Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 16, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | INST | ||
Entity Registrant Name | Instructure Holdings, Inc. | ||
Entity Central Index Key | 0001841804 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Public Float | $ 499,202,051 | ||
Entity Common Stock, Shares Outstanding | 145,207,497 | ||
Entity Shell Company | false | ||
Entity File Number | 001-40647 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-4325548 | ||
Entity Address, Address Line One | 6330 South 3000 East, Suite 700 | ||
Entity Address, City or Town | Salt Lake City | ||
Entity Address, State or Province | UT | ||
Entity Address, Postal Zip Code | 84121 | ||
City Area Code | 800 | ||
Local Phone Number | 203-6755 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Security Exchange Name | NYSE | ||
Document Financial Statement Error Correction [Flag] | false | ||
Documents Incorporated by Reference | The information required by Part III of this Report is incorporated by reference from the Registrant's definitive proxy statement relating to the Annual Meeting of Shareholders to be held in 2024 (the “2024 Proxy Statement” ), to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | Salt Lake City, Utah | ||
Auditor Firm ID | 42 | ||
ICFR Auditor Attestation Flag | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 341,047 | $ 185,954 |
Accounts receivable net | 67,193 | 71,428 |
Prepaid expenses | 12,082 | 11,120 |
Deferred commissions | 13,705 | 13,390 |
Other current assets | 4,797 | 3,144 |
Total current assets | 438,824 | 285,036 |
Property and equipment, net | 13,479 | 12,380 |
Right-of-use assets | 9,002 | 13,575 |
Goodwill | 1,265,316 | 1,266,402 |
Intangible assets, net | 399,712 | 542,679 |
Noncurrent prepaid expenses | 4,182 | 871 |
Deferred commissions, net of current portion | 13,816 | 18,781 |
Deferred tax assets | 6,739 | 8,143 |
Other assets | 6,908 | 5,622 |
Total assets | 2,157,978 | 2,153,489 |
Current liabilities: | ||
Accounts payable | 23,589 | 18,792 |
Accrued liabilities | 23,760 | 28,483 |
Lease liabilities | 7,513 | 7,205 |
Long-term debt, current | 4,013 | 4,013 |
Deferred revenue | 291,784 | 275,564 |
Total current liabilities | 350,659 | 334,057 |
Long-term debt, net of current portion | 482,387 | 486,471 |
Deferred revenue, net of current portion | 10,876 | 13,816 |
Lease liabilities, net of current portion | 9,246 | 16,610 |
Deferred tax liabilities | 14,420 | 24,702 |
Other long-term liabilities | 4,898 | 1,706 |
Total liabilities | 872,486 | 877,362 |
Stockholders’ equity: | ||
Common stock, par value $0.01 per share; 500,000 shares authorized as of December 31, 2023 and December 31, 2022, 145,207 and 142,917 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively. | 1,452 | 1,429 |
Additional paid-in capital | 1,619,020 | 1,575,600 |
Accumulated deficit | (334,980) | (300,902) |
Total stockholders’ equity | 1,285,492 | 1,276,127 |
Total liabilities and stockholders’ equity | $ 2,157,978 | $ 2,153,489 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 145,207,000 | 142,917,000 |
Common stock, shares outstanding | 145,207,000 | 142,917,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | |||
Total revenue | $ 530,210 | $ 475,194 | $ 405,361 |
Cost of revenue: | |||
Total cost of revenue | 186,315 | 172,294 | 169,865 |
Gross profit | 343,895 | 302,900 | 235,496 |
Operating expenses: | |||
Sales and marketing | 197,690 | 181,744 | 162,544 |
Research and development | 88,162 | 77,189 | 63,771 |
General and administrative | 61,261 | 60,447 | 54,911 |
Impairment on disposal group | 0 | 0 | 1,218 |
Total operating expenses | 347,113 | 319,380 | 282,444 |
Income (loss) from operations | (3,218) | (16,480) | (46,948) |
Other income (expense): | |||
Interest income | 5,738 | 1,679 | 29 |
Interest expense | 42,024 | 24,595 | 50,360 |
Other income (expense), net | 1,168 | (2,978) | (2,695) |
Loss on extinguishment of debt | 0 | 0 | (22,424) |
Total other income (expense), net | (35,118) | (25,894) | (75,450) |
Loss before income taxes | (38,336) | (42,374) | (122,398) |
Income tax benefit | 4,258 | 8,132 | 33,719 |
Net loss | $ (34,078) | $ (34,242) | $ (88,679) |
Net loss per common share, basic | $ (0.24) | $ (0.24) | $ (0.67) |
Net loss per common share, diluted | $ (0.24) | $ (0.24) | $ (0.67) |
Weighted-average common shares outstanding ---basic | 143,968 | 141,815 | 132,387 |
Weighted-average common shares outstanding ----diluted | 143,968 | 141,815 | 132,387 |
Subscription and Support | |||
Revenue: | |||
Total revenue | $ 485,516 | $ 430,661 | $ 367,781 |
Cost of revenue: | |||
Total cost of revenue | 158,699 | 146,546 | 148,923 |
Professional Services and Other | |||
Revenue: | |||
Total revenue | 44,694 | 44,533 | 37,580 |
Cost of revenue: | |||
Total cost of revenue | $ 27,616 | $ 25,748 | $ 20,942 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (Loss) | $ (34,078) | $ (34,242) | $ (88,679) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Begining Balance at Dec. 31, 2020 | $ 1,087,984 | $ 1,262 | $ 1,264,703 | $ (177,981) |
Balances, Shares at Dec. 31, 2020 | 126,219 | |||
Vesting of restricted stock units, net | $ 6 | (6) | ||
Vesting of restricted stock units, shares | 634 | |||
Stock-based compensation | 18,324 | 18,324 | ||
Shares withheld for tax withholding on vesting of restricted stock | (1,568) | $ (1) | (1,567) | |
Shares withheld for tax withholding on vesting of restricted stock, Shares | (67) | |||
Repurchase of TopCo Units, shares | (220) | |||
Repurchase of TopCo Units | (930) | $ (2) | (928) | |
Issuance of common stock in connection with initial public offering, net of underwriters' discounts and commissions and issuance costs, shares | 14,175 | |||
Issuance of common stock in connection with initial public offering, net of underwriters' discounts and commissions and issuance costs | 259,254 | $ 142 | 259,112 | |
Net Income (Loss) | (88,679) | (88,679) | ||
Ending Balance at Dec. 31, 2021 | 1,274,385 | $ 1,407 | 1,539,638 | (266,660) |
Balances, Shares at Dec. 31, 2021 | 140,741 | |||
Vesting of restricted stock units, net | $ 20 | (20) | ||
Vesting of restricted stock units, shares | 1,987 | |||
Purchase of ESPP shares | 7,326 | $ 4 | 7,322 | |
Purchase of ESPP shares, Shares | 418 | |||
Stock-based compensation | 33,929 | 33,929 | ||
Restricted stock withheld for taxes (In Shares) | (229) | |||
Restricted Stock, Value, Shares Issued Net of Tax Withholdings | (5,271) | $ (2) | (5,269) | |
Net Income (Loss) | (34,242) | (34,242) | ||
Ending Balance at Dec. 31, 2022 | 1,276,127 | $ 1,429 | 1,575,600 | (300,902) |
Balances, Shares at Dec. 31, 2022 | 142,917 | |||
Vesting of restricted stock units, net | $ 24 | (24) | ||
Vesting of restricted stock units, shares | 2,249 | |||
Purchase of ESPP shares | 6,017 | $ 3 | 6,014 | |
Purchase of ESPP shares, Shares | 300 | |||
Stock-based compensation | 44,056 | 44,056 | ||
Restricted stock withheld for taxes (In Shares) | (259) | |||
Restricted Stock, Value, Shares Issued Net of Tax Withholdings | (6,630) | $ (4) | (6,626) | |
Net Income (Loss) | (34,078) | (34,078) | ||
Ending Balance at Dec. 31, 2023 | $ 1,285,492 | $ 1,452 | $ 1,619,020 | $ (334,980) |
Balances, Shares at Dec. 31, 2023 | 145,207 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Activities: | |||
Net loss | $ (34,078) | $ (34,242) | $ (88,679) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation of property and equipment | 4,786 | 4,491 | 3,713 |
Amortization of intangible assets | 142,967 | 136,717 | 134,003 |
Amortization of deferred financing costs | 1,187 | 1,178 | 2,435 |
Impairment on disposal group | 0 | 0 | 1,218 |
Loss on extinguishment of debt | 0 | 0 | 22,424 |
Stock-based compensation | 43,537 | 33,585 | 18,072 |
Deferred income taxes | (7,792) | (10,222) | (36,485) |
Other | 658 | 3,669 | 1,685 |
Changes in assets and liabilities: | |||
Accounts receivable, net | 2,653 | (18,454) | (4,314) |
Prepaid expenses and other assets | (8,552) | 5,940 | 2,094 |
Deferred commissions | 4,650 | (648) | (8,358) |
Right-of-use assets | 4,573 | 4,888 | 8,729 |
Accounts payable and accrued liabilities | 11 | (2,227) | 8,038 |
Deferred revenue | 13,280 | 24,238 | 48,543 |
Lease liabilities | (7,056) | (6,817) | (6,363) |
Other liabilities | 3,192 | (1,825) | (1,612) |
Net cash provided by operating activities | 164,016 | 140,271 | 105,143 |
Investing Activities: | |||
Purchases of property and equipment | (5,940) | (6,321) | (4,259) |
Proceeds from sale of property and equipment | 50 | 43 | 53 |
Proceeds from sale of Bridge | 0 | 0 | 46,018 |
Business acquisitions, net of cash acquired | 0 | (109,013) | (26,584) |
Net cash provided by (used in) investing activities | (5,890) | (115,291) | 15,228 |
Financing Activities: | |||
IPO proceeds, net of offering costs paid of $6,068 | 0 | 0 | 259,254 |
Proceeds from issuance of common stock from employee equity plans | 6,017 | 7,327 | 0 |
Shares repurchased for tax withholdings on vesting of restricted stock units | (6,630) | (5,272) | (1,568) |
Proceeds from issuance of term debt, net of discount | 0 | 0 | 493,090 |
Distribution To Stockholders | 0 | 0 | (930) |
Repayments of long-term debt | (5,000) | (3,750) | (839,187) |
Term Loan prepayment premium | 0 | 0 | (11,893) |
Payments for financing costs | (84) | (19) | (937) |
Net cash used in financing activities | (5,697) | (1,714) | (102,171) |
Foreign currency impacts on cash and cash equivalents | 1,513 | (2,153) | 0 |
Net increase in cash, cash equivalents and restricted cash | 153,942 | 21,113 | 18,200 |
Cash, cash equivalents and restricted cash, beginning of period | 190,266 | 169,153 | 150,953 |
Cash, cash equivalents and restricted cash, end of period | 344,208 | 190,266 | 169,153 |
Supplemental cash flow disclosure: | |||
Cash paid for taxes | 2,755 | 3,102 | 646 |
Interest paid | 42,430 | 18,073 | 48,058 |
Non-cash investing and financing activities: | |||
Capital expenditures incurred but not yet paid | 2 | 67 | 83 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | |||
Cash and cash equivalents | 341,047 | 185,954 | 164,928 |
Restricted cash | 3,161 | 4,312 | 4,225 |
Total cash, cash equivalents, and restricted cash | $ 344,208 | $ 190,266 | $ 169,153 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Payments of Financing Costs [Abstract] | |
Payments of Stock Issuance Costs | $ 6,068 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ (34,078) | $ (34,242) | $ (88,679) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | 1. Description of Business and Summary of Significant Accounting Policies Organization On March 24, 2020, Instructure Parent, L.P. (“TopCo”) acquired 100 percent of Instructure, Inc.’s equity. Instructure Intermediate Holdings I, Inc. was a wholly-owned subsidiary of TopCo and was formed on January 14, 2020 by Thoma Bravo for the purpose of purchasing Instructure, Inc. and had no operations prior to the Take-Private Transaction. On May 26, 2021, Instructure Intermediate Holdings I, Inc. changed its name to Instructure Holdings, Inc (the “Company,” “Instructure,” “we,” “our,” or “us”). Instructure is an education technology company dedicated to elevating student access, amplifying the power of teaching, and inspiring everyone to learn together. Instructure’s learning platform delivers a next-generation learning management system (“LMS”), robust assessments for learning, actionable analytics, and engaging, dynamic content. Instructure offers its learning platform through a Software-as-a-Service, or SaaS, business model. Instructure, Inc. was incorporated in the state of Delaware in September 2008. We are headquartered in Salt Lake City, Utah, and have wholly-owned subsidiaries in the United Kingdom, Australia, the Netherlands, Hong Kong, Sweden, Brazil, Mexico, Hungary, and Singapore . Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The accompanying consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation. On July 9, 2021, the Company effected a 126,239.815 -for-1 stock split of its issued and outstanding shares of common stock and made comparable and equitable adjustments to its equity awards in accordance with the terms of the awards. The par value of the common stock was not adjusted as a result of the stock split. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retrospectively, where applicable, to reflect this stock split. In connection with the stock split, on July 9, 2021, the Company’s board of directors and stockholders approved the Certificate of Amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 2,000 shares to 500,000,000 shares and to increase the number of authorized shares of preferred stock from zero shares to 50,000,000 shares. No preferred stock has been issued or outstanding. On July 26, 2021, the Company completed its IPO of 12,500,000 shares of common stock at an offering price of $ 20.00 per share. The Company received net proceeds of $ 234.0 million after deducting underwriting discounts and commissions. On August 19, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 1,675,000 shares of common stock at the offering price of $ 20.00 per share. The Company received additional net proceeds of $ 31.4 million after deducting underwriting discounts and commissions. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Such estimates, which we evaluate on an on-going basis, include provisions for credit losses, useful lives for property and equipment and intangible assets, valuation allowances for net deferred income tax assets, acquisition related estimates, our assessment for impairment of goodwill, intangible assets, and other long-lived assets, the standalone selling price of performance obligations, timing of professional services revenue recognition, and the determination of the period of benefit for deferred commissions. We base our estimates on historical experience and on various other assumptions which we believe to be reasonable. Operating Segments We operate in a single operating segment: cloud-based learning management, assessment and performance systems. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision makers (“CODMs”), which are our chief executive officer and chief financial officer, in deciding how to allocate resources and assess performance. Our CODMs evaluate our financial information and resources and assess the performance of these resources on a consolidated basis. Since we operate in one operating segment, all required financial segment information can be found in the consolidated financial statements. Net Loss Per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders for the year ended December 31, 2023, 2022, and 2021 is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. Restricted stock units and shares purchased through the employee stock purchase plan are considered to be common stock equivalents in the year ended December 31, 2023, 2022, and 2021. A reconciliation of the denominator used in the calculation of basic and diluted net loss per share is as follows (in thousands, except per share amounts): Year ended Year ended Year ended 2023 2022 2021 Numerator: Net loss $ ( 34,078 ) $ ( 34,242 ) $ ( 88,679 ) Denominator: Weighted-average common shares outstanding—basic 143,968 141,815 132,387 Dilutive effect of share equivalents resulting from — — — Weighted-average common shares outstanding-diluted 143,968 141,815 132,387 Net loss per common share, basic and diluted $ ( 0.24 ) $ ( 0.24 ) $ ( 0.67 ) For the year ended December 31, 2023, 2022, and 2021, we incurred net losses and, therefore, the effect of our outstanding restricted stock units and rights to purchase common stock through the employee stock purchase plan were not included in the calculation of diluted net loss per share as the effect would be anti-dilutive. The following table contains share totals with a potentially dilutive impact (in thousands): Year ended Year ended Year ended 2023 2022 2021 Restricted stock units 4,790 4,846 4,723 Employee stock purchase plan 105 129 176 Total 4,895 4,975 4,899 Concentration of Credit Risk, Significant Customers and International Operations Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash, cash equivalents and accounts receivable. We deposit cash with high credit quality financial institutions, which typically exceed federally insured amounts. We have not experienced any losses on our deposits. We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral from our customers. We review the expected collectability of accounts receivable and record a provision for credit losses for amounts that we determine are not collectible. There were no customers with revenue as a percentage of total revenue exceeding 10% for the periods presented. As of December 31, 2023, and 2022 there were no customers with outstanding net accounts receivable balances as a percentage of total outstanding net accounts receivable greater than 10 %. Cash and Cash Equivalents We consider all short-term highly liquid investments purchased with original maturities of three months or less at the time of acquisition to be cash equivalents. Provision for Credit Losses Provision for credit losses consist of bad debt expense associated with our accounts receivable balance. These losses are recorded in general and administrative in our consolidated statements of operations and comprehensive loss. We are exposed to credit losses primarily through our receivables from customers. We develop estimates to reflect the risk of credit loss which are based on historical loss trends adjusted for asset specific attributes, current conditions and reasonable and supportable forecasts of the economic conditions that will exist through the contractual life of the financial asset. We monitor our ongoing credit exposure through an active review of collection trends. Our activities include monitoring the timeliness of payment collection, managing dispute resolution and performing timely account reconciliations. The following is a roll-forward of our provision for credit losses (in thousands): Balance Charged to Deductions (1) Balance at Provision for Credit Losses Year ended December 31, 2023 $ 1,468 1,583 ( 1,012 ) $ 2,039 Year ended December 31, 2022 $ 815 940 ( 287 ) $ 1,468 Year ended December 31, 2021 $ 902 232 ( 319 ) $ 815 (1) Deductions include actual accounts written-off, net of recoveries. Property and Equipment and Intangible Assets Property and equipment are stated at cost less accumulated depreciation. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Repairs and maintenance costs that do not extend the useful life or improve the related assets are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or over the related lease terms (if shorter). The estimated useful life of each asset category is as follows: Estimated Computer and office equipment 2 - 3 years Purchased software 2 - 3 years Furniture and fixtures 2 - 5 years Capitalized software development costs 3 years Leasehold improvement and other Lesser of lease term or useful life Certain costs incurred to develop software applications used in the cloud-based learning, assessment, development and engagement system are capitalized and included in property and equipment, net on the consolidated balance sheets. Capitalizable costs consist of (1) certain external direct costs of materials and services incurred in developing or obtaining internal-use software; and (2) payroll and payroll-related costs for employees who are directly associated with and who devote time to the project. These costs generally consist of internal labor during configuration, coding and testing activities. Research and development costs incurred during the preliminary project stage, or costs incurred for data conversion activities, training, maintenance and general and administrative or overhead costs, are expensed as incurred. Costs that cannot be separated between the maintenance of, and relatively minor upgrades and enhancements to, internal-use software are also expensed as incurred. Costs incurred during the application development stage that significantly enhance and add new functionality to the cloud-based learning, assessment, development and engagement system are capitalized as capitalized software development costs. Capitalization begins when: (1) the preliminary project stage is complete; (2) management with the relevant authority authorizes and commits to the funding of the software project; (3) it is probable the project will be completed; (4) the software will be used to perform the functions intended; and (5) certain functional and quality standards have been met. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful life of the asset, which ranges from one to ten years . When there are indicators of potential impairment, we evaluate recoverability of the carrying values of property and equipment and finite-lived intangible assets by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds our estimated undiscounted future net cash flows, an impairment charge is recognized based on the amount by which the carrying value of the asset exceeds the fair value of the asset. Leases We enter into operating lease arrangements for real estate assets related to office space. Consistent with the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases (“Topic 842”), the Company determines if an arrangement conveys the right to control the use of the identified asset in exchange for consideration. Operating leases are included as right-of-use assets and lease liabilities in the consolidated balance sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist of the fixed payments under the arrangements. Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of right-of-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. As the implicit rate of the Company’s leases is not determinable, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Fair Value Our short-term financial instruments include cash equivalents, accounts receivable, accounts payable and accrued liabilities and are carried on the consolidated financial statements as of December 31, 2023 and 2022 at amounts that approximate fair value due to their short-term maturity dates. Goodwill Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Goodwill is not subject to amortization, but is tested annually for impairment within our fourth fiscal quarter using an October 1 measurement date or more frequently if there are indicators of impairment. We first perform a qualitative assessment to determine if it is more likely than not that our reporting unit's carrying amount exceeds its fair value, referred to as a “step zero” approach. If, based on the review of the qualitative factors, we determine it is not more likely than not that the fair value of our reporting unit is less than its carrying value, we would bypass the quantitative impairment test. Management considers the following potential indicators of impairment: (1) significant underperformance relative to historical or projected future operating results; (2) significant changes in our use of acquired assets or the strategy of our overall business; (3) significant negative industry or economic trends; and (4) a significant decline in our stock price for a sustained period. We operate under one reporting unit and, as a result, evaluate goodwill impairment based on our fair value as a whole. Our current year impairment test did not result in any impairment of the goodwill balance as no indicators of impairment were identified. Refer to Note 3—Acquisitions and Disposals for additional information regarding impairment of goodwill recognized in the year ended December 31, 2021 related to the sale of Bridge. We did not recognize any additional impairment charges in any of the periods presented. We have no other intangible assets with indefinite useful lives. There were no acquisitions during the year ended December 31, 2023. Revenue Recognition We generate revenue primarily from two main sources: (1) subscription and support revenue, which is comprised of SaaS fees from customers accessing our learning platform and from customers purchasing additional support beyond the standard support that is included in the basic SaaS fees; and (2) related professional services revenue, which is comprised of training, implementation services and other types of professional services. Consistent with ASC 606, Revenue from Contracts with Customers, revenue is recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The timing of revenue recognition may differ from the timing of invoicing our customers. We record an unbilled receivable, which is included within accounts receivable—net on our consolidated balance sheets, when revenue is recognized prior to invoicing. Unbilled receivable balances as of December 31, 2023 and 2022 were $ 2.8 million and $ 0.6 million, respectively. We determined revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation The following describes the nature of our primary types of revenue and the revenue recognition policies and significant payment terms as they pertain to the types of transactions we enter into with our customers. Subscription and Support Subscription and support revenue is derived from fees from customers to access our learning platform and support beyond the standard support that is included with all subscriptions. The terms of our subscriptions do not provide customers the right to take possession of the software. Subscription and support revenue is generally recognized on a ratable basis over the contract term. Payments from customers are primarily due annually in advance. Professional Services and Other Professional services revenue is derived from implementation, training, and consulting services. Our professional services are typically considered distinct from the related subscription services as the promise to transfer the subscription can be fulfilled independently from the promise to deliver the professional services (i.e., customer receives standalone functionality from the subscription and the customer obtains the intended benefit of the subscription without the professional services). Professional services arrangements are billed in advance, and revenue from these arrangements is typically recognized over time as the services are rendered, using an efforts-expended input method. Implementation services also include nonrefundable upfront setup fees, which are allocated to the remaining performance obligations. Contracts with Multiple Performance Obligations Many of our contracts with customers contain multiple performance obligations. We account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. We determine the SSP based on our overall pricing objectives by reviewing our significant pricing practices, including discounting practices, geographical locations, the size and volume of our transactions, the customer type, price lists, our pricing strategy, and historical standalone sales. SSP is analyzed on a periodic basis to identify if we have experienced significant changes in our selling prices. Deferred Commissions Sales commissions earned by our sales force, as well as related payroll taxes, are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be generally four years. We determined the period of benefit by taking into consideration our customer contracts, our technology and other factors. Amortization of deferred commissions is included in sales and marketing expenses in the accompanying consolidated statements of operations and comprehensive loss. Deferred Revenue Deferred revenue consists of billings and payments received in advance of revenue recognition generated by our subscription and support services and professional services and other, as described above. Cost of Revenue Cost of subscription revenue consists primarily of our managed hosting provider and other third-party service providers, employee-related costs including payroll, benefits and stock-based compensation expense for our operations and customer support teams, amortization of capitalized software development costs and acquired technology, and allocated overhead costs, which we define as rent, facilities and costs related to information technology, or IT. Cost of professional services and other revenue consists primarily of personnel costs of our professional services organization, including salaries, benefits, travel, bonuses and stock-based compensation, as well as allocated overhead costs. Service Availability Warranty We warrant to our customers: (1) that commercially reasonable efforts will be made to maintain the online availability of the platform for a minimum availability in a trailing 365-day period (excluding scheduled outages, standard maintenance windows, force majeure, and outages that result from any technology issue originating from any customer or user); (2) the functionality or features of the platform may change but will not materially degrade during any paid term; and (3) that support may change but will not materially degrade during any paid term. To date, we have not experienced any significant losses under these warranties. Advertising Costs Advertising costs are expensed as incurred and are included in sales and marketing expenses in the consolidated statements of operations and comprehensive loss. Advertising expenses totaled $ 8.4 million, $ 9.4 million, and $ 8.3 million, for the year ended December 31, 2023, 2022, and 2021 , respectively. Stock-Based Compensation Before our IPO, we determined the grant date fair value for all unit-based awards granted to employees and nonemployees by using an option-pricing model. As of June 30, 2021, our equity was not publicly traded and there was no history of market prices for our units. Thus, estimating grant date fair value required us to make assumptions, including the value of our equity, expected time to liquidity, and expected volatility. Stock-based compensation costs for granted units were recognized as expense over the requisite service period, which was generally the vesting period for awards, on a straight-line basis for awards with only a service condition. For granted units subject to performance conditions, the Company recorded expense when the performance condition became probable. Forfeitures were accounted for as they occurred. Subsequent to our IPO in July 2021, we account for all awards granted to employees and nonemployees using a fair value method. Stock-based compensation is recognized as an expense and is measured at the fair value of the award. The measurement date for employee awards is generally the date of the grant. Stock-based compensation costs are recognized as expense over the requisite service period, which is generally the vesting period for awards, on a straight-line basis for awards with only a service condition. Forfeitures are accounted for as they occur. We use the closing price of our common stock as reported on the New York Stock Exchange for the fair value of restricted stock units (“RSUs”) granted. We use the Black-Scholes option pricing model to determine the fair value of purchase rights issued to employees under our 2021 Employee Stock Purchase Plan (“2021 ESPP”). The Black-Scholes option pricing model is affected by the price of our common stock and a number of assumptions, including the award’s expected life, risk-free interest rate, the expected volatility of the underlying stock and expected dividends. These assumptions are estimated as follows: • Fair Value of Our Common Stock. We rely on the closing price of our common stock as reported by the New York Stock Exchange on the date of grant to determine the fair value of our common stock. • Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option pricing model on the implied yield available on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. • Expected Term. For the 2021 ESPP, we used an expected term of 0.6 years for the first offering period and used an expected term of 0.5 years for subsequent offering periods. • Volatility. For the first offering period, we estimated the price volatility factor based on the historical volatilities of our comparable companies as we did not have a sufficient trading history for our common stock. To determine our comparable companies, we considered public enterprise cloud-based application providers and selected those that were similar to us in size, stage of life cycle, and financial leverage. Beginning with the second offering period we began using the trading history of our own common stock to determine expected volatility. • Expected Dividend Yield. We have not paid and do not expect to pay dividends for the foreseeable future. Business Combinations We estimate the fair value of assets acquired and liabilities assumed in a business combination. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. Foreign Currency The functional currency of our foreign subsidiaries is the U.S. dollar. Monetary assets and liabilities denominated in a foreign currency are remeasured into U.S. dollars at the exchange rates in effect at the balance sheet dates. Income and expense accounts are remeasured on the date of the transaction using the exchange rate in effect on the transaction date. Non-monetary assets, liabilities, and equity transactions are converted at historical exchange rates in effect at the time of the transaction. Foreign currency transaction gains and losses are recorded in other income (expense), net in the consolidated statements of operations and comprehensive loss. Research and Development With the exception of capitalized software development costs, research and development costs are expensed as incurred. Risks and Uncertainties We are subject to all of the risks inherent in an early stage business. These risks include, but are not limited to, a limited operating history, new and rapidly evolving markets, dependence on the development of new services, unfavorable economic and market conditions, changes in level of demand for our services, and the timing of new application introductions. If we fail to anticipate or to respond adequately to technological developments in our industry, changes in customer or supplier requirements, or changes in regulatory requirements or industry standards, or any significant delays in the development or introduction of services, our business could be harmed. Income Taxes We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carryforwards. Management must make assumptions, judgments and estimates to determine our current provision for income taxes and our deferred tax assets and liabilities. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. Accordingly, the need to establish such allowance is assessed periodically by considering matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and results of recent operations. The evaluation of recoverability of the deferred tax assets requires that we weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. In recognizing tax benefits from uncertain tax positions, we assess whether it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. As we expand internationally, we will face increased complexity in determining the appropriate tax jurisdictions for revenue and expense items, and as a result, we may record unrecognized tax benefits in the future. At that time, we would make adjustments to these potential future reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. Our estimate of the potential outcome of any uncertain tax position is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. To the extent that the final tax outcome of these matters would be different to the amounts we may potentially record in the future, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results. Recent Accounting Pronouncements Recent accounting pronouncements not yet adopted In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), which updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related notes. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740), which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related notes. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 2. Property and Equipment Property and equipment consisted of the following (in thousands): December 31, 2023 2022 Computer and office equipment $ 5,437 $ 5,528 Capitalized software development costs 13,556 8,585 Furniture and fixtures 1,153 1,589 Leasehold improvements and other 6,270 6,970 Total property and equipment 26,416 22,672 Less accumulated depreciation and amortization ( 12,937 ) ( 10,292 ) Total $ 13,479 $ 12,380 Accumulated amortization for capitalized software development costs was $ 4.7 million and $ 2.4 million at December 31, 2023 and 2022, respectively. Amortization expense for capitalized software development costs for the year ended December 31, 2023, 2022, and 2021 was $ 2.6 million, $ 1.4 million, and $ 0.7 million, respectively, and is recorded within subscription and support cost of revenue in the consolidated statements of operations and comprehensive loss. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisition | 3. Acquisitions and Disposals 2022 Acquisitions On April 13, 2022, we acquired all outstanding shares of Concentric Sky, Inc. (“Concentric Sky,” which was rebranded to “Canvas Credentials” subsequent to acquisition) for the purpose of our continued commitment to building the education industry’s most integrated teaching and learning platform to support lifelong learning. The acquisition did not have a material effect on our revenue or earnings in the consolidated statements of operations and comprehensive loss for the reporting periods presented. For tax purposes, a 338(h)(10) election was filed to step up the tax basis of assets acquired to fair market value. The final allocation of the purchase price was as follows (in thousands): Total purchase consideration $ 21,314 Identifiable assets acquired Cash $ 1,330 Accounts receivable 1,018 Prepaid expenses and other assets 109 Intangible assets: developed technology 3,900 Intangible assets: customer relationships 9,100 Total assets acquired $ 15,457 Liabilities assumed Accounts payable and accrued liabilities $ 1,335 Deferred revenue 2,566 Total liabilities assumed $ 3,901 Goodwill 9,758 Total purchase consideration $ 21,314 On December 15, 2022, we acquired all outstanding shares of LearnPlatform, Inc. (“LearnPlatform”) to accelerate the impact of the Instructure learning platform for schools, universities, and shared partner providers by adding evidence-based insight into inventory, compliance, procurement, and usage. The acquisition did not have a material effect on our revenue or earnings in the consolidated statements of operations and comprehensive loss for the reporting periods presented. At the time of the acquisition, we recorded a provisional net deferred tax liability of $ 3.4 million in purchase accounting due to the step up in book basis of intangible assets as a result of the stock acquisition. We expect the net deferred tax liability to decrease as book amortization expense is recognized on the acquisition-related intangible assets. During the third quarter of 2023, an adjustment of $ 1.1 million was made to the provisional net deferred tax liability, with a corresponding decrease to goodwill, in connection with the completion of the LearnPlatform tax filings for the period ending December 15, 2022. The final allocation of the purchase price was as follows (in thousands): Total purchase consideration $ 93,975 Identifiable assets acquired Cash $ 4,297 Accounts receivable 1,306 Prepaid expenses and other assets 373 Right-of-use asset 288 Deferred tax asset 1,020 Intangible assets: developed technology 7,600 Intangible assets: customer relationships 28,700 Intangible assets: trade names and trademarks 300 Intangible assets: non-compete agreements 50 Total assets acquired $ 43,934 Liabilities assumed Accounts payable and accrued liabilities $ 767 Deferred revenue 6,900 Lease liabilities 288 Deferred tax liabilities 3,341 Total liabilities assumed $ 11,296 Goodwill 61,337 Total purchase consideration $ 93,975 For all periods presented, the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, of which $ 9.7 million is expected to be deductible for tax purposes from the Canvas Credentials acquisition. The goodwill generated from all transactions is attributable to the expected synergies to be achieved upon consummation of the business combinations and the assembled workforce values. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. Developed technology represents the estimated fair value of the acquired existing technology and is being amortized over its estimated useful life of five years. Amortization of developed technology is included in subscription and support cost of revenue expenses in the accompanying consolidated statements of operations and comprehensive loss. Customer relationships represent the estimated fair value of the acquired customer bases and are amortized over the estimated useful life of seven years. The trade names acquired are amortized over the estimated useful life of one to ten years. Amortization of customer relationships and trade names is included in sales and marketing expenses in the accompanying consolidated statements of operations and comprehensive loss. Non-compete agreements are amortized over an estimated useful life of three years and amortization is included in research and development expenses in the accompanying consolidated statements of operations and comprehensive loss . Sale of getBridge LLC (“Bridge”) On February 26, 2021, the Company sold Bridge, its corporate learning platform and wholly-owned subsidiary, for a total purchase price of $ 47.0 million. We received cash proceeds net of transaction costs of $ 46.0 million. The proceeds from this sale were used to pay down the balance of our then outstanding Term Loan (as defined in Note 5—Credit Facility). During the year ended December 31, 2021, we recognized a pretax loss on this divestiture of $ 1.2 million, which is included in operating expenses as impairment on disposal group in the accompanying consolidated statements of operations and comprehensive loss. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets Goodwill activity was as follows (in thousands): Total Balance as of December 31, 2022 $ 1,266,402 Adjustments (Note 3 - Acquisitions and Disposals) ( 1,086 ) Balance as of December 31, 2023 $ 1,265,316 Intangible assets consisted of the following (in thousands): Weighted-Average Remaining Useful Life December 31, 2023 December 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Software 0 Months $ 21 $ ( 21 ) $ — $ 21 $ ( 20 ) $ 1 Trade names 74 Months 126,100 ( 49,336 ) 76,764 126,100 ( 35,936 ) 90,164 Developed technology 20 Months 325,300 ( 232,662 ) 92,638 325,300 ( 167,600 ) 157,700 Customer relationships 45 Months 451,400 ( 221,123 ) 230,277 451,400 ( 156,635 ) 294,765 Non-competition agreements 24 Months 50 ( 17 ) 33 50 ( 1 ) 49 Total $ 902,871 $ ( 503,159 ) $ 399,712 $ 902,871 $ ( 360,192 ) $ 542,679 Amortization expense for intangible assets was $ 143.0 million, $ 136.7 million, and $ 134.0 million, for the year ended December 31, 2023, 2022, and 2021, respectively. Based on the recorded intangible assets at December 31, 2023, estimated amortization expense is expected to be as follows (in thousands): Amortization Years Ending December 31, Expense 2024 $ 142,442 2025 99,729 2026 79,625 2027 40,682 2028 17,806 Thereafter 19,428 Total $ 399,712 |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Credit Facility | 5. Credit Facility On March 24, 2020, we entered into a credit agreement with a syndicate of lenders and Golub Capital Markets LLC, as administrative agent and collateral agent, and Golub Capital Markets LLC and Owl Rock Capital Advisors LLC, as joint bookrunners and joint lead arrangers (the “Credit Agreement”). The Credit Agreement provided for a senior secured term loan facility (the “Initial Term Loan”) in an original aggregate principal amount of $ 775.0 million, which was supplemented by an incremental term loan pursuant to the First Incremental Amendment and Waiver to Credit Agreement, dated as of December 22, 2020, in a principal amount of $ 70.0 million (the “Incremental Term Loan” and, together with the Initial Term Loan, the “Term Loan”). The maturity date for the Term Loan was March 24, 2026 , with the remaining principal due in full on the maturity date. The Credit Agreement also provided for a senior secured revolving credit facility in an aggregate principal amount of $ 50.0 million (the “Revolving Credit Facility” and, together with the Term Loan, the “Credit Facilities”). The Revolving Credit Facility included a $ 10.0 million sublimit for the issuance of letters of credit. The Credit Agreement required us to repay the principal of the Term Loan in equal quarterly repayments equal to 0.25 % of the aggregate original principal amount of the Term Loan, reduced as a result of the application of prepayments. Further, until the last day of the quarter ending June 30, 2021, the Credit Facilities bore interest at a rate equal to (i) 6.00 % plus the highest of (x) the prime rate (as determined by reference to the Wall Street Journal), (y) the Federal funds open rate plus 0.50 % per annum, and (z) a daily Eurodollar rate based on an interest period of one month plus 1.00 % per annum or (ii) the Eurodollar rate plus 7.00 % per annum, subject to a 1.00 % Eurodollar floor. Thereafter, on the last day of each of the five full fiscal quarters, we had the option (a “Pricing Grid Election”) to (i) retain the aforementioned applicable margins or (ii) switch to the applicable margins set forth on a pricing grid which, subject to certain pro forma total net leverage ratio limits, provided for applicable margins ranging from 5.50 % to 7.00 %, in the case of Eurodollar loans, and 4.50 % to 6.00 % in the case of ABR Loans (as defined in the Credit Agreement). The applicable margins set forth on the pricing grid would become mandatory beginning on the last day of the tenth full fiscal quarter ending after March 24, 2020. Interest payments were due quarterly, or more frequently, based on the terms of the Credit Agreement. On May 27, 2021, the Company exercised its option to make a Pricing Grid Election. As a result, the Company’s applicable margin for Eurodollar loans under the Credit Facilities from May 27, 2021 onward was 5.5 %. In connection with the Company's IPO, the Company made a principal prepayment in August 2021 of $ 224.3 million on its outstanding Term Loan. In connection with the underwriters' partial exercise of their over-allotment option in August 2021, the Company made an additional principal prepayment in August 2021 of $ 30.8 million on its outstanding Term Loan. The Company also incurred a 1.5 % prepayment premium in conjunction with each principal prepayment. The Company incurred fees with respect to the Revolving Credit Facility, including a commitment fee of 0.50 % per annum of unused commitments under the Revolving Credit Facility. On October 29, 2021, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, (the “2021 Credit Agreement”) governing our senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of a $ 500.0 million senior secured term loan facility (the “Senior Term Loan”) and a $ 125.0 million senior secured revolving credit facility (the “Senior Revolver”). The proceeds from the Senior Secured Credit Facilities were used, in addition to cash on hand, to (1) refinance, in full, all existing indebtedness under the Credit Agreement (the “Refinancing”), (2) pay certain fees and expenses incurred in connection with the entry into the 2021 Credit Agreement and the Refinancing, and (3) finance working capital needs of the Company and its subsidiaries for general corporate purposes. All of the Company’s obligations under the Senior Secured Credit Facilities are guaranteed by the subsidiary guarantors named therein. The Senior Revolver includes a $ 10.0 million sublimit for the issuance of letters of credit. Any issuance of letters of credit will reduce the amount available under the Senior Revolver. As of December 31, 2023 , we had no outstanding borrowings under our Senior Revolver. The Senior Term Loan has a seven-year maturity and the Senior Revolver has a five-year maturity. Commencing June 30, 2022, we were required to repay the Senior Term Loan portion of the Senior Secured Credit Facilities in quarterly principal installments of 0.25 % of the aggregate original principal amount of the Senior Term Loan at closing, with the balance payable at maturity. Borrowings under the Senior Secured Credit Facilities bore interest, at the Company’s option, at: (i) Base Rate equal to the greater of (a) the Federal Funds Rate plus 1/2 of 1.00 %, (b) the rate of interest in effect for such day as publicly announced from time to time by the administrative agent as its “prime rate,” (c) a Eurocurrency Rate for such date plus 1.00 % and (d) 1.00 %; or (ii) the Eurocurrency Rate (provided that the Eurocurrency Rate applicable to the Senior Term Loan shall not be less than 0.50 % per annum). The Applicable Rate for the Senior Term Loan with respect to Eurocurrency Rate Loans was 2.75 % per annum and 1.75 % per annum for Base Rate Loans. The Applicable Rate for the Senior Revolver with respect to Eurocurrency Rate Loans, SONIA Loans, and Alternative Currency Term Rate Loans ranged from 2.00 % to 2.5 % subject to the Company’s Consolidated First Lien Net Leverage Ratio, while the Applicable Rate for Base Rate Loans ranged from 1.00 % to 1.50 % subject to the Company’s Consolidated First Lien Net Leverage Ratio. We are also required to pay an unused commitment fee to the lenders under the Senior Revolver at the Applicable Commitment Fee of the average daily unutilized commitments. The Applicable Commitment Fee ranges from 0.40 % to 0.50 % subject to the Company’s Consolidated First Lien Net Leverage Ratio. On June 21, 2023, we entered into the first amendment to the 2021 Credit Agreement (the “Amended 2021 Credit Agreement”) whereby all borrowings denominated in U.S. dollars and that incur interest or fees using the Eurocurrency Rate, which are determined by reference to the London Interbank Offered Rate (“LIBOR”), have been replaced with the Secured Overnight Financing Rate (“SOFR”). For SOFR loans, the loans denominated in dollars now bear interest at the Adjusted Term SOFR Rate, which is equal to the Term SOFR Reference Rate, as published by the CME Term SOFR Administrator, plus the Term SOFR Adjustment as dictated by the interest rate period elected by the Company. The Term SOFR Adjustment ranges from 0.11448 % to 0.42826 % per annum. The Applicable Rate (x) for the Initial Term Loans remains at 2.75 % per annum for SOFR loans and (y) for the Revolving Credit Facility remains at 2.50 % per annum with applicable step downs. The transition from LIBOR to SOFR became effective on July 5, 2023. All other terms and conditions in place under the 2021 Credit Agreement on the effective date of the Amended 2021 Credit Agreement remained unchanged and in full effect. The 2021 Credit Agreement contains a financial covenant solely with respect to the Senior Revolver. If the outstanding amounts under the Senior Revolver exceed 35 % of the aggregate amount of the Senior Revolver commitments, we are required to maintain at the end of each fiscal quarter, commencing with the quarter ending June 30, 2022, a Consolidated Net Leverage Ratio of not more than 7.75 to 1.00 . As of December 31, 2023 , there was no amount outstanding under the Senior Revolver. The Company had $ 125.0 million of availability under the Senior Revolver as of December 31, 2023. Debt discount costs of $ 13.6 million were incurred in connection with the Term Loan. An additional $ 3.8 million of debt discount costs were incurred after the IPO in August 2021 in connection with the prepayment premium associated with the Term Loan as the prepayments were treated as modifications for accounting purposes. These debt discount costs were being amortized into interest expense, as set forth in the consolidated statements of operations and comprehensive loss, over the contractual term of the Term Loan. As a result of the Refinancing in the fourth quarter of 2021, the Company wrote off the remaining $ 13.8 million of debt discount costs related to the Credit Facilities to loss on debt extinguishment in the consolidated statements of operations and comprehensive loss. Additionally, as a result of the Refinancing, the Company capitalized $ 1.0 million and $ 5.9 million of debt discount costs incurred in connection with the Senior Term Loan in long-term debt, current and long-term debt, net of current portion, respectively, on the consolidated balance sheets. The Company recognized $ 1.0 million, $ 1.0 million, and $ 2.3 million of amortization of debt discount costs for the years ended December 31, 2023, 2022, and 2021, respectively, which is recorded as interest expense in the accompanying consolidated statements of operations and comprehensive loss. At December 31, 2023 and 2022, the Company had an aggregate principal amount outstanding of $ 491.3 million and $ 496.3 million, respectively, under the Senior Term Loan, bearing interest at 8.68 % and 6.12 % , respectively. The Company had $ 4.9 million and $ 5.8 million of unamortized debt discount costs at December 31, 2023 and 2022, respectively, which is recorded as a reduction of the debt balance on the Company’s consolidated balance sheets. Debt issuance costs of $ 0.7 million were incurred in connection with the Revolving Credit Facility. These debt issuance costs were being amortized into interest expense, as set forth in the consolidated statements of operations and comprehensive loss, over the contractual term of the Revolving Credit Facility. As a result of the Refinancing, the Company wrote off the remaining $ 0.5 million of debt issuance costs related to the Credit Facilities to loss on debt extinguishment in the consolidated statements of operations and comprehensive loss. Additionally, As a result of the Refinancing, the Company capitalized $ 0.2 million and $ 0.8 million of deferred issuance costs incurred in connection with the Senior Revolver in other current assets and other assets, respectively, on the consolidated balance sheets. The Company recognized $ 0.2 million, $ 0.2 million, and $ 0.1 million of amortization of debt issuance costs for the year ended December 31, 2023, 2022, and 2021, respectively, which is included in the accompanying consolidated statements of operations and comprehensive loss. The Company had $ 0.5 million and $ 0.7 million of unamortized debt issuance costs at December 31, 2023 and 2022, respectively, which are included in other current assets and other assets on the Company’s condensed consolidated balance sheets. In connection with the Refinancing, the Company was also required to pay a 1.5 % prepayment premium under the Credit Facilities totaling $ 8.1 million. Due to the Refinancing being treated as an extinguishment for accounting purposes, the prepayment premium was recorded to loss on extinguishment of debt in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2021. The Senior Secured Credit Facilities contain customary negative covenants. At December 31, 2023, the Company was in compliance with all applicable covenants pertaining to the Senior Secured Credit Facilities. The Company also maintained compliance with all applicable covenants pertaining to the Credit Facilities prior to the Refinancing. The maturities of outstanding debt, as of December 31, 2023, are as follows (in thousands): Amount Years Ending December 31, 2024 $ 5,000 2025 5,000 2026 5,000 2027 5,000 2028 471,250 Thereafter — Total $ 491,250 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Geographic Areas, Revenues from External Customers [Abstract] | |
Geographic Data and Revenue | 6. Revenue We have one operating segment, which is our cloud-based learning, assessment, development and engagement systems. Historically, we had primarily generated revenues from two customer bases, Education and Corporate. Education customers consist of K-12 and Higher Education institutions that purchase our Canvas Learning Management System (“LMS”), which includes assessments, analytics and learning content. Corporate customers purchased our Bridge product, which was a corporate learning platform. Following the sale of Bridge in 2021, the Company no longer receives revenues from Corporate customers. The following tables present the Company’s disaggregated revenues based on its two customer bases and by geographic region, based on the physical location of the customer (in thousands): Year ended Year ended Year ended 2023 2022 2021 Education $ 530,210 $ 475,194 $ 401,699 Corporate — — 3,662 Total revenue $ 530,210 $ 475,194 $ 405,361 Percentage of revenue generated by Education 100 % 100 % 99 % Year ended Year ended Year ended 2023 2022 2021 United States $ 422,849 $ 376,694 $ 325,998 Foreign 107,361 98,500 79,363 Total revenue $ 530,210 $ 475,194 $ 405,361 Percentage of revenue generated outside of the United States 20 % 21 % 20 % Deferred Revenue and Performance Obligations During the year ended December 31, 2023, 51 % of revenue recognized was included in our deferred revenue balance at December 31, 2022. Transaction Price Allocated to the Remaining Performance Obligations As of December 31, 2023, approximately $ 833.5 million of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 75 % of th ese remaining performance obligations over the next 24 months, with the balance recognized thereafter. |
Deferred Commissions
Deferred Commissions | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs [Abstract] | |
Deferred Commissions | 7. Deferred Commissions Deferred commissions primarily consist of sales commissions that are capitalized as incremental contract origination costs and were $ 27.5 million and $ 32.2 million as of December 31, 2023 and 2022 respectively. For the year ended December 31, 2023, 2022, and 2021, amortization expense for deferred commissions was $ 19.1 million, $ 16.1 million, and $ 10.9 million, respectively, and there was no impairment of deferred commissions during these periods. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | . Stock-Based Compensation Employee Equity Plans The Instructure Parent, LP Incentive Equity Plan (the “2020 Plan”) was terminated in July 2021 in connection with the initial public offering (the “IPO”). As of the IPO date 6,126,802 unvested incentive units were exchanged for 3,496,739 RSUs under the 2021 Plan. The RSUs will generally vest in 11 equal quarterly installments commencing September 1, 2021. In July 2021, our board of directors adopted the 2021 Omnibus Incentive Plan (the “2021 Plan”) and no shares remain available for issuance under the 2020 Plan. A total of 18,000,000 shares of the Company's common stock were initially reserved for issuance under the 2021 Plan. Pursuant to the terms of the 2021 Plan, the share reserve increased by 5,629,623 shares in January 2022 and 5,716,683 shares in January 2023. As of December 31, 2023, there were 19,683,951 shares of common stock available for future grants under the 2021 Plan. In July 2021, our board of directors adopted, and our stockholders approved, the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which allows eligible employees to purchase shares of our common stock at a discount through payroll deductions of up to 15 % of their eligible compensation, subject to any plan limitations. The initial offering consisted of one offering period, which ended on February 28, 2022. Each new offering begins on or about March 1 and September 1 and is approximately six months in duration. On each purchase date, eligible employees purchase our common stock at a price per share equal to 85 % of the lesser of (1) the fair market value of our common stock on the offering date or (2) the fair market value of our common stock on the purchase date. A total of 1,900,000 shares of the Company's common stock were initially reserved for issuance under the 2021 ESPP. Pursuant to the terms of the 2021 ESPP, the share reserve increased by 1,407,406 shares in January 2022 and 1,429,171 shares in January 2023. As of December 31, 2023 , 4,018,556 shares of common stock were available for future purchases under the 2021 ESPP. During the year ended December 31, 2023, we granted 3,316,718 RSUs to employees under the 2021 Plan. Each RSU entitles the recipient to receive one share of the Company's common stock upon vesting. The RSUs are subject to time-based service requirements and generally vest over a four-year service period. The grant date fair values of the RSUs granted during the year ended December 31, 2023 ranged from $ 24.24 to $ 28.00 , which represent the closing stock price for the underlying common stock on the respective grant dates, with an aggregate fair value of $ 83.5 million. The following two tables show stock-based compensation by award type and where the stock-based compensation expense was recorded in our consolidated statements of operations and comprehensive loss (in thousands): Year ended Year ended Year ended 2023 2022 2021 Options (1) $ — $ 680 $ 132 Restricted stock units 42,567 36,913 19,586 Employee stock purchase plan 1,629 2,186 1,165 Class A and Class B units — — 4,902 Total stock-based compensation $ 44,196 $ 39,779 $ 25,785 (1) For the year ended December 31, 2022, approximately $ 0.7 million is due to the acceleration and settlement of options from the LearnPlatform 2014 Stock Incentive Plan that was not included in consideration transferred. The amounts were settled in cash and the LearnPlatform 2014 Stock Incentive Plan was terminated on the date of acquisition. Year ended Year ended Year ended 2023 2022 2021 Subscription and support cost of revenue $ 1,775 $ 1,348 $ 899 Professional services and other cost of revenue 2,218 1,742 959 Sales and marketing 11,971 11,050 6,936 Research and development 14,333 11,467 6,943 General and administrative 13,899 14,172 10,048 Total stock-based compensation $ 44,196 $ 39,779 $ 25,785 In connection with the Take-Private Transaction on March 31, 2020, and except for certain executives, outstanding stock options and restricted stock units (“RSUs”, and together with the stock options, “equity awards”), whether vested or unvested, were canceled and replaced with the right to receive $ 49.00 per share in cash, less the applicable exercise price per share and applicable withholding taxes (the “per share price”), with respect of each share of common stock underlying such award (“Cash Replacement Awards”). The per share price attributed to the unvested equity awards will vest and be payable at the same time such equity awards would have vested pursuant to their original terms prior to the replacement . During the year ended December 31, 2023, 2022, and 2021, the Company recognized $ 0.7 million, $ 5.5 million, and $ 7.6 million of stock-based compensation expense associated with the Cash Replacement Awards, respectively. Restricted Stock Units Restricted Stock Unit activity on or after the IPO date was as follows during the periods indicated, presented for awards granted to employees and members of the board of directors for the year ended December 31, 2023, 2022, and 2021 (in thousands, except per share amounts): RSUs Outstanding Weighted- Average Grant Date Fair RSUs Value Per Share Unvested and outstanding at January 1, 2021 — $ — Granted 2,250 20.91 Vested ( 23 ) 21.21 Forfeited or canceled ( 240 ) 20.14 Unvested and outstanding at December 31, 2021 1,987 $ 21.00 Granted 2,881 21.77 Vested ( 876 ) 21.04 Forfeited or canceled ( 555 ) 21.23 Unvested and outstanding at December 31, 2022 3,437 $ 21.60 Granted 3,317 25.17 Vested ( 1,262 ) 22.43 Forfeited or canceled ( 1,022 ) 23.10 Unvested and outstanding at December 31, 2023 4,470 $ 23.68 As of December 31, 2023 , total unrecognized compensation cost related to unvested RSUs granted on or after the IPO date amounted to $ 95.1 million, which is expected to be recognized over a weighted average period of 2.9 years. The following table summarizes the activity under the 2020 Plan and their conversion into RSUs under the 2021 Plan for the years ended December 31, 2023, 2022, and 2021 (in thousands, except per unit amounts): RSUs Weighted Average Grant Date Fair Value Per Unit Outstanding Incentive Units at December 31, 2020 8,666 $ 4.03 Incentive Units granted — — Incentive Units forfeited or canceled ( 268 ) 4.09 Incentive Units vested at IPO ( 2,271 ) 4.04 Incentive Units exchanged for RSUs ( 6,127 ) — Incentive Units after IPO — — RSUs exchanged from Incentive Units 3,497 — RSUs forfeited or canceled ( 150 ) 11.06 RSUs vested ( 611 ) 10.00 Unvested and outstanding at December 31, 2021 2,736 $ 10.75 Vested ( 1,112 ) 10.77 Forfeited or canceled ( 215 ) 11.24 Unvested and outstanding at December 31, 2022 1,409 $ 10.72 Vested ( 987 ) 11.21 Forfeited or canceled ( 102 ) 11.13 Unvested and outstanding at December 31, 2023 320 $ 12.30 There were no equity awards granted under the 2020 Plan subsequent to the IPO. As of December 31, 2023 we had $ 2.4 million of unrecognized stock-based compensation expense related to unvested exchanged RSUs that are expected to be recognized over a weighted-average period of 0.3 years. 2021 Employee Stock Purchase Plan The following table summarizes the assumptions relating to 2021 ESPP purchase rights used in a Black-Scholes option pricing model for the years ended December 31, 2023 and 2022: Year ended 2023 2022 Dividend yield None None Volatility 18 - 32 % 32 - 47 % Risk-free interest rate 3.34 - 5.47 % 0.06 - 3.34 % Expected life (years) 0.5 0.5 - 0.6 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | . Income Taxes Income (loss) before provision (benefit) for income taxes was as follows (in thousands): Year ended Year ended Year ended 2023 2022 2021 United States $ ( 46,385 ) $ ( 46,281 ) $ ( 124,654 ) Foreign 8,049 3,907 2,256 Total $ ( 38,336 ) $ ( 42,374 ) $ ( 122,398 ) The components of the provision (benefit) for income taxes were as follows (in thousands): Year ended Year ended Year ended 2023 2022 2021 Current: Federal $ 336 $ — $ — State 1,210 370 2,200 Foreign 1,987 1,741 694 Total 3,533 2,111 2,894 Deferred: Federal ( 6,851 ) ( 6,950 ) ( 24,611 ) State ( 2,304 ) ( 2,229 ) ( 5,367 ) Foreign 1,364 ( 1,064 ) ( 6,635 ) Total ( 7,791 ) ( 10,243 ) ( 36,613 ) Provision (benefit) for income taxes $ ( 4,258 ) $ ( 8,132 ) $ ( 33,719 ) The following reconciles the differences between income taxes computed at the federal statutory rate of 21 % and the provision for income taxes (in thousands): Year ended Year ended Year ended 2023 2022 2021 Expected income tax benefit at the federal statutory rate $ ( 7,971 ) $ ( 8,899 ) $ ( 25,703 ) State tax net of federal benefit ( 1,347 ) ( 1,170 ) ( 4,565 ) Stock-based compensation 17 822 1,277 Withholding Tax 1,227 1,061 612 Difference in foreign tax rates 354 ( 2,744 ) 3 Tax credits ( 2,514 ) 381 — Change in valuation allowance 5,403 1,609 ( 6,385 ) Other 573 808 1,042 Income tax provision (benefit) $ ( 4,258 ) $ ( 8,132 ) $ ( 33,719 ) Year Ended December 31, Year Ended December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 59,630 $ 83,397 Research and development credits 12,078 11,405 Business interest deduction limitation 7,712 9,979 Capitalized R&D expenses 24,726 18,235 Accruals and reserves 4,859 5,089 Depreciation and amortization 485 514 Lease liability 3,868 5,430 Stock-based compensation 2,367 2,062 Valuation allowance ( 18,527 ) ( 12,556 ) Total deferred tax assets 97,198 123,555 Deferred tax liabilities: Intangible assets ( 93,970 ) ( 128,495 ) Deferred commissions ( 6,752 ) ( 7,269 ) Right of use asset ( 1,940 ) ( 2,799 ) Capitalized costs ( 2,217 ) ( 1,551 ) Total deferred tax liabilities ( 104,879 ) ( 140,114 ) Net deferred tax liabilities $ ( 7,681 ) $ ( 16,559 ) On a quarterly basis, we estimate our annual effective tax rate to be applied to ordinary pre-tax income and record the tax impact of any discrete items separately in the relevant period. In addition, any change in valuation allowance that results from a change in judgment of the realizability of deferred tax assets is recorded in the quarter in which the change in judgment occurs. The income tax benefit of $ 4.3 million during the year ended December 31, 2023 primarily relates to the pre-tax GAAP loss, current year credits generated and valuation allowance recorded. During the year ended December 31, 2023 , we recognized a $ 33.4 million add-back to taxable income related to the Section 174 capitalization of research and development expense legislation, which was entirely offset by net operating loss carryforwards in the current year. Given our cumulative loss position, we cannot currently substantiate the realizability of $ 18.5 million of the deferred tax asset established, and have therefore recorded a partial valuation allowance against the balance. At December 31, 2023 , we had $ 59.6 million in tax-effected federal, state and foreign net operating loss carryforwards. Additionally, at December 31, 2023 , we had $ 13.5 million in income tax credits, net of recorded uncertain tax positions ( “UTPs”) , consisting of federal and state research and development tax credits. These tax credits, if unused, begin expiring in 2024 . We review all available evidence to evaluate our recovery of deferred tax assets, including our history of accumulated losses in all tax jurisdictions over the most recent three years as well as our ability to generate income in future periods. We have provided a valuation allowance against some of our U.S. state and federal net deferred tax assets as it is more likely than not that these assets will not be realized given the nature of the assets and the likelihood of future utilization. The valuation allowanc e increased by $ 6.0 million in the year ended December 31, 2023, due to R&D Credit carryforwards and foreign capitalized Section 174 costs. The valuation allowanc e increased by $ 2.8 million in the year ended December 31, 2022, primarily due to the Section 174 capitalization for foreign research and development costs rolling off over a 15 year period, creating deferred tax assets in excess of deferred tax liabilities expected in years 2030 through 2037. U.S. income taxes on the undistributed earnings of our non-U.S. subsidiaries have not been provided for as we currently plan to indefinitely reinvest these amounts and have the ability to do so. Cumulative undistributed foreign earnings were not material at December 31, 2023 and December 31, 2022. We had federal net operating loss carryforwards of $ 173.8 million and $ 271.0 million at December 31, 2023 and 2022 , respectively, some of which if unused will begin to expire at various dates through 2041 . We had federal research and development credit carryforwards of $ 15.7 million and $ 14.5 million at December 31, 2023 and 2022 , respectively, that if unused will expire at various dates through 2041 . We also had state research and investment credit carryforwards of $ 5.1 million and $ 4.5 million as of December 31, 2023 and 2022 , respectively, that if unused will expire at various dates through 2037 . Uncertain Tax Positions We account for uncertainty in income taxes using a two-step process. We first determine whether it is more likely than not that a tax position will be sustained upon examination by the tax authority, including resolutions of any related appeals or litigation processes, based on technical merit. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The following summarizes activity related to unrecognized tax benefits (in thousands): Year ended Year ended Year ended 2023 2022 2021 Unrecognized benefit—beginning of the year $ 7,000 $ 6,897 $ 6,632 Gross increases (decreases)—prior period positions 1,050 103 — Gross increases (decreases)—current period positions — — 265 Unrecognized benefit—end of period $ 8,050 $ 7,000 $ 6,897 The Company does not expect any significant change in our unrecognized tax benefits within the next 12 months. At December 31, 2023 , the Company had $ 8.1 million of total unrecognized tax benefits recorded against research and development tax credit carryforwards and federal net operating loss carryforwards, all of which would impact the effective tax rate if recognized. At December 31, 2022 , the Company had $ 7.0 million of unrecognized tax benefits decreasing deferred tax assets. We have elected to recognize interest and penalties related to UTPs as a component of income tax expense. No interest or penalties have been recorded through the year ended December 31, 2023. We file tax returns in the United States, the United Kingdom, Australia, the Netherlands, Hong Kong, Sweden, Hungary, Mexico, Brazil, China, Singapore and various state jurisdictions. All of our tax years remain open to examination by major taxing jurisdictions to which we are subject, as carryforward attributes generated in past years may still be adjusted upon examination by the Internal Revenue Service or state and foreign tax authorities if they have or will be used in future periods. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 10. Fair Value of Financial Instruments The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. There were no transfers between Level 1 and Level 2 of the fair value measurement hierarchy during 2023 and 2022. Instruments Not Recorded at Fair Value on a Recurring Basis. We estimate the fair value of our Senior Term Loan carried at face value, less unamortized discount costs, quarterly for disclosure purposes. The estimated fair value of our Senior Term Loan is determined by Level 2 inputs, observable market based inputs or unobservable inputs that are corroborated by market data. As of December 31, 2023, the fair value of our Senior Term Loan was $ 486.4 million. The carrying amounts of our cash, accounts receivable, prepaid expenses, other current assets, accounts payable, and accrued liabilities approximate their current fair value because of their nature and relatively short maturity dates or durations. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | 11. Leases The Company leases office space under non-cancelable operating leases with lease terms ranging from one to six years . These leases require monthly lease payments that may be subject to annual increases throughout the lease term. The Company subleases four of its locations. The first sublease expired in the second quarter of 2023, and the second, third, and fourth s ublease terms had 60 months , 25 months , and 4 months remaining, a s of December 31, 2023, respectively. None of the above subleases have an option for renewal. Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Right-of-use assets also include adjustments related to prepaid or deferred lease payments and lease incentives. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present value of lease payments. The Company performed evaluations of its contracts and determined that each of its identified leases are operating leases. The components of operating lease expense were as follows (in thousands): Year ended Year ended Year ended 2023 2022 2021 Operating lease cost, gross $ 6,465 $ 7,053 $ 7,247 Variable lease cost, gross (1) 2,504 2,262 1,961 Sublease income ( 1,023 ) ( 1,180 ) ( 1,094 ) Total lease costs (2) $ 7,946 $ 8,135 $ 8,114 (1) Variable rent expense was not included within the measurement of the Company's operating right-of-use assets and lease liabilities. Variable rent expense is comprised primarily of the Company's proportionate share of operating expenses, property taxes and insurance and is classified as lease expense due to the Company's election to not separate lease and non-lease components. (2) Short-term lease costs for the year ended December 31, 2023, 2022, and 2021 were not significant and are not included in the table above. Cash paid for amounts included in the measurement of operating lease liabilities for the year ended December 31, 2023, 2022, and 2021 were $ 8.7 million, $ 8.4 million, and $ 8.6 million, respectively, and was included in net cash provided by operating activities in the consolidated statements of cash flows. As of December 31, 2023, the maturities of the Company's operating lease liabilities were as follows (in thousands): 2024 $ 8,554 2025 4,423 2026 2,817 2027 1,997 2028 1,097 Thereafter — Total lease payments 18,888 Less: Imputed interest ( 2,129 ) Lease liabilities 16,759 Tenant improvement reimbursements included in the measurement of lease liabilities but not yet received ( 414 ) Lease liabilities, net 16,345 As of December 31, 2023 and 2022, the weighted average remaining lease term was 3.0 and 3.6 years, respectively and the weighted average discount rate used to determine operating lease liabilities was 8.22 % and 8.20 % , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Non-cancelable purchase obligations As of December 31, 2023 , our outstanding non-cancelable purchase obligations with a term of 12 months or longer related to cloud infrastructure and business analytic services in the ordinary course of business totaled $ 56.2 million for fiscal year 2024, $ 60.0 million per year for fiscal years 2025 through 2027, and $ 65.0 million for fiscal year 2028. For the year ended December 31, 2023, we recognized expenses o f $ 50.8 million in subscription and support cost of revenue , $ 1.8 million in research and development, $ 0.9 million in professional services and other cost of revenue, $ 0.1 million in sales and marketing, and $ 0.1 million in general and administrative in our consolidated statements of operations and comprehensive loss related to our non-cancelable purchase obligations. For the year ended December 31, 2022, we recognized expenses of $ 38.4 million in subscription and support cost of revenue, $ 2.2 million in research and development, $ 1.0 million in professional services and other cost of revenue, $ 0.1 million in sales and marketing, and $ 0.1 million in general and administrative in our consolidated statements of operations and comprehensive loss related to our non-cancelable purchase obligations. Letters of Credit As of December 31, 2023 and 2022, we had a total of $ 3.2 million and $ 4.3 million, respectively, of letters of credit outstanding that were issued for purposes of securing certain of the Company’s obligations under facility leases and other contractual arrangements. Litigation We are involved in various legal proceedings and claims, including challenges to trademarks, from time to time arising in the normal course of business. If we determine that it is probable that a loss has been incurred and the amount is reasonably estimable, we will record a liability in our consolidated financial statements. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. Although the results of litigation and claims are inherently unpredictable and uncertain, management does not believe that the outcome of our various legal proceedings, if determined adversely to us, singly or in the aggregate, would have a material impact on our financial position, results of operations, or liquidity. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | 13. Employee Benefit Plan We sponsor a qualified 401(k) defined contribution plan (the “401(k) Plan”), available to all qualified employees. The 401(k) Plan allows employees to contribute gross salary though payroll deductions up to the legally mandated limit based on their jurisdiction. For the year ended December 31, 2023 , the 401(k) Plan provides for matching contributions equal to 50 % of each participant's elective contributions, not to exceed $ 2,500 per participant annually. For the year ended December 31, 2022 and 2021, the 401(k) Plan provided for matching contributions equal to 50 % of each participant's elective contributions, not to exceed $ 2,000 per participant annually. Participants vest in matching contributions over a three-year period after a one-year cliff vest. The cost recognized for our contributions to the 401(k) Plan for the year ended December 31, 2023, 2022, and 2021, was $ 1.8 million, $ 1.4 million, and $ 1.4 million, respectively. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 14. Related-Party Transactions The Company has agreements in place with Thoma Bravo, LLC for financial and management advisory services, along with compensation arrangements and reimbursements to directors and officers. During the year ended December 31, 2023, 2022, and 2021, the Company incurred $ 0.6 million, $ 0.6 million, and $ 0.1 million, respectively, related to these services. The related expense is reflected in general and administrative expense in the consolidated statements of operations and comprehensive loss. In connection with our entry into our Credit Facilities on March 24, 2020, affiliates of Thoma Bravo collectively acquired $ 129.2 million of our Term Loan. In connection with our principal prepayments made in August 2021, $ 42.5 million of the prepayments were applied to the Term Loan held by affiliates of Thoma Bravo. Additionally, in connection with our October 29, 2021 Refinancing, $ 88.6 million of our Term Loan held by affiliates of Thoma Bravo was paid off. Refer to Note 5—Credit Facility for additional information regarding the principal prepayments and Refinancing. Interest paid to affiliates of Thoma Bravo during the year ended December 31, 2021 was $ 7.5 million. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events On January 1, 2024, the Company made the decision to vacate multiple floors of its leased office space at its headquarters in Salt Lake City, Utah, with the intention of subleasing the vacated office space. The Company is assessing the impact of this decision to the current net-book value of its long-lived tangible assets. On February 1, 2024, Instructure entered into the Second Amendment to the Credit Agreement (the “Second Amendment”), which amends that certain Credit Agreement, dated as of October 29, 2021 (as amended by that certain First Amendment to Credit Agreement, dated as of June 21, 2023, and as further amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), by and among the Instructure and certain of its subsidiaries, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders named therein. Pursuant to the Second Amendment, among certain other amendments, the lenders named in the Second Amendment agreed, severally and not jointly, to extend additional 2023 Incremental Term Loans (as defined in the 2021 Credit Agreement) (the “2023 Incremental Term Loans”) to the Company under the 2021 Credit Agreement in an aggregate principal amount equal to $ 685.0 million. The Company used the proceeds of the 2023 Incremental Term Loans, borrowed under the 2021 Credit Agreement, to finance (i) the cash consideration for the acquisition of PCS Holdings, LLC (“Parchment”), a Delaware limited liability company, and (ii) fees and costs incurred in connection with the acquisition and related transactions. On February 1, 2024, Instructure closed the previously announced acquisition of Parchment, the world’s largest academic credentialing platform and network, where 100 % of the equity interests were acquired in the all cash transaction. The purchase was financed through a combination of cash on hand and debt financing. The purpose of the transaction is to bolster the Instructure Learning Platform's scale and reach as learners are engaged throughout their lifelong learning journey, facilitating evidence of learning and streamlining the educational process for educators and learners during key transitions. The Company intends to integrate Parchment into its single operating segment. The preliminary purchase price is $ 833.3 million. The purchase price was paid to the sellers net of unpaid indebtedness and transaction expenses, and is subject to certain post-closing adjustments as set forth in the Purchase Agreement. The Company is currently evaluating the purchase price allocation following the close of the acquisition of Parchment and expects the primary assets acquired to be intangible assets and goodwill, and expects to assume liabilities. It is not practicable to disclose the preliminary purchase price allocation or unaudited pro forma combined financial information for this acquisition, given the short period of time between the acquisition date and the issuance of these consolidated financial statements. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Organization | Organization On March 24, 2020, Instructure Parent, L.P. (“TopCo”) acquired 100 percent of Instructure, Inc.’s equity. Instructure Intermediate Holdings I, Inc. was a wholly-owned subsidiary of TopCo and was formed on January 14, 2020 by Thoma Bravo for the purpose of purchasing Instructure, Inc. and had no operations prior to the Take-Private Transaction. On May 26, 2021, Instructure Intermediate Holdings I, Inc. changed its name to Instructure Holdings, Inc (the “Company,” “Instructure,” “we,” “our,” or “us”). Instructure is an education technology company dedicated to elevating student access, amplifying the power of teaching, and inspiring everyone to learn together. Instructure’s learning platform delivers a next-generation learning management system (“LMS”), robust assessments for learning, actionable analytics, and engaging, dynamic content. Instructure offers its learning platform through a Software-as-a-Service, or SaaS, business model. Instructure, Inc. was incorporated in the state of Delaware in September 2008. We are headquartered in Salt Lake City, Utah, and have wholly-owned subsidiaries in the United Kingdom, Australia, the Netherlands, Hong Kong, Sweden, Brazil, Mexico, Hungary, and Singapore . |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The accompanying consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation. On July 9, 2021, the Company effected a 126,239.815 -for-1 stock split of its issued and outstanding shares of common stock and made comparable and equitable adjustments to its equity awards in accordance with the terms of the awards. The par value of the common stock was not adjusted as a result of the stock split. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retrospectively, where applicable, to reflect this stock split. In connection with the stock split, on July 9, 2021, the Company’s board of directors and stockholders approved the Certificate of Amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 2,000 shares to 500,000,000 shares and to increase the number of authorized shares of preferred stock from zero shares to 50,000,000 shares. No preferred stock has been issued or outstanding. On July 26, 2021, the Company completed its IPO of 12,500,000 shares of common stock at an offering price of $ 20.00 per share. The Company received net proceeds of $ 234.0 million after deducting underwriting discounts and commissions. On August 19, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 1,675,000 shares of common stock at the offering price of $ 20.00 per share. The Company received additional net proceeds of $ 31.4 million after deducting underwriting discounts and commissions. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Such estimates, which we evaluate on an on-going basis, include provisions for credit losses, useful lives for property and equipment and intangible assets, valuation allowances for net deferred income tax assets, acquisition related estimates, our assessment for impairment of goodwill, intangible assets, and other long-lived assets, the standalone selling price of performance obligations, timing of professional services revenue recognition, and the determination of the period of benefit for deferred commissions. We base our estimates on historical experience and on various other assumptions which we believe to be reasonable. |
Operating Segments | Operating Segments We operate in a single operating segment: cloud-based learning management, assessment and performance systems. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision makers (“CODMs”), which are our chief executive officer and chief financial officer, in deciding how to allocate resources and assess performance. Our CODMs evaluate our financial information and resources and assess the performance of these resources on a consolidated basis. Since we operate in one operating segment, all required financial segment information can be found in the consolidated financial statements. |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders for the year ended December 31, 2023, 2022, and 2021 is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. Restricted stock units and shares purchased through the employee stock purchase plan are considered to be common stock equivalents in the year ended December 31, 2023, 2022, and 2021. A reconciliation of the denominator used in the calculation of basic and diluted net loss per share is as follows (in thousands, except per share amounts): Year ended Year ended Year ended 2023 2022 2021 Numerator: Net loss $ ( 34,078 ) $ ( 34,242 ) $ ( 88,679 ) Denominator: Weighted-average common shares outstanding—basic 143,968 141,815 132,387 Dilutive effect of share equivalents resulting from — — — Weighted-average common shares outstanding-diluted 143,968 141,815 132,387 Net loss per common share, basic and diluted $ ( 0.24 ) $ ( 0.24 ) $ ( 0.67 ) For the year ended December 31, 2023, 2022, and 2021, we incurred net losses and, therefore, the effect of our outstanding restricted stock units and rights to purchase common stock through the employee stock purchase plan were not included in the calculation of diluted net loss per share as the effect would be anti-dilutive. The following table contains share totals with a potentially dilutive impact (in thousands): Year ended Year ended Year ended 2023 2022 2021 Restricted stock units 4,790 4,846 4,723 Employee stock purchase plan 105 129 176 Total 4,895 4,975 4,899 |
Concentration of Credit Risk, Significant Customers and International Operations | Concentration of Credit Risk, Significant Customers and International Operations Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash, cash equivalents and accounts receivable. We deposit cash with high credit quality financial institutions, which typically exceed federally insured amounts. We have not experienced any losses on our deposits. We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral from our customers. We review the expected collectability of accounts receivable and record a provision for credit losses for amounts that we determine are not collectible. There were no customers with revenue as a percentage of total revenue exceeding 10% for the periods presented. As of December 31, 2023, and 2022 there were no customers with outstanding net accounts receivable balances as a percentage of total outstanding net accounts receivable greater than 10 %. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all short-term highly liquid investments purchased with original maturities of three months or less at the time of acquisition to be cash equivalents. |
Provision for Credit Losses | Provision for Credit Losses Provision for credit losses consist of bad debt expense associated with our accounts receivable balance. These losses are recorded in general and administrative in our consolidated statements of operations and comprehensive loss. We are exposed to credit losses primarily through our receivables from customers. We develop estimates to reflect the risk of credit loss which are based on historical loss trends adjusted for asset specific attributes, current conditions and reasonable and supportable forecasts of the economic conditions that will exist through the contractual life of the financial asset. We monitor our ongoing credit exposure through an active review of collection trends. Our activities include monitoring the timeliness of payment collection, managing dispute resolution and performing timely account reconciliations. The following is a roll-forward of our provision for credit losses (in thousands): Balance Charged to Deductions (1) Balance at Provision for Credit Losses Year ended December 31, 2023 $ 1,468 1,583 ( 1,012 ) $ 2,039 Year ended December 31, 2022 $ 815 940 ( 287 ) $ 1,468 Year ended December 31, 2021 $ 902 232 ( 319 ) $ 815 (1) Deductions include actual accounts written-off, net of recoveries. |
Property and Equipment and Intangible Assets | Property and Equipment and Intangible Assets Property and equipment are stated at cost less accumulated depreciation. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Repairs and maintenance costs that do not extend the useful life or improve the related assets are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets or over the related lease terms (if shorter). The estimated useful life of each asset category is as follows: Estimated Computer and office equipment 2 - 3 years Purchased software 2 - 3 years Furniture and fixtures 2 - 5 years Capitalized software development costs 3 years Leasehold improvement and other Lesser of lease term or useful life Certain costs incurred to develop software applications used in the cloud-based learning, assessment, development and engagement system are capitalized and included in property and equipment, net on the consolidated balance sheets. Capitalizable costs consist of (1) certain external direct costs of materials and services incurred in developing or obtaining internal-use software; and (2) payroll and payroll-related costs for employees who are directly associated with and who devote time to the project. These costs generally consist of internal labor during configuration, coding and testing activities. Research and development costs incurred during the preliminary project stage, or costs incurred for data conversion activities, training, maintenance and general and administrative or overhead costs, are expensed as incurred. Costs that cannot be separated between the maintenance of, and relatively minor upgrades and enhancements to, internal-use software are also expensed as incurred. Costs incurred during the application development stage that significantly enhance and add new functionality to the cloud-based learning, assessment, development and engagement system are capitalized as capitalized software development costs. Capitalization begins when: (1) the preliminary project stage is complete; (2) management with the relevant authority authorizes and commits to the funding of the software project; (3) it is probable the project will be completed; (4) the software will be used to perform the functions intended; and (5) certain functional and quality standards have been met. Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful life of the asset, which ranges from one to ten years . When there are indicators of potential impairment, we evaluate recoverability of the carrying values of property and equipment and finite-lived intangible assets by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds our estimated undiscounted future net cash flows, an impairment charge is recognized based on the amount by which the carrying value of the asset exceeds the fair value of the asset. |
Leases | Leases We enter into operating lease arrangements for real estate assets related to office space. Consistent with the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”) 842, Leases (“Topic 842”), the Company determines if an arrangement conveys the right to control the use of the identified asset in exchange for consideration. Operating leases are included as right-of-use assets and lease liabilities in the consolidated balance sheets. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease payments consist of the fixed payments under the arrangements. Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of right-of-use assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. As the implicit rate of the Company’s leases is not determinable, the Company uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. |
Fair Value | Fair Value Our short-term financial instruments include cash equivalents, accounts receivable, accounts payable and accrued liabilities and are carried on the consolidated financial statements as of December 31, 2023 and 2022 at amounts that approximate fair value due to their short-term maturity dates. |
Goodwill | Goodwill Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Goodwill is not subject to amortization, but is tested annually for impairment within our fourth fiscal quarter using an October 1 measurement date or more frequently if there are indicators of impairment. We first perform a qualitative assessment to determine if it is more likely than not that our reporting unit's carrying amount exceeds its fair value, referred to as a “step zero” approach. If, based on the review of the qualitative factors, we determine it is not more likely than not that the fair value of our reporting unit is less than its carrying value, we would bypass the quantitative impairment test. Management considers the following potential indicators of impairment: (1) significant underperformance relative to historical or projected future operating results; (2) significant changes in our use of acquired assets or the strategy of our overall business; (3) significant negative industry or economic trends; and (4) a significant decline in our stock price for a sustained period. We operate under one reporting unit and, as a result, evaluate goodwill impairment based on our fair value as a whole. Our current year impairment test did not result in any impairment of the goodwill balance as no indicators of impairment were identified. Refer to Note 3—Acquisitions and Disposals for additional information regarding impairment of goodwill recognized in the year ended December 31, 2021 related to the sale of Bridge. We did not recognize any additional impairment charges in any of the periods presented. We have no other intangible assets with indefinite useful lives. There were no acquisitions during the year ended December 31, 2023. |
Revenue Recognition | Revenue Recognition We generate revenue primarily from two main sources: (1) subscription and support revenue, which is comprised of SaaS fees from customers accessing our learning platform and from customers purchasing additional support beyond the standard support that is included in the basic SaaS fees; and (2) related professional services revenue, which is comprised of training, implementation services and other types of professional services. Consistent with ASC 606, Revenue from Contracts with Customers, revenue is recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The timing of revenue recognition may differ from the timing of invoicing our customers. We record an unbilled receivable, which is included within accounts receivable—net on our consolidated balance sheets, when revenue is recognized prior to invoicing. Unbilled receivable balances as of December 31, 2023 and 2022 were $ 2.8 million and $ 0.6 million, respectively. We determined revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation The following describes the nature of our primary types of revenue and the revenue recognition policies and significant payment terms as they pertain to the types of transactions we enter into with our customers. Subscription and Support Subscription and support revenue is derived from fees from customers to access our learning platform and support beyond the standard support that is included with all subscriptions. The terms of our subscriptions do not provide customers the right to take possession of the software. Subscription and support revenue is generally recognized on a ratable basis over the contract term. Payments from customers are primarily due annually in advance. Professional Services and Other Professional services revenue is derived from implementation, training, and consulting services. Our professional services are typically considered distinct from the related subscription services as the promise to transfer the subscription can be fulfilled independently from the promise to deliver the professional services (i.e., customer receives standalone functionality from the subscription and the customer obtains the intended benefit of the subscription without the professional services). Professional services arrangements are billed in advance, and revenue from these arrangements is typically recognized over time as the services are rendered, using an efforts-expended input method. Implementation services also include nonrefundable upfront setup fees, which are allocated to the remaining performance obligations. Contracts with Multiple Performance Obligations Many of our contracts with customers contain multiple performance obligations. We account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. We determine the SSP based on our overall pricing objectives by reviewing our significant pricing practices, including discounting practices, geographical locations, the size and volume of our transactions, the customer type, price lists, our pricing strategy, and historical standalone sales. SSP is analyzed on a periodic basis to identify if we have experienced significant changes in our selling prices. Deferred Commissions Sales commissions earned by our sales force, as well as related payroll taxes, are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be generally four years. We determined the period of benefit by taking into consideration our customer contracts, our technology and other factors. Amortization of deferred commissions is included in sales and marketing expenses in the accompanying consolidated statements of operations and comprehensive loss. Deferred Revenue Deferred revenue consists of billings and payments received in advance of revenue recognition generated by our subscription and support services and professional services and other, as described above. |
Cost of Revenue | Cost of Revenue Cost of subscription revenue consists primarily of our managed hosting provider and other third-party service providers, employee-related costs including payroll, benefits and stock-based compensation expense for our operations and customer support teams, amortization of capitalized software development costs and acquired technology, and allocated overhead costs, which we define as rent, facilities and costs related to information technology, or IT. Cost of professional services and other revenue consists primarily of personnel costs of our professional services organization, including salaries, benefits, travel, bonuses and stock-based compensation, as well as allocated overhead costs. |
Service Availability Warranty | Service Availability Warranty We warrant to our customers: (1) that commercially reasonable efforts will be made to maintain the online availability of the platform for a minimum availability in a trailing 365-day period (excluding scheduled outages, standard maintenance windows, force majeure, and outages that result from any technology issue originating from any customer or user); (2) the functionality or features of the platform may change but will not materially degrade during any paid term; and (3) that support may change but will not materially degrade during any paid term. To date, we have not experienced any significant losses under these warranties. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and are included in sales and marketing expenses in the consolidated statements of operations and comprehensive loss. Advertising expenses totaled $ 8.4 million, $ 9.4 million, and $ 8.3 million, for the year ended December 31, 2023, 2022, and 2021 , respectively. |
Stock-Based Compensation | Stock-Based Compensation Before our IPO, we determined the grant date fair value for all unit-based awards granted to employees and nonemployees by using an option-pricing model. As of June 30, 2021, our equity was not publicly traded and there was no history of market prices for our units. Thus, estimating grant date fair value required us to make assumptions, including the value of our equity, expected time to liquidity, and expected volatility. Stock-based compensation costs for granted units were recognized as expense over the requisite service period, which was generally the vesting period for awards, on a straight-line basis for awards with only a service condition. For granted units subject to performance conditions, the Company recorded expense when the performance condition became probable. Forfeitures were accounted for as they occurred. Subsequent to our IPO in July 2021, we account for all awards granted to employees and nonemployees using a fair value method. Stock-based compensation is recognized as an expense and is measured at the fair value of the award. The measurement date for employee awards is generally the date of the grant. Stock-based compensation costs are recognized as expense over the requisite service period, which is generally the vesting period for awards, on a straight-line basis for awards with only a service condition. Forfeitures are accounted for as they occur. We use the closing price of our common stock as reported on the New York Stock Exchange for the fair value of restricted stock units (“RSUs”) granted. We use the Black-Scholes option pricing model to determine the fair value of purchase rights issued to employees under our 2021 Employee Stock Purchase Plan (“2021 ESPP”). The Black-Scholes option pricing model is affected by the price of our common stock and a number of assumptions, including the award’s expected life, risk-free interest rate, the expected volatility of the underlying stock and expected dividends. These assumptions are estimated as follows: • Fair Value of Our Common Stock. We rely on the closing price of our common stock as reported by the New York Stock Exchange on the date of grant to determine the fair value of our common stock. • Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes option pricing model on the implied yield available on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. • Expected Term. For the 2021 ESPP, we used an expected term of 0.6 years for the first offering period and used an expected term of 0.5 years for subsequent offering periods. • Volatility. For the first offering period, we estimated the price volatility factor based on the historical volatilities of our comparable companies as we did not have a sufficient trading history for our common stock. To determine our comparable companies, we considered public enterprise cloud-based application providers and selected those that were similar to us in size, stage of life cycle, and financial leverage. Beginning with the second offering period we began using the trading history of our own common stock to determine expected volatility. • Expected Dividend Yield. We have not paid and do not expect to pay dividends for the foreseeable future. |
Business Combinations | Business Combinations We estimate the fair value of assets acquired and liabilities assumed in a business combination. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. |
Foreign Currency | Foreign Currency The functional currency of our foreign subsidiaries is the U.S. dollar. Monetary assets and liabilities denominated in a foreign currency are remeasured into U.S. dollars at the exchange rates in effect at the balance sheet dates. Income and expense accounts are remeasured on the date of the transaction using the exchange rate in effect on the transaction date. Non-monetary assets, liabilities, and equity transactions are converted at historical exchange rates in effect at the time of the transaction. Foreign currency transaction gains and losses are recorded in other income (expense), net in the consolidated statements of operations and comprehensive loss. |
Research and Development | Research and Development With the exception of capitalized software development costs, research and development costs are expensed as incurred. |
Risks and Uncertainties | Risks and Uncertainties We are subject to all of the risks inherent in an early stage business. These risks include, but are not limited to, a limited operating history, new and rapidly evolving markets, dependence on the development of new services, unfavorable economic and market conditions, changes in level of demand for our services, and the timing of new application introductions. If we fail to anticipate or to respond adequately to technological developments in our industry, changes in customer or supplier requirements, or changes in regulatory requirements or industry standards, or any significant delays in the development or introduction of services, our business could be harmed. |
Income Taxes | Income Taxes We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating losses and tax credit carryforwards. Management must make assumptions, judgments and estimates to determine our current provision for income taxes and our deferred tax assets and liabilities. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. Accordingly, the need to establish such allowance is assessed periodically by considering matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and results of recent operations. The evaluation of recoverability of the deferred tax assets requires that we weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. In recognizing tax benefits from uncertain tax positions, we assess whether it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. As we expand internationally, we will face increased complexity in determining the appropriate tax jurisdictions for revenue and expense items, and as a result, we may record unrecognized tax benefits in the future. At that time, we would make adjustments to these potential future reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. Our estimate of the potential outcome of any uncertain tax position is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. To the extent that the final tax outcome of these matters would be different to the amounts we may potentially record in the future, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent accounting pronouncements not yet adopted In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), which updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related notes. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740), which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements and related notes. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Reconciliation of the Denominator Used in the Calculation of Basic and Diluted Net Loss Per Share | A reconciliation of the denominator used in the calculation of basic and diluted net loss per share is as follows (in thousands, except per share amounts): Year ended Year ended Year ended 2023 2022 2021 Numerator: Net loss $ ( 34,078 ) $ ( 34,242 ) $ ( 88,679 ) Denominator: Weighted-average common shares outstanding—basic 143,968 141,815 132,387 Dilutive effect of share equivalents resulting from — — — Weighted-average common shares outstanding-diluted 143,968 141,815 132,387 Net loss per common share, basic and diluted $ ( 0.24 ) $ ( 0.24 ) $ ( 0.67 ) |
Summary of Shares Excluded from Calculation of Diluted Net Loss Per Share with a Potential Dilutive Impact | The following table contains share totals with a potentially dilutive impact (in thousands): Year ended Year ended Year ended 2023 2022 2021 Restricted stock units 4,790 4,846 4,723 Employee stock purchase plan 105 129 176 Total 4,895 4,975 4,899 |
Summary of Allowance for Doubtful Accounts | The following is a roll-forward of our provision for credit losses (in thousands): Balance Charged to Deductions (1) Balance at Provision for Credit Losses Year ended December 31, 2023 $ 1,468 1,583 ( 1,012 ) $ 2,039 Year ended December 31, 2022 $ 815 940 ( 287 ) $ 1,468 Year ended December 31, 2021 $ 902 232 ( 319 ) $ 815 (1) Deductions include actual accounts written-off, net of recoveries. |
Summary of Estimated Useful Life of Each Asset Category | The estimated useful life of each asset category is as follows: Estimated Computer and office equipment 2 - 3 years Purchased software 2 - 3 years Furniture and fixtures 2 - 5 years Capitalized software development costs 3 years Leasehold improvement and other Lesser of lease term or useful life |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following (in thousands): December 31, 2023 2022 Computer and office equipment $ 5,437 $ 5,528 Capitalized software development costs 13,556 8,585 Furniture and fixtures 1,153 1,589 Leasehold improvements and other 6,270 6,970 Total property and equipment 26,416 22,672 Less accumulated depreciation and amortization ( 12,937 ) ( 10,292 ) Total $ 13,479 $ 12,380 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Concentric Sky, Inc | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The final allocation of the purchase price was as follows (in thousands): Total purchase consideration $ 21,314 Identifiable assets acquired Cash $ 1,330 Accounts receivable 1,018 Prepaid expenses and other assets 109 Intangible assets: developed technology 3,900 Intangible assets: customer relationships 9,100 Total assets acquired $ 15,457 Liabilities assumed Accounts payable and accrued liabilities $ 1,335 Deferred revenue 2,566 Total liabilities assumed $ 3,901 Goodwill 9,758 Total purchase consideration $ 21,314 |
LearnPlatform, LLC | |
Schedule of Final Allocation of the Purchase Price | The final allocation of the purchase price was as follows (in thousands): Total purchase consideration $ 93,975 Identifiable assets acquired Cash $ 4,297 Accounts receivable 1,306 Prepaid expenses and other assets 373 Right-of-use asset 288 Deferred tax asset 1,020 Intangible assets: developed technology 7,600 Intangible assets: customer relationships 28,700 Intangible assets: trade names and trademarks 300 Intangible assets: non-compete agreements 50 Total assets acquired $ 43,934 Liabilities assumed Accounts payable and accrued liabilities $ 767 Deferred revenue 6,900 Lease liabilities 288 Deferred tax liabilities 3,341 Total liabilities assumed $ 11,296 Goodwill 61,337 Total purchase consideration $ 93,975 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill activity was as follows (in thousands): Total Balance as of December 31, 2022 $ 1,266,402 Adjustments (Note 3 - Acquisitions and Disposals) ( 1,086 ) Balance as of December 31, 2023 $ 1,265,316 |
Summary of Intangible Assets | Intangible assets consisted of the following (in thousands): Weighted-Average Remaining Useful Life December 31, 2023 December 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Software 0 Months $ 21 $ ( 21 ) $ — $ 21 $ ( 20 ) $ 1 Trade names 74 Months 126,100 ( 49,336 ) 76,764 126,100 ( 35,936 ) 90,164 Developed technology 20 Months 325,300 ( 232,662 ) 92,638 325,300 ( 167,600 ) 157,700 Customer relationships 45 Months 451,400 ( 221,123 ) 230,277 451,400 ( 156,635 ) 294,765 Non-competition agreements 24 Months 50 ( 17 ) 33 50 ( 1 ) 49 Total $ 902,871 $ ( 503,159 ) $ 399,712 $ 902,871 $ ( 360,192 ) $ 542,679 |
Estimated Amortization Expense | Based on the recorded intangible assets at December 31, 2023, estimated amortization expense is expected to be as follows (in thousands): Amortization Years Ending December 31, Expense 2024 $ 142,442 2025 99,729 2026 79,625 2027 40,682 2028 17,806 Thereafter 19,428 Total $ 399,712 |
Credit Facility (Tables)
Credit Facility (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | The maturities of outstanding debt, as of December 31, 2023, are as follows (in thousands): Amount Years Ending December 31, 2024 $ 5,000 2025 5,000 2026 5,000 2027 5,000 2028 471,250 Thereafter — Total $ 491,250 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Geographic Areas, Revenues from External Customers [Abstract] | |
Schedule of Revenue by Geographic Region | The following tables present the Company’s disaggregated revenues based on its two customer bases and by geographic region, based on the physical location of the customer (in thousands): Year ended Year ended Year ended 2023 2022 2021 Education $ 530,210 $ 475,194 $ 401,699 Corporate — — 3,662 Total revenue $ 530,210 $ 475,194 $ 405,361 Percentage of revenue generated by Education 100 % 100 % 99 % Year ended Year ended Year ended 2023 2022 2021 United States $ 422,849 $ 376,694 $ 325,998 Foreign 107,361 98,500 79,363 Total revenue $ 530,210 $ 475,194 $ 405,361 Percentage of revenue generated outside of the United States 20 % 21 % 20 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Summary of Stock-Based Compensation Expense by Award Type | The following two tables show stock-based compensation by award type and where the stock-based compensation expense was recorded in our consolidated statements of operations and comprehensive loss (in thousands): Year ended Year ended Year ended 2023 2022 2021 Options (1) $ — $ 680 $ 132 Restricted stock units 42,567 36,913 19,586 Employee stock purchase plan 1,629 2,186 1,165 Class A and Class B units — — 4,902 Total stock-based compensation $ 44,196 $ 39,779 $ 25,785 (1) For the year ended December 31, 2022, approximately $ 0.7 million is due to the acceleration and settlement of options from the LearnPlatform 2014 Stock Incentive Plan that was not included in consideration transferred. The amounts were settled in cash and the LearnPlatform 2014 Stock Incentive Plan was terminated on the date of acquisition. |
Summary of Stock-Based Compensation Expense Recorded in Consolidated Statement of Operations | Year ended Year ended Year ended 2023 2022 2021 Subscription and support cost of revenue $ 1,775 $ 1,348 $ 899 Professional services and other cost of revenue 2,218 1,742 959 Sales and marketing 11,971 11,050 6,936 Research and development 14,333 11,467 6,943 General and administrative 13,899 14,172 10,048 Total stock-based compensation $ 44,196 $ 39,779 $ 25,785 |
Summary of Restricted Stock Unit Activity | Restricted Stock Unit activity on or after the IPO date was as follows during the periods indicated, presented for awards granted to employees and members of the board of directors for the year ended December 31, 2023, 2022, and 2021 (in thousands, except per share amounts): RSUs Outstanding Weighted- Average Grant Date Fair RSUs Value Per Share Unvested and outstanding at January 1, 2021 — $ — Granted 2,250 20.91 Vested ( 23 ) 21.21 Forfeited or canceled ( 240 ) 20.14 Unvested and outstanding at December 31, 2021 1,987 $ 21.00 Granted 2,881 21.77 Vested ( 876 ) 21.04 Forfeited or canceled ( 555 ) 21.23 Unvested and outstanding at December 31, 2022 3,437 $ 21.60 Granted 3,317 25.17 Vested ( 1,262 ) 22.43 Forfeited or canceled ( 1,022 ) 23.10 Unvested and outstanding at December 31, 2023 4,470 $ 23.68 |
Summary of Assumptions Relating to Incentive Units | The following table summarizes the activity under the 2020 Plan and their conversion into RSUs under the 2021 Plan for the years ended December 31, 2023, 2022, and 2021 (in thousands, except per unit amounts): RSUs Weighted Average Grant Date Fair Value Per Unit Outstanding Incentive Units at December 31, 2020 8,666 $ 4.03 Incentive Units granted — — Incentive Units forfeited or canceled ( 268 ) 4.09 Incentive Units vested at IPO ( 2,271 ) 4.04 Incentive Units exchanged for RSUs ( 6,127 ) — Incentive Units after IPO — — RSUs exchanged from Incentive Units 3,497 — RSUs forfeited or canceled ( 150 ) 11.06 RSUs vested ( 611 ) 10.00 Unvested and outstanding at December 31, 2021 2,736 $ 10.75 Vested ( 1,112 ) 10.77 Forfeited or canceled ( 215 ) 11.24 Unvested and outstanding at December 31, 2022 1,409 $ 10.72 Vested ( 987 ) 11.21 Forfeited or canceled ( 102 ) 11.13 Unvested and outstanding at December 31, 2023 320 $ 12.30 |
Summary of Assumptions Relating to Stock Options and ESPP Purchase Rights | The following table summarizes the assumptions relating to 2021 ESPP purchase rights used in a Black-Scholes option pricing model for the years ended December 31, 2023 and 2022: Year ended 2023 2022 Dividend yield None None Volatility 18 - 32 % 32 - 47 % Risk-free interest rate 3.34 - 5.47 % 0.06 - 3.34 % Expected life (years) 0.5 0.5 - 0.6 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Provision for Income Taxes | Income (loss) before provision (benefit) for income taxes was as follows (in thousands): Year ended Year ended Year ended 2023 2022 2021 United States $ ( 46,385 ) $ ( 46,281 ) $ ( 124,654 ) Foreign 8,049 3,907 2,256 Total $ ( 38,336 ) $ ( 42,374 ) $ ( 122,398 ) |
Components of Provision (Benefit) for Income Taxes | The components of the provision (benefit) for income taxes were as follows (in thousands): Year ended Year ended Year ended 2023 2022 2021 Current: Federal $ 336 $ — $ — State 1,210 370 2,200 Foreign 1,987 1,741 694 Total 3,533 2,111 2,894 Deferred: Federal ( 6,851 ) ( 6,950 ) ( 24,611 ) State ( 2,304 ) ( 2,229 ) ( 5,367 ) Foreign 1,364 ( 1,064 ) ( 6,635 ) Total ( 7,791 ) ( 10,243 ) ( 36,613 ) Provision (benefit) for income taxes $ ( 4,258 ) $ ( 8,132 ) $ ( 33,719 ) |
Reconciliation of Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes | The following reconciles the differences between income taxes computed at the federal statutory rate of 21 % and the provision for income taxes (in thousands): Year ended Year ended Year ended 2023 2022 2021 Expected income tax benefit at the federal statutory rate $ ( 7,971 ) $ ( 8,899 ) $ ( 25,703 ) State tax net of federal benefit ( 1,347 ) ( 1,170 ) ( 4,565 ) Stock-based compensation 17 822 1,277 Withholding Tax 1,227 1,061 612 Difference in foreign tax rates 354 ( 2,744 ) 3 Tax credits ( 2,514 ) 381 — Change in valuation allowance 5,403 1,609 ( 6,385 ) Other 573 808 1,042 Income tax provision (benefit) $ ( 4,258 ) $ ( 8,132 ) $ ( 33,719 ) |
Significant Components of Deferred Tax Assets and Liabilities | Year Ended December 31, Year Ended December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 59,630 $ 83,397 Research and development credits 12,078 11,405 Business interest deduction limitation 7,712 9,979 Capitalized R&D expenses 24,726 18,235 Accruals and reserves 4,859 5,089 Depreciation and amortization 485 514 Lease liability 3,868 5,430 Stock-based compensation 2,367 2,062 Valuation allowance ( 18,527 ) ( 12,556 ) Total deferred tax assets 97,198 123,555 Deferred tax liabilities: Intangible assets ( 93,970 ) ( 128,495 ) Deferred commissions ( 6,752 ) ( 7,269 ) Right of use asset ( 1,940 ) ( 2,799 ) Capitalized costs ( 2,217 ) ( 1,551 ) Total deferred tax liabilities ( 104,879 ) ( 140,114 ) Net deferred tax liabilities $ ( 7,681 ) $ ( 16,559 ) |
Summary of Activity Related to Unrecognized Tax Benefits | The following summarizes activity related to unrecognized tax benefits (in thousands): Year ended Year ended Year ended 2023 2022 2021 Unrecognized benefit—beginning of the year $ 7,000 $ 6,897 $ 6,632 Gross increases (decreases)—prior period positions 1,050 103 — Gross increases (decreases)—current period positions — — 265 Unrecognized benefit—end of period $ 8,050 $ 7,000 $ 6,897 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Components of Operating Lease Expense | The Company performed evaluations of its contracts and determined that each of its identified leases are operating leases. The components of operating lease expense were as follows (in thousands): Year ended Year ended Year ended 2023 2022 2021 Operating lease cost, gross $ 6,465 $ 7,053 $ 7,247 Variable lease cost, gross (1) 2,504 2,262 1,961 Sublease income ( 1,023 ) ( 1,180 ) ( 1,094 ) Total lease costs (2) $ 7,946 $ 8,135 $ 8,114 (1) Variable rent expense was not included within the measurement of the Company's operating right-of-use assets and lease liabilities. Variable rent expense is comprised primarily of the Company's proportionate share of operating expenses, property taxes and insurance and is classified as lease expense due to the Company's election to not separate lease and non-lease components. (2) Short-term lease costs for the year ended December 31, 2023, 2022, and 2021 were not significant and are not included in the table above. |
Schedule of Maturities of Operating Lease Liabilities | As of December 31, 2023, the maturities of the Company's operating lease liabilities were as follows (in thousands): 2024 $ 8,554 2025 4,423 2026 2,817 2027 1,997 2028 1,097 Thereafter — Total lease payments 18,888 Less: Imputed interest ( 2,129 ) Lease liabilities 16,759 Tenant improvement reimbursements included in the measurement of lease liabilities but not yet received ( 414 ) Lease liabilities, net 16,345 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Aug. 19, 2021 USD ($) $ / shares shares | Jul. 26, 2021 USD ($) $ / shares shares | Jul. 09, 2021 shares | Dec. 31, 2023 USD ($) Customer Segment $ / shares shares | Dec. 31, 2022 USD ($) Customer $ / shares shares | Dec. 31, 2021 USD ($) | |
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Stock split of issued and outstanding common stock | 126,239.815 | |||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | ||||
Preferred stock, shares issued | 0 | |||||
Preferred stock, shares outstanding | 0 | |||||
Common stock, shares issued | 145,207,000 | 142,917,000 | ||||
Offering price per share | $ / shares | $ 0.01 | $ 0.01 | ||||
Net proceeds after underwriting discounts and commission deduction | $ | $ 6,017 | $ 7,327 | $ 0 | |||
Number of operating segment | Segment | 1 | |||||
Number of reporting units | Segment | 1 | |||||
Unbilled receivables | $ | $ 2,800 | 600 | ||||
Advertising expense | $ | 8,400 | 9,400 | $ 8,300 | |||
Operating lease right-of-use assets | $ | 9,002 | $ 13,575 | ||||
Operating lease liabilities | $ | $ 16,759 | |||||
Top Co [Member] | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Business acquisition, percentage acquired | 100% | |||||
Minimum | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Common stock, shares authorized | 2,000 | |||||
Preferred stock, shares authorized | 0 | |||||
Finite lived intangible asset, estimated useful life | 1 year | |||||
Maximum | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Common stock, shares authorized | 500,000,000 | |||||
Preferred stock, shares authorized | 50,000,000 | |||||
Finite lived intangible asset, estimated useful life | 10 years | |||||
IPO Member | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Common stock, shares issued | 12,500,000 | |||||
Offering price per share | $ / shares | $ 20 | |||||
Net proceeds after underwriting discounts and commission deduction | $ | $ 234,000 | |||||
Over Allotment Option Member | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Common stock, shares issued | 1,675,000 | |||||
Offering price per share | $ / shares | $ 20 | |||||
Net proceeds after underwriting discounts and commission deduction | $ | $ 31,400 | |||||
2021 Employee Stock Purchase Plan | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Expected life (years) | 7 months 6 days | 6 months | ||||
Revenue | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of customers greater than 10 % of total revenue | Customer | 0 | |||||
Accounts Receivable Net | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Number of other customers greater than 10 % of accounts receivable | Customer | 0 | 0 | ||||
Customer Concentration Risk | Accounts Receivable Net | Minimum | International Customers | ||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||
Concentration risk, percentage | 10% | 10% |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Summary of Reconciliation of the Denominator Used in the Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net Income (Loss) | $ (34,078) | $ (34,242) | $ (88,679) |
Denominator: | |||
Weighted-average common shares outstanding—basic | 143,968,000 | 141,815,000 | 132,387,000 |
Total weighted-average common shares outstanding—basic | 143,968,000 | 141,815,000 | 132,387,000 |
Dilutive effect of share equivalents resulting from stock options and unvested restricted stock units | 0 | 0 | 0 |
Weighted-average common shares outstanding-diluted | 143,968,000 | 141,815,000 | 132,387,000 |
Net loss per common share, basic | $ (0.24) | $ (0.24) | $ (0.67) |
Net loss per common share, diluted | $ (0.24) | $ (0.24) | $ (0.67) |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Summary of Shares Excluded from Calculation of Diluted Net Loss Per Share with a Potential Dilutive Impact (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Shares excluded from calculation of diluted loss per share with a potential dilutive impact | 4,895 | 4,975 | 4,899 |
Restricted Stock Units | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Shares excluded from calculation of diluted loss per share with a potential dilutive impact | 4,790 | 4,846 | 4,723 |
Employee Stock Purchase Plan | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Shares excluded from calculation of diluted loss per share with a potential dilutive impact | 105 | 129 | 176 |
Description of Business and S_7
Description of Business and Summary of Significant Accounting Policies - Summary of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Receivables [Abstract] | ||||
Allowance for doubtful accounts, beginning balance | $ 1,468 | $ 815 | $ 902 | |
Allowance for doubtful accounts, charged to costs or expenses | 1,583 | 940 | 232 | |
Allowance for doubtful accounts, deductions | [1] | (1,012) | (287) | (319) |
Allowance for doubtful accounts, ending balance | $ 2,039 | $ 1,468 | $ 815 | |
[1] Deductions include actual accounts written-off, net of recoveries. |
Description of Business and S_8
Description of Business and Summary of Significant Accounting Policies - Summary of Estimated Useful Life Assets Category (Details) | Dec. 31, 2023 |
Capitalized Software Development Costs | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Useful Life, Lease Term [Member] | |
Property Plant And Equipment [Line Items] | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | Leasehold Improvements [Member] |
Minimum | Computer and Office Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 2 years |
Minimum | Purchased Software | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 2 years |
Minimum | Furniture and Fixtures | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 2 years |
Maximum | Computer and Office Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Maximum | Purchased Software | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Maximum | Furniture and Fixtures | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 26,416 | $ 22,672 |
Less accumulated depreciation and amortization | (12,937) | (10,292) |
Total | 13,479 | 12,380 |
Computer and Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 5,437 | 5,528 |
Capitalized Software Development Costs | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 13,556 | 8,585 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 1,153 | 1,589 |
Leasehold Improvements and Other | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 6,270 | $ 6,970 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Accumulated amortization for capitalized software development costs | $ 4.7 | $ 2.4 | |
Amortization expense for capitalized software development costs | $ 2.6 | $ 1.4 | $ 0.7 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 15, 2022 | Feb. 26, 2021 | Sep. 30, 2023 | Dec. 31, 2021 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | |||||
Business acquisition, Goodwill, Expected tax deductible amount | $ 9,700 | ||||
Purchase price of bridge | $ 47,000 | ||||
Proceeds net of transaction costs | $ 46,000 | ||||
Pre tax loss on sale of business | $ 1,200 | ||||
Trade Name | |||||
Business Acquisition [Line Items] | |||||
Finite lived intangible asset, estimated useful life | 74 months | ||||
Minimum | |||||
Business Acquisition [Line Items] | |||||
Finite lived intangible asset, estimated useful life | 1 year | ||||
Maximum | |||||
Business Acquisition [Line Items] | |||||
Finite lived intangible asset, estimated useful life | 10 years | ||||
LearnPlatform, LLC | |||||
Business Acquisition [Line Items] | |||||
Deferred tax liability | 3,341 | ||||
Increase (decrease) in deferred liabilities | $ 3,400 | $ 1,100 |
Acquisitions - Summary of Estim
Acquisitions - Summary of Estimated Fair Values of Consideration transferred, Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 15, 2022 | Apr. 13, 2022 | Dec. 31, 2023 | Dec. 31, 2022 |
Liabilities assumed | ||||
Goodwill | $ 1,265,316 | $ 1,266,402 | ||
LearnPlatform, LLC | ||||
Consideration transferred | ||||
Total purchase consideration | $ 93,975 | |||
Identifiable assets acquired | ||||
Cash | 4,297 | |||
Accounts receivable | 1,306 | |||
Right-of-use asset | 288 | |||
Prepaid expenses and other assets | 373 | |||
Deferred tax asset | 1,020 | |||
Total assets acquired | 43,934 | |||
Liabilities assumed | ||||
Accounts payable and accrued liabilities | 767 | |||
Deferred revenue | 6,900 | |||
Deferred tax liability | 3,341 | |||
Lease liability | 288 | |||
Total liabilities assumed | 11,296 | |||
Goodwill | 61,337 | |||
Total purchase consideration | (93,975) | |||
LearnPlatform, LLC | Developed Technology | ||||
Identifiable assets acquired | ||||
Intangible assets | 7,600 | |||
LearnPlatform, LLC | Customer Relationships | ||||
Identifiable assets acquired | ||||
Intangible assets | 28,700 | |||
LearnPlatform, LLC | Non-compete Agreements | ||||
Identifiable assets acquired | ||||
Intangible assets | 50 | |||
LearnPlatform, LLC | Trade Names and Trademarks | ||||
Identifiable assets acquired | ||||
Intangible assets | $ 300 | |||
Concentric Sky, Inc | ||||
Consideration transferred | ||||
Total purchase consideration | $ 21,314 | |||
Identifiable assets acquired | ||||
Cash | 1,330 | |||
Accounts receivable | 1,018 | |||
Prepaid expenses and other assets | 109 | |||
Total assets acquired | 15,457 | |||
Liabilities assumed | ||||
Accounts payable and accrued liabilities | 1,335 | |||
Deferred revenue | 2,566 | |||
Total liabilities assumed | 3,901 | |||
Goodwill | 9,758 | |||
Total purchase consideration | (21,314) | |||
Concentric Sky, Inc | Developed Technology | ||||
Identifiable assets acquired | ||||
Intangible assets | 3,900 | |||
Concentric Sky, Inc | Customer Relationships | ||||
Identifiable assets acquired | ||||
Intangible assets | $ 9,100 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 142,967 | $ 136,717 | $ 134,003 |
Accumulated amortization | (503,159) | (360,192) | |
Developed Technology Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated amortization | $ (232,662) | $ (167,600) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance as of December 31, 2022 | $ 1,266,402 |
Adjustments | 1,086 |
Balance as of December 31, 2023 | $ 1,265,316 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 902,871 | $ 902,871 |
Accumulated amortization | (503,159) | (360,192) |
Total | $ 399,712 | 542,679 |
Software | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted Average Remaining Useful Life | 0 months | |
Gross | $ 21 | 21 |
Accumulated amortization | (21) | (20) |
Total | $ 0 | 1 |
Trade names | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted Average Remaining Useful Life | 74 months | |
Gross | $ 126,100 | 126,100 |
Accumulated amortization | (49,336) | (35,936) |
Total | $ 76,764 | 90,164 |
Developed Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted Average Remaining Useful Life | 20 months | |
Gross | $ 325,300 | 325,300 |
Accumulated amortization | (232,662) | (167,600) |
Total | $ 92,638 | 157,700 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted Average Remaining Useful Life | 45 months | |
Gross | $ 451,400 | 451,400 |
Accumulated amortization | (221,123) | (156,635) |
Total | $ 230,277 | 294,765 |
Non-compete Agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted Average Remaining Useful Life | 24 months | |
Gross | $ 50 | 50 |
Accumulated amortization | (17) | (1) |
Total | $ 33 | $ 49 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
2024 | $ 142,442 | |
2025 | 99,729 | |
2026 | 79,625 | |
2027 | 40,682 | |
2028 | 17,806 | |
Thereafter | 19,428 | |
Total | $ 399,712 | $ 542,679 |
Credit Facility - Additional In
Credit Facility - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Jun. 21, 2023 | Oct. 29, 2021 | Mar. 24, 2020 | Aug. 31, 2021 | Mar. 24, 2020 | Mar. 31, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 27, 2021 | |
Line Of Credit Facility [Line Items] | ||||||||||
Percentage of principal amount redeemed | 0.25% | |||||||||
Line of credit facility, interest rate | 6% | |||||||||
Line of credit facility, Variable rate | 1% | |||||||||
Borrowings outstanding | $ 8,100,000 | |||||||||
Prepayment Premium In Conjunction With Principal Payment | 1.50% | 1.50% | ||||||||
Credit facility maturity date | Mar. 24, 2026 | |||||||||
Debt Discount Costs | $ 13,600,000 | |||||||||
Additional debt discount costs | 3,800,000 | |||||||||
Amortization of debt discount cost | 1,000,000 | $ 1,000,000 | 2,300,000 | |||||||
Unamortized debt discount costs | 4,900,000 | 5,800,000 | ||||||||
Amortization of deferred financing costs | $ 1,187,000 | $ 1,178,000 | 2,435,000 | |||||||
Senior Term Loan, bearing interest | 8.68% | 6.12% | ||||||||
Letters of credit outstanding | $ 3,200,000 | $ 4,300,000 | ||||||||
Other Assets | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Debt issuance costs | 800,000 | |||||||||
Federal Fund | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, Variable rate | 1% | |||||||||
Euro dollar | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, Variable rate | 1% | 7% | ||||||||
Euro Dollar Floor | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, Variable rate | 1% | |||||||||
Base Rate | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, Variable rate | 1% | 0.50% | ||||||||
Letter Of Credit | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Letters of credit outstanding | 10,000,000 | |||||||||
Revolving Credit Facility | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | ||||||||
Line of credit facility, interest rate | 2.50% | |||||||||
Quarterly fee payable percentage on unused portion of available borrowing | 0.50% | |||||||||
Debt issuance costs | 700,000 | |||||||||
Unamortized debt discount costs | 500,000 | 700,000 | ||||||||
Amortization of deferred financing costs | 200,000 | 200,000 | $ 100,000 | |||||||
Write off of Deferred Debt Issuance Cost | 500,000 | |||||||||
Initial Term Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | 775,000,000 | 775,000,000 | ||||||||
Initial Term Loan | Secured Overnight Financing Rate | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 2.75% | |||||||||
Incremental Term Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 70,000,000 | $ 70,000,000 | ||||||||
Euro Dollar Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 5.50% | |||||||||
Term Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Write off of Deferred Debt Issuance Cost | 13,800,000 | |||||||||
Term Loan | Current Debt | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Debt Discount Costs | 1,000,000 | |||||||||
Term Loan | Long Term Debt | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Debt issuance costs | 5,900,000 | |||||||||
Term Loan | IPO Member | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Borrowings outstanding | $ 224,300,000 | |||||||||
Term Loan | Over Allotment Option Member | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Borrowings outstanding | $ 30,800,000 | |||||||||
Senior Term Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 500,000,000 | 491,300,000 | $ 496,300,000 | |||||||
Percentage of principal amount redeemed | 0.25% | |||||||||
Line of credit facility, expiration period | 7 years | |||||||||
Senior Term Loan | Euro dollar | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 2.75% | |||||||||
Senior Term Loan | Base Rate | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 1.75% | |||||||||
Senior Revolver | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 125,000,000 | |||||||||
Borrowings outstanding | 0 | |||||||||
Line of credit Facility, available | 125,000,000 | |||||||||
Line of credit facility, expiration period | 5 years | |||||||||
Line of credit percentage of outstanding amount | 35% | |||||||||
Senior Revolver | Other Current Assets | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Debt issuance costs | $ 200,000 | |||||||||
Minimum | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Quarterly fee payable percentage on unused portion of available borrowing | 0.40% | |||||||||
Minimum | Secured Overnight Financing Rate | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 0.11448% | |||||||||
Minimum | Base Rate | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 1% | |||||||||
Minimum | Euro Dollar Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 5.50% | 5.50% | ||||||||
Minimum | A B R Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 4.50% | 4.50% | ||||||||
Minimum | Senior Revolver | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Net leverage ratio | 1% | |||||||||
Minimum | Senior Revolver | Euro dollar | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 2% | |||||||||
Maximum | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Quarterly fee payable percentage on unused portion of available borrowing | 0.50% | |||||||||
Maximum | Secured Overnight Financing Rate | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 0.42826% | |||||||||
Maximum | Base Rate | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 1.50% | |||||||||
Maximum | Euro Dollar Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 7% | 7% | ||||||||
Maximum | A B R Loan | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 6% | 6% | ||||||||
Maximum | Senior Term Loan | Euro dollar | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 0.50% | |||||||||
Maximum | Senior Revolver | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Net leverage ratio | 7.75% | |||||||||
Maximum | Senior Revolver | Euro dollar | ||||||||||
Line Of Credit Facility [Line Items] | ||||||||||
Line of credit facility, interest rate | 2.50% |
Credit Facility - Schedule of M
Credit Facility - Schedule of Maturities of outstanding debt (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 5,000 |
2025 | 5,000 |
2026 | 5,000 |
2027 | 5,000 |
2028 | 471,250 |
Thereafter | 0 |
Total | $ 491,250 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) Segment Customer | |
Disaggregation Of Revenue [Line Items] | |
Number of operating segment | Segment | 1 |
Number of Customer Bases | Customer | 2 |
Revenue, remaining performance obligation expected to be recognized | $ | $ 833.5 |
Minimum | |
Disaggregation Of Revenue [Line Items] | |
Percentage of revenue recognized included in deferred revenue | 51% |
Revenue - Schedule of Revenue b
Revenue - Schedule of Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | |||
Total revenue | $ 530,210 | $ 475,194 | $ 405,361 |
Education | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 530,210 | 475,194 | 401,699 |
Corporate | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 3,662 |
United States | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 422,849 | 376,694 | 325,998 |
Foreign | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | 107,361 | 98,500 | 79,363 |
Sales Revenue | Customer Concentration Risk | |||
Disaggregation Of Revenue [Line Items] | |||
Total revenue | $ 530,210 | $ 475,194 | $ 405,361 |
Sales Revenue | Customer Concentration Risk | Education | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of revenue generated outside of the United States | 100% | 100% | 99% |
Sales Revenue | Geographic Concentration Risk | Foreign | |||
Disaggregation Of Revenue [Line Items] | |||
Percentage of revenue generated outside of the United States | 20% | 21% | 20% |
Revenue - Additional Informat_2
Revenue - Additional Information (Details1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-12-31 | Dec. 31, 2023 |
Disaggregation Of Revenue [Line Items] | |
Revenue, Remaining performance obligation period | 24 months |
Revenue, Remaining performance obligation, percentage | 75% |
Deferred Commissions - Addition
Deferred Commissions - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Costs [Abstract] | |||
Deferred commissions | $ 27,500,000 | $ 32,200,000 | |
Amortization expense for deferred commissions | 19,100,000 | 16,100,000 | $ 10,900,000 |
Deferred commissions impairment charges | $ 0 | $ 0 | $ 0 |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale (Additional Information) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 26, 2021 | Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Purchase price of bridge | $ 47 | |
Proceeds net of transaction costs | $ 46 | |
Pre tax loss on sale of business | $ 1.2 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Class Of Stock [Line Items] | ||
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 145,207,000 | 142,917,000 |
Common stock, shares outstanding | 145,207,000 | 142,917,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 31, 2023 | Jan. 31, 2022 | Jul. 26, 2021 | Jul. 09, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation expense | $ 44,196 | $ 39,779 | $ 25,785 | ||||||
Incentive Units vested at IPO | 1,409,000 | ||||||||
Common stock, authorized | 500,000,000 | 500,000,000 | |||||||
Common stock, shares outstanding | 145,207,000 | 142,917,000 | |||||||
Common stock, shares issued | 145,207,000 | 142,917,000 | |||||||
Shares outstanding | 320,000 | ||||||||
Common stock, capital shares reserved for future issuance | 5,716,683 | 5,629,623 | |||||||
Common stock authorized | 19,683,951 | ||||||||
Total unrecognized compensation cost, period for recognition | 3 months 18 days | ||||||||
Unrecognized stock-based compensation costs | $ 2,400 | ||||||||
Stock issued during period, value, new issues | 259,254 | ||||||||
Total number of shares of capital stock outstanding | 987,000 | 1,112,000 | |||||||
Minimum | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, authorized | 2,000 | ||||||||
Maximum | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, authorized | 500,000,000 | ||||||||
Restricted Stock Units | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Cash value per share of stock repurchased and retired during period | $ 49 | ||||||||
Stock-based compensation expense | $ 42,567 | $ 36,913 | $ 19,586 | ||||||
RSU granted | 3,317,000 | 2,881,000 | 2,250,000 | ||||||
Aggregate fair value of RSU | $ 83,500 | ||||||||
Shares outstanding | 4,470,000 | 3,437,000 | 1,987,000 | 0 | |||||
Unrecognized stock-based compensation | $ 95,100 | ||||||||
Total unrecognized compensation cost, period for recognition | 2 years 10 months 24 days | ||||||||
Vesting rights | The RSUs will generally vest in 11 equal quarterly installments commencing September 1, 2021. | ||||||||
Shares, Vested | (1,262,000) | (876,000) | (23,000) | ||||||
Restricted Stock Units | Minimum | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Amount per share of RSU granted | $ 24.24 | ||||||||
Restricted Stock Units | Maximum | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Amount per share of RSU granted | $ 28 | ||||||||
Cash Replacement Awards | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Stock-based compensation expense | $ 700 | $ 5,500 | $ 7,600 | ||||||
IPO Member | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, shares issued | 12,500,000 | ||||||||
IPO Member | Incentive Carry | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Unvested shares | 6,126,802 | ||||||||
2021 Employee Stock Purchase Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | In July 2021, our board of directors adopted, and our stockholders approved, the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which allows eligible employees to purchase shares of our common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The initial offering consisted of one offering period, which ended on February 28, 2022. Each new offering begins on or about March 1 and September 1 and is approximately six months in duration. On each purchase date, eligible employees purchase our common stock at a price per share equal to 85% of the lesser of (1) the fair market value of our common stock on the offering date or (2) the fair market value of our common stock on the purchase date. A total of 1,900,000 shares of the Company's common stock were initially reserved for issuance under the 2021 ESPP. Pursuant to the terms of the 2021 ESPP, the share reserve increased by 1,407,406 shares in January 2022 and 1,429,171 shares in January 2023. As of December 31, 2023, 4,018,556 shares of common stock were available for future purchases under the 2021 ESPP. | ||||||||
Common stock authorized | 18,000,000 | 1,900,000 | |||||||
Purchase price of common stock, percent | 85% | ||||||||
Discount on share market price | 15% | ||||||||
2021 Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Common stock, capital shares reserved for future issuance | 1,429,171 | 1,407,406 | |||||||
Common stock authorized | 4,018,556 | ||||||||
2021 Plan | Incentive Carry | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Incentive Units vested at IPO | 8,666,000 | ||||||||
Incentive Units vested at IPO | 2,271,000 | ||||||||
2021 Plan | Restricted Stock Units | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
RSU granted | 3,316,718 | ||||||||
Shares, Vested | (3,496,739) | ||||||||
2021 Plan | Restricted Stock Units | Incentive Carry | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Incentive Units vested at IPO | 2,736,000 | ||||||||
Total number of shares of capital stock outstanding | 611,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 44,196 | $ 39,779 | $ 25,785 | |
Employee Stock Option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | [1] | 680 | 132 | |
Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | 42,567 | 36,913 | 19,586 | |
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | 1,629 | 2,186 | 1,165 | |
Class A and Class B Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 0 | $ 0 | $ 4,902 | |
[1] For the year ended December 31, 2022, approximately $ 0.7 million is due to the acceleration and settlement of options from the LearnPlatform 2014 Stock Incentive Plan that was not included in consideration transferred. The amounts were settled in cash and the LearnPlatform 2014 Stock Incentive Plan was terminated on the date of acquisition. |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock-Based Compensation Expense by Award Type (Parenthetical) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
2014 Equity Incentive Plan | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Amount due for acceleraton and settlement | $ 0.7 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Assumptions Relating to Stock Options and ESPP Purchase Rights (Details) - Employee Stock Purchase Plan | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
Expected life (years) | 6 months | |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Volatility | 18% | 32% |
Risk-free interest rate | 3.34% | 0.06% |
Expected life (years) | 6 months | |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Volatility | 32% | 47% |
Risk-free interest rate | 5.47% | 3.34% |
Expected life (years) | 7 months 6 days |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Stock-Based Compensation Expense Recorded in Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | $ 44,196 | $ 39,779 | $ 25,785 |
Subscription and Support Cost of Revenue | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 1,775 | 1,348 | 899 |
Professional Services and Other Cost of Revenue | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 2,218 | 1,742 | 959 |
Sales and Marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 11,971 | 11,050 | 6,936 |
Research and Development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | 14,333 | 11,467 | 6,943 |
General and Administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation | $ 13,899 | $ 14,172 | $ 10,048 |
Stock-Based Compensation - Su_5
Stock-Based Compensation - Summary of Activity Under Stock Plan (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Beginning Balance | 1,409 | ||
Incentive Units vested at IPO | 1,409 | ||
Shares, canceled | (102) | (215) | |
RSUs vested | (987) | (1,112) | |
Shares, Unvested and Outstanding, Ending Balance | 320 | ||
Weighted-Average Grant Date Fair Value Per Share, Unvested, Beginning Balance | $ 10.72 | $ 10.75 | |
Weighted-Average Grant Date Fair Value Per Share, Vested | 11.21 | 10.77 | |
Weighted-Average Grant Date Fair Value Per Share, Cancelled | 11.13 | 11.24 | |
Weighted-Average Grant Date Fair Value Per Share, Unvested, Ending Balance | $ 12.3 | $ 10.72 | $ 10.75 |
Incentive Carry | 2021 Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Beginning Balance | 8,666 | ||
Forfeited or canceled | (268) | ||
Incentive Units vested at IPO | |||
Incentive Units vested at IPO | (2,271) | ||
Incentive Units exchanged for RSUs | (6,127) | ||
Weighted-Average Grant Date Fair Value Per Share, Unvested, Beginning Balance | $ 4.03 | ||
Weighted-Average Grant Date Fair Value Per Share, Vested | 4.04 | ||
Weighted-Average Grant Date Fair Value Per Share, Forfeited | $ 4.09 | ||
Restricted Stock Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares, canceled | (1,022) | (555) | (240) |
Shares, Unvested and Outstanding, Ending Balance | 4,470 | 3,437 | 1,987 |
Weighted-Average Grant Date Fair Value Per Share, Vested | $ 22.43 | $ 21.04 | $ 21.21 |
Weighted-Average Grant Date Fair Value Per Share, Cancelled | $ 23.1 | $ 21.23 | 20.14 |
Restricted Stock Units | 2021 Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Weighted-Average Grant Date Fair Value Per Share, Vested | $ 10 | ||
Restricted Stock Units | Incentive Carry | 2021 Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Beginning Balance | 2,736 | ||
Incentive Units vested at IPO | 2,736 | ||
Incentive Units exchanged for RSUs | 3,497 | ||
Shares, canceled | (150) | ||
RSUs vested | (611) | ||
Weighted-Average Grant Date Fair Value Per Share, Forfeited | $ 11.06 |
Stock-Based Compensation - Su_6
Stock-Based Compensation - Summary of Stock Option Activity (Details) shares in Thousands | Dec. 31, 2022 shares |
Share-Based Payment Arrangement [Abstract] | |
Options, Outstanding, Ending Balance | 1,409 |
Stock-Based Compensation - Su_7
Stock-Based Compensation - Summary of Activity of Unvested Stock Options (Details) | 12 Months Ended |
Dec. 31, 2021 $ / shares | |
Share-Based Payment Arrangement [Abstract] | |
Weighted-Average Grant Date Fair Value Per Share, Unvested, Ending Balance | $ 10.75 |
Stock-Based Compensation - Su_8
Stock-Based Compensation - Summary of Restricted Stock Units Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares, canceled | (102) | (215) | |
Shares, Unvested and Outstanding, Ending Balance | 320 | ||
Weighted-Average Grant Date Fair Value Per Share, Vested | $ 11.21 | $ 10.77 | |
Weighted-Average Grant Date Fair Value Per Share, Cancelled | $ 11.13 | $ 11.24 | |
Restricted Stock Units | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares, Unvested and Outstanding, Beginning Balance | 3,437 | 1,987 | 0 |
Shares, Granted | 3,317 | 2,881 | 2,250 |
Shares, Vested | (1,262) | (876) | (23) |
Shares, canceled | (1,022) | (555) | (240) |
Shares, Unvested and Outstanding, Ending Balance | 4,470 | 3,437 | 1,987 |
Weighted-Average Grant Date Fair Value Per Share, Unvested and Outstanding, Beginning Balance | $ 21.6 | $ 21 | $ 0 |
Weighted-Average Grant Date Fair Value Per Share, Granted | 25.17 | 21.77 | 20.91 |
Weighted-Average Grant Date Fair Value Per Share, Vested | 22.43 | 21.04 | 21.21 |
Weighted-Average Grant Date Fair Value Per Share, Cancelled | 23.1 | 21.23 | 20.14 |
Weighted-Average Grant Date Fair Value Per Share, Unvested and Outstanding, Ending Balance | $ 23.68 | $ 21.6 | $ 21 |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (46,385) | $ (46,281) | $ (124,654) |
Foreign | 8,049 | 3,907 | 2,256 |
Loss before income taxes | $ (38,336) | $ (42,374) | $ (122,398) |
Income Taxes - Components of Pr
Income Taxes - Components of Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 336 | $ 0 | $ 0 |
State | 1,210 | 370 | 2,200 |
Foreign | 1,987 | 1,741 | 694 |
Total | 3,533 | 2,111 | 2,894 |
Deferred: | |||
Federal | (6,851) | (6,950) | (24,611) |
State | (2,304) | (2,229) | (5,367) |
Foreign | 1,364 | (1,064) | (6,635) |
Total | (7,791) | (10,243) | (36,613) |
Income tax provision (benefit) | $ (4,258) | $ (8,132) | $ (33,719) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes [LineItems] | ||||
Federal statutory income tax rate | 21% | |||
Income tax benefit | $ 4,300 | |||
Net operating loss carryforwards | 33,400 | |||
Deferred tax assets Capitalized Section 174 R&D expenses | 24,726 | $ 18,235 | ||
Partial valuation allowance | 18,500 | |||
Increase (decreased) in valuation allowance | 6,000 | 2,800 | ||
Unrecognized tax benefits | 8,050 | 7,000 | $ 6,897 | $ 6,632 |
Interest or penalties recognized | 0 | |||
Unrecognized tax benefits decreasing deferred tax assets | 7,000 | |||
Research And Development Tax Credit Carryforward | ||||
Income Taxes [LineItems] | ||||
Net operating loss carryforwards | 13,500 | |||
Federal, State and Foreign | ||||
Income Taxes [LineItems] | ||||
Net operating loss carryforwards | $ 59,600 | |||
Federal and State | Research And Development Tax Credit Carryforward | ||||
Income Taxes [LineItems] | ||||
Operating loss carry forwards expiration year | 2024 | |||
Federal | ||||
Income Taxes [LineItems] | ||||
Net operating loss carryforwards | $ 173,800 | 271,000 | ||
Operating loss carry forwards expiration year | 2041 | |||
Federal | Research And Development Tax Credit Carryforward | ||||
Income Taxes [LineItems] | ||||
Tax credit carryforwards | $ 15,700 | $ 14,500 | ||
Operating loss carry forwards expiration year | 2041 | |||
State | Research And Development Tax Credit Carryforward | ||||
Income Taxes [LineItems] | ||||
Tax credit carryforwards | $ 5,100 | $ 4,500 | ||
State | Research And Investment Tax Credit Carryforward | ||||
Income Taxes [LineItems] | ||||
Operating loss carry forwards expiration year | 2037 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Expected income tax benefit at the federal statutory rate | $ (7,971) | $ (8,899) | $ (25,703) |
State tax net of federal benefit | (1,347) | (1,170) | (4,565) |
Stock-based compensation | 17 | 822 | 1,277 |
Withholding Tax | 1,227 | 1,061 | 612 |
Difference in foreign tax rates | 354 | (2,744) | 3 |
Tax credits | (2,514) | 381 | 0 |
Change in valuation allowance | 5,403 | 1,609 | (6,385) |
Other | 573 | 808 | 1,042 |
Income tax provision (benefit) | $ (4,258) | $ (8,132) | $ (33,719) |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 59,630 | $ 83,397 |
Research and development credits | 12,078 | 11,405 |
Business interest deduction limitation | 7,712 | 9,979 |
Capitalized R&D expenses | 24,726 | 18,235 |
Accruals and reserves | 4,859 | 5,089 |
Depreciation and amortization | 485 | 514 |
Lease liability | 3,868 | 5,430 |
Stock-based compensation | 2,367 | 2,062 |
Valuation allowance | (18,527) | (12,556) |
Total deferred tax assets | 97,198 | 123,555 |
Deferred tax liabilities: | ||
Intangible assets | (93,970) | (128,495) |
Deferred commissions | (6,752) | (7,269) |
Right of use asset | (1,940) | (2,799) |
Capitalized costs | (2,217) | (1,551) |
Total deferred tax liabilities | (104,879) | (140,114) |
Net deferred tax liabilities | $ (7,681) | $ (16,559) |
Income Taxes - Summary of Activ
Income Taxes - Summary of Activity Related to Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized benefit—beginning of the year | $ 7,000 | $ 6,897 | $ 6,632 |
Gross increases (decreases)-prior period positions | (1,050) | (103) | 0 |
Gross increases (decreases)—current period positions | 0 | 0 | 265 |
Unrecognized benefit—end of period | $ 8,050 | $ 7,000 | $ 6,897 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value liabilities transfers amount | $ 0 | $ 0 |
Fair Value Measurements Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-Term Debt, Fair Value | $ 486,400 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Property Two | |
Lessee Lease Description [Line Items] | |
Sublease remaining lease term | 60 months |
Property Three | |
Lessee Lease Description [Line Items] | |
Sublease remaining lease term | 25 months |
Property Four | |
Lessee Lease Description [Line Items] | |
Sublease remaining lease term | 4 months |
Minimum | |
Lessee Lease Description [Line Items] | |
Operating lease term | 1 year |
Maximum | |
Lessee Lease Description [Line Items] | |
Operating lease term | 6 years |
Leases - Schedule of Components
Leases - Schedule of Components of Operating Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Lease, Cost [Abstract] | ||||
Operating lease cost, gross | $ 6,465 | $ 7,053 | $ 7,247 | |
Variable lease cost, gross | [1] | 2,504 | 2,262 | 1,961 |
Sublease income | (1,023) | (1,180) | (1,094) | |
Total lease costs | [2] | $ 7,946 | $ 8,135 | $ 8,114 |
[1] Variable rent expense was not included within the measurement of the Company's operating right-of-use assets and lease liabilities. Variable rent expense is comprised primarily of the Company's proportionate share of operating expenses, property taxes and insurance and is classified as lease expense due to the Company's election to not separate lease and non-lease components. Short-term lease costs for the year ended December 31, 2023, 2022, and 2021 were not significant and are not included in the table above. |
Leases - Summary of Measurement
Leases - Summary of Measurement of Operating Lease Liabilities - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Measurement of operating lease liabilities | $ 8.7 | $ 8.4 | $ 8.6 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Property, Plant and Equipment [Abstract] | |
2024 | $ 8,554 |
2025 | 4,423 |
2026 | 2,817 |
2027 | 1,997 |
2028 | 1,097 |
Thereafter | 0 |
Total lease payments | 18,888 |
Imputed interest | (2,129) |
Lease liabilities | 16,759 |
Tenant improvement reimbursements included in the measurement of lease liabilities but not yet received | (414) |
Lease liabilities, net | $ 16,345 |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Term - Additional Information (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted average remaining lease term | 3 years | 3 years 7 months 6 days |
Weighted average discount rate | 8.22% | 8.20% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
2024 | $ 56,200 | ||
2025 through 2027 | 60,000 | ||
2028 | 65,000 | ||
Letters of credit outstanding | 3,200 | $ 4,300 | |
Cost of Revenue | 186,315 | 172,294 | $ 169,865 |
Research and Development Expense | 88,162 | 77,189 | 63,771 |
Professional services and other cost of revenue | 186,315 | 172,294 | 169,865 |
Selling and Marketing Expense | 197,690 | 181,744 | 162,544 |
General and Administrative Expense | 61,261 | 60,447 | 54,911 |
Non-cancelable Purchase Obligation | |||
Cost of Revenue | 900 | 1,000 | |
Research and Development Expense | 1,800 | 2,200 | |
Professional services and other cost of revenue | 900 | 1,000 | |
Selling and Marketing Expense | 100 | 100 | |
General and Administrative Expense | 100 | 100 | |
Subscription and Support | |||
Cost of Revenue | 158,699 | 146,546 | 148,923 |
Professional services and other cost of revenue | 158,699 | 146,546 | $ 148,923 |
Subscription and Support | Non-cancelable Purchase Obligation | |||
Cost of Revenue | 50,800 | 38,400 | |
Professional services and other cost of revenue | $ 50,800 | $ 38,400 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Employers matching contribution, percentage | 50% | 50% | 50% |
Maximum annual contributions per employee | $ 2,500 | $ 2,000 | $ 2,000 |
Participants matching contribution vesting period | 3 years | ||
Participants matching contribution cliff vest period | 1 year | ||
Cost recognized under 401(k) plan | $ 1,800,000 | $ 1,400,000 | $ 1,400,000 |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 29, 2021 | Aug. 31, 2021 | Mar. 24, 2020 | |
Related Party Transaction [Line Items] | ||||||
Term loan | $ 491,250 | |||||
Interest Expense | (42,024) | $ (24,595) | $ (50,360) | |||
Affiliates Of Thoma Bravo | ||||||
Related Party Transaction [Line Items] | ||||||
Acquisition of term loan | $ 129,200 | |||||
Principal payment to related party | $ 42,500 | |||||
Term loan | $ 88,600 | |||||
Interest Expense | 7,500 | |||||
Take-Private Transaction | ||||||
Related Party Transaction [Line Items] | ||||||
Related party cost | $ 600 | $ 600 | $ 100 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) - Summary of Selected Unaudited Quarterly Consolidated Statements of Operations Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |||
Total revenues | $ 530,210 | $ 475,194 | $ 405,361 |
Gross profit | 343,895 | 302,900 | 235,496 |
Loss from operations | (3,218) | (16,480) | (46,948) |
Net Income (Loss) | $ (34,078) | $ (34,242) | $ (88,679) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ in Millions | Feb. 01, 2024 | Mar. 24, 2020 |
Incremental Term Loan [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 70 | |
Subsequent Event | Parchment Platform And Network [Member] | ||
Subsequent Event [Line Items] | ||
Payments to Acquire Businesses, Gross | $ 833.3 | |
Subsequent Event | Incremental Term Loan [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 685 | |
Subsequent Event | Other Investees | Parchment Platform And Network [Member] | ||
Subsequent Event [Line Items] | ||
Percentage of the equity interests acquired | 100% |