Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 09, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40557 | |
Entity Registrant Name | INTEGRAL AD SCIENCE HOLDING CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-0731995 | |
City Area Code | 646 | |
Local Phone Number | 278-4871 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | IAS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 153,828,376 | |
Entity Address, Address Line One | 99 Wall Street | |
Entity Address, Address Line Two | #1950 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10005 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001842718 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 73,645 | $ 73,210 |
Restricted cash | 141 | 70 |
Accounts receivable, net | 57,849 | 53,028 |
Unbilled receivables | 35,486 | 36,210 |
Prepaid expenses and other current assets | 20,835 | 7,647 |
Total current assets | 187,956 | 170,165 |
Property and equipment, net | 1,591 | 1,413 |
Internal use software, net | 21,556 | 18,100 |
Intangible assets, net | 226,922 | 258,316 |
Goodwill | 670,978 | 676,513 |
Operating lease right-of-use assets, net | 19,031 | |
Deferred tax asset, net | 812 | 887 |
Other long-term assets | 4,292 | 4,143 |
Total assets | 1,133,138 | 1,129,537 |
Current liabilities: | ||
Accounts payable and accrued expenses | 44,011 | 56,257 |
Due to related party | 104 | 74 |
Deferred revenue | 287 | 160 |
Operating lease liabilities, current | 6,856 | |
Total current liabilities | 51,258 | 56,491 |
Accrued rent | 0 | 854 |
Net deferred tax liability | 52,554 | 53,523 |
Long-term debt | 233,146 | 242,798 |
Operating lease liabilities, non-current | 19,358 | |
Other long-term liabilities | 1,639 | 8,681 |
Total liabilities | 357,955 | 362,347 |
Commitments and Contingencies (Note 15) | ||
Stockholders’ Equity | ||
Preferred Stock, $0.001 par value, 50,000,000 shares authorized at September 30, 2022; 0 shares issued and outstanding at September 30, 2022 and December 31, 2021. | 0 | 0 |
Common Stock, $0.001 par value, 500,000,000 shares authorized, 153,494,308 and 154,398,495 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively. | 153 | 154 |
Additional paid-in-capital | 797,274 | 781,951 |
Accumulated other comprehensive loss | (11,533) | (315) |
Accumulated deficit | (10,711) | (14,600) |
Total stockholders’ equity | 775,183 | 767,190 |
Total liabilities and stockholders’ equity | $ 1,133,138 | $ 1,129,537 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares, issued (in shares) | 153,494,308 | 154,398,495 |
Common stock, shares, outstanding (in shares) | 153,494,308 | 154,398,495 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Statement of Comprehensive Income [Abstract] | |||||
Revenue | $ 101,343 | $ 79,014 | $ 290,913 | $ 221,041 | |
Operating expenses: | |||||
Cost of revenue (excluding depreciation and amortization shown below) | 19,171 | 13,845 | 53,864 | 38,191 | |
Sales and marketing | 28,190 | 19,578 | 77,961 | 62,990 | |
Technology and development | 19,459 | 14,609 | 54,071 | 47,554 | |
General and administrative | 20,150 | 16,081 | 56,081 | 57,670 | |
Depreciation and amortization | 12,617 | 16,100 | 37,585 | 45,098 | |
Foreign exchange loss, net | [1] | 4,064 | 5 | 3,503 | 407 |
Total operating expenses | 103,651 | 80,218 | 283,065 | 251,910 | |
Operating income (loss) | (2,308) | (1,204) | 7,848 | (30,869) | |
Interest expense, net | (2,619) | (5,753) | (5,859) | (17,880) | |
Employee retention tax credit | 6,981 | 0 | 6,981 | 0 | |
Loss on extinguishment of debt | 0 | (3,721) | 0 | (3,721) | |
Net income (loss) before income taxes | 2,054 | (10,678) | 8,970 | (52,470) | |
(Provision) benefit from income taxes | (1,287) | 898 | (5,083) | 4,855 | |
Net income (loss) | $ 767 | $ (9,780) | $ 3,887 | $ (47,615) | |
Net income (loss) per share: | |||||
Net income (loss) per share, basic (in usd per share) | $ 0 | $ (0.06) | $ 0.03 | $ (0.34) | |
Net income (loss) per share, diluted (in usd per share) | $ 0 | $ (0.06) | $ 0.02 | $ (0.34) | |
Weighted average shares outstanding: | |||||
Basic (in shares) | 155,389,195 | 151,988,054 | 155,007,655 | 140,016,260 | |
Diluted (in shares) | 156,696,754 | 151,988,054 | 157,581,569 | 140,016,260 | |
Other comprehensive loss: | |||||
Foreign currency translation adjustments | $ (3,248) | $ (2,549) | $ (11,218) | $ (3,735) | |
Total comprehensive loss | $ (2,481) | $ (12,329) | $ (7,331) | $ (51,350) | |
[1] (1) Prior period amounts have been reclassified to conform to current period presentation. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’/ STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Member’s Interest | Common Stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit | ||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | |||||||
Beginning balance at Dec. 31, 2020 | $ 431,479 | $ 0 | $ 0 | $ 4,523 | $ (126,761) | |||
Beginning balance (in units) at Dec. 31, 2020 | [1] | 134,039,494 | ||||||
Beginning balance at Dec. 31, 2020 | $ 553,717 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
RSUs vested (in shares) | 26,931 | |||||||
RSUs vested | 150 | 150 | ||||||
Option exercises (in shares) | [1] | 246,369 | ||||||
Option exercises | 4,435 | $ 1,075 | 3,360 | |||||
Stock-based compensation | 46,132 | 46,132 | ||||||
Foreign currency translation adjustment | (3,735) | (3,735) | ||||||
Repurchase of common stock / units (in shares/units) | [1] | (99,946) | ||||||
Repurchase of common stock / units | (1,204) | $ (413) | (791) | |||||
Units vested (in shares) | [1] | 17,486 | ||||||
Units vested | 0 | |||||||
Net income (loss) | (47,615) | |||||||
Net loss prior to corporate conversion | (37,832) | (37,832) | ||||||
Conversion to Delaware corporation (Note 1) (in shares) | (134,203,403) | [1] | 134,203,403 | |||||
Conversion to Delaware corporation (Note 1) | 0 | $ (554,379) | $ 134 | 388,860 | 165,385 | |||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs (in shares) | 16,821,330 | |||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs | $ 274,357 | $ 17 | 274,340 | |||||
Issuance of common stock for the acquisition of Publica (in shares) | 2,888,889 | 2,888,889 | ||||||
Issuance of common stock for the acquisition of Publica | $ 49,631 | $ 3 | 49,628 | |||||
Net loss | (9,780) | (9,780) | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 153,940,553 | |||||||
Ending balance at Sep. 30, 2021 | 753,632 | $ 154 | 762,470 | 788 | (9,780) | |||
Ending balance (in units) at Sep. 30, 2021 | [1] | 0 | ||||||
Ending balance at Sep. 30, 2021 | $ 0 | |||||||
Beginning balance (in shares) at Jun. 30, 2021 | 134,203,403 | |||||||
Beginning balance at Jun. 30, 2021 | 433,839 | $ 134 | 430,368 | 3,337 | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
RSUs vested (in shares) | 26,931 | |||||||
RSUs vested | 150 | 150 | ||||||
Stock-based compensation | 7,984 | 7,984 | ||||||
Foreign currency translation adjustment | (2,549) | (2,549) | ||||||
Net income (loss) | (9,780) | (9,780) | ||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs (in shares) | 16,821,330 | |||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs | $ 274,357 | $ 17 | 274,340 | |||||
Issuance of common stock for the acquisition of Publica (in shares) | 2,888,889 | 2,888,889 | ||||||
Issuance of common stock for the acquisition of Publica | $ 49,631 | $ 3 | 49,628 | 0 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 153,940,553 | |||||||
Ending balance at Sep. 30, 2021 | 753,632 | $ 154 | 762,470 | 788 | (9,780) | |||
Ending balance (in units) at Sep. 30, 2021 | [1] | 0 | ||||||
Ending balance at Sep. 30, 2021 | $ 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 154,398,495 | |||||||
Beginning balance at Dec. 31, 2021 | 767,190 | $ 154 | 781,951 | (315) | (14,600) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
RSUs vested (in shares) | 761,208 | |||||||
RSUs vested | $ 1 | $ 1 | ||||||
Option exercises (in shares) | 1,414,666 | 1,414,666 | ||||||
Option exercises | $ 5,908 | $ 1 | 5,907 | |||||
Stock-based compensation | 33,068 | 33,068 | ||||||
Foreign currency translation adjustment | $ (11,218) | (11,218) | ||||||
Repurchase of common stock / units (in shares/units) | (3,080,061) | (3,080,061) | ||||||
Repurchase of common stock / units | $ (23,655) | $ (3) | (23,652) | |||||
Net income (loss) | 3,887 | 3,887 | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 153,494,308 | |||||||
Ending balance at Sep. 30, 2022 | 775,183 | $ 153 | 797,274 | (11,533) | (10,711) | |||
Beginning balance (in shares) at Jun. 30, 2022 | 155,498,704 | |||||||
Beginning balance at Jun. 30, 2022 | 784,566 | $ 155 | 804,175 | (8,285) | (11,479) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
RSUs vested (in shares) | 471,995 | |||||||
RSUs vested | $ 0 | |||||||
Option exercises (in shares) | 603,670 | 603,670 | ||||||
Option exercises | $ 2,527 | $ 1 | 2,526 | |||||
Stock-based compensation | 14,225 | 14,225 | ||||||
Foreign currency translation adjustment | $ (3,248) | (3,248) | ||||||
Repurchase of common stock / units (in shares/units) | (3,080,061) | (3,080,061) | ||||||
Repurchase of common stock / units | $ (23,655) | $ (3) | (23,652) | |||||
Net income (loss) | 767 | 767 | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 153,494,308 | |||||||
Ending balance at Sep. 30, 2022 | $ 775,183 | $ 153 | $ 797,274 | $ (11,533) | $ (10,711) | |||
[1]Amounts for periods prior to the Company’s conversion to a Delaware corporation have been retrospectively adjusted to give effect to the corporate conversion described in Note 1. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 3,887 | $ (47,615) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||
Depreciation and amortization | 37,585 | 45,098 |
Stock-based compensation | 33,107 | 49,673 |
Foreign exchange loss, net | 3,503 | 0 |
Deferred tax benefit | (657) | (9,966) |
Extinguishment of debt | 0 | 3,721 |
Amortization of debt issuance costs | 348 | 1,020 |
Allowance for doubtful accounts | 647 | 764 |
Employee retention tax credit | (6,981) | 0 |
Non-cash interest expense | 0 | 394 |
Impairment of assets | 55 | 0 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | (8,031) | 774 |
Decrease (increase) in unbilled receivables | (289) | 703 |
Increase in prepaid expenses and other current assets | (6,757) | (6,151) |
Increase in operating leases, net | (502) | |
Increase in other long-term assets | (330) | (574) |
Increase (decrease) in accounts payable and accrued expenses | (8,226) | 220 |
Increase in accrued rent | 0 | 220 |
Increase (decrease) in deferred revenue | 127 | (563) |
Increase (decrease) in due to/from related party | 74 | (62) |
Net cash provided by operating activities | 47,560 | 37,656 |
Cash flows from investing activities: | ||
Payment for acquisitions, net of acquired cash | (1,603) | (166,204) |
Purchase of property and equipment | (917) | (636) |
Acquisition and development of internal use software and other | (9,952) | (10,011) |
Net cash used in investing activities | (12,472) | (176,851) |
Cash flows from financing activities: | ||
Proceeds from initial public offering, net of underwriting discounts and commissions | 0 | 281,589 |
Payments for offering costs | 0 | (4,728) |
Repayment of long-term debt | (25,000) | (355,934) |
Repayment of short-term debt | (1,836) | 0 |
Proceeds from the New Revolver | 15,000 | 235,000 |
Payments for debt issuance costs | 0 | (2,318) |
Principal payments on capital lease obligations | 0 | (275) |
Cash paid for unit repurchases | 0 | (1,202) |
Proceeds from exercise of stock options | 5,908 | 1,075 |
Payments for repurchase of common stock | (23,655) | 0 |
Cash received from Employee Stock Purchase Program (ESPP) | 388 | 0 |
Net cash (used in) provided by financing activities | (29,195) | 153,207 |
Net increase in cash, cash equivalents and restricted cash | 5,893 | 14,012 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (5,396) | (2,042) |
Cash, cash equivalents and restricted cash at beginning of period | 76,078 | 54,721 |
Cash, cash equivalents, and restricted cash, at end of period | 76,575 | 66,691 |
Cash paid during the period for: | ||
Interest | 5,548 | 17,109 |
Taxes | 11,817 | 1,438 |
Non-cash investing and financing activities: | ||
Deferred offering costs accrued, not yet paid | 0 | 2,506 |
Property and equipment acquired included in accounts payable | 145 | 11 |
Internal use software acquired included in accounts payable | 1,385 | 682 |
Conversion of members’ equity to additional paid-in capital | 0 | $ 165,385 |
Lease liabilities arising from right of use assets | $ 26,214 |
Description of business
Description of business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of business | Description of business Integral Ad Science Holding Corp. and its wholly-owned subsidiaries (together, the “Company”), formerly known as Kavacha Topco, LLC, is a leading global digital advertising verification company by revenue. The Company’s mission is to be the global benchmark for trust and transparency in digital media quality for the world’s leading brands, publishers, and platforms. The Company’s cloud-based technology platform provides actionable insights and delivers independent measurement and verification of digital advertising across all devices, channels, and formats, including desktop, mobile, connected TV (“CTV”), social, display, and video. The Company’s proprietary and Media Rating Council (the “MRC”) accredited Quality Impressions ® metric is designed to verify that digital ads are served to a real person rather than a bot, viewable on-screen, and appear in a brand-safe and suitable environment in the correct geography. The Company is an independent, trusted partner for buyers and sellers of digital advertising to increase accountability, transparency, and effectiveness in the market. The Company helps advertisers optimize their ad spend and better measure consumer engagement with campaigns across platforms, while enabling publishers to improve their inventory yield and revenue. The Company has its operations within the United States ("U.S.") in New York, California, and Illinois. Operations outside the U.S. include but are not limited to countries such as the United Kingdom ("U.K."), France, Germany, Italy, Singapore, Australia, France, Japan, and India. Corporate conversion On February 23, 2021, the Company amended the certificate of formation of Kavacha Topco, LLC to change the name of the Company to Integral Ad Science Holding LLC and on June 29, 2021, the Company converted to a Delaware corporation pursuant to a statutory conversion and changed its legal name to Integral Ad Science Holding Corp. in connection with its initial public offering ("IPO"). All of the outstanding member units were converted into 134,203,403 shares of common stock of the Company on a proportion of 1 member unit for 242 shares of common stock with the same voting rights. On June 29, 2021, the Company priced its IPO, which closed on July 2, 2021. |
Basis of presentation and summa
Basis of presentation and summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation and summary of significant accounting policies | Basis of presentation and summary of significant accounting policies This summary of significant accounting policies is presented to assist in understanding the Company’s condensed consolidated financial statements. These accounting policies have been consistently applied in the preparation of the condensed consolidated financial statements. (a) Basis of presentation The Company’s condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the financial position, results of operations and cash flows for all periods presented. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The accompanying interim Condensed Consolidated Balance Sheet as of September 30, 2022, the Condensed Consolidated Statements of Operations and Comprehensive Loss, of cash flows and of members’/stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary to state fairly the consolidated financial position of the Company. All adjustments made were of a normal recurring nature. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future period. The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements for the years ended December 31, 2021, 2020 and 2019. There have been no significant changes to these policies, except for the adoption of ASC 842, Leases as disclosed in Note 2(h), that have had a material impact on the Company’s condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2022. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 3, 2022. During the three and nine months ended September 30, 2022, the Company reclassified foreign exchange loss, net from "General and administrative" expenses within the Condensed Consolidated Statement of Operations as a separate line presented on the Condensed Consolidated Statement of Operations. Corresponding prior period amounts have also been reclassified to conform to current period presentation. (b) Basis of consolidation The condensed consolidated financial statements include the accounts of Integral Ad Science Holding Corp. and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. (c) Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include fair value of assets acquired in business combinations, including assumptions with respect to future cash inflows and outflows, discount rates, assets useful lives, market multiples, the allocation of purchase price consideration in the business combination valuation of acquired assets and liabilities, the estimated useful lives of intangible assets and internal use software, the allowance for doubtful accounts, goodwill impairment testing, assumptions used to calculate equity-based compensation, and the realization of deferred tax assets. The Company bases its estimates on past experience, market conditions, and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Actual results may differ from these estimates due to risks and uncertainties, including uncertainty surrounding rapidly changing market and economic conditions due to heightened inflation, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, challenges in the supply chain, disruptions in European economies as a result of the conflict in Ukraine and ongoing effects of the COVID-19 pandemic. (d) Employee retention tax credit The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") provided an employee retention credit which was a refundable tax credit against certain employment taxes. The Consolidated Appropriations Act (the "Appropriations Act") extended and expanded the availability of the employee retention credit through December 31, 2021. The Appropriations Act amended the employee retention credit to be equal to 70% of qualified wages paid to employees during the 2021 fiscal year. The Company qualified for the employee retention credit beginning in March 2020 for qualified wages through June 2021 and filed a cash refund claim during the three months ended September 30, 2022. During the three and nine months ended September 30, 2022, the Company recorded an employee retention credit totaling $6,981, within Employee retention tax credit on the Company’s Condensed Consolidated Statements of Operations. As of September 30, 2022, the tax credit receivable has been included within Prepaid expenses and other current assets on the Company's Condensed Consolidated Balance Sheets. (e) Cash, cash equivalents, and restricted cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheets to the amounts shown in the Condensed Consolidated Statements of Cash Flows. September 30, December 31, Cash and cash equivalents $ 73,645 $ 73,210 Short term restricted cash 141 70 Long term restricted cash (held in other long-term assets) 2,789 2,798 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows $ 76,575 $ 76,078 (f) Accounts receivable, net Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts. The allowance is estimated based on management’s knowledge of its customers’ financial condition, credit history, and existing economic conditions. Invoices are typically issued with net 30-days to net 90-days terms. Account balances are considered delinquent if payment is not received by the due date, and the receivables are written off when deemed uncollectible. These costs are recorded in general and administrative expenses within the Consolidated Statements of Operations and Comprehensive Loss. The activity in our allowance for doubtful accounts consists of the following as of: September 30, 2022 September 30, 2021 Balance, beginning of period $ 5,883 4,257 Additional provision 647 764 Receivables written off (1,129) (640) Balance, end of period $ 5,401 4,381 (g) Stock-based compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures as they occur. The Company used the following assumptions in valuing its time-based service options, which vest over a period of time subject to continued employment ("Time-Based Options"), return target options ("Return-Target Options"), which vest upon a realized cash return of the equity investment of Vista Equity Partners ("Vista"), the Company’s equity sponsor and funds controlled by Vista and registration of the shares held by Vista, market stock units ("MSUs"), and shares to be purchased under the Employee Stock Purchase Plan ("ESPP"). Expected term — For time-based awards, the estimated expected term of options granted is generally calculated as the vesting period plus the midpoint of the remaining contractual term, as the Company does not have sufficient historical information to develop reasonable expectations surrounding future exercise patterns and post-vesting employment termination behavior. For awards subject to market and performance conditions, the expected term represents the period of time that the options granted are expected to be outstanding. Expected volatility — Since the Company does not have substantive trading history of its common stock, volatility is estimated based upon observed option-implied volatilities for a group of peer companies. The Company believes this is the best estimate of the expected volatility over the weighted-average expected term of its option grants. Risk-free interest rate — The risk-free interest rate is based on the implied yield currently available on U.S. Treasury instruments with terms approximately equal to the expected term of the option. Expected dividend — The expected dividend assumption was based on the Company’s history and expectation of dividend payouts. The Company currently has no history or expectation of paying cash dividends on its common stock/units. Fair value —Prior to the IPO, because there was no public market for the Company’s common stock/units, the board of directors determined the best estimate of the fair value of the Company’s option grants, based on reasonable judgment and numerous objective and subjective factors, including independent third-party valuations of the Company’s common stock/units, operating and financial performance, and general and industry-specific economic outlook, amongst other factors. Following the pricing of the IPO, the Company’s shares are traded in the public market, and accordingly, the Company uses the applicable closing price of its common stock to determine fair value. The Company used the following assumptions in valuing its stock-based compensation: September 30, 2022 September 30, 2021 Estimated fair value per share $3.26 - $14.43 $8.16 - $14.04 Expected volatility (%) 65% - 80% 65% - 80% Expected term (in years) 0.5 - 10.00 3.00 - 10.00 Risk-free interest rate (%) 0.46% - 3.35% 0.46% - 0.98% Dividend yield — — (h) Recently adopted accounting pronouncements In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”) effective January 1, 2021, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Most amendments within ASU No. 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company early adopted ASU No. 2019-12, which did not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU No. 2018-15”), which requires customers in a cloud computing arrangement that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets. The guidance requires certain costs incurred during the application development stage to be capitalized and other costs incurred during the preliminary project and post-implementation stages to be expensed as they are incurred. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrange is ready for its intended use. A customer’s accounting for the hosting component of the arrangement is not affected. The Company adopted this guidance on January 1, 2021 on a prospective basis. The adoption of ASU 2018-15 did not have a material impact on the Company’s condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-2, “Leases (Topic 842)” (“ASU No. 2016-2”). Under ASU No. 2016-2, lessees are required to put most leases on their balance sheets but to recognize expenses in the income statement in a manner similar to current accounting. ASU No. 2016-2 also eliminated the current real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. The updated guidance is effective for the Company beginning January 1, 2022. Upon adoption, entities are required to use the modified retrospective approach for leases that exist, or are entered into, after the beginning of the earliest comparative period in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), Targeted Improvements, which allows entities to not apply the new leases standard, including its disclosure requirements, in the comparative periods they present in their financial statements in the year of adoption. The Company adopted ASU No. 2016-2 on January 1, 2022 using the modified retrospective transition approach, which resulted in the recognition of right-of-use assets ("ROU assets") of $21,666 and lease liabilities of $29,361. Differences between ROU assets and lease liabilities are attributed to deferred rent, lease incentive obligations and cease-use liability previously recognized under ASC 420 Exit or Disposal Cost Obligations. The Company elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. In addition, the Company elected the expedient permitting the combination of lease and non-lease components into a single lease component. The Company made a policy election to not recognize ROU assets and lease liabilities for short-term leases for all asset classes. The adoption of ASU No. 2016-2 did not have a material impact on the Consolidated Statements of Operations and Comprehensive Loss or the Consolidated Statement of Cash Flows. Expanded disclosures around the Company's lease agreements under ASU No. 2016-2 are included in Note 14, Leases. (i) Accounting pronouncements not yet adopted In October 2021, the FASB issued ASU 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which is intended to improve the accounting for acquired revenue contracts with customers in a business combination and create consistency in practice related to (i) the recognition of an acquired contract liability, and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2023. The Company will evaluate the impact of this guidance on future acquisitions as transactions occur. In March 2020, the FASB issued ASU 2020-4, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (“ASU No. 2020-4”) which is intended to address accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The amendments in ASU No. 2020-4 provide operational expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions to be affected by reference rate reform if certain criteria are met. The amendments in ASU No. 2020-4 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The optional amendments are effective for all entities as of March 12, 2020, through December 31, 2022. The Company intends to elect to apply certain of the optional expedients when evaluating the impact of reference rate reform on its debt instruments that reference LIBOR. The Company does not expect the adoption of ASU No. 2020-4 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU No. 2016-13”) which is intended to provide more decision-useful information about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU No. 2016-13 revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including, but not limited to accounts receivable. This guidance will be effective for the Company beginning January 1, 2023, including interim periods within that reporting period. Early adoption is permitted and the update allows for a modified retrospective method of adoption. The Company is currently evaluating the potential effect that adopting this guidance will have on its condensed consolidated financial statements. |
Business combinations
Business combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business combinations | Business combinations Publica LLC On August 9, 2021, a wholly-owned subsidiary of the Company acquired, directly or indirectly, all the membership units and membership interests of Publica LLC ("Publica"). The purchase price related to this acquisition was $171,366 in cash and 2,888,889 shares of common stock of the Company, valued at $49,631. The acquisition was financed with proceeds received from the Company's IPO. The Publica acquisition was accounted for in accordance with ASC 805, using the acquisition method of accounting. The assets and liabilities of Publica, including identifiable intangible assets, have been measured at their fair value primarily using Level 3 inputs. Determining the fair value of the assets acquired and liabilities assumed requires judgement and involved the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, assets useful lives, market multiples, and other items. The use of different estimates and judgements could yield materially different results. The fair values allocated to the assets acquired are based on management's estimates and assumptions and may be subject to change as additional information becomes available. The fair value of the customer relationship intangible asset acquired was determined using the excess earnings method. The fair value of the trademark and developed technology intangible assets acquired were determined using the relief from royalty method. The excess of the purchase price, over the fair value of net assets acquired, including the amount assigned to the identifiable intangible assets, has been recorded to goodwill. The resulting goodwill has been allocated to the Company's single reporting unit. $57,972 of goodwill will be deductible for tax purposes. The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows: Fair Value Useful Life Assets acquired: Cash and cash equivalents $ 4,482 Accounts receivable 2,391 Property, plant and equipment 46 Prepaid expenses 188 Security deposits 12 Intangible assets: Developed technology 15,200 5 years Trademarks 2,200 5 years Customer relationships 42,800 6 years Total intangible assets 60,200 Total identifiable assets acquired $ 67,319 Liabilities assumed: Accounts payable $ 560 Other current liabilities 2 Deferred tax liability 36,161 Total liabilities assumed 36,723 Goodwill 190,401 Indefinite Total purchase consideration $ 220,997 Context On December 31, 2021, a wholly-owned subsidiary of the Company acquired, directly or indirectly, all the common equity of Nobora SAS ("Context"). The Context acquisition builds on the Company's current, market-leading media classification and contextual targeting capabilities. The integration of Context's technology will enable marketing partners to identify brand suitable content beyond standard frameworks and contextually target with granularity. The purchase price related to the Context acquisition was $22,575 in cash, of which $967 is payable on December 31, 2023, and 457,959 shares of common stock of the Company, valued at $10,391. The Context acquisition was accounted for in accordance with ASC 805, using the acquisition method of accounting. The assets and liabilities of Context, including identifiable intangible assets, have been measured at their fair value primarily using Level 3 inputs. Determining the fair value of the assets acquired and liabilities assumed requires judgement and involved the use of significant estimates and assumptions, including assumptions with respect to discount rates, opportunity costs, and assets useful lives. The use of different estimates and judgments could yield materially different results. The fair values allocated to the assets acquired are based on management's estimates and assumptions and may be subject to change as additional information becomes available. The fair value of the developed technology intangible asset acquired was determined using the cost method. The excess of the purchase price, over the fair value of net assets acquired, including the amount assigned to the identifiable intangible assets, has been recorded to goodwill. The resulting goodwill has been allocated to the Company's single reporting unit, none of which will be deductible for tax purposes. The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows: Fair Value Useful Life Assets acquired: Accounts receivable $ 122 Other assets 112 Developed technology 7,670 5 years Total identifiable assets acquired $ 7,904 Liabilities assumed: Accounts payable $ 318 Short-term debt 2,354 Deferred tax liability 142 Total liabilities assumed 2,814 Goodwill 27,876 Indefinite Total purchase consideration $ 32,966 |
Property and equipment, net
Property and equipment, net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Property and equipment, net Property and equipment consisted of the following: Estimated September 30, 2022 December 31, 2021 Computer and office equipment 1 - 3 years $ 3,888 $ 3,100 Computer software 3 - 5 years 218 218 Leasehold improvements Various 363 412 Furniture 5 years 81 66 Total property and equipment 4,550 3,796 Less: accumulated depreciation (2,959) (2,383) Total property and equipment, net $ 1,591 $ 1,413 |
Internal use software, net
Internal use software, net | 9 Months Ended |
Sep. 30, 2022 | |
Internal Use Software [Abstract] | |
Internal use software, net | Internal use software, net Internal use software consisted of the following: Estimated September 30, 2022 December 31, 2021 Internal use software 3 - 5 years $ 43,007 $ 32,591 Less: Accumulated amortization (21,451) (14,491) Total internal use software, net $ 21,556 $ 18,100 |
Intangible assets, net
Intangible assets, net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | Intangible assets, net The gross book value, accumulated amortization, net book value and amortization periods of the intangible assets were as follows: September 30, 2022 Estimated Gross book Accumulated Net book value Weighted Customer relationships 5 - 15 years $ 301,853 $ (104,902) $ 196,951 9.7 years Developed technology 4 - 5 years 136,462 (116,888) 19,574 3.7 years Trademarks 5 - 9 years 19,700 (9,362) 10,338 4.6 years Favorable leases 6 years 198 (139) 59 1.8 years Total $ 458,213 $ (231,291) $ 226,922 December 31, 2021 Estimated Gross book Accumulated Net book value Weighted Customer relationships 5 - 15 years $ 302,026 $ (82,105) $ 219,921 10.4 years Developed technology 4 - 5 years 138,342 (112,347) 25,995 4.5 years Trademarks 5 - 9 years 19,700 (7,384) 12,316 5.4 years Favorable leases 6 years 198 (114) 84 2.5 years Total $ 460,266 $ (201,950) $ 258,316 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table provides a roll forward of the changes in the goodwill balance: Goodwill as of December 31, 2021 $ 676,513 Measurement period adjustments (231) Impact of exchange rates (5,304) Goodwill as of September 30, 2022 $ 670,978 |
Accounts payable and accrued ex
Accounts payable and accrued expenses | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | Accounts payable and accrued expenses Accounts payable and accrued expenses consisted of the following: September 30, December 31, Accounts payable $ 9,065 $ 8,307 Accrued payroll 6,807 5,047 Accrued professional fees 2,701 2,334 Accrued bonuses and commissions 12,663 16,454 Accrued revenue sharing 3,883 8,497 Taxes payable 2,056 6,076 Short term debt — 1,976 Accrued hosting fees 3,138 2,465 Cease use liability (short-term) — 1,298 Other accrued expenses 3,698 3,803 Total accounts payable and accrued expenses $ 44,011 $ 56,257 Other long-term liabilities consisted of the following: September 30, December 31, Purchase price payable for the acquisition of Context $ 967 $ 2,320 Cease use liability (long-term) — 5,689 Security deposit received 672 672 Total other long-term liabilities $ 1,639 $ 8,681 |
Long-term debt
Long-term debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt New Credit Agreement On September 29, 2021, the Company entered into a new credit agreement with various lenders (the “New Credit Agreement” or the “New Revolver”), that provides for an initial $300,000 in commitments for revolving credit loans, which amount may be increased or decreased under specific circumstances, with a $30,000 letter of credit sublimit and a $100,000 alternative currency sublimit. In addition, the New Credit Agreement provides for the ability to request incremental term loan facilities, in a minimum amount of $5,000 for each facility. Borrowings pursuant to the New Credit Agreement may be used for working capital and other general corporate purposes, including for acquisitions permitted under the New Credit Agreement. The Company drew down $235,000 on the New Revolver on September 29, 2021 and an additional $10,000 on December 23, 2021. On June 27, 2022, the Company paid down $10,000. During the three months ended September 30, 2022, the Company drew and paid down $15,000 under the New Revolver. Borrowings under the New Credit Agreement are scheduled to mature on September 29, 2026. The New Credit Agreement contains certain customary events of default including failure to make payments when due thereunder, and failure to observe or perform certain covenants. The proceeds of the New Revolver, together with cash on hand, were used to repay the outstanding balance of the term loan and revolving loan under the Company's prior Credit Agreement. In connection with the New Revolver, the Company incurred costs of $2,318 that are included in Long-term debt, net, in the Condensed Consolidated Balance Sheets. In connection with the extinguishment of the term loan and revolving loan under the prior Credit Agreement, the Company wrote off deferred financing costs of $3,721 as a loss on extinguishment. The interest rates for the New Revolver under the New Credit Agreement for U.S. dollar loans are equal to (i) the applicable rate for base rate loans range from 0.75% to 1.50% per annum, (ii) for LIBO Rate (as defined in the New Credit Agreement) loans range from 1.75% to 2.50% per annum, (iii) for RFR Loans (as defined in the New Credit Agreement) denominated in sterling range from 1.7826% to 2.5326%, and (iv) for RFR Loans denominated in euro range from 1.7965% to 2.5456%, in each case, based on the Senior Secured Net Leverage Ratio (as defined in the New Credit Agreement). Base rate borrowings may only be made in dollars. The Company is required to pay a commitment fee during the term of the New Credit Agreement ranging from 0.20% to 0.35% per annum of the average daily undrawn portion of the revolving commitments based on the Senior Secured Net Leverage Ratio. The interest rate on September 30, 2022 was 4.6%. Any borrowings under the New Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and any amounts repaid may be reborrowed. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed the aggregate commitment of all lenders. The New Credit Agreement contains covenants requiring certain financial information to be submitted quarterly and annually. In addition, the Company is also required to comply with certain financial covenants such as maintaining a Net Leverage Ratio (as defined in the New Credit Agreement) of 3.50 to 1.00 or lower and maintaining a minimum Interest Coverage Ratio (as defined in the New Credit Agreement) of 2.50 to 1.00. As of September 30, 2022, the Company was in compliance with all covenants contained in the New Credit Agreement. September 30, 2022 December 31, 2021 New Revolver $ 235,000 $ 245,000 Less: Unamortized debt issuance costs (1,854) (2,202) Total carrying amount $ 233,146 $ 242,798 Amortization of debt issuance costs for the three months ended September 30, 2022 and 2021 were $116 and $337, respectively. Amortization of debt issuance costs for the nine months ended September 30, 2022 and 2021 were $348 and $1,020, respectively. Amortization of debt issuance costs is recorded to interest expense, net on the Company's Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company recognized interest expense of $2,592 and $5,417 during the three months ended September 30, 2022 and 2021, respectively. The Company recognized interest expense of $5,615 and $16,464 during the nine months ended September 30, 2022 and 2021, respectively. Future principal payments of long-term debt as of September 30, 2022 are as follows: Year Ending 2022 (remaining three months) $ — 2023 — 2024 — 2025 — 2026 235,000 $ 235,000 |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxesAt the end of each interim period, the Company estimates the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs. The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the Company’s tax environment changes. To the extent that the expected annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax provision in the quarter in which the change occurs. For the three months ended September 30, 2022 and 2021, the Company recorded an income tax provision of $1,287 and an income tax benefit of $898, respectively. The Company’s effective tax rate for the three months ended September 30, 2022 and 2021 was 62.7% and (8.4%), respectively. The Company's effective tax rate for the three months ended September 30, 2022 differs from the statutory rate for the three months ended September 30, 2021 effective tax rate, primarily due to non-deductible executive compensation as the Company became subject to the provisions of Section 162(m) of the Internal Revenue Code as a result of becoming a public company, other permanent tax differences and discrete items. For the nine months ended September 30, 2022 and 2021, the Company recorded an income tax provision of $5,083 and an income tax benefit of $4,855, respectively. The Company’s effective tax rate for the nine months ended September 30, 2022 and 2021 was 56.7% and (9.3%), respectively. The Company's effective tax rate for the nine months ended September 30, 2022 differs from the statutory rate for the nine months ended September 30, 2021 effective tax rate, primarily due to non-deductible executive compensation as the Company became subject to the provisions of Section 162(m) of the Internal Revenue Code as a result of becoming a public company, other permanent tax differences and discrete items. |
Segment data
Segment data | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment data | Segment data Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer is the CODM. The Company manages its operations as a single segment for the purpose of assessing and making operating decisions. The Company’s CODM allocates resources and assesses performance based upon financial information at the consolidated level. Since the Company operates in one operating segment, all required financial segment information can be found in the condensed consolidated financial statements. The following table summarizes revenue by geographic area: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 North and South America (“Americas”) $ 69,786 $ 50,286 $ 199,078 $ 136,919 Europe, Middle East and Africa (“EMEA”) 23,110 20,222 68,368 61,185 Asia and Pacific Rim (“APAC”) 8,447 8,506 23,467 22,937 Total $ 101,343 $ 79,014 $ 290,913 $ 221,041 For the three months ended September 30, 2022 and 2021, revenue in the U.S. was $65,725 and $46,156, respectively. For the nine months ended September 30, 2022 and 2021, revenue in the U.S. was $188,193 and $126,226, respectively. The following table summarizes long lived assets (including property and equipment, net and operating right-of-use assets, net) by geographic area: September 30, December 31, Long lived assets Americas $ 17,252 $ 876 EMEA 327 181 APAC 3,043 356 Total $ 20,622 $ 1,413 |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based compensation | Stock-based compensation Integral Ad Science Holding Corp. Amended and Restated 2018 Stock Option Plan On August 1, 2018, the Company adopted the 2018 Non-Qualified Stock Option Plan (“2018 Plan”). Under the 2018 Plan, the Company had issued (i) Time-Based Options that vest over four years with 25% vesting after twelve months and an additional 6.25% vesting at the end of each successive quarter thereafter; and (ii) Return-Target Options that vest upon the first to occur of sale of the Company, or, sale or transfer to any third party of shares, as a result of which, any person or group other than Vista, obtains possession of voting power to elect a majority of the Company’s board of directors or any other governing body and the achievement of a total equity return multiple of 3.0 or greater. The 2018 Plan contained a provision wherein, the Time-Based Options can be repurchased by the Company at cost upon resignation of the employee. Due to this repurchase feature, the Time-Based Options did not automatically provide the employee with the potential benefits associated with a stock award holder, and therefore, these awards were not accounted for as a stock-based award under ASC 718, Compensation - Stock Compensation but instead, compensation cost was recognized when the benefit to the employee was determined to be probable. The Return-Target Options were considered to contain both market (total stockholder return threshold) and performance (exit event) conditions. As such, the award was measured on the date of grant. Since the conditions for vesting related to the Return-Target Options were not met prior to the IPO, no stock-based compensation was recognized in the pre-IPO financial statements of the Company. In connection with the Company’s IPO, the 2018 Plan was amended and restated (“Amended and Restated 2018 Plan”) with the following modifications: (i) the provision to repurchase the Time-Based Options at cost upon resignation of the employee was removed and (ii) the Return-Target Options were modified to include vesting upon a sale of shares by Vista following the IPO resulting in Vista realizing a cash return on its investment in the Company equaling or exceeding $1.17 billion. As a result of the modification to the Time-Based Options, the awards became subject to the guidance in ASC 718, Compensation - Stock Compensation . During the three and nine months ended September 30, 2022, the Company recognized stock compensation expense of $3,234 and $10,970, respectively, related to the Time-Based Options. During the three and nine months ended September 30, 2021, the Company recognized stock compensation expense of $4,595 and $42,742, respectively, related to the Time-Based Options. As the return multiple and vesting conditions associated with the Return-Target Options were also modified, the Company fair valued the Return-Target Options using a Monte Carlo simulation model. The Return-Target Options become exercisable following both (i) a registration of shares of common stock held by Vista and (ii) Vista realizing a cash return on its investment in the Company equaling or exceeding $1.17 billion. As of September 30, 2022, the condition relating to Vista's cash return was not deemed probable and therefore, no stock-based compensation expense relating to the Return-Target Options was recognized during the three month period ended September 30, 2022. Vesting of the Time-Based Options accelerate when the Return-Target Options vest and therefore, recognition of the remaining unamortized stock compensation expense related to the Time-Based Options will accelerate when it becomes probable that the Return-Target Options would vest. The total number of Time-Based Options and Return Target Options outstanding under the Amended and Restated 2018 Plan as of September 30, 2022 were 3,464,146 and 1,759,104, respectively. The Company does not expect to issue any additional awards under the Amended and Restated 2018 Plan. 2021 Omnibus Incentive Plan (“2021 Plan”) On June 29, 2021, the Company adopted the 2021 Plan to incentivize execu tive officers, management, employees, consultants and directors of the Company and to align the interests of the participants with those of the Company’s share holders. As of September 30, 2022, there were 27,421,802 shares reserved for issuance under the 2021 Plan and the total number of shares reserved for issuance under the 2021 Plan will be increased on January 1 of each of the first 10 calendar years during the term of the 2021 Plan, by the lesser of (i) 5% of the total number of shares of common stock outstanding on each December 31 immediately prior to the date of increase or (ii) such number of shares of common stock determined by our Board or compensation committee. During the three and nine months ended September 30, 2022, the Company recognized stock compensation expense of $672 and $2,417 respectively related to stock options. During the three and nine months ended September 30, 2021, the Company recognized stock compensation expense of $887 related to stock options. As of September 30, 2022, there are 1,525,398 total options outstanding under the 2021 Plan, consisting of 1,021,111 Time-Based Options and 504,287 Return-Target Options. The vesting conditions for the options issued under the 2021 Plan are identical to those described under the Amended and Restated 2018 Plan. Stock option activity for the three months ended September 30, 2022 is as follows: Time-Based Options Stock options Weighted Weighted average Aggregate Outstanding at July 1, 2022 5,636,565 $ 8.06 7.51 20,889 Granted — — — — Canceled or forfeited (547,638) 11.32 — — Exercised (603,670) 4.19 — — Outstanding at September 30, 2022 4,485,257 $ 8.18 6.85 $ 8,119 Vested and expected to vest at September 30, 2022 4,485,257 $ 8.18 6.85 $ 8,119 Exercisable as of September 30, 2022 3,004,243 $ 6.47 6.29 $ 6,847 Return-Target Options Stock options Weighted Weighted average Aggregate Outstanding at July 1, 2022 2,898,674 $ 7.95 7.50 10,892 Granted — — — — Canceled or forfeited (745,410) 7.73 — — Exercised — — — — Outstanding at September 30, 2022 2,153,264 $ 8.03 7.22 $ 4,047 Vested and expected to vest at September 30, 2022 2,153,264 $ 8.03 7.22 $ 4,047 Exercisable as of September 30, 2022 — — — — Stock option activity for the nine months ended September 30, 2022 is as follows: Time-Based Options Stock options Weighted Weighted average Aggregate Outstanding at January 1, 2022 6,648,975 $ 7.46 7.76 98,055 Granted — — — — Canceled or forfeited (749,052) 9.38 — — Exercised (1,414,666) 4.18 — — Outstanding at September 30, 2022 4,485,257 $ 8.18 6.85 $ 8,119 Vested and expected to vest at September 30, 2022 4,485,257 $ 8.18 6.85 $ 8,119 Exercisable as of September 30, 2022 3,004,243 $ 6.47 6.29 $ 6,847 Return-Target Options Stock options Weighted Weighted average Aggregate Outstanding at January 1, 2022 3,265,126 $ 7.53 7.27 47,947 Granted — — — — Canceled or forfeited (1,111,862) 6.54 — — Exercised — — — — Outstanding at September 30, 2022 2,153,264 $ 8.03 7.22 $ 4,047 Vested and expected to vest at September 30, 2022 2,153,264 $ 8.03 7.22 $ 4,047 Exercisable as of September 30, 2022 — — — — As of September 30, 2022, unamortized stock-based compensation expense related to the Time-Based Options was $15,845, which will be recognized over the weighted average vesting term of 2.1 years. In addition, unamortized stock-based compensation expense related to the Return-Target Options of $26,108 will be recognized when events that trigger vesting are deemed probable. Restricted Stock Units ("RSUs") The majority of RSUs under the 2021 Plan vest 25% each year and become fully vested after four years of service. Beginning in May 2022, RSUs will begin to vest 6.25% at the end of each successive quarter and become fully vested after four years of service. RSU activity for the three months ended September 30, 2022 is as follows: RSUs Number of Shares Weighted Average Grant Date Fair Value Outstanding as of July 1, 2022 7,365,070 $ 13.85 Granted 1,369,772 8.44 Canceled or forfeited (176,180) 13.63 Vested (471,995) 15.54 Outstanding as of September 30, 2022 8,086,667 $ 12.83 Expected to vest as of September 30, 2022 8,086,667 RSU activity for the nine months ended September 30, 2022 is as follows: RSUs Number of Shares Weighted Average Grant Date Fair Value Outstanding as of January 1, 2022 2,426,147 $ 19.43 Granted 6,949,384 11.13 Canceled or forfeited (527,656) 15.94 Vested (761,208) 16.35 Outstanding as of September 30, 2022 8,086,667 $ 12.83 Expected to vest as of September 30, 2022 8,086,667 During the three and nine months ended September 30, 2022, the Company recognized $7,552 and $16,524, respectively, of stock-based compensation expense related to these RSU awards. During the three and nine months ended September 30, 2021, the Company recognized $2,652 of stock-based compensation expense related to these RSU awards. Unamortized stock-based compensation expense related to RSUs as of September 30, 2022 was $93,458, which will be recognized over the weighted average vesting term of 3.4 years. Performance Stock Units The Company granted Performance Stock Units under the 2021 Plan, which are contingent upon achieving specified revenue performance goals by December 31, 2023. As of September 30, 2022, no stock-based compensation expense has been recognized as performance vesting conditions were not deemed probable to occur. The unrecognized compensation expense is $12,000 assuming performance at the highest tier. Market Stock Units The Company granted market stock units ("MSUs") under the 2021 Plan to certain executive officers. MSUs vest over four years, 25% on May 2, 2023 and 6.25% at the end of each quarter thereafter. The number of MSUs eligible to vest is based on the performance of the Company's common stock over each vesting period. The number of shares eligible to vest is calculated based on a payout factor. The payout factor is calculated by dividing the average closing price of the Company's stock during the ten trading days immediately preceding the applicable vesting date by the closing price of the Company's stock on April 29, 2022. The payout factor is zero if the quotient is less than 0.60 and is capped at 2.25. This quotient is then multiplied by the target number of MSUs granted to the relevant officer to determine the number of shares to be issued to the officer at vesting. The grant date fair value of the MSUs was determined using a Monte-Carlo simulation. The Company uses the accelerated attribution method to account for these awards. MSU activity for the three and nine months ended September 30, 2022 is as follows: MSUs Number of Shares Weighted Average Grant Date Fair Value Outstanding as of January 1, 2022 — $ — Granted 1,261,413 14.43 Canceled or forfeited (86,674) 14.43 Vested — — Outstanding as of September 30, 2022 1,174,739 $ 14.43 Expected to vest as of September 30, 2022 1,174,739 All outstanding MSU awards were granted in three months ended June 30, 2022. Forfeitures of MSU awards occurred during the three and nine months ended September 30, 2022. During the three and nine months ended September 30, 2022, the Company recognized stock-based compensation expense of $2,657 and $3,065, respectively related to the MSU awards. Unamortized stock-based compensation expense related to MSUs was $13,882, which will be recognized over the weighted average vesting term of 3.7 years. 2021 Employee Stock Purchase Plan (“ESPP”) The Company adopted the ESPP for the primary purpose of incentivizing employees in future periods. As of September 30, 2022, 3,033,556 shares of common stock are reserved for issuance under the ESPP. The number of shares available for issuance under the ESPP will be increased on January 1 of each calendar year, ending in and including 2031, by an amount equal to the lesser of (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by our Board, subject to a maximum of 16,000,000 shares of our common stock for the portion of the ESPP intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. All Company employees and employees of designated subsidiaries are eligible to participate in the ESPP and may purchase shares through payroll deductions of up to 15% of their eligible compensation, subject to a maximum of $25,000 in any annual period for the portion of the ESPP intended to qualify as an employee purchase plan under Section 423 of the Internal Revenue Code. The ESPP provides eligible employees the opportunity to purchase shares of the Company's common stock through payroll deductions at a price equal to 85% of the fair market value of the shares on the first business day of the offering period or the last business day of the offering period, whichever is lower. The six month offering under the ESPP commenced on August 1, 2022. There are no shares issued under the ESPP plan as of September 30, 2022. Stock-based compensation expense recognized in the three and nine months ended September 30, 2022 was $131. Total stock-based compensation expense for all equity arrang ements for the three and nine months e nded September 30, 2022 and 2021 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of revenue $ 101 $ 48 $ 258 $ 48 Sales and marketing 4,457 2,419 10,650 13,227 Technology and development 3,168 1,820 6,979 8,829 General and administrative 6,521 3,854 15,220 27,569 Total $ 14,247 $ 8,141 $ 33,107 $ 49,673 |
Members__ Stockholders_ equity
Members’/ Stockholders’ equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Members’/ Stockholders’ equity | Members’/ Stockholders’ equity As discussed in Note 1, the Company converted to a Delaware corporation, which created new elements of the capital structure upon its IPO. Common stock As of September 30, 2022, our authorized common stock consists of 500,000,000 shares of common stock, par value $0.001 per share and 50,000,000 preferred stock, par value $0.001 per share. For the three months ended September 30, 2022, the Company issued 471,995 shares of common stock for vested RSUs and employees exercised stock options in exchange for 603,670 shares of common stock for $2,527. For the nine months ended September 30, 2022, the Company issued 761,208 shares of common stock for vested RSUs and employees exercised stock options in exchange for 1,414,666 shares of common stock for $5,908. During the three and nine months ended September 30, 2022, the Company repurchased 3,080,061 shares of common stock for $23,655. For the three and nine months ended September 30, 2021, the Company issued and sold 15,000,000 shares of common stock in connection with the closing of its IPO on July 2, 2021 and 1,821,330 shares of common stock in connection with the exercise of the underwriters' option that closed on July 28, 2021. The Company issued 2,888,889 shares of common stock in connection with its acquisition of Publica on August 9, 2021. For the three months ended September 30, 2021, the Company also issued 26,931 shares of common stock for vested RSUs. Members’ equity Prior to the IPO, the Company was a single member LLC, and the Company’s Board of Directors, through the Kavacha Topco, LLC Amended and Restated Limited Liability Company Agreement (the “Operating Agreement”), had the authority to admit additional members. Under the terms of the Operating Agreement, the members of the Company were not obligated for debt, liabilities, contracts or other obligations of the Company. Profits and losses are allocated to members as defined in the Operating Agreement. In conjunction with the pricing of the IPO, the Operating Agreement was terminated, and the Company converted from a Delaware domestic limited liability company to a Delaware domestic corporation. All outstanding member units were converted into 134,203,403 shares of common stock of the Company on a proportion of 1 member unit for 242 shares of common stock. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases Determination of a leasing arrangement is performed at inception. Right-of-use assets represent the Company's right to use leased assets over the term of the lease, adjusted for lease incentives such as tenant improvements. Lease liabilities represent the Company's contractual obligation to make lease payments over the lease term. Right-of-use assets and lease liabilities are determined based on the present value of future lease payments using the interest rate implicit in the loan or, if that rate cannot be readily determined, the incremental borrowing rate. Incremental borrowing rates were determined for each lease based on the Company's borrowing rate adjusted for term differences and foreign currency risk. Some real estate leases contain lease and non-lease components. Non-lease components generally represent use-based charges for common area maintenance, taxes and utilities. The Company has elected not to separate lease and non-lease components. Variable lease payments consist primarily of common area maintenance, utilities and taxes, which are not included in the recognition of ROU assets and related lease liabilities. Some contracts also contain lease incentives such as tenant improvement allowances and rent holidays, which are treated as a reduction of lease payments for the measurement of the lease liability. The Company leases office spaces under non-cancelable lease terms, and have a remaining lease term of up to 4.4 years, with a number of month-to-month leases that are accounted for as short-term leases. The Company has not recognized renewal options as part of its right-of-use assets and lease liabilities, as the renewal options are not reasonably certain of exercise or occurrence as of September 30, 2022. Additionally, these lease arrangements do not contain residual value guarantees, and there are no other restrictions or covenants in the contracts. The weighted-average remaining term of the Company's operating leases was 3.9 years as of September 30, 2022. The weighted-average discount rate used to measure the present value of the operating lease liabilities was 4.7% as of September 30, 2022. The following table presents components of lease cost recorded in the Condensed Consolidated Statement of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022. Three Months Ended Nine Months Ended Lease costs: Operating lease costs $ 1,756 $ 5,294 Short-term lease costs 838 2,524 Variable lease costs 62 241 Sublease income (656) (1,968) Total lease costs $ 2,000 $ 6,091 For the nine months ended September 30, 2022, operating cash flows included $5,665 of cash paid for operating lease liabilities and $672 received from the sublease. As of September 30, 2022, there are no material operating leases that have not yet commenced. As of September 30, 2022, the maturities of remaining lease payments included in the measurement of operating leases are as follows: Year Ended December 31, 2022 (remaining three months) $ 2,015 2023 7,761 2024 6,286 2025 6,377 2026 5,142 Thereafter 1,149 Total lease payments 28,730 Less: imputed interest (2,516) Total operating lease liability $ 26,214 As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, the following table summarizes operating leases as of December 31, 2021 under ASC 840. Year Ended December 31, Minimum lease payments Sublease income 2022 $ 6,957 $ 1,569 2023 6,276 2,756 2024 6,345 2,825 2025 6,467 2,896 2026 5,157 2,968 2027 and thereafter 1,149 761 $ 32,351 $ 13,775 |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Indemnifications In its normal course of business, the Company has made certain indemnities, commitments, and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company’s customers, indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware, and indemnifications related to the Company’s lease agreements. In addition, the Company’s advertiser and distribution partner agreements contain certain indemnification provisions which are generally consistent with those prevalent in the Company’s industry. The Company has not incurred any obligations under indemnification provisions historically and does not expect to incur significant obligations in the future. Accordingly, the Company has not recorded any liability for these indemnities, commitments, and guarantees in the accompanying balance sheets. Purchase commitments In the ordinary course of business, the Company enters into various purchase commitments primarily related to third-party cloud hosting and data services, and information technology operations. Total non-cancelable purchase commitments as of September 30, 2022 were approximately $110,488 for periods through 2026. |
Net income (loss) per share
Net income (loss) per share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net income (loss) per share | Net income (loss) per share For periods prior to the Company’s conversion to a Delaware corporation, including fiscal 2021 for which a portion of the period preceded the conversion, the Company has retrospectively presented net income (loss) per share as if the conversion had occurred at the beginning of the earliest period presented. The weighted average shares used in computing net income (loss) per share in these periods are based on the number of units held by members after giving effect to the conversion ratio. Basic and diluted income (loss) per share is computed by dividing net income (loss) by the weighted-average shares outstanding: Three months ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ 767 $ (9,780) $ 3,887 $ (47,615) Denominator: Basic Shares: Weighted-average shares outstanding 155,389,195 151,988,054 155,007,655 140,016,260 Diluted Shares: Basic weighted-average shares outstanding 155,389,195 151,988,054 155,007,655 140,016,260 Dilutive effect of stock based awards 1,307,559 — 2,573,914 — Weighted-average diluted shares outstanding 156,696,754 151,988,054 157,581,569 140,016,260 Net income (loss) per share Basic $ 0.00 $ (0.06) $ 0.03 $ (0.34) Diluted $ 0.00 $ (0.06) $ 0.02 $ (0.34) The following potentially dilutive securities were excluded from the computation of diluted net income (loss) per share attributable to common stock/unit-holders for the periods presented given that their inclusion would have been anti-dilutive. Since the conditions associated with the vesting of the Return-Target Options have not occurred as of the reporting date, such options are excluded from potentially anti-dilutive securities. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Options to purchase common stock 5,169,703 6,676,630 4,493,135 6,676,630 RSUs 6,964,588 2,237,050 2,086,980 2,237,050 MSUs 793,212 — 284,942 — Total 12,928,267 8,913,680 6,865,197 8,913,680 |
Fair value disclosures
Fair value disclosures | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value disclosures | Fair value disclosuresFinancial instrumentsThe carrying value of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximated fair value due to their short maturities. The carrying value of long-term debt approximates its fair value based on Level 2 inputs as the principal amounts outstanding are subject to variable interest rates that are based on market rates (see Note 9). |
Related-party transactions
Related-party transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related-party transactions | Related-party transactionsThe Company incurs expenses for consulting services and other expenses related to services provided by Vista Consulting Group, LLC (“VCG”). For the three months ended September 30, 2022 and 2021, the Company incurred expenses of $18 and $20, respectively. For the nine months ended September 30, 2022 and 2021, the Company incurred expenses of $82 and $153, respectively. These costs were included in general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to VCG as of September 30, 2022 and December 31, 2021 were $21 and $0, respectively. In addition, amounts due from VCG as of September 30, 2022 and December 31, 2021 were $25 and $0, respectively.The Company incurs various travel and other expenses related to services provided by Vista Equity Partners Management, LLC (“VEP”). For the three months ended September 30, 2022 and 2021, the Company incurred expenses of $19 and $22, respectively. For the nine months ended September 30, 2022 and 2021, the Company incurred expenses of $56 and $23, respectively. These costs were included in general and administrative expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Amounts due to VEP as of September 30, 2022 and December 31, 2021 were $18 and $0, respectively.The Company had other related party transactions with companies owned by Vista Equity Partners that are immaterial individually and in aggregate to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statement of Operations. |
Basis of presentation and sum_2
Basis of presentation and summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The Company’s condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the financial position, results of operations and cash flows for all periods presented. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The accompanying interim Condensed Consolidated Balance Sheet as of September 30, 2022, the Condensed Consolidated Statements of Operations and Comprehensive Loss, of cash flows and of members’/stockholders’ equity for the three and nine months ended September 30, 2022 and 2021, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary to state fairly the consolidated financial position of the Company. All adjustments made were of a normal recurring nature. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future period. The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements for the years ended December 31, 2021, 2020 and 2019. There have been no significant changes to these policies, except for the adoption of ASC 842, Leases as disclosed in Note 2(h), that have had a material impact on the Company’s condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2022. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 3, 2022. During the three and nine months ended September 30, 2022, the Company reclassified foreign exchange loss, net from "General and administrative" expenses within the Condensed Consolidated Statement of Operations as a separate line presented on the Condensed Consolidated Statement of Operations. Corresponding prior period amounts have also been reclassified to conform to current period presentation. |
Basis of consolidation | Basis of consolidationThe condensed consolidated financial statements include the accounts of Integral Ad Science Holding Corp. and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include fair value of assets acquired in business combinations, including assumptions with respect to future cash inflows and outflows, discount rates, assets useful lives, market multiples, the |
Accounts receivable, net | Accounts receivable, netAccounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts. The allowance is estimated based on management’s knowledge of its customers’ financial condition, credit history, and existing economic conditions. Invoices are typically issued with net 30-days to net 90-days terms. Account balances are considered delinquent if payment is not received by the due date, and the receivables are written off when deemed uncollectible. These costs are recorded in general and administrative expenses within the Consolidated Statements of Operations and Comprehensive Loss. |
Stock-based compensation | Stock-based compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures as they occur. The Company used the following assumptions in valuing its time-based service options, which vest over a period of time subject to continued employment ("Time-Based Options"), return target options ("Return-Target Options"), which vest upon a realized cash return of the equity investment of Vista Equity Partners ("Vista"), the Company’s equity sponsor and funds controlled by Vista and registration of the shares held by Vista, market stock units ("MSUs"), and shares to be purchased under the Employee Stock Purchase Plan ("ESPP"). Expected term — For time-based awards, the estimated expected term of options granted is generally calculated as the vesting period plus the midpoint of the remaining contractual term, as the Company does not have sufficient historical information to develop reasonable expectations surrounding future exercise patterns and post-vesting employment termination behavior. For awards subject to market and performance conditions, the expected term represents the period of time that the options granted are expected to be outstanding. Expected volatility — Since the Company does not have substantive trading history of its common stock, volatility is estimated based upon observed option-implied volatilities for a group of peer companies. The Company believes this is the best estimate of the expected volatility over the weighted-average expected term of its option grants. Risk-free interest rate — The risk-free interest rate is based on the implied yield currently available on U.S. Treasury instruments with terms approximately equal to the expected term of the option. Expected dividend — The expected dividend assumption was based on the Company’s history and expectation of dividend payouts. The Company currently has no history or expectation of paying cash dividends on its common stock/units. Fair value —Prior to the IPO, because there was no public market for the Company’s common stock/units, the board of directors determined the best estimate of the fair value of the Company’s option grants, based on reasonable judgment and numerous objective and subjective factors, including independent third-party valuations of the Company’s common stock/units, operating and financial performance, and general and industry-specific economic outlook, amongst other factors. Following the pricing of the IPO, the Company’s shares are traded in the public market, and accordingly, the Company uses the applicable closing price of its common stock to determine fair value. |
Recently adopted accounting pronouncements & Accounting pronouncements not yet adopted | Recently adopted accounting pronouncements In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”) effective January 1, 2021, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Most amendments within ASU No. 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company early adopted ASU No. 2019-12, which did not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU No. 2018-15”), which requires customers in a cloud computing arrangement that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets. The guidance requires certain costs incurred during the application development stage to be capitalized and other costs incurred during the preliminary project and post-implementation stages to be expensed as they are incurred. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrange is ready for its intended use. A customer’s accounting for the hosting component of the arrangement is not affected. The Company adopted this guidance on January 1, 2021 on a prospective basis. The adoption of ASU 2018-15 did not have a material impact on the Company’s condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-2, “Leases (Topic 842)” (“ASU No. 2016-2”). Under ASU No. 2016-2, lessees are required to put most leases on their balance sheets but to recognize expenses in the income statement in a manner similar to current accounting. ASU No. 2016-2 also eliminated the current real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. The updated guidance is effective for the Company beginning January 1, 2022. Upon adoption, entities are required to use the modified retrospective approach for leases that exist, or are entered into, after the beginning of the earliest comparative period in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), Targeted Improvements, which allows entities to not apply the new leases standard, including its disclosure requirements, in the comparative periods they present in their financial statements in the year of adoption. The Company adopted ASU No. 2016-2 on January 1, 2022 using the modified retrospective transition approach, which resulted in the recognition of right-of-use assets ("ROU assets") of $21,666 and lease liabilities of $29,361. Differences between ROU assets and lease liabilities are attributed to deferred rent, lease incentive obligations and cease-use liability previously recognized under ASC 420 Exit or Disposal Cost Obligations. The Company elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. In addition, the Company elected the expedient permitting the combination of lease and non-lease components into a single lease component. The Company made a policy election to not recognize ROU assets and lease liabilities for short-term leases for all asset classes. The adoption of ASU No. 2016-2 did not have a material impact on the Consolidated Statements of Operations and Comprehensive Loss or the Consolidated Statement of Cash Flows. Expanded disclosures around the Company's lease agreements under ASU No. 2016-2 are included in Note 14, Leases. (i) Accounting pronouncements not yet adopted In October 2021, the FASB issued ASU 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which is intended to improve the accounting for acquired revenue contracts with customers in a business combination and create consistency in practice related to (i) the recognition of an acquired contract liability, and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2023. The Company will evaluate the impact of this guidance on future acquisitions as transactions occur. In March 2020, the FASB issued ASU 2020-4, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (“ASU No. 2020-4”) which is intended to address accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The amendments in ASU No. 2020-4 provide operational expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions to be affected by reference rate reform if certain criteria are met. The amendments in ASU No. 2020-4 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The optional amendments are effective for all entities as of March 12, 2020, through December 31, 2022. The Company intends to elect to apply certain of the optional expedients when evaluating the impact of reference rate reform on its debt instruments that reference LIBOR. The Company does not expect the adoption of ASU No. 2020-4 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU No. 2016-13”) which is intended to provide more decision-useful information about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU No. 2016-13 revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including, but not limited to accounts receivable. This guidance will be effective for the Company beginning January 1, 2023, including interim periods within that reporting period. Early adoption is permitted and the update allows for a modified retrospective method of adoption. The Company is currently evaluating the potential effect that adopting this guidance will have on its condensed consolidated financial statements. |
Basis of presentation and sum_3
Basis of presentation and summary of significant accounting policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheets to the amounts shown in the Condensed Consolidated Statements of Cash Flows. September 30, December 31, Cash and cash equivalents $ 73,645 $ 73,210 Short term restricted cash 141 70 Long term restricted cash (held in other long-term assets) 2,789 2,798 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows $ 76,575 $ 76,078 |
Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheets to the amounts shown in the Condensed Consolidated Statements of Cash Flows. September 30, December 31, Cash and cash equivalents $ 73,645 $ 73,210 Short term restricted cash 141 70 Long term restricted cash (held in other long-term assets) 2,789 2,798 Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows $ 76,575 $ 76,078 |
Schedule of Allowance for Doubtful Accounts | The activity in our allowance for doubtful accounts consists of the following as of: September 30, 2022 September 30, 2021 Balance, beginning of period $ 5,883 4,257 Additional provision 647 764 Receivables written off (1,129) (640) Balance, end of period $ 5,401 4,381 |
Schedule of Valuation Assumptions of Stock Options | The Company used the following assumptions in valuing its stock-based compensation: September 30, 2022 September 30, 2021 Estimated fair value per share $3.26 - $14.43 $8.16 - $14.04 Expected volatility (%) 65% - 80% 65% - 80% Expected term (in years) 0.5 - 10.00 3.00 - 10.00 Risk-free interest rate (%) 0.46% - 3.35% 0.46% - 0.98% Dividend yield — — |
Business combinations (Tables)
Business combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows: Fair Value Useful Life Assets acquired: Cash and cash equivalents $ 4,482 Accounts receivable 2,391 Property, plant and equipment 46 Prepaid expenses 188 Security deposits 12 Intangible assets: Developed technology 15,200 5 years Trademarks 2,200 5 years Customer relationships 42,800 6 years Total intangible assets 60,200 Total identifiable assets acquired $ 67,319 Liabilities assumed: Accounts payable $ 560 Other current liabilities 2 Deferred tax liability 36,161 Total liabilities assumed 36,723 Goodwill 190,401 Indefinite Total purchase consideration $ 220,997 The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows: Fair Value Useful Life Assets acquired: Accounts receivable $ 122 Other assets 112 Developed technology 7,670 5 years Total identifiable assets acquired $ 7,904 Liabilities assumed: Accounts payable $ 318 Short-term debt 2,354 Deferred tax liability 142 Total liabilities assumed 2,814 Goodwill 27,876 Indefinite Total purchase consideration $ 32,966 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Estimated September 30, 2022 December 31, 2021 Computer and office equipment 1 - 3 years $ 3,888 $ 3,100 Computer software 3 - 5 years 218 218 Leasehold improvements Various 363 412 Furniture 5 years 81 66 Total property and equipment 4,550 3,796 Less: accumulated depreciation (2,959) (2,383) Total property and equipment, net $ 1,591 $ 1,413 |
Internal use software, net (Tab
Internal use software, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Internal Use Software [Abstract] | |
Schedule of Internal Use Software, Net | Internal use software consisted of the following: Estimated September 30, 2022 December 31, 2021 Internal use software 3 - 5 years $ 43,007 $ 32,591 Less: Accumulated amortization (21,451) (14,491) Total internal use software, net $ 21,556 $ 18,100 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Book Value, Accumulated Amortization, Net Book Value and Amortization Periods of Intangible Assets | The gross book value, accumulated amortization, net book value and amortization periods of the intangible assets were as follows: September 30, 2022 Estimated Gross book Accumulated Net book value Weighted Customer relationships 5 - 15 years $ 301,853 $ (104,902) $ 196,951 9.7 years Developed technology 4 - 5 years 136,462 (116,888) 19,574 3.7 years Trademarks 5 - 9 years 19,700 (9,362) 10,338 4.6 years Favorable leases 6 years 198 (139) 59 1.8 years Total $ 458,213 $ (231,291) $ 226,922 December 31, 2021 Estimated Gross book Accumulated Net book value Weighted Customer relationships 5 - 15 years $ 302,026 $ (82,105) $ 219,921 10.4 years Developed technology 4 - 5 years 138,342 (112,347) 25,995 4.5 years Trademarks 5 - 9 years 19,700 (7,384) 12,316 5.4 years Favorable leases 6 years 198 (114) 84 2.5 years Total $ 460,266 $ (201,950) $ 258,316 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following table provides a roll forward of the changes in the goodwill balance: Goodwill as of December 31, 2021 $ 676,513 Measurement period adjustments (231) Impact of exchange rates (5,304) Goodwill as of September 30, 2022 $ 670,978 |
Accounts payable and accrued _2
Accounts payable and accrued expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: September 30, December 31, Accounts payable $ 9,065 $ 8,307 Accrued payroll 6,807 5,047 Accrued professional fees 2,701 2,334 Accrued bonuses and commissions 12,663 16,454 Accrued revenue sharing 3,883 8,497 Taxes payable 2,056 6,076 Short term debt — 1,976 Accrued hosting fees 3,138 2,465 Cease use liability (short-term) — 1,298 Other accrued expenses 3,698 3,803 Total accounts payable and accrued expenses $ 44,011 $ 56,257 |
Other Noncurrent Liabilities | Other long-term liabilities consisted of the following: September 30, December 31, Purchase price payable for the acquisition of Context $ 967 $ 2,320 Cease use liability (long-term) — 5,689 Security deposit received 672 672 Total other long-term liabilities $ 1,639 $ 8,681 |
Long-term debt (Tables)
Long-term debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | September 30, 2022 December 31, 2021 New Revolver $ 235,000 $ 245,000 Less: Unamortized debt issuance costs (1,854) (2,202) Total carrying amount $ 233,146 $ 242,798 |
Schedule of Future Principal Payments of Long-term Debt | Future principal payments of long-term debt as of September 30, 2022 are as follows: Year Ending 2022 (remaining three months) $ — 2023 — 2024 — 2025 — 2026 235,000 $ 235,000 |
Segment data (Tables)
Segment data (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following table summarizes revenue by geographic area: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 North and South America (“Americas”) $ 69,786 $ 50,286 $ 199,078 $ 136,919 Europe, Middle East and Africa (“EMEA”) 23,110 20,222 68,368 61,185 Asia and Pacific Rim (“APAC”) 8,447 8,506 23,467 22,937 Total $ 101,343 $ 79,014 $ 290,913 $ 221,041 The following table summarizes long lived assets (including property and equipment, net and operating right-of-use assets, net) by geographic area: September 30, December 31, Long lived assets Americas $ 17,252 $ 876 EMEA 327 181 APAC 3,043 356 Total $ 20,622 $ 1,413 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | Stock option activity for the three months ended September 30, 2022 is as follows: Time-Based Options Stock options Weighted Weighted average Aggregate Outstanding at July 1, 2022 5,636,565 $ 8.06 7.51 20,889 Granted — — — — Canceled or forfeited (547,638) 11.32 — — Exercised (603,670) 4.19 — — Outstanding at September 30, 2022 4,485,257 $ 8.18 6.85 $ 8,119 Vested and expected to vest at September 30, 2022 4,485,257 $ 8.18 6.85 $ 8,119 Exercisable as of September 30, 2022 3,004,243 $ 6.47 6.29 $ 6,847 Return-Target Options Stock options Weighted Weighted average Aggregate Outstanding at July 1, 2022 2,898,674 $ 7.95 7.50 10,892 Granted — — — — Canceled or forfeited (745,410) 7.73 — — Exercised — — — — Outstanding at September 30, 2022 2,153,264 $ 8.03 7.22 $ 4,047 Vested and expected to vest at September 30, 2022 2,153,264 $ 8.03 7.22 $ 4,047 Exercisable as of September 30, 2022 — — — — Stock option activity for the nine months ended September 30, 2022 is as follows: Time-Based Options Stock options Weighted Weighted average Aggregate Outstanding at January 1, 2022 6,648,975 $ 7.46 7.76 98,055 Granted — — — — Canceled or forfeited (749,052) 9.38 — — Exercised (1,414,666) 4.18 — — Outstanding at September 30, 2022 4,485,257 $ 8.18 6.85 $ 8,119 Vested and expected to vest at September 30, 2022 4,485,257 $ 8.18 6.85 $ 8,119 Exercisable as of September 30, 2022 3,004,243 $ 6.47 6.29 $ 6,847 Return-Target Options Stock options Weighted Weighted average Aggregate Outstanding at January 1, 2022 3,265,126 $ 7.53 7.27 47,947 Granted — — — — Canceled or forfeited (1,111,862) 6.54 — — Exercised — — — — Outstanding at September 30, 2022 2,153,264 $ 8.03 7.22 $ 4,047 Vested and expected to vest at September 30, 2022 2,153,264 $ 8.03 7.22 $ 4,047 Exercisable as of September 30, 2022 — — — — |
Schedule of Restricted Stock Unit Activity | RSU activity for the three months ended September 30, 2022 is as follows: RSUs Number of Shares Weighted Average Grant Date Fair Value Outstanding as of July 1, 2022 7,365,070 $ 13.85 Granted 1,369,772 8.44 Canceled or forfeited (176,180) 13.63 Vested (471,995) 15.54 Outstanding as of September 30, 2022 8,086,667 $ 12.83 Expected to vest as of September 30, 2022 8,086,667 RSU activity for the nine months ended September 30, 2022 is as follows: RSUs Number of Shares Weighted Average Grant Date Fair Value Outstanding as of January 1, 2022 2,426,147 $ 19.43 Granted 6,949,384 11.13 Canceled or forfeited (527,656) 15.94 Vested (761,208) 16.35 Outstanding as of September 30, 2022 8,086,667 $ 12.83 Expected to vest as of September 30, 2022 8,086,667 |
Share-Based Payment Arrangement, Market Stock Unit, Activity | MSU activity for the three and nine months ended September 30, 2022 is as follows: MSUs Number of Shares Weighted Average Grant Date Fair Value Outstanding as of January 1, 2022 — $ — Granted 1,261,413 14.43 Canceled or forfeited (86,674) 14.43 Vested — — Outstanding as of September 30, 2022 1,174,739 $ 14.43 Expected to vest as of September 30, 2022 1,174,739 |
Schedule of Allocation of Recognized Period Costs | Total stock-based compensation expense for all equity arrang ements for the three and nine months e nded September 30, 2022 and 2021 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of revenue $ 101 $ 48 $ 258 $ 48 Sales and marketing 4,457 2,419 10,650 13,227 Technology and development 3,168 1,820 6,979 8,829 General and administrative 6,521 3,854 15,220 27,569 Total $ 14,247 $ 8,141 $ 33,107 $ 49,673 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease, Cost | The following table presents components of lease cost recorded in the Condensed Consolidated Statement of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022. Three Months Ended Nine Months Ended Lease costs: Operating lease costs $ 1,756 $ 5,294 Short-term lease costs 838 2,524 Variable lease costs 62 241 Sublease income (656) (1,968) Total lease costs $ 2,000 $ 6,091 |
Lessee, Operating Lease, Liability, Maturity | As of September 30, 2022, the maturities of remaining lease payments included in the measurement of operating leases are as follows: Year Ended December 31, 2022 (remaining three months) $ 2,015 2023 7,761 2024 6,286 2025 6,377 2026 5,142 Thereafter 1,149 Total lease payments 28,730 Less: imputed interest (2,516) Total operating lease liability $ 26,214 |
Schedule of Future Minimum Rental Payments for Operating Leases | As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, the following table summarizes operating leases as of December 31, 2021 under ASC 840. Year Ended December 31, Minimum lease payments Sublease income 2022 $ 6,957 $ 1,569 2023 6,276 2,756 2024 6,345 2,825 2025 6,467 2,896 2026 5,157 2,968 2027 and thereafter 1,149 761 $ 32,351 $ 13,775 |
Schedule of Future Minimum Rental Payments Receivable for Operating Leases | As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, the following table summarizes operating leases as of December 31, 2021 under ASC 840. Year Ended December 31, Minimum lease payments Sublease income 2022 $ 6,957 $ 1,569 2023 6,276 2,756 2024 6,345 2,825 2025 6,467 2,896 2026 5,157 2,968 2027 and thereafter 1,149 761 $ 32,351 $ 13,775 |
Net income (loss) per share (Ta
Net income (loss) per share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted | Basic and diluted income (loss) per share is computed by dividing net income (loss) by the weighted-average shares outstanding: Three months ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ 767 $ (9,780) $ 3,887 $ (47,615) Denominator: Basic Shares: Weighted-average shares outstanding 155,389,195 151,988,054 155,007,655 140,016,260 Diluted Shares: Basic weighted-average shares outstanding 155,389,195 151,988,054 155,007,655 140,016,260 Dilutive effect of stock based awards 1,307,559 — 2,573,914 — Weighted-average diluted shares outstanding 156,696,754 151,988,054 157,581,569 140,016,260 Net income (loss) per share Basic $ 0.00 $ (0.06) $ 0.03 $ (0.34) Diluted $ 0.00 $ (0.06) $ 0.02 $ (0.34) |
Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share | The following potentially dilutive securities were excluded from the computation of diluted net income (loss) per share attributable to common stock/unit-holders for the periods presented given that their inclusion would have been anti-dilutive. Since the conditions associated with the vesting of the Return-Target Options have not occurred as of the reporting date, such options are excluded from potentially anti-dilutive securities. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Options to purchase common stock 5,169,703 6,676,630 4,493,135 6,676,630 RSUs 6,964,588 2,237,050 2,086,980 2,237,050 MSUs 793,212 — 284,942 — Total 12,928,267 8,913,680 6,865,197 8,913,680 |
Description of business - Narra
Description of business - Narrative (Details) | 9 Months Ended | ||
Jul. 02, 2021 shares | Sep. 30, 2021 shares | ||
Member’s Interest | |||
Subsidiary, Sale of Stock [Line Items] | |||
Stock issued during period, conversion of units (in shares) | 134,203,403 | (134,203,403) | [1] |
Common Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Stock issued during period, conversion of units (in shares) | 134,203,403 | ||
Ratio of conversion of member units to common stock | 242 | ||
[1]Amounts for periods prior to the Company’s conversion to a Delaware corporation have been retrospectively adjusted to give effect to the corporate conversion described in Note 1. |
Basis of presentation and sum_4
Basis of presentation and summary of significant accounting policies - Employee Retention Credit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||||
Employee retention tax credit | $ 6,981 | $ 0 | $ 6,981 | $ 0 |
Basis of presentation and sum_5
Basis of presentation and summary of significant accounting policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 73,645 | $ 73,210 | ||
Short term restricted cash | 141 | 70 | ||
Long term restricted cash (held in other long-term assets) | 2,789 | 2,798 | ||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows | $ 76,575 | $ 76,078 | $ 66,691 | $ 54,721 |
Basis of presentation and sum_6
Basis of presentation and summary of significant accounting policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of period | $ 5,883 | $ 4,257 |
Additional provision | 647 | 764 |
Receivables written off | (1,129) | (640) |
Balance, end of period | $ 5,401 | $ 4,381 |
Basis of presentation and sum_7
Basis of presentation and summary of significant accounting policies - Valuation Assumptions of Stock Options (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Estimated fair value per share (in usd per share) | $ 3.26 | $ 8.16 |
Expected volatility (%) | 65% | 65% |
Expected term (in years) | 6 months | 3 years |
Risk-free interest rate (%) | 0.46% | 0.46% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Estimated fair value per share (in usd per share) | $ 14.43 | $ 14.04 |
Expected volatility (%) | 80% | 80% |
Expected term (in years) | 10 years | 10 years |
Risk-free interest rate (%) | 3.35% | 0.98% |
Basis of presentation and sum_8
Basis of presentation and summary of significant accounting policies - Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 01, 2022 |
Accounting Policies [Abstract] | ||
Operating lease right-of-use assets, net | $ 19,031 | $ 21,666 |
Total operating lease liability | $ 26,214 | $ 29,361 |
Business combinations - Narrati
Business combinations - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Aug. 09, 2021 | Sep. 30, 2022 |
Business Acquisition [Line Items] | |||
Purchase price payable for the acquisition of Context | $ 2,320 | $ 967 | |
Publica LLC | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 171,366 | ||
Stock issued for acquisition (in shares) | 2,888,889 | ||
Value of stock issued for acquisition | $ 49,631 | ||
Portion of goodwill acquired expected to be deductible for tax purposes | 57,972 | ||
Deferred tax liability | $ 36,161 | ||
Norbora SAS (Context) | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 22,575 | ||
Stock issued for acquisition (in shares) | 457,959 | ||
Value of stock issued for acquisition | $ 10,391 | ||
Portion of goodwill acquired expected to be deductible for tax purposes | 0 | ||
Purchase price payable for the acquisition of Context | 967 | ||
Deferred tax liability | $ 142 |
Business combinations - Assets
Business combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Aug. 09, 2021 | Sep. 30, 2022 |
Liabilities assumed: | |||
Goodwill | $ 676,513 | $ 670,978 | |
Publica LLC | |||
Assets acquired: | |||
Cash and cash equivalents | $ 4,482 | ||
Accounts receivable | 2,391 | ||
Property, plant and equipment | 46 | ||
Prepaid expenses | 188 | ||
Security deposits | 12 | ||
Intangible assets: | 60,200 | ||
Total identifiable assets acquired | 67,319 | ||
Liabilities assumed: | |||
Accounts payable | 560 | ||
Other current liabilities | 2 | ||
Deferred tax liability | 36,161 | ||
Total liabilities assumed | 36,723 | ||
Goodwill | 190,401 | ||
Total purchase consideration | 220,997 | ||
Publica LLC | Developed technology | |||
Assets acquired: | |||
Intangible assets: | $ 15,200 | ||
Liabilities assumed: | |||
Estimate useful lives of acquired intangible assets | 5 years | ||
Publica LLC | Trademarks | |||
Assets acquired: | |||
Intangible assets: | $ 2,200 | ||
Liabilities assumed: | |||
Estimate useful lives of acquired intangible assets | 5 years | ||
Publica LLC | Customer relationships | |||
Assets acquired: | |||
Intangible assets: | $ 42,800 | ||
Liabilities assumed: | |||
Estimate useful lives of acquired intangible assets | 6 years | ||
Norbora SAS (Context) | |||
Assets acquired: | |||
Accounts receivable | 122 | ||
Other assets | 112 | ||
Total identifiable assets acquired | 7,904 | ||
Liabilities assumed: | |||
Accounts payable | 318 | ||
Short-term debt | 2,354 | ||
Deferred tax liability | 142 | ||
Total liabilities assumed | 2,814 | ||
Goodwill | 27,876 | ||
Total purchase consideration | 32,966 | ||
Norbora SAS (Context) | Developed technology | |||
Assets acquired: | |||
Intangible assets: | $ 7,670 | ||
Liabilities assumed: | |||
Estimate useful lives of acquired intangible assets | 5 years |
Property and equipment, net - S
Property and equipment, net - Summary (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 4,550 | $ 3,796 |
Less: accumulated depreciation | (2,959) | (2,383) |
Total property and equipment, net | 1,591 | 1,413 |
Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,888 | 3,100 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 218 | 218 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 363 | $ 412 |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years | 5 years |
Total property and equipment | $ 81 | $ 66 |
Minimum | Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 1 year | 1 year |
Minimum | Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 3 years | 3 years |
Maximum | Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 3 years | 3 years |
Maximum | Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (in years) | 5 years | 5 years |
Property and equipment, net - N
Property and equipment, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 234 | $ 418 | $ 669 | $ 1,378 |
Internal use software, net - Su
Internal use software, net - Summary (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Internal Use Software [Line Items] | ||
Internal use software | $ 43,007 | $ 32,591 |
Less: Accumulated amortization | (21,451) | (14,491) |
Total internal use software, net | $ 21,556 | $ 18,100 |
Minimum | ||
Internal Use Software [Line Items] | ||
Estimated useful life | 3 years | 3 years |
Maximum | ||
Internal Use Software [Line Items] | ||
Estimated useful life | 5 years | 5 years |
Internal use software, net - Na
Internal use software, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Internal Use Software [Abstract] | ||||
Capitalized computer software, amortization | $ 2,453 | $ 2,086 | $ 7,000 | $ 5,793 |
Impairment costs of projects no longer being implemented | $ 49 |
Intangible assets, net - Summar
Intangible assets, net - Summary (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross book value | $ 458,213 | $ 460,266 |
Accumulated amortization | (231,291) | (201,950) |
Net book value | 226,922 | 258,316 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross book value | 301,853 | 302,026 |
Accumulated amortization | (104,902) | (82,105) |
Net book value | $ 196,951 | $ 219,921 |
Weighted average remaining useful life | 9 years 8 months 12 days | 10 years 4 months 24 days |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross book value | $ 136,462 | $ 138,342 |
Accumulated amortization | (116,888) | (112,347) |
Net book value | $ 19,574 | $ 25,995 |
Weighted average remaining useful life | 3 years 8 months 12 days | 4 years 6 months |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross book value | $ 19,700 | $ 19,700 |
Accumulated amortization | (9,362) | (7,384) |
Net book value | $ 10,338 | $ 12,316 |
Weighted average remaining useful life | 4 years 7 months 6 days | 5 years 4 months 24 days |
Favorable leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 6 years | 6 years |
Gross book value | $ 198 | $ 198 |
Accumulated amortization | (139) | (114) |
Net book value | $ 59 | $ 84 |
Weighted average remaining useful life | 1 year 9 months 18 days | 2 years 6 months |
Minimum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | 5 years |
Minimum | Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 4 years | 4 years |
Minimum | Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | 5 years |
Maximum | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | 15 years |
Maximum | Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 5 years | 5 years |
Maximum | Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 9 years | 9 years |
Intangible assets, net - Narrat
Intangible assets, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 9,930 | $ 13,596 | $ 29,916 | $ 37,927 |
Goodwill - Summary (Details)
Goodwill - Summary (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill at beginning of period | $ 676,513 |
Measurement period adjustments | (231) |
Impact of exchange rates | (5,304) |
Goodwill at end of period | $ 670,978 |
Accounts payable and accrued _3
Accounts payable and accrued expenses - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 9,065 | $ 8,307 |
Accrued payroll | 6,807 | 5,047 |
Accrued professional fees | 2,701 | 2,334 |
Accrued bonuses and commissions | 12,663 | 16,454 |
Accrued revenue sharing | 3,883 | 8,497 |
Taxes payable | 2,056 | 6,076 |
Short term debt | 0 | 1,976 |
Accrued hosting fees | 3,138 | 2,465 |
Cease use liability (short-term) | 0 | 1,298 |
Other accrued expenses | 3,698 | 3,803 |
Total accounts payable and accrued expenses | $ 44,011 | $ 56,257 |
Accounts payable and accrued _4
Accounts payable and accrued expenses - Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Purchase price payable for the acquisition of Context | $ 967 | $ 2,320 |
Cease use liability (long-term) | 0 | 5,689 |
Security deposit received | 672 | 672 |
Total other long-term liabilities | $ 1,639 | $ 8,681 |
Long-term debt - Narrative (Det
Long-term debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jun. 27, 2022 | Dec. 23, 2021 | Sep. 29, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | |||||||
Loss on debt refinancing | $ 0 | $ 3,721 | $ 0 | $ 3,721 | |||
Amortization of debt issuance costs | 116 | 337 | 348 | 1,020 | |||
Interest expense, debt | 2,592 | $ 5,417 | $ 5,615 | $ 16,464 | |||
Revolving Credit Facility | New Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 300,000 | ||||||
Incremental increases in maximum borrowing capacity | 5,000 | ||||||
Proceeds from long-term lines of credit | $ 10,000 | 235,000 | 15,000 | ||||
Repayments of long-term lines of credit | $ 10,000 | $ 15,000 | |||||
Debt costs | $ 2,318 | ||||||
Effective interest rate on debt (as a percent) | 4.60% | 4.60% | |||||
Minimum net leverage ratio | 3.50 | 3.50 | |||||
Minimum interest coverage ratio | 2.50 | 2.50 | |||||
Revolving Credit Facility | New Credit Agreement | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee rate (as a percent) | 0.20% | ||||||
Revolving Credit Facility | New Credit Agreement | Minimum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 0.75% | ||||||
Revolving Credit Facility | New Credit Agreement | Minimum | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 1.75% | ||||||
Revolving Credit Facility | New Credit Agreement | Minimum | Sterling | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 1.7826% | ||||||
Revolving Credit Facility | New Credit Agreement | Minimum | Eurodollar | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 1.7965% | ||||||
Revolving Credit Facility | New Credit Agreement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee rate (as a percent) | 0.35% | ||||||
Revolving Credit Facility | New Credit Agreement | Maximum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 1.50% | ||||||
Revolving Credit Facility | New Credit Agreement | Maximum | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 2.50% | ||||||
Revolving Credit Facility | New Credit Agreement | Maximum | Sterling | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 2.5326% | ||||||
Revolving Credit Facility | New Credit Agreement | Maximum | Eurodollar | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 2.5456% | ||||||
Revolving Credit Facility | Prior Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Loss on debt refinancing | $ 3,721 | ||||||
Letter of Credit | New Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 30,000 | ||||||
Incremental increases in maximum borrowing capacity | 5,000 | ||||||
Alternative Currency | New Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | 100,000 | ||||||
Incremental increases in maximum borrowing capacity | $ 5,000 |
Long-term debt - Summary of Car
Long-term debt - Summary of Carrying Amount of The Term Loan (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Less: Unamortized debt issuance costs | $ (1,854) | $ (2,202) |
Total carrying amount | 233,146 | 242,798 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
New Revolver | $ 235,000 | $ 245,000 |
Long-term debt - Future Princip
Long-term debt - Future Principal Payments (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Maturities of Long-term Debt [Abstract] | |
2022 (remaining three months) | $ 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 235,000 |
Long-term debt | $ 235,000 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision (benefit) | $ 1,287 | $ (898) | $ 5,083 | $ (4,855) |
Effective tax rate (percent) | 62.70% | (8.40%) | 56.70% | (9.30%) |
Segment data - Narrative (Detai
Segment data - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Revenue | $ 101,343 | $ 79,014 | $ 290,913 | $ 221,041 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 65,725 | $ 46,156 | $ 188,193 | $ 126,226 |
Segment data - Summary (Details
Segment data - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | $ 101,343 | $ 79,014 | $ 290,913 | $ 221,041 | |
Long lived assets | 20,622 | 20,622 | $ 1,413 | ||
North and South America (“Americas”) | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 69,786 | 50,286 | 199,078 | 136,919 | |
Long lived assets | 17,252 | 17,252 | 876 | ||
Europe, Middle East and Africa (“EMEA”) | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 23,110 | 20,222 | 68,368 | 61,185 | |
Long lived assets | 327 | 327 | 181 | ||
Asia and Pacific Rim (“APAC”) | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 8,447 | $ 8,506 | 23,467 | $ 22,937 | |
Long lived assets | $ 3,043 | $ 3,043 | $ 356 |
Stock-based compensation - Narr
Stock-based compensation - Narrative (Details) | 3 Months Ended | 4 Months Ended | 5 Months Ended | 9 Months Ended | ||||||||
Aug. 01, 2022 | Jun. 29, 2021 | Aug. 01, 2018 | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Apr. 30, 2022 | Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 USD ($) day shares | Sep. 30, 2021 USD ($) | Jun. 30, 2022 shares | Dec. 31, 2021 shares | Jul. 02, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ 14,247,000 | $ 8,141,000 | $ 33,107,000 | $ 49,673,000 | ||||||||
ESPP | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ 131,000 | $ 131,000 | ||||||||||
Stock authorized for awards (in shares) | shares | 3,033,556 | 3,033,556 | 3,033,556 | |||||||||
Increase in stock reserved for future issuance, proportion of common stock outstanding (as a percent) | 1% | |||||||||||
Increase in stock reserved for future issuance, maximum shares of common stock allotted for ESPP (in shares) | shares | 16,000,000 | 16,000,000 | 16,000,000 | |||||||||
Maximum employee payroll deductions of eligible compensation for ESPP (as a percent) | 15% | 15% | 15% | |||||||||
Maximum annual employee payroll deductions of eligible compensation for ESPP | $ 25,000 | $ 25,000 | $ 25,000 | |||||||||
Purchase price of ESPP shares, percent | 85% | |||||||||||
Offering period | 6 months | |||||||||||
Stock issued under the ESPP (in shares) | shares | 0 | |||||||||||
Time Based Options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock options outstanding (in shares) | shares | 4,485,257 | 4,485,257 | 4,485,257 | 5,636,565 | 6,648,975 | |||||||
Unrecognized stock-based compensation expense | $ 15,845,000 | $ 15,845,000 | $ 15,845,000 | |||||||||
Recognition period for unamortized stock-based compensation expense | 2 years 1 month 6 days | |||||||||||
Time Based Options | 2018 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting period | 4 years | |||||||||||
Time Based Options | 2018 Plan | Tranche One | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting period | 12 months | |||||||||||
Award vesting rate (as a percent) | 25% | |||||||||||
Time Based Options | 2018 Plan | Tranche Two | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting rate (as a percent) | 6.25% | |||||||||||
Time Based Options | Amended and Restated 2018 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ 3,234,000 | 4,595,000 | $ 10,970,000 | 42,742,000 | ||||||||
Stock options outstanding (in shares) | shares | 3,464,146 | 3,464,146 | 3,464,146 | |||||||||
Time Based Options | 2021 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock options outstanding (in shares) | shares | 1,021,111 | 1,021,111 | 1,021,111 | |||||||||
Return Target Options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock options outstanding (in shares) | shares | 2,153,264 | 2,153,264 | 2,153,264 | 2,898,674 | 3,265,126 | |||||||
Unrecognized stock-based compensation expense | $ 26,108,000 | $ 26,108,000 | $ 26,108,000 | |||||||||
Return Target Options | 2018 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Minimum equity return multiple | 3 | |||||||||||
Return Target Options | Amended and Restated 2018 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based compensation arrangement by share-based payment award, vesting upon sale of share resulting in cash return, threshold | $ 1,170,000,000 | |||||||||||
Stock-based compensation expense | $ 0 | |||||||||||
Stock options outstanding (in shares) | shares | 1,759,104 | 1,759,104 | 1,759,104 | |||||||||
Return Target Options | 2021 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock options outstanding (in shares) | shares | 504,287 | 504,287 | 504,287 | |||||||||
Stock Options | 2021 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ 672,000 | 887,000 | $ 2,417,000 | 887,000 | ||||||||
Stock options outstanding (in shares) | shares | 1,525,398 | 1,525,398 | 1,525,398 | |||||||||
Stock authorized for awards (in shares) | shares | 27,421,802 | 27,421,802 | 27,421,802 | |||||||||
Period of increase in stock reserved for future issuance | 10 years | |||||||||||
Increase in stock reserved for future issuance, proportion of common stock outstanding (as a percent) | 5% | |||||||||||
RSUs | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ 7,552,000 | $ 2,652,000 | $ 16,524,000 | $ 2,652,000 | ||||||||
Unrecognized stock-based compensation expense | 93,458,000 | $ 93,458,000 | $ 93,458,000 | |||||||||
Recognition period for unamortized stock-based compensation expense | 3 years 4 months 24 days | |||||||||||
RSUs | 2021 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting period | 4 years | 4 years | ||||||||||
Award vesting rate (as a percent) | 25% | 6.25% | ||||||||||
Performance Stock Units (PSUs) | 2021 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | $ 0 | |||||||||||
Unrecognized stock-based compensation expense | 12,000,000 | $ 12,000,000 | 12,000,000 | |||||||||
MSUs | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expense | 2,657,000 | 3,065,000 | ||||||||||
Unrecognized stock-based compensation expense | $ 13,882,000 | $ 13,882,000 | $ 13,882,000 | |||||||||
Recognition period for unamortized stock-based compensation expense | 3 years 8 months 12 days | |||||||||||
MSUs | 2021 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting period | 4 years | |||||||||||
Vesting eligibility, payout factor calculation, measurement period for average closing stock price, number of trading days preceding vesting date | day | 10 | |||||||||||
Vesting eligibility payout factor calculation, maximum quotient allowable for minimum payout factor (less than) | 0.60 | |||||||||||
MSUs | 2021 Plan | Minimum | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Vesting eligibility, payout factor | 0 | |||||||||||
MSUs | 2021 Plan | Maximum | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Vesting eligibility, payout factor | 2.25 | |||||||||||
MSUs | 2021 Plan | Tranche One | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting rate (as a percent) | 25% | |||||||||||
MSUs | 2021 Plan | Tranche Two | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Award vesting rate (as a percent) | 6.25% |
Stock-based compensation - Stoc
Stock-based compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Stock options | ||||
Stock options - exercised (in shares) | (603,670) | (1,414,666) | ||
Time Based Options | ||||
Stock options | ||||
Stock options - beginning balance (in shares) | 5,636,565 | 6,648,975 | 6,648,975 | |
Stock options - granted (in shares) | 0 | 0 | ||
Stock options - canceled or forfeited (in shares) | (547,638) | (749,052) | ||
Stock options - exercised (in shares) | (603,670) | (1,414,666) | ||
Stock options - ending balance (in shares) | 4,485,257 | 5,636,565 | 4,485,257 | 6,648,975 |
Stock options - vested and expected to vest (in shares) | 4,485,257 | 4,485,257 | ||
Stock options - exercisable (in shares) | 3,004,243 | 3,004,243 | ||
Weighted average exercise price | ||||
Weighted average exercise price - beginning balance (in usd per share) | $ 8.06 | $ 7.46 | $ 7.46 | |
Weighted average exercise price - granted (in usd per share) | 0 | 0 | ||
Weighted average exercise price - canceled or forfeited (in usd per share) | 11.32 | 9.38 | ||
Weighted average exercise price - exercised (in usd per share) | 4.19 | 4.18 | ||
Weighted average exercise price - ending balance (in usd per share) | 8.18 | $ 8.06 | 8.18 | $ 7.46 |
Weighted average exercise price - vested and expected to vest (in usd per share) | 8.18 | 8.18 | ||
Weighted average exercise price - exercisable (in usd per share) | $ 6.47 | $ 6.47 | ||
Weighted average remaining contractual life (years) | ||||
Weighted average remaining contractual life (years) - beginning balance | 7 years 6 months 3 days | 6 years 10 months 6 days | 7 years 9 months 3 days | |
Weighted average remaining contractual life (years) - ending balance | 7 years 6 months 3 days | 6 years 10 months 6 days | 7 years 9 months 3 days | |
Weighted average remaining contractual life (years) - vested and expected to vest | 6 years 10 months 6 days | |||
Weighted average remaining contractual life (years) - exercisable | 6 years 3 months 14 days | |||
Aggregate intrinsic value | ||||
Aggregate intrinsic value - beginning balance | $ 20,889 | $ 98,055 | $ 98,055 | |
Aggregate intrinsic value - ending balance | 8,119 | $ 20,889 | 8,119 | $ 98,055 |
Aggregate intrinsic value - vested and expected to vest | 8,119 | 8,119 | ||
Aggregate intrinsic value - exercisable | $ 6,847 | $ 6,847 | ||
Return Target Options | ||||
Stock options | ||||
Stock options - beginning balance (in shares) | 2,898,674 | 3,265,126 | 3,265,126 | |
Stock options - granted (in shares) | 0 | 0 | ||
Stock options - canceled or forfeited (in shares) | (745,410) | (1,111,862) | ||
Stock options - exercised (in shares) | 0 | 0 | ||
Stock options - ending balance (in shares) | 2,153,264 | 2,898,674 | 2,153,264 | 3,265,126 |
Stock options - vested and expected to vest (in shares) | 2,153,264 | 2,153,264 | ||
Stock options - exercisable (in shares) | 0 | 0 | ||
Weighted average exercise price | ||||
Weighted average exercise price - beginning balance (in usd per share) | $ 7.95 | $ 7.53 | $ 7.53 | |
Weighted average exercise price - granted (in usd per share) | 0 | 0 | ||
Weighted average exercise price - canceled or forfeited (in usd per share) | 7.73 | 6.54 | ||
Weighted average exercise price - exercised (in usd per share) | 0 | 0 | ||
Weighted average exercise price - ending balance (in usd per share) | 8.03 | $ 7.95 | 8.03 | $ 7.53 |
Weighted average exercise price - vested and expected to vest (in usd per share) | 8.03 | 8.03 | ||
Weighted average exercise price - exercisable (in usd per share) | $ 0 | $ 0 | ||
Weighted average remaining contractual life (years) | ||||
Weighted average remaining contractual life (years) - beginning balance | 7 years 6 months | 7 years 2 months 19 days | 7 years 3 months 7 days | |
Weighted average remaining contractual life (years) - ending balance | 7 years 6 months | 7 years 2 months 19 days | 7 years 3 months 7 days | |
Weighted average remaining contractual life (years) - vested and expected to vest | 7 years 2 months 19 days | |||
Aggregate intrinsic value | ||||
Aggregate intrinsic value - beginning balance | $ 10,892 | $ 47,947 | $ 47,947 | |
Aggregate intrinsic value - ending balance | 4,047 | $ 10,892 | 4,047 | $ 47,947 |
Aggregate intrinsic value - vested and expected to vest | 4,047 | 4,047 | ||
Aggregate intrinsic value - exercisable | $ 0 | $ 0 |
Stock-based compensation - Rest
Stock-based compensation - Restricted Stock Unit and Market Stock Unit Activity (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | Sep. 30, 2022 $ / shares shares | |
RSUs | ||
Number of Shares | ||
Awards - beginning balance (in shares) | 7,365,070 | 2,426,147 |
Awards - granted (in shares) | 1,369,772 | 6,949,384 |
Awards - canceled or forfeited (in shares) | (176,180) | (527,656) |
Awards - vested (in shares) | (471,995) | (761,208) |
Awards - ending balance (in shares) | 8,086,667 | 8,086,667 |
Weighted Average Grant Date Fair Value | ||
Weighted average grant date fair value - outstanding beginning balance (in usd per share) | $ / shares | $ 13.85 | $ 19.43 |
Weighted average grant date fair value - granted (in usd per share) | $ / shares | 8.44 | 11.13 |
Weighted average grant date fair value - canceled or forfeited (in usd per share) | $ / shares | 13.63 | 15.94 |
Weighted average grant date fair value - vested (in usd per share) | $ / shares | 15.54 | 16.35 |
Weighted average grant date fair value - outstanding ending balance (in usd per share) | $ / shares | $ 12.83 | $ 12.83 |
Expected to vest at end of period (in shares) | 8,086,667 | 8,086,667 |
MSUs | ||
Number of Shares | ||
Awards - beginning balance (in shares) | 0 | |
Awards - granted (in shares) | 1,261,413 | |
Awards - canceled or forfeited (in shares) | (86,674) | |
Awards - vested (in shares) | 0 | |
Awards - ending balance (in shares) | 1,174,739 | 1,174,739 |
Weighted Average Grant Date Fair Value | ||
Weighted average grant date fair value - outstanding beginning balance (in usd per share) | $ / shares | $ 0 | |
Weighted average grant date fair value - granted (in usd per share) | $ / shares | 14.43 | |
Weighted average grant date fair value - canceled or forfeited (in usd per share) | $ / shares | 14.43 | |
Weighted average grant date fair value - vested (in usd per share) | $ / shares | 0 | |
Weighted average grant date fair value - outstanding ending balance (in usd per share) | $ / shares | $ 14.43 | $ 14.43 |
Expected to vest at end of period (in shares) | 1,174,739 | 1,174,739 |
Stock-based compensation - Allo
Stock-based compensation - Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 14,247 | $ 8,141 | $ 33,107 | $ 49,673 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 101 | 48 | 258 | 48 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 4,457 | 2,419 | 10,650 | 13,227 |
Technology and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 3,168 | 1,820 | 6,979 | 8,829 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 6,521 | $ 3,854 | $ 15,220 | $ 27,569 |
Members__ Stockholders_ equity
Members’/ Stockholders’ equity - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jul. 02, 2021 shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) shares | Dec. 31, 2021 $ / shares shares | |||
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | |||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Option exercises (in shares) | 603,670 | 1,414,666 | ||||||
Option exercises | $ | $ 2,527 | $ 5,908 | $ 4,435 | |||||
Stock repurchased during period (in shares) | 3,080,061 | 3,080,061 | ||||||
Stock repurchased during period | $ | $ 23,655 | $ 23,655 | $ 1,204 | |||||
Issuance of common stock for the acquisition of Publica (in shares) | 2,888,889 | 2,888,889 | ||||||
IPO | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs (in shares) | 15,000,000 | 15,000,000 | ||||||
Over-Allotment Option | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs (in shares) | 1,821,330 | 1,821,330 | ||||||
RSUs | ||||||||
Class of Stock [Line Items] | ||||||||
RSUs vested (in shares) | 471,995 | 26,931 | 761,208 | |||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
RSUs vested (in shares) | 471,995 | 26,931 | 761,208 | 26,931 | ||||
Option exercises (in shares) | 603,670 | 1,414,666 | ||||||
Option exercises | $ | $ 1 | $ 1 | ||||||
Stock repurchased during period (in shares) | 3,080,061 | 3,080,061 | ||||||
Stock repurchased during period | $ | $ 3 | $ 3 | ||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs (in shares) | 16,821,330 | 16,821,330 | ||||||
Stock issued during period, conversion of units (in shares) | 134,203,403 | |||||||
Ratio of conversion of member units to common stock | 242 | |||||||
Issuance of common stock for the acquisition of Publica (in shares) | 2,888,889 | 2,888,889 | ||||||
Member’s Interest | ||||||||
Class of Stock [Line Items] | ||||||||
Option exercises (in shares) | [1] | 246,369 | ||||||
Option exercises | $ | $ 1,075 | |||||||
Stock repurchased during period (in shares) | [1] | 99,946 | ||||||
Stock repurchased during period | $ | $ 413 | |||||||
Stock issued during period, conversion of units (in shares) | 134,203,403 | (134,203,403) | [1] | |||||
Units vested (in shares) | [1] | 17,486 | ||||||
Accumulated deficit | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchased during period | $ | $ 791 | |||||||
[1]Amounts for periods prior to the Company’s conversion to a Delaware corporation have been retrospectively adjusted to give effect to the corporate conversion described in Note 1. |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Weighted average remaining lease term | 3 years 10 months 24 days |
Weighted-average discount rate | 4.70% |
Operating lease, cash paid | $ 5,665 |
Cash received from sublease | $ 672 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease remaining term | 4 years 4 months 24 days |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating lease costs | $ 1,756 | $ 5,294 |
Short-term lease costs | 838 | 2,524 |
Variable lease costs | 62 | 241 |
Sublease income | (656) | (1,968) |
Total lease costs | $ 2,000 | $ 6,091 |
Leases - Maturities of Remainin
Leases - Maturities of Remaining Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 01, 2022 |
Leases [Abstract] | ||
2022 (remaining three months) | $ 2,015 | |
2023 | 7,761 | |
2024 | 6,286 | |
2025 | 6,377 | |
2026 | 5,142 | |
Thereafter | 1,149 | |
Total lease payments | 28,730 | |
Less: imputed interest | (2,516) | |
Total operating lease liability | $ 26,214 | $ 29,361 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Minimum lease payments | |
2022 | $ 6,957 |
2023 | 6,276 |
2024 | 6,345 |
2025 | 6,467 |
2026 | 5,157 |
2027 and thereafter | 1,149 |
Operating leases, future minimum lease payments | 32,351 |
Sublease income | |
2022 | 1,569 |
2023 | 2,756 |
2024 | 2,825 |
2025 | 2,896 |
2026 | 2,968 |
2027 and thereafter | 761 |
Operating leases, sublease income | $ 13,775 |
Commitments and contingencies -
Commitments and contingencies - Narrative (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase obligation | $ 110,488 |
Net income (loss) per share - S
Net income (loss) per share - Summary (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net income (loss) | $ 767 | $ (9,780) | $ 3,887 | $ (47,615) |
Denominator: | ||||
Weighted-average shares outstanding, basic (in shares) | 155,389,195 | 151,988,054 | 155,007,655 | 140,016,260 |
Dilutive effect of stock based awards (in shares) | 1,307,559 | 0 | 2,573,914 | 0 |
Weighted-average shares outstanding, diluted (in shares) | 156,696,754 | 151,988,054 | 157,581,569 | 140,016,260 |
Net income (loss) per share, basic (in usd per share) | $ 0 | $ (0.06) | $ 0.03 | $ (0.34) |
Net income (loss) per share, diluted (in usd per share) | $ 0 | $ (0.06) | $ 0.02 | $ (0.34) |
Net income (loss) per share - A
Net income (loss) per share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 12,928,267 | 8,913,680 | 6,865,197 | 8,913,680 |
Options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 5,169,703 | 6,676,630 | 4,493,135 | 6,676,630 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 6,964,588 | 2,237,050 | 2,086,980 | 2,237,050 |
MSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 793,212 | 0 | 284,942 | 0 |
Related-party transactions - Na
Related-party transactions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||
Due to related party | $ 104 | $ 104 | $ 74 | ||
VCG | Consulting Services and Other | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred for services provided by related parties | 18 | $ 20 | 82 | $ 153 | |
Due to related party | 21 | 21 | 0 | ||
Due from related parties | 25 | 25 | 0 | ||
VEP | Travel and Other | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred for services provided by related parties | 19 | $ 22 | 56 | $ 23 | |
Due to related party | $ 18 | $ 18 | $ 0 |