 31, 2023 2022 (unaudited) Changes to deferred revenue: Beginning balance $ 279,136 $ 249,010 Additional amounts deferred 136,731 111,689 Revenues recognized (132,751) (114,984) Ending balance $ 283,116 $ 245,715 |
Schedule of information about the changes to contract cost balances | For the three months ended March 31, 2023 2022 (unaudited) Deferred commissions: Beginning balance $ 15,463 $ 12,555 Additions 2,851 1,750 Amortization (2,393) (2,626) Ending balance $ 15,921 $ 11,679 |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 (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 $ 46,617 $ 46,617 $ — $ — Commercial Paper 9,722 — 9,722 — U.S. Treasury Securities 5,338 — 5,338 — Tellutax Contingent Consideration 5,000 — — 5,000 Foreign Currency Forward Contracts 817 — 817 — Fair Value Measurements Using As of December 31, 2022 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 $ 67,430 $ 67,430 $ — $ — Commercial Paper 9,660 — 9,660 — U.S. Treasury Securities 5,203 — 5,203 — Tellutax Contingent Consideration 4,800 — — 4,800 Foreign Currency Forward Contracts 569 — 569 — |
Summary of estimated fair value of Tellutax contingent consideration | March 31, 2023 (unaudited) Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 5,000 Monte Carlo Simulation Revenue volatility 70.0 % Revenue discount rate 22.1 % Term (in years) 2.1 December 31, 2022 Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 4,800 Monte Carlo Simulation Revenue volatility 75.0 % Revenue discount rate 22.4 % Term (in years) 2.4 |
Changes in fair value of Tellutax contingent consideration | Tellutax Contingent Consideration (unaudited) Balance, January 1, 2023 $ 4,800 Fair value adjustments 200 Balance, March 31, 2023 $ 5,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
PROPERTY AND EQUIPMENT | |
Schedule of major components of property and equipment | As of March 31, As of December 31, 2023 2022 (unaudited) Leasehold improvements $ 20,935 $ 20,929 Equipment 39,530 39,238 Computer software purchased 11,903 11,892 Internal-use software developed: Cloud-based customer solutions 149,851 142,980 Internal systems and tools 47,846 42,035 Furniture and fixtures 7,667 7,665 In-process internal-use software 33,843 32,878 Property and equipment 311,575 297,617 Less accumulated depreciation and amortization (194,131) (181,849) Property and equipment, net $ 117,444 $ 115,768 |
Schedule of major components of internal-use software | As of March 31, As of December 31, 2023 2022 (unaudited) Internal-use software developed $ 197,697 $ 185,015 Less accumulated depreciation (130,062) (119,603) Internal-use software developed, net of accumulated depreciation 67,635 65,412 In-process internal-use software 33,843 32,878 Internal-use software developed, net $ 101,478 $ 98,290 |
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, 2023 2022 (unaudited) Cloud-based customer solutions $ 6,182 $ 7,400 Internal systems and tools 6,858 4,848 Total $ 13,040 $ 12,248 |
CAPITALIZED SOFTWARE (Tables)
CAPITALIZED SOFTWARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
CAPITALIZED SOFTWARE | |
Schedule of major components of capitalized software | As of March 31, As of December 31, 2023 2022 (unaudited) Capitalized software $ 99,286 $ 96,577 Less accumulated amortization (66,426) (62,197) Capitalized software, net of accumulated depreciation 32,860 34,380 In-process capitalized software 5,930 4,632 Capitalized software, net $ 38,790 $ 39,012 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Changes in the carrying amount of goodwill | As of March 31, As of December 31, 2023 2022 (unaudited) Goodwill $ 254,897 $ 251,842 Other intangible assets, net 4,406 5,181 Total $ 259,303 $ 257,023 |
Schedule of other acquired intangible assets | As of March 31, As of December 31, 2023 2022 (unaudited) Weighted average amortization period (years) 3.5 3.5 Gross value $ 10,802 $ 10,667 Accumulated amortization (6,396) (5,486) Carrying value $ 4,406 $ 5,181 |
Schedule of acquired intangible assets | For the three months ended March 31, Cost of Revenues, Software Subscriptions Selling and Marketing Expense Total Expense 2023 $ 58 $ 766 $ 824 2022 65 249 314 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
DEBT | |
Schedule of Debt | As of March 31, As of December 31, 2023 2022 (unaudited) Term Loan $ 2,500 $ 2,188 2,500 2,188 Term Loan 46,250 46,875 Deferred financing costs (157) (166) Debt, net of current portion $ 46,093 $ 46,709 Total debt, net of financing costs $ 48,593 $ 48,897 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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: 2023 2022 (unaudited) Numerator, basic: Net loss attributable to all stockholders $ (18,132) $ (334) Class A common stock as a percentage of total shares outstanding, basic 33.49 % 28.39 % Net loss attributable to Class A stockholders, basic $ (6,072) $ (95) Numerator, diluted: Net loss attributable to all stockholders $ (18,132) $ (334) Class A common stock as a percentage of total shares outstanding, diluted 33.49 % 28.39 % Net loss attributable to Class A stockholders, diluted $ (6,072) $ (95) Denominator, basic and diluted: Weighted average Class A common stock, basic 50,456 42,349 Dilutive effect of common stock equivalents (1) (2) — — Weighted average Class A common stock, diluted 50,456 42,349 Net loss per Class A share, basic $ (0.12) $ (0.00) Net loss per Class A share, diluted $ (0.12) $ (0.00) (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 (“RSA’s”), 3,141 RSU’s and 45 shares under the ESPP. (2) For the three months ended March 31, 2022, 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: 9,430 options (including 768 out-of-themoney options), 326 RSA’s, 1,547 RSUs and 41 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 | |
STOCK-BASED AWARD PLANS (Tables
STOCK-BASED AWARD PLANS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Compensation plans: | |
Schedule of ESPP valuation assumptions | Offering Period Ending 5/31/2023 11/30/2022 5/31/2022 11/30/2021 Fair market value of common stock $ 17.21 $ 11.16 $ 17.38 $ 19.89 Volatility 46.4 % 35.4 % 37.3 % 35.1 % Expected term (years) 0.5 0.5 0.5 0.5 Expected dividend yield - % - % - % - % Risk-free interest rate 4.7 % 1.6 % 0.1 % 0.1 % |
Schedule of stock-based compensation cost related to incentive awards | For the three months ended March 31, 2023 2022 (unaudited) Stock-based compensation expense: Stock options $ 2,171 $ 2,281 RSUs 8,345 1,779 RSAs 727 734 ESPP 191 139 Total stock-based compensation expense $ 11,434 $ 4,933 |
Schedule of stock based compensation cost in consolidated statement of operations | For the three months ended March 31, 2023 2022 (unaudited) Stock-based compensation expense: Cost of revenues, software subscriptions $ 996 $ 446 Cost of revenues, services 836 406 Research and development 2,234 114 Selling and marketing 2,898 1,572 General and administrative 4,470 2,395 Total stock-based compensation expense $ 11,434 $ 4,933 |
Stock options | |
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, 2023 8,508 $ 4.34 4.3 $ 86,514 Exercised (609) $ 2.61 2020 Plan options outstanding at March 31, 2023 7,899 $ 4.47 4.1 128,086 2020 Plan options excercisable at March 31, 2023 5,983 $ 3.30 3.3 104,037 *Amended Options have indefinite contractual lives |
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 1,656 — 1,656 — $2.15 229 1.7 229 1.7 $2.50 2,126 3.3 2,126 3.3 $2.67 172 3.9 172 3.9 $3.17 836 5.1 491 4.9 $3.73 1,463 6.6 686 6.6 $4.70 658 6.9 316 6.9 $18.47 213 8.7 53 8.7 $18.96 235 8.4 105 8.4 $19.00 66 8.5 17 8.5 $32.16 245 7.9 132 7.5 7,899 5,983 |
Restricted Stock Units | |
Compensation plans: | |
Schedule of Option activity | Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2023 2,562 $ 15.90 Granted 2,139 15.41 Vested (622) 17.51 Forfeited (70) 14.82 Outstanding at March 31, 2023 4,009 $ 15.40 |
Restricted Stock Awards | |
Compensation plans: | |
Schedule of restricted activity | Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2023 235 $ 14.91 Outstanding at March 31, 2023 235 $ 14.91 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - segment | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accounting policies: | ||
Operating segments | 1 | |
Effective Income Tax Rate Reconciliation, Percent | 111.40% | 170.50% |
Systax - VIE | Systax | ||
Accounting policies: | ||
Ownership (as a percent) | 65% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment information: | |||
Property and equipment | $ 117,444 | $ 115,768 | |
Outside United States | |||
Segment information: | |||
Property and equipment | $ 895 | $ 827 | |
Revenue | Geographic Concentration Risk | Outside United States | |||
Segment information: | |||
Risk percentage | 7% | 5% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Prepaid expenses and other current assets: | ||
Prepaid expenses | $ 9,244 | $ 5,875 |
Prepaid Insurance | 1,469 | 2,291 |
Prepaid licenses and support | 11,823 | 12,217 |
Prepaid expenses and other current assets | 22,536 | 20,383 |
Accrued expenses: | ||
Accrued general expenses | 17,599 | 18,485 |
Accrued contract labor and professional fees | 14,579 | 17,421 |
Accrued income and other taxes | 23,718 | 2,328 |
Accrued expenses | $ 55,896 | $ 38,234 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of revenue: | ||
Total revenues | $ 132,751 | $ 114,984 |
Software subscriptions | ||
Disaggregation of revenue: | ||
Total revenues | 111,014 | 97,131 |
Software licenses | ||
Disaggregation of revenue: | ||
Total revenues | 62,808 | 58,857 |
Cloud subscriptions | ||
Disaggregation of revenue: | ||
Total revenues | 48,206 | 38,274 |
Services | ||
Disaggregation of revenue: | ||
Total revenues | $ 21,737 | $ 17,853 |
REVENUE RECOGNITION - Accounts
REVENUE RECOGNITION - Accounts receivable, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
REVENUE RECOGNITION | ||||
Allowance for accounts receivable | $ 10,641 | $ 9,554 | $ 8,450 | $ 9,151 |
Allowance for credit loss | ||||
Balance, beginning of period | 102,885 | 76,929 | ||
Balance, end of period | 102,760 | 102,885 | ||
Increase (decrease), net | $ (125) | $ 25,956 |
REVENUE RECOGNITION - Allowance
REVENUE RECOGNITION - Allowance and deferred allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Allowance for credit loss | ||
Beginning balance | $ (9,554) | $ (9,151) |
Ending balance | (10,641) | (8,450) |
Change in allowance | 1,087 | (701) |
Deferred beginning balance | 7,133 | 6,537 |
Deferred ending balance | 7,516 | 6,098 |
Change in deferred allowance | (383) | 439 |
Net amount charged to revenues | 704 | $ (262) |
Software subscriptions | ||
Allowance for credit loss | ||
Beginning balance | (9,554) | |
Ending balance | (10,641) | |
Deferred beginning balance | 7,133 | |
Deferred ending balance | $ 7,516 |
REVENUE RECOGNITION - Deferred
REVENUE RECOGNITION - Deferred revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
REVENUE RECOGNITION | ||||
Deferred revenue, current | $ 276,004 | $ 268,847 | ||
Deferred revenue, non-current | 7,112 | 10,289 | ||
Total deferred revenue | $ 283,116 | $ 279,136 | $ 245,715 | $ 249,010 |
REVENUE RECOGNITION - Changes t
REVENUE RECOGNITION - Changes to deferred revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
REVENUE RECOGNITION | ||
Beginning balance | $ 279,136 | $ 249,010 |
Additional amounts deferred | 136,731 | 111,689 |
Revenues recognized | (132,751) | (114,984) |
Ending balance | $ 283,116 | $ 245,715 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract cost balances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Deferred commissions: | ||
Beginning balance | $ 15,463 | $ 12,555 |
Additions | 2,851 | 1,750 |
Amortization | (2,393) | (2,626) |
Ending balance | $ 15,921 | $ 11,679 |
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 ($) payment | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Forward foreign current contract, asset | $ 817 | $ 569 | |
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 | 817 | 569 | |
Money Market Funds | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 46,617 | 67,430 | |
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 | 46,617 | 67,430 | |
Commercial Paper | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 9,722 | 9,660 | |
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 | 9,722 | 9,660 | |
U.S. Treasury Securities | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 5,338 | 5,203 | |
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 | 5,338 | 5,203 | |
Tellutax | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Tellutax Contingent Consideration | 5,000 | 4,800 | |
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 | 5,000 | 4,800 | |
Tellutax | Significant unobservable inputs (Level 3) | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Tellutax Contingent Consideration | $ 5,000 | $ 4,800 |
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, 2023 USD ($) Y | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) Y | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value adjustments to contingent consideration | $ 200 | $ 700 | |
Purchase commitment and contingent consideration liabilities, current | 8,340 | $ 6,149 | |
Purchase commitment and contingent consideration liabilities, net of current portion | 6,813 | 8,412 | |
Tellutax | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Tellutax Contingent Consideration | 5,000 | 4,800 | |
Fair value adjustments to contingent consideration | 200 | $ 700 | |
Purchase commitment and contingent consideration liabilities, current | 3,400 | 1,400 | |
Purchase commitment and contingent consideration liabilities, net of current portion | $ 1,600 | $ 3,400 | |
Tellutax | Revenue volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration measurement input | 70 | 75 | |
Tellutax | Revenue discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration measurement input | 22.1 | 22.4 | |
Tellutax | Term (in years) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration measurement input | Y | 2.1 | 2.4 |
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, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 4,800 |
Fair value adjustments | 200 |
Ending balance | $ 5,000 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Non-recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
LCR-Dixon | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred purchase consideration | $ 9,924 | $ 19,824 | |
Systax | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Purchase commitment liability | 5,213 | 5,012 | |
Purchase commitment liability | 12,592 | ||
Adjustment due to currency exchange rates fluctuation | 0 | $ 0 | |
Minimum Purchase Commitment liability | $ 4,940 | $ 4,749 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property and equipment | ||
Property and equipment | $ 311,575 | $ 297,617 |
Less accumulated depreciation and amortization | (194,131) | (181,849) |
Property and equipment, net | 117,444 | 115,768 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment | 20,935 | 20,929 |
Equipment | ||
Property and equipment | ||
Property and equipment | 39,530 | 39,238 |
Computer software purchased | ||
Property and equipment | ||
Property and equipment | 11,903 | 11,892 |
Internal-Use Software | ||
Property and equipment | ||
Property and equipment | 197,697 | 185,015 |
Less accumulated depreciation and amortization | (130,062) | (119,603) |
Property and equipment, net | 101,478 | 98,290 |
Cloud-based customer solutions | ||
Property and equipment | ||
Property and equipment | 149,851 | 142,980 |
Internal systems and tools | ||
Property and equipment | ||
Property and equipment | 47,846 | 42,035 |
Furniture and fixtures | ||
Property and equipment | ||
Property and equipment | 7,667 | 7,665 |
In-process internal-use software | ||
Property and equipment | ||
Property and equipment | $ 33,843 | $ 32,878 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property and equipment | |||
Finance lease amortization | $ 279 | $ 235 | |
Property and equipment, gross | 311,575 | $ 297,617 | |
Property and equipment | 117,444 | 115,768 | |
Accumulated amortization | 194,131 | 181,849 | |
Excluding internal-use software and capital leases | |||
Property and equipment | |||
Depreciation expense | 1,517 | 1,718 | |
Assets under finance leases | |||
Property and equipment | |||
Property and equipment, gross | 1,461 | 1,461 | |
Accumulated amortization | 1,140 | 861 | |
Internal-Use Software | |||
Property and equipment | |||
Property and equipment, gross | 197,697 | 185,015 | |
Property and equipment | 101,478 | 98,290 | |
Accumulated amortization | 130,062 | 119,603 | |
Depreciation expense | 8,148 | 6,331 | |
Internal systems and tools | |||
Property and equipment | |||
Property and equipment, gross | 47,846 | $ 42,035 | |
Depreciation expense | $ 1,945 | $ 1,007 |
PROPERTY AND EQUIPMENT - Major
PROPERTY AND EQUIPMENT - Major components of internal-use software (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property and equipment | ||
Property and equipment, gross | $ 311,575 | $ 297,617 |
Less accumulated depreciation and amortization | (194,131) | (181,849) |
Property and equipment | 117,444 | 115,768 |
Internal-Use Software | ||
Property and equipment | ||
Property and equipment, gross | 197,697 | 185,015 |
Less accumulated depreciation and amortization | (130,062) | (119,603) |
Property and equipment, net excluding in-process internal-use software | 67,635 | 65,412 |
Property and equipment | 101,478 | 98,290 |
In-process internal-use software | ||
Property and equipment | ||
Property and equipment, gross | $ 33,843 | $ 32,878 |
PROPERTY AND EQUIPMENT - Amount
PROPERTY AND EQUIPMENT - Amounts capitalized for internal-use software and included in property and equipment additions on the consolidated statements of cash flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property and equipment | ||
Capitalized internal-use software | $ 13,313 | $ 13,873 |
Cloud-based customer solutions | ||
Property and equipment | ||
Capitalized internal-use software | 6,182 | 7,400 |
Internal systems and tools | ||
Property and equipment | ||
Capitalized internal-use software | 6,858 | 4,848 |
Internal-Use Software | ||
Property and equipment | ||
Capitalized internal-use software | $ 13,040 | $ 12,248 |
CAPITALIZED SOFTWARE (Details)
CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Capitalized software, movement | |||
Capitalized software, net | $ 38,790 | $ 39,012 | |
Capitalized software amortization expense | 4,229 | $ 3,301 | |
Software | |||
Capitalized software, movement | |||
Capitalized software, gross | 99,286 | 96,577 | |
Less accumulated amortization | (66,426) | (62,197) | |
Capitalized software, net | 32,860 | 34,380 | |
Capitalized development costs | 4,007 | $ 2,912 | |
In-process internal-use software | |||
Capitalized software, movement | |||
Capitalized software, gross | $ 5,930 | $ 4,632 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill. | $ 254,897 | $ 251,842 |
Goodwill and other intangible assets | 259,303 | 257,023 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | $ 4,406 | $ 5,181 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Amortization of acquired intangible assets | |||
Amortization | $ 824 | $ 314 | |
Cost of Revenues | |||
Amortization of acquired intangible assets | |||
Amortization | 58 | 65 | |
Selling and marketing | |||
Amortization of acquired intangible assets | |||
Amortization | $ 766 | $ 249 | |
Other intangible assets | |||
Other intangible assets | |||
Weighted Average Amortization Period (Years) | 3 years 6 months | 3 years 6 months | |
Gross Value | $ 10,802 | $ 10,667 | |
Accumulated amortization | (6,396) | (5,486) | |
Carrying Value | $ 4,406 | $ 5,181 |
DEBT - Credit Agreement (Detail
DEBT - Credit Agreement (Details) $ in Thousands | Mar. 08, 2022 USD ($) |
Line of Credit | |
Debt | |
Line of credit, capacity | $ 200,000 |
New Term Loan. | |
Debt | |
Face amount | $ 50,000 |
DEBT - Indebtness (Details)
DEBT - Indebtness (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current portion of long-term debt | ||
Current portion of long-term debt | $ 2,500 | $ 2,188 |
Debt, net of current portion | ||
Deferred financing costs | (157) | (166) |
Total debt, net of current portion | 46,093 | 46,709 |
Total Debt | 48,593 | 48,897 |
Term Loan | ||
Current portion of long-term debt | ||
Current portion of long-term debt | 2,500 | 2,188 |
Debt, net of current portion | ||
Debt, net of current portion | $ 46,250 | $ 46,875 |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Common Stock | ||
Exchange of shares | 2,589 | |
Class A | ||
Common Stock | ||
Exercise of stock options, net (in shares) | 592 | 272 |
Shares exchanged in lieu | 17 | 47 |
Class A | Restricted Stock Units | ||
Common Stock | ||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 391 | 3 |
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 231 | 1 |
S Corporation | ||
Common Stock | ||
Distributions | $ 536 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net loss attributable to all stockholders | $ (18,132) | $ (334) |
Class A | ||
Numerator: | ||
Common stock as a percentage of total shares outstanding, basic | 33.49% | 28.39% |
Net loss attributable to stockholders, basic | $ (6,072) | $ (95) |
Common stock as a percentage of total shares outstanding, diluted | 33.49% | 28.39% |
Net loss attributable to stockholders, diluted | $ (6,072) | $ (95) |
Denominator: | ||
Weighted average common stock, basic (in shares) | 50,456 | 42,349 |
Weighted average common stock, diluted (in shares) | 50,456 | 42,349 |
Net loss per share, basic (in dollars per share) | $ (0.12) | $ 0 |
Net loss per share, diluted (in dollars per share) | $ (0.12) | $ 0 |
Class A | Amended Options | ||
Denominator: | ||
Anti-dilutive shares | 8,335 | 9,430 |
Class A | Out-of-the-money options | ||
Denominator: | ||
Anti-dilutive shares | 705 | 768 |
Class A | Restricted Stock Awards | ||
Denominator: | ||
Anti-dilutive shares | 235 | 326 |
Class A | Restricted Stock Units | ||
Denominator: | ||
Anti-dilutive shares | 3,141 | 1,547 |
Class A | ESPP | ||
Denominator: | ||
Anti-dilutive shares | 45 | 41 |
Class B | ||
Numerator: | ||
Common stock as a percentage of total shares outstanding, basic | 66.51% | 71.61% |
Net loss attributable to stockholders, basic | $ (12,060) | $ (239) |
Common stock as a percentage of total shares outstanding, diluted | 66.51% | 71.61% |
Net loss attributable to stockholders, diluted | $ (12,060) | $ (239) |
Denominator: | ||
Weighted average common stock, basic (in shares) | 100,221 | 106,807 |
Weighted average common stock, diluted (in shares) | 100,221 | 106,807 |
Net loss per share, basic (in dollars per share) | $ (0.12) | $ 0 |
Net loss per share, diluted (in dollars per share) | $ (0.12) | $ 0 |
STOCK-BASED AWARD PLANS - Optio
STOCK-BASED AWARD PLANS - Options under 2020 Plan (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Weighted Average Per Share | |||
Compensation expense | $ 11,434 | $ 4,933 | |
Stock options | |||
Units | |||
Beginning, balance | 8,508 | ||
Granted | 0 | 0 | |
Exercised | (609) | ||
Ending balance | 7,899 | 8,508 | |
Exercisable | 5,983 | ||
Weighted Average Per Share | |||
Beginning balance | $ 4.34 | ||
Exercised | 2.61 | ||
Ending Balance | 4.47 | $ 4.34 | |
Exercisable | $ 3.30 | ||
Remaining contractual life, outstanding | 4 years 1 month 6 days | 4 years 3 months 18 days | |
Remaining contractual life, exercisable | 3 years 3 months 18 days | ||
Intrinsic value, outstanding | $ 128,086 | $ 86,514 | |
Intrinsic value, exercisable | 104,037 | ||
Compensation expense | $ 2,171 | $ 2,281 | |
Unrecognized compensation expense period | 1 year 9 months 18 days | ||
Stock options | Minimum | |||
Weighted Average Per Share | |||
Vesting period | 1 year | ||
Stock options | Maximum | |||
Weighted Average Per Share | |||
Vesting period | 4 years |
STOCK-BASED AWARD PLANS - 2020
STOCK-BASED AWARD PLANS - 2020 Plan (Details) shares in Thousands | Mar. 31, 2023 shares |
Stock options | |
Compensation plans: | |
Shares authorized | 14,786 |
STOCK-BASED AWARD PLANS - Opt_2
STOCK-BASED AWARD PLANS - Options under 2020 Plan Price Range (Details) - Stock options | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Options outstanding, vested and exercisable: | |
Options outstanding | 7,899 |
Options outstanding, life | 0 years |
Options vested and exercisable | 5,983 |
Options vested and exercisable, life | 0 years |
$0.15 to $0.71 | |
Options outstanding, vested and exercisable: | |
Exercise prices, lower range | $ / shares | $ 0.15 |
Exercise prices, upper range | $ / shares | $ 0.71 |
Options outstanding | 1,656,000 |
Options vested and exercisable | 1,656,000 |
$2.15 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 2.15 |
Options outstanding | 229,000 |
Options outstanding, life | 1 year 8 months 12 days |
Options vested and exercisable | 229,000 |
Options vested and exercisable, life | 1 year 8 months 12 days |
$2.50 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 2.50 |
Options outstanding | 2,126,000 |
Options outstanding, life | 3 years 3 months 18 days |
Options vested and exercisable | 2,126,000 |
Options vested and exercisable, life | 3 years 3 months 18 days |
$2.67 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 2.67 |
Options outstanding | 172,000 |
Options outstanding, life | 3 years 10 months 24 days |
Options vested and exercisable | 172,000 |
Options vested and exercisable, life | 3 years 10 months 24 days |
$3.17 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 3.17 |
Options outstanding | 836,000 |
Options outstanding, life | 5 years 1 month 6 days |
Options vested and exercisable | 491,000 |
Options vested and exercisable, life | 4 years 10 months 24 days |
$3.73 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 3.73 |
Options outstanding | 1,463,000 |
Options outstanding, life | 6 years 7 months 6 days |
Options vested and exercisable | 686,000 |
Options vested and exercisable, life | 6 years 7 months 6 days |
$4.70 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 4.70 |
Options outstanding | 658,000 |
Options outstanding, life | 6 years 10 months 24 days |
Options vested and exercisable | 316,000 |
Options vested and exercisable, life | 6 years 10 months 24 days |
$18.47 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 18.47 |
Options outstanding | 213,000 |
Options outstanding, life | 8 years 8 months 12 days |
Options vested and exercisable | 53,000 |
Options vested and exercisable, life | 8 years 8 months 12 days |
$18.96 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 18.96 |
Options outstanding | 235,000 |
Options outstanding, life | 8 years 4 months 24 days |
Options vested and exercisable | 105,000 |
Options vested and exercisable, life | 8 years 4 months 24 days |
$19.00 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 19 |
Options outstanding | 66,000 |
Options outstanding, life | 8 years 6 months |
Options vested and exercisable | 17,000 |
Options vested and exercisable, life | 8 years 6 months |
$32.16 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 32.16 |
Options outstanding | 245,000 |
Options outstanding, life | 7 years 10 months 24 days |
Options vested and exercisable | 132,000 |
Options vested and exercisable, life | 7 years 6 months |
STOCK-BASED AWARD PLANS - Restr
STOCK-BASED AWARD PLANS - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Compensation plans: | ||
Compensation expense | $ 11,434 | $ 4,933 |
Unrecognized compensation cost | 8,755 | |
Restricted Stock Units | ||
Compensation plans: | ||
Compensation expense | 8,345 | $ 1,779 |
Unrecognized compensation cost | $ 53,653 | |
Unrecognized compensation expense period | 3 years 3 months 18 days | |
Units | ||
Beginning balance (in units) | 2,562 | |
Granted (in units) | 2,139 | |
Vested (in units) | (622) | |
Forfeited (in units) | (70) | |
Ending balance (in units) | 4,009 | |
Weighted Average Per Share | ||
Beginning balance (in dollars per share) | $ 15.90 | |
Granted (in dollars per share) | 15.41 | |
Vested (in dollars per share) | 17.51 | |
Forfeited (in dollars per share) | 14.82 | |
Ending balance (in dollars per share) | $ 15.40 | |
Restricted Stock Units | Minimum | ||
Compensation plans: | ||
Service requirement (in years) | 1 year | |
Restricted Stock Units | Maximum | ||
Compensation plans: | ||
Service requirement (in years) | 4 years | |
PSU | Taxamo | ||
Compensation plans: | ||
Compensation expense | $ 0 | |
Grant date fair value | $ 15,803 | |
Units | ||
Granted (in units) | 895 |
STOCK-BASED AWARD PLANS - Res_2
STOCK-BASED AWARD PLANS - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Weighted Average Per Share | ||
Compensation expense | $ 11,434 | $ 4,933 |
Unrecognized compensation cost | $ 8,755 | |
Restricted Stock Awards | ||
Units | ||
Beginning balance (in units) | 235 | |
Ending balance (in units) | 235 | |
Weighted Average Per Share | ||
Beginning balance (in dollars per share) | $ 14.91 | |
Ending balance (in dollars per share) | $ 14.91 | |
Compensation expense | $ 727 | $ 734 |
Unrecognized compensation cost | $ 1,389 | |
Unrecognized compensation expense period | 9 months 18 days | |
Restricted Stock Awards | Minimum | ||
Compensation plans: | ||
Service requirement (in years) | 1 year | |
Restricted Stock Awards | 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, 2023 USD ($) period shares | Mar. 31, 2022 period | |
Compensation plans: | ||
Unrecognized compensation cost | $ 8,755 | |
Class A | ||
Compensation plans: | ||
Purchase price as a percent of fair value | 85% | |
ESPP | ||
Compensation plans: | ||
Reserved for issuance | shares | 5,065 | |
Amounts withheld from participants | $ 937 | |
Unrecognized compensation cost | $ 131 | |
Number of offering periods | period | 2 | 2 |
ESPP offering period | 6 months | |
Discount | 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, 2023 | Nov. 30, 2022 | May 31, 2022 | Nov. 30, 2021 | |
Fair Value Assumptions and Methodology | ||||
Fair market value of common stock | $ 17.21 | $ 11.16 | $ 17.38 | $ 19.89 |
Volatility | 46.40% | 35.40% | 37.30% | 35.10% |
Expected term (in years) | 6 months | 6 months | 6 months | 6 months |
Risk-free interest rate | 4.70% | 1.60% | 0.10% | 0.10% |
STOCK-BASED AWARD PLANS - Stock
STOCK-BASED AWARD PLANS - Stock based compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Allocation of costs | ||
Compensation expense | $ 11,434 | $ 4,933 |
Stock options | ||
Allocation of costs | ||
Compensation expense | 2,171 | 2,281 |
Restricted Stock Units | ||
Allocation of costs | ||
Compensation expense | 8,345 | 1,779 |
Restricted Stock Awards | ||
Allocation of costs | ||
Compensation expense | 727 | 734 |
ESPP | ||
Allocation of costs | ||
Compensation expense | $ 191 | $ 139 |
STOCK-BASED AWARD PLANS - Sto_2
STOCK-BASED AWARD PLANS - Stock based compensation, comprehensive loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Allocation of costs | ||
Compensation expense | $ 11,434 | $ 4,933 |
Research and development | ||
Allocation of costs | ||
Compensation expense | 2,234 | 114 |
Selling and marketing | ||
Allocation of costs | ||
Compensation expense | 2,898 | 1,572 |
General and administrative | ||
Allocation of costs | ||
Compensation expense | 4,470 | 2,395 |
Software subscriptions | ||
Allocation of costs | ||
Compensation expense | 996 | 446 |
Services | ||
Allocation of costs | ||
Compensation expense | $ 836 | $ 406 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
INCOME TAXES | ||
Income tax expense | $ 9,553 | $ 808 |
Effective tax rate (as a percent) | 111.40% | 170.50% |
U.S. federal statutory income tax rate | 21% | 21% |