Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | May 06, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40575 | |
Entity Registrant Name | EverCommerce Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-4063248 | |
Entity Address, Address Line One | 3601 Walnut Street, Suite 400 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80205 | |
City Area Code | 720 | |
Local Phone Number | 647-4948 | |
Title of 12(b) Security | Common stock, $0.00001 par value | |
Trading Symbol | EVCM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 195,601,997 | |
Entity Central Index Key | 0001853145 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 101,201 | $ 93,993 |
Restricted cash | 3,798 | 3,566 |
Accounts receivable, net of allowance for doubtful accounts of $2.1 million and $1.9 million at March 31, 2022 and December 31, 2021, respectively | 42,318 | 40,514 |
Contract assets | 12,861 | 11,039 |
Prepaid expenses and other current assets | 26,304 | 22,505 |
Total current assets | 186,482 | 171,617 |
Non-current assets: | ||
Property and equipment, net | 13,367 | 13,509 |
Capitalized software, net | 26,357 | 24,000 |
Other non-current assets | 21,036 | 24,296 |
Intangible assets, net | 482,536 | 508,535 |
Goodwill | 921,615 | 921,416 |
Total non-current assets | 1,464,911 | 1,491,756 |
Total assets | 1,651,393 | 1,663,373 |
Current liabilities: | ||
Accounts payable | 8,195 | 10,325 |
Accrued expenses and other | 53,735 | 49,340 |
Deferred revenue | 27,075 | 22,992 |
Customer deposits | 8,805 | 9,828 |
Current maturities of long-term debt | 11,070 | 10,943 |
Total current liabilities | 108,880 | 103,428 |
Non-current liabilities: | ||
Deferred tax liability, net | 7,747 | 17,862 |
Long-term deferred revenue | 2,982 | 2,803 |
Long-term debt, net of current maturities and deferred financing costs | 534,122 | 535,184 |
Other non-current liabilities | 19,129 | 18,448 |
Total non-current liabilities | 563,980 | 574,297 |
Total liabilities | 672,860 | 677,725 |
Commitments and contingencies (Note 15) | ||
Stockholders’ equity: | ||
Preferred stock, $0.00001 par value, 50,000,000 shares authorized and no shares issued or outstanding as of March 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.00001 par value, 2,000,000,000 shares authorized and 195,510,446 and 195,384,291 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 2 | 2 |
Accumulated other comprehensive loss | (2,431) | (1,767) |
Additional paid-in capital | 1,507,501 | 1,500,643 |
Accumulated deficit | (526,539) | (513,230) |
Total stockholders’ equity | 978,533 | 985,648 |
Total liabilities, convertible preferred stock and stockholders’ equity | $ 1,651,393 | $ 1,663,373 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 2.1 | $ 1.9 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
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 dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 195,510,446 | 195,384,291 |
Common stock, shares outstanding (in shares) | 195,510,446 | 195,384,291 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Total revenues | $ 143,576 | $ 104,906 |
Operating expenses: | ||
Cost of revenues (exclusive of depreciation and amortization presented separately below) | 50,745 | 35,674 |
Sales and marketing | 30,145 | 19,689 |
Product development | 17,637 | 10,325 |
General and administrative | 31,226 | 22,094 |
Depreciation and amortization | 27,391 | 23,697 |
Total operating expenses | 157,144 | 111,479 |
Operating loss | (13,568) | (6,573) |
Interest and other expense, net | (5,478) | (12,949) |
Net loss before income tax benefit | (19,046) | (19,522) |
Income tax benefit | 5,737 | 3,527 |
Net loss | (13,309) | (15,995) |
Other comprehensive income: | ||
Foreign currency translation gains (losses), net | (664) | 543 |
Comprehensive loss | (13,973) | (15,452) |
Net loss attributable to common stockholders: | ||
Net loss | (13,309) | (15,995) |
Adjustments to net loss (see Note 12) | 0 | (15,105) |
Net loss attributable to common stockholders, basic | (13,309) | (31,100) |
Net loss attributable to common stockholders, diluted | $ (13,309) | $ (31,100) |
Basic and diluted net loss per share attributable to common stockholders | ||
Basic (in dollars per share) | $ (0.07) | $ (0.72) |
Diluted (in dollars per share) | $ (0.07) | $ (0.72) |
Basic and diluted weighted-average shares of common stock outstanding used in computing net loss per share | ||
Basic (in shares) | 195,432,404 | 43,231,295 |
Diluted (in shares) | 195,432,404 | 43,231,295 |
Subscription and transaction fees | ||
Revenues: | ||
Total revenues | $ 108,001 | $ 75,195 |
Marketing technology solutions | ||
Revenues: | ||
Total revenues | 29,904 | 25,388 |
Other | ||
Revenues: | ||
Total revenues | $ 5,671 | $ 4,323 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (unaudited) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Series B Convertible Preferred Stock | Series A Convertible Preferred Stock |
Beginning balance (in shares) at Dec. 31, 2020 | 72,226,000 | 44,958,000 | ||||||
Beginning balance at Dec. 31, 2020 | $ 908,310 | $ 745,046 | $ 163,264 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Accretion of Series B convertible preferred stock to redemption value | 15,105 | $ 15,105 | ||||||
Ending balance (in shares) at Mar. 31, 2021 | 72,226,000 | 44,958,000 | ||||||
Ending balance at Mar. 31, 2021 | 923,415 | $ 760,151 | $ 163,264 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 43,074,000 | |||||||
Beginning balance at Dec. 31, 2020 | (389,154) | $ 0 | $ 40,564 | $ (431,264) | $ 1,546 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Rollover equity in consideration of net assets acquired (in shares) | 45,000 | |||||||
Rollover equity in consideration of net assets acquired | 416 | 416 | ||||||
Stock-based compensation | 903 | 903 | ||||||
Stock option exercises (in shares) | 223,000 | |||||||
Stock option exercises | 735 | 735 | ||||||
Foreign currency translation gains (losses), net | 543 | 543 | ||||||
Accretion of Series B convertible preferred stock to redemption value | (15,105) | (15,105) | $ (15,100) | |||||
Net loss | (15,995) | (15,995) | ||||||
Ending balance (in shares) at Mar. 31, 2021 | 43,342,000 | |||||||
Ending balance at Mar. 31, 2021 | (417,657) | $ 0 | 27,513 | (447,259) | 2,089 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Accretion of Series B convertible preferred stock to redemption value | 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 195,384,000 | ||||||
Beginning balance at Dec. 31, 2021 | 985,648 | $ 0 | $ 2 | 1,500,643 | (513,230) | (1,767) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Rollover equity in consideration of net assets acquired | 0 | |||||||
Stock-based compensation | $ 6,135 | 6,135 | ||||||
Stock option exercises (in shares) | 126,000 | 126,000 | ||||||
Stock option exercises | $ 723 | 723 | ||||||
Foreign currency translation gains (losses), net | (664) | (664) | ||||||
Net loss | (13,309) | (13,309) | ||||||
Ending balance (in shares) at Mar. 31, 2022 | 0 | 195,510,000 | ||||||
Ending balance at Mar. 31, 2022 | $ 978,533 | $ 0 | $ 2 | $ 1,507,501 | $ (526,539) | $ (2,431) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows provided by (used in) operating activities: | ||
Net loss | $ (13,309) | $ (15,995) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 27,391 | 23,697 |
Amortization of discount on long-term debt | 104 | 1,540 |
Deferred taxes | (5,990) | (3,429) |
Bad debt expense | 460 | 637 |
Paid-in-kind interest on long-term debt | 107 | 99 |
Stock-based compensation expense | 6,135 | 903 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable, net | (2,261) | (4,715) |
Prepaid expenses and other current assets | (5,717) | (776) |
Other non-current assets | (691) | (2,039) |
Accounts payable | (2,122) | 1,471 |
Accrued expenses and other | 3,498 | (10,289) |
Deferred revenue | 4,240 | 5,143 |
Other long-term liabilities | 681 | (1,935) |
Net cash provided by (used in) operating activities | 12,854 | (5,400) |
Cash flows used in investing activities: | ||
Purchases of property and equipment | (889) | (262) |
Capitalization of software costs | (3,503) | (2,765) |
Acquisition of companies, net of cash acquired | 0 | (69,117) |
Net cash used in investing activities | (4,392) | (72,144) |
Cash flows provided by (used in) financing activities: | ||
Payments on long-term debt | (1,375) | (2,015) |
Proceeds from long-term debt | 0 | 69,216 |
Exercise of stock options | 723 | 735 |
Net cash provided by (used in) financing activities | (652) | 67,936 |
Effect of foreign currency exchange rate changes on cash | (370) | 196 |
Net increase (decrease) in cash and cash equivalents and restricted cash | 7,440 | (9,412) |
Cash and cash equivalents and restricted cash: | ||
Beginning of period | 97,559 | 98,337 |
End of period | 104,999 | 88,925 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 4,943 | 10,837 |
Cash paid for income taxes | 235 | 5 |
Supplemental disclosures of noncash investing and financing activities: | ||
Rollover equity in consideration of net assets acquired | 0 | 416 |
Accretion of Series B convertible preferred stock to redemption value | 0 | 15,105 |
Long-term Debt | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of deferred financing costs on long-term debt | 229 | 59 |
Credit Facility | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of deferred financing costs on long-term debt | $ 99 | $ 229 |
Nature of the Business
Nature of the Business | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | Nature of the BusinessEverCommerce Inc. and subsidiaries (the “Company” or “EverCommerce”) is a leading provider of integrated software-as-a-service (“SaaS”) solutions or services for service-based small- and medium-sized businesses (“SMBs”). Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today, the Company serves over 600,000 customers across three core verticals: Home Services; Health Services; and Fitness & Wellness Services. Within the core verticals, customers operate within numerous micro-verticals, ranging from home service professionals, such as construction contractors and home maintenance technicians, to physician practices and therapists in the Health Services industry, to personal trainers and salon owners in the Fitness & Wellness sectors. The platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly nuanced demands, as well as highly complementary solutions that complete end-to-end offerings, allowing service SMBs and EverCommerce to succeed in the market, and provide end consumers more convenient service experiences. See Note 3 in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information on acquired subsidiaries. The Company was incorporated in Delaware on September 29, 2016, and began operations on October 17, 2016 (Inception). The Company is headquartered in Denver, Colorado, and has operations across the United States, Canada, Jordan, United Kingdom, Australia and New Zealand. The Company changed its name from PaySimple Holdings, Inc. to EverCommerce Inc. as of December 14, 2020. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2021 and the related notes (“Annual Report on Form 10-K”). The December 31, 2021 condensed consolidated balance sheet was derived from our audited consolidated financial statements as of that date. Our unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the unaudited condensed consolidated financial statements. All intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes in accounting policies during the three months ended March 31, 2022 from those disclosed in the annual consolidated financial statements for the year ended December 31, 2021 and the related notes. The operating results for the three months ended March 31, 2022 are not necessarily indicative of the results expected for the full year ending December 31, 2022. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain amounts reported in the unaudited condensed consolidated financial statements, including the accompanying notes. The Company bases its estimates on historical factors, current circumstances, and the experience and judgment of management. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ from those estimates. Significant estimates reflected in the consolidated financial statements include revenue recognition, allowance for doubtful accounts, valuation allowances with respect to deferred tax assets, assumptions underlying the fair value used in the calculation of stock-based compensation, valuation of intangible assets and goodwill and useful lives of tangible and intangible assets, among others. Emerging Growth Company As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use the extended transition period under the JOBS Act until the earlier of the date that it is (i) no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The adoption dates are discussed below to reflect this election within the “Recently Issued Accounting Pronouncements” section. Recently Issued Accounting Pronouncements not yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which is intended to improve financial reporting about leasing transactions. The ASU affects all companies that lease assets such as real estate and equipment for a period for more than 12 months, and will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The updated standard will be effective for annual reporting periods beginning after December 15, 2021 and interim periods the following year. The Company will adopt this standard in the fourth quarter of 2022. Based on management’s current assessment, the impact of adoption will result in an additional right-of-use asset and corresponding lease liability presented on the consolidated balance sheet, largely comprised of its future real estate lease obligations in Note 15 in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q along with any embedded leases in service contracts. Based on our assessment through March 31, 2022, we expect no material impact to the consolidated statements of operations and comprehensive loss; however, management’s analysis of the impact of adoption is not complete. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, which includes the Company’s accounts receivable and contract assets. This updated standard will be effective for annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements. In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which amends the guidance in ASC 805 to require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. FASB’s objective in issuing the ASU is to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity and inconsistency related to both the recognition of an acquired contract liability and payment terms’ effects on subsequent revenue recognized by the acquirer. This updated standard will be effective for annual reporting periods beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating whether it will early adopt this standard. The impact of adoption is unknown as it will be based on any potential acquisitions consummated in the year of adoption. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions 2021 Acquisitions During 2021 and in the three months ended March 31, 2021, the Company completed five and two business acquisitions, respectively, in conjunction with the execution of its long-term plans and objectives in building a service commerce platform supporting the success of SMBs. All of the acquisitions qualified as business combinations under ASC 805. Accordingly, the Company recorded all assets acquired and liabilities assumed at their acquisition date fair values, with any excess consideration recognized as goodwill. Goodwill primarily represents the value associated with the assembled workforce, and expected synergies subsumed into goodwill. Assets acquired and liabilities assumed in connection with each acquisition have been recorded at their fair values. Fair values were determined by management using the assistance of third-party valuation specialists. The valuation methods used to determine the fair value of intangible assets included the income approach—relief from royalty method for developed technology and trade name, the income approach—excess earnings method for customer relationships and the comparative business valuation method for non-compete agreements. A number of assumptions and estimates were involved in the application of these valuation methods, including revenue forecasts, expected competition, costs of revenues, obsolescence, tax rates, capital spending, discount rates and working capital changes. Cash flow forecasts were generally based on pre-acquisition forecasts coupled with estimated revenues and cost synergies available to a market participant. The Company’s condensed consolidated statements of operations and comprehensive loss include $8.4 million of acquisition related transaction costs in general and administrative for acquisitions consummated in 2021, with $2.7 million incurred in the three months ended March 31, 2021. Each acquisition allows for an adjustment to the purchase price to be made subsequent to the transaction closing date based on the actual amount of working capital and cash delivered to the Company. The consideration paid and purchase price allocations disclosed reflect the effects of these adjustments. The allocation of purchase consideration related to certain 2021 acquisitions is considered preliminary. The following table summarizes the estimated fair values of consideration transferred, assets acquired and liabilities assumed for each acquisition in 2021: Briostack PulseM MDTech Timely DrChrono Total (in thousands) Cash $ 34,441 $ 34,430 $ 15,751 $ 99,820 $ 181,919 $ 366,361 Rollover equity 726 — — — — 726 Total consideration $ 35,167 $ 34,430 $ 15,751 $ 99,820 $ 181,919 $ 367,087 Net assets acquired: Cash and cash equivalents $ 17 $ — $ 100 $ 1,170 $ 130 $ 1,417 Accounts receivable, trade 156 — 175 290 3,344 3,965 Other receivables 222 151 48 95 149 665 Contract Assets — — — — 1,172 1,172 Prepaid expenses and other current assets 53 32 34 128 3,115 3,362 Property and equipment 22 4 16 219 226 487 Deposits and other long-term assets 144 3 — 52 23 222 Intangible—developed technology 1,360 2,380 1,640 7,014 8,480 20,874 Intangible—customer relationships 4,800 12,510 5,830 28,836 53,970 105,946 Intangible—trade name 390 260 200 1,414 3,250 5,514 Intangible—non-compete agreements 23 10 10 63 10 116 Goodwill 28,274 22,866 7,899 69,737 126,947 255,723 Deferred tax asset, net 1 — 2 3,397 — 3,400 Accounts payable (33) (113) (44) (230) (2,749) (3,169) Other Current Liabilities (28) — — (670) (2,086) (2,784) Accrued expenses and other (206) (99) (116) (940) (2,948) (4,309) Deferred tax liability, net — (3,538) — (10,463) (10,740) (24,741) Deferred revenue (28) (36) (43) (292) (374) (773) Total net assets acquired $ 35,167 $ 34,430 $ 15,751 $ 99,820 $ 181,919 $ 367,087 Briostack On January 19, 2021, the Company acquired 100% of the interest of Briostack LLC dba Briostack (“Briostack”), a provider of operational management software to pest control businesses, for $35.2 million. Under the terms of the purchase agreement, certain members of Briostack received 45,454 shares of common stock rollover equity. The Company finalized the fair value of the shares at $0.7 million in the quarter ended June 30, 2021 by applying a market approach. The fair value of the rollover equity is reflected in the total consideration above. PulseM On March 17, 2021, the Company acquired 100% of the interest of Speetra, Inc. dba PulseM (“PulseM”), a provider of enterprise-level reputation management software for small businesses, for $34.4 million. MDTech On July 8, 2021, the Company acquired 100% of the interest of PM Ventures, LLC dba MDTech (“MDTech”), a provider of electronic charge capture solutions to physicians via its SaaS-based MD Coder application and suite of add-ons, for $15.8 million. Timely On July 8, 2021, the Company acquired 100% of the interest of Timely Ltd. (“Timely”), a booking and business management software company, for $99.8 million. Timely is based in New Zealand and has operations in the U.K. and Australia, as well. DrChrono On November 18, 2021, the Company acquired 100% of the interest of DrChrono Inc. (“DrChrono”), an electronic health record and practice management provider, for $181.9 million. Pro Forma Results of Acquisitions (unaudited) The following table presents unaudited pro forma consolidated results of operations for the three months ended March 31, 2022 and 2021, as if the aforementioned 2021 acquisitions had occurred as of January 1, 2021. The Company did not consummate any transactions during the three months ended March 31, 2022; accordingly, no adjustments have been made to the results reported for that period. The pro forma information includes the business combination accounting effects resulting from these acquisitions, including interest expense of $3.1 million for the three months ended March 31, 2021 to account for funds borrowed earlier, issuance of our common stock at earlier dates which impacts the calculation of basic and diluted net loss per share, removal of transaction costs of $2.7 million for the three months ended March 31, 2021 and additional amortization expense of $3.6 million for the three months ended March 31, 2021 resulting from the amortization of intangible assets beginning as of January 1, 2021. We prepared the pro forma financial information for the combined entities for comparative purposes only, and the information is not indicative of what actual results would have been if the acquisitions had occurred at the beginning of the periods presented, nor is the information intended to represent or be indicative of future results of operations. Three months ended 2022 Pro Forma 2021 Pro Forma (in thousands, except per share amounts) (unaudited) Total revenue $ 143,576 $ 119,493 Net loss $ (13,309) $ (20,728) Adjustments to net loss per share (see Note 12) — (15,105) Net loss attributable to common stockholders $ (13,309) $ (35,833) Basic and diluted net loss per share attributable to common stockholders $ (0.07) $ (0.83) |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following tables present a disaggregation of our revenue from contracts with customers by revenue recognition pattern and geographical market: Three months ended 2022 2021 (in thousands) By pattern of recognition (timing of transfer of services): Point in time $ 12,106 $ 11,253 Over time 131,470 93,653 Total $ 143,576 $ 104,906 By geographical market: United States $ 130,286 $ 93,685 International 13,290 11,221 Total $ 143,576 $ 104,906 Contract Balances Supplemental balance sheet information related to contracts from customers as of: March 31, December 31, 2022 2021 (in thousands) Accounts receivables $ 42,318 $ 40,514 Contract assets $ 12,861 $ 11,039 Deferred revenue $ 27,075 $ 22,992 Customer deposits $ 8,805 $ 9,828 Long-term deferred revenue $ 2,982 $ 2,803 Accounts receivable, net: Accounts receivable represent rights to consideration in exchange for products or services that have been transferred by us, when payment is unconditional and only the passage of time is required before payment is due. Contract assets: Contract assets represent rights to consideration in exchange for products or services that have been transferred (i.e., the performance obligation or portion of the performance obligation has been satisfied), but payment is conditional on something other than the passage of time. These amounts typically relate to contracts that include on-premise licenses and professional services where the right to payment is not present until completion of the contract or achievement of specified milestones and the fair value of products or services transferred exceed this constraint. Contract liabilities : Contract liabilities represent our obligation to transfer products or services to a customer for which consideration has been received in advance of the satisfaction of performance obligations. Short-term contract liabilities are included within deferred revenue on the consolidated balance sheets. Long-term contract liabilities are included within long-term deferred revenue on the consolidated balance sheets. Revenue recognized from the contract liability balance at December 31, 2021 was $14.5 million for the three months ended March 31, 2022. Customer deposits : Customer deposits relate to payments received in advance for contracts, which allow the customer to terminate a contract and receive a pro rata refund for the unused portion of payments received to date. In these arrangements, we have concluded there are no enforceable rights and obligations during the period in which the option to cancel is exercisable by the customer and therefore the consideration received is recorded as a customer deposit liability. Remaining Performance Obligations Remaining performance obligations represent the transaction price of unsatisfied or partially satisfied performance obligations within contracts with an original expected contract term that is greater than one year for which fulfillment of the contract has started as of the end of the reporting period. Variable consideration accounted for under the variable consideration allocation exception associated with unsatisfied performance obligations or an unsatisfied promise that forms part of a single performance obligation under application of the series guidance have been excluded. Remaining performance obligations generally relate to those which are stand-ready in nature, as found within the subscription and Marketing Technology Solutions revenue streams. The aggregate amount of transaction consideration allocated to remaining performance obligations as of March 31, 2022, was $24.6 million, which is comprised of contracts where the contract term under ASC 606 is in excess of one year. The Company expects to recognize approximately 53% of its remaining performance obligations as revenue within the next year, 27% of its remaining performance obligations as revenue the subsequent year, 10% of its remaining performance obligations as revenue in the third year, and the remainder during the two year period thereafter. Cost to Obtain and Fulfill a Contract The Company incurs certain costs to obtain contracts, principally sales and third-party commissions, which the Company capitalizes when the liability has been incurred if they are (i) incremental costs of obtaining a contract, (ii) expected to be recovered and (iii) have an expected amortization period that is greater than one year (as the Company has elected the practical expedient to expense any costs to obtain a contract when the liability is incurred if the amortization period of such costs would be one year or less). Assets resulting from costs to obtain contracts are included within prepaid expenses and other current assets for short-term balances and other non-current assets for long-term balances on the Company’s consolidated balance sheets. The costs to obtain contracts are amortized over 5 years, which corresponds with the useful life of the related capitalized software. Short-term assets were $5.2 million and $4.8 million at March 31, 2022 and December 31, 2021, respectively, and long-term assets were $12.5 million and $11.9 million at March 31, 2022 and December 31, 2021, respectively. The Company recorded amortization expense of $1.3 million and $0.8 million for the three months ended March 31, 2022 and 2021, respectively, which is included in sales and marketing expense on the condensed consolidated statements of operations and comprehensive loss. The Company has concluded that there are no other material costs incurred in fulfillment of customer contracts that are not accounted for under other GAAP, which meet the capitalization criteria under ASC 606 and FASB ASC Topic 340-40, Accounting for Other Assets and Deferred Costs (“ASC 340-40”). The Company has elected to account for shipping and handling activities as fulfillment activities and recognize the associated expense when the transfer of control of the product has occurred, as permitted under the shipping and handling activities practical expedient. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill activity consisted of the following for the three months ended March 31, 2022 (in thousands): Balance at December 31, 2021 $ 921,416 Measurement period adjustments (1) (73) Effect of foreign currency exchange rate changes 272 Balance at March 31, 2022 $ 921,615 (1) The $0.1 million of measurement period adjustments relate to acquisitions consummated during the year ended December 31, 2021. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of the following as of: March 31, 2022 Useful Gross Carrying Accumulated Net Book (in thousands) Customer relationships 3-20 years $ 606,975 $ 207,005 $ 399,970 Developed technology 2-12 years 106,015 46,496 59,519 Trade name 3-10 years 38,189 15,845 22,344 Non-compete agreements 2-5 years 2,409 1,706 703 Total $ 753,588 $ 271,052 $ 482,536 December 31, 2021 Useful Gross Carrying Accumulated Net Book (in thousands) Customer relationships 3-20 years $ 607,625 $ 187,556 $ 420,069 Developed technology 2-12 years 106,162 42,215 63,947 Trade name 3-10 years 38,218 14,540 23,678 Non-compete agreements 2-5 years 2,409 1,568 841 Total $ 754,414 $ 245,879 $ 508,535 Amortization expense was $25.2 million and $22.0 million for the three months ended March 31, 2022 and 2021, respectively. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following as of: March 31, December 31, 2022 2021 (in thousands) Computer equipment and software $ 9,059 $ 8,191 Furniture and fixtures 3,676 3,667 Leasehold improvements 12,030 12,032 Total property and equipment 24,765 23,890 Less accumulated depreciation (11,398) (10,381) Property and equipment, net $ 13,367 $ 13,509 Depreciation expense was $1.0 million and $0.9 million for the three months ended March 31, 2022 and 2021, respectively. |
Capitalized Software
Capitalized Software | 3 Months Ended |
Mar. 31, 2022 | |
Research and Development [Abstract] | |
Capitalized Software | Capitalized Software Capitalized software consisted of the following as of: March 31, December 31, 2022 2021 (in thousands) Capitalized software $ 35,453 $ 31,960 Less: accumulated amortization (9,096) (7,960) Capitalized software, net $ 26,357 $ 24,000 Amortization expense was $1.2 million and $0.8 million for the three months ended March 31, 2022 and 2021, respectively. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following as of: March 31, December 31, 2022 2021 (in thousands) Term notes with interest payable monthly, interest rate at Adjusted LIBOR or Alternative Base Rate, plus an applicable margin of 3.25% (3.75% at March 31, 2022) quarterly principal payments of 0.25% of original principal balance with balloon payment due July 2028 $ 547,250 $ 548,625 Revolver with interest payable monthly, interest rate at Adjusted LIBOR or Alternative Base Rate, plus an applicable margin of 3.25% (3.71% at March 31, 2022), and outstanding balance due July 2026 — — Subordinated unsecured promissory note related to acquisition of Service Nation, Inc., interest paid-in-kind, interest rate at 8.5% with balloon payment due September 2022 2,927 2,866 Subordinated unsecured promissory note related to acquisition of Technique Fitness, Inc. D/B/A Club OS, interest paid-in-kind, interest rate at 7% with balloon payment due December 2022 2,701 2,655 Principal debt 552,878 554,146 Deferred financing costs on long-term debt (5,597) (5,826) Discount on long-term debt (2,089) (2,193) Total debt 545,192 546,127 Less current maturities 11,070 10,943 Long-term portion $ 534,122 $ 535,184 On July 6, 2021, the Company entered into a credit facility (“Credit Agreement”) that includes term loans in an aggregate principal amount of $350.0 million (“Initial Term Loans”), a revolver with a capacity of $190.0 million (“Revolver”) and a sub-limit of the Revolver available for letters of credit up to an aggregate face amount of $20.0 million. The Initial Term Loans were used to retire the Company’s debt arrangements that were outstanding prior to the Initial Public Offering (“IPO”). As of November 2021, the Company had $35.0 million outstanding under the Revolver, and borrowed the remaining capacity of the Revolver to fund the acquisition of DrChrono. Subsequently in the same month, the Company received additional term loans in an aggregate principal amount of $200.0 million (together with the Initial Term Loans, the “Term Loans”), the proceeds of which were used to repay the outstanding principal balance of the Revolver of $190.0 million and for general corporate purposes. The Initial Term Loans, Revolver and Additional Term Loans are collectively referred to herein as the (“Credit Facilities”). The Company determines the fair value of long-term debt based on trading prices for its debt if available. As of March 31, 2022, the Company obtained trading prices for the term notes outstanding. However, as such trading prices require significant unobservable inputs to the pricing model, such instruments are classified as Level 2. If no such trading prices are available, the Company determines the fair value of long-term debt using discounted cash flows, applying current interest rates and current credit spreads, based on its own credit risk. The fair value amounts were approximately $545.9 million and $552.8 million as of March 31, 2022 and December 31, 2021, respectively. As of January 1, 2021, the Company also had outstanding subordinated promissory notes (“Legacy Subordinated Notes”) that included paid-in-kind (“PIK”) interest. The interest on the Legacy Subordinated Notes is all PIK and is due upon maturity. Total PIK interest was $0.1 million for each of the three months ended March 31, 2022 and 2021. The Company’s Credit Facilities are subject to certain financial and nonfinancial covenants and is secured by substantially all assets of the Company. As of March 31, 2022, the Company was in compliance with all of its covenants. Aggregate maturities of the Company’s debt for the years ending December 31 are as follows as of March 31, 2022 (in thousands): Years ending December 31: 2022 (remaining nine months) $ 9,998 2023 5,500 2024 5,500 2025 5,500 2026 5,500 Thereafter 521,125 Total aggregate maturities of the Company’s debt $ 553,123 Included in aggregate maturities is future paid-in-kind interest totaling $0.2 million that will accrue over the term of the related debt. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Equity | Equity On May 5, 2021, the Company amended its Certificate of Incorporation (“Third Amended and Restated Certificate of Incorporation”) to increase the number of authorized shares of Preferred Stock from 125,000,000 shares to 140,000,000 shares of Preferred Stock, $0.00001 par value per share, of which 50,000,000 were designated as Series A, 75,000,000 were designated as Series B and 15,000,000 were designated as Series C as of such date. Each share of Series A, Series B and Series C could have been converted into common stock at any time, at the option of the holder, based on a prescribed formula set forth in the Company’s Third Amended and Restated Certificate of Incorporation. In the event of a liquidation, dissolution, winding up of the Company or other similar event, liquidation payments would have first been made to the holders of Series B, then to Series C, then to Series A. In May 2021, the Company issued 7.9 million shares of Series C for proceeds of $109.8 million net of issuance costs. In accordance with ASC 480, Distinguishing Liabilities from Equity , if the carrying value of redeemable preferred stock is less than its redemption value, redeemable preferred stock shall be accreted to its redemption value if it is probable it will become redeemable. Prior to March 15, 2021, the Company concluded it was probable that the Series B would become redeemable due to the passage of time. However, after that date the Company concluded that it was no longer probable that the Series B would become redeemable due to the increased likelihood of a successful IPO prior to February 23, 2026. The Company’s Series B accruing dividends comprised a component of the redemption value of such stock. The Company recorded the accretion of Series B through March 15, 2021, by increasing its carrying value and recording a corresponding reduction of Additional Paid-In Capital in the amount of $15.1 million for the three months ended March 31, 2021. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation In 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan provided for the granting of stock-based awards, including stock options, stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards, and other stock-based awards. In connection with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2021 Incentive Award Plan (the “2021 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO and, as a result of which, the Company can no longer make awards under the 2016 Plan. The 2021 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards. The number of shares initially reserved for issuance under the 2021 Plan was 22,000,000 shares, inclusive of available shares previously reserved for issuance under the 2016 Plan. In addition, the number of shares reserved for issuance under the 2021 Plan is subject to an annual increase on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 3% of the shares outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares as determined by the Company’s board of directors, provided that no more than 22,000,000 shares may be issued upon the exercise of incentive stock options. Based on the Company’s outstanding shares of common stock as of December 31, 2021, as of January 1, 2022 the number of shares reserved for issuance under the 2021 Plan increased by 5.9 million. In connection with the IPO, the Company’s board of directors adopted the 2021 Employee Stock Purchase Plan (the “ESPP”). For more information on the ESPP, refer to Note 11 in the Annual Report on Form 10-K. The following table summarizes our restricted stock unit (“RSU”) and stock option activity for the three months ended March 31, 2022: RSUs Options (in thousands) Outstanding as of January 1, 2022 541 16,444 Granted 1,521 1,480 Vested or exercised — (126) Cancelled or forfeited (10) (160) Outstanding as of March 31, 2022 2,052 17,638 As of March 31, 2022, total unrecognized compensation expense was $25.3 million and $40.5 million related to outstanding restricted stock units and outstanding stock options, respectively. Stock-based compensation expense was classified in the unaudited condensed consolidated statements of operations and comprehensive loss as follows: Three months ended 2022 2021 (in thousands) Cost of revenues $ 82 $ 1 Sales and marketing 328 29 Product development 392 33 General and administrative 5,333 840 Total stock-based compensation expense $ 6,135 $ 903 |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock as of: Three months ended 2022 2021 (in thousands except share and per share amounts) Numerator: Net loss $ (13,309) $ (15,995) Accretion of Series B to redemption value — (15,105) Numerator for basic and diluted EPS – net loss attributable to common stockholders $ (13,309) $ (31,100) Denominator: Denominator for basic and diluted EPS – weighted-average shares of common stock outstanding used in computing net loss per share 195,432,404 43,231,295 Basic and diluted net loss per share attributable to common stockholders $ (0.07) $ (0.72) The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented due to their anti-dilutive effect as of: March 31, 2022 2021 Outstanding options to purchase common stock and unvested RSUs 19,690,100 15,073,429 Outstanding convertible preferred stock (Series A and B) — 117,183,540 Total anti-dilutive outstanding potential common stock 19,690,100 132,256,969 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value. The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: • Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. • Level 2: Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. • Level 3: Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Liabilities historically valued with Level 3 inputs on a recurring basis are contingent consideration. The carrying value of cash and cash equivalents, accounts receivable, contract assets, contract liabilities and accounts payable approximate their fair value because of the short-term nature of these instruments. There were no transfers between fair value measurement levels during the three months ended March 31, 2022 or 2021. The following table presents information about the Company's financial assets and liabilities measured at fair value on a recurring basis as of: March 31, 2022 Balance Sheet Classification Level 1 Level 2 Level 3 Total (in thousands) Asset: Money market $ 46,415 $ — $ — $ 46,415 Cash equivalents December 31, 2021 Balance Sheet Classification Level 1 Level 2 Level 3 Total (in thousands) Asset: Money market $ 14,855 $ — $ — $ 14,855 Cash equivalents Liability: Contingent consideration $ — $ — $ 675 $ 675 Other current liabilities The following is a reconciliation of the opening and closing balance for contingent consideration measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2022 (in thousands): Opening balance $ 675 Fair value adjustments (18) Amounts settled through payment (657) Ending balance $ — |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our provision for income taxes in interim periods is based on our estimated annual effective tax rate. We record cumulative adjustments in the quarter in which a change in the estimated annual effective rate is determined. The income tax benefit was $5.7 million and $3.5 million for the three months ended March 31, 2022 and 2021, respectively. Our effective income tax rate was 30.1% and 18.1% for the three months ended March 31, 2022 and 2021, respectively. The difference in the effective income tax rate was primarily driven by discrete items, including a California law change and an intercompany intellectual property sale in the three months ended March 31, 2022 and acquisition accounting in the three months ended March 31, 2021. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is obligated under non-cancelable operating leases for office space expiring through 2030. Most of these leases include renewal options. Future minimum payments due under the existing lease agreements are as follows as of March 31, 2022 (in thousands): Years ending December 31: 2022 (remaining nine months) $ 6,486 2023 6,526 2024 4,941 2025 4,705 2026 4,558 Thereafter 12,692 Total future minimum payments due $ 39,908 Included in the condensed consolidated statements of operations and comprehensive loss is total rent expense of approximately $2.6 million and $2.1 million for the three months ended March 31, 2022 and 2021, respectively. From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. |
Geographic Areas
Geographic Areas | 3 Months Ended |
Mar. 31, 2022 | |
Geographic Areas, Long-Lived Assets [Abstract] | |
Geographic Areas | Geographic Areas The following table sets forth long-lived assets by geographic area as of: March 31, December 31, 2022 2021 (in thousands) United States $ 37,105 $ 34,906 International $ 2,619 $ 2,603 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2021 and the related notes (“Annual Report on Form 10-K”). The December 31, 2021 condensed consolidated balance sheet was derived from our audited consolidated financial statements as of that date. Our unaudited interim condensed consolidated financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair statement of the unaudited condensed consolidated financial statements. All intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes in accounting policies during the three months ended March 31, 2022 from those disclosed in the annual consolidated financial statements for the year ended December 31, 2021 and the related notes. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain amounts reported in the unaudited condensed consolidated financial statements, including the accompanying notes. The Company bases its estimates on historical factors, current circumstances, and the experience and judgment of management. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could differ from those estimates. Significant estimates reflected in the consolidated financial statements include revenue recognition, allowance for doubtful accounts, valuation allowances with respect to deferred tax assets, assumptions underlying the fair value used in the calculation of stock-based compensation, valuation of intangible assets and goodwill and useful lives of tangible and intangible assets, among others. |
Recently Issued Accounting Pronouncements not yet Adopted | Recently Issued Accounting Pronouncements not yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which is intended to improve financial reporting about leasing transactions. The ASU affects all companies that lease assets such as real estate and equipment for a period for more than 12 months, and will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The updated standard will be effective for annual reporting periods beginning after December 15, 2021 and interim periods the following year. The Company will adopt this standard in the fourth quarter of 2022. Based on management’s current assessment, the impact of adoption will result in an additional right-of-use asset and corresponding lease liability presented on the consolidated balance sheet, largely comprised of its future real estate lease obligations in Note 15 in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q along with any embedded leases in service contracts. Based on our assessment through March 31, 2022, we expect no material impact to the consolidated statements of operations and comprehensive loss; however, management’s analysis of the impact of adoption is not complete. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, which includes the Company’s accounts receivable and contract assets. This updated standard will be effective for annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact the adoption of this standard will have on its financial statements. In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which amends the guidance in ASC 805 to require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. FASB’s objective in issuing the ASU is to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity and inconsistency related to both the recognition of an acquired contract liability and payment terms’ effects on subsequent revenue recognized by the acquirer. This updated standard will be effective for annual reporting periods beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating whether it will early adopt this standard. The impact of adoption is unknown as it will be based on any potential acquisitions consummated in the year of adoption. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Transferred and Net Assets Acquired | The following table summarizes the estimated fair values of consideration transferred, assets acquired and liabilities assumed for each acquisition in 2021: Briostack PulseM MDTech Timely DrChrono Total (in thousands) Cash $ 34,441 $ 34,430 $ 15,751 $ 99,820 $ 181,919 $ 366,361 Rollover equity 726 — — — — 726 Total consideration $ 35,167 $ 34,430 $ 15,751 $ 99,820 $ 181,919 $ 367,087 Net assets acquired: Cash and cash equivalents $ 17 $ — $ 100 $ 1,170 $ 130 $ 1,417 Accounts receivable, trade 156 — 175 290 3,344 3,965 Other receivables 222 151 48 95 149 665 Contract Assets — — — — 1,172 1,172 Prepaid expenses and other current assets 53 32 34 128 3,115 3,362 Property and equipment 22 4 16 219 226 487 Deposits and other long-term assets 144 3 — 52 23 222 Intangible—developed technology 1,360 2,380 1,640 7,014 8,480 20,874 Intangible—customer relationships 4,800 12,510 5,830 28,836 53,970 105,946 Intangible—trade name 390 260 200 1,414 3,250 5,514 Intangible—non-compete agreements 23 10 10 63 10 116 Goodwill 28,274 22,866 7,899 69,737 126,947 255,723 Deferred tax asset, net 1 — 2 3,397 — 3,400 Accounts payable (33) (113) (44) (230) (2,749) (3,169) Other Current Liabilities (28) — — (670) (2,086) (2,784) Accrued expenses and other (206) (99) (116) (940) (2,948) (4,309) Deferred tax liability, net — (3,538) — (10,463) (10,740) (24,741) Deferred revenue (28) (36) (43) (292) (374) (773) Total net assets acquired $ 35,167 $ 34,430 $ 15,751 $ 99,820 $ 181,919 $ 367,087 |
Schedule of Pro Forma Results | The following table presents unaudited pro forma consolidated results of operations for the three months ended March 31, 2022 and 2021, as if the aforementioned 2021 acquisitions had occurred as of January 1, 2021. The Company did not consummate any transactions during the three months ended March 31, 2022; accordingly, no adjustments have been made to the results reported for that period. The pro forma information includes the business combination accounting effects resulting from these acquisitions, including interest expense of $3.1 million for the three months ended March 31, 2021 to account for funds borrowed earlier, issuance of our common stock at earlier dates which impacts the calculation of basic and diluted net loss per share, removal of transaction costs of $2.7 million for the three months ended March 31, 2021 and additional amortization expense of $3.6 million for the three months ended March 31, 2021 resulting from the amortization of intangible assets beginning as of January 1, 2021. We prepared the pro forma financial information for the combined entities for comparative purposes only, and the information is not indicative of what actual results would have been if the acquisitions had occurred at the beginning of the periods presented, nor is the information intended to represent or be indicative of future results of operations. Three months ended 2022 Pro Forma 2021 Pro Forma (in thousands, except per share amounts) (unaudited) Total revenue $ 143,576 $ 119,493 Net loss $ (13,309) $ (20,728) Adjustments to net loss per share (see Note 12) — (15,105) Net loss attributable to common stockholders $ (13,309) $ (35,833) Basic and diluted net loss per share attributable to common stockholders $ (0.07) $ (0.83) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present a disaggregation of our revenue from contracts with customers by revenue recognition pattern and geographical market: Three months ended 2022 2021 (in thousands) By pattern of recognition (timing of transfer of services): Point in time $ 12,106 $ 11,253 Over time 131,470 93,653 Total $ 143,576 $ 104,906 By geographical market: United States $ 130,286 $ 93,685 International 13,290 11,221 Total $ 143,576 $ 104,906 |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to contracts from customers as of: March 31, December 31, 2022 2021 (in thousands) Accounts receivables $ 42,318 $ 40,514 Contract assets $ 12,861 $ 11,039 Deferred revenue $ 27,075 $ 22,992 Customer deposits $ 8,805 $ 9,828 Long-term deferred revenue $ 2,982 $ 2,803 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill activity consisted of the following for the three months ended March 31, 2022 (in thousands): Balance at December 31, 2021 $ 921,416 Measurement period adjustments (1) (73) Effect of foreign currency exchange rate changes 272 Balance at March 31, 2022 $ 921,615 (1) The $0.1 million of measurement period adjustments relate to acquisitions consummated during the year ended December 31, 2021. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following as of: March 31, 2022 Useful Gross Carrying Accumulated Net Book (in thousands) Customer relationships 3-20 years $ 606,975 $ 207,005 $ 399,970 Developed technology 2-12 years 106,015 46,496 59,519 Trade name 3-10 years 38,189 15,845 22,344 Non-compete agreements 2-5 years 2,409 1,706 703 Total $ 753,588 $ 271,052 $ 482,536 December 31, 2021 Useful Gross Carrying Accumulated Net Book (in thousands) Customer relationships 3-20 years $ 607,625 $ 187,556 $ 420,069 Developed technology 2-12 years 106,162 42,215 63,947 Trade name 3-10 years 38,218 14,540 23,678 Non-compete agreements 2-5 years 2,409 1,568 841 Total $ 754,414 $ 245,879 $ 508,535 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of: March 31, December 31, 2022 2021 (in thousands) Computer equipment and software $ 9,059 $ 8,191 Furniture and fixtures 3,676 3,667 Leasehold improvements 12,030 12,032 Total property and equipment 24,765 23,890 Less accumulated depreciation (11,398) (10,381) Property and equipment, net $ 13,367 $ 13,509 |
Capitalized Software (Tables)
Capitalized Software (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Research and Development [Abstract] | |
Schedule of Capitalized Software | Capitalized software consisted of the following as of: March 31, December 31, 2022 2021 (in thousands) Capitalized software $ 35,453 $ 31,960 Less: accumulated amortization (9,096) (7,960) Capitalized software, net $ 26,357 $ 24,000 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following as of: March 31, December 31, 2022 2021 (in thousands) Term notes with interest payable monthly, interest rate at Adjusted LIBOR or Alternative Base Rate, plus an applicable margin of 3.25% (3.75% at March 31, 2022) quarterly principal payments of 0.25% of original principal balance with balloon payment due July 2028 $ 547,250 $ 548,625 Revolver with interest payable monthly, interest rate at Adjusted LIBOR or Alternative Base Rate, plus an applicable margin of 3.25% (3.71% at March 31, 2022), and outstanding balance due July 2026 — — Subordinated unsecured promissory note related to acquisition of Service Nation, Inc., interest paid-in-kind, interest rate at 8.5% with balloon payment due September 2022 2,927 2,866 Subordinated unsecured promissory note related to acquisition of Technique Fitness, Inc. D/B/A Club OS, interest paid-in-kind, interest rate at 7% with balloon payment due December 2022 2,701 2,655 Principal debt 552,878 554,146 Deferred financing costs on long-term debt (5,597) (5,826) Discount on long-term debt (2,089) (2,193) Total debt 545,192 546,127 Less current maturities 11,070 10,943 Long-term portion $ 534,122 $ 535,184 |
Schedule of Maturities of Long-term Debt | Aggregate maturities of the Company’s debt for the years ending December 31 are as follows as of March 31, 2022 (in thousands): Years ending December 31: 2022 (remaining nine months) $ 9,998 2023 5,500 2024 5,500 2025 5,500 2026 5,500 Thereafter 521,125 Total aggregate maturities of the Company’s debt $ 553,123 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Unit and Stock Option Activity | The following table summarizes our restricted stock unit (“RSU”) and stock option activity for the three months ended March 31, 2022: RSUs Options (in thousands) Outstanding as of January 1, 2022 541 16,444 Granted 1,521 1,480 Vested or exercised — (126) Cancelled or forfeited (10) (160) Outstanding as of March 31, 2022 2,052 17,638 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense was classified in the unaudited condensed consolidated statements of operations and comprehensive loss as follows: Three months ended 2022 2021 (in thousands) Cost of revenues $ 82 $ 1 Sales and marketing 328 29 Product development 392 33 General and administrative 5,333 840 Total stock-based compensation expense $ 6,135 $ 903 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock as of: Three months ended 2022 2021 (in thousands except share and per share amounts) Numerator: Net loss $ (13,309) $ (15,995) Accretion of Series B to redemption value — (15,105) Numerator for basic and diluted EPS – net loss attributable to common stockholders $ (13,309) $ (31,100) Denominator: Denominator for basic and diluted EPS – weighted-average shares of common stock outstanding used in computing net loss per share 195,432,404 43,231,295 Basic and diluted net loss per share attributable to common stockholders $ (0.07) $ (0.72) |
Schedule of Antidilutive Outstanding Common Stock Excluded from Computation of Diluted Net Loss Per Share | The following outstanding potentially dilutive common stock equivalents have been excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented due to their anti-dilutive effect as of: March 31, 2022 2021 Outstanding options to purchase common stock and unvested RSUs 19,690,100 15,073,429 Outstanding convertible preferred stock (Series A and B) — 117,183,540 Total anti-dilutive outstanding potential common stock 19,690,100 132,256,969 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities at Fair Value on a Recurring Basis | The following table presents information about the Company's financial assets and liabilities measured at fair value on a recurring basis as of: March 31, 2022 Balance Sheet Classification Level 1 Level 2 Level 3 Total (in thousands) Asset: Money market $ 46,415 $ — $ — $ 46,415 Cash equivalents December 31, 2021 Balance Sheet Classification Level 1 Level 2 Level 3 Total (in thousands) Asset: Money market $ 14,855 $ — $ — $ 14,855 Cash equivalents Liability: Contingent consideration $ — $ — $ 675 $ 675 Other current liabilities |
Schedule of Reconciliation of Opening and Closing Balances for Contingent Consideration | The following is a reconciliation of the opening and closing balance for contingent consideration measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2022 (in thousands): Opening balance $ 675 Fair value adjustments (18) Amounts settled through payment (657) Ending balance $ — |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments | Future minimum payments due under the existing lease agreements are as follows as of March 31, 2022 (in thousands): Years ending December 31: 2022 (remaining nine months) $ 6,486 2023 6,526 2024 4,941 2025 4,705 2026 4,558 Thereafter 12,692 Total future minimum payments due $ 39,908 |
Geographic Areas (Tables)
Geographic Areas (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Geographic Areas, Long-Lived Assets [Abstract] | |
Schedule of Long-Lived Assets by Geographic Areas | The following table sets forth long-lived assets by geographic area as of: March 31, December 31, 2022 2021 (in thousands) United States $ 37,105 $ 34,906 International $ 2,619 $ 2,603 |
Nature of the Business (Details
Nature of the Business (Details) customer in Thousands | Mar. 31, 2022core_verticalcustomer |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of customers (over) | customer | 600 |
Number of core verticals | core_vertical | 3 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | Nov. 18, 2021USD ($) | Jul. 08, 2021USD ($) | Mar. 17, 2021USD ($) | Jan. 19, 2021USD ($)shares | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($)business | Dec. 31, 2021USD ($)business |
Business Acquisition [Line Items] | |||||||
Number of businesses acquired | business | 2 | 5 | |||||
Acquisition related costs | $ 2,700 | $ 8,400 | |||||
Interest expense | 3,100 | ||||||
Transaction costs removed | 2,700 | ||||||
Additional amortization expense | $ 3,600 | ||||||
Briostack | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of interest acquired | 100.00% | ||||||
Purchase price | $ 35,200 | 35,167 | |||||
Shares issued (in shares) | shares | 45,454 | ||||||
Rollover equity | $ 700 | 726 | |||||
PulseM | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of interest acquired | 100.00% | ||||||
Purchase price | $ 34,400 | 34,430 | |||||
Rollover equity | 0 | ||||||
MDTech | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of interest acquired | 100.00% | ||||||
Purchase price | $ 15,800 | 15,751 | |||||
Rollover equity | 0 | ||||||
Timely | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of interest acquired | 100.00% | ||||||
Purchase price | $ 99,800 | 99,820 | |||||
Rollover equity | 0 | ||||||
DrChrono | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of interest acquired | 100.00% | ||||||
Purchase price | $ 181,900 | 181,919 | |||||
Rollover equity | $ 0 |
Acquisitions - Consideration Tr
Acquisitions - Consideration Transferred and Net Assets Acquired (Details) - USD ($) $ in Thousands | Nov. 18, 2021 | Jul. 08, 2021 | Mar. 17, 2021 | Jan. 19, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 |
Net assets acquired: | |||||||
Goodwill | $ 921,416 | $ 921,615 | |||||
Accrued expenses and other | (4,309) | ||||||
Total net assets acquired | 367,087 | ||||||
Developed technology | |||||||
Net assets acquired: | |||||||
Intangible | 20,874 | ||||||
2021 Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Cash | 366,361 | ||||||
Rollover equity | 726 | ||||||
Total consideration | 367,087 | ||||||
Net assets acquired: | |||||||
Cash and cash equivalents | 1,417 | ||||||
Accounts receivable, trade | 3,965 | ||||||
Other receivables | 665 | ||||||
Contract Assets | 1,172 | ||||||
Prepaid expenses and other current assets | 3,362 | ||||||
Property and equipment | 487 | ||||||
Deposits and other long-term assets | 222 | ||||||
Goodwill | 255,723 | ||||||
Deferred tax asset, net | 3,400 | ||||||
Accounts payable | (3,169) | ||||||
Other Current Liabilities | (2,784) | ||||||
Deferred tax liability, net | (24,741) | ||||||
Deferred revenue | (773) | ||||||
2021 Acquisitions | Customer relationships | |||||||
Net assets acquired: | |||||||
Intangible | 105,946 | ||||||
2021 Acquisitions | Trade name | |||||||
Net assets acquired: | |||||||
Intangible | 5,514 | ||||||
2021 Acquisitions | Non-compete agreements | |||||||
Net assets acquired: | |||||||
Intangible | 116 | ||||||
Briostack | |||||||
Business Acquisition [Line Items] | |||||||
Cash | 34,441 | ||||||
Rollover equity | $ 700 | 726 | |||||
Total consideration | $ 35,200 | 35,167 | |||||
Net assets acquired: | |||||||
Cash and cash equivalents | 17 | ||||||
Accounts receivable, trade | 156 | ||||||
Other receivables | 222 | ||||||
Contract Assets | 0 | ||||||
Prepaid expenses and other current assets | 53 | ||||||
Property and equipment | 22 | ||||||
Deposits and other long-term assets | 144 | ||||||
Goodwill | 28,274 | ||||||
Deferred tax asset, net | 1 | ||||||
Accounts payable | (33) | ||||||
Other Current Liabilities | (28) | ||||||
Accrued expenses and other | (206) | ||||||
Deferred tax liability, net | 0 | ||||||
Deferred revenue | (28) | ||||||
Total net assets acquired | 35,167 | ||||||
Briostack | Developed technology | |||||||
Net assets acquired: | |||||||
Intangible | 1,360 | ||||||
Briostack | Customer relationships | |||||||
Net assets acquired: | |||||||
Intangible | 4,800 | ||||||
Briostack | Trade name | |||||||
Net assets acquired: | |||||||
Intangible | 390 | ||||||
Briostack | Non-compete agreements | |||||||
Net assets acquired: | |||||||
Intangible | 23 | ||||||
PulseM | |||||||
Business Acquisition [Line Items] | |||||||
Cash | 34,430 | ||||||
Rollover equity | 0 | ||||||
Total consideration | $ 34,400 | 34,430 | |||||
Net assets acquired: | |||||||
Cash and cash equivalents | 0 | ||||||
Accounts receivable, trade | 0 | ||||||
Other receivables | 151 | ||||||
Contract Assets | 0 | ||||||
Prepaid expenses and other current assets | 32 | ||||||
Property and equipment | 4 | ||||||
Deposits and other long-term assets | 3 | ||||||
Goodwill | 22,866 | ||||||
Deferred tax asset, net | 0 | ||||||
Accounts payable | (113) | ||||||
Other Current Liabilities | 0 | ||||||
Accrued expenses and other | (99) | ||||||
Deferred tax liability, net | (3,538) | ||||||
Deferred revenue | (36) | ||||||
Total net assets acquired | 34,430 | ||||||
PulseM | Developed technology | |||||||
Net assets acquired: | |||||||
Intangible | 2,380 | ||||||
PulseM | Customer relationships | |||||||
Net assets acquired: | |||||||
Intangible | 12,510 | ||||||
PulseM | Trade name | |||||||
Net assets acquired: | |||||||
Intangible | 260 | ||||||
PulseM | Non-compete agreements | |||||||
Net assets acquired: | |||||||
Intangible | 10 | ||||||
MDTech | |||||||
Business Acquisition [Line Items] | |||||||
Cash | 15,751 | ||||||
Rollover equity | 0 | ||||||
Total consideration | $ 15,800 | 15,751 | |||||
Net assets acquired: | |||||||
Cash and cash equivalents | 100 | ||||||
Accounts receivable, trade | 175 | ||||||
Other receivables | 48 | ||||||
Contract Assets | 0 | ||||||
Prepaid expenses and other current assets | 34 | ||||||
Property and equipment | 16 | ||||||
Deposits and other long-term assets | 0 | ||||||
Goodwill | 7,899 | ||||||
Deferred tax asset, net | 2 | ||||||
Accounts payable | (44) | ||||||
Other Current Liabilities | 0 | ||||||
Accrued expenses and other | (116) | ||||||
Deferred tax liability, net | 0 | ||||||
Deferred revenue | (43) | ||||||
Total net assets acquired | 15,751 | ||||||
MDTech | Developed technology | |||||||
Net assets acquired: | |||||||
Intangible | 1,640 | ||||||
MDTech | Customer relationships | |||||||
Net assets acquired: | |||||||
Intangible | 5,830 | ||||||
MDTech | Trade name | |||||||
Net assets acquired: | |||||||
Intangible | 200 | ||||||
MDTech | Non-compete agreements | |||||||
Net assets acquired: | |||||||
Intangible | 10 | ||||||
Timely | |||||||
Business Acquisition [Line Items] | |||||||
Cash | 99,820 | ||||||
Rollover equity | 0 | ||||||
Total consideration | $ 99,800 | 99,820 | |||||
Net assets acquired: | |||||||
Cash and cash equivalents | 1,170 | ||||||
Accounts receivable, trade | 290 | ||||||
Other receivables | 95 | ||||||
Contract Assets | 0 | ||||||
Prepaid expenses and other current assets | 128 | ||||||
Property and equipment | 219 | ||||||
Deposits and other long-term assets | 52 | ||||||
Goodwill | 69,737 | ||||||
Deferred tax asset, net | 3,397 | ||||||
Accounts payable | (230) | ||||||
Other Current Liabilities | (670) | ||||||
Accrued expenses and other | (940) | ||||||
Deferred tax liability, net | (10,463) | ||||||
Deferred revenue | (292) | ||||||
Total net assets acquired | 99,820 | ||||||
Timely | Developed technology | |||||||
Net assets acquired: | |||||||
Intangible | 7,014 | ||||||
Timely | Customer relationships | |||||||
Net assets acquired: | |||||||
Intangible | 28,836 | ||||||
Timely | Trade name | |||||||
Net assets acquired: | |||||||
Intangible | 1,414 | ||||||
Timely | Non-compete agreements | |||||||
Net assets acquired: | |||||||
Intangible | 63 | ||||||
DrChrono | |||||||
Business Acquisition [Line Items] | |||||||
Cash | 181,919 | ||||||
Rollover equity | 0 | ||||||
Total consideration | $ 181,900 | 181,919 | |||||
Net assets acquired: | |||||||
Cash and cash equivalents | 130 | ||||||
Accounts receivable, trade | 3,344 | ||||||
Other receivables | 149 | ||||||
Contract Assets | 1,172 | ||||||
Prepaid expenses and other current assets | 3,115 | ||||||
Property and equipment | 226 | ||||||
Deposits and other long-term assets | 23 | ||||||
Goodwill | 126,947 | ||||||
Deferred tax asset, net | 0 | ||||||
Accounts payable | (2,749) | ||||||
Other Current Liabilities | (2,086) | ||||||
Accrued expenses and other | (2,948) | ||||||
Deferred tax liability, net | (10,740) | ||||||
Deferred revenue | (374) | ||||||
Total net assets acquired | 181,919 | ||||||
DrChrono | Developed technology | |||||||
Net assets acquired: | |||||||
Intangible | 8,480 | ||||||
DrChrono | Customer relationships | |||||||
Net assets acquired: | |||||||
Intangible | 53,970 | ||||||
DrChrono | Trade name | |||||||
Net assets acquired: | |||||||
Intangible | 3,250 | ||||||
DrChrono | Non-compete agreements | |||||||
Net assets acquired: | |||||||
Intangible | $ 10 |
Acquisitions - Pro Forma (Detai
Acquisitions - Pro Forma (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Total revenue | $ 143,576 | $ 119,493 |
Net loss | (13,309) | (20,728) |
Adjustments to net loss (see Note 12) | 0 | (15,105) |
Net loss attributable to common stockholders | $ (13,309) | $ (35,833) |
Basic (in dollars per share) | $ (0.07) | $ (0.83) |
Diluted (in dollars per share) | $ (0.07) | $ (0.83) |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 143,576 | $ 104,906 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 130,286 | 93,685 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 13,290 | 11,221 |
Point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 12,106 | 11,253 |
Over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 131,470 | $ 93,653 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivables | $ 42,318 | $ 40,514 |
Contract assets | 12,861 | 11,039 |
Deferred revenue | 27,075 | 22,992 |
Customer deposits | 8,805 | 9,828 |
Long-term deferred revenue | $ 2,982 | $ 2,803 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue recognized | $ 14.5 | ||
Cost to obtain contracts amortization period | 5 years | ||
Short-term assets | $ 5.2 | $ 4.8 | |
Long-term assets | 12.5 | $ 11.9 | |
Amortization expense | $ 1.3 | $ 0.8 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Details) $ in Millions | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 24.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 53.00% |
Remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 27.00% |
Remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 10.00% |
Remaining performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected timing of satisfaction | 2 years |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 921,416 |
Measurement period adjustments | (73) |
Effect of foreign currency exchange rate changes | 272 |
Ending balance | 921,615 |
2021 Acquisitions | |
Goodwill [Roll Forward] | |
Beginning balance | 255,723 |
Measurement period adjustments | $ (100) |
Intangible Assets - Summary (De
Intangible Assets - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 753,588 | $ 754,414 |
Accumulated Amortization | 271,052 | 245,879 |
Net Book Value | 482,536 | 508,535 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 606,975 | 607,625 |
Accumulated Amortization | 207,005 | 187,556 |
Net Book Value | $ 399,970 | $ 420,069 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 3 years | 3 years |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 20 years | 20 years |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 106,015 | $ 106,162 |
Accumulated Amortization | 46,496 | 42,215 |
Net Book Value | $ 59,519 | $ 63,947 |
Developed technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 2 years | 2 years |
Developed technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 12 years | 12 years |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 38,189 | $ 38,218 |
Accumulated Amortization | 15,845 | 14,540 |
Net Book Value | $ 22,344 | $ 23,678 |
Trade name | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 3 years | 3 years |
Trade name | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 10 years | 10 years |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 2,409 | $ 2,409 |
Accumulated Amortization | 1,706 | 1,568 |
Net Book Value | $ 703 | $ 841 |
Non-compete agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 2 years | 2 years |
Non-compete agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years | 5 years |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 25.2 | $ 22 |
Property and Equipment - Summar
Property and Equipment - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 24,765 | $ 23,890 |
Less accumulated depreciation | (11,398) | (10,381) |
Property and equipment, net | 13,367 | 13,509 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 9,059 | 8,191 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,676 | 3,667 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 12,030 | $ 12,032 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 1 | $ 0.9 |
Capitalized Software - Summary
Capitalized Software - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Research and Development [Abstract] | ||
Capitalized software | $ 35,453 | $ 31,960 |
Less: accumulated amortization | (9,096) | (7,960) |
Capitalized software, net | $ 26,357 | $ 24,000 |
Capitalized Software - Narrativ
Capitalized Software - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Research and Development [Abstract] | ||
Amortization | $ 1.2 | $ 0.8 |
Long-Term Debt - Summary of Deb
Long-Term Debt - Summary of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | |
Debt Instrument [Line Items] | |||
Principal debt | $ 552,878 | $ 554,146 | |
Deferred financing costs on long-term debt | (5,597) | (5,826) | |
Discount on long-term debt | (2,089) | (2,193) | |
Total debt | 545,192 | 546,127 | |
Less current maturities | 11,070 | 10,943 | |
Long-term portion | 534,122 | 535,184 | |
New Term Loan | Term loan | |||
Debt Instrument [Line Items] | |||
Principal debt | $ 547,250 | 548,625 | |
Effective interest rate | 3.75% | ||
Principal payment as a percentage of original principal balance | 0.25% | ||
New Term Loan | Base Rate Or London Interbank Offered Rate (LIBOR) | Term loan | |||
Debt Instrument [Line Items] | |||
Basis spread | 3.25% | ||
New Revolver | Revolving loans | |||
Debt Instrument [Line Items] | |||
Principal debt | $ 0 | 0 | |
Total debt | $ 35,000 | ||
Effective interest rate | 3.71% | ||
New Revolver | Base Rate Or London Interbank Offered Rate (LIBOR) | Revolving loans | |||
Debt Instrument [Line Items] | |||
Basis spread | 3.25% | ||
Subordinated unsecured promissory note | Subordinated Unsecured Promissory Note, Service Nation, Inc | |||
Debt Instrument [Line Items] | |||
Principal debt | $ 2,927 | 2,866 | |
Interest rate | 8.50% | ||
Subordinated unsecured promissory note | Subordinated Unsecured Promissory Note, Technique Fitness, Inc | |||
Debt Instrument [Line Items] | |||
Principal debt | $ 2,701 | $ 2,655 | |
Interest rate | 7.00% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Nov. 30, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jul. 06, 2021 | |
Debt Instrument [Line Items] | |||||
Amount outstanding | $ 545,192,000 | $ 546,127,000 | |||
Debt repaid | 1,375,000 | $ 2,015,000 | |||
Paid-in-kind interest on long-term debt | 107,000 | $ 99,000 | |||
Expected paid-in-kind interest | 200,000 | ||||
New Term Loan | Term loan | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 350,000,000 | ||||
Increase in borrowing capacity | $ 200,000,000 | ||||
New Revolver | Revolving loans | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | 190,000,000 | ||||
Amount outstanding | 35,000,000 | ||||
Debt repaid | $ 190,000,000 | ||||
New Revolver | Letter of credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 20,000,000 | ||||
Level 2 | Fair Value | |||||
Debt Instrument [Line Items] | |||||
Fair value | $ 545,900,000 | $ 552,800,000 |
Long-Term Debt - Maturities (De
Long-Term Debt - Maturities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Debt Disclosure [Abstract] | |
2022 (remaining nine months) | $ 9,998 |
2023 | 5,500 |
2024 | 5,500 |
2025 | 5,500 |
2026 | 5,500 |
Thereafter | 521,125 |
Total debt | $ 553,123 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |||||
May 31, 2021 | Mar. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Jul. 06, 2021 | May 05, 2021 | May 04, 2021 | |
Class of Stock [Line Items] | |||||||
Convertible preferred stock, shares authorized (in shares) | 140,000,000 | 125,000,000 | |||||
Convertible preferred stock, par value (in dollars per share) | $ 0.00001 | ||||||
Accretion of Series B convertible preferred stock to redemption value | $ 15,105 | ||||||
Shares authorized (in shares) | 2,050,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | ||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | ||||
Series A Convertible Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Convertible preferred stock, shares authorized (in shares) | 50,000,000 | ||||||
Series B Convertible Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Convertible preferred stock, shares authorized (in shares) | 75,000,000 | ||||||
Accretion of Series B convertible preferred stock to redemption value | $ 15,100 | ||||||
Series C Convertible Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Convertible preferred stock, shares authorized (in shares) | 15,000,000 | ||||||
Issuance of convertible preferred stock (in shares) | 7,900,000 | ||||||
Proceeds from issuance of convertible preferred stock | $ 109,800 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | Jan. 01, 2022 | Jul. 06, 2021 | Mar. 31, 2022 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense, RSUs | $ 25.3 | ||
Unrecognized compensation expense, stock options | $ 40.5 | ||
2021 Incentive Award Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for issuance (in shares) | 22,000,000 | ||
Percentage of stock outstanding | 3.00% | ||
Additional shares reserved for issuance (in shares) | 5,900,000 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU and Stock Option Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2022shares | |
Options | |
Beginning balance (in shares) | 16,444 |
Granted (in shares) | 1,480 |
Vested or exercised (in shares) | (126) |
Cancelled or forfeited (in shares) | (160) |
Ending balance (in shares) | 17,638 |
RSUs | |
RSUs | |
Beginning balance (in shares) | 541 |
Granted (in shares) | 1,521 |
Vested or exercised (in shares) | 0 |
Cancelled or forfeited (in shares) | (10) |
Ending balance (in shares) | 2,052 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 6,135 | $ 903 |
Cost of revenues | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 82 | 1 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 328 | 29 |
Product development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 392 | 33 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 5,333 | $ 840 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Schedule of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator | ||
Net loss | $ (13,309) | $ (15,995) |
Accretion of Series B to redemption value | 0 | (15,105) |
Net loss attributable to common stockholders, basic | (13,309) | (31,100) |
Net loss attributable to common stockholders, diluted | $ (13,309) | $ (31,100) |
Denominator | ||
Denominator for basic EPS - weighted-average shares of common stock outstanding used in computing net loss per share (in shares) | 195,432,404 | 43,231,295 |
Denominator for diluted EPS - weighted-average shares of common stock outstanding used in computing net loss per share (in shares) | 195,432,404 | 43,231,295 |
Basic net loss per share attributable to common stockholders (in dollars per share) | $ (0.07) | $ (0.72) |
Diluted net loss per share attributable to common stockholders (in dollars per share) | $ (0.07) | $ (0.72) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Antidilutive Common Stock Excluded from Computation of Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive outstanding potential common stock | 19,690,100 | 132,256,969 |
Outstanding options to purchase common stock and unvested RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive outstanding potential common stock | 19,690,100 | 15,073,429 |
Outstanding convertible preferred stock (Series A and B) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive outstanding potential common stock | 0 | 117,183,540 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Assets and Liabilities at Fair Value On a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Liability | ||
Contingent consideration | $ 675 | |
Level 1 | ||
Liability | ||
Contingent consideration | 0 | |
Level 2 | ||
Liability | ||
Contingent consideration | 0 | |
Level 3 | ||
Liability | ||
Contingent consideration | 675 | |
Money market | ||
Asset | ||
Money market | $ 46,415 | 14,855 |
Money market | Level 1 | ||
Asset | ||
Money market | 46,415 | 14,855 |
Money market | Level 2 | ||
Asset | ||
Money market | 0 | 0 |
Money market | Level 3 | ||
Asset | ||
Money market | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Reconciliation of Contingent Consideration Measured at Fair Value (Details) - Level 3 - Fair Value, Recurring $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Opening balance | $ 675 |
Fair value adjustments | (18) |
Amounts settled through payment | (657) |
Ending balance | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ 5,737 | $ 3,527 |
Effective income tax rate | 30.10% | 18.10% |
Commitment and Contingencies -
Commitment and Contingencies - Future Minimum Payments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 (remaining nine months) | $ 6,486 |
2023 | 6,526 |
2024 | 4,941 |
2025 | 4,705 |
2026 | 4,558 |
Thereafter | 12,692 |
Total future minimum payments due | $ 39,908 |
Commitment and Contingencies _2
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 2.6 | |
Rent expense | $ 2.1 |
Geographic Areas (Details)
Geographic Areas (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
United States | ||
Finite-Lived Intangible Assets [Line Items] | ||
Long-lived assets | $ 37,105 | $ 34,906 |
International | ||
Finite-Lived Intangible Assets [Line Items] | ||
Long-lived assets | $ 2,619 | $ 2,603 |