Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MAX | |
Entity Registrant Name | MediaAlpha, Inc. | |
Entity Central Index Key | 0001818383 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-39671 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1854133 | |
Entity Address, Address Line One | 700 South Flower Street | |
Entity Address, Address Line Two | Suite 640 | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90017 | |
City Area Code | 213 | |
Local Phone Number | 316-6256 | |
Title of 12(b) Security | Class A Common Stock, $0.01 par value per share | |
Security Exchange Name | NYSE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A Common | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 33,169,141 | |
Class B Common | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 25,536,043 |
CONDENSED BALANCE SHEET (Unaudi
CONDENSED BALANCE SHEET (Unaudited) | Sep. 30, 2020USD ($) |
Current liabilities | |
Accrued liabilities | $ 9,869 |
Total current liabilities | 9,869 |
Total liabilities | 9,869 |
Commitments and contingencies (Note 4) | |
Stockholders’ equity (deficit) | |
Accumulated deficit | (9,869) |
Total stockholders’ equity (deficit) | $ (9,869) |
CONDENSED BALANCE SHEET (Unau_2
CONDENSED BALANCE SHEET (Unaudited) (Parenthetical) | Sep. 30, 2020$ / sharesshares |
Statement Of Financial Position [Abstract] | |
Common stock, par value | $ / shares | $ 0.01 |
Common stock, authorized | 1,000 |
Common stock, issued | 0 |
Common stock, outstanding | 0 |
CONDENSED STATEMENT OF OPERATIO
CONDENSED STATEMENT OF OPERATIONS (Unaudited) $ in Thousands | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Cost and operating expenses | |
General and administrative | $ 9,869 |
Total costs and operating expenses | 9,869 |
Income from operations | (9,869) |
Net loss | $ (9,869) |
CONDENSED STATEMENT OF CASH FLO
CONDENSED STATEMENT OF CASH FLOWS (Unaudited) $ in Thousands | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Cash flows from operating activities | |
Net loss | $ (9,869) |
Changes in operating assets and liabilities: | |
Accrued expenses | 9,869 |
Net cash provided by (used in) operating activities | 0 |
Net increase in cash and cash equivalents | 0 |
Cash and cash equivalents, beginning of period | 0 |
Cash and cash equivalents, end of period | $ 0 |
Unaudited condensed consolidate
Unaudited condensed consolidated balance sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current liabilities | ||
Accrued expenses | $ 9,869 | |
Total current liabilities | 9,869 | |
Total liabilities | 9,869 | |
Commitments and contingencies (Note 4) | ||
Members’ (deficit) equity | ||
Accumulated deficit | (9,869) | |
QL Holdings LLC and Subsidiaries | ||
Current assets | ||
Cash and cash equivalents | 12,005,000 | $ 10,028,000 |
Accounts receivable, net of allowance for doubtful accounts | 63,084,000 | 56,012,000 |
Prepaid expenses and other current assets | 1,623,000 | 1,448,000 |
Total current assets | 76,712,000 | 67,488,000 |
Property and equipment, net | 701,000 | 755,000 |
Intangible assets, net | 16,350,000 | 18,752,000 |
Goodwill | 18,402,000 | 18,402,000 |
Other assets | 21,665,000 | |
Assets | 133,830,000 | 105,397,000 |
Current liabilities | ||
Accounts payable | 61,697,000 | 40,455,000 |
Accrued expenses | 12,651,000 | 6,532,000 |
Current portion of long-term debt | 6,262,000 | 873,000 |
Current portion of deferred rent | 71,000 | 52,000 |
Total current liabilities | 80,681,000 | 47,912,000 |
Long-term debt, net of current portion | 199,146,000 | 96,665,000 |
Deferred rent, net of current portion | 331,000 | 319,000 |
Other long-term liabilities | 276,000 | |
Total liabilities | 280,434,000 | 144,896,000 |
Commitments and contingencies (Note 4) | ||
Members’ (deficit) equity | ||
Accumulated deficit | (409,770,000) | (193,143,000) |
Total members’ deficit | (327,670,000) | (113,596,000) |
Total Liabilities and stockholders’ equity (deficit) | 133,830,000 | 105,397,000 |
QL Holdings LLC and Subsidiaries | Redeemable Class A | ||
Current liabilities | ||
Redeemable Class A units, 284,211 at redemption value of approximately $637.08 and $260.71 per unit as of September 30, 2020 and December 31, 2019, respectively | 181,066,000 | 74,097,000 |
QL Holdings LLC and Subsidiaries | Class A | ||
Members’ (deficit) equity | ||
Members' capital | 73,003,000 | 73,003,000 |
QL Holdings LLC and Subsidiaries | Class B | ||
Members’ (deficit) equity | ||
Members' capital | $ 9,097,000 | $ 6,544,000 |
Unaudited condensed consolida_2
Unaudited condensed consolidated balance sheets (Parenthetical) - QL Holdings LLC and Subsidiaries - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Redeemable Class A | ||
Redeemable units | 284,211 | 284,211 |
Redeemable units, redemption value per unit | $ 637.08 | $ 260.71 |
Class A | ||
Members' capital, authorized | 1,136,842 | 1,136,842 |
Members' capital, issued | 852,631 | 852,631 |
Members' capital, outstanding | 852,631 | 852,631 |
Members' capital, subject to possible redemption | 284,211 | 284,211 |
Class B | ||
Members' capital, authorized | 177,300 | 177,300 |
Members' capital, issued | 177,300 | 163,800 |
Members' capital, outstanding | 177,300 | 163,800 |
Unaudited condensed consolida_3
Unaudited condensed consolidated statements of operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
QL Holdings LLC and Subsidiaries | ||||
Revenue | $ 151,548 | $ 110,397 | $ 394,609 | $ 281,857 |
Cost and operating expenses | ||||
Cost of revenue | 130,830 | 92,707 | 335,692 | 237,130 |
Sales and marketing | 2,916 | 3,227 | 8,866 | 10,586 |
Product development | 1,766 | 1,609 | 5,482 | 5,174 |
General and administrative | 7,595 | 3,171 | 13,897 | 16,265 |
Total costs and operating expenses | 143,107 | 100,714 | 363,937 | 269,155 |
Income from operations | 8,441 | 9,683 | 30,672 | 12,702 |
Other expense | 1,998 | 1,998 | ||
Interest expense | 1,594 | 1,920 | 4,844 | 5,259 |
Total other expense | 3,592 | 1,920 | 6,842 | 5,259 |
Provision for income taxes | 20 | 20 | ||
Net loss | $ 4,829 | $ 7,763 | $ 23,810 | $ 7,443 |
Unaudited condensed consolida_4
Unaudited condensed consolidated statements of changes in redeemable Class A units and members' deficit - USD ($) | Total | QL Holdings LLC and Subsidiaries | QL Holdings LLC and SubsidiariesRedeemable Class A | QL Holdings LLC and SubsidiariesClass A Common | QL Holdings LLC and SubsidiariesClass B Common | QL Holdings LLC and SubsidiariesAccumulated Deficit |
Beginning balance at Dec. 31, 2018 | $ 40,480,000 | $ 73,003,000 | $ 2,950,000 | $ (35,473,000) | ||
Beginning balance, Shares at Dec. 31, 2018 | 1,136,842,000 | 98,090,000 | ||||
Class A issuances | $ 62,806,000 | |||||
Class A issuances, Shares | 284,211,000 | |||||
Class A repurchase | (62,806,000) | (62,806,000) | ||||
Class A repurchase, Shares | (284,211,000) | |||||
Remeasurement of redeemable Class A units | (5,616,000) | $ 5,616,000 | (5,616,000) | |||
Class B issuances, Shares | 89,738,000 | |||||
Class B repurchased | (5,753,000) | (5,753,000) | ||||
Class B repurchased, Shares | (31,799,000) | |||||
Class B forfeited or cancelled, Shares | (3,229,000) | |||||
Equity-based compensation | 3,081,000 | $ 3,081,000 | ||||
Member distributions | (88,934,000) | (88,934,000) | ||||
Net income | 7,443,000 | 7,443,000 | ||||
Ending balance at Sep. 30, 2019 | (112,105,000) | $ 73,003,000 | $ 6,031,000 | (191,139,000) | ||
Ending balance, Shares at Sep. 30, 2019 | 284,211,000 | |||||
Ending balance at Sep. 30, 2019 | $ 68,422,000 | |||||
Ending balance, Shares at Sep. 30, 2019 | 852,631,000 | 152,800,000 | ||||
Beginning balance at Jun. 30, 2019 | (109,063,000) | $ 73,003,000 | $ 5,511,000 | (187,577,000) | ||
Beginning balance, Shares at Jun. 30, 2019 | 284,211,000 | |||||
Beginning balance at Jun. 30, 2019 | $ 62,806,000 | |||||
Beginning balance, Shares at Jun. 30, 2019 | 852,631,000 | 155,930,000 | ||||
Remeasurement of redeemable Class A units | (5,616,000) | $ 5,616,000 | (5,616,000) | |||
Class B issuances, Shares | 1,750,000 | |||||
Class B repurchased | (1,105,000) | (1,105,000) | ||||
Class B repurchased, Shares | (4,880,000) | |||||
Equity-based compensation | 520,000 | $ 520,000 | ||||
Member distributions | (4,604,000) | (4,604,000) | ||||
Net income | 7,763,000 | 7,763,000 | ||||
Ending balance at Sep. 30, 2019 | (112,105,000) | $ 73,003,000 | $ 6,031,000 | (191,139,000) | ||
Ending balance, Shares at Sep. 30, 2019 | 284,211,000 | |||||
Ending balance at Sep. 30, 2019 | $ 68,422,000 | |||||
Ending balance, Shares at Sep. 30, 2019 | 852,631,000 | 152,800,000 | ||||
Beginning balance at Dec. 31, 2019 | (113,596,000) | $ 73,003,000 | $ 6,544,000 | (193,143,000) | ||
Beginning balance, Shares at Dec. 31, 2019 | 284,211,000 | |||||
Beginning balance at Dec. 31, 2019 | $ 74,097,000 | |||||
Beginning balance, Shares at Dec. 31, 2019 | 852,631,000 | 163,800,000 | ||||
Remeasurement of redeemable Class A units | (106,969,000) | $ 106,969,000 | (106,969,000) | |||
Class B issuances, Shares | 25,500,000 | |||||
Class B repurchased | (2,244,000) | (2,244,000) | ||||
Class B repurchased, Shares | (8,568,000) | |||||
Class B forfeited or cancelled, Shares | (3,432,000) | |||||
Equity-based compensation | 2,553,000 | $ 2,553,000 | ||||
Member distributions | (131,224,000) | (131,224,000) | ||||
Net income | 23,810,000 | 23,810,000 | ||||
Ending balance at Sep. 30, 2020 | $ (9,869) | (327,670,000) | $ 73,003,000 | $ 9,097,000 | (409,770,000) | |
Ending balance, Shares at Sep. 30, 2020 | 284,211,000 | |||||
Ending balance at Sep. 30, 2020 | $ 181,066,000 | |||||
Ending balance, Shares at Sep. 30, 2020 | 852,631,000 | 177,300,000 | ||||
Beginning balance at Jun. 30, 2020 | (212,408,000) | $ 73,003,000 | $ 8,491,000 | (293,902,000) | ||
Beginning balance, Shares at Jun. 30, 2020 | 284,211,000 | |||||
Beginning balance at Jun. 30, 2020 | $ 181,066,000 | |||||
Beginning balance, Shares at Jun. 30, 2020 | 852,631,000 | 161,300,000 | ||||
Class B issuances, Shares | 16,000,000 | |||||
Equity-based compensation | 606,000 | $ 606,000 | ||||
Member distributions | (120,697,000) | (120,697,000) | ||||
Net income | 4,829,000 | 4,829,000 | ||||
Ending balance at Sep. 30, 2020 | $ (9,869) | $ (327,670,000) | $ 73,003,000 | $ 9,097,000 | $ (409,770,000) | |
Ending balance, Shares at Sep. 30, 2020 | 284,211,000 | |||||
Ending balance at Sep. 30, 2020 | $ 181,066,000 | |||||
Ending balance, Shares at Sep. 30, 2020 | 852,631,000 | 177,300,000 |
Unaudited condensed consolida_5
Unaudited condensed consolidated statements of cash flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash flows from operating activities | ||||||
Net income | $ (9,869) | |||||
Changes in operating assets and liabilities: | ||||||
Accrued expenses | 9,869 | |||||
Net cash provided by (used in) operating activities | 0 | |||||
Cash flows from financing activities | ||||||
Net increase in cash and cash equivalents | 0 | |||||
Cash and cash equivalents, beginning of period | 0 | |||||
Cash and cash equivalents, end of period | $ 0 | 0 | $ 0 | |||
QL Holdings LLC and Subsidiaries | ||||||
Cash flows from operating activities | ||||||
Net income | 4,829 | $ 7,763 | 23,810 | $ 7,443 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||
Non-cash equity-based compensation expense | 1,762 | 1,795 | ||||
Depreciation expense on property and equipment | 210 | 208 | ||||
Amortization of intangible assets | 800 | 1,400 | 2,402 | 4,158 | $ 5,381 | |
Amortization of deferred debt issuance costs | 100 | 100 | 334 | 551 | ||
Loss on extinguishment of debt | 1,998 | |||||
Bad debt expense | 356 | 263 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (7,428) | (16,799) | ||||
Prepaid expenses and other current assets | (147) | 47 | ||||
Other assets | (11,665) | |||||
Accounts payable | 21,242 | 14,038 | ||||
Accrued expenses | 6,395 | (341) | ||||
Deferred rent | 31 | (70) | ||||
Net cash provided by (used in) operating activities | 39,300 | 11,293 | ||||
Cash flows from investing activities | ||||||
Purchases of property and equipment | (156) | (109) | ||||
Purchase of cost method investment | (10,000) | |||||
Net cash used in investing activities | (10,156) | (109) | ||||
Cash flows from financing activities | ||||||
Proceeds from revolving line of credit | 7,500 | |||||
Repayments on revolving line of credit | (7,500) | |||||
Proceeds from issuance of long-term debt | 210,000 | 100,000 | ||||
Repayments on long-term debt | (100,023) | (14,823) | ||||
Payments of debt issuance costs | (4,467) | (2,303) | ||||
Cash paid to repurchase Class B units up to fair value | (1,453) | (4,467) | ||||
Cash paid for repurchases of Class A units | (62,806) | |||||
Member contributions | 62,806 | |||||
Member distributions | (131,224) | (88,934) | ||||
Net cash used in financing activities | (27,167) | (10,527) | ||||
Net increase in cash and cash equivalents | 1,977 | 657 | ||||
Cash and cash equivalents, beginning of period | 10,028 | 5,662 | 5,662 | |||
Cash and cash equivalents, end of period | $ 12,005 | $ 12,005 | $ 6,319 | 12,005 | 6,319 | $ 10,028 |
Supplemental disclosures of cash flow information | ||||||
Cash paid for interest | 4,503 | 4,750 | ||||
Cash paid for repurchase of Class B units in excess of fair value | $ 791 | $ 1,286 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2020 | |
Organization | 1. Organization MediaAlpha, Inc. (the “Company”) was formed as a Delaware corporation on July 9, 2020. As described in more detail in Note 6, on October 30, 2020, the Company closed an initial public offering (the “IPO”) of 7,027,606 shares of Class A common stock at a public offering price of $19.00 per share, including 769,104 shares sold in connection with the full exercise of the underwriter’s option to purchase additional shares, receiving $124.2 million in proceeds, net of underwriting discounts and commissions. Subsequent to the IPO and related organizational transactions, the Company is a holding company and the principal asset is a controlling equity interest in QL Holdings LLC (“QLH”) by and through the Company’s wholly owned subsidiary, Intermediate Holdco. As the sole managing member of QLH, the Company operates and controls all of the business and affairs of QLH, and through QLH and subsidiaries, conducts the Company’s business. As a result, beginning in the fourth quarter of 2020, the Company will consolidate QLH’s financial results and report a non-controlling interest related to the portion of QLH not owned by the Company. |
QL Holdings LLC and Subsidiaries | |
Organization | 1. Organization Formation and acquisition QL Holdings LLC (“QLH” or the “Company”), a Delaware limited liability company, was formed on March 7, 2014, for the sole purpose of reorganizing the ownership structure of Quote Lab, Inc. (“QL”) and MediaAlpha Ventures, LLC (“MAV”) in order to effectuate the purchase of 60% of the membership interests of QLH by White Mountains Capital, Inc. (“WMC”), pursuant to the membership interest purchase agreement effective March 14, 2014 (the “Acquisition” or “Closing”). Concurrent to the Closing, QL Inc. was restructured into QuoteLab, LLC (“QL”), a Delaware limited liability company, and the historical owners (collectively, the “Sellers”) transferred all ownership of QL and MAV to QLH. The Acquisition was accounted for under the acquisition method of accounting in accordance with Financial Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations On September 26, 2016, MAV was dissolved to effectuate a merger with QL. Insignia Capital Group In connection with a recapitalization transaction (“Insignia Recapitalization”), on February 26, 2019, Insignia Capital Group (“ICG”) acquired 284,211 Class A units from the Company for $62.8 million, and the Company immediately repurchased 25% of the Class A units from WMC and the founders, and 25% of outstanding Class B units from Class B unitholders, for an aggregate of $62.8 million. As part of that transaction, QL entered into a new secured credit facility with Monroe Capital Management Advisors, LLC (“Monroe Capital”) on February 26, 2019. See Note 8 for more information. WMC remains a significant equity holder in QLH with a 42% ownership interest on a fully-diluted basis as of September 30, 2020. ICG is a significant minority equity holder in QLH with a 22% ownership interest on a fully-diluted basis, as of September 30, 2020. MediaAlpha’s founders continue to lead the business, and each remains a significant equity holder, as of September 30, 2020. The Company incurred total transaction expenses of $8.8 million related to the sale of Class A units to ICG. The transaction expenses consisted of $7.2 million of legal, investment banking, and other consulting fees and $1.6 million in transaction bonuses which were recorded in general and administrative expenses in the consolidated statements of operations. The Company recorded $2.3 million in fees related to the closing of the new secured credit facility with Monroe Capital as a reduction of long-term debt in the consolidated balance sheets. MediaAlpha, Inc. MediaAlpha, Inc. was incorporated as a Delaware corporation on July 9, 2020. MediaAlpha, Inc. was formed to serve as a holding company for QLH and QLH’s principal operating subsidiary, QL, by and through MediaAlpha, Inc.’s wholly owned subsidiary, Guilford Holdings, Inc. (“Intermediate Holdco”), following the occurrence of a series of reorganization transactions in connection with MediaAlpha, Inc.’s initial public offering (“IPO”). Nature of business The Company does business as MediaAlpha. MediaAlpha specializes in end customer acquisition for insurance carriers, distributors and other clients in various verticals, including property & casualty insurance, health insurance and life insurance. The corporate headquarters is located in Los Angeles, California, with additional offices throughout the United States. Impact of COVID-19 The COVID-19 pandemic is currently impacting the United States and many countries around the world. The outbreak and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce. The future progression of the pandemic and its effects on the Company’s business and operations are uncertain and the Company is unable to estimate the full impact at this time. However, the Company’s travel vertical has experienced a decline in revenue and the Company expects this trend to continue indefinitely. Although the Company does not believe the situation will materially impact the Company’s liquidity or capital position, the Company does not expect revenue from the travel vertical to recover in the foreseeable future. The Company is monitoring the potential impact of the COVID-19 pandemic on its business and financial statements. To date, the Company has not experienced material business disruptions or incurred impairment losses in the carrying values of its assets as result of the pandemic and it is not aware of any specific related event or circumstance that would require it to revise its estimates reflected in these condensed consolidated financial statements. The extent to which the COVID-19 pandemic will further impact the Company’s business, results of operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19, the actions taken to contain or treat it, and the duration and intensity of the related effects. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies [Line Items] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Income taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. The Company’s policy is to record interest and penalties related to income taxes as part of the tax provision. |
QL Holdings LLC and Subsidiaries | |
Significant Accounting Policies [Line Items] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies Other than the policies disclosed below, there have been no significant changes in accounting policies during the nine months ended September 30, 2020 from those disclosed in the annual consolidated financial statements for the year ended December 31, 2019 and the related notes. Accordingly, these interim financial statements do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principal generally accepted in the United States of America (“GAAP”). Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s final prospectus dated October 30, 2020 and filed with the SEC pursuant to Rule 424(b)(4) on October 29, 2020. Basis of presentation The condensed consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. The condensed consolidated financial statements include the accounts of QLH and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. QLH was formed for the sole purpose of reorganizing the ownership structure of QL in order to complete the purchase of a majority of QLH membership interests by WMC, with an effective date of March 14, 2014. This acquisition was accounted for by WMC under the acquisition method of accounting in accordance with FASB ASC 805, under which the purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of the acquisition. In accordance with ASC 805, QLH and its wholly owned subsidiary QL elected the option to apply pushdown accounting, and accordingly, recorded goodwill to the extent the purchase price exceeded the fair value of assets acquired, net of liabilities assumed, on the accounting records of QL, with a corresponding entry to Members’ Equity in the Company. In the opinion of the Company, the accompanying unaudited condensed financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2020, and its results of operations and cash flows for the three and nine months ended September 30, 2020 and 2019. The condensed balance sheet at December 31, 2019, was derived from audited annual financial statements but does not contain all the footnote disclosures from the annual financial statements. Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, certain disclosures at the date of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, valuation of goodwill and long-lived assets for impairment and inputs into the valuation of our equity-based compensation awards. Significant estimates affecting the consolidated financial statements have been prepared on the basis of the most current and best available information, including historical experience, known trends and other market-specific or other relevant factors that the Company believes to be reasonable. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts and experience. Changes in estimates are recorded in periods which they become known. However, actual results from the resolution of such estimates and assumptions may vary from those used in the preparation of the consolidated financial statements. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including revenue, expenses, reserves and allowances, asset recoverability, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on our customers and markets. We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates. Accounts receivable The Company provides credit to customers in the ordinary course of business and believes its credit policies are prudent and reflect industry practices and business risk. Accounts receivables are stated at amounts due from customers. The Company reviews accounts receivable on a periodic basis and determines an allowance for doubtful accounts by considering a number of factors including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off outstanding accounts receivable against the allowance when the Company has exhausted all collection efforts and the potential recovery is considered remote. Payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The Company reported an allowance for doubtful accounts of $0.6 Concentrations of credit risk and of significant customers and suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts, and believes it is not exposed to unusual credit risk beyond the normal credit risk in this area based on the financial strength of institutions with which the Company maintains its deposits. The Company’s accounts receivable, which are unsecured, may expose the Company to credit risk due to collectability. The Company controls credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic reviews of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivables, and recording allowances for doubtful accounts when these receivables become uncollectible. Customer concentrations consisted of one customer that accounted for approximately $46.0 million and $102.4 million, or 30% and 26%, of revenue for the three and nine months ended September 30, 2020, respectively, and $23.7 million and $61.3 million, or 21% and 22%, of revenue for the three and nine months ended September 30, 2019, respectively; the same customer accounted for approximately $16.0 million, or 25%, of the Company’s accounts receivable as of September 30, 2020 compared to $4.7 million, or 8%, as of December 31, 2019. The Company’s accounts payable can expose the Company to business risks such as supplier concentrations. For the three and nine months ended September 30, 2020 and 2019, supplier concentrations consisted of two suppliers that accounted for approximately $33.8 million and $70.5 million, or 25% and 20%, and $20.0 million and $57.7 million, or 22% and 23%, of total purchases, respectively; the same suppliers accounted for approximately $14.2 million, or 23%, of the Company’s total accounts payable as of September 30, 2020 compared to $14.7 million, or 36%, as of December 31, 2019. Deferred initial public offering costs Deferred offering costs, which consist of direct incremental legal and accounting fees relating to the Company becoming a publicly traded company, are capitalized and will be offset against the proceeds upon the completion of the IPO in October 2020. As of September 30, 2020 and December 31, 2019, $7.2 Income Taxes The Company is a pass-through entity for federal and state income tax purposes and is not subject to income tax as the LLC member is responsible for the tax consequences of its proportionate share of the pass-through income or loss. As such, the Company’s tax provision consists solely of the activities of its wholly-owned Taiwanese subsidiary, Skytiger Studio Ltd., which is a taxpaying entity in Taiwan. Accordingly, the Company provides current and deferred income taxes for this entity. The Company’s taxable subsidiary accounts for income taxes using the asset and liability method, under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss (“NOL”) and tax credit carryforwards. Deferred tax assets and liabilities are classified as noncurrent on the consolidated balance sheet. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company uses a recognition threshold and measurement attribute for the consolidated financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than a 50% likelihood of being realized upon ultimate settlement with a taxing authority. Interest and penalties related to unrecognized tax benefits are recognized in benefit from income taxes in the accompanying consolidated statements of operations and comprehensive loss. No such interest and penalties were recognized for any period presented. Segment information The Company operates in the United States and in a single operating segment. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. Recently issued not yet adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Financial Instruments–Credit Losses (Topic 326) and Leases (Topic 842)–Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update), In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 3. Stockholders’ Equity The Company is authorized to issue 1,000 shares of Common Stock, par value $0.01 per share, none of which have been issued or are outstanding as of September 30, 2020. The only stockholders’ equity activity for the period from inception through September 30, 2020 is the increase in accumulated deficit due to the Company’s net loss for the period. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | 4. Commitments and contingencies As of September 30, 2020, the Company has no commitments and contingencies. |
QL Holdings LLC and Subsidiaries | |
Commitments and Contingencies | 9. Commitments and contingencies Operating leases The Company is obligated under certain non-cancellable operating leases for its facilities, which expire on various dates through 2027. Certain facility leases contain predetermined fixed escalation of minimum rents. The Company recognizes rent expense on a straight-line basis for these leases and records the difference between recognized rental expense and the amounts payable under the lease agreement as deferred rent. The deferred rent liability was $0.4 million and $0.4 million as of September 30, 2020 and December 31, 2019, respectively. Total rental expense amounted to $0.1 million and $0.5 million, and $0.1 million and $0.4 million for the three and nine months ended September 30, 2020 and 2019, respectively, and is recorded in operating expenses in the condensed consolidated statements of operations. Future minimum lease payments under the non-cancellable leases are as follows: (in thousands) Rent payments Nine Months Ended September 30, 2020–Remaining Period $ 132 2021 539 2022 555 2023 572 2024 598 Thereafter 1,173 Total $ 3,569 Litigation The Company is subject to certain legal proceedings and claims that arise in the normal course of business. In the opinion of management, the Company does not believe that the amount of liability, if any, as a result of these proceedings and claims will have a materially adverse effect on the Company’s consolidated financial position, results of operations, and cash flows. As of September 30, 2020 and December 31, 2019, the Company does not have any contingency reserves established for any litigation liabilities. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income taxes The Company has no income tax expense for the period ended September 30, 2020. The Company has no foreign operations and therefore, has not provided for any foreign taxes. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets, which are comprised of net operating loss carryforwards related to the Company’s loss for the period. At September 30, 2020, management recorded a full valuation allowance against its U.S. deferred tax asset, based on its history of cumulative losses and the conclusion that further taxable profit may not be available for the utilization of deferred tax asset for federal and state income tax purposes. As of September 30, 2020, the Company did not have a liability for unrecognized tax benefits and has no accrued interest or penalties related to uncertain tax positions. The Company is subject to examination by taxing authorities in the U.S. federal and state jurisdictions. For federal and state income tax, the Company remains subject to examination for 2020. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Event [Line Items] | |
Subsequent Events | 6. Subsequent events Reorganization Transactions On October 27, 2020, in connection with the completion of our IPO, the Company completed a series of reorganization transactions (“Reorganization Transactions”) pursuant to a reorganization agreement by and among MediaAlpha, Inc., Intermediate Holdco, and QLH and certain other parties. The Reorganization Transactions included the following: • the amendment and restatement of the articles of incorporation and bylaws of MediaAlpha, Inc. (the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws) pursuant to which we amended and restated our certificate of incorporation to authorize two classes of common stock, Class A common stock and Class B common stock; • the amendment and restatement of QLH’s limited liability company agreement (the Fourth Amended and Restated Limited Liability Agreement of QLH) to, among other things, convert legacy Class A units of QLH held by Intermediate Holdco into voting, managing member Class A-1 units of QLH and to convert all other legacy Class A and Class B units held by Insignia, the Senior Executives and Legacy Profit Interests Holders into non-managing member, non-voting Class B-1 units of QLH; • the contribution by White Mountains Capital, Inc. of Intermediate Holdco to MediaAlpha, Inc. in exchange for 24,142,096 shares of Class A common stock of MediaAlpha, Inc.; and • the issuance of 30,308,492 shares of Class B common stock to Insignia, Senior Executives and the Legacy Profit Interests Holders and the issuance of 1,999,439 Class A shares of common stock to the Legacy Profit Interests Holders. QL Holdings Recapitalization As noted above, the Fourth Amended and Restated Limited Liability Agreement of QLH, among other things, recapitalized the Class A units held by Intermediate Holdco, to voting, managing member Class A-1 units of QLH and recapitalized all other legacy Class A units and Class B units into non-voting, non-managing member, Class B-1 units of QLH. After the contribution of Intermediate Holdco to MediaAlpha, Inc., the Company became the sole voting member of QLH, by and through Intermediate Holdco, and control the management of QLH. As a result, beginning in the fourth quarter of 2020, we will consolidate both Intermediate Holdco and QLH’s financial results and report a non-controlling interest related to the portion of QLH not owned by us. Exchange Agreement On October 27, 2020, the Company entered into an exchange agreement with Insignia and the Senior Executives, which will each hold Class B-1 units. Pursuant to and subject to the terms of the exchange agreement and the fourth amended and restated limited liability company agreement of QLH, holders of Class B-1 units, from time to time, may exchange one Class B-1 unit, together with the corresponding share of our Class B common stock, for one share of the Company’s Class A common stock (or, at the Company’s election, cash of an equivalent value). We have reserved for issuance 25,536,043 shares of our Class A common stock for potential exchange in the future for Class B-1 units, which is the aggregate number of Class B common stock outstanding after completion of the Reorganization Transactions and the IPO. Tax Receivables Agreement Concurrent with the completion of the IPO, we became a party to a tax receivables agreement with Insignia, the Senior Executives, and White Mountains related to the tax basis step-up of the assets of QLH and certain net operating losses of Intermediate Holdco. The agreement requires us to pay Insignia and the Senior Executives 85% of the cash savings, if any, in U.S. federal, state and local income tax we realize (or are deemed to realize) as a result of (i) any increases in tax basis following our purchase (through Intermediate Holdco) of Class B-1 units of QLH from certain unitholders (including the Selling Class B-1 Unit Holders) in connection with the IPO, as well as any future exchanges described above; (ii) the pre-offering leveraged distribution and actual or deemed other distributions by QLH to its members that result in tax basis adjustments to the assets of QLH, and (iii) certain other tax benefits attributable to payments under the tax receivables agreement itself. The tax receivables agreement also requires us to pay White Mountains 85% of the amount of the cash savings, if any, in U.S. federal, state and local income tax that we realize (or are deemed to realize) as a result of the utilization of the net operating losses of Intermediate Holdco attributable to periods prior to the IPO and the deduction of any imputed interest attributable to our payment obligations under the tax receivables agreement. 2020 Omnibus Incentive Plan On October 27, 2020, the Company’s board of directors (the “Board”) and its stockholder approved the Company’s adoption of the MediaAlpha, Inc. 2020 Omnibus Incentive Plan (the “Omnibus Incentive Plan”). The Omnibus Incentive Plan provides for an initial reserve of an aggregate of 12,506,550 shares of Class A common stock, subject to annual increases for each year during the plan term, as described in the Omnibus Incentive Plan. The Omnibus Incentive Plan authorizes the grants of various types of equity awards, such as nonqualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards, cash incentive awards and other equity-based awards (including deferred share units and fully vested shares) to current or prospective directors, officers, employees and consultants of the Company and its affiliates. Initial Public Offering As noted above, we completed an IPO of 7,027,606 shares of Class A common stock at a public offering price of $19.00 per share, which includes 769,104 shares issued pursuant to the underwriters’ over-allotment option. We received $124.2 million, net of underwriting discounts and commissions, which we used in part to repurchase 4,772,449 Class B-1 units from the Selling Class B-1 Unit Holders. Immediately following the completion of the IPO, there were 33,169,141 shares of Class A common stock outstanding, representing an approximately 56.5% ownership interest in QLH. Additionally, immediately following the completion of the IPO, there were 25,536,043 shares of Class B common stock outstanding, equivalent to all but 41,620 Class B-1 units of QLH not held by us, representing an approximately 43.5% ownership interest in QLH. MediaAlpha, Inc. contributed (i) $84.3 million of the net proceeds to Intermediate Holdco for Intermediate Holdco to repurchase 4,772,449 Class B-1 units of QLH (which Class B-1 units will be converted into Class A-1 units of QLH) and (ii) $23.6 million of the net proceeds to Intermediate Holdco for further contribution to QLH, and in turn to QuoteLab LLC (“QL”), to repay outstanding borrowings under the 2020 Term Loan Facility. The remaining net proceeds of $16.3 million were contributed to Intermediate Holdco for further contribution to QLH and QL to pay for costs associated with the offering and to use for working capital, capital expenditures and general corporate purposes. Equity Awards Effective as of the closing of the IPO on October 30, 2020, the Company granted 4,856,189 restricted stock unit (“RSU”) awards of our Class A common stock at a grant-date fair value of $19.00 per share, the public offering price at the IPO, under the Omnibus Incentive Plan to certain officers of the Company and to the non-employee directors who joined the Board in connection with the IPO. Such RSU awards will vest quarterly over the first three years following the date of grant, subject to continued employment or service through each applicable vesting date (with limited exceptions in the case of a change of control (or certain qualifying terminations in connection with a change of control) or, for certain officers, death, disability, termination without cause or resignation for good reason). On November 16, 2020, the Company granted a further 966,601 RSU awards of our Class A common stock under the Omnibus Incentive Plan to certain non-executive employees of the Company. Such RSU awards vest quarterly over terms that range from less than one year to four years, dependent on length of service rendered by each employee at the grant date, subject to continued employment or service through the applicable vesting date. Partial prepayment of 2020 Term Loan Facility On December 1, 2020, QL repaid $23.6 million of the 2020 Term Loan Facility. |
QL Holdings LLC and Subsidiaries | |
Subsequent Event [Line Items] | |
Subsequent Events | 12. Subsequent events Termination of supply partner relationship On October 19, 2020, the Company terminated a relationship with a supply partner. For the three and nine months ended September 30, 2020, this partner represented 3.5% and 3.3% of revenue, respectively. Reorganization and IPO On October 27, 2020, the Company entered into a reorganization agreement with MediaAlpha, Inc., White Mountains, Intermediate Holdco, Insignia, founders and certain officers (the “Senior Executives”), and certain current or former employees of QLH and its subsidiaries (the “Legacy Profits Interest Holders”) that sets forth a series of reorganization transactions to be consummated in connection with the IPO, as described in Note 6 to MediaAlpha, Inc.’s financial statements. Among these reorganization transactions, the Company entered into a fourth amended and restated liability limited company agreement and established two classes of outstanding equity: Class A-1 units, which may only be issued to Intermediate Holdco, as sole managing member, and Class B-1 units. Intermediate Holdco holds 100% of the Class A-1 units and the previous equity interests held by the Legacy Profits Interest Holders, the Senior Executives, and Insignia, including the redeemable Class A units, are converted into Class B-1 units in QLH held by the same parties. The Class A-1 units and Class B-1 units entitle their holders to equivalent economic rights, meaning an equal share in the profits and losses of, and distributions from, QLH. Holders of Class B-1 units have no voting rights as it pertains to QLH, except for the right to approve certain amendments to the fourth amended and restated limited liability company agreement. On October 30, 2020, MediaAlpha, Inc. closed its IPO of its shares of Class A common stock and received $124.2 million in proceeds, net of underwriting discounts and commissions of $9.3 million. MediaAlpha, Inc. contributed (i) $84.3 million of the net proceeds to Intermediate Holdco for Intermediate Holdco to repurchase 4,772,449 Class B-1 units of QLH (which Class B-1 units will be converted into Class A-1 units of QLH) and (ii) $23.6 million of the net proceeds to Intermediate Holdco for further contribution to QLH and QL, to repay outstanding borrowings under the 2020 Term Loan Facility. The remaining net proceeds of $16.3 million were contributed to Intermediate Holdco for further contribution to QLH and QL to pay for costs associated with the offering and to use for working capital, capital expenditures and general corporate purposes. Of the repurchased Class B-1 units, the Company determined that modification accounting under ASC 718 will be applied to certain partially vested and unvested awards and will recognize an acceleration of equity-based compensation expense of $2.8 million upon the IPO. Debt prepayment On December 1, 2020, the Company prepaid $23.6 million of the 2020 Term Loan Facility. |
Disaggregation of Revenue
Disaggregation of Revenue | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue | 3. Disaggregation of revenue The following table shows the Company’s revenue disaggregated by transaction model: Three months ended September 30, Nine months ended September 30, (in thousands) 2020 2019 2020 2019 Revenue Open platform transactions $ 148,240 $ 108,146 $ 386,224 $ 275,991 Private platform transactions 3,308 2,251 8,385 5,866 Total $ 151,548 $ 110,397 $ 394,609 $ 281,857 The following table shows the Company’s revenue disaggregated by product vertical: Three months ended September 30, Nine months ended September 30, (in thousands) 2020 2019 2020 2019 Revenue Property & casualty insurance $ 114,132 $ 65,905 $ 274,822 $ 157,071 Health insurance 27,343 22,860 81,420 59,375 Life insurance 7,392 8,381 24,265 25,515 Other 2,681 13,251 14,102 39,896 Total $ 151,548 $ 110,397 $ 394,609 $ 281,857 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Property Plant And Equipment [Line Items] | |
Property and Equipment | 4. Property and equipment Property and equipment consisted of the following as of: As of (in thousands) September 30, 2020 December 31, 2019 Leasehold improvements $ 840 $ 783 Furniture and fixtures 304 302 Computers 312 215 Property and equipment, gross 1,456 1,300 Less: Accumulated depreciation (755 ) (545 ) Property and equipment, net $ 701 $ 755 Depreciation expense related to property and equipment amounted to $0.1 million and $0.2 million, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2020 and 2019, respectively. |
Goodwill and Intangible assets
Goodwill and Intangible assets | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Goodwill And Intangible Assets [Line Items] | |
Goodwill and Intangible Assets | 5. Goodwill and intangible assets Goodwill and intangible assets consisted of: As of September 30, 2020 December 31, 2019 (in thousands) Useful life (months) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Technology and intellectual property 60 $ — $ — $ — $ 32,027 $ (32,027 ) $ — Customer relationships 120 25,040 (9,285 ) 15,755 25,040 (7,094 ) 17,946 Costs to acquire third party publishers 24 — — — 1,363 (1,363 ) — Non-compete agreements 60 303 (197 ) 106 303 (155 ) 148 Domain names 60 1,224 (735 ) 489 1,224 (566 ) 658 Total Intangible Assets 26,567 (10,217 ) 16,350 59,957 (41,205 ) 18,752 Goodwill Indefinite 18,402 — 18,402 18,402 — 18,402 Amortization expense related to intangible assets amounted to $0.8 million and $2.4 million, and $1.4 million and $4.2 million for the three and nine months ended September 30, 2020 and, 2019, respectively. Goodwill is not amortized and is tested for impairment at least annually in the fourth quarter or when events or circumstances indicate that the fair value of a reporting unit may be below its carrying value. We have no accumulated impairment of goodwill. The following table presents the change in goodwill and intangible assets: As of September 30, 2020 December 31, 2019 (in thousands) Goodwill Intangible assets Goodwill Intangible assets Beginning balance at January 1, $ 18,402 $ 18,752 $ 18,402 $ 23,985 Additions to goodwill and intangible assets — — — 148 Amortization — (2,402 ) — (5,381 ) Ending balance $ 18,402 $ 16,350 $ 18,402 $ 18,752 As of September 30, 2020, future amortization expense on identifiable intangible assets with estimable useful lives over the next five years is as follows: (in thousands) Amortization expense 2020–Remaining Period $ 799 2021 2,984 2022 2,730 2023 2,389 2024 2,211 Thereafter 5,237 $ 16,350 |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Other Asset [Line Items] | |
Other assets | 6. Other assets During the nine months ended September 30, 2020, the Company entered into a 10-year partnership agreement with a large online customer acquisition marketing company focused on the U.S. insurance industry to be its exclusive click monetization partner for the majority of its insurance categories beginning October 1, 2020. The agreement included a one-time upfront cash payment of $5.0 million. In connection with this partnership agreement, the Company also entered into a common stock subscription agreement to acquire 10,000,000 shares of the partner company’s common stock and paid $10.0 million in cash. The acquired shares represent 7% of this partner company’s total outstanding shares of common stock. This investment will be evaluated for impairment when indicators of impairment exist. For the three and nine months ended September 30, 2020, no impairment losses were recorded and no price changes were observed. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Accrued Expenses [Line Items] | |
Accrued Expenses | 7. Accrued expenses Accrued expenses consisted of: As of (in thousands) September 30, 2020 December 31, 2019 Accrued deferrable IPO costs and IPO expenses $ 8,140 $ — Accrued payroll and related expenses 3,397 4,954 Accrued operating expenses 687 754 Other accrued expenses 427 824 Total accrued expenses $ 12,651 $ 6,532 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Debt Instrument [Line Items] | |
Long-term Debt | 8. Long-term debt 2019 Revolver and Term Loan QL, as the borrower, and QLH, as the guarantor, entered into a new secured credit facility on February 26, 2019 with Monroe Capital. The credit facility was comprised of (a) a term loan in an initial principal amount of $100.0 million (“2019 Term Loan Facility”) and (b) a revolving line of credit of up to $5.0 million (“2019 Revolving Credit Facility” and, collectively with the 2019 Term Loan Facility, the “2019 Credit Facilities”). Proceeds from the $100.0 million 2019 Term Loan Facility were used to (i) repay the 2017 Term Loan Facility in full, (ii) pay a cash dividend to QLH Class A Unit Holders and certain QLH Class B Unit Holders, (iii) pay transaction expenses, and (iv) fund the redemption of certain QLH Class A and Class B Unit Holders for cash. On June 12, 2019, QL, as the borrower, and QLH as the guarantor, executed an amendment to the 2019 Credit Facilities to bring City National Bank on as a lender. Monroe Capital assigned $25.0 million of the 2019 Term Loan Facility and the entire $5.0 million of the 2019 Revolving Credit Facility to City National Bank. In connection with the assignment of the debt, the applicable margin on borrowings was reduced from LIBOR plus 5.50% to LIBOR plus 4.85% and the Company incurred $0.2 million of debt issuance costs. This amendment was accounted for as a modification to the 2019 Credit Facilities. As of December 31, 2019, the Company had no outstanding amount drawn on the 2019 Revolving Credit Facility and $97.5 million outstanding, net of deferred debt issuance costs of $1.7 million, on the 2019 Term Loan Facility, of which $0.9 million was classified within current portion of long-term debt and $96.7 million was classified within long-term debt, net of current portion. 2020 Revolver and Term Loan On September 23, 2020, the Company entered into a new senior secured credit facility (“2020 Credit Facilities”) with a syndicate of banks and financial institutions, comprising of (a) $210.0 million term loan (“2020 Term Loan Facility”), which was fully drawn at close and (b) a revolving line of credit of $5.0 million (“2020 Revolving Credit Facility”), which was undrawn at close. Proceeds from the $210.0 million term loan were used to (i) repay the 2019 Term Loan Facilities in full, (ii) pay a $105.8 million cash distribution to QLH Class A Unit Holders and certain QLH Class B Unit Holders, and (iii) pay related transaction expenses. The 2020 Credit Facilities are collateralized by substantially all of the Company’s assets and contain certain financial and non-financial covenants. The financial covenants include a minimum Fixed Charge Coverage Ratio and a maximum Total Net Leverage Ratio (in each case, as defined in the 2020 Credit Facilities). Non-financial covenants include restrictions on investments, dividends, asset sales, and the incurrence of additional debt and liens. The 2020 Credit Facilities have a maturity date of September 22, 2023, subject to an extension of the termination date, at which time all outstanding borrowings and accrued interest are due. Under the 2020 Term Loan Facility, principal repayments of $2.625 million are made As of September 30, 2020, the Company had no outstanding amount drawn on the 2020 Revolving Credit Facility and $205.4 million outstanding on the 2020 Term Loan Facility, net of new deferred debt issuance costs of $4.3 million and $0.3 million of unamortized deferred financing costs on the portion of the 2019 Credit Facilities accounted for as a partial modification, of which $1.6 million was classified within current portion of long-term debt and $3.0 million was classified within long-term debt, net of current portion. Additionally, during the three and nine months ended September 30, 2020, the Company recognized a loss on extinguishment of the 2019 Credit Facilities of $2.0 million, which has been recorded within other expense. The 2020 Credit Facilities bear interest at a rate equal to LIBOR plus an applicable margin on borrowings. The expected future principal payments for all borrowings as of September 30, 2020 is as follows (in thousands): Contractual maturity Nine Months Ended September 30, 2020–Remaining Period $ 2,625 2021 10,500 2022 10,500 2023 186,375 Debt and issuance costs 210,000 Unamortized debt issuance costs (4,592 ) Total long-term debt 205,408 The Company incurred interest expense of $1.6 million and $4.8 million, and $1.9 million and $5.3 million during the three and nine months ended September 30, 2020 and 2019, respectively. Included in interest expense is $0.1 million and $0.3 million, and $0.1 million and $0.6 million of amortization of debt issuance costs during the three months and nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, unamortized deferred debt issuance costs amounted to $4.6 million and $1.8 million as of September 30, 2019. Accrued interest was less than $0.1 million as of September 30, 2020 and 2019, respectively. |
Redeemable Class A Units and Me
Redeemable Class A Units and Members' Deficit | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity | 3. Stockholders’ Equity The Company is authorized to issue 1,000 shares of Common Stock, par value $0.01 per share, none of which have been issued or are outstanding as of September 30, 2020. The only stockholders’ equity activity for the period from inception through September 30, 2020 is the increase in accumulated deficit due to the Company’s net loss for the period. |
QL Holdings LLC and Subsidiaries | |
Stockholders' Equity | 10. Redeemable Class A units and members’ deficit Authorized, issued, and outstanding units As of September 30, 2020, there are 1,136,842 Class A units authorized and 852,631 units issued and outstanding (excluding 284,211 units subject to possible redemption) and 177,300 Class B units authorized with 177,300 units issued and outstanding, of which 82,161 are vested. Redeemable Class A units QLH’s Class A units that are held by ICG feature a redemption right that are considered to be outside of the Company’s control. The key terms and conditions of this redemption right are as follows. The redemption right may be exercised on three dates which are on the fifth, seventh, and ninth anniversary of the Insignia Recapitalization of February 26, 2019 and must be settled by the Company no later than one year from the exercise date. The redemption may only be exercised on all of ICG’s Class A units at once. At settlement, the Company must pay an amount of cash equal to the Class A redemption value (as defined in the third amended and restated limited liability company agreement). The Company may, instead of settling the redemption right as noted above on or prior to the settlement date, engage a nationally recognized investment banking firm to conduct a marketing process with respect to a sale of the Company, on or prior to the settlement date. In the event that the Company enters into a binding definitive agreement with respect to a sale of the Company, ICG will be entitled to receive an amount in full exchange for all of the Class A units equal to the aggregate amount of the Class A redemption value (as defined in the third amended and restated limited liability company agreement) on the date the sale is consummated, based on the Class A redemption value (as defined in the third amended and restated limited liability company agreement) for the Company and its subsidiaries, taken as a whole based on the transaction value ascribed to the Company and its subsidiaries. If the Company enters into a binding definitive agreement to consummate a Liquidation Event (as defined in the third amended and restated limited liability company agreement–including, for example a qualified offering of the Company’s stock) that would not otherwise result in the sale, lease, transfer, or other disposition of all or substantially all of the Company’s assets or the sale, transfer or other disposition of all of ICG’s Class A units, ICG will have the right, to elect to sell, transfer or otherwise dispose of all of the Class A units held by ICG in the Liquidation Event by electing to participate in the Liquidation Event within 10 business days of receiving notice by the Company of the Liquidation Event. Upon the consummation of the Liquidation Event, ICG will be entitled to receive an amount in respect of its entire Class A units based on the transaction value ascribed to the Company and its subsidiaries in such Liquidation Event. In the event that ICG elects to participate in the Liquidation Event, and the Liquidation Event does not otherwise result in the sale, transfer, or other disposition of all of ICG’s Class A units, the redemption right on any remaining Class A units continuing to be held by ICG will be cancelled for no further consideration. If the redemption right is not exercised, the redemption right will terminate upon and following the first to occur of; the ninth anniversary of the ICG investment date, the consummation of a Qualified Public Offering (as defined in the third amended and restated limited liability company agreement), and the date on which the Company enters into a binding definitive agreement for a Liquidation Event. The Company accounts for its Class A units subject to possible redemption in accordance with the guidance in FASB ASC 480. Conditionally redeemable Class A units (including Class A units that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within QLH’s control) are classified as temporary equity. As of September 30, 2020 and December 31, 2019, 284,211 units of the 1,136,842 outstanding Class A units were classified outside of permanent equity. If the Class A units are probable of becoming redeemable, QLH recognizes changes in redemption value immediately as they occur and will adjust the carrying value of the security to equal the redemption value at the end of each reporting period. In doing so, QLH views the end of the reporting period as if it were the redemption date. Increases or decreases in the carrying amount of redeemable Class A units are effected by charges against or credits to accumulated deficit with credits being recognized only to the extent of previous charges. As of December 31, 2019, the Company has assessed redemption of the Class A units as probable. As of September 30, 2020, the Company has assessed redemption of the Class A units as not probable, given the expected series of reorganization transactions and termination of the redemption right in connection with the IPO in October 2020, and the varying value of the security has been adjusted to its fair value through the date at which the redemption was determined to no longer be probable. Member distributions Member distributions generally represent reimbursement of the tax liability passed through to members of QLH as a result of the taxable income generated by QLH or other cash payments distributed to members. Class A units Class A units are entitled to: one vote for each Class A unit; distributions from QLH’s operations and dispositions of QLH’s assets, at such times and in such amounts as approved by the board of directors (“BOD”), in the proportion of units held to the total units issued and outstanding; and liquidating distributions, as approved by the BOD, in the proportion of units held to the total units issued and outstanding. Class B units Class B units are non-voting and will participate in the same distributions from QLH’s operations and dispositions of QLH’s assets and liquidating distributions as the Class A units, provided that cumulative distributions up to the applicable Participation Threshold (as defined in the third amended and restated LLC agreement) have already been paid to the other holders of QLH’s units (the “performance condition”). Class B units are reserved for issuance to directors, employees, managers, independent contractors, and advisors of QLH and its subsidiaries, upon approval of the BOD. Upon the occurrence of a Termination Event (as defined in the third amended and restated LLC agreement) at QLH’s discretion, the vested Class B units are repurchased at fair value and the unvested Class B units are forfeited. |
Equity-based Compensation
Equity-based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | |
Equity-based Compensation | 11. Equity-based compensation QLH Class B Restricted Unit Plan QLH’s Class B Restricted Unit Plan (the “Plan”) authorizes QLH to issue Class B units to directors, employees, managers, independent contractors, and advisors of QLH and its subsidiaries upon approval of the BOD. Class B units granted to employees are generally subject to a four-year vesting period, whereby the incentive awards become 25% vested on the first anniversary from the beginning of the requisite service period and then vest ratably on a monthly basis thereafter through the end of the vesting period. As of September 30, 2020, the total number of Class B units that may be issued under the Plan was 177,300, of which no units remained available for future grant as of September 30, 2020. The option pricing model assumptions for determining the fair value of the Class B units in the nine months ended September 30, 2020 and 2019 were as follows: Nine months ended September 30, 2020 2019 Expected term (in years) 0.5 - 2 years 3 years Expected volatility 70% - 88% 70 % Expected dividend yield — — Risk-free interest rate 0.11% - 1.41% 2.19 % Discount for lack of marketability 25 % 30 % Equity compensation awards activity The following is a summary of the Class B units’ activity for the nine months ended September 30, 2020: Number of units Weighted- average grant date fair value/unit Aggregate intrinsic value (in thousands) Class B units Outstanding as of December 31, 2019 163,800 $ 61.62 $ 28,622 Granted 25,500 105.85 Repurchased (8,568 ) 51.03 Forfeited or canceled (3,432 ) 74.22 Outstanding as of September 30, 2020 177,300 $ 68.25 $ 70,953 As of September 30, 2020, the Company had 82,161 vested units and 95,139 unvested units of Class B units with weighted average grant date fair value per unit of $55.96 and $87.79, respectively. The aggregate intrinsic value of the unvested shares of Class B units as of September 30, 2020 was $38.1 million. As of September 30, 2019, the Company had 49,242 vested units and 103,558 unvested units of Class B units with weighted average grant date fair value per unit of $42.93 and $70.43, respectively. During the nine months ended September 30, 2020, 39,617 units were vested with aggregate intrinsic value of $10.1 million. During the three and nine months ended September 30, 2020 and 2019, the Company recognized $0.0 million and $0.8 million, and $0.0 million and $1.3 million, respectively, of equity-based compensation expense for the amount by which the amount paid to redeem the units exceeded the fair value at the date of redemption. These amounts are included within operating cash flow. Redemptions include redemptions arising in connection with the Insignia Recapitalization as well as optional unit repurchases by the Company following an employee’s termination of employment. Cash used to settle the redemptions was $0.0 million and $2.2 million, and $1.1 million and $5.8 million for the three and nine months ended September 30, 2020 and 2019, respectively. Equity-based compensation expense The Company recorded equity-based compensation expense in the following expense categories in its condensed consolidated statements of operations (in thousands): Three months ended September 30, Nine months ended September 30, (in thousands) 2020 2019 2020 2019 Cost of revenue $ 18 $ 19 $ 58 $ 158 Sales and marketing 158 116 313 1,272 Product development 94 79 723 455 General and administrative 336 306 1,459 1,196 Total equity-based compensation $ 606 $ 520 $ 2,553 $ 3,081 As of September 30, 2020 and 2019, unrecognized compensation cost related to the Class B units was $8.2 million and $6.4 million, respectively, and will be recognized over a weighted-average period of 3.1 years as of September 30, 2020 and 3.3 years as of September 30, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Significant Accounting Policies [Line Items] | |
Basis of presentation | Basis of presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. |
Income taxes | Income taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. The Company’s policy is to record interest and penalties related to income taxes as part of the tax provision. |
QL Holdings LLC and Subsidiaries | |
Significant Accounting Policies [Line Items] | |
Basis of presentation | Basis of presentation The condensed consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. The condensed consolidated financial statements include the accounts of QLH and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. QLH was formed for the sole purpose of reorganizing the ownership structure of QL in order to complete the purchase of a majority of QLH membership interests by WMC, with an effective date of March 14, 2014. This acquisition was accounted for by WMC under the acquisition method of accounting in accordance with FASB ASC 805, under which the purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of the acquisition. In accordance with ASC 805, QLH and its wholly owned subsidiary QL elected the option to apply pushdown accounting, and accordingly, recorded goodwill to the extent the purchase price exceeded the fair value of assets acquired, net of liabilities assumed, on the accounting records of QL, with a corresponding entry to Members’ Equity in the Company. In the opinion of the Company, the accompanying unaudited condensed financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2020, and its results of operations and cash flows for the three and nine months ended September 30, 2020 and 2019. The condensed balance sheet at December 31, 2019, was derived from audited annual financial statements but does not contain all the footnote disclosures from the annual financial statements. |
Income taxes | Income Taxes The Company is a pass-through entity for federal and state income tax purposes and is not subject to income tax as the LLC member is responsible for the tax consequences of its proportionate share of the pass-through income or loss. As such, the Company’s tax provision consists solely of the activities of its wholly-owned Taiwanese subsidiary, Skytiger Studio Ltd., which is a taxpaying entity in Taiwan. Accordingly, the Company provides current and deferred income taxes for this entity. The Company’s taxable subsidiary accounts for income taxes using the asset and liability method, under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss (“NOL”) and tax credit carryforwards. Deferred tax assets and liabilities are classified as noncurrent on the consolidated balance sheet. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company uses a recognition threshold and measurement attribute for the consolidated financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than a 50% likelihood of being realized upon ultimate settlement with a taxing authority. Interest and penalties related to unrecognized tax benefits are recognized in benefit from income taxes in the accompanying consolidated statements of operations and comprehensive loss. No such interest and penalties were recognized for any period presented. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, certain disclosures at the date of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, valuation of goodwill and long-lived assets for impairment and inputs into the valuation of our equity-based compensation awards. Significant estimates affecting the consolidated financial statements have been prepared on the basis of the most current and best available information, including historical experience, known trends and other market-specific or other relevant factors that the Company believes to be reasonable. On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts and experience. Changes in estimates are recorded in periods which they become known. However, actual results from the resolution of such estimates and assumptions may vary from those used in the preparation of the consolidated financial statements. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including revenue, expenses, reserves and allowances, asset recoverability, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on our customers and markets. We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates. |
Accounts receivable | Accounts receivable The Company provides credit to customers in the ordinary course of business and believes its credit policies are prudent and reflect industry practices and business risk. Accounts receivables are stated at amounts due from customers. The Company reviews accounts receivable on a periodic basis and determines an allowance for doubtful accounts by considering a number of factors including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off outstanding accounts receivable against the allowance when the Company has exhausted all collection efforts and the potential recovery is considered remote. Payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The Company reported an allowance for doubtful accounts of $0.6 |
Concentrations of credit risk and of significant customers and suppliers | Concentrations of credit risk and of significant customers and suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts, and believes it is not exposed to unusual credit risk beyond the normal credit risk in this area based on the financial strength of institutions with which the Company maintains its deposits. The Company’s accounts receivable, which are unsecured, may expose the Company to credit risk due to collectability. The Company controls credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic reviews of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivables, and recording allowances for doubtful accounts when these receivables become uncollectible. Customer concentrations consisted of one customer that accounted for approximately $46.0 million and $102.4 million, or 30% and 26%, of revenue for the three and nine months ended September 30, 2020, respectively, and $23.7 million and $61.3 million, or 21% and 22%, of revenue for the three and nine months ended September 30, 2019, respectively; the same customer accounted for approximately $16.0 million, or 25%, of the Company’s accounts receivable as of September 30, 2020 compared to $4.7 million, or 8%, as of December 31, 2019. The Company’s accounts payable can expose the Company to business risks such as supplier concentrations. For the three and nine months ended September 30, 2020 and 2019, supplier concentrations consisted of two suppliers that accounted for approximately $33.8 million and $70.5 million, or 25% and 20%, and $20.0 million and $57.7 million, or 22% and 23%, of total purchases, respectively; the same suppliers accounted for approximately $14.2 million, or 23%, of the Company’s total accounts payable as of September 30, 2020 compared to $14.7 million, or 36%, as of December 31, 2019. |
Deferred initial public offering costs | Deferred initial public offering costs Deferred offering costs, which consist of direct incremental legal and accounting fees relating to the Company becoming a publicly traded company, are capitalized and will be offset against the proceeds upon the completion of the IPO in October 2020. As of September 30, 2020 and December 31, 2019, $7.2 |
Segment information | Segment information The Company operates in the United States and in a single operating segment. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. |
Recently issued not yet adopted accounting pronouncements | Recently issued not yet adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Financial Instruments–Credit Losses (Topic 326) and Leases (Topic 842)–Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) (SEC Update), In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Disaggregation of Revenue [Line Items] | |
Summary of Disaggregation of Revenue | The following table shows the Company’s revenue disaggregated by transaction model: Three months ended September 30, Nine months ended September 30, (in thousands) 2020 2019 2020 2019 Revenue Open platform transactions $ 148,240 $ 108,146 $ 386,224 $ 275,991 Private platform transactions 3,308 2,251 8,385 5,866 Total $ 151,548 $ 110,397 $ 394,609 $ 281,857 The following table shows the Company’s revenue disaggregated by product vertical: Three months ended September 30, Nine months ended September 30, (in thousands) 2020 2019 2020 2019 Revenue Property & casualty insurance $ 114,132 $ 65,905 $ 274,822 $ 157,071 Health insurance 27,343 22,860 81,420 59,375 Life insurance 7,392 8,381 24,265 25,515 Other 2,681 13,251 14,102 39,896 Total $ 151,548 $ 110,397 $ 394,609 $ 281,857 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Property Plant And Equipment [Line Items] | |
Summary of Property and Equipment | Property and equipment consisted of the following as of: As of (in thousands) September 30, 2020 December 31, 2019 Leasehold improvements $ 840 $ 783 Furniture and fixtures 304 302 Computers 312 215 Property and equipment, gross 1,456 1,300 Less: Accumulated depreciation (755 ) (545 ) Property and equipment, net $ 701 $ 755 |
Goodwill and Intangible assets
Goodwill and Intangible assets (Tables) - QL Holdings LLC and Subsidiaries | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets [Line Items] | |
Summary of Goodwill and Intangible Assets | Goodwill and intangible assets consisted of: As of September 30, 2020 December 31, 2019 (in thousands) Useful life (months) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Technology and intellectual property 60 $ — $ — $ — $ 32,027 $ (32,027 ) $ — Customer relationships 120 25,040 (9,285 ) 15,755 25,040 (7,094 ) 17,946 Costs to acquire third party publishers 24 — — — 1,363 (1,363 ) — Non-compete agreements 60 303 (197 ) 106 303 (155 ) 148 Domain names 60 1,224 (735 ) 489 1,224 (566 ) 658 Total Intangible Assets 26,567 (10,217 ) 16,350 59,957 (41,205 ) 18,752 Goodwill Indefinite 18,402 — 18,402 18,402 — 18,402 |
Summary of Change in Goodwill and Intangible Assets | The following table presents the change in goodwill and intangible assets: As of September 30, 2020 December 31, 2019 (in thousands) Goodwill Intangible assets Goodwill Intangible assets Beginning balance at January 1, $ 18,402 $ 18,752 $ 18,402 $ 23,985 Additions to goodwill and intangible assets — — — 148 Amortization — (2,402 ) — (5,381 ) Ending balance $ 18,402 $ 16,350 $ 18,402 $ 18,752 |
Summary of Future Amortization Expense on Identifiable Intangible Assets | As of September 30, 2020, future amortization expense on identifiable intangible assets with estimable useful lives over the next five years is as follows: (in thousands) Amortization expense 2020–Remaining Period $ 799 2021 2,984 2022 2,730 2023 2,389 2024 2,211 Thereafter 5,237 $ 16,350 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Accrued Expenses [Line Items] | |
Summary of Accrued Expenses | Accrued expenses consisted of: As of (in thousands) September 30, 2020 December 31, 2019 Accrued deferrable IPO costs and IPO expenses $ 8,140 $ — Accrued payroll and related expenses 3,397 4,954 Accrued operating expenses 687 754 Other accrued expenses 427 824 Total accrued expenses $ 12,651 $ 6,532 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Debt Instrument [Line Items] | |
Schedule of Expected Future Principal Payments for Borrowings | The expected future principal payments for all borrowings as of September 30, 2020 is as follows (in thousands): Contractual maturity Nine Months Ended September 30, 2020–Remaining Period $ 2,625 2021 10,500 2022 10,500 2023 186,375 Debt and issuance costs 210,000 Unamortized debt issuance costs (4,592 ) Total long-term debt 205,408 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
QL Holdings LLC and Subsidiaries | |
Summary of Future Minimum Lease Payments Under Non-cancellable Leases | Future minimum lease payments under the non-cancellable leases are as follows: (in thousands) Rent payments Nine Months Ended September 30, 2020–Remaining Period $ 132 2021 539 2022 555 2023 572 2024 598 Thereafter 1,173 Total $ 3,569 |
Equity-based Compensation (Tabl
Equity-based Compensation (Tables) - QL Holdings LLC and Subsidiaries | 9 Months Ended |
Sep. 30, 2020 | |
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | |
Schedule of Equity-based Compensation Expense | The Company recorded equity-based compensation expense in the following expense categories in its condensed consolidated statements of operations (in thousands): Three months ended September 30, Nine months ended September 30, (in thousands) 2020 2019 2020 2019 Cost of revenue $ 18 $ 19 $ 58 $ 158 Sales and marketing 158 116 313 1,272 Product development 94 79 723 455 General and administrative 336 306 1,459 1,196 Total equity-based compensation $ 606 $ 520 $ 2,553 $ 3,081 |
Class B Units | |
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | |
Summary of Class B Units' Activity | The following is a summary of the Class B units’ activity for the nine months ended September 30, 2020: Number of units Weighted- average grant date fair value/unit Aggregate intrinsic value (in thousands) Class B units Outstanding as of December 31, 2019 163,800 $ 61.62 $ 28,622 Granted 25,500 105.85 Repurchased (8,568 ) 51.03 Forfeited or canceled (3,432 ) 74.22 Outstanding as of September 30, 2020 177,300 $ 68.25 $ 70,953 |
QLH Class B Restricted Unit Plan | Class B Units | |
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | |
Schedule of Option Pricing Model Assumptions for Determining Fair Value of Class B Units | The option pricing model assumptions for determining the fair value of the Class B units in the nine months ended September 30, 2020 and 2019 were as follows: Nine months ended September 30, 2020 2019 Expected term (in years) 0.5 - 2 years 3 years Expected volatility 70% - 88% 70 % Expected dividend yield — — Risk-free interest rate 0.11% - 1.41% 2.19 % Discount for lack of marketability 25 % 30 % |
Organization - Additional Infor
Organization - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 30, 2020 | Feb. 26, 2019 | Sep. 30, 2020 |
QL Holdings LLC and Subsidiaries | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Proceeds from initial public offering, net of underwriting discounts and commissions | $ 124.2 | ||
Company formation date | Mar. 7, 2014 | ||
State in which the limited liability company or limited partnership was organized. | Delaware | ||
Fees related to the closing of the new secured credit facility | $ 2.3 | ||
QL Holdings LLC and Subsidiaries | General and Administrative Expense | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Total transaction expenses | 8.8 | ||
QL Holdings LLC and Subsidiaries | General and Administrative Expense | Legal Investment Banking And Other Consulting Fees | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Total transaction expenses | 7.2 | ||
QL Holdings LLC and Subsidiaries | Transaction Bonuses | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Total transaction expenses | 1.6 | ||
QL Holdings LLC and Subsidiaries | Insignia Capital Group | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Aggregate amount of share unit repurchased | $ 62.8 | ||
QL Holdings LLC and Subsidiaries | MediaAlpha Ventures, LLC | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Membership interest purchased | 60.00% | ||
QL Holdings LLC and Subsidiaries | Q L Holdings L L C | White Mountains Capital Inc | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Ownership percentage | 42.00% | ||
QL Holdings LLC and Subsidiaries | Q L Holdings L L C | Insignia Capital Group | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Ownership percentage | 22.00% | ||
Class A Common | Initial Public Offering (IPO) | Subsequent Event | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Shares issued | 7,027,606 | ||
Public offering price, per share | $ 19 | ||
Proceeds from initial public offering, net of underwriting discounts and commissions | $ 124.2 | ||
Class A Common | Initial Public Offering (IPO) | Subsequent Event | QL Holdings LLC and Subsidiaries | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Proceeds from initial public offering, net of underwriting discounts and commissions | $ 124.2 | ||
Class A Common | Underwriters' Over-allotment Option | Subsequent Event | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Shares issued | 769,104 | ||
Class A | QL Holdings LLC and Subsidiaries | Insignia Capital Group | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Sale of Class A units, Number of Shares | 284,211 | ||
Sale of Class A units, Consideration | $ 62.8 | ||
Percentage of repurchase of share units | 25.00% | ||
Class B | QL Holdings LLC and Subsidiaries | Insignia Capital Group | |||
Consolidation Less Than Wholly Owned Subsidiary Parent Ownership Interest Effects Of Changes Net [Line Items] | |||
Percentage of repurchase of share units | 25.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)CustomerSupplier | Sep. 30, 2019USD ($)CustomerSupplier | Sep. 30, 2020USD ($)CustomerSupplierSegment | Sep. 30, 2019USD ($)CustomerSupplier | Dec. 31, 2019USD ($)CustomerSupplier | |
Significant Accounting Policies [Line Items] | |||||
Minimum tax benefit likely of being realized upon ultimate settlement with tax authority percentage | 50.00% | ||||
QL Holdings LLC and Subsidiaries | |||||
Significant Accounting Policies [Line Items] | |||||
Allowance for doubtful accounts | $ 600,000 | $ 600,000 | $ 300,000 | ||
Revenue | 151,548,000 | $ 110,397,000 | 394,609,000 | $ 281,857,000 | |
Accounts receivable | 63,084,000 | 63,084,000 | 56,012,000 | ||
Total purchases | 130,830,000 | 92,707,000 | 335,692,000 | 237,130,000 | |
Accounts payable | 61,697,000 | $ 61,697,000 | 40,455,000 | ||
Number of operating segment | Segment | 1 | ||||
QL Holdings LLC and Subsidiaries | Non-Current Assets | |||||
Significant Accounting Policies [Line Items] | |||||
Deferred offering costs | 7,200,000 | $ 7,200,000 | 0 | ||
QL Holdings LLC and Subsidiaries | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Revenue | 46,000,000 | $ 23,700,000 | 102,400,000 | $ 61,300,000 | |
Accounts receivable | $ 16,000,000 | $ 16,000,000 | $ 4,700,000 | ||
QL Holdings LLC and Subsidiaries | Customer Concentration Risk | Revenue from Contract with Customer Benchmark | |||||
Significant Accounting Policies [Line Items] | |||||
Number of major customer | Customer | 1 | 1 | 1 | 1 | |
Concentration risk percentage | 30.00% | 21.00% | 26.00% | 22.00% | |
QL Holdings LLC and Subsidiaries | Customer Concentration Risk | Accounts Receivable | |||||
Significant Accounting Policies [Line Items] | |||||
Number of major customer | Customer | 1 | 1 | |||
Concentration risk percentage | 25.00% | 8.00% | |||
QL Holdings LLC and Subsidiaries | Supplier Concentration Risk | Purchases | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 25.00% | 22.00% | 20.00% | 23.00% | |
Number of major supplier | Supplier | 2 | 2 | 2 | 2 | |
Total purchases | $ 33,800,000 | $ 20,000,000 | $ 70,500,000 | $ 57,700,000 | |
QL Holdings LLC and Subsidiaries | Supplier Concentration Risk | Accounts Payable Benchmark | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 23.00% | 36.00% | |||
Number of major supplier | Supplier | 2 | 2 | |||
Accounts payable | $ 14,200,000 | $ 14,200,000 | $ 14,700,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | Sep. 30, 2020$ / sharesshares |
Stockholders Equity Note [Abstract] | |
Common stock, authorized | 1,000 |
Common stock, par value | $ / shares | $ 0.01 |
Common stock, issued | 0 |
Common stock, outstanding | 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Sep. 30, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and contingencies |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Income tax expense | $ 0 |
Liability for unrecognized tax benefits | 0 |
Accrued interest or penalties related to uncertain tax positions | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 01, 2020 | Nov. 16, 2020 | Oct. 30, 2020 | Oct. 27, 2020 | Oct. 19, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Subsequent Event [Line Items] | |||||||||
Common stock, outstanding | 0 | 0 | |||||||
QL Holdings LLC and Subsidiaries | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | $ 124,200 | ||||||||
Repayment of term loan facility | $ 100,023 | $ 14,823 | |||||||
Voting rights | QLH. Holders of Class B-1 units have no voting rights as it pertains to QLH, except for the right to approve certain amendments to the fourth amended and restated limited liability company agreement. | ||||||||
Equity-based compensation expense | $ 606 | $ 520 | $ 2,553 | $ 3,081 | |||||
QL Holdings LLC and Subsidiaries | Supply Partner | |||||||||
Subsequent Event [Line Items] | |||||||||
Percentage of revenue represented | 3.50% | 3.30% | |||||||
Subsequent Event | 2020 Term Loan Facility | |||||||||
Subsequent Event [Line Items] | |||||||||
Repayment of term loan facility | $ 23,600 | ||||||||
Subsequent Event | QL Holdings LLC and Subsidiaries | Supply Partner | |||||||||
Subsequent Event [Line Items] | |||||||||
Date of Termination | Oct. 19, 2020 | ||||||||
Subsequent Event | QL Holdings LLC and Subsidiaries | 2020 Term Loan Facility | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from initial public offering | $ 23,600 | ||||||||
Subsequent Event | Class A-1 Units | Intermediate Holdco | QL Holdings LLC and Subsidiaries | |||||||||
Subsequent Event [Line Items] | |||||||||
Ownership interest percentage by parent | 100.00% | ||||||||
Initial Public Offering (IPO) | Subsequent Event | QLH and QL | |||||||||
Subsequent Event [Line Items] | |||||||||
Remaining net proceeds | 16,300 | ||||||||
Initial Public Offering (IPO) | Subsequent Event | QLH and QL | 2020 Term Loan Facility | |||||||||
Subsequent Event [Line Items] | |||||||||
Repayment of term loan facility | 23,600 | ||||||||
Initial Public Offering (IPO) | Subsequent Event | QL Holdings LLC and Subsidiaries | |||||||||
Subsequent Event [Line Items] | |||||||||
Equity-based compensation expense | 2,800 | ||||||||
Initial Public Offering (IPO) | Subsequent Event | Intermediate Holdco | QL Holdings LLC and Subsidiaries | 2020 Term Loan Facility | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | 16,300 | ||||||||
Proceeds from initial public offering | 23,600 | ||||||||
Initial Public Offering (IPO) | Subsequent Event | Class B-1 Units | Intermediate Holdco | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | $ 84,300 | ||||||||
Initial Public Offering (IPO) | Subsequent Event | Class B-1 Units | Q L Holdings L L C | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares repurchased | 4,772,449 | ||||||||
Initial Public Offering (IPO) | Subsequent Event | Class B-1 Units | Q L Holdings L L C | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock, outstanding | 41,620 | ||||||||
Initial Public Offering (IPO) | Subsequent Event | Class B-1 Units | Intermediate Holdco | QL Holdings LLC and Subsidiaries | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | $ 84,300 | ||||||||
Shares repurchased | 4,772,449 | ||||||||
Initial Public Offering (IPO) | Subsequent Event | Class B-1 Units | Not Held by Media Alpha Inc | Q L Holdings L L C | |||||||||
Subsequent Event [Line Items] | |||||||||
Ownership interest percentage by noncontrolling owners | 43.50% | ||||||||
Class A Common | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Share reserved for issuance | 25,536,043 | ||||||||
Class A Common | Subsequent Event | Omnibus Incentive Plan | |||||||||
Subsequent Event [Line Items] | |||||||||
Initial reserve (in shares) | 12,506,550 | ||||||||
Class A Common | Subsequent Event | Omnibus Incentive Plan | Restricted Stock Unit (RSU) | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares granted | 966,601 | ||||||||
Class A Common | Subsequent Event | Omnibus Incentive Plan | Restricted Stock Unit (RSU) | Minimum | |||||||||
Subsequent Event [Line Items] | |||||||||
Vesting period | 1 year | ||||||||
Class A Common | Subsequent Event | Omnibus Incentive Plan | Restricted Stock Unit (RSU) | Maximum | |||||||||
Subsequent Event [Line Items] | |||||||||
Vesting period | 4 years | ||||||||
Class A Common | Initial Public Offering (IPO) | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Class B issuances, Shares | 7,027,606 | ||||||||
Public offering price, per share | $ 19 | ||||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | $ 124,200 | ||||||||
Common stock, outstanding | 33,169,141 | ||||||||
Class A Common | Initial Public Offering (IPO) | Subsequent Event | QL Holdings LLC and Subsidiaries | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | $ 124,200 | ||||||||
Underwriting discounts and commissions | $ 9,300 | ||||||||
Class A Common | Initial Public Offering (IPO) | Subsequent Event | Q L Holdings L L C | |||||||||
Subsequent Event [Line Items] | |||||||||
Ownership interest percentage by parent | 56.50% | ||||||||
Class A Common | Initial Public Offering (IPO) | Subsequent Event | Omnibus Incentive Plan | Restricted Stock Unit (RSU) | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares granted | 4,856,189 | ||||||||
Grant-date fair value of shares granted | $ 19 | ||||||||
Vesting period | 3 years | ||||||||
Class A Common | Underwriters' Over-allotment Option | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Class B issuances, Shares | 769,104 | ||||||||
Class B Common | QL Holdings LLC and Subsidiaries | |||||||||
Subsequent Event [Line Items] | |||||||||
Class B issuances, Shares | 16,000,000 | 1,750,000 | 25,500,000 | 89,738,000 | |||||
Shares repurchased | 4,880,000 | 8,568,000 | 31,799,000 | ||||||
Class B Common | Initial Public Offering (IPO) | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock, outstanding | 25,536,043 | ||||||||
Class B-1 Units | Initial Public Offering (IPO) | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares repurchased | 4,772,449 | ||||||||
White Mountains Capital, Inc. of Intermediate Holdco | Subsequent Event | Tax Receivables Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Percentage of cash savings required to pay up on agreement | 85.00% | ||||||||
White Mountains Capital, Inc. of Intermediate Holdco | Class A Common | Initial Public Offering (IPO) | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Class B issuances, Shares | 24,142,096 | ||||||||
Insignia, Senior Executives and Legacy Profit Interests Holders | Class B Common | Initial Public Offering (IPO) | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Class B issuances, Shares | 30,308,492 | ||||||||
Legacy Profit Interests Holders | Class A Common | Initial Public Offering (IPO) | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Class B issuances, Shares | 1,999,439 | ||||||||
Insignia and Senior Executives | Subsequent Event | Tax Receivables Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Percentage of cash savings required to pay up on agreement | 85.00% |
Disaggregation of Revenue - Sum
Disaggregation of Revenue - Summary of Disaggregation of Revenue by Transaction Model (Details) - QL Holdings LLC and Subsidiaries - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 151,548 | $ 110,397 | $ 394,609 | $ 281,857 |
Open Platform Transactions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 148,240 | 108,146 | 386,224 | 275,991 |
Private Platform Transactions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 3,308 | $ 2,251 | $ 8,385 | $ 5,866 |
Disaggregation of Revenue - S_2
Disaggregation of Revenue - Summary of Disaggregation of Revenue by Product Vertical (Details) - QL Holdings LLC and Subsidiaries - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 151,548 | $ 110,397 | $ 394,609 | $ 281,857 |
Property & Casualty Insurance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 114,132 | 65,905 | 274,822 | 157,071 |
Health Insurance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 27,343 | 22,860 | 81,420 | 59,375 |
Life Insurance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,392 | 8,381 | 24,265 | 25,515 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 2,681 | $ 13,251 | $ 14,102 | $ 39,896 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - QL Holdings LLC and Subsidiaries - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 1,456 | $ 1,300 |
Less: Accumulated depreciation | (755) | (545) |
Property and equipment, net | 701 | 755 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 840 | 783 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 304 | 302 |
Computers | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 312 | $ 215 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
QL Holdings LLC and Subsidiaries | ||||
Property Plant And Equipment [Line Items] | ||||
Depreciation expense | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.3 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Goodwill and Intangible Assets (Details) - QL Holdings LLC and Subsidiaries - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill And Intangible Assets [Line Items] | |||
Gross carrying amount | $ 26,567 | $ 59,957 | |
Accumulated amortization | (10,217) | (41,205) | |
Net carrying amount | 16,350 | 18,752 | $ 23,985 |
Goodwill | $ 18,402 | 18,402 | $ 18,402 |
Technology and Intellectual Property | |||
Goodwill And Intangible Assets [Line Items] | |||
Useful life (months) | 60 months | ||
Gross carrying amount | 32,027 | ||
Accumulated amortization | (32,027) | ||
Customer Relationships | |||
Goodwill And Intangible Assets [Line Items] | |||
Useful life (months) | 120 months | ||
Gross carrying amount | $ 25,040 | 25,040 | |
Accumulated amortization | (9,285) | (7,094) | |
Net carrying amount | $ 15,755 | 17,946 | |
Costs to Acquire Third Party Publishers | |||
Goodwill And Intangible Assets [Line Items] | |||
Useful life (months) | 24 months | ||
Gross carrying amount | 1,363 | ||
Accumulated amortization | (1,363) | ||
Non-compete Agreements | |||
Goodwill And Intangible Assets [Line Items] | |||
Useful life (months) | 60 months | ||
Gross carrying amount | $ 303 | 303 | |
Accumulated amortization | (197) | (155) | |
Net carrying amount | $ 106 | 148 | |
Domain Names | |||
Goodwill And Intangible Assets [Line Items] | |||
Useful life (months) | 60 months | ||
Gross carrying amount | $ 1,224 | 1,224 | |
Accumulated amortization | (735) | (566) | |
Net carrying amount | $ 489 | $ 658 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - QL Holdings LLC and Subsidiaries - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill And Intangible Assets [Line Items] | |||||
Amortization expense related to intangible assets | $ 800,000 | $ 1,400,000 | $ 2,402,000 | $ 4,158,000 | $ 5,381,000 |
Accumulated impairment of goodwill | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Change in Goodwill and Intangible Assets (Details) - QL Holdings LLC and Subsidiaries - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill, Beginning balance | $ 18,402 | $ 18,402 | $ 18,402 | ||
Goodwill, Ending balance | $ 18,402 | 18,402 | 18,402 | ||
Intangible assets, Beginning balance | 18,752 | 23,985 | 23,985 | ||
Additions to intangible assets | 148 | ||||
Intangible assets, Amortization | (800) | $ (1,400) | (2,402) | $ (4,158) | (5,381) |
Intangible assets, Ending balance | $ 16,350 | $ 16,350 | $ 18,752 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Summary of Future Amortization Expense on Identifiable Intangible Assets (Details) - QL Holdings LLC and Subsidiaries - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill And Intangible Assets [Line Items] | |||
2020–Remaining Period | $ 799 | ||
2021 | 2,984 | ||
2022 | 2,730 | ||
2023 | 2,389 | ||
2024 | 2,211 | ||
Thereafter | 5,237 | ||
Total | $ 16,350 | $ 18,752 | $ 23,985 |
Other Assets - Additional Infor
Other Assets - Additional Information (Details) - QL Holdings LLC and Subsidiaries | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($)shares | |
Other Asset [Line Items] | ||
Duration of partnership agreement with large online customer acquisition marketing company | 10 years | |
One time upfront cash payment | $ 5,000,000 | |
Common stock subscription agreement to acquire | shares | 10,000,000 | |
Paid cash | $ 10,000,000 | |
Percentage of total outstanding common shares acquired | 7.00% | 7.00% |
Impairment losses | $ 0 | $ 0 |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued Expenses [Line Items] | ||
Total accrued expenses | $ 9,869 | |
QL Holdings LLC and Subsidiaries | ||
Accrued Expenses [Line Items] | ||
Accrued deferrable IPO costs and IPO expenses | 8,140,000 | |
Accrued payroll and related expenses | 3,397,000 | $ 4,954,000 |
Accrued operating expenses | 687,000 | 754,000 |
Other accrued expenses | 427,000 | 824,000 |
Total accrued expenses | $ 12,651,000 | $ 6,532,000 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) - QL Holdings LLC and Subsidiaries - USD ($) | Sep. 23, 2020 | Jun. 12, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Feb. 26, 2019 |
Debt Instrument [Line Items] | ||||||||
Debt issuance costs | $ 200,000 | $ 4,467,000 | $ 2,303,000 | |||||
Long-term debt | $ 205,408,000 | 205,408,000 | ||||||
Deferred debt issuance costs | 4,592,000 | 4,592,000 | ||||||
Current portion of long-term debt | 6,262,000 | 6,262,000 | $ 873,000 | |||||
Long-term debt, net of current portion | 199,146,000 | 199,146,000 | 96,665,000 | |||||
Cash distribution to QLH class A Unit holders and certain QLH class B unit holders | $ 105,800,000 | |||||||
Unamortized deferred financing costs | 4,600,000 | $ 1,800,000 | 4,600,000 | 1,800,000 | ||||
Loss on extinguishment of debt | (1,998,000) | |||||||
Interest expense | 1,600,000 | 1,900,000 | 4,800,000 | 5,300,000 | ||||
Amortization of deferred debt issuance costs | 100,000 | 100,000 | 334,000 | 551,000 | ||||
Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest Payable | 100,000 | $ 100,000 | 100,000 | $ 100,000 | ||||
LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 5.50% | |||||||
Debt instrument, reduced interest rate | 4.85% | |||||||
2019 Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility assigned to third party | $ 5,000,000 | |||||||
Outstanding amount drawn under revolving credit facility | 0 | |||||||
2019 Revolving Credit Facility | Monroe Capital | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving line of credit | $ 5,000,000 | |||||||
2020 Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving line of credit | 5,000,000 | |||||||
Outstanding amount drawn under revolving credit facility | 0 | 0 | ||||||
2019 Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Unamortized deferred financing costs | 300,000 | 300,000 | ||||||
2019 Credit Facilities | Other Expense | ||||||||
Debt Instrument [Line Items] | ||||||||
Loss on extinguishment of debt | (2,000,000) | (2,000,000) | ||||||
2019 Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan facility assigned to third party | $ 25,000,000 | |||||||
Long-term debt | 97,500,000 | |||||||
Deferred debt issuance costs | 1,700,000 | |||||||
Current portion of long-term debt | 900,000 | |||||||
Long-term debt, net of current portion | $ 96,700,000 | |||||||
2019 Term Loan Facility | Monroe Capital | ||||||||
Debt Instrument [Line Items] | ||||||||
Initial principal amount of term loan | 100,000,000 | |||||||
Proceeds from term loan | $ 100,000,000 | |||||||
2020 Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Initial principal amount of term loan | 210,000,000 | |||||||
Proceeds from term loan | $ 210,000,000 | |||||||
Long-term debt | 205,400,000 | 205,400,000 | ||||||
Deferred debt issuance costs | 4,300,000 | 4,300,000 | ||||||
Current portion of long-term debt | 1,600,000 | 1,600,000 | ||||||
Long-term debt, net of current portion | $ 3,000,000 | 3,000,000 | ||||||
Debt instrument, periodic payment | $ 2,625,000 | |||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||
Debt instrument, date of first required payment | Dec. 31, 2020 | |||||||
Two Thousand Twenty Credit Facilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facilities, maturity date | Sep. 22, 2023 |
Long-term Debt - Schedule of Ex
Long-term Debt - Schedule of Expected Future Principal Payments for Borrowings (Details) - QL Holdings LLC and Subsidiaries $ in Thousands | Sep. 30, 2020USD ($) |
Long Term Debt By Maturity [Line Items] | |
2020–Remaining Period | $ 2,625 |
2021 | 10,500 |
2022 | 10,500 |
2023 | 186,375 |
Debt and issuance costs | 210,000 |
Unamortized debt issuance costs | (4,592) |
Total long-term debt | $ 205,408 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) - QL Holdings LLC and Subsidiaries - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Lessee Lease Description [Line Items] | |||||
Deferred rent liability | $ 400,000 | $ 400,000 | $ 400,000 | ||
Rental expense | 100,000 | $ 500,000 | 100,000 | $ 400,000 | |
Contingency reserves for litigation liabilities | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Future Minimum Lease Payments Under Non-cancellable Leases (Details) - QL Holdings LLC and Subsidiaries $ in Thousands | Sep. 30, 2020USD ($) |
Lessee Lease Description [Line Items] | |
2020–Remaining Period | $ 132 |
2021 | 539 |
2022 | 555 |
2023 | 572 |
2024 | 598 |
Thereafter | 1,173 |
Total | $ 3,569 |
Redeemable Class A Units and _2
Redeemable Class A Units and Members' Deficit - Additional Information (Details) - QL Holdings LLC and Subsidiaries | 9 Months Ended | |
Sep. 30, 2020Dateshares | Dec. 31, 2019shares | |
Capital Unit [Line Items] | ||
Voting rights | QLH. Holders of Class B-1 units have no voting rights as it pertains to QLH, except for the right to approve certain amendments to the fourth amended and restated limited liability company agreement. | |
Redeemable Class A | ||
Capital Unit [Line Items] | ||
Number of dates on redemption right exercised | Date | 3 | |
Redemption right exercised | The redemption right may be exercised on three dates which are on the fifth, seventh, and ninth anniversary of the Insignia Recapitalization of February 26, 2019 and must be settled by the Company no later than one year from the exercise date. The redemption may only be exercised on all of ICG’s Class A units at once. | |
Redeemable units | 284,211 | 284,211 |
Redeemable Class A | Maximum | ||
Capital Unit [Line Items] | ||
Redemption right settlement period exercise date | 1 year | |
Insignia Capital Group | Redeemable Class A | ||
Capital Unit [Line Items] | ||
Recapitalization transaction date | Feb. 26, 2019 | |
Insignia Capital Group | Redeemable Class A | Maximum | ||
Capital Unit [Line Items] | ||
Liquidation event notice period | 10 business days | |
Class A | ||
Capital Unit [Line Items] | ||
Members' capital, authorized | 1,136,842 | 1,136,842 |
Members' capital, issued | 852,631 | 852,631 |
Members' capital, outstanding | 852,631 | 852,631 |
Members' capital, subject to possible redemption | 284,211 | 284,211 |
Voting rights | one vote for each Class A unit | |
Class B | ||
Capital Unit [Line Items] | ||
Members' capital, authorized | 177,300 | 177,300 |
Members' capital, issued | 177,300 | 163,800 |
Members' capital, outstanding | 177,300 | 163,800 |
Members' capital, vested | 82,161 |
Equity-based Compensation - Add
Equity-based Compensation - Additional Information (Details) - QL Holdings LLC and Subsidiaries - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||||
Number of vested units | 39,617 | |||
Aggregate intrinsic value of vested shares | $ 10.1 | |||
Equity-based compensation expense recognized amount paid to redeem units exceeded fair value at redemption | $ 0 | $ 0 | 0.8 | $ 1.3 |
Cash used to settle redemptions | $ 0 | $ 1.1 | $ 2.2 | $ 5.8 |
Class B Units | ||||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||||
Number of vested units | 82,161 | 49,242 | ||
Number of unvested units | 95,139 | 103,558 | 95,139 | 103,558 |
Weighted average grant date fair value per unit, vested | $ 55.96 | $ 42.93 | ||
Weighted average grant date fair value per unit, unvested | $ 87.79 | $ 70.43 | $ 87.79 | $ 70.43 |
Aggregate intrinsic value of unvested shares | $ 38.1 | $ 38.1 | ||
Unrecognized compensation cost | $ 8.2 | $ 6.4 | $ 8.2 | $ 6.4 |
Weighted-average period for recognize compensation cost | 3 years 1 month 6 days | 3 years 3 months 18 days | ||
Class B Units | QLH Class B Restricted Unit Plan | ||||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||||
Number of units issued | 177,300 | 177,300 | ||
Number of units remained available for future grant | 0 | 0 | ||
Class B Units | QLH Class B Restricted Unit Plan | Four-year Vesting Period | ||||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Vesting percentage | 25.00% |
Equity-based Compensation - Sch
Equity-based Compensation - Schedule of Option Pricing Model Assumptions for Determining Fair Value of Class B Units - (Details) - QL Holdings LLC and Subsidiaries - QLH Class B Restricted Unit Plan - Class B Units | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Expected term (in years) | 3 years | |
Expected volatility | 70.00% | |
Expected volatility, Minimum | 70.00% | |
Expected volatility, Maximum | 88.00% | |
Risk-free interest rate | 2.19% | |
Risk-free interest rate, Minimum | 0.11% | |
Risk-free interest rate, Maximum | 1.41% | |
Discount for lack of marketability | 25.00% | 30.00% |
Minimum | ||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 months | |
Maximum | ||
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | ||
Expected term (in years) | 2 years |
Equity-based Compensation - Sum
Equity-based Compensation - Summary of Class B Units' Activity (Details) - Class B Units - QL Holdings LLC and Subsidiaries $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Share Based Compensation Arrangement by Share Based Payment Award [Line Items] | |
Number of units, Beginning balance | shares | 163,800 |
Number of units, Granted | shares | 25,500 |
Number of units, Repurchased | shares | (8,568) |
Number of units, Forfeited or canceled | shares | (3,432) |
Number of units, Ending balance | shares | 177,300 |
Weighted average grant date fair value/unit, Beginning balance | $ / shares | $ 61.62 |
Weighted average grant date fair value/unit, Granted | $ / shares | 105.85 |
Weighted average grant date fair value/unit, Repurchased | $ / shares | 51.03 |
Weighted average grant date fair value/unit, Forfeited or canceled | $ / shares | 74.22 |
Weighted average grant date fair value/unit, Ending balance | $ / shares | $ 68.25 |
Aggregate intrinsic value, Beginning balance | $ | $ 28,622 |
Aggregate intrinsic value, Ending balance | $ | $ 70,953 |
Equity-based Compensation - S_2
Equity-based Compensation - Schedule of Equity-based Compensation Expense (Details) - QL Holdings LLC and Subsidiaries - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share Based Compensation Allocation of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | $ 606 | $ 520 | $ 2,553 | $ 3,081 |
Cost of Revenue | ||||
Employee Service Share Based Compensation Allocation of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | 18 | 19 | 58 | 158 |
Sales and Marketing | ||||
Employee Service Share Based Compensation Allocation of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | 158 | 116 | 313 | 1,272 |
Product Development | ||||
Employee Service Share Based Compensation Allocation of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | 94 | 79 | 723 | 455 |
General and Administrative Expense | ||||
Employee Service Share Based Compensation Allocation of Recognized Period Costs [Line Items] | ||||
Equity-based compensation expense | $ 336 | $ 306 | $ 1,459 | $ 1,196 |