Cover
Cover | 3 Months Ended |
Mar. 31, 2021shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2021 |
Document Transition Report | false |
Entity File Number | 001-819881 |
Entity Registrant Name | Paya Holdings Inc. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 85-2199433 |
Entity Address, Address Line One | 303 Perimeter Center North |
Entity Address, Address Line Two | Suite 600 |
Entity Address, City or Town | Atlanta |
Entity Address, State or Province | GA |
Entity Address, Postal Zip Code | 30346 |
City Area Code | 800 |
Local Phone Number | 261-0240 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 126,697,492 |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2021 |
Amendment Flag | false |
Entity Central Index Key | 0001819881 |
Current Fiscal Year End Date | --12-31 |
Common stock, par value $0.0001 per share | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common stock, par value $0.0001 per share |
Trading Symbol | PAYA |
Warrants to purchase common stock | |
Entity Information [Line Items] | |
Title of 12(b) Security | Warrants to purchase common stock |
Trading Symbol | PAYAW |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Other Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 55,255 | $ 49,139 |
Cost of services exclusive of depreciation and amortization | (26,137) | (24,498) |
Selling, general & administrative expenses | (16,914) | (15,580) |
Depreciation and amortization | (7,032) | (5,996) |
Income from operations | 5,172 | 3,065 |
Interest expense | (4,043) | (4,645) |
Other income (expense) | 492 | (17) |
Total other expense | (3,551) | (4,662) |
Income (loss) before income taxes | 1,621 | (1,597) |
Income tax (expense) benefit | (576) | 922 |
Net income (loss) | $ 1,045 | $ (675) |
Weighted average shares outstanding of common stock (in shares) | 117,808,563 | 54,534,022 |
Basic net loss per share (in dollars per share) | $ 0.01 | $ (0.01) |
Diluted net loss per share (in dollars per share) | $ 0.01 | $ (0.01) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 133,824 | $ 23,617 |
Trade receivables, net | 22,060 | 17,493 |
Prepaid expenses | 2,766 | 2,218 |
Income taxes receivable | 541 | 541 |
Other current assets | 636 | 457 |
Total current assets before funds held for clients | 159,827 | 44,326 |
Funds held for clients | 69,430 | 78,505 |
Total current assets | 229,257 | 122,831 |
Noncurrent assets: | ||
Property and equipment, net | 14,057 | 12,805 |
Goodwill | 206,337 | 206,308 |
Intangible assets, net | 133,287 | 132,616 |
Other long-term assets | 756 | 781 |
Total Assets | 583,694 | 475,341 |
Current liabilities: | ||
Trade payables | 2,918 | 3,967 |
Accrued liabilities | 10,419 | 10,435 |
Accrued revenue share | 8,351 | 7,535 |
Income taxes payable | 744 | 0 |
Other current liabilities | 2,985 | 3,071 |
Total current liabilities before client funds obligations | 25,417 | 25,008 |
Client funds obligations | 68,990 | 78,658 |
Total current liabilities | 94,407 | 103,666 |
Noncurrent liabilities: | ||
Deferred tax liability, net | 14,453 | 14,618 |
Long-term debt | 219,795 | 220,152 |
Tax receivable agreement liability | 19,175 | 19,627 |
Other long-term liabilities | 1,105 | 1,246 |
Total liabilities | 348,935 | 359,309 |
Stockholders’ Equity: | ||
Common stock, $0.0001 par value; 500,000,000 authorized; 126,697,492 and 116,697,441 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 13 | 12 |
Additional Paid-in-Capital | 247,134 | 129,453 |
Accumulated deficit | (12,388) | (13,433) |
Total stockholders’ equity | 234,759 | 116,032 |
Liabilities and Equity | $ 583,694 | $ 475,341 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in share) | 126,697,492 | 116,697,441 |
Common stock, outstanding (in shares) | 126,697,492 | 116,697,441 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Class C incentive units | Common stock | Common stock | Additional paid-in-capital | Additional paid-in-capitalClass C incentive units | Additional paid-in-capitalCommon stock | Retained earnings |
Beginning balance (in shares) at Dec. 31, 2019 | 54,534,022 | |||||||
Beginning balance at Dec. 31, 2019 | $ 134,364 | $ 5 | $ 147,268 | $ (12,909) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (675) | (675) | ||||||
Stock based compensation | $ 392 | $ 392 | ||||||
Ending balance (in shares) at Mar. 31, 2020 | 54,534,022 | |||||||
Ending balance at Mar. 31, 2020 | $ 134,081 | $ 5 | 147,660 | (13,584) | ||||
Beginning balance (in shares) at Dec. 31, 2020 | 116,697,441 | 116,697,441 | ||||||
Beginning balance at Dec. 31, 2020 | $ 116,032 | $ 12 | 129,453 | (13,433) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | 1,045 | 1,045 | ||||||
Stock based compensation | $ 259 | $ 451 | $ 259 | $ 451 | ||||
Equity offering (in shares) | 10,000,000 | |||||||
Equity offering | 116,971 | $ 1 | 116,970 | |||||
Warrant exercise (in shares) | 51 | |||||||
Warrant exercise | $ 1 | 1 | ||||||
Ending balance (in shares) at Mar. 31, 2021 | 126,697,492 | 126,697,492 | ||||||
Ending balance at Mar. 31, 2021 | $ 234,759 | $ 13 | $ 247,134 | $ (12,388) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,045 | $ (675) |
Depreciation and amortization | 7,032 | 5,996 |
Loss on disposal of property and equipment | 0 | 98 |
Deferred taxes | (164) | 952 |
Bad debt expense | 226 | 441 |
Stock based compensation | 710 | 392 |
Gain on tax receivable agreement liability | (452) | 0 |
Amortization of debt issuance costs | 259 | 274 |
Changes in assets and liabilities, net of impact of business acquisitions: | ||
Trade receivables | (4,792) | (2,919) |
Prepaid expenses | (549) | (886) |
Other current assets | (179) | 234 |
Trade payables | (1,050) | (1,076) |
Accrued liabilities | (16) | (3,980) |
Accrued revenue share | 816 | 192 |
Income tax payable/receivable, net | 745 | (1,873) |
Other current liabilities | (86) | (149) |
Movements in cash held on behalf of customers, net | (594) | 452 |
Other long-term liabilities | 31 | (38) |
Net cash provided by (used in) operating activities | 2,982 | (2,565) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,290) | (963) |
Purchases of customer lists | (6,865) | (85) |
Net cash (used in) investing activities | (9,155) | (1,048) |
Cash flows from financing activities: | ||
Payments on long-term debt | (591) | (591) |
Borrowings under Credit Facility | 0 | 25,000 |
Distribution to Ultra | 0 | (555) |
Proceeds from equity offering | 116,970 | 0 |
Net cash provided by financing activities | 116,379 | 23,854 |
Effect of foreign currency exchange rates on cash and cash equivalents | 1 | 0 |
Net change in cash and cash equivalents | 110,207 | 20,241 |
Cash and cash equivalents, beginning of period | 23,617 | 25,957 |
Cash and cash equivalents, end of period | 133,824 | 46,198 |
Supplemental Cash Flow Information [Abstract] | ||
Cash interest paid | 3,727 | 4,318 |
Cash taxes paid, including estimated payments | $ 0 | $ 3 |
Organization, basis of presenta
Organization, basis of presentation and summary of accounting policies | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, basis of presentation and summary of accounting policies | Organization, basis of presentation and summary of accounting policies Organization Paya Holdings, Inc., a Delaware corporation, conducts operations through its wholly-owned subsidiaries. These operating subsidiaries are comprised of Paya, Inc., Paya EFT, Inc., Stewardship Technology, Inc., First Mobile Trust, LLC, and The Payment Group, LLC. On October 16, 2020, we consummated the business combination (the “Business Combination”) contemplated by that certain Agreement and Plan of Merger, dated as of August 3, 2020 (“Merger Agreement”), by and among Paya Holdings Inc. (f/k/a FinTech Acquisition Corp. III Parent Corp.) (“we,” “us,” “Paya” or the “Company”), FinTech Acquisition Corp. III (“FinTech”), FinTech III Merger Sub Corp. (“Merger Sub”), GTCR-Ultra Holdings, LLC (“Ultra”), GTCR-Ultra Holdings II, LLC (n/k/a Paya Holdings II, LLC, “Holdings”), GTCR/Ultra Blocker, Inc. and GTCR Fund XI/C LP ("Fund"). See Note 3, Business combination for more information. The Company is a leading independent integrated payments platform providing card, ACH, and check payment processing solutions via software to middle-market businesses in the United States. Paya’s solutions integrate with customers’ core business software to enable payments acceptance, reconcile invoice detail, and post payment information to their core accounting system. In this manner, Paya enables its customers to collect revenue from their B2C and B2B customers with a seamless experience and high-level of security across payment types. The Company is headquartered in Atlanta, Georgia and also has operations in Reston, VA, Fort Walton Beach, FL, Mount Vernon, OH, Miamisburg, OH and Dallas, TX. Basis of presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. As permitted under accounting principles generally accepted in the United States of America (“U.S. GAAP”), certain notes and other information have been omitted from the interim unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, for the year ended December 31, 2021, as filed with the SEC. In management’s opinion, the condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows. The results of operations for any interim period are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2021 or any future period. Emerging growth company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. Use of estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. The more significant estimates made by management relate to allowance for doubtful accounts, income taxes, tax receivable agreement liability, and impairment of intangibles and long-lived assets. The Company periodically evaluates the methodologies employed in making its estimates. Principles of Consolidation These condensed consolidated financial statements include the accounts of the Company and its subsidiary companies. All significant intercompany accounts and transactions have been eliminated in consolidation. Cash and cash equivalents Cash and cash equivalents are short-term, highly liquid investments with a maturity of ninety days or less at the time of purchase. The fair value of our cash and cash equivalents approximates carrying value. At times, cash and cash equivalents exceed the amount insured by the Federal Deposit Insurance Corporation. Concentration of credit risk Our cash, cash equivalents, trade receivables, funds receivable and customer accounts are potentially subject to concentration of credit risk. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. No individual customers represented more than 10% of the Company’s revenue. Trade receivables, net Trade receivables are recorded at net realizable value, which includes allowances for doubtful accounts. The Company estimates an allowance for doubtful accounts related to balances that it estimates it cannot collect from merchants. These uncollectible amounts relate to chargebacks, uncollectible merchant fees, and ACH transactions that have been rejected subsequent to the payout date. The Company uses historical write-off data to estimate losses incurred relating to uncollectible accounts. The allowance for doubtful accounts was $1.3 million and $1.2 million at March 31, 2021 and December 31, 2020, respectively. Prepaid expenses Prepaid expenses primarily consist of prepaid insurance, rent and supplier invoices. Other current assets Other current assets primarily consist of current deferred tax assets, current deferred debt issuance costs for the revolving credit facility (the “Revolver”), other receivables and equipment inventory. Funds held for clients and client funds obligation Funds held for clients and client funds obligations result from the Company’s processing services and associated settlement activities, including settlement of payment transactions. Funds held for clients are generated principally from merchant services transactions and are comprised of both settlements’ receivable and cash as of period end. Certain merchant settlement assets that relate to settlement obligations accrued by the Company are held by partner banks. The Company records corresponding settlement obligations for amounts payable to merchants and for payment instruments not yet presented for settlement. Differences in the funds held for clients and client funds obligation are due to timing differences between when transactions are settled and when payment instruments are presented for settlement and are considered to be immaterial. The changes in settlement assets and obligations are presented on a net basis within operating activities in the condensed consolidated statements of cash flows. Property and equipment, net Property and equipment, is stated at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets. These lives are 3 years for computers and equipment, 5 years for furniture, fixtures, and office equipment, and the lesser of the asset useful life or remaining lease term for leasehold improvements. Also, the Company capitalizes software development costs and website development costs incurred in accordance with ASC 350-40, Internal Use Software. The useful lives are 3 to 5 years for internal-use software. Repair and maintenance costs are expensed as incurred and included in selling, general and administrative expenses on the condensed consolidated statements of income and other comprehensive income. Impairment of long-lived assets The Company evaluates the recoverability of its long-lived assets in accordance with the provisions of ASC 360, Property, Plant and Equipment (“ASC 360”). ASC 360 requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. There was no impairment of long-lived assets recognized in any period presented in the condensed consolidated financial statements. Goodwill and other intangible assets, net Goodwill represents the premium paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s business combinations. The Company evaluates goodwill and intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets (“ASC 350”). ASC 350 requires goodwill to be either qualitatively or quantitatively assessed for impairment annually (or more frequently if impairment indicators arise) for each reporting unit. The Company tests goodwill annually for impairment as of September 30 of each year, and at interim periods upon a potential indication of impairment, using a qualitative approach. The Company tests goodwill for impairment by comparing the estimated fair value of the reporting units to the related carrying value. If the fair value of the reporting units is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds fair value. The loss recognized cannot exceed the carrying amount of the goodwill. There was no goodwill impairment recognized in any period presented in the condensed consolidated financial statements. Intangible assets with finite lives consist of developed technology and customer relationships and are amortized on a straight-line basis over their estimated useful lives. From time to time, the Company acquires customer lists from sales agents in exchange for an upfront cash payment. The purchase of customer lists are treated as asset acquisition, resulting in recording an intangible asset at cost on the date of acquisition. The acquired customer lists intangible assets have a useful life of 5 years. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of our use of the acquired assets or the strategy for our overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net book value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the asset over the remaining amortization period, the Company reduces the net book value of the related intangible asset to fair value and may adjust the remaining amortization period. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the net book value may not be recoverable. There were no indicators of impairment identified nor was impairment recognized in intangible assets in any period presented in the condensed consolidated financial statements. Long-term debt and issuance costs Eligible debt issuance costs associated with the Company's credit facilities are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Debt issuance costs associated with Company's term debt are presented on the Company's condensed consolidated balance sheets as a direct reduction in the carrying value of the associated debt liability. Revenue The Company’s business model provides payment services, card processing, and ACH, to merchants through enterprise or vertically focused software partners, direct sales, reseller partners, other referral partners, and a limited number of financial institutions. The Company recognizes processing revenues on bankcard merchant accounts and ACH merchant accounts at the time merchant transactions are processed and periodic fees over the period the service is performed. See Note 2, Revenue recognition for more information on the Company's revenue recognition policy. Cost of services exclusive of depreciation and amortization Cost of services includes card processing costs, ACH costs, and other fees paid to card networks, and equipment expenses directly attributable to payment processing and related services to merchants. These costs are recognized as incurred. Cost of services also includes revenue share amounts paid to reseller and referral partners and are calculated monthly based on monthly merchant activity. These expenses are recognized as transactions are processed. Accrued revenue share represent amounts earned during the period but not yet paid at the end of the period. Selling, general and administrative expenses Selling, general and administrative expenses consist primarily of salaries, stock based compensation expense, wages, commissions, marketing costs, professional services costs, technology costs, occupancy costs of leased space, and bad debt expense. Depreciation & Amortization Depreciation and amortization consist primarily of amortization of intangible assets, mainly including customer relationships, internal-use software, customer lists, trade names and to a lesser extent depreciation on our investments in property, equipment, and software. We depreciate and amortize our assets on a straight-line basis in accordance with our accounting policies. Repair and maintenance costs are expensed as incurred and included in selling, general and administrative expenses on the condensed consolidated statements of income and other comprehensive income. Customer lists are amortized over a period of 5-15 years depending on the intangible, developed technology 3-5 years, and trade names over 25 years. Derivative financial instruments The Company accounts for its derivative instruments in accordance with ASC 815, Derivatives and Hedging. ASC 815 establishes accounting and reporting standards for derivative instruments requiring the recognition of all derivative instruments as assets or liabilities in the Company’s condensed consolidated balance sheets at fair value. The Company records its derivative instruments as assets or liabilities, depending on its rights or obligations under the applicable derivative contract. Changes in fair value are recognized in earnings in the affected period. The Company uses an interest rate cap contract to manage risk from fluctuations in interest rates on its Term Loan credit agreement. Interest rate caps involve the receipt of variable-rate amounts beyond a specified strike price over the life of the agreement without exchange of the underlying principal amount. The interest rate cap is not designated as a hedging instrument. Changes in the fair value of the interest rate cap are recorded through other income (expense) in the condensed consolidated statement of income and other comprehensive income, other current assets and other current liabilities on the condensed consolidated balance sheet, and in changes in other current assets in the combined statement of cash flows. Income taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized principally for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts, using currently enacted tax rates. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company recognizes a tax benefit for uncertain tax positions if the Company believes it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position. The Company evaluates uncertain tax positions after the consideration of all available information. Such tax positions must initially and subsequently be estimated as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authorities, assuming full knowledge of the position and relevant facts. The Company's policy is to recognize any interest and penalties related to income taxes as income tax expense in the relevant period. Fair-Value Measurements ASC 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The determination of fair value is based on the principal or most advantageous market in which the Company could participate and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. Also, determination of fair value assumes that market participants will consider the highest and best use of the asset. The Company uses the hierarchy prescribed in ASC 820 for fair value measurements, based on the available inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels of the hierarchy are as follows: Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date; Level 2 Inputs—Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 Inputs—Unobservable inputs for the asset or liability used to measure fair value allowing for inputs reflecting the Company’s assumptions about what other market participants would use in pricing the asset or liability, including assumptions about risk. Recently Issued Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning an interim period that includes or is subsequent to March 12, 2020, or prospectively from the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. The Company may apply ASU 2020-04 as its contracts referenced in London Interbank Offered Rate (“LIBOR”) are impacted by reference rate reform. The Company is currently evaluating the effect of ASU 2020-04 on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to enhance and simplify various aspects of the accounting for income taxes. The amendments in this update remove certain exceptions to the general principles in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and amends existing guidance to improve consistent application of the accounting for franchise taxes, enacted changes in tax laws or rates and transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the effect of ASU 2019-12 on our condensed consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance amends the hedge accounting model in Accounting Standards Codification (“ASC”) 815 to better portray the economic results of an entity’s risk management activities in its financial statements and simplifies the application of hedge accounting in certain situations. The ASU eliminates the requirement to separately measure and report hedge ineffectiveness. The ASU is effective for annual periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a significant impact on its condensed consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The ASU simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. As a result, an impairment charge will be recorded based on the excess of a reporting unit's carrying amount over its fair value. The amendments of this ASU are effective for reporting periods beginning after December 15, 2022. Early adoption of this ASU is permitted for interim and annual impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this ASU to have a significant impact on its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU presents a new methodology for calculating credit losses on financial instruments (e.g. trade receivables) based on expected credit losses and expands the types of information companies must use when calculating expected losses. This ASU is effective for annual periods beginning after December 15, 2021 and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The ASU requires lessees to put most leases on their balance sheets. The guidance also modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors and provides new presentation and disclosure requirements for both lessees and lessors. In June 2020, the FASB issued ASU 2020-05 which delayed the effective date of ASC 842. This standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company plans to adopt this ASU on January 1, 2022 and does not expect the adoption of this ASU to have a significant impact on its condensed consolidated financial statements. |
Revenue recognition
Revenue recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | Revenue recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). ASC 606 supersedes the revenue recognition requirements in ASC 605, Revenue Recognition (“ASC 605”). The new standard provides a five-step analysis of transactions to determine when and how revenue is recognized, based upon the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASC 606 on January 1, 2019 using the modified retrospective approach. As a result of adopting the new standard, the Company did not have material changes to the timing of its revenue recognition, nor an impact to the financial statements. At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies performance obligations for each promise to transfer to the customer a good or service that is distinct. The Company’s performance obligation relating to its payment processing services revenue is to provide continuous access to the Company’s system to process as much as its customers require. Since the number or volume of transactions to be processed is not determinable at contract inception, the Company’s payment processing services consist of variable consideration under a stand-ready service of distinct days of service that are substantially the same with the same pattern of transfer to the customer. As such, the stand-ready obligation is accounted for as a single-series performance obligation whereby the variability of the transaction value is satisfied daily as the performance obligation is performed. In addition, the Company applies the right to invoice practical expedient to payment processing services as each performance obligation is recognized over time and the amounts invoiced are reflective of the value transferred to the customer. The Company uses each day as a time-based measure of progress toward satisfaction of the single performance obligation of each contract. This method most accurately depicts the pattern by which services are transferred to the merchant, as performance depends on the extent of transactions processed for that merchant on a given day. Likewise, consideration to which the Company expects to be entitled is determined according to our efforts to provide service each day. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by the standard, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As discussed above, the Company’s core performance obligation is a stand-ready obligation comprised of a series of distinct days of service, and revenue related to this performance obligation is generally billed and recognized as the services are performed. The variable consideration allocated to this performance obligation meets the specified criteria for disclosure exclusion. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. The Company’s customers are all domestic, small to medium size businesses who are underwritten to the credit standards of the Company and who each have merchant processing agreements. The Company, through its risk informed bad debt and allowance accounting, appropriately reserves for any potential risk to its revenue and cash flows. Since the cash is collected for the majority of transactions within a month, there is not a significant time lag or risk of uncollectibility in the recognition of revenue. We do not have any material contract assets or liabilities for any period presented and we did not recognize any impairments of any contract assets or liabilities for the three months ended March 31, 2021 and 2020, respectively. The Company generates its revenue from three revenue sources which include Transaction based revenue, Service based fee revenue and Equipment revenue and are defined below: Transaction based revenue Transaction based revenue represents revenue generated from transaction fees based on volume, including interchange fees and convenience based fees. The Company generates transaction based revenue from fees charged to merchants for card-based processing volume and ACH transactions. Transaction based revenues are recognized on a net basis equal to the full amount billed to the bankcard merchant, net of interchange fees and assessments. Interchange fees are fees paid to card-issuing banks and assessments paid to payment card networks. Interchange fees are set by credit card networks based on various factors, including the type of bank card, card brand, merchant transaction processing volume, the merchant’s industry and the merchant’s risk profile and are recognized at the time merchant transactions are processed. Transaction based revenue was recorded net of interchange fees and assessments of $104,519 and $101,041 for the three months ended March 31, 2021 and 2020, respectively. Service based fee revenue Service based fee revenue represents revenue generated from recurring and periodic service fees. The Company generates service based fee revenue from charging a service fee, a fee charged to the client for facilitating bankcard processing, which are recognized on a gross basis. The Company also generates service based fees related to ACH inclusive of monthly support fees and monthly statement fees. Equipment revenue Equipment revenue comprises sales of equipment which primarily consists of payment terminals. The Company generates its revenue from two segments which are Integrated Solutions and Payment Services and are defined below: Integrated Solutions Our Integrated Solutions segment represents the delivery of our credit and debit card payment solutions, and to a lesser extent, ACH processing solutions to customers via integrations with software partners across our strategic vertical markets. Our Integrated Solutions partners include vertical focused front-end Customer Relationship Management software providers as well as back-end Enterprise Resource Planning and accounting solutions. Payment Services Our Payment Services segment represents the delivery of card payment processing solutions to our customers through resellers, as well as ACH, check, and gift card processing. Card payment processing solutions in this segment do not originate via a software integration but still utilize Paya’s core technology infrastructure. ACH, check, and gift card processing may or may not be integrated with third-party software. The following table presents the Company's revenue disaggregated by segment and by source as follows: Integrated Solutions Three Months Ended March 31, 2021 2020 Revenue from contracts with customers Transaction based revenue $ 30,178 $ 26,562 Service based fee revenue 2,646 2,765 Equipment revenue 67 62 Total revenue $ 32,891 $ 29,389 Payment Services Three Months Ended March 31, 2021 2020 Revenue from contracts with customers Transaction based revenue $ 18,052 $ 15,747 Service based fee revenue 4,293 3,972 Equipment revenue 19 31 Total revenue $ 22,364 $ 19,750 |
Business combination & acquisit
Business combination & acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Business combination & acquisitions | Business combination & acquisitions Business combination transaction overview On October 16, 2020, FinTech consummated the Business Combination pursuant to the terms of the Merger Agreement and acquired all of the issued and outstanding equity interests in Paya. As of March 31, 2021, there have been no material changes outside the ordinary course of business related to the Business Combination from the amounts reported within our Annual Report on Form 10-K for the year ended December 31, 2020. The Payment Group transaction overview Paya purchased The Payment Group, LLC ("TPG" or "The Payment Group"). on October 1, 2020 for total cash consideration of $22,270, which was accounted for as a business combination as defined by ASC 805. The assets acquired and liabilities assumed are recorded at their respective fair values as of the date of the acquisition with the excess of the purchase price over those fair values recorded as goodwill. The determination of the fair values of the acquired assets and assumed liabilities required significant judgment, including estimates impacting the determination of estimated lives of tangible and intangible assets, and their related fair values. The fair values were determined considering the income, market and cost approaches. The fair value measurement is based on significant inputs that are not observable in the market and, therefore represents a Level 3 measurement. As of March 31, 2021, there have been no material changes outside the ordinary course of business related to the TPG acquisition from the amounts reported within our Annual Report on Form 10-K for the year ended December 31, 2020, other than those resulting from changes in goodwill as discussed below, as the measurement period remains open, primarily due to continued refinement of intangibles valuation. In the three months ended March 31, 2021, the Company made measurement period adjustments totaling $29 to increase goodwill to reflect facts and circumstances in existence as of the effective date of the acquisition. |
Property and equipment, net
Property and equipment, net | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Property and equipment, net Property and equipment, net consists of the following: March 31, 2021 December 31, 2020 Computers and equipment $ 7,635 $ 7,134 Internal-use software 12,430 10,708 Office equipment 141 130 Furniture and fixtures 1,320 1,320 Leasehold improvements 1,360 1,353 Other equipment 26 26 Total property and equipment 22,912 20,671 Less: accumulated depreciation (8,855) (7,866) Total property and equipment, net $ 14,057 $ 12,805 |
Goodwill and other intangible a
Goodwill and other intangible assets, net | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets, net | Goodwill and other intangible assets, net Goodwill recorded in the condensed consolidated financial statements was $206,337 and $206,308 as of March 31, 2021 and December 31, 2020, respectively. There were no indicators of impairment noted in the periods presented. The following table presents changes to goodwill for the three months ended March 31, 2021: Integrated Solutions Payments Services Total Balance at December 31, 2020 $ 152,408 $ 53,900 $ 206,308 Measurement period adjustment (Note 3) 29 — 29 Balance at March 31, 2020 $ 152,437 $ 53,900 $ 206,337 Intangible assets other than goodwill at March 31, 2021 included the following: Weighted Average Useful Life (Years) Useful Lives Gross Carrying Amount at March 31, 2021 Accumulated Amortization Net Carrying Value as of March 31, 2021 Customer Relationships 10.4 5-15 years $ 173,823 $ (55,010) $ 118,813 Developed Technology 4.3 3-5 years 25,520 (14,854) 10,666 Trade name 25.0 25 years 4,190 (382) 3,808 8.0 $ 203,533 $ (70,246) $ 133,287 Intangible assets other than goodwill at December 31, 2020 included the following: Weighted Average Useful Life (Years) Useful Lives Gross Carrying Amount at December 31, 2020 Accumulated Amortization Net Carrying Value as of December 31, 2020 Customer Relationships 10.4 5-15 years $ 167,158 $ (50,477) $ 116,681 Developed Technology 4.2 3-5 years 25,520 (13,435) 12,085 Trade name 25.0 25 years 4,190 (340) 3,850 8.6 $ 196,868 $ (64,252) $ 132,616 Amortization expense totaled $5,994 and $5,016 for the three months ended March 31, 2021 and 2020, respectively. The following table shows the expected future amortization expense for intangible assets at March 31, 2021: Expected Future Amortization Expense 2021 - remaining $ 17,213 2022 21,363 2023 21,161 2024 19,541 2025 18,585 Thereafter 35,424 Total expected future amortization expense $ 133,287 |
Long-term debt
Long-term debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt The Company’s long-term debt consisted of the following for the three months ended March 31, 2021 and year ended December 31, 2020: March 31, 2021 December 31, 2020 Term loan credit agreement $ 228,086 $ 228,677 Debt issuance costs, net (5,927) (6,161) Total debt 222,159 222,516 Less: current portion of debt (2,364) (2,364) Total long-term debt $ 219,795 $ 220,152 In August 2017, Paya Inc. entered into a credit agreement providing for a term loan facility (the “Term Loan”), a revolving credit facility (the “Revolver”) and a delayed term loan that was not utilized. In December 2018, the Company amended the credit agreement and Paya Holdings III, LLC (f/k/a GTCR-Ultra Holdings III, LLC), a wholly-owned subsidiary of the Company, assumed all of Paya Inc.’s right and obligations as “Borrower” under the credit agreement and related documents. The credit agreement currently provides for a $235,500 Term Loan and a $25,000 Revolver and is secured by substantially all of the assets of Paya Holdings II, LLC (f/k/a GTCR-Ultra Holdings II, LLC), the parent of the Borrower, and its subsidiaries. In July 2020, the Company amended the credit agreement to perform the Business Combination, and among other things, extend the maturity of the Revolver to July 24, 2025 and the maturity of the Term Loan to August 1, 2027. There were no borrowings outstanding under the Revolver as of March 31, 2021 and December 31, 2020, respectively. The net leverage ratio is the ratio of the Company’s secured indebtedness to the condensed consolidated adjusted EBITDA. The maximum ratio permitted by the financial covenant in the credit agreement is 7.25x as of March 31, 2021. The current portion of debt was included within other current liabilities on the condensed consolidated balance sheet. The Company had $5,927 and $6,161 of unamortized Term Loan debt issuance costs that were netted against the outstanding loan balance and $432 and $457 of unamortized costs associated with the Revolver as of March 31, 2021 and December 31, 2020, respectively. The Revolver debt issuance costs are recorded in other current and other long term assets and are amortized over the life of the Revolver. Amortization of the debt issuance costs are included in interest expense in the condensed consolidated statement of income and other comprehensive income. The interest rate for the Revolver and the Term Loan was originally set at LIBOR (with a floor of 1.00%) plus a margin of 6.00% on July 1, 2017. In July 2018, the interest rate was reduced to LIBOR (with a floor of 1.00%) plus a margin of 5.25% and remained unchanged at March 31, 2021. Interest expense related to long-term debt totaled $3,573 and $4,096 for the three months ending March 31, 2021 and 2020, respectively. Unused Revolver borrowings incur administrative agent fees at a rate of 0.50% per annum on the daily average of the unused amount and are recorded in interest expense. Total interest expense was $4,043 and $4,645 for the three months ended March 31, 2021 and 2020, respectively. This included the long-term debt interest expense of $3,573 and $4,096 for the three months ended March 31, 2021 and 2020, and amortization of debt issuance costs of $259 and $274 for the three months ended March 31, 2021 and 2020, respectively. Principal payments on the Term Loan of $591 were paid quarterly for the three months ended March 31, 2021 and 2020. Annual principal payments on the Term Loan for the remainder of 2021 and the following years is as follows: Future Principal Payments 2021 - remaining $ 1,773 2022 2,364 2023 2,364 2024 2,364 2025 2,364 Thereafter 216,857 Total future principal payments $ 228,086 |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The Company utilizes derivative instruments to manage risk from fluctuations in interest rates on its Term Loan credit agreement. On February 3, 2021, the Company entered into an interest rate cap agreement with a notional amount of $171,525. The effective date is March 31, 2021 and terminates on March 31, 2023. The Company paid a premium of $67 for the right to receive payments if LIBOR rises above the cap rate of 1.00%. The premium is recorded in other long-term assets on the condensed consolidated balance sheet. The interest rate cap agreement was a derivative not designated as a hedging instrument for accounting purposes. The fair value of the interest rate cap agreement was $108 at March 31, 2021. The Company recognized $(41) in other income (expense) for the three months ended March 31, 2021. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Equity | Equity Common Stock The holders of the Company's common stock are entitled to one vote for each share of common stock held. Of the 126,697,492 shares of common stock outstanding at March 31, 2021, a total of 5,681,812 are considered contingently issuable as they require the trading price of our stock to exceed certain thresholds. In addition, should our share price exceed a series of trading price thresholds, the Company may issue up to an additional 14,018,188 shares of common stock, for total contingently issuable shares of 19,700,000. On March 17, 2021, the Company priced an offering of 20,000,000 shares of its common stock, $0.0001 par value per share. The Company and the selling stockholder each agreed to sell 10,000,000 shares of common stock to the underwriters at a price of $12.25 per share. The offering closed and the shares were delivered on March 22, 2021. As a result of the offering, the Company received cash proceeds of $122,500, net of transaction costs of $5,530. Paya Holdings Inc. Omnibus Incentive Plan On December 22, 2020, the Company adopted the Paya Holdings Inc. Omnibus Incentive Plan, which allows for issuance of up to 8,800,000 shares of its common stock. Under the Omnibus Incentive Plan, the Company may grant stock options, stock appreciation rights, restricted shares, performance awards, and other stock-based and cash-based awards to eligible employees, consultants or non-employee directors of the Company. The Company recognized $451 and $0 of share-based compensation for the three months ended March 31, 2021 and 2020, respectively. in selling, general & administrative expenses on the condensed consolidated statement of income and other comprehensive income on a straight-line basis over the vesting periods. As of March 31, 2021, the Company had two stock-based compensation award types granted and outstanding: restricted stock units (RSUs) and stock options. A summary of RSUs activity under the Omnibus Incentive Plan is as follows: Number of RSUs Weighted-Average Grant Date Fair Value Weighted-Average Remaining Term December 31, 2020 balance 230,000 $ 13.73 3.4 years Granted 104,090 $ 13.87 1.4 years March 31, 2021 balance 334,090 $ 13.77 2.8 years On December 22, 2020, the Company granted 185,000 stock options under the Omnibus Incentive Plan. These options generally vest in five annual installments, starting on the first anniversary of the grant date and have ten-year contractual terms. The grant date fair value of the stock options was $0.8 million based on the use of the Black-Scholes option pricing model with the following assumptions: expected term of 6.5 years; risk-free interest rate of 0.57%; expected volatility of 29.9%; dividend yield of 0%; and fair value at the grant date and weighted-average strike price of $13.73. No additional stock options were granted in the three months ended March 31, 2021. The risk-free interest rate is based on the yield of a zero coupon United States Treasury Security with a maturity equal to the expected life of the stock option from the date of the grant. The assumption for expected volatility is based on the historical volatility of a peer group of market participants as the Company has limited historical volatility. It is the Company's intent to retain all profits for the operations of the business for the foreseeable future, as such the dividend yield assumption is zero. The Company applied the simplified method (as described in Staff Accounting Bulletin 110), which is the mid-point between the vesting date and the end of the contract term in determining the expected term of the stock options as the Company has limited historical basis upon which to determine historical exercise periods. All stock options exercised will be settled in common stock. Class C Incentive Units Ultra provides Class C Incentive Units as part of their incentive plan. As certain employees of the Company were recipients of the Class C Incentive Units, the related share-based compensation was recorded by the Company. The total number of units associated with share-based compensation granted and forfeited during the period from December 31, 2019 to March 31, 2020 and December 31, 2020 to March 31, 2021 is as follows: Total Units December 31, 2019 balance 43,451,157 Granted 409,181 Forfeited — March 31, 2020 balance 43,860,338 December 31, 2020 balance 42,881,437 Granted — Forfeited — March 31, 2021 balance 42,881,437 As of March 31, 2021, 20,357,438 of the units had vested. The units vest on a straight-line basis over the terms of the agreement as described below. There were 42,881,437 and 42,881,437 Class C Incentive Units issued as of March 31, 2021 and December 31, 2020, respectively. Of these units issued as of March 31, 2021, 42,583,141 units were time vesting units with a five-year vesting period (vesting date varies by employee contract) and 298,296 units were time vesting units within a one-year vesting period. Of these units issued as of December 31, 2020, 42,583,437 units were time vesting units with a five-year vesting period (vesting date varies by employee contract) and 298,000 units were time vesting units with a one-year vesting period. The Company recognized $259 and $392 of share-based compensation related to the Class C Incentive Units, for the three months ended March 31, 2021 and 2020, respectively, in selling, general & administrative expenses on the condensed consolidated statement of income and other comprehensive income. The Company used the fair value of the awards on the grant date to determine the share-based compensation expense. To determine the fair value of units issued in 2020, Ultra estimated its enterprise value (“EV”) and evaluated the value of units based on the distribution waterfall outlined below. To determine the fair value of units issued in early 2020, Ultra used a third-party valuation firm to calculate an EV of $574,000 as determined by discounted cash flow, guideline public company, and merger and acquisition valuation methodologies. Ultra used the aggregate implied equity value based on capital contributions and a Black-Scholes Option Pricing Model utilizing certain assumptions, such as the risk-free interest rate and equity volatility, to determine total equity value. A risk-free interest rate of 0.3% was utilized with a 5-year term. Volatility of 60.0% was utilized based on comparable companies publicly traded common stock prices and the capital structure of Ultra. A weighted average cost of capital of 12.0% was used in the discounted cash flow analysis. Multiples of 13.0x EV/Last twelve months (“LTM”) earnings before interest taxes depreciation and amortization (“EBITDA”) and 12.5x EV/2019 EBITDA and 10.5x EV / 2020 EBITDA were utilized in the guideline public company analysis. Multiples of 13.0x EV/LTM EBITDA and 12.5x EV/Next twelve months EBITDA were utilized in the merger and acquisition analysis. Warrants The Company currently has 17,714,949 warrants outstanding as of March 31, 2021. Each warrant entitles the registered holder to purchase one whole share of the Company's common stock at a price of $11.50 per share. The warrants will expire on October 16, 2025 or earlier upon redemption or liquidation. Earnings per Share Earnings per share has been computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding during the respective period. Diluted earnings per share has been computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common shares outstanding during the respective period. Diluted earnings per share reflect the assumed exercise, settlement, and vesting of all dilutive securities, except when the effect is anti-dilutive. Diluted earnings per share is calculated as the weighted-average number of common shares outstanding, including the dilutive impact of the Company’s stock option grants, RSU’s and warrants as determined per the treasury stock method. Potentially dilutive securities consist of shares issuable upon the exercise of stock options, issuance of earnout shares, exercise of warrants, and vesting of restricted stock awards. The following table provides the computation of basic and diluted earnings per share: Three Months Ended March 31, 2021 2020 Numerator: Net income (loss) $ 1,045 $ (675) Denominator: Weighted average common shares 117,808,563 54,534,022 Add effect of dilutive securities: RSUs 6,624 — Warrants 1,727,098 — Weighted average common shares assuming dilution 119,542,285 54,534,022 Earnings per share: Basic $ 0.01 $ (0.01) Diluted $ 0.01 $ (0.01) Anti-dilutive shares excluded from calculation of diluted EPS: Restricted stock units - granted 50,000 — Stock options - granted 185,000 — Earnout shares 19,700,000 — Total anti-dilutive shares 19,935,000 — |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The Company’s effective tax rate for the three months ended March 31, 2021 and March 31, 2020 was 49.26% and 57.72%, respectively. The Company recorded income tax expense of $576 and an income tax benefit of $922 for the three months ended March 31, 2021 and March 31, 2020, respectively. The increase in income tax expense was primarily attributable to an increase in pre-tax income and transaction costs anticipated to be non-deductible for tax purposes. The difference in the Company’s effective income tax rate for the three months ended March 31, 2021 and its federal statutory tax rate of 21% is primarily related to transaction costs anticipated to be non-deductible for tax purposes and state and local income taxes. During the three months ended March 31, 2021 and March 31, 2020, the Company recognized $740 and $(1,874) of current tax payable related to income tax expense. ASC 740, Income Tax requires deferred tax assets to be reduced by a valuation allowance, if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In accordance with this requirement, the Company regularly reviews the recoverability of its deferred tax assets and establishes a valuation allowance if appropriate. In determining the amount of any required valuation allowance, the Company considers the history of profitability, projections of future profitability, the reversal of future taxable temporary differences, the overall amount of deferred tax assets, and the timeframe necessary to utilize the deferred tax assets prior to their expiration. Based on the weight of all positive and negative quantitative and qualitative evidence available as outlined above, management has concluded that it is more likely than not that the Company will be able to realize a portion of its federal and state deferred tax assets in the foreseeable future and has recorded a valuation allowance of $9,493 and $9,459 against these assets as of March 31, 2021, and December 31, 2020, respectively. There are no material uncertain tax positions as of March 31, 2021. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The Company makes recurring fair value measurements for derivative instruments. Refer to Note 7 . Derivatives for additional information. There were no transfers into or out of Level 3 during the three months ended March 31, 2021 or the year ended December 31, 2020. Other financial instruments not measured at fair value on the Company’s condensed consolidated balance sheets at March 31, 2021 and December 31, 2020 include cash, trade receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities as their estimated carrying values reasonably approximate their fair value as reported on the condensed consolidated balance sheets. The Company’s debt obligations are carried at amortized cost less debt issuance costs. Amortized cost approximates fair value. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Operating leases The Company leases certain property and equipment for various periods under noncancellable operating leases. The Company’s future minimum lease payments under such agreements at March 31, 2021 were approximately: Year ending December 31, (In thousands) 2021 - remaining $ 974 2022 1,294 2023 1,271 2024 1,004 2025 899 Thereafter 609 Total $ 6,051 Rental expense was $412 and $400 for the three months ended March 31, 2021 and March 31, 2020, respectively. Liabilities under Tax Receivable Agreement The Company is party to a Tax Receivable Agreement (the “TRA”) under which we are contractually committed to pay Ultra 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of certain transactions. The Company is not obligated to make any payments under the TRA until the tax benefits associated with the transaction that gave rise to the payment are realized. Amounts payable under the TRA are contingent upon, among other things, generation of future taxable income over the term of the TRA. If the Company does not generate sufficient taxable income in the aggregate over the term of the TRA to utilize the tax benefits, then the Company would not be required to make the related TRA payments. As of March 31, 2021 and December 31, 2020, the Company recognized $19,175 and $19,627 of liabilities, respectively, relating to our obligations under the TRA, based on our estimate of the probable amount of future benefit. The total potential payments to be made under the TRA, assuming sufficient future taxable income to realize 100% of the tax benefits is $31,849. Any changes in the value of the TRA liability are recorded in other income (expense) on the condensed consolidated statements of income and other comprehensive income. Legal matters From time to time the Company is a party to legal proceedings arising in the ordinary course of business. In accordance with U.S. GAAP, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed regularly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. |
Related party transactions
Related party transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactionsRelated party transactions – AntaresAntares is an investor in GTCR and lender of the Company’s credit agreement. As such, Antares is considered a related party. The Company recorded interest expense of $3,573 and $4,096 in expense on the condensed consolidated statement of income and other comprehensive income for the three months ended March 31, 2021 and March 31, 2020, respectively. The outstanding balance of debt at March 31, 2021 and December 31, 2020 respectively recorded on the condensed consolidated balance sheet was $222,159 and $222,516, net of debt issuance costs of $5,927 and $6,161. |
Defined contribution plan
Defined contribution plan | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Defined contribution plan | Defined contribution plan The Company maintains a 401(k) Plan as a defined contribution retirement plan for all eligible employees. The 401(k) Plan provides for tax-deferred contributions of employees’ salaries, limited to a maximum annual amount as established by the IRS. The plan enrolls employees immediately with no age or service requirement. The Company matches 50% of employees’ contributions up to the first 7% contributed. Matching contributions made to an employee’s account are 100% vested as of the date of contribution. The 401(k) Plan employer match was $243 and $232 in the three months ended March 31, 2021 and 2020, respectively. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company determines its operating segments based on ASC 280, Segment Reporting . The Company reorganized its segments in 2020. Based on the manner in which the chief operating decision making group (“CODM”) manages and monitors the performance of the business in 2020, the Company currently has two operating and reportable segments: Integrated Solutions and Payment Services. All prior periods, are presented based on the current segment structure. More information about our two reportable segments: • Integrated Solutions - Our Integrated Solutions segment represents the delivery of our credit and debit card payment solutions, and to a lesser extent, ACH processing solutions to customers via integrations with software partners across our strategic vertical markets. Our Integrated Solutions partners include vertical focused front-end Customer Relationship Management software providers as well as back-end Enterprise Resource Planning and accounting solutions. • Payment Services - Our Payment Services segment represents the delivery of card payment processing solutions to our customers through resellers, as well as ACH, check, and gift card processing. Card payment processing solutions in this segment do not originate via a software integration but still utilize Paya’s core technology infrastructure. ACH, check, and gift card processing may or may not be integrated with third-party software. All segment revenue is from external customers. The following table presents total revenues and segment gross profit, excluding depreciation and amortization, for each reportable segment and includes a reconciliation of segment gross profit to total U.S. GAAP operating profit, excluding depreciation and amortization, by including certain corporate-level expenses. Three Months Ended March 31, 2021 2020 Integrated Solutions $ 32,891 $ 29,389 Payment Services 22,364 19,750 Total Revenue 55,255 49,139 Integrated Solutions gross profit 18,200 15,484 Payment Services gross profit 10,918 9,157 Total segment gross profit 29,118 24,641 Selling, general & administrative expenses (16,914) (15,580) Depreciation and amortization (7,032) (5,996) Interest expense (4,043) (4,645) Other income (expense) 492 (17) Income (loss) before income taxes $ 1,621 $ (1,597) Segment assets are not included in the CODM reporting package as they are not considered as part of the CODM’s allocation of resources. The Company does not have any revenue or material assets outside the United States. There were no single customers from either operating segment that represented 10% or more of the Company’s condensed consolidated revenues for the three months ended March 31, 2021 and 2020, respectively. There were no transactions between reportable operating segments for the three months ended March 31, 2021 and 2020, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn April 23, 2021, the Company closed the acquisition of Paragon Payment Solutions. The aggregate purchase price paid at closing was $27.5 million, consisting of $20 million in cash and $7.5 million of common stock. In addition, up to $5 million may become payable, subject to the achievement of certain future performance metrics. |
Organization, basis of presen_2
Organization, basis of presentation and summary of accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. As permitted under accounting principles generally accepted in the United States of America (“U.S. GAAP”), certain notes and other information have been omitted from the interim unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, for the year ended December 31, 2021, as filed with the SEC. In management’s opinion, the condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows. The results of operations for any interim period are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2021 or any future period. |
Use of estimates | Use of estimates The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. The more significant estimates made by management relate to allowance for doubtful accounts, income taxes, tax receivable agreement liability, and impairment of intangibles and long-lived assets. The Company periodically evaluates the methodologies employed in making its estimates. |
Principles of Consolidation | Principles of Consolidation These condensed consolidated financial statements include the accounts of the Company and its subsidiary companies. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents are short-term, highly liquid investments with a maturity of ninety days or less at the time of purchase. The fair value of our cash and cash equivalents approximates carrying value. At times, cash and cash equivalents exceed the amount insured by the Federal Deposit Insurance Corporation. |
Concentration of credit risk | Concentration of credit risk Our cash, cash equivalents, trade receivables, funds receivable and customer accounts are potentially subject to concentration of credit risk. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. No individual customers represented more than 10% of the Company’s revenue. |
Trade receivables, net | Trade receivables, netTrade receivables are recorded at net realizable value, which includes allowances for doubtful accounts. The Company estimates an allowance for doubtful accounts related to balances that it estimates it cannot collect from merchants. These uncollectible amounts relate to chargebacks, uncollectible merchant fees, and ACH transactions that have been rejected subsequent to the payout date. The Company uses historical write-off data to estimate losses incurred relating to uncollectible accounts. |
Prepaid expenses | Prepaid expenses Prepaid expenses primarily consist of prepaid insurance, rent and supplier invoices. |
Other current assets | Other current assets Other current assets primarily consist of current deferred tax assets, current deferred debt issuance costs for the revolving credit facility (the “Revolver”), other receivables and equipment inventory. |
Funds held for clients and client funds obligation | Funds held for clients and client funds obligation Funds held for clients and client funds obligations result from the Company’s processing services and associated settlement activities, including settlement of payment transactions. Funds held for clients are generated principally from merchant services transactions and are comprised of both settlements’ receivable and cash as of period end. Certain merchant settlement assets that relate to settlement obligations accrued by the Company are held by partner banks. The Company records corresponding settlement obligations for amounts payable to merchants and for payment instruments not yet presented for settlement. Differences in the funds held for clients and client funds obligation are due to timing differences between when transactions are settled and when payment instruments are presented for settlement and are considered to be immaterial. The changes in settlement assets and obligations are presented on a net basis within operating activities in the condensed consolidated statements of cash flows. |
Property and equipment, net | Property and equipment, net Property and equipment, is stated at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets. These lives are 3 years for computers and equipment, 5 years for furniture, fixtures, and office equipment, and the lesser of the asset useful life or remaining lease term for leasehold improvements. Also, the Company capitalizes software development costs and website development costs incurred in accordance with ASC 350-40, Internal Use Software. The useful lives are 3 to 5 years for internal-use software. Repair and maintenance costs are expensed as incurred and included in selling, general and administrative expenses on the condensed consolidated statements of income and other comprehensive income. |
Impairment of long-lived assets | Impairment of long-lived assets The Company evaluates the recoverability of its long-lived assets in accordance with the provisions of ASC 360, Property, Plant and Equipment (“ASC 360”). ASC 360 requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. There was no impairment of long-lived assets recognized in any period presented in the condensed consolidated financial statements. |
Goodwill and other intangible assets, net | Goodwill and other intangible assets, net Goodwill represents the premium paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s business combinations. The Company evaluates goodwill and intangible assets in accordance with ASC 350, Goodwill and Other Intangible Assets (“ASC 350”). ASC 350 requires goodwill to be either qualitatively or quantitatively assessed for impairment annually (or more frequently if impairment indicators arise) for each reporting unit. The Company tests goodwill annually for impairment as of September 30 of each year, and at interim periods upon a potential indication of impairment, using a qualitative approach. The Company tests goodwill for impairment by comparing the estimated fair value of the reporting units to the related carrying value. If the fair value of the reporting units is lower than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds fair value. The loss recognized cannot exceed the carrying amount of the goodwill. There was no goodwill impairment recognized in any period presented in the condensed consolidated financial statements. Intangible assets with finite lives consist of developed technology and customer relationships and are amortized on a straight-line basis over their estimated useful lives. From time to time, the Company acquires customer lists from sales agents in exchange for an upfront cash payment. The purchase of customer lists are treated as asset acquisition, resulting in recording an intangible asset at cost on the date of acquisition. The acquired customer lists intangible assets have a useful life of 5 years. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of our use of the acquired assets or the strategy for our overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net book value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the asset over the remaining amortization period, the Company reduces the net book value of the related intangible asset to fair value and may adjust the remaining amortization period. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the net book value may not be recoverable. There were no indicators of impairment identified nor was impairment recognized in intangible assets in any period presented in the condensed consolidated financial statements. |
Long-term debt and issuance costs | Long-term debt and issuance costs Eligible debt issuance costs associated with the Company's credit facilities are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Debt issuance costs associated with Company's term debt are presented on the Company's condensed consolidated balance sheets as a direct reduction in the carrying value of the associated debt liability. |
Revenue | RevenueThe Company’s business model provides payment services, card processing, and ACH, to merchants through enterprise or vertically focused software partners, direct sales, reseller partners, other referral partners, and a limited number of financial institutions. The Company recognizes processing revenues on bankcard merchant accounts and ACH merchant accounts at the time merchant transactions are processed and periodic fees over the period the service is performed. |
Cost of services exclusion of depreciation and amortization | Cost of services exclusive of depreciation and amortization Cost of services includes card processing costs, ACH costs, and other fees paid to card networks, and equipment expenses directly attributable to payment processing and related services to merchants. These costs are recognized as incurred. Cost of services also includes revenue share amounts paid to reseller and referral partners and are calculated monthly based on monthly merchant activity. These expenses are recognized as transactions are processed. Accrued revenue share represent amounts earned during the period but not yet paid at the end of the period. |
Selling, general and administrative expenses | Selling, general and administrative expenses Selling, general and administrative expenses consist primarily of salaries, stock based compensation expense, wages, commissions, marketing costs, professional services costs, technology costs, occupancy costs of leased space, and bad debt expense. |
Depreciation & Amortization | Depreciation & Amortization Depreciation and amortization consist primarily of amortization of intangible assets, mainly including customer relationships, internal-use software, customer lists, trade names and to a lesser extent depreciation on our investments in property, equipment, and software. We depreciate and amortize our assets on a straight-line basis in accordance with our accounting policies. Repair and maintenance costs are expensed as incurred and included in selling, general and administrative expenses on the condensed consolidated statements of income and other comprehensive income. Customer lists are amortized over a period of 5-15 years depending on the intangible, developed technology 3-5 years, and trade names over 25 years. |
Derivative financial instruments | Derivative financial instruments The Company accounts for its derivative instruments in accordance with ASC 815, Derivatives and Hedging. ASC 815 establishes accounting and reporting standards for derivative instruments requiring the recognition of all derivative instruments as assets or liabilities in the Company’s condensed consolidated balance sheets at fair value. The Company records its derivative instruments as assets or liabilities, depending on its rights or obligations under the applicable derivative contract. Changes in fair value are recognized in earnings in the affected period. The Company uses an interest rate cap contract to manage risk from fluctuations in interest rates on its Term Loan credit agreement. Interest rate caps involve the receipt of variable-rate amounts beyond a specified strike price over the life of the agreement without exchange of the underlying principal amount. The interest rate cap is not designated as a hedging instrument. Changes in the fair value of the interest rate cap are recorded through other income (expense) in the condensed consolidated statement of income and other comprehensive income, other current assets and other current liabilities on the condensed consolidated balance sheet, and in changes in other current assets in the combined statement of cash flows. |
Income taxes | Income taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized principally for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts, using currently enacted tax rates. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company recognizes a tax benefit for uncertain tax positions if the Company believes it is more likely than not that the position will be upheld on audit based solely on the technical merits of the tax position. The Company evaluates uncertain tax positions after the consideration of all available information. Such tax positions must initially and subsequently be estimated as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authorities, assuming full knowledge of the position and relevant facts. The Company's policy is to recognize any interest and penalties related to income taxes as income tax expense in the relevant period. |
Fair-Value Measurements | Fair-Value Measurements ASC 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The determination of fair value is based on the principal or most advantageous market in which the Company could participate and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. Also, determination of fair value assumes that market participants will consider the highest and best use of the asset. The Company uses the hierarchy prescribed in ASC 820 for fair value measurements, based on the available inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels of the hierarchy are as follows: Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date; Level 2 Inputs—Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 Inputs—Unobservable inputs for the asset or liability used to measure fair value allowing for inputs reflecting the Company’s assumptions about what other market participants would use in pricing the asset or liability, including assumptions about risk. |
Recently Issued Pronouncements Not Yet Adopted | Recently Issued Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning an interim period that includes or is subsequent to March 12, 2020, or prospectively from the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. The Company may apply ASU 2020-04 as its contracts referenced in London Interbank Offered Rate (“LIBOR”) are impacted by reference rate reform. The Company is currently evaluating the effect of ASU 2020-04 on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to enhance and simplify various aspects of the accounting for income taxes. The amendments in this update remove certain exceptions to the general principles in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and amends existing guidance to improve consistent application of the accounting for franchise taxes, enacted changes in tax laws or rates and transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual and interim periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the effect of ASU 2019-12 on our condensed consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new guidance amends the hedge accounting model in Accounting Standards Codification (“ASC”) 815 to better portray the economic results of an entity’s risk management activities in its financial statements and simplifies the application of hedge accounting in certain situations. The ASU eliminates the requirement to separately measure and report hedge ineffectiveness. The ASU is effective for annual periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a significant impact on its condensed consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The ASU simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. As a result, an impairment charge will be recorded based on the excess of a reporting unit's carrying amount over its fair value. The amendments of this ASU are effective for reporting periods beginning after December 15, 2022. Early adoption of this ASU is permitted for interim and annual impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of this ASU to have a significant impact on its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU presents a new methodology for calculating credit losses on financial instruments (e.g. trade receivables) based on expected credit losses and expands the types of information companies must use when calculating expected losses. This ASU is effective for annual periods beginning after December 15, 2021 and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The ASU requires lessees to put most leases on their balance sheets. The guidance also modifies the classification criteria and the accounting for sales-type and direct financing leases for lessors and provides new presentation and disclosure requirements for both lessees and lessors. In June 2020, the FASB issued ASU 2020-05 which delayed the effective date of ASC 842. This standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company plans to adopt this ASU on January 1, 2022 and does not expect the adoption of this ASU to have a significant impact on its condensed consolidated financial statements. |
Revenue recognition (Tables)
Revenue recognition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the Company's revenue disaggregated by segment and by source as follows: Integrated Solutions Three Months Ended March 31, 2021 2020 Revenue from contracts with customers Transaction based revenue $ 30,178 $ 26,562 Service based fee revenue 2,646 2,765 Equipment revenue 67 62 Total revenue $ 32,891 $ 29,389 Payment Services Three Months Ended March 31, 2021 2020 Revenue from contracts with customers Transaction based revenue $ 18,052 $ 15,747 Service based fee revenue 4,293 3,972 Equipment revenue 19 31 Total revenue $ 22,364 $ 19,750 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following: March 31, 2021 December 31, 2020 Computers and equipment $ 7,635 $ 7,134 Internal-use software 12,430 10,708 Office equipment 141 130 Furniture and fixtures 1,320 1,320 Leasehold improvements 1,360 1,353 Other equipment 26 26 Total property and equipment 22,912 20,671 Less: accumulated depreciation (8,855) (7,866) Total property and equipment, net $ 14,057 $ 12,805 |
Goodwill and other intangible_2
Goodwill and other intangible assets, net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes Goodwill | The following table presents changes to goodwill for the three months ended March 31, 2021: Integrated Solutions Payments Services Total Balance at December 31, 2020 $ 152,408 $ 53,900 $ 206,308 Measurement period adjustment (Note 3) 29 — 29 Balance at March 31, 2020 $ 152,437 $ 53,900 $ 206,337 |
Schedule of Intangibles Assets Other Than Goodwill | Intangible assets other than goodwill at March 31, 2021 included the following: Weighted Average Useful Life (Years) Useful Lives Gross Carrying Amount at March 31, 2021 Accumulated Amortization Net Carrying Value as of March 31, 2021 Customer Relationships 10.4 5-15 years $ 173,823 $ (55,010) $ 118,813 Developed Technology 4.3 3-5 years 25,520 (14,854) 10,666 Trade name 25.0 25 years 4,190 (382) 3,808 8.0 $ 203,533 $ (70,246) $ 133,287 Intangible assets other than goodwill at December 31, 2020 included the following: Weighted Average Useful Life (Years) Useful Lives Gross Carrying Amount at December 31, 2020 Accumulated Amortization Net Carrying Value as of December 31, 2020 Customer Relationships 10.4 5-15 years $ 167,158 $ (50,477) $ 116,681 Developed Technology 4.2 3-5 years 25,520 (13,435) 12,085 Trade name 25.0 25 years 4,190 (340) 3,850 8.6 $ 196,868 $ (64,252) $ 132,616 |
Summary of Expected Future Amortization Expense for Intangible Assets | The following table shows the expected future amortization expense for intangible assets at March 31, 2021: Expected Future Amortization Expense 2021 - remaining $ 17,213 2022 21,363 2023 21,161 2024 19,541 2025 18,585 Thereafter 35,424 Total expected future amortization expense $ 133,287 |
Long-term debt (Tables)
Long-term debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | The Company’s long-term debt consisted of the following for the three months ended March 31, 2021 and year ended December 31, 2020: March 31, 2021 December 31, 2020 Term loan credit agreement $ 228,086 $ 228,677 Debt issuance costs, net (5,927) (6,161) Total debt 222,159 222,516 Less: current portion of debt (2,364) (2,364) Total long-term debt $ 219,795 $ 220,152 |
Schedule of Annual Principal Payments | Annual principal payments on the Term Loan for the remainder of 2021 and the following years is as follows: Future Principal Payments 2021 - remaining $ 1,773 2022 2,364 2023 2,364 2024 2,364 2025 2,364 Thereafter 216,857 Total future principal payments $ 228,086 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Summary of RSUs Activity | A summary of RSUs activity under the Omnibus Incentive Plan is as follows: Number of RSUs Weighted-Average Grant Date Fair Value Weighted-Average Remaining Term December 31, 2020 balance 230,000 $ 13.73 3.4 years Granted 104,090 $ 13.87 1.4 years March 31, 2021 balance 334,090 $ 13.77 2.8 years |
Schedule of Units Associated with Share-based Compensation | The total number of units associated with share-based compensation granted and forfeited during the period from December 31, 2019 to March 31, 2020 and December 31, 2020 to March 31, 2021 is as follows: Total Units December 31, 2019 balance 43,451,157 Granted 409,181 Forfeited — March 31, 2020 balance 43,860,338 December 31, 2020 balance 42,881,437 Granted — Forfeited — March 31, 2021 balance 42,881,437 |
Summary of Computation of Basic and Diluted Earnings Per Share | The following table provides the computation of basic and diluted earnings per share: Three Months Ended March 31, 2021 2020 Numerator: Net income (loss) $ 1,045 $ (675) Denominator: Weighted average common shares 117,808,563 54,534,022 Add effect of dilutive securities: RSUs 6,624 — Warrants 1,727,098 — Weighted average common shares assuming dilution 119,542,285 54,534,022 Earnings per share: Basic $ 0.01 $ (0.01) Diluted $ 0.01 $ (0.01) Anti-dilutive shares excluded from calculation of diluted EPS: Restricted stock units - granted 50,000 — Stock options - granted 185,000 — Earnout shares 19,700,000 — Total anti-dilutive shares 19,935,000 — |
Commitments and contingencies (
Commitments and contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | The Company’s future minimum lease payments under such agreements at March 31, 2021 were approximately: Year ending December 31, (In thousands) 2021 - remaining $ 974 2022 1,294 2023 1,271 2024 1,004 2025 899 Thereafter 609 Total $ 6,051 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Reconciliation of Segment Gross Profit | The following table presents total revenues and segment gross profit, excluding depreciation and amortization, for each reportable segment and includes a reconciliation of segment gross profit to total U.S. GAAP operating profit, excluding depreciation and amortization, by including certain corporate-level expenses. Three Months Ended March 31, 2021 2020 Integrated Solutions $ 32,891 $ 29,389 Payment Services 22,364 19,750 Total Revenue 55,255 49,139 Integrated Solutions gross profit 18,200 15,484 Payment Services gross profit 10,918 9,157 Total segment gross profit 29,118 24,641 Selling, general & administrative expenses (16,914) (15,580) Depreciation and amortization (7,032) (5,996) Interest expense (4,043) (4,645) Other income (expense) 492 (17) Income (loss) before income taxes $ 1,621 $ (1,597) |
Organization, basis of presen_3
Organization, basis of presentation and summary of accounting policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Allowance for doubtful accounts | $ 1,300 | $ 1,200 |
Trade name | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, useful life | 25 years | |
Developed Technology | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, useful life | 5 years | |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Minimum | Customer lists | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, useful life | 5 years | |
Minimum | Developed Technology | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, useful life | 3 years | 3 years |
Minimum | Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Maximum | Customer lists | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, useful life | 15 years | |
Maximum | Developed Technology | ||
Property, Plant and Equipment [Line Items] | ||
Intangible assets, useful life | 5 years | 5 years |
Maximum | Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years |
Revenue recognition - Disaggreg
Revenue recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 55,255 | $ 49,139 |
Integrated Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 32,891 | 29,389 |
Payments Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 22,364 | 19,750 |
Transaction based revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 104,519 | 101,041 |
Transaction based revenue | Integrated Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 30,178 | 26,562 |
Transaction based revenue | Payments Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 18,052 | 15,747 |
Service based fee revenue | Integrated Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 2,646 | 2,765 |
Service based fee revenue | Payments Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,293 | 3,972 |
Equipment revenue | Integrated Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 67 | 62 |
Equipment revenue | Payments Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 19 | $ 31 |
Business combination & acquis_2
Business combination & acquisitions (Details) - USD ($) $ in Thousands | Oct. 01, 2020 | Mar. 31, 2021 |
Business Acquisition [Line Items] | ||
Goodwill increase | $ 29 | |
The Payment Group, LLC | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 22,270 |
Property and equipment, net - (
Property and equipment, net - (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 22,912 | $ 20,671 | |
Less: accumulated depreciation | (8,855) | (7,866) | |
Property and equipment, net | 14,057 | 12,805 | |
Depreciation | 1,038 | $ 980 | |
Computers and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 7,635 | 7,134 | |
Internal-use software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 12,430 | 10,708 | |
Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 141 | 130 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,320 | 1,320 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,360 | 1,353 | |
Other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 26 | $ 26 |
Goodwill and other intangible_3
Goodwill and other intangible assets, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 206,337 | $ 206,308 | |
Total expected future amortization expense | 133,287 | $ 132,616 | |
Amortization expense | $ 5,994 | $ 5,016 |
Goodwill and other intangible_4
Goodwill and other intangible assets, net - Schedule of Changes in Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 206,308 |
Measurement period adjustment (Note 3) | 29 |
Ending balance | 206,337 |
Integrated Solutions | |
Goodwill [Roll Forward] | |
Beginning balance | 152,408 |
Ending balance | 152,437 |
Payments Services | |
Goodwill [Roll Forward] | |
Beginning balance | 53,900 |
Measurement period adjustment (Note 3) | 0 |
Ending balance | $ 53,900 |
Goodwill and other intangible_5
Goodwill and other intangible assets, net - Schedule of Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 203,533 | $ 196,868 |
Accumulated Amortization | (70,246) | (64,252) |
Total | $ 133,287 | $ 132,616 |
Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 8 years | 8 years 7 months 6 days |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 173,823 | $ 167,158 |
Accumulated Amortization | (55,010) | (50,477) |
Total | $ 118,813 | $ 116,681 |
Customer Relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 5 years | 5 years |
Customer Relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 15 years | 15 years |
Customer Relationships | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 10 years 4 months 24 days | 10 years 4 months 24 days |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 5 years | |
Gross Carrying Amount | $ 25,520 | $ 25,520 |
Accumulated Amortization | (14,854) | (13,435) |
Total | $ 10,666 | $ 12,085 |
Developed Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 3 years | 3 years |
Developed Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 5 years | 5 years |
Developed Technology | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 4 years 3 months 18 days | 4 years 2 months 12 days |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 25 years | |
Gross Carrying Amount | $ 4,190 | $ 4,190 |
Accumulated Amortization | (382) | (340) |
Total | $ 3,808 | $ 3,850 |
Trade name | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 25 years | |
Trade name | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Lives | 25 years | 25 years |
Goodwill and other intangible_6
Goodwill and other intangible assets, net - Summary of Expected Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 - remaining | $ 17,213 | |
2022 | 21,363 | |
2023 | 21,161 | |
2024 | 19,541 | |
2025 | 18,585 | |
Thereafter | 35,424 | |
Total | $ 133,287 | $ 132,616 |
Long-term debt - Summary of Lon
Long-term debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Term loan credit agreement | $ 228,086 | $ 228,677 |
Debt issuance costs, net | (5,927) | (6,161) |
Total debt | 222,159 | 222,516 |
Less: current portion of debt | 2,364 | 2,364 |
Long-term debt | $ 219,795 | $ 220,152 |
Long-term debt - Narrative (Det
Long-term debt - Narrative (Details) $ in Thousands | Jul. 01, 2017 | Jul. 31, 2018 | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Aug. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | ||||||
Maximum leverage ratio | 7.25 | |||||
Debt issuance costs, net | $ (5,927) | $ (6,161) | ||||
Long-term debt issuance costs | 4,043 | $ 4,645 | ||||
Amortization of debt issuance costs | 259 | 274 | ||||
Interest Expense, Debt, Excluding Amortization | 3,573 | 4,096 | ||||
Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
LIBOR floor rate | 1.00% | |||||
Credit Agreement | LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate | 6.00% | 5.25% | ||||
Credit Agreement | LIBOR | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate | 1.00% | |||||
Term Loan | Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Available under credit afreement | $ 235,500 | |||||
Quarterly payment | 591 | $ 591 | ||||
Line of Credit | Credit Agreement | Revolver | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit agreement amount | $ 25,000 | |||||
Unamortized debt issuance costs | $ 432 | $ 457 | ||||
Administrative fees, percent | 0.50% |
Long-term debt - Annual Princip
Long-term debt - Annual Principal Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2021 - remaining | $ 1,773 | |
2022 | 2,364 | |
2023 | 2,364 | |
2024 | 2,364 | |
2025 | 2,364 | |
Thereafter | 216,857 | |
Term loan credit agreement | $ 228,086 | $ 228,677 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - Interest Rate Cap - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Feb. 03, 2021 | |
Derivative [Line Items] | ||
Loss recognized in other income (expense) | $ (41) | |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Notional amount | $ 171,525 | |
Premium paid for right to receive payments | $ 67 | |
Cap rate | 1.00% | |
Fair value of derivative instrument | $ 108 |
Equity - Narrative (Details)
Equity - Narrative (Details) $ / shares in Units, $ in Thousands | Mar. 17, 2021USD ($)$ / sharesshares | Dec. 22, 2020USD ($)installment$ / sharesshares | Mar. 31, 2021USD ($)awardType$ / sharesshares | Mar. 31, 2020USD ($)shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019shares |
Class of Stock [Line Items] | ||||||
Common stock outstanding (in shares) | 126,697,492 | 116,697,441 | ||||
Common stock, contingently issuable (in shares) | 5,681,812 | |||||
Common stock, additional shares to be issued (in shares) | 14,018,188 | |||||
Common stock, additional contingently issuable (in shares) | 19,700,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Cash proceeds from stock offernig | $ | $ 122,500 | $ 116,970 | $ 0 | |||
Stock offering, transaction costs | $ | $ 5,530 | |||||
Number of awards | awardType | 2 | |||||
Warrants outstanding (in shares) | 17,714,949 | |||||
Warrant exercise price (in dollars per share) | $ / shares | $ 11.50 | |||||
Stock option | ||||||
Class of Stock [Line Items] | ||||||
Fair value assumption, expected term | 6 years 6 months | |||||
Fair value assumption, risk free interest rate | 0.57% | |||||
Fair value assumption, expected volatility | 29.90% | |||||
Fair value assumption, dividend yield | 0.00% | 0.00% | ||||
Fair value assumption, weighted-average strike price (in dollars per share) | $ / shares | $ 13.73 | |||||
Class C incentive units | ||||||
Class of Stock [Line Items] | ||||||
Share-based compensation expense | $ | $ 259 | $ 392 | ||||
Fair value assumption, expected term | 5 years | |||||
Fair value assumption, risk free interest rate | 0.30% | |||||
Fair value assumption, expected volatility | 60.00% | |||||
Vested (in shares) | 20,357,438 | |||||
Class C incentive units issued (in shares) | 42,881,437 | 43,860,338 | 42,881,437 | 43,451,157 | ||
Enterprise value | $ | $ 574 | |||||
Weighted average cost of capital | 12.00% | |||||
EBITDA multiple, last twelve months | 13 | |||||
EBITDA multiple, prior year | 12.5 | |||||
EBITDA multiple, current year | 10.5 | |||||
EBITDA multiple, next twelve months | 12.5 | |||||
Class C incentive units | Five-year vesting period | ||||||
Class of Stock [Line Items] | ||||||
Class C incentive units issued (in shares) | 42,583,141 | 42,583,437 | ||||
Vesting period | 5 years | 5 years | ||||
Class C incentive units | One-year vesting period | ||||||
Class of Stock [Line Items] | ||||||
Class C incentive units issued (in shares) | 298,296 | 298,000 | ||||
Vesting period | 1 year | 1 year | ||||
Omnibus Incentive Plan | ||||||
Class of Stock [Line Items] | ||||||
Maximum shares allowed for issuance (in shares) | 8,800,000 | |||||
Share-based compensation expense | $ | $ 451 | $ 0 | ||||
Granted (in shares) | 185,000 | |||||
Grant date fair value | $ | $ 800 | |||||
Omnibus Incentive Plan | Stock option | ||||||
Class of Stock [Line Items] | ||||||
Number of installments | installment | 5 | |||||
Contractual term | 10 years | |||||
Public Stock Offering | ||||||
Class of Stock [Line Items] | ||||||
Shares sold in offering (in shares) | 20,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
Public Stock Offering - Underwriters | ||||||
Class of Stock [Line Items] | ||||||
Shares sold in offering (in shares) | 10,000,000 | |||||
Share price (in dollars per share) | $ / shares | $ 12.25 |
Equity - Summary of RSUs Activi
Equity - Summary of RSUs Activity (Details) - RSUs - Omnibus Incentive Plan - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Number of RSUs | ||
Beginning balance (in shares) | 230,000 | |
Granted (in shares) | 104,090 | |
Ending balance (in shares) | 334,090 | 230,000 |
Weighted-Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 13.73 | |
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | 13.87 | |
Ending balance (in dollars per share) | $ 13.77 | $ 13.73 |
Weighted-Average Remaining Term | 2 years 9 months 18 days | 3 years 4 months 24 days |
Weighted-Average Remaining Term, Granted | 1 year 4 months 24 days |
Equity - Schedule of Units Asso
Equity - Schedule of Units Associated with Share-based Compensation (Details) - Class C incentive units - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total Units | ||
Beginning balance (in shares) | 42,881,437 | 43,451,157 |
Granted (in shares) | 0 | 409,181 |
Forfeited (in shares) | 0 | 0 |
Ending balance (in shares) | 42,881,437 | 43,860,338 |
Equity - Summary of Computation
Equity - Summary of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator | ||
Net loss | $ 1,045 | $ (675) |
Denominator | ||
Weighted average common shares (in shares) | 117,808,563 | 54,534,022 |
RSUs (in shares) | 6,624 | 0 |
Warrants (in shares) | 1,727,098 | 0 |
Weighted average common shares assuming dilution (in shares) | 119,542,285 | 54,534,022 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.01 | $ (0.01) |
Diluted (in dollars per share) | $ 0.01 | $ (0.01) |
Anti-dilutive shares excluded from calculation of diluted EPS (in shares) | 19,935,000 | 0 |
Restricted stock units - granted | ||
Earnings per share | ||
Anti-dilutive shares excluded from calculation of diluted EPS (in shares) | 50,000 | 0 |
Stock options - granted | ||
Earnings per share | ||
Anti-dilutive shares excluded from calculation of diluted EPS (in shares) | 185,000 | 0 |
Earnout shares | ||
Earnings per share | ||
Anti-dilutive shares excluded from calculation of diluted EPS (in shares) | 19,700,000 | 0 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 49.26% | 57.72% | |
Income tax (expense) benefit | $ (576) | $ 922 | |
Current income tax expense (benefit) | 740 | $ 1,874 | |
Valuation allowance | $ 9,493 | $ 9,459 |
Commitments and contingencies -
Commitments and contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2021 - remaining | $ 974 | |
2022 | 1,294 | |
2023 | 1,271 | |
2024 | 1,004 | |
2025 | 899 | |
Thereafter | 609 | |
Total | 6,051 | |
Rent expense | $ 412 | $ 400 |
Commitments and contingencies_2
Commitments and contingencies - Liabilities under Tax Receivable Agreement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Tax receivable obligation, percent | 85.00% | |
Tax receivable agreement liability | $ 19,175 | $ 19,627 |
Tax receivable agreement, total potential payments percentage | 100.00% | |
Tax receivable agreement, total potential payments | $ 31,849 |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Long-term debt | $ 222,159 | $ 222,516 | |
Debt issuance costs, net | 5,927 | 6,161 | |
Investor | |||
Related Party Transaction [Line Items] | |||
Interest expense | 3,573 | $ 4,096 | |
Long-term debt | 222,159 | 222,516 | |
Debt issuance costs, net | $ 5,927 | $ 6,161 |
Defined contribution plan (Deta
Defined contribution plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Employer matching contribution, percent of match | 50.00% | |
Employer matching contribution, percent of employees' gross pay | 7.00% | |
Contributions | $ 243 | $ 232 |
Segments (Details)
Segments (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)segment | Mar. 31, 2020USD ($) | |
Revenue, Major Customer [Line Items] | ||
Number of operating segments | segment | 2 | |
Number of reportable segments | segment | 2 | |
Total revenue | $ 55,255 | $ 49,139 |
Total segment gross profit | 29,118 | 24,641 |
Selling, general & administrative expenses | (16,914) | (15,580) |
Depreciation and amortization | (7,032) | (5,996) |
Interest expense | (4,043) | (4,645) |
Other income (expense) | 492 | (17) |
Income (loss) before income taxes | 1,621 | (1,597) |
Integrated Solutions | ||
Revenue, Major Customer [Line Items] | ||
Total revenue | 32,891 | 29,389 |
Total segment gross profit | 18,200 | 15,484 |
Payments Services | ||
Revenue, Major Customer [Line Items] | ||
Total revenue | 22,364 | 19,750 |
Total segment gross profit | $ 10,918 | $ 9,157 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Paragon Payment Solutions Acquisition $ in Millions | Apr. 23, 2021USD ($) |
Subsequent Event [Line Items] | |
Aggregate purchase price | $ 27.5 |
Purchase price | 20 |
Common stock | 7.5 |
Amount that may become payable from achievement of certain future performance metrics | $ 5 |