Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 03, 2023 | |
Document Information: | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 $0.001 Per Share | |
Trading Symbol | VERX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001806837 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A | ||
Document Information: | ||
Entity Common Stock, Shares Outstanding | 60,325,387 | |
Class B | ||
Document Information: | ||
Entity Common Stock, Shares Outstanding | 92,661,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 49,499 | $ 91,803 |
Funds held for customers | 31,623 | 14,945 |
Accounts receivable, net of allowance of $14,308 and $9,554, respectively | 129,018 | 102,885 |
Prepaid expenses and other current assets | 19,637 | 22,340 |
Investment securities available-for-sale, at fair value (amortized cost of $8,359 and $11,220, respectively) | 8,326 | 11,173 |
Total current assets | 238,103 | 243,146 |
Property and equipment, net of accumulated depreciation | 100,270 | 101,090 |
Capitalized software, net of accumulated amortization | 39,356 | 39,012 |
Goodwill and other intangible assets | 253,976 | 257,023 |
Deferred commissions | 17,094 | 15,463 |
Deferred income tax asset | 40,557 | 30,938 |
Operating lease right-of-use assets | 15,333 | 17,187 |
Other assets | 15,379 | 15,333 |
Total assets | 720,068 | 719,192 |
Current liabilities: | ||
Current portion of long-term debt | 2,500 | 2,188 |
Accounts payable | 24,379 | 14,329 |
Accrued expenses | 49,614 | 38,234 |
Customer funds obligations | 29,117 | 12,121 |
Accrued salaries and benefits | 17,355 | 10,790 |
Accrued variable compensation | 23,232 | 23,729 |
Deferred compensation, current | 2,809 | |
Deferred revenue, current | 264,785 | 268,847 |
Current portion of operating lease liabilities | 4,198 | 4,086 |
Current portion of finance lease liabilities | 84 | 103 |
Deferred purchase consideration, current | 10,000 | 19,824 |
Purchase commitment and contingent consideration liabilities, current | 7,842 | 6,149 |
Total current liabilities | 433,106 | 403,209 |
Deferred revenue, net of current portion | 2,030 | 10,289 |
Debt, net of current portion | 44,863 | 46,709 |
Operating lease liabilities, net of current portion | 17,445 | 20,421 |
Finance lease liabilities, net of current portion | 65 | 10 |
Purchase commitment and contingent consideration liabilities, net of current portion | 2,200 | 8,412 |
Deferred other liabilities | 187 | 417 |
Total liabilities | 499,896 | 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 | 265,251 | 244,820 |
(Accumulated deficit) retained earnings | (15,920) | 12,507 |
Accumulated other comprehensive loss | (29,312) | (27,752) |
Total stockholders' equity | 220,172 | 229,725 |
Total liabilities and stockholders' equity | 720,068 | 719,192 |
Class A | ||
Stockholders' equity: | ||
Common stock | 56 | 50 |
Class B | ||
Stockholders' equity: | ||
Common stock | $ 97 | $ 100 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Allowance for accounts receivable | $ 14,308 | $ 9,554 |
Amortized cost | $ 8,359 | $ 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) | 55,825 | 50,014 |
Common stock, shares outstanding (in shares) | 55,825 | 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) | 96,839 | 100,307 |
Common stock, shares outstanding (in shares) | 96,839 | 100,307 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 145,027 | $ 126,238 | $ 417,473 | $ 360,498 |
Cost of revenues: | ||||
Total cost of revenues | 56,871 | 50,658 | 162,497 | 143,653 |
Gross profit | 88,156 | 75,580 | 254,976 | 216,845 |
Operating expenses: | ||||
Research and development | 16,772 | 10,351 | 45,314 | 30,294 |
Selling and marketing | 33,919 | 30,252 | 103,196 | 89,683 |
General and administrative | 35,385 | 31,679 | 109,071 | 90,520 |
Depreciation and amortization | 3,782 | 2,936 | 11,401 | 9,120 |
Other operating expense , net | 316 | 1,233 | 1,013 | 1,927 |
Total operating expenses | 90,174 | 76,451 | 269,995 | 221,544 |
Loss from operations | (2,018) | (871) | (15,019) | (4,699) |
Other (income) expense: | ||||
Interest expense, net | 597 | 361 | 142 | 1,079 |
Loss before income taxes | (2,615) | (1,232) | (15,161) | (5,778) |
Income tax expense (benefit) | 784 | (91) | 13,266 | 1,217 |
Net loss | (3,399) | (1,141) | (28,427) | (6,995) |
Other comprehensive (income) loss: | ||||
Foreign currency translation adjustments and revaluations, net of tax | 5,311 | 10,670 | 1,580 | 24,496 |
Unrealized (gain) loss on investments, net of tax | (10) | 28 | (20) | 26 |
Total other comprehensive (income) loss, net of tax | 5,301 | 10,698 | 1,560 | 24,522 |
Total comprehensive loss | (8,700) | (11,839) | (29,987) | (31,517) |
Software subscriptions | ||||
Revenues: | ||||
Total revenues | 121,285 | 106,368 | 350,135 | 304,587 |
Cost of revenues: | ||||
Total cost of revenues | 41,055 | 36,638 | 116,974 | 105,760 |
Services | ||||
Revenues: | ||||
Total revenues | 23,742 | 19,870 | 67,338 | 55,911 |
Cost of revenues: | ||||
Total cost of revenues | 15,816 | 14,020 | 45,523 | 37,893 |
Class A | ||||
Other comprehensive (income) loss: | ||||
Net loss attributable to stockholders, basic | $ (1,228) | $ (369) | $ (9,960) | $ (2,092) |
Net loss per share, basic (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.19) | $ (0.05) |
Weighted average common stock, basic (in shares) | 54,931 | 48,488 | 53,050 | 44,708 |
Net loss attributable to stockholders, diluted | $ (1,228) | $ (369) | $ (9,960) | $ (2,092) |
Net loss per share, diluted (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.19) | $ (0.05) |
Weighted average common stock, diluted (in shares) | 54,931 | 48,488 | 53,050 | 44,708 |
Class B | ||||
Other comprehensive (income) loss: | ||||
Net loss attributable to stockholders, basic | $ (2,171) | $ (772) | $ (18,467) | $ (4,903) |
Net loss per share, basic (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.19) | $ (0.05) |
Weighted average common stock, basic (in shares) | 97,145 | 101,307 | 98,361 | 104,772 |
Net loss attributable to stockholders, diluted | $ (2,171) | $ (772) | $ (18,467) | $ (4,903) |
Net loss per share, diluted (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.19) | $ (0.05) |
Weighted average common stock, diluted (in shares) | 97,145 | 101,307 | 98,361 | 104,772 |
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. | (Accumulated Deficit) 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 | |||||||
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, 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 (in shares) | 577 | |||||||
Foreign currency translation adjustments and revaluations, net of tax | (24,496) | |||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | (26) | |||||||
Net loss | (6,995) | |||||||
Balance at Sep. 30, 2022 | $ 49 | $ 101 | 238,093 | 17,816 | (42,019) | 214,040 | ||
Balance (in shares) at Sep. 30, 2022 | 48,673 | 101,307 | ||||||
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 | ||||||
Exercise of stock options, net | (34) | (34) | ||||||
Exercise of stock options, net (in shares) | 93 | |||||||
Shares issued upon vesting of Restricted Stock Awards, net (in shares) | 59 | |||||||
Shares issued in connection with ESPP | 967 | 967 | ||||||
Shares issued in connection with ESPP (shares) | 103 | |||||||
Stock-based compensation expense | 4,166 | 4,166 | ||||||
Class B shares exchanged for Class A shares | $ 6 | $ (6) | ||||||
Class B shares exchanged for Class A shares (in shares) | 5,500 | (5,500) | ||||||
Foreign currency translation adjustments and revaluations, net of tax | (11,777) | (11,777) | ||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | 2 | 2 | ||||||
Net loss | (5,520) | (5,520) | ||||||
Balance at Jun. 30, 2022 | $ 48 | $ 101 | 232,850 | 18,957 | (31,321) | 220,635 | ||
Balance (in shares) at Jun. 30, 2022 | 48,316 | 101,307 | ||||||
Exercise of stock options, net | $ 1 | 387 | 388 | |||||
Exercise of stock options, net (in shares) | 212 | 212 | ||||||
Shares issued upon vesting of Restricted Stock Units, net | (176) | (176) | ||||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 31 | |||||||
Shares issued upon vesting of Restricted Stock Awards, net | (164) | (164) | ||||||
Shares issued upon vesting of Restricted Stock Awards, net (in shares) | 114 | |||||||
Stock-based compensation expense | 5,196 | 5,196 | ||||||
Foreign currency translation adjustments and revaluations, net of tax | (10,670) | (10,670) | ||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | (28) | (28) | ||||||
Net loss | (1,141) | (1,141) | ||||||
Balance at Sep. 30, 2022 | $ 49 | $ 101 | 238,093 | 17,816 | (42,019) | 214,040 | ||
Balance (in shares) at Sep. 30, 2022 | 48,673 | 101,307 | ||||||
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 | |||||||
Shares issued upon vesting of Restricted Stock Units, net | (3,471) | (3,471) | ||||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 391 | |||||||
Stock-based compensation expense | 10,938 | 10,938 | ||||||
Class B shares exchanged for Class A shares | $ 2 | $ (2) | ||||||
Class B shares exchanged for Class A shares (in shares) | 2,589 | (2,589) | ||||||
Foreign currency translation adjustments and revaluations, net of tax | 3,122 | 3,122 | ||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | 13 | 13 | ||||||
Net loss | (18,132) | (18,132) | ||||||
Balance at Mar. 31, 2023 | $ 53 | $ 98 | 253,566 | (5,625) | (24,617) | 223,475 | ||
Balance (in shares) at Mar. 31, 2023 | 53,586 | 97,718 | ||||||
Balance at Dec. 31, 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 (in shares) | 1,595 | |||||||
Foreign currency translation adjustments and revaluations, net of tax | (1,580) | |||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | 20 | |||||||
Net loss | (28,427) | |||||||
Balance at Sep. 30, 2023 | $ 56 | $ 97 | 265,251 | (15,920) | (29,312) | 220,172 | ||
Balance (in shares) at Sep. 30, 2023 | 55,825 | 96,839 | 55,825 | 96,839 | ||||
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 | ||||||
Exercise of stock options, net | $ 1 | 668 | 669 | |||||
Exercise of stock options, net (in shares) | 259 | |||||||
Shares issued upon vesting of Restricted Stock Units, net | (221) | (221) | ||||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 22 | |||||||
Shares issued upon vesting of Restricted Stock Awards, net (in shares) | 106 | |||||||
Shares issued in connection with ESPP | 1,178 | 1,178 | ||||||
Shares issued in connection with ESPP (shares) | 81 | |||||||
Stock-based compensation expense | 6,904 | 6,904 | ||||||
Foreign currency translation adjustments and revaluations, net of tax | 609 | 609 | ||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | (3) | (3) | ||||||
Net loss | (6,896) | (6,896) | ||||||
Balance at Jun. 30, 2023 | $ 54 | $ 98 | 262,095 | (12,521) | (24,011) | 225,715 | ||
Balance (in shares) at Jun. 30, 2023 | 54,054 | 97,718 | ||||||
Exercise of stock options, net | $ 1 | (3,717) | (3,716) | |||||
Exercise of stock options, net (in shares) | 744 | 744 | ||||||
Shares issued upon vesting of Restricted Stock Units, net | (508) | (508) | ||||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 56 | |||||||
Shares issued upon vesting of Restricted Stock Awards, net | (146) | (146) | ||||||
Shares issued upon vesting of Restricted Stock Awards, net (in shares) | 92 | |||||||
Stock-based compensation expense | 7,527 | 7,527 | ||||||
Class B shares exchanged for Class A shares | $ 1 | $ (1) | ||||||
Class B shares exchanged for Class A shares (in shares) | 879 | (879) | ||||||
Foreign currency translation adjustments and revaluations, net of tax | (5,311) | (5,311) | ||||||
Unrealized gain (loss) from available-for-sale investments, net of tax | 10 | 10 | ||||||
Net loss | (3,399) | (3,399) | ||||||
Balance at Sep. 30, 2023 | $ 56 | $ 97 | $ 265,251 | $ (15,920) | $ (29,312) | $ 220,172 | ||
Balance (in shares) at Sep. 30, 2023 | 55,825 | 96,839 | 55,825 | 96,839 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (28,427) | $ (6,995) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 52,597 | 45,328 |
Amortization of cloud computing implementation costs | 1,550 | |
Provision for subscription cancellations and non-renewals | 1,407 | 29 |
Amortization of deferred financing costs | 189 | 181 |
Change in fair value of contingent consideration liability | 1,349 | 2,000 |
Write-off of deferred financing costs | 370 | |
Stock-based compensation expense | 26,228 | 14,383 |
Deferred income tax (benefit) | (10,034) | (20) |
Non-cash operating lease costs | 1,855 | 2,448 |
Other | (145) | 709 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (30,760) | (17,578) |
Prepaid expenses and other current assets | 520 | (2,465) |
Deferred commissions | (1,632) | (1,202) |
Accounts payable | 10,049 | 106 |
Accrued expenses | 9,865 | 6,113 |
Accrued and deferred compensation | 2,487 | (12,445) |
Deferred revenue | (8,977) | 5,250 |
Operating lease liabilities | (2,863) | (2,837) |
Other | 1,438 | (9,776) |
Net cash provided by operating activities | 26,696 | 23,599 |
Cash flows from investing activities: | ||
Acquisition of business, net of cash acquired | (474) | |
Property and equipment additions | (35,357) | (33,546) |
Capitalized software additions | (14,083) | (10,288) |
Purchase of investment securities, available-for-sale | (12,864) | (6,127) |
Proceeds from sales and maturities of investment securities, available-for-sale | 16,040 | |
Net cash used in investing activities | (46,264) | (50,435) |
Cash flows from financing activities: | ||
Net increase (decrease) in customer funds obligations | 16,996 | (2,603) |
Proceeds from term loan | 50,000 | |
Principal payments on long-term debt | (1,563) | (625) |
Payments for deferred financing costs | (983) | |
Proceeds from purchases of stock under ESPP | 1,178 | 967 |
Payments for taxes related to net share settlement of stock-based awards | (9,210) | (1,012) |
Proceeds from exercise of stock options | 3,097 | 1,288 |
Distributions under Tax Sharing Agreement | (536) | |
Payments for purchase commitment and contingent consideration liabilities | (6,424) | (423) |
Payments of finance lease liabilities | (77) | (96) |
Payments for deferred purchase commitments | (10,000) | (20,000) |
Net cash (used in) provided by financing activities | (6,003) | 25,977 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (55) | (1,137) |
Net decrease in cash, cash equivalents and restricted cash | (25,626) | (1,996) |
Cash, cash equivalents and restricted cash, beginning of period | 106,748 | 98,206 |
Cash, cash equivalents and restricted cash, end of period | $ 81,122 | $ 96,210 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets, end of period: | ||
Cash and cash equivalents | $ 49,499 | $ 72,370 |
Restricted cash-funds held for customers | 31,623 | 23,840 |
Total cash, cash equivalents and restricted cash, end of period | $ 81,122 | $ 96,210 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 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 80% controlling equity interest in Systax Sistemas Fiscais LTDA (“Systax”), a provider of Brazilian transaction tax content and software. Systax was determined to be a VIE and the accounts are included in the condensed consolidated 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 September 30, 2023, the interim condensed consolidated statements of comprehensive loss and changes in stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, and the interim condensed consolidated statements of cash flows for the nine months ended September 30, 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 and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the full year ending December 31, 2023. Revision of Previously Issued Financial Statements Certain prior period amounts on the condensed consolidated balance sheets and condensed consolidated statements of cash flows, reflected in the tables below, have been revised to correct for certain immaterial errors, as described below. During the second quarter of 2023, management identified certain immaterial errors impacting previously issued financial statements beginning as of December 31, 2021, and subsequent annual and quarterly reporting periods through March 31, 2023. Specifically, management identified an error in financial statement presentation required to be corrected to correctly reflect Cloud Computing Arrangement (“CCA”) software implementation costs in accordance with Accounting Standards Codification (“ASC”) 350-40, Goodwill and Other, Internal-Use Software Management assessed the materiality of this presentation on prior period consolidated financial statements in accordance with the SEC Staff Accounting Bulletin No. 99, “Materiality,” codified in ASC Topic 250, Accounting Changes and Error Corrections (“ASC 250”). Based on this assessment, management concluded that the error correction is not material to any previously presented interim or annual financial statements. The effect on the consolidated balance sheets is as follows: December 31, 2021 As Reported Revision As Revised Property and equipment, net of accumulated depreciation $ 98,390 $ (1,680) $ 96,710 Other assets 1,900 1,680 3,580 March 31, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 102,228 $ (4,642) $ 97,586 Other assets 3,158 4,642 7,800 June 30, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 106,526 $ (7,668) $ 98,858 Other assets 2,592 7,668 10,260 September 30, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 109,123 $ (11,107) $ 98,016 Other assets 2,422 11,107 13,529 December 31, 2022 Prepaid expenses and other current assets $ 20,383 $ 1,957 $ 22,340 Total current assets 241,189 1,957 243,146 Property and equipment, net of accumulated depreciation 115,768 (14,678) 101,090 Other assets 2,612 12,721 15,333 March 31, 2023 (unaudited) Prepaid expenses and other current assets $ 22,536 $ 3,588 $ 26,124 Total current assets 231,435 3,588 235,023 Property and equipment, net of accumulated depreciation 117,444 (17,942) 99,502 Other assets 2,621 14,354 16,975 The effect on the consolidated statements of cash flows are as follows: Twelve months ended December 31, 2021 As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ 336 $ (1,680) $ (1,344) Net cash (used in) provided by operating activities 91,969 (1,680) 90,289 Cash flows from investing activities: Property and equipment additions (33,386) 1,680 (31,706) Net cash used in investing activities (296,458) 1,680 (294,778) Three months ended March 31, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (950) $ (2,962) $ (3,912) Net cash (used in) provided by operating activities 2,595 (2,962) (367) Cash flows from investing activities: Property and equipment additions (13,873) 2,962 (10,911) Net cash used in investing activities (17,259) 2,962 (14,297) Six months ended June 30, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (457) $ (5,988) $ (6,445) Net cash (used in) provided by operating activities 14,576 (5,988) 8,588 Cash flows from investing activities: Property and equipment additions (27,827) 5,988 (21,839) Net cash used in investing activities (41,170) 5,988 (35,182) Nine months ended September 30, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (349) $ (9,427) $ (9,776) Net cash (used in) provided by operating activities 33,026 (9,427) 23,599 Cash flows from investing activities: Property and equipment additions (42,973) 9,427 (33,546) Net cash used in investing activities (59,862) 9,427 (50,435) Twelve months ended December 31, 2022 As Reported Revision As Revised Cash flows from operating activities: Prepaid expenses and other current assets $ (214) $ (1,957) $ (2,171) Other changes in operating assets and liabilities (583) (11,041) (11,624) Net cash (used in) provided by operating activities 76,846 (12,998) 63,848 Cash flows from investing activities: Property and equipment additions (58,530) 12,998 (45,532) Net cash used in investing activities (85,046) 12,998 (72,048) Three months ended March 31, 2023 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Prepaid expenses and other current assets $ (2,109) $ (1,631) $ (3,740) Other changes in operating assets and liabilities (58) (1,633) (1,691) Net cash (used in) provided by operating activities 6,755 (3,264) 3,491 Cash flows from investing activities: Property and equipment additions (13,313) 3,264 (10,049) Net cash used in investing activities (17,561) 3,264 (14,297) The condensed consolidated balance sheet as of December 31, 2022 and the condensed consolidated statement of cash flows for the nine months ended September 30, 2022 have been revised in this Quarterly Report on Form 10-Q. The Company intends to revise the remaining quarterly and annual amounts affected in future filings in which they appear, as applicable. Segments The Company operates its business as one operating segment. For the three and nine months ended September 30, 2023, approximately 7% of the Company’s revenues were generated from customers located outside the U.S. For the three and nine months ended September 30, 2022, revenues generated from customers located outside the U.S. were approximately 7% and 8%, respectively. As of September 30, 2023 and December 31, 2022, $755 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, intangible assets, and capitalized CCA software implementation costs; (viii) potential impairment of goodwill; (ix) determination of the fair value of tangible and intangible assets acquired, liabilities assumed, and consideration transferred in acquisitions; (x) amortization period of 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. Software Development Costs Cloud Computing Software Implementation Costs The Company follows ASC 350-40, Goodwill and Other, Internal-Use Software, two Amortization expense for capitalized cloud computing implementation costs for both the three and nine month periods ended September 30, 2023 was $919 and $1,550, respectively, and is included in general and administrative expense in the condensed consolidated statements of comprehensive loss. There was no amortization expense for the three and nine month periods ended September 30, 2022. Supplemental Balance Sheet Disclosures Supplemental balance sheet disclosures are as follows for the respective periods: As of September 30, December 31, 2023 2022 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 3,922 $ 5,875 Unamortized cloud computing implementation costs 3,999 1,957 Prepaid insurance 969 2,291 Prepaid licenses and support 10,747 12,217 Prepaid expenses and other current assets $ 19,637 $ 22,340 Other assets: Unamortized cloud computing implementation costs $ 13,491 $ 12,721 Other assets 1,888 2,612 Total other assets $ 15,379 $ 15,333 Accrued expenses: Accrued general expenses $ 17,015 $ 18,485 Accrued contract labor and professional fees 12,229 17,421 Accrued income and other taxes 20,370 2,328 Accrued expenses $ 49,614 $ 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 | 9 Months Ended |
Sep. 30, 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 September 30, Nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Software subscriptions: Software licenses $ 66,637 $ 62,589 $ 196,070 $ 182,320 Cloud subscriptions 54,648 43,779 154,065 122,267 Software subscriptions 121,285 106,368 350,135 304,587 Services 23,742 19,870 67,338 55,911 Total revenues $ 145,027 $ 126,238 $ 417,473 $ 360,498 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 $14,308 and $9,554 at September 30, 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 nine months ended September 30, 2023 For the year ended December 31, 2022 (unaudited) Balance, beginning of period $ 102,885 $ 76,929 Balance, end of period 129,018 102,885 Increase, net $ 26,133 $ 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 $10,472 and $7,133 at September 30, 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 September 30, 2023 2022 Balance Net Change Balance Net Change (unaudited) Allowance balance, July 1, $ (14,218) $ (8,719) Allowance balance, September 30, (14,308) (9,620) Change in allowance $ 90 $ 901 Deferred allowance balance, July 1, 10,409 6,700 Deferred allowance balance, September 30, 10,472 6,954 Change in deferred allowance (63) (254) Net amount charged to revenues $ 28 $ 647 For the nine months ended September 30, 2023 2022 Balance Net Change Balance Net Change (unaudited) Allowance balance, January 1, $ (9,554) $ (9,151) Allowance balance, September 30, (14,308) (9,620) Change in allowance $ 4,754 $ 469 Deferred allowance balance, January 1, 7,133 6,537 Deferred allowance balance, September 30, 10,472 6,954 Change in deferred allowance (3,339) (417) Net amount charged to revenues $ 1,416 $ 52 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 September 30, As of December 31, 2023 2022 (unaudited) Balances: Deferred revenue, current $ 264,785 $ 268,847 Deferred revenue, non-current 2,030 10,289 Total deferred revenue $ 266,815 $ 279,136 For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Changes to deferred revenue: Beginning balance $ 277,053 $ 255,074 $ 279,136 $ 249,010 Additional amounts deferred 134,789 124,899 405,152 365,223 Revenues recognized (145,027) (126,238) (417,473) (360,498) Ending balance $ 266,815 $ 253,735 $ 266,815 $ 253,735 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 September 30, For the nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Deferred commissions: Beginning balance $ 15,921 $ 12,168 $ 15,463 $ 12,555 Additions 3,839 3,248 9,437 7,904 Amortization (2,666) (1,659) (7,806) (6,702) Ending balance $ 17,094 $ 13,757 $ 17,094 $ 13,757 |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 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 September 30, 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 $ 30,419 $ 30,419 $ — $ — Commercial Paper 8,402 — 8,402 — U.S. Treasury Securities 2,671 — 2,671 — Tellutax Contingent Consideration 4,700 — — 4,700 Foreign Currency Forward Contracts 506 — 506 — 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 $900 and $1,349 was recorded in other operating expense, net for the three and nine months ended September 30, 2023, respectively. A fair value adjustment of $1,300 and $2,000 was recorded in other operating expense, net for the three and nine months ended September 30, 2022, respectively. At September 30, 2023, the Tellutax Contingent Consideration of $2,500 and $2,200 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 September 30, 2023 and December 31, 2022 and unobservable inputs used for the Monte Carlo Simulation valuation were as follows: September 30, 2023 (unaudited) Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 4,700 Monte Carlo Simulation Revenue volatility 70.0 % Revenue discount rate 22.9 % Term (in years) 1.9 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 nine months ended September 30, 2023 were as follows: Tellutax Contingent Consideration (unaudited) Balance, January 1, 2023 $ 4,800 Fair value adjustments 1,349 Payments (1,449) Balance, September 30, 2023 $ 4,700 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”) 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 acquisition was $10,000 and $19,824 at September 30, 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 or nine months ended September 30, 2023 or 2022. The Company acquired an additional 15% equity interest of Systax through a Purchase Commitment Liability payment of $0 and $4,975 during the three and nine months ended September 30, 2023, respectively, increasing the Company’s equity interest in Systax to 80%. The remaining Purchase Commitment Liability at September 30, 2023 was $5,342, and is included in purchase commitment and contingent consideration liabilities, current, in the condensed consolidated balance sheet. The Purchase Commitment Liability included in purchase commitment and contingent consideration liabilities, current 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 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 | 9 Months Ended |
Sep. 30, 2023 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT The major components of property and equipment are as follows: As of September 30, As of December 31, 2023 2022 (unaudited) Leasehold improvements $ 20,649 $ 20,929 Equipment 21,925 39,238 Computer software purchased 2,781 11,892 Internal-use software developed: Cloud-based customer solutions 140,346 142,980 Internal systems and tools 39,430 42,035 Furniture and fixtures 7,666 7,665 In-process internal-use software 15,857 18,200 Property and equipment 248,654 282,939 Less accumulated depreciation and amortization (148,384) (181,849) Property and equipment, net $ 100,270 $ 101,090 Depreciation expense for property and equipment, excluding all internal-use software developed and finance leases, was $1,636 and $1,535 for the three months ended September 30, 2023 and 2022, respectively, and $5,120 and $4,923 for the nine months ended September 30, 2023 and 2022, respectively, and is reflected in depreciation and amortization in the condensed consolidated statements of comprehensive loss. Finance lease amortization was $70 Assets under finance leases of $303 and $1,461, net of accumulated amortization of $166 and $861, respectively, at September 30, 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 September 30, As of December 31, 2023 2022 (unaudited) Internal-use software developed $ 179,776 $ 185,015 Less accumulated depreciation (107,992) (119,603) Internal-use software developed, net of accumulated depreciation 71,784 65,412 In-process internal-use software 15,857 18,200 Internal-use software developed, net $ 87,641 $ 83,612 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 nine months ended September 30, 2023 2022 (unaudited) Cloud-based customer solutions $ 22,170 $ 22,014 Internal systems and tools 12,095 9,496 Total $ 34,265 $ 31,510 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 September 30, 2023 and 2022 was $8,821 and $6,881, respectively, and $25,230 and $20,139, for the nine months ended September 30, 2023 and 2022, 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 September 30, 2023 and 2022 was $1,466 and $1,228, respectively, and $5,695 and $3,253 for the nine months ended September 30, 2023 and 2022, respectively, and is included in depreciation and amortization in the condensed consolidated statements of comprehensive loss. |
CAPITALIZED SOFTWARE
CAPITALIZED SOFTWARE | 9 Months Ended |
Sep. 30, 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 September 30, As of December 31, 2023 2022 (unaudited) Capitalized software $ 115,152 $ 96,577 Less accumulated amortization (75,936) (62,197) Capitalized software, net of accumulated depreciation 39,216 34,380 In-process capitalized software 140 4,632 Capitalized software, net $ 39,356 $ 39,012 Software development costs capitalized for the three months ended September 30, 2023 and 2022, excluding acquisitions, were $5,041 and $4,362, respectively, and $14,083 and $10,288 for the nine months ended September 30, 2023 and 2022, respectively. Capitalized software amortization expense, including amortization of acquired technology, was $5,147 and $4,163 for the three months ended September 30, 2023 and 2022, respectively, and $13,739 and $12,869 for the nine months ended September 30, 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 | 9 Months Ended |
Sep. 30, 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 September 30, As of December 31, 2023 2022 (unaudited) Goodwill $ 250,955 $ 251,842 Other intangible assets, net 3,021 5,181 Total $ 253,976 $ 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 September 30, As of December 31, 2023 2022 (unaudited) Weighted average amortization period (years) 3.5 3.5 Gross value $ 10,791 $ 10,667 Accumulated amortization (7,770) (5,486) Carrying value $ 3,021 $ 5,181 The following table presents amortization of other intangible assets: For the three months ended September 30, Cost of Revenues, Software Subscriptions Selling and Marketing Expense Total Expense 2023 $ 61 $ 596 $ 657 2022 58 755 813 For the nine months ended September 30, Cost of Revenues, Software Subscriptions Selling and Marketing Expense Total Expense 2023 $ 181 $ 2,046 $ 2,227 2022 177 3,023 3,200 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 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 September 30, 2023 and December 31, 2022 was as follows: As of September 30, As of December 31, 2023 2022 (unaudited) Term Loan $ 2,500 $ 2,188 Current portion of long-term debt 2,500 2,188 Term Loan 45,000 46,875 Deferred financing costs (137) (166) Debt, net of current portion $ 44,863 $ 46,709 Total debt, net of financing costs $ 47,363 $ 48,897 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | 8 . Common Stock During the three and nine months ended and September 30, 2023, the Company issued 744 and 1,595 shares of Class A common stock, respectively, related to the exercise of options, net of 292 and 315 shares, respectively, returned to the Company in lieu of payment of the exercise price and taxes due on these exercises. During the three and nine months ended September 30, 2023, the Company issued 56 and 469 shares of Class A common stock, respectively, in connection with the vesting of Restricted Stock Units (“RSUs”), net of 24 and 266 shares, respectively, returned to the Company in lieu of payment of taxes due on the vesting of these RSUs. During the three and nine months ended September 30, 2023, the Company issued 92 and 198 shares of Class A common stock, respectively, in connection with the vesting of Restricted Stock Awards (“RSAs”), net of 7 and 7 shares, respectively, returned to the Company in lieu of payment of taxes due on the vesting of these RSAs. During the three and nine months ended September 30, 2023, a stockholder exchanged 879 and 3,468 shares of Class B common stock, for an equivalent number of shares of Class A common stock. During the three and nine months ended and September 30, 2022, the Company issued 212 and 577 shares of Class A, respectively, related to the exercise of options, net of 21 and 91 shares, respectively, returned to the Company in lieu of payment of the exercise price and taxes due on these exercises. During the three and nine months ended September 30, 2022, the Company issued 31 and 34 shares of Class A, respectively, in connection with the vesting of RSUs, net of 13 and 14 shares, respectively, returned to the Company in lieu of payment of taxes due on the vesting of these RSUs. During the three and nine months ended September 30, 2022, the Company issued 114 and 173 shares of Class A common stock, respectively in connection with the vesting of Restricted Stock Awards (“RSAs”), net of 15 and 15 shares, respectively, returned to the Company in lieu of payment of taxes due on the vesting of these RSAs. During the three and nine months ended September 30, 2022, a stockholder exchanged 0 and 5,500 shares of Class B common stock, respectively 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. No payments were required under the Tax Sharing Agreement in 2023. During the three and nine months ended September 30, 2022, the Company distributed $0 and $536, respectively, 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 | 9 Months Ended |
Sep. 30, 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 stock and Class B common stock for the periods reflected below. For the three months ended September 30, For the nine months ended September 30, Class A common stock: 2023 2022 2023 2022 (unaudited) (unaudited) Numerator, basic: Net loss attributable to all stockholders $ (3,399) $ (1,141) $ (28,427) $ (6,995) Class A common stock as a percentage of total shares outstanding, basic 36.12 % 32.37 % 35.04 % 29.91 % Net loss attributable to Class A stockholders, basic $ (1,228) $ (369) $ (9,960) $ (2,092) Numerator, diluted: Net loss attributable to all stockholders $ (3,399) $ (1,141) $ (28,427) $ (6,995) Class A common stock as a percentage of total shares outstanding, diluted 36.12 % 32.37 % 35.04 % 29.91 % Net loss attributable to Class A stockholders, diluted $ (1,228) $ (369) $ (9,960) $ (2,092) Denominator, basic and diluted: Weighted average Class A common stock, basic 54,931 48,488 53,050 44,708 Dilutive effect of common stock equivalents (1) (2) — — — — Weighted average Class A common stock, diluted 54,931 48,488 53,050 44,708 Net loss per Class A share, basic $ (0.02) $ (0.01) $ (0.19) $ (0.05) Net loss per Class A share, diluted $ (0.02) $ (0.01) $ (0.19) $ (0.05) (1) For the three months ended September 30, 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: 7,332 options (including 307 out-of-the-money options), 121 restricted stock awards (“RSAs”), 4,162 RSUs, and 36 shares under the ESPP. For the three months ended September 30, 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: 8,113 options (including 760 out-of-the-money options), 273 RSAs, 2,485 RSUs, and 53 shares under the ESPP. (2) For the nine months ended September 30, 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: 7,814 options (including 498 out-of-the-money options), 193 RSAs, 3,825 RSUs, and 43 shares under the ESPP. For the nine months ended September 30, 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: 8,343 options (including 764 out-of-the-money options), 301 RSAs, 2,153 RSUs, and 48 shares under the ESPP. For the three months ended September 30, For the nine months ended September 30, Class B common stock: 2023 2022 2023 2022 (unaudited) (unaudited) Numerator, basic: Net loss attributable to all stockholders $ (3,399) $ (1,141) $ (28,427) $ (6,995) Class B common stock as a percentage of total shares outstanding, basic 63.88 % 67.63 % 64.96 % 70.09 % Net loss attributable to Class B stockholders, basic $ (2,171) $ (772) $ (18,467) $ (4,903) Numerator, diluted: Net loss attributable to all stockholders $ (3,399) $ (1,141) $ (28,427) $ (6,995) Class B common stock as a percentage of total shares outstanding, diluted 63.88 % 67.63 % 64.96 % 70.09 % Net loss attributable to Class B stockholders, diluted $ (2,171) $ (772) $ (18,467) $ (4,903) Denominator, basic and diluted: Weighted average Class B common stock, basic 97,145 101,307 98,361 104,772 Dilutive effect of common stock equivalents — — — — Weighted average Class B common stock, diluted 97,145 101,307 98,361 104,772 Net loss per Class B share, basic $ (0.02) $ (0.01) $ (0.19) $ (0.05) Net loss per Class B share, diluted $ (0.02) $ (0.01) $ (0.19) $ (0.05) |
STOCK-BASED AWARD PLANS
STOCK-BASED AWARD PLANS | 9 Months Ended |
Sep. 30, 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 September 30, 2023, 14,875 shares of Class A common stock were available for issuance under the 2020 Plan. Options The following table summarizes activity for options outstanding under the 2020 Plan for the nine months ended September 30, 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 (1,909) $ 2.47 Forfeited (34) $ 5.55 2020 Plan options outstanding at September 30, 2023 6,565 $ 4.88 4.9 121,818 2020 Plan options exercisable at September 30, 2023 5,108 $ 3.77 4.3 99,941 The detail of options outstanding, vested, and exercisable under the 2020 Plan as of September 30, 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 1,391 * 1,393 * $2.15 172 1.4 172 1.4 $2.50 1,761 2.9 1,761 2.9 $2.67 77 3.4 77 3.4 $3.17 538 4.6 538 4.6 $3.73 1,241 6.0 494 6.0 $4.70 628 6.4 286 6.4 $18.47 213 8.2 53 8.2 $18.96 235 7.9 170 7.9 $19.00 65 8.0 32 8.0 $32.16 244 7.4 132 7.4 6,565 5,108 *Amended Options have indefinite contractual lives The Board of Directors (“the Board”) intends all options granted to be exercisable at a price per share not less than the per share fair market value of the Company’s Class A common stock underlying the options on the date of grant. Compensation expense for option awards are measured based on the grant date fair value of the awards and recognized in the condensed consolidated statements of comprehensive 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 or nine months ended September 30, 2023 or 2022. At September 30, 2023, $5,960 of unrecognized compensation expense associated with options is expected to be recognized over a weighted average period of approximately 1.4 years. Restricted Stock Units The following table summarizes RSU activity for the nine months ended September 30, 2023: Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2023 2,562 $ 15.90 Granted 2,462 16.10 Vested (735) 17.51 Forfeited (169) 14.86 Outstanding at September 30, 2023 4,120 $ 15.77 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 September 30, 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 September 30, 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 nine months ended September 30, 2023: Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2023 235 $ 14.91 Granted 62 $ 22.69 Vested (206) 14.32 Outstanding at September 30, 2023 91 $ 21.50 Stock-based compensation cost for RSAs is measured based on the fair value of the Company’s underlying common stock on the date of grant and is recognized on a straight-line basis in the condensed consolidated statements of comprehensive 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 stock through payroll deductions of up to a specified percentage of their eligible compensation. The purchase price of the shares, in the absence of a contrary designation, is 85% of the lower of the fair value of the Class A common stock on the first or last day of the ESPP offering period. Amounts withheld from participants are reflected in accrued salaries and benefits in the condensed consolidated balance sheets until such shares are purchased. Amounts withheld from participants for the offering period ending November 30, 2023 aggregated $1,062 as of September 30, 2023. As of September 30, 2023, 4,984 shares of Class A common stock were available for issuance under the ESPP. As of September 30, 2023 there was approximately $138 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 November 30, 2023. At September 30, 2023 and 2022, there were two ESPP offering periods open that end November 30, 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 September 30, 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 11/30/2023 11/30/2022 Fair market value of common stock $ 21.76 $ 11.16 Volatility 39.4 % 35.4 % Expected term (years) 0.5 0.5 Expected dividend yield - % - % Risk-free interest rate 5.4 % 1.6 % 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 September 30, For the nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Stock-based compensation expense: Stock options $ 1,515 $ 1,836 $ 4,788 $ 5,250 RSUs 5,452 2,544 18,762 6,665 RSAs 598 725 2,076 2,034 ESPP 207 151 602 434 Total stock-based compensation expense $ 7,772 $ 5,256 $ 26,228 $ 14,383 The Company recognized stock-based compensation cost in the condensed consolidated statements of comprehensive loss as follows: For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Stock-based compensation expense: Cost of revenues, software subscriptions $ 728 $ 577 $ 2,143 $ 1,502 Cost of revenues, services 452 374 1,454 1,055 Research and development 1,398 581 4,407 1,193 Selling and marketing 2,325 1,621 6,305 4,594 General and administrative 2,869 2,103 11,919 6,039 Total stock-based compensation expense $ 7,772 $ 5,256 $ 26,228 $ 14,383 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended |
Sep. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES The Company reported income tax expense (benefit) of $784 and $(91) for the three months ended September 30, 2023, and 2022, respectively. The Company reported income tax expense of $13,266 and $1,217 for the nine months ended September 30, 2023, and 2022, respectively. The effective income tax rate ("ETR") was (30.0)% for the three months ended September 30, 2023, compared to 7.4% for the three months ended September 30, 2022. The ETR was (87.5)% for the nine months ended September 30, 2023, compared to (21.1)% for the nine months ended September 30, 2022. The ETR for the three and nine months ended September 30, 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, limitations on deductions of certain employees’ compensation under Internal Revenue Code Section 162(m), and tax benefits on exercises and vestings of stock awards. In addition, the ETR for September 30, 2023 includes a valuation allowance recorded on certain foreign deferred tax assets. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 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 80% controlling equity interest in Systax Sistemas Fiscais LTDA (“Systax”), a provider of Brazilian transaction tax content and software. Systax was determined to be a VIE and the accounts are included in the condensed consolidated 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 September 30, 2023, the interim condensed consolidated statements of comprehensive loss and changes in stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, and the interim condensed consolidated statements of cash flows for the nine months ended September 30, 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 and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the full year ending December 31, 2023. |
Revision of Previously Issued Financial Statements | Revision of Previously Issued Financial Statements Certain prior period amounts on the condensed consolidated balance sheets and condensed consolidated statements of cash flows, reflected in the tables below, have been revised to correct for certain immaterial errors, as described below. During the second quarter of 2023, management identified certain immaterial errors impacting previously issued financial statements beginning as of December 31, 2021, and subsequent annual and quarterly reporting periods through March 31, 2023. Specifically, management identified an error in financial statement presentation required to be corrected to correctly reflect Cloud Computing Arrangement (“CCA”) software implementation costs in accordance with Accounting Standards Codification (“ASC”) 350-40, Goodwill and Other, Internal-Use Software Management assessed the materiality of this presentation on prior period consolidated financial statements in accordance with the SEC Staff Accounting Bulletin No. 99, “Materiality,” codified in ASC Topic 250, Accounting Changes and Error Corrections (“ASC 250”). Based on this assessment, management concluded that the error correction is not material to any previously presented interim or annual financial statements. The effect on the consolidated balance sheets is as follows: December 31, 2021 As Reported Revision As Revised Property and equipment, net of accumulated depreciation $ 98,390 $ (1,680) $ 96,710 Other assets 1,900 1,680 3,580 March 31, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 102,228 $ (4,642) $ 97,586 Other assets 3,158 4,642 7,800 June 30, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 106,526 $ (7,668) $ 98,858 Other assets 2,592 7,668 10,260 September 30, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 109,123 $ (11,107) $ 98,016 Other assets 2,422 11,107 13,529 December 31, 2022 Prepaid expenses and other current assets $ 20,383 $ 1,957 $ 22,340 Total current assets 241,189 1,957 243,146 Property and equipment, net of accumulated depreciation 115,768 (14,678) 101,090 Other assets 2,612 12,721 15,333 March 31, 2023 (unaudited) Prepaid expenses and other current assets $ 22,536 $ 3,588 $ 26,124 Total current assets 231,435 3,588 235,023 Property and equipment, net of accumulated depreciation 117,444 (17,942) 99,502 Other assets 2,621 14,354 16,975 The effect on the consolidated statements of cash flows are as follows: Twelve months ended December 31, 2021 As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ 336 $ (1,680) $ (1,344) Net cash (used in) provided by operating activities 91,969 (1,680) 90,289 Cash flows from investing activities: Property and equipment additions (33,386) 1,680 (31,706) Net cash used in investing activities (296,458) 1,680 (294,778) Three months ended March 31, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (950) $ (2,962) $ (3,912) Net cash (used in) provided by operating activities 2,595 (2,962) (367) Cash flows from investing activities: Property and equipment additions (13,873) 2,962 (10,911) Net cash used in investing activities (17,259) 2,962 (14,297) Six months ended June 30, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (457) $ (5,988) $ (6,445) Net cash (used in) provided by operating activities 14,576 (5,988) 8,588 Cash flows from investing activities: Property and equipment additions (27,827) 5,988 (21,839) Net cash used in investing activities (41,170) 5,988 (35,182) Nine months ended September 30, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (349) $ (9,427) $ (9,776) Net cash (used in) provided by operating activities 33,026 (9,427) 23,599 Cash flows from investing activities: Property and equipment additions (42,973) 9,427 (33,546) Net cash used in investing activities (59,862) 9,427 (50,435) Twelve months ended December 31, 2022 As Reported Revision As Revised Cash flows from operating activities: Prepaid expenses and other current assets $ (214) $ (1,957) $ (2,171) Other changes in operating assets and liabilities (583) (11,041) (11,624) Net cash (used in) provided by operating activities 76,846 (12,998) 63,848 Cash flows from investing activities: Property and equipment additions (58,530) 12,998 (45,532) Net cash used in investing activities (85,046) 12,998 (72,048) Three months ended March 31, 2023 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Prepaid expenses and other current assets $ (2,109) $ (1,631) $ (3,740) Other changes in operating assets and liabilities (58) (1,633) (1,691) Net cash (used in) provided by operating activities 6,755 (3,264) 3,491 Cash flows from investing activities: Property and equipment additions (13,313) 3,264 (10,049) Net cash used in investing activities (17,561) 3,264 (14,297) The condensed consolidated balance sheet as of December 31, 2022 and the condensed consolidated statement of cash flows for the nine months ended September 30, 2022 have been revised in this Quarterly Report on Form 10-Q. The Company intends to revise the remaining quarterly and annual amounts affected in future filings in which they appear, as applicable. |
Segments | Segments The Company operates its business as one operating segment. For the three and nine months ended September 30, 2023, approximately 7% of the Company’s revenues were generated from customers located outside the U.S. For the three and nine months ended September 30, 2022, revenues generated from customers located outside the U.S. were approximately 7% and 8%, respectively. As of September 30, 2023 and December 31, 2022, $755 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, intangible assets, and capitalized CCA software implementation costs; (viii) potential impairment of goodwill; (ix) determination of the fair value of tangible and intangible assets acquired, liabilities assumed, and consideration transferred in acquisitions; (x) amortization period of 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. |
Software Development Costs | Software Development Costs Cloud Computing Software Implementation Costs The Company follows ASC 350-40, Goodwill and Other, Internal-Use Software, two |
Capitalized Cloud Implementation Costs | Amortization expense for capitalized cloud computing implementation costs for both the three and nine month periods ended September 30, 2023 was $919 and $1,550, respectively, and is included in general and administrative expense in the condensed consolidated statements of comprehensive loss. There was no amortization expense for the three and nine month periods ended September 30, 2022. |
Supplemental Balance Sheet Disclosures | Supplemental Balance Sheet Disclosures Supplemental balance sheet disclosures are as follows for the respective periods: As of September 30, December 31, 2023 2022 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 3,922 $ 5,875 Unamortized cloud computing implementation costs 3,999 1,957 Prepaid insurance 969 2,291 Prepaid licenses and support 10,747 12,217 Prepaid expenses and other current assets $ 19,637 $ 22,340 Other assets: Unamortized cloud computing implementation costs $ 13,491 $ 12,721 Other assets 1,888 2,612 Total other assets $ 15,379 $ 15,333 Accrued expenses: Accrued general expenses $ 17,015 $ 18,485 Accrued contract labor and professional fees 12,229 17,421 Accrued income and other taxes 20,370 2,328 Accrued expenses $ 49,614 $ 38,234 |
Recently Issued or Adopted 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) | 9 Months Ended |
Sep. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of revision of previously issued financial statements | December 31, 2021 As Reported Revision As Revised Property and equipment, net of accumulated depreciation $ 98,390 $ (1,680) $ 96,710 Other assets 1,900 1,680 3,580 March 31, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 102,228 $ (4,642) $ 97,586 Other assets 3,158 4,642 7,800 June 30, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 106,526 $ (7,668) $ 98,858 Other assets 2,592 7,668 10,260 September 30, 2022 (unaudited) Property and equipment, net of accumulated depreciation $ 109,123 $ (11,107) $ 98,016 Other assets 2,422 11,107 13,529 December 31, 2022 Prepaid expenses and other current assets $ 20,383 $ 1,957 $ 22,340 Total current assets 241,189 1,957 243,146 Property and equipment, net of accumulated depreciation 115,768 (14,678) 101,090 Other assets 2,612 12,721 15,333 March 31, 2023 (unaudited) Prepaid expenses and other current assets $ 22,536 $ 3,588 $ 26,124 Total current assets 231,435 3,588 235,023 Property and equipment, net of accumulated depreciation 117,444 (17,942) 99,502 Other assets 2,621 14,354 16,975 The effect on the consolidated statements of cash flows are as follows: Twelve months ended December 31, 2021 As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ 336 $ (1,680) $ (1,344) Net cash (used in) provided by operating activities 91,969 (1,680) 90,289 Cash flows from investing activities: Property and equipment additions (33,386) 1,680 (31,706) Net cash used in investing activities (296,458) 1,680 (294,778) Three months ended March 31, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (950) $ (2,962) $ (3,912) Net cash (used in) provided by operating activities 2,595 (2,962) (367) Cash flows from investing activities: Property and equipment additions (13,873) 2,962 (10,911) Net cash used in investing activities (17,259) 2,962 (14,297) Six months ended June 30, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (457) $ (5,988) $ (6,445) Net cash (used in) provided by operating activities 14,576 (5,988) 8,588 Cash flows from investing activities: Property and equipment additions (27,827) 5,988 (21,839) Net cash used in investing activities (41,170) 5,988 (35,182) Nine months ended September 30, 2022 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Other changes in operating assets and liabilities $ (349) $ (9,427) $ (9,776) Net cash (used in) provided by operating activities 33,026 (9,427) 23,599 Cash flows from investing activities: Property and equipment additions (42,973) 9,427 (33,546) Net cash used in investing activities (59,862) 9,427 (50,435) Twelve months ended December 31, 2022 As Reported Revision As Revised Cash flows from operating activities: Prepaid expenses and other current assets $ (214) $ (1,957) $ (2,171) Other changes in operating assets and liabilities (583) (11,041) (11,624) Net cash (used in) provided by operating activities 76,846 (12,998) 63,848 Cash flows from investing activities: Property and equipment additions (58,530) 12,998 (45,532) Net cash used in investing activities (85,046) 12,998 (72,048) Three months ended March 31, 2023 (unaudited) As Reported Revision As Revised Cash flows from operating activities: Prepaid expenses and other current assets $ (2,109) $ (1,631) $ (3,740) Other changes in operating assets and liabilities (58) (1,633) (1,691) Net cash (used in) provided by operating activities 6,755 (3,264) 3,491 Cash flows from investing activities: Property and equipment additions (13,313) 3,264 (10,049) Net cash used in investing activities (17,561) 3,264 (14,297) |
Schedule of supplemental balance sheet information | As of September 30, December 31, 2023 2022 (unaudited) Prepaid expenses and other current assets: Prepaid expenses $ 3,922 $ 5,875 Unamortized cloud computing implementation costs 3,999 1,957 Prepaid insurance 969 2,291 Prepaid licenses and support 10,747 12,217 Prepaid expenses and other current assets $ 19,637 $ 22,340 Other assets: Unamortized cloud computing implementation costs $ 13,491 $ 12,721 Other assets 1,888 2,612 Total other assets $ 15,379 $ 15,333 Accrued expenses: Accrued general expenses $ 17,015 $ 18,485 Accrued contract labor and professional fees 12,229 17,421 Accrued income and other taxes 20,370 2,328 Accrued expenses $ 49,614 $ 38,234 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue | Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Software subscriptions: Software licenses $ 66,637 $ 62,589 $ 196,070 $ 182,320 Cloud subscriptions 54,648 43,779 154,065 122,267 Software subscriptions 121,285 106,368 350,135 304,587 Services 23,742 19,870 67,338 55,911 Total revenues $ 145,027 $ 126,238 $ 417,473 $ 360,498 |
Schedule of beginning and ending balances of accounts receivable, net of allowance | For the nine months ended September 30, 2023 For the year ended December 31, 2022 (unaudited) Balance, beginning of period $ 102,885 $ 76,929 Balance, end of period 129,018 102,885 Increase, net $ 26,133 $ 25,956 |
Schedule of beginning and ending balances of and changes to the allowance and the deferred allowance | For the three months ended September 30, 2023 2022 Balance Net Change Balance Net Change (unaudited) Allowance balance, July 1, $ (14,218) $ (8,719) Allowance balance, September 30, (14,308) (9,620) Change in allowance $ 90 $ 901 Deferred allowance balance, July 1, 10,409 6,700 Deferred allowance balance, September 30, 10,472 6,954 Change in deferred allowance (63) (254) Net amount charged to revenues $ 28 $ 647 For the nine months ended September 30, 2023 2022 Balance Net Change Balance Net Change (unaudited) Allowance balance, January 1, $ (9,554) $ (9,151) Allowance balance, September 30, (14,308) (9,620) Change in allowance $ 4,754 $ 469 Deferred allowance balance, January 1, 7,133 6,537 Deferred allowance balance, September 30, 10,472 6,954 Change in deferred allowance (3,339) (417) Net amount charged to revenues $ 1,416 $ 52 |
Schedule of information about the balances of and changes to deferred revenue | As of September 30, As of December 31, 2023 2022 (unaudited) Balances: Deferred revenue, current $ 264,785 $ 268,847 Deferred revenue, non-current 2,030 10,289 Total deferred revenue $ 266,815 $ 279,136 For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Changes to deferred revenue: Beginning balance $ 277,053 $ 255,074 $ 279,136 $ 249,010 Additional amounts deferred 134,789 124,899 405,152 365,223 Revenues recognized (145,027) (126,238) (417,473) (360,498) Ending balance $ 266,815 $ 253,735 $ 266,815 $ 253,735 |
Schedule of information about the changes to contract cost balances | For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Deferred commissions: Beginning balance $ 15,921 $ 12,168 $ 15,463 $ 12,555 Additions 3,839 3,248 9,437 7,904 Amortization (2,666) (1,659) (7,806) (6,702) Ending balance $ 17,094 $ 13,757 $ 17,094 $ 13,757 |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 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 $ 30,419 $ 30,419 $ — $ — Commercial Paper 8,402 — 8,402 — U.S. Treasury Securities 2,671 — 2,671 — Tellutax Contingent Consideration 4,700 — — 4,700 Foreign Currency Forward Contracts 506 — 506 — 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 | September 30, 2023 (unaudited) Liability Fair Value Valuation Technique Unobservable Inputs Tellutax Contingent Consideration $ 4,700 Monte Carlo Simulation Revenue volatility 70.0 % Revenue discount rate 22.9 % Term (in years) 1.9 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 1,349 Payments (1,449) Balance, September 30, 2023 $ 4,700 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
PROPERTY AND EQUIPMENT | |
Schedule of major components of property and equipment | As of September 30, As of December 31, 2023 2022 (unaudited) Leasehold improvements $ 20,649 $ 20,929 Equipment 21,925 39,238 Computer software purchased 2,781 11,892 Internal-use software developed: Cloud-based customer solutions 140,346 142,980 Internal systems and tools 39,430 42,035 Furniture and fixtures 7,666 7,665 In-process internal-use software 15,857 18,200 Property and equipment 248,654 282,939 Less accumulated depreciation and amortization (148,384) (181,849) Property and equipment, net $ 100,270 $ 101,090 |
Schedule of major components of internal-use software | As of September 30, As of December 31, 2023 2022 (unaudited) Internal-use software developed $ 179,776 $ 185,015 Less accumulated depreciation (107,992) (119,603) Internal-use software developed, net of accumulated depreciation 71,784 65,412 In-process internal-use software 15,857 18,200 Internal-use software developed, net $ 87,641 $ 83,612 |
Schedule of amounts capitalized for internal-use software and included in property and equipment additions on the consolidated statements of cash flows | For the nine months ended September 30, 2023 2022 (unaudited) Cloud-based customer solutions $ 22,170 $ 22,014 Internal systems and tools 12,095 9,496 Total $ 34,265 $ 31,510 |
CAPITALIZED SOFTWARE (Tables)
CAPITALIZED SOFTWARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
CAPITALIZED SOFTWARE | |
Schedule of major components of capitalized software | As of September 30, As of December 31, 2023 2022 (unaudited) Capitalized software $ 115,152 $ 96,577 Less accumulated amortization (75,936) (62,197) Capitalized software, net of accumulated depreciation 39,216 34,380 In-process capitalized software 140 4,632 Capitalized software, net $ 39,356 $ 39,012 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Changes in the carrying amount of goodwill | As of September 30, As of December 31, 2023 2022 (unaudited) Goodwill $ 250,955 $ 251,842 Other intangible assets, net 3,021 5,181 Total $ 253,976 $ 257,023 |
Schedule of other acquired intangible assets | As of September 30, As of December 31, 2023 2022 (unaudited) Weighted average amortization period (years) 3.5 3.5 Gross value $ 10,791 $ 10,667 Accumulated amortization (7,770) (5,486) Carrying value $ 3,021 $ 5,181 |
Schedule of acquired intangible assets | For the three months ended September 30, Cost of Revenues, Software Subscriptions Selling and Marketing Expense Total Expense 2023 $ 61 $ 596 $ 657 2022 58 755 813 For the nine months ended September 30, Cost of Revenues, Software Subscriptions Selling and Marketing Expense Total Expense 2023 $ 181 $ 2,046 $ 2,227 2022 177 3,023 3,200 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
DEBT | |
Schedule of Debt | As of September 30, As of December 31, 2023 2022 (unaudited) Term Loan $ 2,500 $ 2,188 Current portion of long-term debt 2,500 2,188 Term Loan 45,000 46,875 Deferred financing costs (137) (166) Debt, net of current portion $ 44,863 $ 46,709 Total debt, net of financing costs $ 47,363 $ 48,897 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, For the nine months ended September 30, Class A common stock: 2023 2022 2023 2022 (unaudited) (unaudited) Numerator, basic: Net loss attributable to all stockholders $ (3,399) $ (1,141) $ (28,427) $ (6,995) Class A common stock as a percentage of total shares outstanding, basic 36.12 % 32.37 % 35.04 % 29.91 % Net loss attributable to Class A stockholders, basic $ (1,228) $ (369) $ (9,960) $ (2,092) Numerator, diluted: Net loss attributable to all stockholders $ (3,399) $ (1,141) $ (28,427) $ (6,995) Class A common stock as a percentage of total shares outstanding, diluted 36.12 % 32.37 % 35.04 % 29.91 % Net loss attributable to Class A stockholders, diluted $ (1,228) $ (369) $ (9,960) $ (2,092) Denominator, basic and diluted: Weighted average Class A common stock, basic 54,931 48,488 53,050 44,708 Dilutive effect of common stock equivalents (1) (2) — — — — Weighted average Class A common stock, diluted 54,931 48,488 53,050 44,708 Net loss per Class A share, basic $ (0.02) $ (0.01) $ (0.19) $ (0.05) Net loss per Class A share, diluted $ (0.02) $ (0.01) $ (0.19) $ (0.05) (1) For the three months ended September 30, 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: 7,332 options (including 307 out-of-the-money options), 121 restricted stock awards (“RSAs”), 4,162 RSUs, and 36 shares under the ESPP. For the three months ended September 30, 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: 8,113 options (including 760 out-of-the-money options), 273 RSAs, 2,485 RSUs, and 53 shares under the ESPP. (2) For the nine months ended September 30, 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: 7,814 options (including 498 out-of-the-money options), 193 RSAs, 3,825 RSUs, and 43 shares under the ESPP. For the nine months ended September 30, 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: 8,343 options (including 764 out-of-the-money options), 301 RSAs, 2,153 RSUs, and 48 shares under the ESPP. |
Class B | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Schedule of earnings per share basic and diluted | For the three months ended September 30, For the nine months ended September 30, Class B common stock: 2023 2022 2023 2022 (unaudited) (unaudited) Numerator, basic: Net loss attributable to all stockholders $ (3,399) $ (1,141) $ (28,427) $ (6,995) Class B common stock as a percentage of total shares outstanding, basic 63.88 % 67.63 % 64.96 % 70.09 % Net loss attributable to Class B stockholders, basic $ (2,171) $ (772) $ (18,467) $ (4,903) Numerator, diluted: Net loss attributable to all stockholders $ (3,399) $ (1,141) $ (28,427) $ (6,995) Class B common stock as a percentage of total shares outstanding, diluted 63.88 % 67.63 % 64.96 % 70.09 % Net loss attributable to Class B stockholders, diluted $ (2,171) $ (772) $ (18,467) $ (4,903) Denominator, basic and diluted: Weighted average Class B common stock, basic 97,145 101,307 98,361 104,772 Dilutive effect of common stock equivalents — — — — Weighted average Class B common stock, diluted 97,145 101,307 98,361 104,772 Net loss per Class B share, basic $ (0.02) $ (0.01) $ (0.19) $ (0.05) Net loss per Class B share, diluted $ (0.02) $ (0.01) $ (0.19) $ (0.05) |
STOCK-BASED AWARD PLANS (Tables
STOCK-BASED AWARD PLANS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Compensation plans: | |
Schedule of ESPP valuation assumptions | Offering Period Ending 11/30/2023 11/30/2022 Fair market value of common stock $ 21.76 $ 11.16 Volatility 39.4 % 35.4 % Expected term (years) 0.5 0.5 Expected dividend yield - % - % Risk-free interest rate 5.4 % 1.6 % |
Schedule of stock-based compensation cost related to incentive awards | For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Stock-based compensation expense: Stock options $ 1,515 $ 1,836 $ 4,788 $ 5,250 RSUs 5,452 2,544 18,762 6,665 RSAs 598 725 2,076 2,034 ESPP 207 151 602 434 Total stock-based compensation expense $ 7,772 $ 5,256 $ 26,228 $ 14,383 |
Schedule of stock based compensation cost in consolidated statement of operations | For the three months ended September 30, For the nine months ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Stock-based compensation expense: Cost of revenues, software subscriptions $ 728 $ 577 $ 2,143 $ 1,502 Cost of revenues, services 452 374 1,454 1,055 Research and development 1,398 581 4,407 1,193 Selling and marketing 2,325 1,621 6,305 4,594 General and administrative 2,869 2,103 11,919 6,039 Total stock-based compensation expense $ 7,772 $ 5,256 $ 26,228 $ 14,383 |
Employee Stock Option [Member] | |
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 (1,909) $ 2.47 Forfeited (34) $ 5.55 2020 Plan options outstanding at September 30, 2023 6,565 $ 4.88 4.9 121,818 2020 Plan options exercisable at September 30, 2023 5,108 $ 3.77 4.3 99,941 |
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 1,391 * 1,393 * $2.15 172 1.4 172 1.4 $2.50 1,761 2.9 1,761 2.9 $2.67 77 3.4 77 3.4 $3.17 538 4.6 538 4.6 $3.73 1,241 6.0 494 6.0 $4.70 628 6.4 286 6.4 $18.47 213 8.2 53 8.2 $18.96 235 7.9 170 7.9 $19.00 65 8.0 32 8.0 $32.16 244 7.4 132 7.4 6,565 5,108 *Amended Options have indefinite contractual lives |
Restricted Stock Units | |
Compensation plans: | |
Schedule of Option activity | Weighted Average Grant Date Fair Units Value Per Share Outstanding at January 1, 2023 2,562 $ 15.90 Granted 2,462 16.10 Vested (735) 17.51 Forfeited (169) 14.86 Outstanding at September 30, 2023 4,120 $ 15.77 |
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 Granted 62 $ 22.69 Vested (206) 14.32 Outstanding at September 30, 2023 91 $ 21.50 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Accounting policies: | |
Operating segments | 1 |
Minimum | |
Accounting policies: | |
Capitalized software development cost amortization extension term | 2 years |
Maximum | |
Accounting policies: | |
Capitalized software development cost amortization extension term | 5 years |
Systax - VIE | Systax | |
Accounting policies: | |
Ownership (as a percent) | 80% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revised condensed consolidated balance sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Revision of Previously Issued Financial Statements | |||||||
Prepaid expenses and other current assets | $ 19,637 | $ 26,124 | $ 22,340 | ||||
Total current assets | 238,103 | 235,023 | 243,146 | ||||
Property and equipment, net of accumulated depreciation | 100,270 | 99,502 | 101,090 | $ 98,016 | $ 98,858 | $ 97,586 | $ 96,710 |
Other assets | $ 15,379 | 16,975 | 15,333 | 13,529 | 10,260 | 7,800 | 3,580 |
As Reported | |||||||
Revision of Previously Issued Financial Statements | |||||||
Prepaid expenses and other current assets | 22,536 | 20,383 | |||||
Total current assets | 231,435 | 241,189 | |||||
Property and equipment, net of accumulated depreciation | 117,444 | 115,768 | 109,123 | 106,526 | 102,228 | 98,390 | |
Other assets | 2,621 | 2,612 | 2,422 | 2,592 | 3,158 | 1,900 | |
Revision | |||||||
Revision of Previously Issued Financial Statements | |||||||
Prepaid expenses and other current assets | 3,588 | 1,957 | |||||
Total current assets | 3,588 | 1,957 | |||||
Property and equipment, net of accumulated depreciation | (17,942) | (14,678) | (11,107) | (7,668) | (4,642) | (1,680) | |
Other assets | $ 14,354 | $ 12,721 | $ 11,107 | $ 7,668 | $ 4,642 | $ 1,680 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revised condensed consolidated statements of cash flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||||||
Prepaid expenses and other current assets | $ (3,740) | $ 520 | $ (2,465) | $ (2,171) | |||
Other changes in operating assets and liabilities | (1,691) | $ (3,912) | $ (6,445) | 1,438 | (9,776) | (11,624) | $ (1,344) |
Net cash (used in) provided by operating activities | 3,491 | (367) | 8,588 | 26,696 | 23,599 | 63,848 | 90,289 |
Cash flows from investing activities: | |||||||
Property and equipment additions | (10,049) | (10,911) | (21,839) | (35,357) | (33,546) | (45,532) | (31,706) |
Net cash used in investing activities | (14,297) | (14,297) | (35,182) | $ (46,264) | (50,435) | (72,048) | (294,778) |
As Reported | |||||||
Cash flows from operating activities: | |||||||
Prepaid expenses and other current assets | (2,109) | (214) | |||||
Other changes in operating assets and liabilities | (58) | (950) | (457) | (349) | (583) | 336 | |
Net cash (used in) provided by operating activities | 6,755 | 2,595 | 14,576 | 33,026 | 76,846 | 91,969 | |
Cash flows from investing activities: | |||||||
Property and equipment additions | (13,313) | (13,873) | (27,827) | (42,973) | (58,530) | (33,386) | |
Net cash used in investing activities | (17,561) | (17,259) | (41,170) | (59,862) | (85,046) | (296,458) | |
Revision | |||||||
Cash flows from operating activities: | |||||||
Prepaid expenses and other current assets | (1,631) | (1,957) | |||||
Other changes in operating assets and liabilities | (1,633) | (2,962) | (5,988) | (9,427) | (11,041) | (1,680) | |
Net cash (used in) provided by operating activities | (3,264) | (2,962) | (5,988) | (9,427) | (12,998) | (1,680) | |
Cash flows from investing activities: | |||||||
Property and equipment additions | 3,264 | 2,962 | 5,988 | 9,427 | 12,998 | 1,680 | |
Net cash used in investing activities | $ 3,264 | $ 2,962 | $ 5,988 | $ 9,427 | $ 12,998 | $ 1,680 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Segment information: | |||||||||
Property and equipment | $ 100,270 | $ 98,016 | $ 100,270 | $ 98,016 | $ 99,502 | $ 101,090 | $ 98,858 | $ 97,586 | $ 96,710 |
Outside United States | |||||||||
Segment information: | |||||||||
Property and equipment | $ 755 | $ 755 | $ 827 | ||||||
Revenue | Geographic Concentration Risk | Outside United States | |||||||||
Segment information: | |||||||||
Risk percentage | 7% | 7% | 7% | 8% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Capitalized Costs and Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Cloud computing implementation costs | |||||||||
Amortization of cloud computing implementation costs | $ 919 | $ 0 | $ 1,550 | $ 0 | |||||
Prepaid expenses and other current assets: | |||||||||
Prepaid expenses | 3,922 | 3,922 | $ 5,875 | ||||||
Unamortized cloud computing implementation costs | 3,999 | 3,999 | 1,957 | ||||||
Prepaid Insurance | 969 | 969 | 2,291 | ||||||
Prepaid licenses and support | 10,747 | 10,747 | 12,217 | ||||||
Prepaid expenses and other current assets | 19,637 | 19,637 | $ 26,124 | 22,340 | |||||
Other assets: | |||||||||
Unamortized cloud computing implementation costs | 13,491 | 13,491 | 12,721 | ||||||
Other assets | 1,888 | 1,888 | 2,612 | ||||||
Total other assets | 15,379 | $ 13,529 | 15,379 | $ 13,529 | $ 16,975 | 15,333 | $ 10,260 | $ 7,800 | $ 3,580 |
Accrued expenses: | |||||||||
Accrued general expenses | 17,015 | 17,015 | 18,485 | ||||||
Accrued contract labor and professional fees | 12,229 | 12,229 | 17,421 | ||||||
Accrued income and other taxes | 20,370 | 20,370 | 2,328 | ||||||
Accrued expenses | $ 49,614 | $ 49,614 | $ 38,234 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of revenue: | ||||
Total revenues | $ 145,027 | $ 126,238 | $ 417,473 | $ 360,498 |
Software subscriptions | ||||
Disaggregation of revenue: | ||||
Total revenues | 121,285 | 106,368 | 350,135 | 304,587 |
Software licenses | ||||
Disaggregation of revenue: | ||||
Total revenues | 66,637 | 62,589 | 196,070 | 182,320 |
Cloud subscriptions | ||||
Disaggregation of revenue: | ||||
Total revenues | 54,648 | 43,779 | 154,065 | 122,267 |
Services | ||||
Disaggregation of revenue: | ||||
Total revenues | $ 23,742 | $ 19,870 | $ 67,338 | $ 55,911 |
REVENUE RECOGNITION - Accounts
REVENUE RECOGNITION - Accounts receivable, net (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
REVENUE RECOGNITION | ||||||
Allowance for accounts receivable | $ 14,308 | $ 9,554 | $ 14,218 | $ 9,620 | $ 8,719 | $ 9,151 |
Allowance for credit loss | ||||||
Balance, beginning of period | 102,885 | 76,929 | ||||
Balance, end of period | 129,018 | 102,885 | ||||
Increase, net | $ 26,133 | $ 25,956 |
REVENUE RECOGNITION - Allowance
REVENUE RECOGNITION - Allowance and deferred allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Allowance for credit loss | ||||
Beginning balance | $ (14,218) | $ (8,719) | $ (9,554) | $ (9,151) |
Ending balance | (14,308) | (9,620) | (14,308) | (9,620) |
Change in allowance | 90 | 901 | 4,754 | 469 |
Deferred beginning balance | 10,409 | 6,700 | 7,133 | 6,537 |
Deferred ending balance | 10,472 | 6,954 | 10,472 | 6,954 |
Change in deferred allowance | (63) | (254) | (3,339) | (417) |
Net amount charged to revenues | 28 | $ 647 | 1,416 | $ 52 |
Software subscriptions | ||||
Allowance for credit loss | ||||
Beginning balance | (9,554) | |||
Ending balance | (14,308) | (14,308) | ||
Deferred beginning balance | 7,133 | |||
Deferred ending balance | $ 10,472 | $ 10,472 |
REVENUE RECOGNITION - Deferred
REVENUE RECOGNITION - Deferred revenue (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
REVENUE RECOGNITION | ||||||
Deferred revenue, current | $ 264,785 | $ 268,847 | ||||
Deferred revenue, non-current | 2,030 | 10,289 | ||||
Total deferred revenue | $ 266,815 | $ 277,053 | $ 279,136 | $ 253,735 | $ 255,074 | $ 249,010 |
REVENUE RECOGNITION - Changes t
REVENUE RECOGNITION - Changes to deferred revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
REVENUE RECOGNITION | ||||
Beginning balance | $ 277,053 | $ 255,074 | $ 279,136 | $ 249,010 |
Additional amounts deferred | 134,789 | 124,899 | 405,152 | 365,223 |
Revenues recognized | (145,027) | (126,238) | (417,473) | (360,498) |
Ending balance | $ 266,815 | $ 253,735 | $ 266,815 | $ 253,735 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract cost balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Deferred commissions: | ||||
Beginning balance | $ 15,921 | $ 12,168 | $ 15,463 | $ 12,555 |
Additions | 3,839 | 3,248 | 9,437 | 7,904 |
Amortization | (2,666) | (1,659) | (7,806) | (6,702) |
Ending balance | $ 17,094 | $ 13,757 | $ 17,094 | $ 13,757 |
Contract costs, amortization period | 3 years | 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 ($) payment | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Forward foreign current contract, asset | $ 506 | $ 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 | 506 | 569 | |
Money Market Funds | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 30,419 | 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 | 30,419 | 67,430 | |
Commercial Paper | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 8,402 | 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 | 8,402 | 9,660 | |
U.S. Treasury Securities | Fair Value, Recurring | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Assets, Fair Value Disclosure | 2,671 | 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 | 2,671 | 5,203 | |
Tellutax | |||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||
Tellutax Contingent Consideration | 4,700 | 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 | 4,700 | 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 | $ 4,700 | $ 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 | 9 Months Ended | |||
Sep. 30, 2023 USD ($) Y | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Y | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) Y | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Fair value adjustments to contingent consideration | $ 1,349 | $ 2,000 | |||
Purchase commitment and contingent consideration liabilities, current | $ 7,842 | 7,842 | $ 6,149 | ||
Purchase commitment and contingent consideration liabilities, net of current portion | 2,200 | 2,200 | 8,412 | ||
Tellutax | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Tellutax Contingent Consideration | 4,700 | 4,700 | 4,800 | ||
Fair value adjustments to contingent consideration | 900 | $ 1,300 | 1,349 | $ 2,000 | |
Purchase commitment and contingent consideration liabilities, current | 2,500 | 2,500 | 1,400 | ||
Purchase commitment and contingent consideration liabilities, net of current portion | $ 2,200 | $ 2,200 | $ 3,400 | ||
Tellutax | Revenue volatility | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Contingent consideration measurement input | 70 | 70 | 75 | ||
Tellutax | Revenue discount rate | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Contingent consideration measurement input | 22.9 | 22.9 | 22.4 | ||
Tellutax | Term (in years) | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Contingent consideration measurement input | Y | 1.9 | 1.9 | 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 | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 4,800 |
Fair value adjustments | 1,349 |
Payments | (1,449) |
Ending balance | $ 4,700 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Non-recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
LCR | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Deferred purchase consideration | $ 10,000 | $ 10,000 | $ 19,824 | ||
Systax | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Interest acquired (as a percent) | 15% | 15% | |||
Purchase commitment liability payment | $ 0 | $ 4,975 | |||
Total equity interests | 80% | 80% | |||
Purchase commitment liability | 5,012 | ||||
Purchase commitment liability | $ 12,592 | $ 12,592 | |||
Adjustment due to currency exchange rates fluctuation | 0 | $ 0 | 0 | $ 0 | |
Minimum Purchase Commitment liability | $ 5,342 | $ 5,342 | $ 4,749 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Property and equipment | |||||||
Property and equipment | $ 248,654 | $ 282,939 | |||||
Less accumulated depreciation | (148,384) | (181,849) | |||||
Property and equipment, net | 100,270 | $ 99,502 | 101,090 | $ 98,016 | $ 98,858 | $ 97,586 | $ 96,710 |
Leasehold improvements | |||||||
Property and equipment | |||||||
Property and equipment | 20,649 | 20,929 | |||||
Equipment | |||||||
Property and equipment | |||||||
Property and equipment | 21,925 | 39,238 | |||||
Computer software purchased | |||||||
Property and equipment | |||||||
Property and equipment | 2,781 | 11,892 | |||||
Internal-use software | |||||||
Property and equipment | |||||||
Property and equipment | 179,776 | 185,015 | |||||
Less accumulated depreciation | (107,992) | (119,603) | |||||
Property and equipment, net | 87,641 | 83,612 | |||||
Cloud-based customer solutions | |||||||
Property and equipment | |||||||
Property and equipment | 140,346 | 142,980 | |||||
Internal systems and tools | |||||||
Property and equipment | |||||||
Property and equipment | 39,430 | 42,035 | |||||
Furniture and fixtures | |||||||
Property and equipment | |||||||
Property and equipment | 7,666 | 7,665 | |||||
In-process internal-use software | |||||||
Property and equipment | |||||||
Property and equipment | $ 15,857 | $ 18,200 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property and equipment | |||||
Finance lease amortization | $ 70 | $ 174 | $ 586 | $ 363 | |
Property and equipment, gross | 248,654 | 248,654 | $ 282,939 | ||
Accumulated amortization | 148,384 | 148,384 | 181,849 | ||
Excluding internal-use software and capital leases | |||||
Property and equipment | |||||
Depreciation expense | 1,636 | 1,535 | 5,120 | 4,923 | |
Assets under finance leases | |||||
Property and equipment | |||||
Property and equipment, gross | 303 | 303 | 1,461 | ||
Accumulated amortization | 166 | 166 | 861 | ||
Internal-use software | |||||
Property and equipment | |||||
Property and equipment, gross | 179,776 | 179,776 | 185,015 | ||
Accumulated amortization | 107,992 | 107,992 | 119,603 | ||
Depreciation expense | 8,821 | 6,881 | 25,230 | 20,139 | |
Internal systems and tools | |||||
Property and equipment | |||||
Property and equipment, gross | 39,430 | 39,430 | $ 42,035 | ||
Depreciation expense | $ 1,466 | $ 1,228 | $ 5,695 | $ 3,253 |
PROPERTY AND EQUIPMENT - Major
PROPERTY AND EQUIPMENT - Major components of internal-use software (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Property and equipment | |||||||
Property and equipment, gross | $ 248,654 | $ 282,939 | |||||
Less accumulated depreciation | (148,384) | (181,849) | |||||
Property and equipment | 100,270 | $ 99,502 | 101,090 | $ 98,016 | $ 98,858 | $ 97,586 | $ 96,710 |
Internal-use software | |||||||
Property and equipment | |||||||
Property and equipment, gross | 179,776 | 185,015 | |||||
Less accumulated depreciation | (107,992) | (119,603) | |||||
Internal-use software developed, net of accumulated depreciation | 71,784 | 65,412 | |||||
Property and equipment | 87,641 | 83,612 | |||||
In-process internal-use software | |||||||
Property and equipment | |||||||
Property and equipment, gross | $ 15,857 | $ 18,200 |
PROPERTY AND EQUIPMENT - Amount
PROPERTY AND EQUIPMENT - Amounts included in property and equipment additions related to capitalized internal-use software (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cloud-based customer solutions | ||
Property and equipment | ||
Total | $ 22,170 | $ 22,014 |
Internal systems and tools | ||
Property and equipment | ||
Total | 12,095 | 9,496 |
Internal-use software | ||
Property and equipment | ||
Total | $ 34,265 | $ 31,510 |
CAPITALIZED SOFTWARE (Details)
CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Capitalized software, movement | |||||
Capitalized software, net | $ 39,356 | $ 39,356 | $ 39,012 | ||
Capitalized software amortization expense | 5,147 | $ 4,163 | 13,739 | $ 12,869 | |
Software | |||||
Capitalized software, movement | |||||
Capitalized software, gross | 115,152 | 115,152 | 96,577 | ||
Less accumulated amortization | (75,936) | (75,936) | (62,197) | ||
Capitalized software, net | 39,216 | 39,216 | 34,380 | ||
Capitalized development costs | 5,041 | $ 4,362 | 14,083 | $ 10,288 | |
In-process internal-use software | |||||
Capitalized software, movement | |||||
Capitalized software, gross | $ 140 | $ 140 | $ 4,632 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill. | $ 250,955 | $ 251,842 |
Goodwill and other intangible assets | 253,976 | 257,023 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets, net | $ 3,021 | $ 5,181 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Amortization of acquired intangible assets | |||||
Amortization | $ 657 | $ 813 | $ 2,227 | $ 3,200 | |
Cost of Revenues | |||||
Amortization of acquired intangible assets | |||||
Amortization | 61 | 58 | 181 | 177 | |
Selling and marketing | |||||
Amortization of acquired intangible assets | |||||
Amortization | 596 | $ 755 | $ 2,046 | $ 3,023 | |
Other intangible assets | |||||
Other intangible assets | |||||
Weighted average amortization period (years) | 3 years 6 months | 3 years 6 months | |||
Gross Value | 10,791 | $ 10,791 | $ 10,667 | ||
Accumulated amortization | (7,770) | (7,770) | (5,486) | ||
Carrying Value | $ 3,021 | $ 3,021 | $ 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 | Sep. 30, 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 | (137) | (166) |
Total debt, net of current portion | 44,863 | 46,709 |
Total Debt | 47,363 | 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 | $ 45,000 | $ 46,875 |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Class A | ||||
Common Stock | ||||
Exercise of stock options, net (in shares) | 744 | 212 | 1,595 | 577 |
Shares exchanged in lieu | 292 | 21 | 315 | 91 |
Class A | Restricted Stock Units | ||||
Common Stock | ||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 56 | 31 | 469 | 34 |
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 24 | 13 | 266 | 14 |
Class A | Restricted Stock Awards | ||||
Common Stock | ||||
Shares issued upon vesting of Restricted Stock Units, net (in shares) | 92 | 114 | 198 | 173 |
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 7 | 15 | 7 | 15 |
Class B | ||||
Common Stock | ||||
Exchange of shares | 879 | 0 | 3,468 | 5,500 |
S Corporation | ||||
Common Stock | ||||
Distributions | $ 0 | $ 536 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||||||
Net Income (Loss) | $ (3,399) | $ (6,896) | $ (18,132) | $ (1,141) | $ (5,520) | $ (334) | $ (28,427) | $ (6,995) |
Class A | ||||||||
Numerator: | ||||||||
Common stock as a percentage of total shares outstanding, basic | 36.12% | 32.37% | 35.04% | 29.91% | ||||
Net loss attributable to stockholders, basic | $ (1,228) | $ (369) | $ (9,960) | $ (2,092) | ||||
Common stock as a percentage of total shares outstanding, diluted | 36.12% | 32.37% | 35.04% | 29.91% | ||||
Net loss attributable to stockholders, diluted | $ (1,228) | $ (369) | $ (9,960) | $ (2,092) | ||||
Denominator: | ||||||||
Weighted average common stock, basic (in shares) | 54,931 | 48,488 | 53,050 | 44,708 | ||||
Weighted average common stock, diluted (in shares) | 54,931 | 48,488 | 53,050 | 44,708 | ||||
Net loss per share, basic (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.19) | $ (0.05) | ||||
Net loss per share, diluted (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.19) | $ (0.05) | ||||
Class A | Amended Options | ||||||||
Denominator: | ||||||||
Anti-dilutive shares | 7,332 | 8,113 | 7,814 | 8,343 | ||||
Class A | Out-of-the-money options | ||||||||
Denominator: | ||||||||
Anti-dilutive shares | 307 | 760 | 498 | 764 | ||||
Class A | Restricted Stock Awards | ||||||||
Denominator: | ||||||||
Anti-dilutive shares | 121 | 273 | 193 | 301 | ||||
Class A | Restricted Stock Units | ||||||||
Denominator: | ||||||||
Anti-dilutive shares | 4,162 | 2,485 | 3,825 | 2,153 | ||||
Class A | ESPP | ||||||||
Denominator: | ||||||||
Anti-dilutive shares | 36 | 53 | 43 | 48 | ||||
Class B | ||||||||
Numerator: | ||||||||
Common stock as a percentage of total shares outstanding, basic | 63.88% | 67.63% | 64.96% | 70.09% | ||||
Net loss attributable to stockholders, basic | $ (2,171) | $ (772) | $ (18,467) | $ (4,903) | ||||
Common stock as a percentage of total shares outstanding, diluted | 63.88% | 67.63% | 64.96% | 70.09% | ||||
Net loss attributable to stockholders, diluted | $ (2,171) | $ (772) | $ (18,467) | $ (4,903) | ||||
Denominator: | ||||||||
Weighted average common stock, basic (in shares) | 97,145 | 101,307 | 98,361 | 104,772 | ||||
Weighted average common stock, diluted (in shares) | 97,145 | 101,307 | 98,361 | 104,772 | ||||
Net loss per share, basic (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.19) | $ (0.05) | ||||
Net loss per share, diluted (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.19) | $ (0.05) |
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 | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Weighted Average Per Share | |||||
Unrecognized compensation cost | $ 5,960 | $ 5,960 | |||
Unrecognized compensation expense period | 1 year 4 months 24 days | ||||
Employee Stock Option [Member] | |||||
Units | |||||
Beginning, balance | 8,508 | ||||
Granted | 0 | 0 | 0 | 0 | |
Forfeited | (34) | ||||
Exercised | (1,909) | ||||
Ending balance | 6,565 | 6,565 | 8,508 | ||
Exercisable | 5,108 | 5,108 | |||
Weighted Average Per Share | |||||
Beginning balance | $ 4.34 | ||||
Forfeited | 5.55 | ||||
Exercised | 2.47 | ||||
Ending Balance | $ 4.88 | 4.88 | $ 4.34 | ||
Exercisable | $ 3.77 | $ 3.77 | |||
Remaining contractual life, outstanding | 4 years 10 months 24 days | 4 years 3 months 18 days | |||
Remaining contractual life, exercisable | 4 years 3 months 18 days | ||||
Intrinsic value, outstanding | $ 121,818 | $ 121,818 | $ 86,514 | ||
Intrinsic value, exercisable | $ 99,941 | $ 99,941 | |||
Employee Stock Option [Member] | Minimum | |||||
Weighted Average Per Share | |||||
Vesting period | 1 year | ||||
Employee Stock Option [Member] | Maximum | |||||
Weighted Average Per Share | |||||
Vesting period | 4 years |
STOCK-BASED AWARD PLANS - 2020
STOCK-BASED AWARD PLANS - 2020 Plan (Details) shares in Thousands | Sep. 30, 2023 shares |
Employee Stock Option [Member] | |
Compensation plans: | |
Shares authorized | 14,875 |
STOCK-BASED AWARD PLANS - Opt_2
STOCK-BASED AWARD PLANS - Options under 2020 Plan Price Range (Details) - Employee Stock Option [Member] shares in Thousands | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Options outstanding, vested and exercisable: | |
Options outstanding, life | 0 years |
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 | 1,391 |
Options vested and exercisable | 1,393 |
$2.15 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 2.15 |
Options outstanding | 172 |
Options outstanding, life | 1 year 4 months 24 days |
Options vested and exercisable | 172 |
Options vested and exercisable, life | 1 year 4 months 24 days |
$2.50 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 2.50 |
Options outstanding | 1,761 |
Options outstanding, life | 2 years 10 months 24 days |
Options vested and exercisable | 1,761 |
Options vested and exercisable, life | 2 years 10 months 24 days |
$2.67 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 2.67 |
Options outstanding | 77 |
Options outstanding, life | 3 years 4 months 24 days |
Options vested and exercisable | 77 |
Options vested and exercisable, life | 3 years 4 months 24 days |
$3.17 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 3.17 |
Options outstanding | 538 |
Options outstanding, life | 4 years 7 months 6 days |
Options vested and exercisable | 538 |
Options vested and exercisable, life | 4 years 7 months 6 days |
$3.73 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 3.73 |
Options outstanding | 1,241 |
Options outstanding, life | 6 years |
Options vested and exercisable | 494 |
Options vested and exercisable, life | 6 years |
$4.70 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 4.70 |
Options outstanding | 628 |
Options outstanding, life | 6 years 4 months 24 days |
Options vested and exercisable | 286 |
Options vested and exercisable, life | 6 years 4 months 24 days |
$18.47 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 18.47 |
Options outstanding | 213 |
Options outstanding, life | 8 years 2 months 12 days |
Options vested and exercisable | 53 |
Options vested and exercisable, life | 8 years 2 months 12 days |
$18.96 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 18.96 |
Options outstanding | 235 |
Options outstanding, life | 7 years 10 months 24 days |
Options vested and exercisable | 170 |
Options vested and exercisable, life | 7 years 10 months 24 days |
$19.00 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 19 |
Options outstanding | 65 |
Options outstanding, life | 8 years |
Options vested and exercisable | 32 |
Options vested and exercisable, life | 8 years |
$32.16 | |
Options outstanding, vested and exercisable: | |
Exercise prices | $ / shares | $ 32.16 |
Options outstanding | 244 |
Options outstanding, life | 7 years 4 months 24 days |
Options vested and exercisable | 132 |
Options vested and exercisable, life | 7 years 4 months 24 days |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Compensation plans: | ||||
Compensation expense | $ 7,772 | $ 5,256 | $ 26,228 | $ 14,383 |
Unrecognized compensation cost | 5,960 | $ 5,960 | ||
Unrecognized compensation expense period | 1 year 4 months 24 days | |||
Restricted Stock Units | ||||
Compensation plans: | ||||
Compensation expense | 5,452 | $ 2,544 | $ 18,762 | $ 6,665 |
Unrecognized compensation cost | $ 48,378 | $ 48,378 | ||
Unrecognized compensation expense period | 2 years 8 months 12 days | |||
Units | ||||
Beginning balance (in units) | 2,562 | |||
Granted (in units) | 2,462 | |||
Vested (in units) | (735) | |||
Forfeited (in units) | (169) | |||
Ending balance (in units) | 4,120 | 4,120 | ||
Weighted Average Per Share | ||||
Beginning balance (in dollars per share) | $ 15.90 | |||
Granted (in dollars per share) | 16.10 | |||
Vested (in dollars per share) | 17.51 | |||
Forfeited (in dollars per share) | 14.86 | |||
Ending balance (in dollars per share) | $ 15.77 | $ 15.77 | ||
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) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Weighted Average Per Share | |
Unrecognized compensation cost | $ | $ 5,960 |
Unrecognized compensation expense period | 1 year 4 months 24 days |
Restricted Stock Awards | |
Units | |
Beginning balance (in units) | shares | 235 |
Granted (in units) | shares | 62 |
Vested (in units) | shares | (206) |
Ending balance (in units) | shares | 91 |
Weighted Average Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 14.91 |
Granted (in dollars per share) | $ / shares | 22.69 |
Vested (in dollars per share) | $ / shares | 14.32 |
Ending balance (in dollars per share) | $ / shares | $ 21.50 |
Unrecognized compensation cost | $ | $ 1,444 |
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 | 9 Months Ended | |
Sep. 30, 2023 USD ($) period shares | Sep. 30, 2022 period | |
Compensation plans: | ||
Unrecognized compensation cost | $ 5,960 | |
Class A | ||
Compensation plans: | ||
Purchase price as a percent of fair value | 85% | |
ESPP | ||
Compensation plans: | ||
Reserved for issuance | shares | 4,984 | |
Amounts withheld from participants | $ 1,062 | |
Unrecognized compensation cost | $ 138 | |
Number of offering periods | period | 2 | 2 |
ESPP offering period | 6 months | |
Discount | 15% | 15% |
STOCK-BASED AWARD PLANS - ESPP
STOCK-BASED AWARD PLANS - ESPP - Option-pricing model key input assumptions (Details) - Initial Public Offering - ESPP - $ / shares | 1 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
Fair Value Assumptions and Methodology | ||
Fair market value of common stock | $ 21.76 | $ 11.16 |
Volatility | 39.40% | 35.40% |
Expected term (in years) | 6 months | 6 months |
Risk-free interest rate | 5.40% | 1.60% |
STOCK-BASED AWARD PLANS - Stock
STOCK-BASED AWARD PLANS - Stock based compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Allocation of costs | ||||
Compensation expense | $ 7,772 | $ 5,256 | $ 26,228 | $ 14,383 |
Employee Stock Option [Member] | ||||
Allocation of costs | ||||
Compensation expense | 1,515 | 1,836 | 4,788 | 5,250 |
Restricted Stock Units | ||||
Allocation of costs | ||||
Compensation expense | 5,452 | 2,544 | 18,762 | 6,665 |
Restricted Stock Awards | ||||
Allocation of costs | ||||
Compensation expense | 598 | 725 | 2,076 | 2,034 |
ESPP | ||||
Allocation of costs | ||||
Compensation expense | $ 207 | $ 151 | $ 602 | $ 434 |
STOCK-BASED AWARD PLANS - Sto_2
STOCK-BASED AWARD PLANS - Stock based compensation, comprehensive loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Allocation of costs | ||||
Compensation expense | $ 7,772 | $ 5,256 | $ 26,228 | $ 14,383 |
Software subscriptions | ||||
Allocation of costs | ||||
Compensation expense | 728 | 577 | 2,143 | 1,502 |
Services | ||||
Allocation of costs | ||||
Compensation expense | 452 | 374 | 1,454 | 1,055 |
Research and development | ||||
Allocation of costs | ||||
Compensation expense | 1,398 | 581 | 4,407 | 1,193 |
Selling and marketing | ||||
Allocation of costs | ||||
Compensation expense | 2,325 | 1,621 | 6,305 | 4,594 |
General and administrative | ||||
Allocation of costs | ||||
Compensation expense | $ 2,869 | $ 2,103 | $ 11,919 | $ 6,039 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
INCOME TAXES | ||||
Income tax expense (benefit) | $ 784 | $ (91) | $ 13,266 | $ 1,217 |
Effective tax rate (as a percent) | (30.00%) | 7.40% | (87.50%) | (21.10%) |
U.S. federal statutory income tax rate | 21% | 21% | 21% | 21% |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net Income (Loss) | $ (3,399) | $ (6,896) | $ (18,132) | $ (1,141) | $ (5,520) | $ (334) | $ (28,427) | $ (6,995) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 shares | |
John Schwab | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On September 15, 2023 , John Schwab , our Chief Financial Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 35,000 shares of Class A common stock until March 28, 2024 . |
Name | John Schwab |
Title | Chief Financial Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | September 15, 2023 |
Aggregate Available | 35,000 |
Expiration Date | March 28, 2024 |
Eric Andersen | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On August 18, 2023 , Eric Andersen , Director , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 80,000 shares of Class A common stock until August 15, 2025 . |
Name | Eric Andersen |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | August 18, 2023 |
Aggregate Available | 80,000 |
Expiration Date | August 15, 2025 |