Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 08, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40297 | |
Entity Registrant Name | N-able, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-4069861 | |
Entity Address, Address Line One | 30 Corporate Drive | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Burlington | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01803 | |
City Area Code | 781 | |
Local Phone Number | 328-6490 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | NABL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 182,037,246 | |
Entity Central Index Key | 0001834488 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 98,080 | $ 98,847 |
Accounts receivable, net of allowances of $1,239 and $1,330 as of March 31, 2023 and December 31, 2022, respectively | 36,003 | 34,798 |
Income tax receivable | 13,641 | 7,814 |
Prepaid and other current assets | 14,893 | 12,697 |
Total current assets | 162,617 | 154,156 |
Property and equipment, net | 37,061 | 37,404 |
Operating lease right-of-use assets | 30,516 | 31,752 |
Deferred taxes | 1,571 | 795 |
Goodwill | 833,015 | 828,795 |
Intangible assets, net | 7,999 | 8,873 |
Other assets, net | 19,799 | 17,082 |
Total assets | 1,092,578 | 1,078,857 |
Current liabilities: | ||
Accounts payable | 3,141 | 3,544 |
Accrued liabilities and other | 32,303 | 35,630 |
Current operating lease liabilities | 5,678 | 5,771 |
Income taxes payable | 6,822 | 1,629 |
Current portion of deferred revenue | 12,407 | 11,740 |
Current debt obligation | 3,500 | 3,500 |
Total current liabilities | 63,851 | 61,814 |
Long-term liabilities: | ||
Deferred revenue, net of current portion | 231 | 387 |
Non-current deferred taxes | 1,983 | 2,783 |
Non-current operating lease liabilities | 31,765 | 33,110 |
Long-term debt, net of current portion | 333,007 | 333,488 |
Other long-term liabilities | 5,546 | 5,204 |
Total liabilities | 436,383 | 436,786 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value: 550,000,000 shares authorized and 182,036,421 and 180,849,537 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 182 | 181 |
Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 0 | 0 |
Additional paid-in capital | 637,752 | 632,871 |
Accumulated other comprehensive loss | (2,112) | (7,815) |
Retained earnings | 20,373 | 16,834 |
Total stockholders' equity | 656,195 | 642,071 |
Total liabilities and stockholders' equity | $ 1,092,578 | $ 1,078,857 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Allowance on accounts receivable | $ 1,239 | $ 1,330 |
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 550,000,000 | 550,000,000 |
Common stock, shares issued (in shares) | 182,036,421 | 180,849,537 |
Common stock outstanding (in shares) | 182,036,421 | 180,849,537 |
Preferred stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Subscription and other revenue | $ 99,818 | $ 90,860 |
Cost of revenue: | ||
Cost of revenue | 15,753 | 13,281 |
Amortization of acquired technologies | 456 | 982 |
Total cost of revenue | 16,209 | 14,263 |
Gross profit | 83,609 | 76,597 |
Operating expenses: | ||
Sales and marketing | 32,563 | 31,054 |
Research and development | 18,810 | 15,385 |
General and administrative | 17,348 | 17,629 |
Amortization of acquired intangibles | 564 | 1,461 |
Total operating expenses | 69,285 | 65,529 |
Operating income | 14,324 | 11,068 |
Other expense: | ||
Interest expense, net | (7,200) | (3,526) |
Other income, net | 988 | 1,059 |
Total other expense | (6,212) | (2,467) |
Income before income taxes | 8,112 | 8,601 |
Income tax expense | 4,573 | 3,500 |
Net income | $ 3,539 | $ 5,101 |
Net income per share: | ||
Basic earnings per share (in dollars per share) | $ 0.02 | $ 0.03 |
Diluted earnings per share (in dollars per share) | $ 0.02 | $ 0.03 |
Weighted-average shares used to compute net income per share: | ||
Shares used in computation of basic earnings per share (in shares) | 181,435 | 179,460 |
Shares used in computation of diluted earnings per share (in shares) | 183,191 | 180,184 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 3,539 | $ 5,101 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | 5,703 | (9,167) |
Other comprehensive income (loss) | 5,703 | (9,167) |
Comprehensive income (loss) | $ 9,242 | $ (4,066) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 179,049,000 | ||||
Balance at beginning of period at Dec. 31, 2021 | $ 618,355 | $ 179 | $ 602,996 | $ 15,053 | $ 127 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,101 | 5,101 | |||
Foreign currency translation adjustment | (9,167) | (9,167) | |||
Exercise of stock options (in shares) | 13,000 | ||||
Exercise of stock options | 16 | 16 | |||
Restricted stock units issued, net of shares withheld for taxes (in shares) | 746,000 | ||||
Restricted stock units issued, net of shares withheld for taxes | (4,553) | $ 1 | (4,554) | ||
Issuance of stock (in shares) | 51,000 | ||||
Issuance of stock | 0 | ||||
Issuance of stock under employee stock purchase plan (in shares) | 57,000 | ||||
Issuance of stock under employee stock purchase plan | 568 | 568 | |||
Stock-based compensation | 8,235 | 8,235 | |||
Balance at end of period (in shares) at Mar. 31, 2022 | 179,916,000 | ||||
Balance at end of period at Mar. 31, 2022 | $ 618,555 | $ 180 | 607,261 | 5,886 | 5,228 |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 180,849,537 | 180,850,000 | |||
Balance at beginning of period at Dec. 31, 2022 | $ 642,071 | $ 181 | 632,871 | (7,815) | 16,834 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 3,539 | 3,539 | |||
Foreign currency translation adjustment | 5,703 | 5,703 | |||
Exercise of stock options (in shares) | 26,000 | ||||
Exercise of stock options | 21 | 21 | |||
Restricted stock units issued, net of shares withheld for taxes (in shares) | 1,069,000 | ||||
Restricted stock units issued, net of shares withheld for taxes | (5,837) | $ 1 | (5,838) | ||
Issuance of stock (in shares) | 3,000 | ||||
Issuance of stock | 0 | ||||
Issuance of stock under employee stock purchase plan (in shares) | 88,000 | ||||
Issuance of stock under employee stock purchase plan | 771 | 771 | |||
Stock-based compensation | $ 9,927 | 9,927 | |||
Balance at end of period (in shares) at Mar. 31, 2023 | 182,036,421 | 182,036,000 | |||
Balance at end of period at Mar. 31, 2023 | $ 656,195 | $ 182 | $ 637,752 | $ (2,112) | $ 20,373 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 3,539 | $ 5,101 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 5,667 | 6,338 |
Benefit from doubtful accounts | (91) | (17) |
Stock-based compensation expense | 9,850 | 8,169 |
Deferred taxes | 8 | 480 |
Amortization of debt issuance costs | 394 | 398 |
Operating lease right-of-use assets, net | (110) | (892) |
Loss (gain) on foreign currency exchange rates | 25 | (825) |
Loss on contingent consideration | 240 | 0 |
Other non-cash expenses | 31 | 39 |
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations: | ||
Accounts receivable | (1,393) | (1,097) |
Income tax receivable | (5,816) | (972) |
Prepaid expenses and other assets | (2,181) | (59) |
Accounts payable | (270) | (2,043) |
Due to and from affiliates | 0 | (394) |
Accrued liabilities and other | (3,837) | (4,945) |
Income taxes payable | 5,297 | 3,363 |
Deferred revenue | 509 | 673 |
Other long-term assets | (1,275) | (187) |
Other long-term liabilities | 44 | 0 |
Net cash provided by operating activities | 10,631 | 13,130 |
Cash flows from investing activities | ||
Purchases of property and equipment | (3,404) | (2,704) |
Purchases of intangible assets | (2,211) | (1,141) |
Net cash used in investing activities | (5,615) | (3,845) |
Cash flows from financing activities | ||
Payments of tax withholding obligations related to restricted stock units | (5,838) | (4,553) |
Exercise of stock options | 21 | 16 |
Proceeds from issuance of common stock under employee stock purchase plan | 771 | 568 |
Repayments of borrowings from Credit Agreement | (875) | (875) |
Net cash used in financing activities | (5,921) | (4,844) |
Effect of exchange rate changes on cash and cash equivalents | 138 | (738) |
Net (decrease) increase in cash and cash equivalents | (767) | 3,703 |
Cash and cash equivalents | ||
Beginning of period | 98,847 | 66,736 |
End of period | 98,080 | 70,439 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 6,689 | 3,057 |
Cash paid for income taxes | 4,665 | 707 |
Supplemental disclosure of non-cash activities: | ||
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses | (163) | (483) |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 0 | $ 967 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Background On August 6, 2020, SolarWinds Corporation (“SolarWinds” or “Parent”) announced that its board of directors had authorized management to explore a potential spin-off of its managed service provider (“MSP”) business into our company, a newly created and separately traded public company, and separate into two distinct, publicly traded companies (the “Separation”). On July 19, 2021, SolarWinds completed the Separation through a pro-rata distribution (the “Distribution”) of all the outstanding shares of our common stock it held to the stockholders of record of SolarWinds as of the close of business on July 12, 2021 (the “Record Date”). Each SolarWinds stockholder of record received one share of our common stock, $0.001 par value, for every two shares of SolarWinds common stock, $0.001 par value, held by such stockholder as of the close of business on the Record Date. SolarWinds distributed 158,020,156 shares of our common stock in the Distribution, which was effective at 11:59 p.m., Eastern Time, on July 19, 2021. The Distribution reflected 316,040,312 shares of SolarWinds common stock outstanding on July 12, 2021 at a distribution ratio of one share of our common stock for every two shares of SolarWinds common stock. In addition, on July 19, 2021, and prior to completion of the Distribution, we issued 20,623,282 newly-issued shares of our common stock in connection with a private placement of N-able’s common stock (the “Private Placement”). As a result of the Distribution, we became an independent public company and our common stock is listed under the symbol “NABL” on the New York Stock Exchange. Description of Business N-able, Inc., a Delaware corporation, together with its subsidiaries is a leading global provider of cloud-based software solutions for MSPs, enabling them to support digital transformation and growth for small and medium-sized enterprises (“SMEs”), which we define as those enterprises having less than 1,000 employees. With a flexible technology platform and powerful integrations, N-able makes it easy for MSPs to monitor, manage, and protect their end-customer systems, data, and networks. Our growing portfolio of security, automation, and backup and recovery solutions is built for IT services management professionals. N-able simplifies complex ecosystems and enables customers to solve their most pressing challenges. In addition, we provide extensive, proactive support—through enriching partner programs, hands-on training, and growth resources—to help MSPs deliver exceptional value and achieve success at scale. Through our multi-dimensional land and expand model and global presence, we are able to drive strong recurring revenue growth and profitability. N-able qualifies as an “emerging growth company” (“EGC”) 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”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation Our interim Consolidated Financial Statements do not include all of the information and footnotes required by United States of America generally accepted accounting principles (“GAAP”) for complete financial statements. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the audited Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022, referred to as our “2022 Annual Report.” Use of Estimates The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The impact from the rapidly changing market and economic conditions in part due to the coronavirus disease 2019 (“COVID-19”) pandemic on our business, results of operations and financial condition is uncertain. We have made estimates of the impact of the COVID-19 pandemic within our financial statements as of and for the three months ended March 31, 2023 and 2022 which did not result in material adjustments. The estimates assessed included, but were not limited to, allowances for credit losses, the carrying values of goodwill and intangible assets and other long-lived assets, valuation allowances for tax assets and revenue recognition and may change in future periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include: • the valuation of goodwill, intangibles, long-lived assets and contingent consideration; • revenue recognition; and • income taxes. Recently Issued Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The standard became effective upon issuance and may be applied to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” extending the sunset date of the relief provided under ASU No. 2020-04 to December 31, 2024. We do not believe this standard will have a material impact on our consolidated financial statements. Recently Adopted Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers,” instead of at fair value on the acquisition date as previously required by ASC 805, “Business Combinations.” The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for acquired revenue contracts and revenue contracts not acquired in a business combination. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2022, and early adoption is permitted. The updated guidance will be applied prospectively to business combinations occurring during or after the fiscal year of adoption. We adopted this standard as of January 1, 2023. The adoption of the standard did not have a material impact on our consolidated financial statements for the three months ended March 31, 2023. Money Market Fund Financial Assets As of March 31, 2023 and December 31, 2022, we have money market fund financial assets of $67.4 million and $48.4 million, respectively, which are included in “cash and cash equivalents” in our Consolidated Balance Sheets. See “Fair Value Measurements” below and Note 6. Fair Value Measurements for further details regarding the fair value measurements of our money market fund financial assets. Fair Value Measurements We apply the authoritative guidance on fair value measurements for financial assets and liabilities, such as our money market fund financial assets and contingent consideration liabilities, that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows: Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us. Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1. Level 3: Inputs that are unobservable in the marketplace and significant to the valuation. The carrying amounts reported in our Consolidated Balance Sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. See Note 6. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, the carrying value of our outstanding debt approximates its estimated fair value as the interest rate on the debt is adjusted for changes in market rates. See Note 8. Debt for additional information regarding our debt. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component are summarized below: Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss (in thousands) Balance at December 31, 2022 $ (7,815) $ (7,815) Other comprehensive income before reclassification 5,703 5,703 Net current period other comprehensive income 5,703 5,703 Balance at March 31, 2023 $ (2,112) $ (2,112) Revenue Our revenue consists of the following: Three Months Ended March 31, 2023 2022 (in thousands) Subscription revenue $ 97,442 $ 88,635 Other revenue 2,376 2,225 Total subscription and other revenue $ 99,818 $ 90,860 During the three month periods ended March 31, 2023 and 2022, respectively, we recognized the following revenue from subscription and other services at a point in time and over time: Three Months Ended March 31, 2023 2022 (in thousands) Revenue recognized at a point in time $ 15,279 $ 15,514 Revenue recognized over time 84,539 75,346 Total revenue recognized $ 99,818 $ 90,860 Deferred Revenue Deferred revenue primarily consists of transaction prices allocated to remaining performance obligations from annually billed subscription agreements and maintenance services associated with our historical sales of perpetual license products which are delivered over time. Certain of our maintenance agreements are billed annually in advance for services to be performed over a 12-month period. We initially record the amounts allocated to maintenance performance obligations as deferred revenue and recognize these amounts ratably on a daily basis over the term of the maintenance agreement. Details of our total deferred revenue balance was as follows: Total Deferred Revenue (in thousands) Balance at December 31, 2022 $ 12,127 Deferred revenue recognized (5,167) Additional amounts deferred 5,678 Balance at March 31, 2023 $ 12,638 We expect to recognize revenue related to the following remaining performance obligations as of March 31, 2023 as follows: Revenue Recognition Expected by Period Total Less than 1 year 1-3 years More than 3 years (in thousands) Expected recognition of remaining performance obligations $ 13,318 $ 12,935 $ 382 $ 1 Cost of Revenue Amortization of Acquired Technologies. Amortization of acquired technologies included in cost of revenue relate to our subscription products as follows: Three Months Ended March 31, 2023 2022 (in thousands) Amortization of acquired technologies $ 456 $ 982 |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On July 1, 2022, we completed the acquisition of all the outstanding equity of Spinpanel B.V. (“Spinpanel”) for a total consideration of up to approximately $20.0 million, including up to $10.0 million payable upon the achievement of certain revenue metrics through July 1, 2025. We funded the transaction with cash on hand. Based in the Netherlands, Spinpanel is a multi-tenant Microsoft 365 management and automation platform built for Microsoft Cloud Solution Providers to automate the provisioning, security, and management of all Microsoft tenants, users, and licenses in a single consolidated hub. The acquisition of Spinpanel is intended to help our partners optimize the value of their Microsoft Cloud products and, in turn, give Spinpanel customers access to a wider array of IT management and security solutions. We incurred net acquisition-related costs of $0.3 million during the year ended December 31, 2022, which are included in general and administrative expense. Goodwill and acquired identifiable intangible assets for this acquisition are not deductible for tax purposes. The initial determination of the fair value of the assets acquired and liabilities assumed is based on a preliminary valuation and the estimates and assumptions for these items are subject to change as we obtain additional information during the measurement period. Subsequent changes to the purchase price or other fair value adjustments determined during the measurement period will be recorded as an adjustment to goodwill. During the three months ended March 31, 2023, a measurement period adjustment of $1.6 million was recorded to non-current deferred tax liabilities and goodwill. See Note 4. Goodwill for additional information regarding changes in goodwill for the three months ended March 31, 2023. The following table summarizes the amounts recognized for the assets acquired and liabilities assumed: (in thousands) Current assets, including cash acquired of $6 $ 128 Property and equipment, net 48 Current liabilities (1,199) Non-current deferred tax liabilities (764) Identifiable intangible assets Developed technology 8,890 Customer relationships 80 Goodwill 7,176 Total assets acquired, net $ 14,359 The following table summarizes the total consideration for the assets acquired and liabilities assumed: (in thousands) Cash paid, net of cash acquired of $6 $ 9,199 Contingent consideration 5,160 Total consideration, net $ 14,359 The following table summarizes the fair value of the acquired identifiable intangible assets and weighted-average useful life by category: Fair Value Weighted-Average Useful Life (in thousands) (in years) Developed technology $ 8,890 5 Customer relationships 80 3 Total identifiable intangible assets $ 8,970 The results of operations related to Spinpanel since the acquisition date are included in our Consolidated Financial Statements during the three months ended March 31, 2023. As noted above, total consideration includes up to $10.0 million payable upon the achievement of certain revenue metrics through July 1, 2025. The contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains and losses recognized within general and administrative expense in our Consolidated Statements of Operations. The fair value of this contingent consideration was $5.2 million at the date of acquisition and $5.1 million as of December 31, 2022. As of March 31, 2023, the fair value of this contingent consideration is $5.3 million, resulting in the recognition of a loss of $0.2 million for the three months ended March 31, 2023. The current portion of the contingent consideration of $0.2 million is included in accrued liabilities and other and the non-current portion of $5.1 million is included in other long-term liabilities in our Consolidated Balance Sheets as of March 31, 2023. See Note 6. Fair Value Measurements , Note 7. Accrued Liabilities and Other , and Note 11. Commitments and Contingencies for additional information regarding our contingent consideration liabilities. Pro forma information for the acquisition has not been provided because the impact of the historical financials on our revenue, net income and net income per share is not material. We recognize revenue on the acquired products in accordance with our revenue recognition policy as described in Note 2. Summary of Significant Accounting Policies |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table reflects the changes in goodwill for the three months ended March 31, 2023: (in thousands) Balance at December 31, 2022 $ 828,795 Acquisitions (1,550) Foreign currency translation 5,770 Balance at March 31, 2023 $ 833,015 |
Relationship with Parent and Re
Relationship with Parent and Related Entities | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Relationship with Parent and Related Entities | Relationship with Parent and Related Entities Due to and from Affiliates There were no amounts due to or from SolarWinds as of March 31, 2023 and December 31, 2022, respectively. Equity-Based Incentive Plans Prior to the Separation and Distribution, certain of our employees participated in Parent’s equity-based incentive plans. Under the SolarWinds Corporation 2016 Equity Incentive Plan (the “2016 Plan”), our employees, consultants, directors, managers and advisors were awarded stock-based incentive awards in a number of forms, including non-qualified stock options. The ability to grant any future equity awards under the 2016 Plan terminated in October 2018. Under the SolarWinds Corporation 2018 Equity Incentive Plan, our employees were eligible to be awarded stock-based incentive awards, including non-statutory stock options or incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock units and other cash-based or share-based awards. Awards granted to our employees under the Parent incentive plans generally vested over periods ranging from one In connection with the Separation and Distribution, all of the vested and outstanding and unvested SolarWinds equity awards held by our employees were converted to N-able awards through the Conversion. The modification of these equity awards resulted in incremental compensation expense to the extent the estimated fair value of the awards immediately following the modification exceeded the estimated fair value of the awards immediately prior to the modification. This expense is to be recognized upfront for all vested and outstanding awards and over the remaining vesting term for all unvested awards. For the three months ended March 31, 2023 and 2022, we recognized $0.3 million and $0.6 million, respectively, of incremental expense in connection with the Conversion. We include stock-based compensation expense in operating expense (general and administrative, sales and marketing and research and development) and cost of revenue on our Consolidated Statements of Operations, depending on the nature of the employee’s role in our operations. Agreements with SolarWinds In connection with the completion of the Separation and Distribution on July 19, 2021, we entered into several agreements with SolarWinds that, among other things, provide a framework for our relationship with SolarWinds after the Separation and Distribution . The following summarizes some of the most significant agreements and relationships that we continue to have with SolarWinds. Separation and Distribution Agreement The Separation and Distribution Agreement sets forth our agreements with SolarWinds regarding the principal actions taken in connection with the Separation and Distribution . It also sets forth other agreements that govern aspects of our relationship with SolarWinds following the Separation and Distribution , including (i) the manner in which legal matters and claims are allocated and certain liabilities are shared between N-able and SolarWinds; (ii) other matters including transfers of assets and liabilities, treatment or termination of intercompany arrangements and the settlement or extinguishment of certain liabilities and other obligations between N-able and SolarWinds; and (iii) mutual indemnification clauses. The Separation and Distribution Agreement also provides that SolarWinds will be liable and obligated to indemnify us for all liabilities based upon, arising out of, or relating to the Cyber Incident other than certain specified expenses for which we will be responsible. The term of the Separation and Distribution Agreement is indefinite and it may only be terminated with the prior written consent of both N-able and SolarWinds. Transition Services Agreement We entered into a Transition Services Agreement pursuant to which N-able and SolarWinds provide various services to each other. Under this agreement, SolarWinds continues to provide us with certain corporate and shared services, such as engineering, marketing, internal audit and travel support in exchange fo r the fees specified in the agreement. The Transition Services Agreement terminated during the year ended December 31, 2022, on the expiration of the term of the last service provided under it. We incurred less than $0.1 million of costs under the Transition Services Agreement during the three months ended March 31, 2022. Tax Matters Agreement We entered into a Tax Matters Agreement with SolarWinds that governs the parties’ respective rights, responsibilities and obligations with respect to tax liabilities a nd benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. Costs incurred under the Tax Matters Agreement were insignificant during the three months ended March 31, 2023 and 2022, respectively. Software OEM Agreements We entered into Software OEM Agreements with SolarWinds pursuant to which SolarWinds granted to N-able, and N-able granted to SolarWinds, a non-exclusive and royalty-bearing license to market, advertise, distribute and sublicense certain SolarWinds and N-able software products, respectively, to customers on a worldwide basis. Each agreement has a two year term, and may be terminated by the applicable licensor in certain instances. We earned $0.4 million and $0.3 million of revenue during the three months ended March 31, 2023 and 2022, respectively, and incurred less than $0.1 million of costs during the three months ended March 31, 2023 and 2022, respectively, under the Software OEM Agreements. Employee Matters Agreement We entered into an Employee Matters Agreement with SolarWinds that governs N-able's and SolarWinds’ compensation and employee benefit obligations with respect to the employees and other service providers of each company, and generally allocated liabilities and responsibilities relating to employment matters and employee compensation and benefit plans and programs. Costs incurred under the Employee Matters Agreement were insignificant during the three months ended March 31, 2023 and 2022, respectively. Intellectual Property Matters Agreement We entered into an Intellectual Property Matters Agreement with SolarWinds pursuant to which each party granted to the other party a generally irrevocable, non-exclusive, worldwide, and royalty-free license to use certain intellectual property rights retained by the other party. Under the Intellectual Property Matters Agreement, the term for the licensed or sublicensed know-how is perpetual and the term for each licensed or sublicensed patent is until expiration of the last valid claim of such patent. The Intellectual Property Matters Agreement will terminate only if N-able and SolarWinds agree in writing to terminate it. Costs incurred under the Intellectual Property Matters Agreement were insignificant during the three months ended March 31, 2023 and 2022, respectively. Trademark License Agreement We entered into a Trademark License Agreement with SolarWinds pursuant to which SolarWinds granted to N-able a generally limited, worldwide, non-exclusive and royalty-free license to use certain trademarks retained by SolarWinds that were used by SolarWinds in the conduct of its business prior to the Separation and Distribution. The Trademark License Agreement will terminate once we cease to use all of the licensed trademarks. Costs incurred under the Trademark License Agreement were insignificant during the three months ended March 31, 2023 and 2022, respectively. Software Cross License Agreement We entered into a Software Cross License Agreement with SolarWinds pursuant to which each party granted to the other party a generally perpetual, irrevocable, non-exclusive, worldwide and, subject to certain exceptions, royalty-free license to certain software libraries and internal tools for limited uses. The term of the Software Cross License Agreement will be perpetual unless N-able and SolarWinds agree in writing to terminate the agreement. We earned $0.1 million of revenue during the three months ended March 31, 2023 and 2022, respectively, and incurred $0.1 million and $0.2 million of costs during the three months ended March 31, 2023 and 2022, respectively, under the Software Cross License Agreement. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table summarizes the fair value of our money market fund financial assets and contingent consideration financial liabilities that were measured on a recurring basis as of March 31, 2023 and December 31, 2022. See Note 3. Acquisitions and Note 11. Commitments and Contingencies for additional information regarding our contingent consideration liabilities. There have been no transfers between fair value measurement levels during the three months ended March 31, 2023. Fair Value Measurements at March 31, 2023 Using Quoted Prices in Significant Significant Total (in thousands) Assets: Money market funds $ 67,352 $ — $ — $ 67,352 Liabilities: Contingent consideration $ — $ — $ 5,330 $ 5,330 As of March 31, 2023, the carrying value of our outstanding debt approximates its estimated fair value as the interest rate on the debt is adjusted for changes in market rates. See Note 8. Debt |
Accrued Liabilities and Other
Accrued Liabilities and Other | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities and Other | Accrued Liabilities and Other Accrued and other current liabilities were as follows: March 31, December 31, 2023 2022 (in thousands) Payroll-related accruals $ 12,603 $ 19,622 Value-added and other tax 3,939 1,904 Purchasing accruals 4,449 4,390 Accrued royalties 1,868 1,104 Accrued contingent consideration liability 2,688 2,746 Accrued other liabilities 6,756 5,864 Total accrued liabilities and other $ 32,303 $ 35,630 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt In connection with the Separation and Distribution, on July 19, 2021, certain subsidiaries of the Company, including N-able International Holdings I, Inc. (as guarantor) and N-able International Holdings II, Inc. (as borrower), entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase, Bank, N.A. as administrative agent and collateral agent and the lenders from time to time party thereto. N-able International Holdings I, Inc. is a holding company with no other operations, cash flows, material assets or liabilities other than the equity interests in N-able International Holdings II, Inc. The Credit Agreement provides for $410.0 million of first lien secured credit facilities (the “Credit Facilities”), consisting of a $60.0 million revolving credit facility (the “Revolving Facility”), and a $350.0 million term loan facility (the “Term Loan”). On July 19, 2021, prior to the completion of the Distribution, the Company distributed approximately $16.5 million, representing the proceeds from the Term Loan, net of the repayment of related party debt due to SolarWinds Holdings, Inc., payment of intercompany trade payables, and fees and other transaction-related expenses, to SolarWinds. The Revolving Facility will primarily be available for general corporate purposes. The following table summarizes information relating to our outstanding debt as of March 31, 2023: March 31, 2023 Amount Outstanding Effective Rate (in thousands, except interest rates) Term loan facility $ 344,750 7.95 % Revolving credit facility — — % Total principal amount 344,750 Unamortized discount and debt issuance costs (8,243) Total debt, net 336,507 Less: Current debt obligation (3,500) Long-term debt, net of current portion $ 333,007 Borrowings denominated in U.S. dollars under the Revolving Facility bear interest at a floating rate of an Adjusted LIBOR rate (subject to a “floor” of 0.0%) for a specified interest period plus an applicable margin of 3.00%. The borrowings denominated in Euros under the Revolving Facility bear interest at a floating rate of an Adjusted EURIBOR rate (subject to a “floor” of 0.0%) for a specified interest period plus an applicable margin of 3.00%. Borrowings under the Term Loan bear interest at a floating rate of an Adjusted LIBOR rate (subject to a “floor” of 0.5%) for a specified interest period plus an applicable margin of 3.00%. Each margin is subject to reductions to 2.75% and 1.75%, respectively, based on our first lien net leverage ratio. In addition to paying interest on loans outstanding under the Revolving Facility, we are required to pay a commitment fee of 0.375% per annum in respect of unused commitments thereunder, subject to a reduction to 0.25% per annum based on our first lien net leverage ratio. The Term Loan requires quarterly repayments equal to 0.25% of the original principal amount, commencing in December 2021 through June 2028. The final maturity dates of the Revolving Facility and Term Loan are July 18, 2026 and July 18, 2028, respectively. The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to: incur additional indebtedness; create liens; engage in mergers or consolidations; sell or transfer assets; pay dividends and distributions or repurchase our capital stock; make investments, loans, or advances; prepay certain junior indebtedness; engage in certain transactions with affiliates; and enter into negative pledge agreements. In addition, the Revolving Facility is subject to a financial covenant requiring compliance with a maximum first lien net leverage ratio of 7.50 to 1.00 at the end of each fiscal quarter, which will trigger when loans outstanding under the Revolving Facility exceed 35% of the aggregate commitments under the Revolving Facility. The Credit Agreement contains certain customary events of default, including, among others, failure to pay principal, interest or other amounts; inaccuracy of representations and warranties; violation of covenants; cross events of default; certain bankruptcy and insolvency events; certain ERISA events; certain undischarged judgments; and change of control. As of March 31, 2023, we were in compliance with all covenants of the Credit Agreement. The following table summarizes the remaining future minimum principal payments under Credit Agreement as of March 31, 2023: (in thousands) 2023 $ 2,625 2024 3,500 2025 3,500 2026 3,500 2027 3,500 Thereafter 328,125 Total minimum principal payments $ 344,750 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share A reconciliation of the number of shares in the calculation of basic and diluted earnings per share follows: Three Months Ended March 31, 2023 2022 (in thousands) Basic earnings per share: Numerator: Net income $ 3,539 $ 5,101 Denominator: Weighted-average common shares outstanding used in computing basic earnings per share 181,435 179,460 Basic earnings per share $ 0.02 $ 0.03 Diluted earnings per share: Numerator: Net income $ 3,539 $ 5,101 Denominator: Weighted-average shares used in computing basic earnings per share 181,435 179,460 Add dilutive impact of employee equity plans 1,756 724 Weighted-average shares used in computing diluted earnings per share 183,191 180,184 Diluted earnings per share $ 0.02 $ 0.03 The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income per share attributable to common stockholders for the three months ended March 31, 2023 and 2022 because their effect would have been anti-dilutive or for which the performance condition had not been met at the end of the period: Three Months Ended March 31, 2023 2022 (in thousands) Restricted stock units 1,219 3,116 Total anti-dilutive shares 1,219 3,116 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2023 and 2022, we recorded income tax expense of $4.6 million and $3.5 million, respectively, resulting in an effective tax rate of 56.4% and 40.7%, respectively. The increase in the effective tax rate for the three months ended March 31, 2023 compared to the same period in 2022 was primarily related to an increase in taxable income outside the United States and a decrease in the amount of unbenefited loss in the United States. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. At March 31, 2023, we did not have any accrued interest and penalties related to unrecognized tax benefits. We file U.S. Federal and state and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2013 through 2021 tax years generally remain open and subject to examination by federal, state and foreign tax authorities. We are currently under examination by the IRS for the tax years 2013 through the period ending February 2016. During the nine months ended September 30, 2021, we finalized a settlement agreement with the IRS for the tax years 2011 to 2012. We are currently under audit by the Texas Comptroller for the 2015 through 2018 tax years. The Massachusetts Department of Revenue audit for the 2015 through February 2016 tax years was closed with immaterial adjustments. On March 31, 2022, we received correspondence from the Canadian Revenue Agency (“CRA”) indicating that we are under Part XIII Income Tax audit of non-resident withholding for tax years 2017 through 2018. On June 16, 2022, we received correspondence from the CRA indicating the audit for Part XIII Income Tax audit of non-resident withholding for tax years 2017 through 2018 was closed without adjustments. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time, we have been and may be involved in various legal proceedings arising in our ordinary course of business. We are party to a stockholders’ agreement dated as of July 19, 2021, by and among N-able, Inc. and the stockholders named therein, as amended December 13, 2021 (the “Stockholders’ Agreement”). On March 16, 2023, a stockholder filed a Complaint for Declaratory Relief in the Court of Chancery of the State of Delaware against us seeking, among other relief, class action certification and a declaratory judgement that certain provisions in the Stockholders’ Agreement are unenforceable, including, among others, provisions relating to the election and removal of directors, the composition of committees and the hiring, or termination of the employment, of our chief executive officer. We believe the claims are without merit. In the opinion of management, resolution of any pending claims (either individually or in the aggregate) is not expected to have a material adverse impact on our Consolidated Financial Statements, cash flows or financial position and it is not possible to provide an estimated amount of any such loss. However, the outcome of disputes is inherently uncertain. Therefore, although management considers the likelihood of such an outcome to be remote, an unfavorable resolution of one or more matters could materially affect our future results of operations or cash flows, or both, in a particular period. Commitments as a Result of Acquisitions On July 1, 2022, we completed the acquisition of all the outstanding equity of Spinpanel for a total consideration of up to approximately $20.0 million, including up to $10.0 million payable upon the achievement of certain revenue metrics through July 1, 2025. The contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains and losses recognized within general and administrative expense in our Consolidated Statements of Operations. The fair value of this contingent consideration was $5.2 million at the date of acquisition and $5.1 million as of December 31, 2022. As of March 31, 2023, the fair value of this contingent consideration is $5.3 million, resulting in the recognition of a loss of $0.2 million for the three months ended March 31, 2023. The current portion of the contingent consideration of $0.2 million is included in accrued liabilities and other and the non-current portion of $5.1 million is included in other long-term liabilities in our Consolidated Balance Sheets as of March 31, 2023. See Note 3. Acquisitions , Note 6. Fair Value Measurements , and Note 7. Accrued Liabilities and Other for additional information regarding our contingent consideration liabilities. On December 14, 2022, we completed the acquisition of certain assets, primarily in the form of intellectual property, from a third party for a total consideration of up to $6.5 million, including $3.1 million of cash paid on the acquisition date, $1.0 million of product delivery fees, and up to $2.5 million payable upon the achievement of certain software engineering and knowledge transfer milestones as of September 1, 2023, and December 1, 2023. The total consideration of $6.5 million has been capitalized as costs to obtain internal-use computer software from third parties and will be amortized over an estimated useful life of three years, beginning when the related technology is deemed ready for its intended use, in accordance with our policy for the capitalization of internal-use software costs. The $2.5 million of contingent consideration is deemed to be the total value of technology not ready for its intended use as of the acquisition date. The contingent consideration liabilities will be re-evaluated periodically, but at least quarterly, with the resulting gains and losses recognized as an adjustment to the amount capitalized as costs to obtain internal-use computer software from third parties. No gains or losses on the contingent consideration were recognized during the three months ended March 31, 2023. See Note 7. Accrued Liabilities and Other for additional information regarding our contingent consideration liabilities. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Our interim Consolidated Financial Statements do not include all of the information and footnotes required by United States of America generally accepted accounting principles (“GAAP”) for complete financial statements. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the audited Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022, referred to as our “2022 Annual Report.” |
Use of Estimates | The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The impact from the rapidly changing market and economic conditions in part due to the coronavirus disease 2019 (“COVID-19”) pandemic on our business, results of operations and financial condition is uncertain. We have made estimates of the impact of the COVID-19 pandemic within our financial statements as of and for the three months ended March 31, 2023 and 2022 which did not result in material adjustments. The estimates assessed included, but were not limited to, allowances for credit losses, the carrying values of goodwill and intangible assets and other long-lived assets, valuation allowances for tax assets and revenue recognition and may change in future periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include: • the valuation of goodwill, intangibles, long-lived assets and contingent consideration; • revenue recognition; and • income taxes. |
Recently Issued Accounting Pronouncements and Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The standard became effective upon issuance and may be applied to any new or amended contracts, hedging relationships, and other transactions that reference LIBOR through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” extending the sunset date of the relief provided under ASU No. 2020-04 to December 31, 2024. We do not believe this standard will have a material impact on our consolidated financial statements. Recently Adopted Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers,” instead of at fair value on the acquisition date as previously required by ASC 805, “Business Combinations.” The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for acquired revenue contracts and revenue contracts not acquired in a business combination. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2022, and early adoption is permitted. The updated guidance will be applied prospectively to business combinations occurring during or after the fiscal year of adoption. We adopted this standard as of January 1, 2023. The adoption of the standard did not have a material impact on our consolidated financial statements for the three months ended March 31, 2023. |
Fair Value Measurements | We apply the authoritative guidance on fair value measurements for financial assets and liabilities, such as our money market fund financial assets and contingent consideration liabilities, that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows: Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us. Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1. Level 3: Inputs that are unobservable in the marketplace and significant to the valuation. The carrying amounts reported in our Consolidated Balance Sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. See Note 6. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, the carrying value of our outstanding debt approximates its estimated fair value as the interest rate on the debt is adjusted for changes in market rates. See Note 8. Debt for additional information regarding our debt. |
Deferred Revenue | Deferred revenue primarily consists of transaction prices allocated to remaining performance obligations from annually billed subscription agreements and maintenance services associated with our historical sales of perpetual license products which are delivered over time. Certain of our maintenance agreements are billed annually in advance for services to be performed over a 12-month period. We initially record the amounts allocated to maintenance performance obligations as deferred revenue and recognize these amounts ratably on a daily basis over the term of the maintenance agreement. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Changes in accumulated other comprehensive income by component | Changes in accumulated other comprehensive loss by component are summarized below: Foreign Currency Translation Adjustments Accumulated Other Comprehensive Loss (in thousands) Balance at December 31, 2022 $ (7,815) $ (7,815) Other comprehensive income before reclassification 5,703 5,703 Net current period other comprehensive income 5,703 5,703 Balance at March 31, 2023 $ (2,112) $ (2,112) |
Disaggregation of revenue | Our revenue consists of the following: Three Months Ended March 31, 2023 2022 (in thousands) Subscription revenue $ 97,442 $ 88,635 Other revenue 2,376 2,225 Total subscription and other revenue $ 99,818 $ 90,860 During the three month periods ended March 31, 2023 and 2022, respectively, we recognized the following revenue from subscription and other services at a point in time and over time: Three Months Ended March 31, 2023 2022 (in thousands) Revenue recognized at a point in time $ 15,279 $ 15,514 Revenue recognized over time 84,539 75,346 Total revenue recognized $ 99,818 $ 90,860 |
Details of total deferred revenue balance | Details of our total deferred revenue balance was as follows: Total Deferred Revenue (in thousands) Balance at December 31, 2022 $ 12,127 Deferred revenue recognized (5,167) Additional amounts deferred 5,678 Balance at March 31, 2023 $ 12,638 |
Remaining performance obligations for revenue recognition | as of March 31, 2023 as follows: Revenue Recognition Expected by Period Total Less than 1 year 1-3 years More than 3 years (in thousands) Expected recognition of remaining performance obligations $ 13,318 $ 12,935 $ 382 $ 1 |
Amortization of acquired technologies | Amortization of acquired technologies included in cost of revenue relate to our subscription products as follows: Three Months Ended March 31, 2023 2022 (in thousands) Amortization of acquired technologies $ 456 $ 982 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of consideration paid and amounts recognized for assets acquired and liabilities assumed | The following table summarizes the amounts recognized for the assets acquired and liabilities assumed: (in thousands) Current assets, including cash acquired of $6 $ 128 Property and equipment, net 48 Current liabilities (1,199) Non-current deferred tax liabilities (764) Identifiable intangible assets Developed technology 8,890 Customer relationships 80 Goodwill 7,176 Total assets acquired, net $ 14,359 The following table summarizes the total consideration for the assets acquired and liabilities assumed: (in thousands) Cash paid, net of cash acquired of $6 $ 9,199 Contingent consideration 5,160 Total consideration, net $ 14,359 |
Summary of fair value of acquired identifiable intangible assets and weighted-average useful life | The following table summarizes the fair value of the acquired identifiable intangible assets and weighted-average useful life by category: Fair Value Weighted-Average Useful Life (in thousands) (in years) Developed technology $ 8,890 5 Customer relationships 80 3 Total identifiable intangible assets $ 8,970 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table reflects the changes in goodwill for the three months ended March 31, 2023: (in thousands) Balance at December 31, 2022 $ 828,795 Acquisitions (1,550) Foreign currency translation 5,770 Balance at March 31, 2023 $ 833,015 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial assets measured on a recurring basis | The following table summarizes the fair value of our money market fund financial assets and contingent consideration financial liabilities that were measured on a recurring basis as of March 31, 2023 and December 31, 2022. See Note 3. Acquisitions and Note 11. Commitments and Contingencies for additional information regarding our contingent consideration liabilities. There have been no transfers between fair value measurement levels during the three months ended March 31, 2023. Fair Value Measurements at March 31, 2023 Using Quoted Prices in Significant Significant Total (in thousands) Assets: Money market funds $ 67,352 $ — $ — $ 67,352 Liabilities: Contingent consideration $ — $ — $ 5,330 $ 5,330 |
Accrued Liabilities and Other (
Accrued Liabilities and Other (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued and other current liabilities were as follows: March 31, December 31, 2023 2022 (in thousands) Payroll-related accruals $ 12,603 $ 19,622 Value-added and other tax 3,939 1,904 Purchasing accruals 4,449 4,390 Accrued royalties 1,868 1,104 Accrued contingent consideration liability 2,688 2,746 Accrued other liabilities 6,756 5,864 Total accrued liabilities and other $ 32,303 $ 35,630 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of debt | The following table summarizes information relating to our outstanding debt as of March 31, 2023: March 31, 2023 Amount Outstanding Effective Rate (in thousands, except interest rates) Term loan facility $ 344,750 7.95 % Revolving credit facility — — % Total principal amount 344,750 Unamortized discount and debt issuance costs (8,243) Total debt, net 336,507 Less: Current debt obligation (3,500) Long-term debt, net of current portion $ 333,007 |
Schedule of maturities of long-term debt | The following table summarizes the remaining future minimum principal payments under Credit Agreement as of March 31, 2023: (in thousands) 2023 $ 2,625 2024 3,500 2025 3,500 2026 3,500 2027 3,500 Thereafter 328,125 Total minimum principal payments $ 344,750 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Reconciliation of shares in basic and diluted earnings per share calculation | A reconciliation of the number of shares in the calculation of basic and diluted earnings per share follows: Three Months Ended March 31, 2023 2022 (in thousands) Basic earnings per share: Numerator: Net income $ 3,539 $ 5,101 Denominator: Weighted-average common shares outstanding used in computing basic earnings per share 181,435 179,460 Basic earnings per share $ 0.02 $ 0.03 Diluted earnings per share: Numerator: Net income $ 3,539 $ 5,101 Denominator: Weighted-average shares used in computing basic earnings per share 181,435 179,460 Add dilutive impact of employee equity plans 1,756 724 Weighted-average shares used in computing diluted earnings per share 183,191 180,184 Diluted earnings per share $ 0.02 $ 0.03 |
Weighted average shares excluded from earnings per share computation | The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income per share attributable to common stockholders for the three months ended March 31, 2023 and 2022 because their effect would have been anti-dilutive or for which the performance condition had not been met at the end of the period: Three Months Ended March 31, 2023 2022 (in thousands) Restricted stock units 1,219 3,116 Total anti-dilutive shares 1,219 3,116 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) | 3 Months Ended | ||
Jul. 19, 2021 $ / shares shares | Mar. 31, 2023 employee $ / shares | Dec. 31, 2022 $ / shares | |
Schedule of Investments [Line Items] | |||
Spinoff transaction, conversion ratio | 1 | ||
Common stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 |
Maximum threshold of number of employees for consideration of a small and medium-sized enterprise | employee | 1,000 | ||
Private placement | |||
Schedule of Investments [Line Items] | |||
Sale of stock, number of shares issued in transaction (in shares) | 20,623,282 | ||
SolarWinds Holdings, Inc. | |||
Schedule of Investments [Line Items] | |||
Spinoff transaction, conversion ratio | 2 | ||
Common stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.001 | ||
Stock issued during period distributed for spinoff (in shares) | 158,020,156 | ||
Common stock outstanding after distribution due to spinoff (in shares) | 316,040,312 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value disclosure | $ 67.4 | $ 48.4 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 642,071 | $ 618,355 |
Other comprehensive income before reclassification | 5,703 | |
Other comprehensive income (loss) | 5,703 | (9,167) |
Balance at end of period | 656,195 | 618,555 |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (7,815) | |
Other comprehensive income before reclassification | 5,703 | |
Other comprehensive income (loss) | 5,703 | |
Balance at end of period | (2,112) | |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (7,815) | 15,053 |
Balance at end of period | $ (2,112) | $ 5,886 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Revenue Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 99,818 | $ 90,860 |
Revenue recognized at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15,279 | 15,514 |
Revenue recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 84,539 | 75,346 |
Subscription revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 97,442 | 88,635 |
Other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 2,376 | $ 2,225 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Changes in Deferred Revenue (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Movement in Deferred Revenue [Roll Forward] | |
Balance at December 31, 2022 | $ 12,127 |
Deferred revenue recognized | (5,167) |
Additional amounts deferred | 5,678 |
Balance at March 31, 2023 | $ 12,638 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Expected Recognition of Deferred Revenue (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Accounting Policies [Abstract] | |
Expected recognition of remaining performance obligations | $ 13,318 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Accounting Policies [Abstract] | |
Expected recognition of remaining performance obligations | $ 12,935 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue Recognition Expected by Period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Accounting Policies [Abstract] | |
Expected recognition of remaining performance obligations | $ 382 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue Recognition Expected by Period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | |
Accounting Policies [Abstract] | |
Expected recognition of remaining performance obligations | $ 1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue Recognition Expected by Period |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Cost of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Product Information [Line Items] | ||
Amortization of acquired technologies | $ 456 | $ 982 |
Subscription and other revenue | ||
Product Information [Line Items] | ||
Amortization of acquired technologies | $ 456 | $ 982 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jul. 01, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Goodwill, purchase accounting adjustments | $ (1,550) | |||
Loss on contingent consideration | (240) | $ 0 | ||
Accrued contingent consideration liability | 2,688 | $ 2,746 | ||
Spinpanel BV | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, gross | $ 20,000 | |||
Contingent consideration maximum | 10,000 | |||
Acquisition related costs | 300 | |||
Contingent consideration | $ 5,160 | 5,300 | $ 5,100 | |
Loss on contingent consideration | 200 | |||
Accrued contingent consideration liability | 200 | |||
Contingent consideration non-current | $ 5,100 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Mar. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 833,015 | $ 828,795 | |
Spinpanel BV | |||
Business Acquisition [Line Items] | |||
Current assets, including cash acquired of $6 | $ 128 | ||
Cash acquired | 6 | ||
Property and equipment, net | 48 | ||
Current liabilities | (1,199) | ||
Non-current deferred tax liabilities | (764) | ||
Identifiable intangible assets | 8,970 | ||
Goodwill | 7,176 | ||
Total assets acquired, net | 14,359 | ||
Acquisitions, net of cash acquired | 9,199 | ||
Contingent consideration | 5,160 | $ 5,300 | $ 5,100 |
Consideration transferred | 14,359 | ||
Spinpanel BV | Developed product technologies | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 8,890 | ||
Weighted-Average Useful Life | 5 years | ||
Spinpanel BV | Customer relationships | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 80 | ||
Weighted-Average Useful Life | 3 years |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 828,795 |
Acquisitions | (1,550) |
Foreign currency translation | 5,770 |
Balance at end of period | $ 833,015 |
Relationship with Parent and _2
Relationship with Parent and Related Entities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Related party transaction, term | 2 years | ||
Minimum | Equity-based incentive plan | |||
Related Party Transaction [Line Items] | |||
Award vesting period | 1 year | ||
Maximum | Equity-based incentive plan | |||
Related Party Transaction [Line Items] | |||
Award vesting period | 5 years | ||
Affiliated entity | SolarWinds Holdings, Inc. | |||
Related Party Transaction [Line Items] | |||
Accounts payable, related parties | $ 0 | $ 0 | |
Accounts receivable, related parties | 0 | $ 0 | |
Affiliated entity | SolarWinds Holdings, Inc. | Transition services agreement | |||
Related Party Transaction [Line Items] | |||
Expenses (credits) from transactions with related party | 0.1 | ||
Affiliated entity | SolarWinds Holdings, Inc. | Software OEM agreements | |||
Related Party Transaction [Line Items] | |||
Expenses (credits) from transactions with related party | $ 0.1 | 0.1 | |
Revenue from related parties | 0.4 | 0.3 | |
Affiliated entity | SolarWinds Holdings, Inc. | Software cross license agreement | |||
Related Party Transaction [Line Items] | |||
Expenses (credits) from transactions with related party | 0.1 | 0.2 | |
Revenue from related parties | 0.1 | 0.1 | |
Affiliated entity | SolarWinds Holdings, Inc. | Equity-based incentive plan | |||
Related Party Transaction [Line Items] | |||
Conversion incremental compensation expense | $ 0.3 | $ 0.6 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 5,330 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 5,330 | |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value disclosure | 67,400 | $ 48,400 |
Money market funds | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value disclosure | 67,352 | |
Money market funds | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value disclosure | 67,352 | |
Money market funds | Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value disclosure | 0 | |
Money market funds | Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value disclosure | $ 0 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Payroll-related accruals | $ 12,603 | $ 19,622 |
Value-added and other tax | 3,939 | 1,904 |
Purchasing accruals | 4,449 | 4,390 |
Accrued royalties | 1,868 | 1,104 |
Accrued contingent consideration liability | 2,688 | 2,746 |
Accrued other liabilities | 6,756 | 5,864 |
Accrued liabilities and other | $ 32,303 | $ 35,630 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Credit agreement - USD ($) | 3 Months Ended | |
Jul. 19, 2021 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 410,000,000 | |
Secured debt | ||
Debt Instrument [Line Items] | ||
Face amount of debt | 350,000,000 | |
Payments of line of credit proceeds to former parent | 16,500,000 | |
LIBOR floor | 0.50% | |
Basis spread on variable rate | 3% | |
Margin is subject to reductions based on our first lien net leverage ratio, percentage | 1.75% | |
Quarterly periodic payment, as a percentage of original principal | 0.25% | |
Revolving credit facility | Line of credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 60,000,000 | |
Margin is subject to reductions based on our first lien net leverage ratio, percentage | 2.75% | |
Commitment fee percentage | 0.375% | |
Covenant, commitment fee percentage, net leverage ratio, reduction per annum | 0.25% | |
Covenant, leverage ratio, maximum | 7.50 | |
Covenant, borrowing percentage of commitments, maximum | 35% | |
Revolving credit facility | Line of credit | US dollars | ||
Debt Instrument [Line Items] | ||
LIBOR floor | 0% | |
Revolving credit facility | LIBOR | Line of credit | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3% | |
Revolving credit facility | Eurodollar | Line of credit | ||
Debt Instrument [Line Items] | ||
LIBOR floor | 0% | |
Basis spread on variable rate | 3% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total principal amount | $ 344,750 | |
Unamortized discount and debt issuance costs | (8,243) | |
Total debt, net | 336,507 | |
Less: Current debt obligation | (3,500) | $ (3,500) |
Long-term debt, net of current portion | 333,007 | $ 333,488 |
Secured debt | Credit agreement | ||
Debt Instrument [Line Items] | ||
Total principal amount | $ 344,750 | |
Effective Rate | 7.95% | |
Total debt, net | $ 344,750 | |
Line of credit | Revolving credit facility | Credit agreement | ||
Debt Instrument [Line Items] | ||
Total principal amount | $ 0 | |
Effective Rate | 0% |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Principal Payments of Debt (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Instrument [Line Items] | |
Total debt, net | $ 336,507 |
Credit agreement | Secured debt | |
Debt Instrument [Line Items] | |
2023 | 2,625 |
2024 | 3,500 |
2025 | 3,500 |
2026 | 3,500 |
2027 | 3,500 |
Thereafter | 328,125 |
Total debt, net | $ 344,750 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Shares in the Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income | $ 3,539 | $ 5,101 |
Shares used in computation of basic earnings per share (in shares) | 181,435 | 179,460 |
Basic earnings per share (in dollars per share) | $ 0.02 | $ 0.03 |
Denominator: | ||
Net income | $ 3,539 | $ 5,101 |
Weighted-average shares used in computing basic earnings per share (in shares) | 181,435 | 179,460 |
Add dilutive impact of employee equity plans (in shares) | 1,756 | 724 |
Weighted-average shares used in computing diluted earnings per share (in shares) | 183,191 | 180,184 |
Diluted earnings per share (in dollars per share) | $ 0.02 | $ 0.03 |
Earnings Per Share - Weighted A
Earnings Per Share - Weighted Average Outstanding Shares of Common Stock Equivalents Excluded (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive shares (in shares) | 1,219 | 3,116 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive shares (in shares) | 1,219 | 3,116 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 4,573 | $ 3,500 |
Effective income tax rate | 56.40% | 40.70% |
Commitment and Contingencies (D
Commitment and Contingencies (Details) - USD ($) | 3 Months Ended | ||||
Dec. 14, 2022 | Jul. 01, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||
Loss on contingent consideration | $ 240,000 | $ 0 | |||
Accrued contingent consideration liability | 2,688,000 | $ 2,746,000 | |||
Intellectual Property Acquisition | |||||
Business Acquisition [Line Items] | |||||
Asset acquisition, consideration transferred | $ 6,500,000 | ||||
Payments for asset acquisition | 3,100,000 | ||||
Product delivery fees | 1,000,000 | ||||
Contingent consideration | $ 2,500,000 | ||||
Internal-use software useful life | 3 years | ||||
Gain (loss) on contingent consideration | 0 | ||||
Spinpanel BV | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire businesses, gross | $ 20,000,000 | ||||
Contingent consideration maximum | 10,000,000 | ||||
Contingent consideration | $ 5,160,000 | 5,300,000 | $ 5,100,000 | ||
Loss on contingent consideration | (200,000) | ||||
Accrued contingent consideration liability | 200,000 | ||||
Contingent consideration non-current | $ 5,100,000 |