Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40982 | |
Entity Registrant Name | HireRight Holdings Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-1092072 | |
Entity Address, Address Line One | 100 Centerview Drive, Suite 300 | |
Entity Address, City or Town | Nashville | |
Entity Incorporation, State or Country Code | TN | |
Entity Address, Postal Zip Code | 37214 | |
City Area Code | (615) | |
Local Phone Number | 320-9800 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | HRT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 67,644,747 | |
Entity Central Index Key | 0001859285 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 103,218 | $ 162,092 |
Restricted cash | 0 | 1,310 |
Accounts receivable, net of allowance for credit losses of $5,421 and $5,812 at September 30, 2023 and December 31, 2022, respectively | 139,557 | 136,656 |
Prepaid expenses and other current assets | 26,118 | 18,745 |
Total current assets | 268,893 | 318,803 |
Property and equipment, net | 7,190 | 9,045 |
Right-of-use assets, net | 6,352 | 8,423 |
Intangible assets, net | 312,542 | 331,598 |
Goodwill | 833,264 | 809,463 |
Cloud computing software, net | 37,736 | 35,230 |
Deferred tax assets | 74,110 | 74,236 |
Other non-current assets | 20,975 | 18,949 |
Total assets | 1,561,062 | 1,605,747 |
Current liabilities | ||
Accounts payable | 11,740 | 11,571 |
Accrued expenses and other current liabilities | 102,189 | 75,208 |
Accrued salaries and payroll | 30,801 | 31,075 |
Debt, current portion | 7,500 | 8,350 |
Total current liabilities | 152,230 | 126,204 |
Debt, long-term portion | 726,338 | 683,206 |
Tax receivable agreement liability, long-term portion | 183,504 | 210,543 |
Deferred taxes liabilities | 11,269 | 5,748 |
Other non-current liabilities | 10,844 | 11,728 |
Total liabilities | 1,084,185 | 1,037,429 |
Commitments and contingent liabilities (Note 14) | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, authorized 100,000,000 shares; none issued and outstanding as of September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.001 par value, authorized 1,000,000,000 shares; 79,884,225 and 79,660,397 shares issued, and 68,138,638 and 78,131,568 shares outstanding as of September 30, 2023 and December 31, 2022, respectively | 80 | 80 |
Additional paid-in capital | 820,090 | 805,799 |
Treasury stock, at cost; 11,745,587 and 1,528,829 shares repurchased at September 30, 2023 and December 31, 2022, respectively | (126,742) | (16,827) |
Accumulated deficit | (222,844) | (215,790) |
Accumulated other comprehensive loss | (11,420) | (4,944) |
Total HireRight Holdings Corporation stockholders' equity | 459,164 | 568,318 |
Noncontrolling interest | 17,713 | 0 |
Total stockholders’ equity | 476,877 | 568,318 |
Total liabilities and stockholders’ equity | $ 1,561,062 | $ 1,605,747 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 5,421 | $ 5,812 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 79,884,225 | 79,660,397 |
Common stock, outstanding (in shares) | 68,138,638 | 78,131,568 |
Treasury stock (in shares) | 11,745,587 | 1,528,829 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Income Statement [Abstract] | |||||
Revenues | $ 188,262 | $ 210,303 | $ 555,833 | $ 631,306 | |
Expenses | |||||
Cost of services (exclusive of depreciation and amortization below) | 94,422 | 110,848 | 291,449 | 343,241 | |
Selling, general and administrative | 48,588 | 49,378 | 164,442 | 152,032 | |
Depreciation and amortization | 19,063 | 17,946 | 56,246 | 54,056 | |
Total expenses | 162,073 | 178,172 | 512,137 | 549,329 | |
Operating income | 26,189 | 32,131 | 43,696 | 81,977 | |
Other expenses | |||||
Interest expense, net | 22,447 | 8,457 | 48,392 | 20,971 | |
Other expense, net | 881 | 89 | 1,429 | 163 | |
Total other expenses | 23,328 | 8,546 | 49,821 | 21,134 | |
Income (loss) before income taxes | 2,861 | 23,585 | (6,125) | 60,843 | |
Income tax expense (benefit) | 4,450 | (69,704) | 863 | (68,456) | |
Net income (loss) | (1,589) | 93,289 | (6,988) | 129,299 | |
Less: Net income attributable to noncontrolling interest | [1] | 66 | 0 | 66 | 0 |
Net income (loss) attributable to HireRight Holdings Corporation | $ (1,655) | $ 93,289 | $ (7,054) | $ 129,299 | |
Net income (loss) per share attributable to HireRight Holdings Corporation: | |||||
Basic (in dollars per share) | $ (0.02) | $ 1.17 | $ (0.10) | $ 1.63 | |
Diluted (in dollars per share) | $ (0.02) | $ 1.17 | $ (0.10) | $ 1.63 | |
Weighted average shares outstanding: | |||||
Basic (in shares) | 69,090,882 | 79,459,633 | 73,080,851 | 79,419,725 | |
Diluted (in shares) | 69,090,882 | 79,542,715 | 73,080,851 | 79,476,574 | |
[1]See Note 1 — Organization, Basis of Presentation and Consolidation, and Significant Accounting Policies for a description of noncontrolling interest. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Statement of Other Comprehensive Income [Abstract] | |||||
Net income (loss) | $ (1,589) | $ 93,289 | $ (6,988) | $ 129,299 | |
Unrealized (loss) gain on derivatives qualified for hedge accounting: | |||||
Unrealized gain on interest rate swaps | 0 | 0 | 0 | 7,981 | |
Reclassification adjustments included in earnings | [1] | (2,088) | (3,413) | (6,890) | (7,997) |
Total unrealized loss | (2,088) | (3,413) | (6,890) | (16) | |
Currency translation adjustment, net of tax expense of $16 and $64 for the three months ended September 30, 2023 and 2022, respectively, and $102 and $210 for the nine months ended September 30, 2023 and 2022, respectively | (4,318) | (12,565) | 414 | (26,400) | |
Other comprehensive loss | (6,406) | (15,978) | (6,476) | (26,416) | |
Comprehensive income (loss) | (7,995) | 77,311 | (13,464) | 102,883 | |
Less: comprehensive income attributable to noncontrolling interest, net of tax | 66 | 0 | 66 | 0 | |
Comprehensive income (loss) attributable to HireRight Holdings Corporation | $ (8,061) | $ 77,311 | $ (13,530) | $ 102,883 | |
[1]Represents the reclassification of the effective portion of the gain on the Company's interest rate swaps into interest expense. Includes reclassification to earnings as a reduction to interest expense of unrealized gains included in accumulated other comprehensive loss on the condensed consolidated balance sheet related to the interest rate swap agreements terminated on February 18, 2022. See Note 12 for additional information. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Other Comprehensive Income [Abstract] | ||||
Currency translation adjustment, tax portion | $ 16 | $ 64 | $ 102 | $ 210 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | ||
Beginning balance (in shares) at Dec. 31, 2021 | 79,392,937 | ||||||||
Beginning balance at Dec. 31, 2021 | $ 445,717 | $ 79 | $ 0 | $ 793,382 | $ (360,364) | $ 12,620 | |||
Treasury stock, beginning (in shares) at Dec. 31, 2021 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock under stock-based compensation plans, net of shares withheld for employee taxes (in shares) | 89,675 | ||||||||
Issuance of common stock under stock-based compensation plans, net of shares withheld for employee taxes | 803 | 803 | |||||||
Net loss attributable to HireRight Holdings Corporation | 129,299 | ||||||||
Net income (loss) | 129,299 | 129,299 | |||||||
Net income attributable to noncontrolling interest | [1] | 0 | |||||||
Stock-based compensation | 8,299 | 8,299 | |||||||
Other comprehensive loss | (26,416) | (26,416) | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 79,482,612 | ||||||||
Ending balance at Sep. 30, 2022 | 557,702 | $ 79 | $ 0 | 802,484 | (231,065) | (13,796) | |||
Treasury stock, ending (in shares) at Sep. 30, 2022 | 0 | ||||||||
Beginning balance (in shares) at Jun. 30, 2022 | 79,432,321 | ||||||||
Beginning balance at Jun. 30, 2022 | 478,473 | $ 79 | $ 0 | 800,566 | (324,354) | 2,182 | |||
Treasury stock, beginning (in shares) at Jun. 30, 2022 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock under stock-based compensation plans, net of shares withheld for employee taxes (in shares) | 50,291 | ||||||||
Issuance of common stock under stock-based compensation plans, net of shares withheld for employee taxes | 803 | 803 | |||||||
Net loss attributable to HireRight Holdings Corporation | 93,289 | ||||||||
Net income (loss) | 93,289 | 93,289 | |||||||
Net income attributable to noncontrolling interest | [1] | 0 | |||||||
Stock-based compensation | 1,115 | 1,115 | |||||||
Other comprehensive loss | (15,978) | (15,978) | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 79,482,612 | ||||||||
Ending balance at Sep. 30, 2022 | $ 557,702 | $ 79 | $ 0 | 802,484 | (231,065) | (13,796) | |||
Treasury stock, ending (in shares) at Sep. 30, 2022 | 0 | ||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 78,131,568 | 78,131,568 | |||||||
Beginning balance at Dec. 31, 2022 | $ 568,318 | $ 80 | $ (16,827) | 805,799 | (215,790) | (4,944) | $ 0 | ||
Treasury stock, beginning (in shares) at Dec. 31, 2022 | 1,528,829 | 1,528,829 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock under stock-based compensation plans, net of shares withheld for employee taxes (in shares) | 223,828 | ||||||||
Issuance of common stock under stock-based compensation plans, net of shares withheld for employee taxes | $ 402 | 402 | |||||||
Net loss attributable to HireRight Holdings Corporation | (7,054) | (7,054) | |||||||
Net income (loss) | (6,988) | ||||||||
Acquisition date fair value of noncontrolling interest (Note 3) | 17,647 | 17,647 | |||||||
Net income attributable to noncontrolling interest | 66 | [1] | 66 | ||||||
Stock-based compensation | 13,889 | 13,889 | |||||||
Repurchase of common stock (in shares) | (10,216,758) | (10,216,758) | |||||||
Repurchase of common stock | (109,915) | $ (109,915) | |||||||
Other comprehensive loss | $ (6,476) | (6,476) | |||||||
Ending balance (in shares) at Sep. 30, 2023 | 68,138,638 | 68,138,638 | |||||||
Ending balance at Sep. 30, 2023 | $ 476,877 | $ 80 | $ (126,742) | 820,090 | (222,844) | (11,420) | 17,713 | ||
Treasury stock, ending (in shares) at Sep. 30, 2023 | 11,745,587 | 11,745,587 | |||||||
Beginning balance (in shares) at Jun. 30, 2023 | 70,326,266 | ||||||||
Beginning balance at Jun. 30, 2023 | $ 486,399 | $ 80 | $ (102,889) | 815,411 | (221,189) | (5,014) | 0 | ||
Treasury stock, beginning (in shares) at Jun. 30, 2023 | 9,524,029 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock under stock-based compensation plans, net of shares withheld for employee taxes (in shares) | 33,930 | ||||||||
Issuance of common stock under stock-based compensation plans, net of shares withheld for employee taxes | (139) | (139) | |||||||
Net loss attributable to HireRight Holdings Corporation | (1,655) | (1,655) | |||||||
Net income (loss) | (1,589) | ||||||||
Acquisition date fair value of noncontrolling interest (Note 3) | 17,647 | 17,647 | |||||||
Net income attributable to noncontrolling interest | 66 | [1] | 66 | ||||||
Stock-based compensation | 4,818 | 4,818 | |||||||
Repurchase of common stock (in shares) | (2,221,558) | (2,221,558) | |||||||
Repurchase of common stock | (23,853) | $ (23,853) | |||||||
Other comprehensive loss | $ (6,406) | (6,406) | |||||||
Ending balance (in shares) at Sep. 30, 2023 | 68,138,638 | 68,138,638 | |||||||
Ending balance at Sep. 30, 2023 | $ 476,877 | $ 80 | $ (126,742) | $ 820,090 | $ (222,844) | $ (11,420) | $ 17,713 | ||
Treasury stock, ending (in shares) at Sep. 30, 2023 | 11,745,587 | 11,745,587 | |||||||
[1]See Note 1 — Organization, Basis of Presentation and Consolidation, and Significant Accounting Policies for a description of noncontrolling interest. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income (loss) | $ (6,988) | $ 129,299 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 56,246 | 54,056 |
Deferred income taxes | (1,021) | (70,954) |
Amortization of debt issuance costs | 2,404 | 2,549 |
Amortization of contract assets | 3,742 | 3,312 |
Amortization of right-of-use assets | 3,715 | 2,094 |
Amortization of unrealized gains on terminated interest rate swap agreements | (6,890) | (9,676) |
Amortization of cloud computing software costs | 5,012 | 1,446 |
Stock-based compensation | 13,889 | 8,587 |
Change in tax receivable agreement liability | 0 | 800 |
Loss on modification and extinguishment of debt | 7,745 | 0 |
Other non-cash charges, net | 1,010 | 524 |
Changes in operating assets and liabilities (net of acquisitions): | ||
Accounts receivable | (1,546) | (24,521) |
Prepaid expenses and other current assets | (6,850) | 1,516 |
Cloud computing software | (8,465) | (23,158) |
Other non-current assets | (4,960) | (3,934) |
Accounts payable | 156 | (5,212) |
Accrued expenses and other current liabilities | 259 | 5,498 |
Accrued salaries and payroll | (661) | 3,631 |
Operating lease liabilities, net | (3,759) | (4,125) |
Other non-current liabilities | (2,410) | (805) |
Net cash provided by operating activities | 50,628 | 70,927 |
Cash flows from investing activities | ||
Purchases of property and equipment | (2,049) | (3,973) |
Capitalized software development | (8,829) | (9,149) |
Cash paid for acquisitions, net of cash acquired | (21,653) | 0 |
Other investing | (2,000) | 0 |
Net cash used in investing activities | (34,531) | (13,122) |
Cash flows from financing activities | ||
Repayments of debt | (638,653) | (6,263) |
Proceeds from Second Amended First Lien Term Loan Facility, net of debt discount | 677,890 | 0 |
Payments for termination of interest rate swap agreements | 0 | (18,445) |
Payment of issuance costs | (6,252) | (342) |
Repurchases of common stock | (109,642) | 0 |
Proceeds from issuance of common stock in connection with stock-based compensation plans | 613 | 0 |
Taxes paid related to net share settlement of equity awards | (211) | 0 |
Net cash used in financing activities | (76,255) | (25,050) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (60,158) | 32,755 |
Effect of exchange rates | (26) | (1,155) |
Cash, cash equivalents and restricted cash | ||
Beginning of year | 163,402 | 116,214 |
End of period | 103,218 | 147,814 |
Cash paid for | ||
Interest | 47,234 | 27,890 |
Income taxes | 1,804 | 2,718 |
Supplemental schedule of non-cash activities | ||
Unpaid property and equipment and capitalized software purchases | 654 | 1,102 |
Acquisition cash holdback | $ 2,250 | $ 0 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Consolidation, and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Basis of Presentation and Consolidation, and Significant Accounting Policies | Organization, Basis of Presentation and Consolidation, and Significant Accounting Policies Organization Description of Business HireRight Holdings Corporation (“HireRight” or the “Company”) is incorporated in Delaware. The Company is a leading global provider of technology-driven workforce risk management and compliance solutions, providing comprehensive background screening, verification, identification, monitoring, and drug and health screening services for customers across the globe, predominantly under the HireRight brand. Income Tax Receivable Agreement In connection with the Company’s initial public offering (“IPO”), the Company entered into an income tax receivable agreement (“TRA”), which provides for the payment by the Company over a period of approximately 12 years to pre-IPO equityholders or their permitted transferees of 85% of the benefits, if any, that the Company and its subsidiaries realize, or are deemed to realize (calculated using certain assumptions) in U.S. federal, state, and local income tax savings as a result of the utilization (or deemed utilization) of certain existing tax attributes. As of September 30, 2023 and December 31, 2022, the Company had a total liability of $210.5 million in connection with the projected obligations under the TRA, for which annual payments will begin in the first quarter of 2024. TRA related liabilities are classified as current or non-current based on the expected date of payment and are included on the Company’s condensed consolidated balance sheets under the captions accrued expenses and other current liabilities and tax receivable agreement liability, long-term portion, respectively. See Note 7 — Accrued Expenses and Other Current Liabilities for further details related to the current portion of the TRA liability. Basis of Presentation and Principles of Consolidation The unaudited condensed consolidated financial statements include the Company’s accounts and those of its wholly and majority-owned subsidiaries for which the Company has a controlling interest. The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. The unaudited condensed consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 10, 2023 (“Annual Report”). The December 31, 2022 condensed consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements have been included. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared on a consistent basis with the accounting policies described in Note 1 of the notes to the audited consolidated financial statements for the year ended December 31, 2022, included in the Annual Report. Significant Accounting Policies The Company’s significant accounting policies are discussed in “Note 1 — Organization, Basis of Presentation and Consolidation, and Significant Accounting Policies” of the notes to the audited consolidated financial statements for the year ended December 31, 2022, included in the Annual Report. There have been no significant changes to these policies which have had a material impact on the Company’s unaudited condensed consolidated financial statements during the nine months ended September 30, 2023, except as noted below. Business Combinations On July 3, 2023, the Company completed the acquisition of a controlling equity interest in a privately-held company. See Note 3 — Business Combinations for additional information. Business combinations are accounted for under Accounting Standards Codification (“ASC”) 805—Business Combinations, using the acquisition method of accounting under which all acquired tangible and identifiable intangible assets and assumed liabilities and applicable noncontrolling interests are recognized at fair value as of the respective acquisition date, while the costs associated with the acquisition of a business are expensed as incurred. The allocation of purchase consideration requires management to make significant estimates and assumptions, especially with respect to identifiable intangible assets. These estimates can include, but are not limited to, a market participant’s expectation of future cash flows from acquired platforms, acquired trade names, useful lives of acquired assets, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. As a result, actual results may differ from such estimates. Noncontrolling Interest As a result of the Company’s acquisition of a majority interest in a privately-held company on July 3, 2023, the Company’s condensed consolidated financial statements present noncontrolling interest. Noncontrolling interest represents the portion of profit or loss, comprehensive profit or loss, and net assets of the acquired company that are not allocable to the Company. See Note 3 — Business Combinations for additional information. Use of Estimates Preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates, judgments, and assumptions that affect the amounts reported and disclosed in the financial statements. The Company believes that the estimates, judgments, and assumptions used to determine certain amounts that affect the financial statements are reasonable based upon information available at the time they are made. The Company uses such estimates, judgments, and assumptions when accounting for items and matters such as, but not limited to, the allowance for credit losses, customer rebates, impairment assessments and charges, recoverability of long-lived assets, deferred tax assets, lease accounting, uncertain tax positions, income tax expense, liabilities under the TRA, derivative instruments, fair value of debt, stock-based compensation expense, useful lives assigned to long-lived assets, the allocation of purchase consideration, and the stand-alone selling price of performance obligations for revenue recognition purposes. Results and outcomes could differ materially from these estimates, judgments, and assumptions due to risks and uncertainties. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Recently Issued Accounting Pronouncements Adopted Accounting Pronouncements Adopted in 2023 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which delayed the effective date for this guidance until the fiscal year beginning after December 15, 2022 including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2016-13 effective January 1, 2023, using the modified retrospective transition method. The adoption of this ASU did not have a material impact on the condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which aims to improve the accounting for acquired revenue contracts with customers in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The new guidance is effective for the Company for annual periods beginning after December 15, 2023 and interim periods within those fiscal years. The Company adopted ASU 2021-08 effective January 1, 2023. The adoption of this ASU did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04 , “Reference Rate Reform (Topic 848),” which provides temporary, optional practical expedients and exceptions to enable a smoother transition to the new reference rates which will replace the London Interbank Offered Rate (“LIBOR”) and other reference rates expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope, ” which expanded the scope of Topic 848 to include derivative instruments impacted by the discounting transition. In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” which extended the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024. The Company does not expect the adoption of this guidance to have a material impact on the condensed consolidated financial statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations On December 31, 2022, and February 16, 2023, the Company entered into definitive agreements to purchase 60% of the equity interests in Digital Technology Identity Services, LLC (“DTIS”), a privately held company that specializes in collecting and processing biometric and biographical data, for a total purchase price of $26.5 million, including a one-year $2.3 million cash holdback, which, subject to claims by the Company under the purchase agreement, is due no later than 15 days following the first anniversary of the closing date (the “DTIS Acquisition”). The purchase of 60% of the equity interests represents a controlling interest in DTIS. The purchase was completed on July 3, 2023 and was funded with available cash. The remaining 40% of the equity interest in DTIS is retained by a leading professional organization representing individuals who work at public-use commercial and general aviation airports. The DTIS Acquisition expands the Company’s biometric-based screening capabilities as a critical component for customers in both regulated and non-regulated industries. Acquisition-related costs incurred by the Company during the three and nine months ended September 30, 2023 related to the DTIS Acquisition were $0.1 million and $0.4 million, respectively, and are included in selling, general and administrative expenses in the condensed consolidated statements of operations. The acquisition constitutes a business combination and therefore was accounted for as an acquisition of a business under the applicable guidance. The Company fully consolidated the assets and liabilities of DTIS, with a corresponding noncontrolling interest classified as equity in the Company’s condensed consolidated balance sheets. The following table summarizes the purchase consideration. As of (in thousands) Consideration transferred, net of cash acquired (1) $ 23,903 Estimated fair value of noncontrolling interest 17,647 Total consideration $ 41,550 (1) Consideration transferred includes a one-year $2.3 million cash holdback. The total purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values on the date of acquisition. The following table presents the preliminary allocation of the fair value of consideration transferred: As of (in thousands) Current assets $ 1,742 Other non-current assets 470 Intangible assets 24,100 Goodwill 22,669 Total assets acquired 48,981 Accounts payable and accrued liabilities 814 Long-term deferred tax liabilities 6,333 Other non-current liabilities 284 Total liabilities assumed 7,431 Net assets acquired $ 41,550 Identifiable intangible assets acquired in the DTIS Acquisition and their useful lives consist of the following: Useful lives As of (in thousands) Biometric screening platform 12.5 years $ 23,700 Trade names 8.5 years 400 Total $ 24,100 The Company used a third-party valuation specialist to determine the acquisition-date fair value of the intangible assets using various methods. The biometric screening platform was valued using the income method, specifically the Greenfield Method, which estimates the present value of future cash flows associated with developing an operating business assuming an entity holds only the identified intangible asset. Key assumptions in valuing the biometric screening platform included significant judgments and assumptions relating to (i) forecasted revenue attributable to the platform, (ii) costs incurred, and (iii) a discount rate of 19%. Trade names were valued using the relief from royalty method. Key assumptions in valuing the acquired trade names included (i) a royalty rate of 1%, (ii) forecasted revenue attributable to the trade names, and (iii) a discount rate of 19%. The results of the valuation are preliminary and may change as the Company continues to evaluate key assumptions. The goodwill represents the excess of the purchase price over the fair value of the assets acquired less liabilities assumed. The Company expects to realize strategic benefits by offering enhanced biometric-based screening from the DTIS Acquisition, which can be integrated into the Company’s current service offerings. None of the goodwill is deductible for tax purposes. Revenue and earnings of the entity acquired were not presented as they were not material to the condensed consolidated financial statements. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets, and Other Non-Current Assets | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets, and Other Non-Current Assets | Prepaid Expenses and Other Current Assets, and Other Non-Current Assets The components of prepaid expenses and other current assets were as follows: September 30, 2023 December 31, 2022 (in thousands) Prepaid software licenses, maintenance and insurance $ 13,381 $ 9,237 Other prepaid expenses and current assets 12,737 9,508 Total prepaid expenses and other current assets $ 26,118 $ 18,745 The components of other non-current assets were as follows: September 30, 2023 December 31, 2022 (in thousands) Contract implementation assets $ 18,838 $ 17,983 Other non-current assets 2,137 966 Total other non-current assets $ 20,975 $ 18,949 See Note 16 — Revenues for further discussion on contract implementation costs and related amortization included in cost of services in the Company’s condensed consolidated statements of operations. |
Right-of-Use Assets and Lease L
Right-of-Use Assets and Lease Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Right-of-Use Assets and Lease Liabilities | Right-of-Use Assets and Lease Liabilities The Company leases office facilities under operating leases in various domestic and foreign locations with initial terms ranging from 1 to 12 years. Some leases include one or more options to extend the term of the lease, generally at the Company’s sole discretion, with renewal terms that can extend the lease term up to 5 years. The Company’s operating leases were as follows: September 30, 2023 December 31, 2022 (in thousands) Right-of-use assets, net (1) $ 6,352 $ 8,423 Current operating lease liabilities (2) $ 4,316 $ 5,509 Operating lease liabilities, long-term (2) 9,313 10,055 Total operating lease liabilities $ 13,629 $ 15,564 (1) Includes impact of accelerated expense on abandoned right-of-use assets related to the global restructuring plan, see Note 21 — Restructuring and Related Charges for additional information. (2) Current and long-term operating lease liabilities are recorded in accrued expenses and other current liabilities Supplemental cash flow information related to leases was as follows: Nine Months Ended 2023 2022 (in thousands) Cash paid for amounts included in measurement of operating lease liabilities $ 4,641 $ 4,193 ROU assets obtained in exchange for operating lease liabilities $ 897 $ 10,896 The weighted average remaining lease term and weighted average discount rate for the Company’s operating leases were as follows: September 30, 2023 2022 Weighted average remaining lease term (in years) 4.12 4.22 Weighted average discount rate 5.3 % 4.6 % |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The changes in the carrying amount of goodwill for the nine months ended September 30, 2023, were as follows: (in thousands) Balance at December 31, 2022 $ 809,463 Foreign currency translation 585 Acquired goodwill (1) 23,216 Balance as of September 30, 2023 $ 833,264 (1) Acquired goodwill includes $0.5 million of acquired goodwill related to immaterial acquisitions. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities The components of accrued expenses and other current liabilities were as follows: September 30, 2023 December 31, 2022 (in thousands) Accrued data costs $ 38,509 $ 34,080 Tax receivable agreement liability, current portion 27,039 — Other 36,641 41,128 Total accrued expenses and other current liabilities $ 102,189 $ 75,208 |
Accrued Salaries and Payroll
Accrued Salaries and Payroll | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Salaries and Payroll | Accrued Salaries and Payroll The components of accrued salaries and payroll were as follows: September 30, 2023 December 31, 2022 (in thousands) Wages, benefits and taxes (1) $ 18,418 $ 15,198 Accrued bonus 12,383 15,877 Total accrued salaries and payroll $ 30,801 $ 31,075 (1) Accrued wages, benefits and taxes at September 30, 2023 includes $1.9 million in accrued employee severance and benefits related to the workforce reduction. See Note 21 — Restructuring and Related Charges for additional information. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The components of debt were as follows: September 30, 2023 December 31, 2022 (in thousands) Second Amended First Lien Term Loan Facility $ 750,000 $ 699,513 Second Amended Revolving Credit Facility — — Total debt 750,000 699,513 Less: Unamortized original issue discount (11,852) (1,464) Less: Unamortized debt issuance costs (4,310) (6,493) Less: Current portion of long-term debt (7,500) (8,350) Long-term debt, less current portion $ 726,338 $ 683,206 On July 12, 2018, the Company entered into the following credit arrangements with the lenders party thereto and Bank of America, N.A. as administrative agent, collateral agent and a letter of credit issuer: • a first lien senior secured term loan facility, in an aggregate principal amount of $835.0 million, maturing on July 12, 2025 (“First Lien Term Loan Facility”); • a first lien senior secured revolving credit facility, in an aggregate principal amount of up to $100.0 million, including a $40.0 million letter of credit sub-facility, maturing on July 12, 2023 (“Revolving Credit Facility” and, together with the First Lien Term Loan Facility, the “First Lien Facilities”). The following discussion summarizes historical amendments to the First Lien Facilities and various terms thereunder. Amended First Lien Facilities On June 3, 2022, the Company entered into an amendment to the First Lien Facilities under which, (i) the aggregate commitments under the Company’s Revolving Credit Facility were increased from $100.0 million to $145.0 million; (ii) the maturity date of the Revolving Credit Facility was extended from July 12, 2023 to June 3, 2027 or, if earlier, 91 days prior to the maturity of the Company’s term loans under the Amended First Lien Facilities, subject to extension or refinancing; and (iii) the interest rate benchmark applicable to the Revolving Credit Facility was converted from LIBOR to term Secured Overnight Financing Rate (“SOFR”). The First Lien Term Loan Facility as amended is hereinafter referred to as the “Amended First Lien Term Loan Facility” and the Revolving Credit Facility as amended is herein after referred to as the “Amended Revolving Credit Facility” (and together with the Amended First Lien Term Loan Facility, the “Amended First Lien Facilities”). The Company’s existing term loans under the Amended First Lien Facilities remained in effect. Upon the effectiveness of the Amended First Lien Facilities, the Company did not have any outstanding principal balance on the Amended Revolving Credit Facility. The Amended First Lien Facilities did not modify the financial covenants, negative covenants, mandatory prepayment events or security provisions or arrangements under the First Lien Facilities. Second Amended First Lien Facilities On September 28, 2023, the Company entered into a second amendment to the Amended First Lien Facilities by which, (i) the aggregate commitments under the Company’s Amended Revolving Credit Facility were increased from $145.0 million to $160.0 million; (ii) the maturity date of the Amended First Lien Term Loan Facility was extended from July 12, 2025 to September 30, 2030 by providing for the refinancing and replacement in full of the term loan outstanding thereunder with a new term loan in an aggregate initial principal amount of $750.0 million, subject to an original issue discount of 1.5%; and (iii) the interest rate benchmark applicable to the First Amended First Lien Term Loan Facility was converted from LIBOR to term SOFR. As so amended, the First Lien Term Loan Facility is hereinafter referred to as the “Second Amended First Lien Term Loan Facility” and the Amended Revolving Credit Facility is hereinafter referred to as the “Second Amended Revolving Credit Facility” (and together with the Second Amended First Lien Term Loan Facility, the “Second Amended First Lien Facilities”). Upon the effectiveness of the Second Amended First Lien Facilities, no revolving loans were outstanding under the Second Amended Revolving Credit Facility. The Second Amended First Lien Facilities did not modify the financial covenants, negative covenants, mandatory prepayment events or security provisions or arrangements under the Amended First Lien Facilities. The Company is required to make scheduled quarterly payments equal to 0.25% of the aggregate initial outstanding principal amount of the Second Amended First Lien Term Loan Facility, or approximately $1.9 million per quarter, with the remaining balance payable at maturity. The Company may make voluntary prepayments on the Second Amended First Lien Term Loan Facility at any time prior to maturity at par. Voluntary prepayments of the term loan within six months after the effectiveness of the Second Amended First Lien Term Loan Facility in connection with certain repricing transactions will require payment of a 1.00% prepayment premium. The Company is required to make prepayments on the Second Amended First Lien Term Loan Facility with the net cash proceeds of certain asset sales, debt incurrences, casualty events and sale-leaseback transactions, subject to certain specified limitations, thresholds and reinvestment rights. Additionally, the Company is required to make annual prepayments on the Second Amended First Lien Term Loan Facility with a percentage (subject to leverage-based reductions) of the Company’s excess cash flow, as defined therein, if the excess cash flow exceeds a certain specified threshold. For the three and nine months ended September 30, 2023 and 2022, the Company was not required to make a prepayment under the Amended First Lien Term Loan Facility or the Second Amended First Lien Term Loan Facility based on the Company’s excess cash flow. The Second Amended First Lien Term Loan Facility was accounted for as a modification, extinguishment, or new loan for certain lenders in accordance with the applicable accounting guidance. Accordingly, original issue discount and debt issuance costs of $11.9 million and $4.3 million, respectively, will be amortized to interest expense over the remaining term of the Second Amended First Lien Term Loan Facility. The Company recognized $7.8 million for the loss on debt extinguishment and write-off of third-party costs of the debt modification within interest expense during the three and nine months ended September 30, 2023. The Second Amended First Lien Term Loan Facility has an interest rate calculated at a per annum rate of, at the Company’s option, either (a) a SOFR rate, plus 4.00% or (b) an alternative base rate, plus 3.00%, with the alternative base rate (“ABR”) determined by reference to the highest of (i) the federal funds effective rate plus 0.50%, (ii) the rate the Administrative Agent announces from time to time as its prime lending rate in New York City, (iii) one-month SOFR plus 1.00%, and (iv) zero%. The applicable margin for borrowings under the Second Amended Revolving Credit Facility is 3.00% for SOFR loans and 2.00% for ABR loans, in each case, subject to adjustment pursuant to a leverage-based pricing grid. As of September 30, 2023, the Second Amended First Lien Term Loan Facility accrued interest at one-month SOFR plus 4.00%, and the Second Amended Revolving Credit Facility accrued interest at one-month SOFR plus 2.50% based upon the current pricing grid. The Borrower from time to time may elect to convert all or a portion of its SOFR loans under the Second Amended Revolving Credit Facility into ABR loans, and may elect to convert all or a portion of its SOFR loans under the Second Amended First Lien Term Loan Facility into ABR loans, in each case, subject to a minimum conversion amount of $2.5 million. The Company’s obligations under the Second Amended First Lien Facilities are guaranteed, jointly and severally, on a senior secured first-priority basis, by substantially all of the Company’s domestic wholly-owned material subsidiaries, as defined in the agreement, and are secured by first-priority security interests in substantially all of the assets of the Company and its domestic wholly-owned material subsidiaries, subject to certain permitted liens and exceptions. Collateral includes all outstanding equity interests in whatever form of the borrower and each restricted subsidiary that is owned by any credit party. As of September 30, 2023, the Company had $158.7 million in available borrowing under the Second Amended Revolving Credit Facility, after utilizing $1.3 million for letters of credit. The Company is required to pay a quarterly fee of 0.38% on unutilized commitments under the Second Amended Revolving Credit Facility, subject to adjustment pursuant to a leverage-based pricing grid. As of both September 30, 2023 and December 31, 2022, the quarterly fee on unutilized commitments under the Second Amended Revolving Credit Facility and the Amended Revolving Credit Facility, respectively, was 0.38%. Debt Covenants The Second Amended First Lien Facilities contain certain covenants and restrictions that limit the Company’s ability to, among other things: (a) incur additional debt or issue certain preferred equity interests; (b) create or permit the existence of certain liens; (c) make certain loans or investments (including acquisitions); (d) pay dividends on or make distributions in respect of the capital stock or make other restricted payments; (e) consolidate, merge, sell, or otherwise dispose of all or substantially all of the Company’s assets; (f) sell assets; (g) enter into certain transactions with affiliates; (h) enter into sale-leaseback transactions; (i) restrict dividends from the Company’s subsidiaries or restrict liens; (j) change the Company’s fiscal year; and (k) modify the terms of certain debt agreements. In addition, the Second Amended First Lien Facilities also provide for customary events of default. The Company was in compliance with the covenants through the three and nine months ended September 30, 2023. The Company is also subject to a springing financial maintenance covenant under the Second Amended Revolving Credit Facility, which requires the Company to not exceed a specified first lien leverage ratio at the end of each fiscal quarter if the outstanding loans and letters of credit under the Second Amended Revolving Credit Facility, subject to certain exceptions, exceed 35% of the total commitments under the Second Amended Revolving Credit Facility at the end of such fiscal quarter. The Company was not subject to this covenant as of September 30, 2023 and December 31, 2022, as outstanding loans and letters of credit did not exceed 35% of the total commitments under the facility. Other Amortization of debt discount and debt issuance costs related to the Second Amended First Lien Term Loan Facility are included in interest expense in the condensed consolidated statements of operations and were as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands) Debt discount amortization $ 139 $ 133 $ 413 $ 395 Debt issuance costs amortization 609 588 1,812 1,750 Total debt discount and issuance costs $ 748 $ 721 $ 2,225 $ 2,145 Interest expense also includes the amortization of debt issuance costs for the Second Amended Revolving Credit Facility of $0.1 million for each of the three months ended September 30, 2023 and 2022 and $0.2 million and $0.4 million, for the nine months ended September 30, 2023 and 2022, respectively. Unamortized debt issuance costs for the Second Amended Revolving Credit Facility are recorded in other non-current assets on the Company’s condensed consolidated balance sheets. The weighted average interest rate on outstanding borrowings during the nine months ended September 30, 2023 and the year ended December 31, 2022 was 8.8% and 5.5%, respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and requires disclosures about fair value measurements. The standard is applicable whenever assets and liabilities are measured at fair value. The fair value hierarchy established in the standard prioritizes the inputs used in valuation techniques into three levels as follows: Level 1 Quoted prices in active markets for identical assets and liabilities; Level 2 Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in inactive markets, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data; or Level 3 Amounts derived from valuation models in which unobservable inputs reflect the reporting entity’s own assumptions about the assumptions of market participants that would be used in pricing the asset or liability, such as discounted cash flow models or valuations. The Company’s outstanding debt instruments are recorded at their carrying values in the condensed consolidated balance sheets, which may differ from their respective fair values. The estimated fair value of the Company’s debt, which is Level 2 of the fair value hierarchy, is based on quoted prices for similar instruments in active markets or identical instruments in markets that are not active. The fair value of the Company’s Second Amended First Lien Term Loan Facility is calculated based upon market price quotes obtained for the Company’s debt agreements (Level 2 fair value inputs). The fair value of the Second Amended Revolving Credit Facility approximates carrying value, based upon the short-term duration of the interest rate periods currently available to the Company. The estimated fair values were as follows: September 30, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Second Amended First Lien Term Loan Facility $ 738,148 $ 739,070 $ 698,049 $ 673,617 Second Amended Revolving Credit Facility — — — — Total debt $ 738,148 $ 739,070 $ 698,049 $ 673,617 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company entered into interest rate swap agreements with a total notional amount of $700 million with an effective date of December 31, 2018 (“Interest Rate Swap Agreements”) with a scheduled expiration date of December 31, 2023. Prior to termination discussed herein, the Interest Rate Swap Agreements were determined to be effective hedging agreements. Effective February 18, 2022, the Company terminated the Interest Rate Swap Agreements. In connection with the termination of the Interest Rate Swap Agreements, the Company made a payment of $18.4 million to the swap counterparties. Following these terminations, $21.5 million of unrealized gains related to the terminated Interest Rate Swap Agreements included in accumulated other comprehensive income (loss) will be reclassified to earnings as reductions to interest expense through December 31, 2023. The Company reclassified interest expense related to hedges of these transactions into earnings as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands) Reclassification of the effective portion of the gain on the Interest Rate Swap Agreements into interest expense $ — $ — $ — $ 1,679 Reclassification of unrealized gains related to terminated Interest Rate Swap Agreements into interest expense (2,088) (3,413) (6,890) (9,676) Total reclassification adjustments included in earnings $ (2,088) $ (3,413) $ (6,890) $ (7,997) The results of derivative activities are recorded in cash flows from operating activities on the condensed consolidated statements of cash flows. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) consists primarily of unrealized gains related to the terminated Interest Rate Swap Agreements and cumulative foreign currency translation adjustments. The components of accumulated other comprehensive income (loss) as of September 30, 2023 and December 31, 2022 were as follows: Derivative Currency Total (in thousands) Balance at December 31, 2022 $ 8,849 $ (13,793) $ (4,944) Other comprehensive loss (6,890) 414 (6,476) Balance at September 30, 2023 $ 1,959 $ (13,379) $ (11,420) As of September 30, 2023, the remaining $2.0 million of the accumulated other comprehensive income related to terminated Interest Rate Swap Agreements is expected to be reclassified into earnings as a reduction to interest expense through December 31, 2023. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segments and Geographic Information The Company operates in one reportable segment. Revenues are attributed to each geographic region based on the location of the HireRight entity that has contracted for the services that result in the revenues. The following table summarizes the Company’s revenues by region: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands, except percent) Revenues: United States $ 174,632 92.8 % $ 194,081 92.3 % $ 513,592 92.4 % $ 582,817 92.3 % International 13,630 7.2 % 16,222 7.7 % 42,241 7.6 % 48,489 7.7 % Total revenues $ 188,262 100.0 % $ 210,303 100.0 % $ 555,833 100.0 % $ 631,306 100.0 % The following table summarizes the Company’s long-lived assets, which consist of property and equipment, net, and operating lease ROU assets, net, by geographic region: September 30, 2023 December 31, 2022 (in thousands) Long-lived assets: United States $ 7,739 $ 10,811 International 5,803 6,657 Total long-lived assets $ 13,542 $ 17,468 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Indemnification In the ordinary course of business, the Company enters into agreements with customers, providers of services and data that the Company uses in its business operations, and other third parties pursuant to which the Company agrees to indemnify and defend them and their affiliates for losses resulting from claims of intellectual property infringement, damages to property or persons, business losses, and other costs and liabilities. Generally, these indemnity and defense obligations relate to claims and losses that result from the Company’s acts or omissions, including actual or alleged process errors, inclusion of erroneous or impermissible information, or omission of includable information in background screening reports that the Company prepares. In addition, under some circumstances, the Company agrees to indemnify and defend contract counterparties against losses resulting from their own business operations, obligations, and acts or omissions, or the business operations, obligations, and acts or omissions of third parties. For example, its business interposes the Company between suppliers of information that the Company includes in its background screening reports and customers that use those reports; the Company generally agrees to indemnify and defend its customers against claims and losses that result from erroneous information provided by its suppliers, and also to indemnify and defend its suppliers against claims and losses that result from misuse of their information by its customers. The Company’s agreements with customers, suppliers, and other third parties typically include provisions limiting its liability to the counterparty, and the counterparty’s liability to the Company. However, these limits often do not apply to indemnity obligations. The Company’s rights to recover from one party for its acts or omissions may be capped below the Company’s obligation to another party for those same acts or omissions, and the Company’s obligation to provide indemnity and defense for its own acts or omissions in any particular situation may be uncapped. The Company has entered into indemnification agreements with the members of its board of directors and executive officers that require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service. In addition, customers of the Company may seek indemnity for negligent hiring claims that result from the Company’s alleged failure to identify or report adverse background information about an individual. The Company is not aware of any pending demands to provide indemnity or defense under such agreements that would reasonably be expected to have a material adverse effect on its condensed consolidated financial statements. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal ProceedingsThe Company is subject to claims, investigations, audits, and enforcement proceedings by private plaintiffs, third parties the Company does business with, and governmental and regulatory authorities charged with overseeing the enforcement of laws and regulations that govern the Company’s business. In the U.S., most of these matters arise under the federal Fair Credit Reporting Act and various state and local laws focused on privacy and the conduct and content of background reports. These claims are typically brought by individuals alleging process errors, inclusion of erroneous or impermissible information, or failure to include appropriate information in background reports prepared about them by the Company. Proceedings related to the Company’s U.S. operations may also be brought under the same laws by the Consumer Financial Protection Bureau or Federal Trade Commission, or by state authorities. Claims or proceedings may also arise under the European Union (“E.U.”) and U.K. General Data Protection Regulations and other laws around the world addressing privacy and the use of background information such as criminal and credit histories and may be brought by individuals about whom the Company has prepared background reports or by the Data Protection Authorities of E.U. member states and other governmental authorities. In addition, customers of the Company may seek indemnity for negligent hiring claims that result from the Company’s alleged failure to identify or report adverse background information about an individual. In addition to claims related to privacy and background checks, the Company is also subject to other claims and proceedings arising in the ordinary course of its business, including without limitation claims for indemnity by customers and vendors, employment-related claims, and claims for alleged taxes owed, infringement of intellectual property rights, and breach of contract. The Company accrues for contingent liabilities if it is probable that a liability has been incurred and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. Although the Company and its subsidiaries are subject to various claims and proceedings from time to time in the ordinary course of business, the Company and its subsidiaries are not party to any pending legal proceedings that the Company believes to be material. On November 6, 2020, the Company entered into a settlement agreement related to 24 lawsuits that had been filed in 2009 and 2010 against HireRight Solutions, Inc. (“Old HireRight”), which is the predecessor to the Company’s subsidiary HireRight, LLC, by approximately 1,400 individuals alleging violation of the California Investigative Consumer Reporting Agencies Act by Old HireRight and one of its customers (“Customer”) related to background reports that Old HireRight prepared for the Customer about those individuals. Pursuant to the settlement agreement, the Company paid $11.2 million on November 15, 2021, and the remaining balance of $0.3 million on March 31, 2022. The Company subsequently sued Old HireRight’s insurer to recover the costs of the settlement. The litigation involved substantial issues of law, and in order to avoid the risks of litigation, the Company and the insurer reached a settlement on September 14, 2023, pursuant to which the Company and the insurer agreed to release each other and the insurer agreed to pay the Company $7.0 million. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Revenues consist of service revenue and surcharge revenue. Service revenue consists of fees charged to customers for services provided by the Company. Surcharge revenue consists of fees charged to customers for the Company’s acquisition of data from federal, state and local jurisdictions and certain services from commercial data providers required to fulfill the Company’s performance obligations. Revenue is recognized when the Company satisfies its obligation to complete the service and delivers the screening report to the customer. Disaggregated revenues were as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands) Revenues: Service revenues $ 135,922 $ 151,256 $ 396,794 $ 451,184 Surcharge revenues 52,340 59,047 159,039 180,122 Total revenues $ 188,262 $ 210,303 $ 555,833 $ 631,306 Contract Implementation Costs Contract implementation costs represent incremental set up costs to fulfill contracts with customers, including, for example, salaries and wages incurred to onboard customers onto the Company’s platform to enable the customers to request and access completed background screening reports. Contract implementation costs, net of accumulated amortization are recorded in other non-current assets on the Company’s condensed consolidated balance sheets and amortization expense is recorded in cost of services (exclusive of depreciation and amortization) in the Company’s condensed consolidated statements of operations. Amortization of contract implementation costs included in cost of services (exclusive of depreciation and amortization) was $1.3 million and $3.7 million for the three and nine months ended September 30, 2023, respectively, and $1.1 million and $3.3 million for the three and nine months ended September 30, 2022, respectively. See Note 4 — Prepaid Expenses and Other Current Assets, and Other Non-Current Assets for contract implementation costs included in the Company’s condensed consolidated balance sheets. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense (benefit) and effective tax rates were as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands, except effective tax rate) Income (loss) before income taxes $ 2,861 $ 23,585 $ (6,125) $ 60,843 Income tax expense (benefit) 4,450 (69,704) 863 (68,456) Effective tax rate 155.5 % (295.5) % (14.1) % (112.5) % The effective tax rate for the three and nine months ended September 30, 2023, differs from the federal statutory rate of 21% primarily due to state taxes, non-deductible stock-based compensation expense, and U.S. tax on foreign operations partially offset by the recognition of stranded deferred taxes in accumulated comprehensive loss. The effective tax rate for the three and nine months ended September 30, 2022 differs from the federal statutory rate of 21% primarily due to the release of federal and state valuation allowances during the three months ended September 30, 2022 as discussed below, state taxes, and U.S. tax on foreign operations. Prior to September 2022, the Company’s net U.S. federal and state deferred tax assets were fully offset by a valuation allowance, excluding a portion of its deferred tax liabilities for tax deductible goodwill, primarily as a result of the Company’s lack of U.S. earnings history and cumulative loss position. The Company prepares a quarterly analysis of its deferred tax assets which considers positive and negative evidence, including its cumulative income (loss) position, revenue growth, continuing and improved profitability, and expectations regarding future profitability. Although the Company believes its estimates are reasonable, the ultimate determination of the appropriate amount of valuation allowance involves significant judgment. During the three months ended September 30, 2022, the Company determined sufficient positive evidence existed to conclude that the U.S. deferred tax assets are more likely than not realizable. As a result, the Company released the valuation allowance attributed to the deferred tax assets associated with the Company’s operations in the U.S. during the third quarter of 2022. There is no change in assessment as of September 30, 2023. On August 16, 2022, the “Inflation Reduction Act” (H.R. 5376) was signed into law in the United States. Among other things, the Act imposes a 15% corporate alternative minimum tax for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. During the nine months ended September 30, 2023, the Company recorded $1.1 million of excise tax related to share repurchases, which are recorded in Treasury stock on the Company’s |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plans The Company issues stock-based compensation awards under the 2021 Omnibus Incentive Plan (“Omnibus Incentive Plan”), and prior to the IPO the Company issued stock-based compensation under the HireRight GIS Group Holdings LLC Equity Incentive Plan (“Equity Plan”). At September 30, 2023, the total number of shares authorized for issuance under the Omnibus Incentive Plan was 14.2 million shares and 7.9 million shares remain available for issuance. Stock-Based Compensation Expense Stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands) Selling, general and administrative $ 4,691 $ 1,089 $ 12,844 $ 8,083 Cost of services (exclusive of depreciation and amortization) 127 193 1,045 504 Total stock-based compensation expense $ 4,818 $ 1,282 $ 13,889 $ 8,587 Stock Options under the Equity Plan For stock options issued under the Equity Plan that were outstanding and unvested as of September 30, 2023, the Company expects to recognize future compensation expense of $4.9 million over a weighted average remaining vesting period of 2.2 years. Awards under the Omnibus Incentive Plan The Company granted 46,081 options during the nine months ended September 30, 2023 under the Omnibus Incentive Plan, with a weighted average grant date fair value of $3.96 calculated using the Black-Scholes option pricing model. For options under the Omnibus Incentive Plan outstanding and unvested as of September 30, 2023, the Company expects to recognize future compensation expense of $4.9 million over a weighted average remaining vesting period of 2.2 years. The Company granted 3,389,064 restricted stock units (“RSU”), including the performance RSUs discussed below, with a weighted average grant date fair value of $9.11 per share during the nine months ended September 30, 2023 under the Omnibus Incentive Plan. For RSUs outstanding and unvested as of September 30, 2023, the Company expects to recognize future compensation expense of $31.2 million over a weighted average remaining vesting period of 2.4 years. On March 20, 2023, the Company approved a grant of a total of 2,561,275 performance RSUs. A total of 1,116,323 of these performance RSUs had a grant-date fair value of $5.67 per unit based on a Monte Carlo valuation model and may vest based upon the achievement of a market condition related to achievement of stock price targets of the Company's common stock, and are subject to continued service. The expected stock-based compensation expense for the market condition performance RSUs is $6.3 million and is expected to be recognized over the period |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Repurchase of Common Stock On November 14, 2022, the Company announced that its Board of Directors authorized a $100.0 million share repurchase program that was completed on June 21, 2023 (the “Initial Program”). Pursuant to the Initial Program, the Company repurchased a total of approximately 9.3 million shares of the Company’s common stock at an average price paid of $10.79 per share, including commissions paid and excise taxes. On June 22, 2023, the Company announced that its Board of Directors authorized an additional share repurchase program for repurchase of up to an additional $25.0 million of the Company's common stock (the “Second Program”). The Second Program was completed on August 28, 2023. Pursuant to the Second Program, the Company repurchased a total of approximately 2.4 million shares of the Company’s common stock at an average price paid of $10.82 per share, including commissions paid and excise taxes. On September 12, 2023, the Company announced a third share repurchase program for repurchase of up to an additional $25.0 million of the Company’s common stock (the “Third Program”). As of September 30, 2023, the Company purchased approximately 0.1 million shares of the Company’s common stock at an average price paid of $9.57 per share, including commissions paid and excise taxes. Approximately $24.3 million remained available for future purchases under the Third Program. Repurchases under the Third Program continued at similar rates through the date of filing of this report, and the Board of Directors has not yet determined whether to implement any further stock repurchase program after termination of the Third Program. The repurchased shares under the Initial program, the Second Program, and the Third Program are recorded as Treasury stock on the Company's condensed consolidated balance sheets. The Initial Program and the Second Program authorized, and the Third Program authorizes, repurchases in the open market in accordance with the requirements of Rule 10b-18, in privately negotiated transactions or otherwise, including through Rule 10b5-1 trading plans, with the amount and timing of repurchases depending on stock price, trading volume, market conditions and other general business considerations. The Initial Program and the Second Program did not obligate the Company to acquire any particular amount of common stock and could be extended, modified, suspended, or discontinued at any time at the Company's discretion. The Third Program has the same characteristics. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic net income (loss) per share (“EPS”) is computed by dividing net income (loss) attributable to HireRight Holdings Corporation stockholders by the weighted average number of outstanding shares during the period. The weighted average outstanding shares may include potentially dilutive equity awards. Diluted net income (loss) per share includes the effects of potentially dilutive equity awards, which include stock options, restricted stock units, and other potentially dilutive equity awards outstanding during the year. For the three and nine months ended September 30, 2023, there were 6,274,784, and 9,136,703 potentially dilutive equity awards, respectively, which were excluded from the calculations of diluted EPS because including them would have had an anti-dilutive effect. For the three and nine months ended September 30, 2022, there were 6,630,588 and 6,799,424 potentially dilutive awards, which were excluded from the calculation of diluted EPS because including them would have had an anti-dilutive effect. Basic and diluted EPS for the three and nine months ended September 30, 2023 and 2022 were: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands, except share and per share data) Numerator: Net income (loss) attributable to HireRight Holdings Corporation $ (1,655) $ 93,289 $ (7,054) $ 129,299 Denominator: Weighted average shares outstanding - basic 69,090,882 79,459,633 73,080,851 79,419,725 Effect of dilutive equity awards — 83,082 — 56,849 Weighted average shares outstanding - diluted 69,090,882 79,542,715 73,080,851 79,476,574 Net income (loss) per share attributable to HireRight Holdings Corporation: Basic $ (0.02) $ 1.17 $ (0.10) $ 1.63 Diluted $ (0.02) $ 1.17 $ (0.10) $ 1.63 |
Restructuring and Related Charg
Restructuring and Related Charges | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Charges | Restructuring and Related Charges Global Restructuring Plan In the first quarter of 2023, the Company began a global restructuring plan intended to improve the Company’s cost structure, operating efficiency, and profitability as part of its ongoing margin improvement initiatives. The plan involves reduction in force, offshoring certain functions, and other measures designed to reduce costs to achieve the Company’s long term margin goals. The plan was approved and initiated in the first quarter of 2023 and is expected to continue throughout 2023 and the first half of 2024. During the three and nine months ended September 30, 2023, the Company recognized restructuring charges of $4.6 million and $15.3 million respectively, primarily for employee severance and benefits in connection with the workforce reduction, accelerated expense on abandoned right-of-use assets, and other restructuring charges. In addition, the Company incurred professional service fees of $1.4 million and $8.6 million during the three and nine months ended September 30, 2023, respectively, for consulting costs related to the execution of the Company’s global restructuring plan. All charges were recorded as selling, general and administrative expenses and cost of services (exclusive of depreciation and amortization) in the condensed consolidated statements of operations. The Company expects to recognize additional restructuring charges in 2023 through the first half of 2024 of $6.0 million to $8.0 million, primarily for severance and benefits, professional service fees, and transition costs. The Company is continuing to evaluate operating costs and outsourcing opportunities and the expected charges related to our global restructuring plan may be greater than expected, including charges for additional severance and professional service fees. The components of the restructuring charges (including professional service fees) are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 (in thousands) Severance and benefits (1) $ 3,325 $ 11,152 Accelerated expense on abandoned right-of-use assets (2) 350 2,560 Professional fees (3) 1,373 8,628 Other (4) 927 1,624 Total restructuring charges $ 5,975 $ 23,964 (1) Charges of $1.0 million and $4.2 million recorded in cost of services (exclusive of depreciation and amortization) for the three and nine months ended September 30, 2023. Charges of $2.4 million and $7.0 million recorded in selling, general and administrative expenses for the three and nine months ended September 30, 2023. (2) Charges for accelerated expense and additional costs associated with abandoned right-of-use assets recorded in selling, general and administrative expenses. (3) Professional service fees consist of consulting costs related to the execution of the Company’s global restructuring plan to improve the Company’s cost structure, operating efficiency, and redesign and right size the organization. These charges are recorded in selling, general and administrative expenses. (4) Other charges recorded in selling, general and administrative expenses. The following table provides the components of and changes in the Company’s restructuring and related charges, included in accrued salaries and payroll and accrued expenses and other current liabilities on the condensed consolidated balance sheets: September 30, 2023 (in thousands) Balance at December 31, 2022 $ — Charges incurred (1) 21,404 Payments (18,176) Balance at September 30, 2023 $ 3,228 (1) Includes $11.2 million in charges for employee severance and benefits related to the workforce reduction, $1.9 million of which remains unpaid as of September 30, 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (1,655) | $ 93,289 | $ (7,054) | $ 129,299 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization, Basis of Presen_2
Organization, Basis of Presentation and Consolidation, and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The unaudited condensed consolidated financial statements include the Company’s accounts and those of its wholly and majority-owned subsidiaries for which the Company has a controlling interest. The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. The unaudited condensed consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 10, 2023 (“Annual Report”). The December 31, 2022 condensed consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements have been included. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared on a consistent basis with the accounting policies described in Note 1 of the notes to the audited consolidated financial statements for the year ended December 31, 2022, included in the Annual Report. |
Principles of Consolidation | Basis of Presentation and Principles of Consolidation The unaudited condensed consolidated financial statements include the Company’s accounts and those of its wholly and majority-owned subsidiaries for which the Company has a controlling interest. The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. The unaudited condensed consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 10, 2023 (“Annual Report”). The December 31, 2022 condensed consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements have been included. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements have been prepared on a consistent basis with the accounting policies described in Note 1 of the notes to the audited consolidated financial statements for the year ended December 31, 2022, included in the Annual Report. |
Business Combinations | Business Combinations On July 3, 2023, the Company completed the acquisition of a controlling equity interest in a privately-held company. See Note 3 — Business Combinations for additional information. Business combinations are accounted for under Accounting Standards Codification (“ASC”) 805—Business Combinations, using the acquisition method of accounting under which all acquired tangible and identifiable intangible assets and assumed liabilities and applicable noncontrolling interests are recognized at fair value as of the respective acquisition date, while the costs associated with the acquisition of a business are expensed as incurred. |
Noncontrolling Interest | Noncontrolling InterestAs a result of the Company’s acquisition of a majority interest in a privately-held company on July 3, 2023, the Company’s condensed consolidated financial statements present noncontrolling interest. Noncontrolling interest represents the portion of profit or loss, comprehensive profit or loss, and net assets of the acquired company that are not allocable to the Company. |
Use of Estimates | Use of Estimates Preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates, judgments, and assumptions that affect the amounts reported and disclosed in the financial statements. The Company believes that the estimates, judgments, and assumptions used to determine certain amounts that affect the financial statements are reasonable based upon information available at the time they are made. The Company uses such estimates, judgments, and assumptions when accounting for items and matters such as, but not limited to, the allowance for credit losses, customer rebates, impairment assessments and charges, recoverability of long-lived assets, deferred tax assets, lease accounting, uncertain tax positions, income tax expense, liabilities under the TRA, derivative instruments, fair value of debt, stock-based compensation expense, useful lives assigned to long-lived assets, the allocation of purchase consideration, and the stand-alone selling price of performance obligations for revenue recognition purposes. Results and outcomes could differ materially from these estimates, judgments, and assumptions due to risks and uncertainties. |
Recently Issued Accounting Pronouncements Adopted and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Adopted Accounting Pronouncements Adopted in 2023 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which delayed the effective date for this guidance until the fiscal year beginning after December 15, 2022 including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2016-13 effective January 1, 2023, using the modified retrospective transition method. The adoption of this ASU did not have a material impact on the condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which aims to improve the accounting for acquired revenue contracts with customers in a business combination. The ASU requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The new guidance is effective for the Company for annual periods beginning after December 15, 2023 and interim periods within those fiscal years. The Company adopted ASU 2021-08 effective January 1, 2023. The adoption of this ASU did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04 , “Reference Rate Reform (Topic 848),” which provides temporary, optional practical expedients and exceptions to enable a smoother transition to the new reference rates which will replace the London Interbank Offered Rate (“LIBOR”) and other reference rates expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope, ” which expanded the scope of Topic 848 to include derivative instruments impacted by the discounting transition. In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” which extended the temporary accounting rules under Topic 848 from December 31, 2022 to December 31, 2024. The Company does not expect the adoption of this guidance to have a material impact on the condensed consolidated financial statements. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Paid and Assets and Liabilities Acquired | The following table summarizes the purchase consideration. As of (in thousands) Consideration transferred, net of cash acquired (1) $ 23,903 Estimated fair value of noncontrolling interest 17,647 Total consideration $ 41,550 |
Schedule of Allocation of Fair Value of Consideration Transferred | The following table presents the preliminary allocation of the fair value of consideration transferred: As of (in thousands) Current assets $ 1,742 Other non-current assets 470 Intangible assets 24,100 Goodwill 22,669 Total assets acquired 48,981 Accounts payable and accrued liabilities 814 Long-term deferred tax liabilities 6,333 Other non-current liabilities 284 Total liabilities assumed 7,431 Net assets acquired $ 41,550 |
Schedule of Identifiable Intangible Assets Acquired | Identifiable intangible assets acquired in the DTIS Acquisition and their useful lives consist of the following: Useful lives As of (in thousands) Biometric screening platform 12.5 years $ 23,700 Trade names 8.5 years 400 Total $ 24,100 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets, and Other Non-Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | The components of prepaid expenses and other current assets were as follows: September 30, 2023 December 31, 2022 (in thousands) Prepaid software licenses, maintenance and insurance $ 13,381 $ 9,237 Other prepaid expenses and current assets 12,737 9,508 Total prepaid expenses and other current assets $ 26,118 $ 18,745 |
Schedule of Other Non-Current Assets | The components of other non-current assets were as follows: September 30, 2023 December 31, 2022 (in thousands) Contract implementation assets $ 18,838 $ 17,983 Other non-current assets 2,137 966 Total other non-current assets $ 20,975 $ 18,949 |
Right-of-Use Assets and Lease_2
Right-of-Use Assets and Lease Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Operating Leases | The Company’s operating leases were as follows: September 30, 2023 December 31, 2022 (in thousands) Right-of-use assets, net (1) $ 6,352 $ 8,423 Current operating lease liabilities (2) $ 4,316 $ 5,509 Operating lease liabilities, long-term (2) 9,313 10,055 Total operating lease liabilities $ 13,629 $ 15,564 (1) Includes impact of accelerated expense on abandoned right-of-use assets related to the global restructuring plan, see Note 21 — Restructuring and Related Charges for additional information. (2) Current and long-term operating lease liabilities are recorded in accrued expenses and other current liabilities |
Schedule of Supplemental Cash Flow Information and Weighted Average remaining Lease Term and Weighted Average Discount Rate | Supplemental cash flow information related to leases was as follows: Nine Months Ended 2023 2022 (in thousands) Cash paid for amounts included in measurement of operating lease liabilities $ 4,641 $ 4,193 ROU assets obtained in exchange for operating lease liabilities $ 897 $ 10,896 The weighted average remaining lease term and weighted average discount rate for the Company’s operating leases were as follows: September 30, 2023 2022 Weighted average remaining lease term (in years) 4.12 4.22 Weighted average discount rate 5.3 % 4.6 % |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the nine months ended September 30, 2023, were as follows: (in thousands) Balance at December 31, 2022 $ 809,463 Foreign currency translation 585 Acquired goodwill (1) 23,216 Balance as of September 30, 2023 $ 833,264 (1) Acquired goodwill includes $0.5 million of acquired goodwill related to immaterial acquisitions. |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | The components of accrued expenses and other current liabilities were as follows: September 30, 2023 December 31, 2022 (in thousands) Accrued data costs $ 38,509 $ 34,080 Tax receivable agreement liability, current portion 27,039 — Other 36,641 41,128 Total accrued expenses and other current liabilities $ 102,189 $ 75,208 |
Accrued Salaries and Payroll (T
Accrued Salaries and Payroll (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Salaries and Payroll | The components of accrued salaries and payroll were as follows: September 30, 2023 December 31, 2022 (in thousands) Wages, benefits and taxes (1) $ 18,418 $ 15,198 Accrued bonus 12,383 15,877 Total accrued salaries and payroll $ 30,801 $ 31,075 (1) Accrued wages, benefits and taxes at September 30, 2023 includes $1.9 million in accrued employee severance and benefits related to the workforce reduction. See Note 21 — Restructuring and Related Charges for additional information. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The components of debt were as follows: September 30, 2023 December 31, 2022 (in thousands) Second Amended First Lien Term Loan Facility $ 750,000 $ 699,513 Second Amended Revolving Credit Facility — — Total debt 750,000 699,513 Less: Unamortized original issue discount (11,852) (1,464) Less: Unamortized debt issuance costs (4,310) (6,493) Less: Current portion of long-term debt (7,500) (8,350) Long-term debt, less current portion $ 726,338 $ 683,206 |
Schedule of Amortization of Debt Discount and Debt Issuance | Amortization of debt discount and debt issuance costs related to the Second Amended First Lien Term Loan Facility are included in interest expense in the condensed consolidated statements of operations and were as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands) Debt discount amortization $ 139 $ 133 $ 413 $ 395 Debt issuance costs amortization 609 588 1,812 1,750 Total debt discount and issuance costs $ 748 $ 721 $ 2,225 $ 2,145 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Estimated Fair Value | The estimated fair values were as follows: September 30, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Second Amended First Lien Term Loan Facility $ 738,148 $ 739,070 $ 698,049 $ 673,617 Second Amended Revolving Credit Facility — — — — Total debt $ 738,148 $ 739,070 $ 698,049 $ 673,617 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Expense Reclassification | The Company reclassified interest expense related to hedges of these transactions into earnings as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands) Reclassification of the effective portion of the gain on the Interest Rate Swap Agreements into interest expense $ — $ — $ — $ 1,679 Reclassification of unrealized gains related to terminated Interest Rate Swap Agreements into interest expense (2,088) (3,413) (6,890) (9,676) Total reclassification adjustments included in earnings $ (2,088) $ (3,413) $ (6,890) $ (7,997) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) as of September 30, 2023 and December 31, 2022 were as follows: Derivative Currency Total (in thousands) Balance at December 31, 2022 $ 8,849 $ (13,793) $ (4,944) Other comprehensive loss (6,890) 414 (6,476) Balance at September 30, 2023 $ 1,959 $ (13,379) $ (11,420) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenues and Property and Equipment by Geographic Region | Revenues are attributed to each geographic region based on the location of the HireRight entity that has contracted for the services that result in the revenues. The following table summarizes the Company’s revenues by region: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands, except percent) Revenues: United States $ 174,632 92.8 % $ 194,081 92.3 % $ 513,592 92.4 % $ 582,817 92.3 % International 13,630 7.2 % 16,222 7.7 % 42,241 7.6 % 48,489 7.7 % Total revenues $ 188,262 100.0 % $ 210,303 100.0 % $ 555,833 100.0 % $ 631,306 100.0 % The following table summarizes the Company’s long-lived assets, which consist of property and equipment, net, and operating lease ROU assets, net, by geographic region: September 30, 2023 December 31, 2022 (in thousands) Long-lived assets: United States $ 7,739 $ 10,811 International 5,803 6,657 Total long-lived assets $ 13,542 $ 17,468 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Disaggregated revenues were as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands) Revenues: Service revenues $ 135,922 $ 151,256 $ 396,794 $ 451,184 Surcharge revenues 52,340 59,047 159,039 180,122 Total revenues $ 188,262 $ 210,303 $ 555,833 $ 631,306 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) and Effective Tax Rates | Income tax expense (benefit) and effective tax rates were as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands, except effective tax rate) Income (loss) before income taxes $ 2,861 $ 23,585 $ (6,125) $ 60,843 Income tax expense (benefit) 4,450 (69,704) 863 (68,456) Effective tax rate 155.5 % (295.5) % (14.1) % (112.5) % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense | Stock-based compensation expense recognized in the condensed consolidated statements of operations was as follows: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands) Selling, general and administrative $ 4,691 $ 1,089 $ 12,844 $ 8,083 Cost of services (exclusive of depreciation and amortization) 127 193 1,045 504 Total stock-based compensation expense $ 4,818 $ 1,282 $ 13,889 $ 8,587 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Basic and diluted EPS for the three and nine months ended September 30, 2023 and 2022 were: Three Months Ended September 30, Nine Months Ended 2023 2022 2023 2022 (in thousands, except share and per share data) Numerator: Net income (loss) attributable to HireRight Holdings Corporation $ (1,655) $ 93,289 $ (7,054) $ 129,299 Denominator: Weighted average shares outstanding - basic 69,090,882 79,459,633 73,080,851 79,419,725 Effect of dilutive equity awards — 83,082 — 56,849 Weighted average shares outstanding - diluted 69,090,882 79,542,715 73,080,851 79,476,574 Net income (loss) per share attributable to HireRight Holdings Corporation: Basic $ (0.02) $ 1.17 $ (0.10) $ 1.63 Diluted $ (0.02) $ 1.17 $ (0.10) $ 1.63 |
Restructuring and Related Cha_2
Restructuring and Related Charges (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Components of and Changes in Restructuring and Related Charges | The components of the restructuring charges (including professional service fees) are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 (in thousands) Severance and benefits (1) $ 3,325 $ 11,152 Accelerated expense on abandoned right-of-use assets (2) 350 2,560 Professional fees (3) 1,373 8,628 Other (4) 927 1,624 Total restructuring charges $ 5,975 $ 23,964 (1) Charges of $1.0 million and $4.2 million recorded in cost of services (exclusive of depreciation and amortization) for the three and nine months ended September 30, 2023. Charges of $2.4 million and $7.0 million recorded in selling, general and administrative expenses for the three and nine months ended September 30, 2023. (2) Charges for accelerated expense and additional costs associated with abandoned right-of-use assets recorded in selling, general and administrative expenses. (3) Professional service fees consist of consulting costs related to the execution of the Company’s global restructuring plan to improve the Company’s cost structure, operating efficiency, and redesign and right size the organization. These charges are recorded in selling, general and administrative expenses. (4) Other charges recorded in selling, general and administrative expenses. The following table provides the components of and changes in the Company’s restructuring and related charges, included in accrued salaries and payroll and accrued expenses and other current liabilities on the condensed consolidated balance sheets: September 30, 2023 (in thousands) Balance at December 31, 2022 $ — Charges incurred (1) 21,404 Payments (18,176) Balance at September 30, 2023 $ 3,228 (1) Includes $11.2 million in charges for employee severance and benefits related to the workforce reduction, $1.9 million of which remains unpaid as of September 30, 2023. |
Organization, Basis of Presen_3
Organization, Basis of Presentation and Consolidation, and Significant Accounting Policies (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Tax receivable agreements, term | 12 years | |
Tax receivable agreements, percentage of benefits payable to shareholders | 0.85 | |
Tax receivable agreements, estimated tax liability, current and noncurrent | $ 210.5 | $ 210.5 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 03, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Cash holdback amount | $ 2,250 | $ 0 | ||
One Leading Professional Organization | Digital Technology Identity Services, LLC | ||||
Business Acquisition [Line Items] | ||||
Remaining ownership percentage | 40% | |||
Digital Technology Identity Services, LLC | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests in agreement | 60% | |||
Total purchase price | $ 26,500 | |||
Cash holdback period | 1 year | |||
Cash holdback amount | $ 2,300 | |||
Threshold holdback term, period following the first anniversary of closing date | 15 days | |||
Acquisition related costs | $ 100 | $ 400 | ||
Business acquisition, goodwill, expected tax deductible amount | $ 0 | |||
Digital Technology Identity Services, LLC | Biometric screening platform | Measurement Input, Discount Rate | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, measurement input | 19% | |||
Digital Technology Identity Services, LLC | Trade names | Measurement Input, Discount Rate | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, measurement input | 19% | |||
Digital Technology Identity Services, LLC | Trade names | Measurement Input, Royalty Rate | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, measurement input | 1% |
Business Combinations - Conside
Business Combinations - Consideration Paid and Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 03, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | |||
Consideration transferred, net of cash acquired | $ 21,653 | $ 0 | |
Acquisition cash holdback | $ 2,250 | $ 0 | |
Digital Technology Identity Services, LLC | |||
Business Acquisition [Line Items] | |||
Consideration transferred, net of cash acquired | $ 23,903 | ||
Estimated fair value of noncontrolling interest | 17,647 | ||
Total consideration | $ 41,550 | ||
Cash holdback period | 1 year | ||
Acquisition cash holdback | $ 2,300 |
Business Combinations - Allocat
Business Combinations - Allocation of Fair Value of Consideration Transferred (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jul. 03, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 833,264 | $ 809,463 | |
Digital Technology Identity Services, LLC | |||
Business Acquisition [Line Items] | |||
Current assets | $ 1,742 | ||
Other non-current assets | 470 | ||
Intangible assets | 24,100 | ||
Goodwill | 22,669 | ||
Total assets acquired | 48,981 | ||
Accounts payable and accrued liabilities | 814 | ||
Long-term deferred tax liabilities | 6,333 | ||
Other non-current liabilities | 284 | ||
Total liabilities assumed | 7,431 | ||
Net assets acquired | $ 41,550 |
Business Combinations - Identif
Business Combinations - Identifiable Intangible Assets Acquired (Details) - Digital Technology Identity Services, LLC $ in Thousands | Jul. 03, 2023 USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 24,100 |
Biometric screening platform | |
Business Acquisition [Line Items] | |
Useful lives | 12 years 6 months |
Intangible assets | $ 23,700 |
Trade names | |
Business Acquisition [Line Items] | |
Useful lives | 8 years 6 months |
Intangible assets | $ 400 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets, and Other Non-Current Assets - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid software licenses, maintenance and insurance | $ 13,381 | $ 9,237 |
Other prepaid expenses and current assets | 12,737 | 9,508 |
Total prepaid expenses and other current assets | $ 26,118 | $ 18,745 |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets, and Other Non-Current Assets - Other Non-Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Contract implementation assets | $ 18,838 | $ 17,983 |
Other non-current assets | 2,137 | 966 |
Total other non-current assets | $ 20,975 | $ 18,949 |
Right-of-Use Assets and Lease_3
Right-of-Use Assets and Lease Liabilities - Narrative (Details) | Sep. 30, 2023 option |
Lessee, Lease, Description [Line Items] | |
Number of renewal options (at least) | 1 |
Lease renewal term | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease term | 12 years |
Right-of-Use Assets and Lease_4
Right-of-Use Assets and Lease Liabilities - Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Right-of-use assets, net | $ 6,352 | $ 8,423 |
Current operating lease liabilities | 4,316 | 5,509 |
Operating lease liabilities, long-term | 9,313 | 10,055 |
Total operating lease liabilities | $ 13,629 | $ 15,564 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Right-of-Use Assets and Lease_5
Right-of-Use Assets and Lease Liabilities - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Cash paid for amounts included in measurement of operating lease liabilities | $ 4,641 | $ 4,193 |
ROU assets obtained in exchange for operating lease liabilities | $ 897 | $ 10,896 |
Right-of-Use Assets and Lease_6
Right-of-Use Assets and Lease Liabilities - Weighted Average remaining Lease Term and Weighted Average Discount Rate (Details) | Sep. 30, 2023 | Sep. 30, 2022 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 4 years 1 month 13 days | 4 years 2 months 19 days |
Weighted average discount rate | 5.30% | 4.60% |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 809,463 |
Foreign currency translation | 585 |
Acquired goodwill | 23,216 |
Ending balance | 833,264 |
Immaterial Business Acquisitions | |
Goodwill [Roll Forward] | |
Acquired goodwill | $ 500 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued data costs | $ 38,509 | $ 34,080 |
Tax receivable agreement liability, current portion | 27,039 | 0 |
Other | 36,641 | 41,128 |
Total accrued expenses and other current liabilities | $ 102,189 | $ 75,208 |
Accrued Salaries and Payroll (D
Accrued Salaries and Payroll (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Wages, benefits and taxes | $ 18,418 | $ 15,198 |
Accrued bonus | 12,383 | 15,877 |
Total accrued salaries and payroll | 30,801 | 31,075 |
Global Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and benefits | 3,228 | $ 0 |
Global Restructuring Plan | Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and benefits | $ 1,900 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 750,000 | $ 699,513 |
Less: Unamortized original issue discount | (11,852) | (1,464) |
Less: Unamortized debt issuance costs | (4,310) | (6,493) |
Less: Current portion of long-term debt | (7,500) | (8,350) |
Debt, long-term portion | 726,338 | 683,206 |
Second Amended First Lien Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 750,000 | 699,513 |
Second Amended Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Total debt | $ 0 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 28, 2023 | Jun. 03, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jul. 12, 2018 | |
Debt Instrument [Line Items] | ||||||||
Amortization of debt issuance costs | $ 2,404,000 | $ 2,549,000 | ||||||
Weighted average interest rate | 8.80% | 8.80% | 5.50% | |||||
Line of Credit | First Lien Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount | $ 835,000,000 | |||||||
Line of Credit | First Lien Facility, Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 100,000,000 | |||||||
Line of Credit | Letter of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 40,000,000 | |||||||
Letters of credit outstanding | $ 1,300,000 | $ 1,300,000 | ||||||
Line of Credit | Amended First Lien Facility, Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 145,000,000 | |||||||
Line of Credit | Amended First Lien Facility, Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Days prior to term loan debt, gross | 91 days | |||||||
Line of Credit | Second Amended Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 160,000,000 | |||||||
Available borrowing | $ 158,700,000 | $ 158,700,000 | ||||||
Unused capacity, commitment fee percentage | 0.38% | 0.38% | ||||||
Debt instrument leverage ratio percent | 35% | 35% | 35% | |||||
Amortization of debt issuance costs | $ 100,000 | $ 100,000 | $ 200,000 | 400,000 | ||||
Line of Credit | Second Amended Revolving Credit Facility | SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin for borrowing | 3% | |||||||
Line of Credit | Second Amended Revolving Credit Facility | ABR | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin for borrowing | 2% | |||||||
Line of Credit | Second Amended Revolving Credit Facility | One-month SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.50% | |||||||
Line of Credit | Second Amended First Lien Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount | $ 750,000,000 | |||||||
Original issue discount | 1.50% | |||||||
Periodic payment percentage of principal | 0.25% | |||||||
Periodic payment, amount | $ 1,900,000 | |||||||
Term of voluntary prepayment of term loan | 6 months | |||||||
Prepayment premium | 1% | |||||||
Unamortized debt discount | $ 11,900,000 | |||||||
Unamortized debt issuance cost | $ 4,300,000 | |||||||
Loss on modification and extinguishment of debt | 7,800,000 | $ 7,800,000 | ||||||
Debt instrument, minimum conversion threshold | 2,500,000 | 2,500,000 | ||||||
Amortization of debt issuance costs | $ 609,000 | $ 588,000 | $ 1,812,000 | $ 1,750,000 | ||||
Line of Credit | Second Amended First Lien Term Loan Facility | Variable Rate Component, Scenario Three | ||||||||
Debt Instrument [Line Items] | ||||||||
Alternative base rate | 0% | |||||||
Line of Credit | Second Amended First Lien Term Loan Facility | SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4% | |||||||
Line of Credit | Second Amended First Lien Term Loan Facility | ABR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 3% | |||||||
Line of Credit | Second Amended First Lien Term Loan Facility | One-month SOFR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 4% | |||||||
Line of Credit | Second Amended First Lien Term Loan Facility | One-month SOFR | Variable Rate Component, Scenario Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1% | |||||||
Line of Credit | Second Amended First Lien Term Loan Facility | Federal Funds | Variable Rate Component, Scenario One | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% |
Debt - Amortization of Debt Dis
Debt - Amortization of Debt Discount and Debt Issuance Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Debt issuance costs amortization | $ 2,404 | $ 2,549 | ||
Second Amended First Lien Term Loan Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Debt discount amortization | $ 139 | $ 133 | 413 | 395 |
Debt issuance costs amortization | 609 | 588 | 1,812 | 1,750 |
Total debt discount and issuance costs | $ 748 | $ 721 | $ 2,225 | $ 2,145 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | $ 738,148 | $ 698,049 |
Carrying Value | Line of Credit | Second Amended First Lien Term Loan Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | 738,148 | 698,049 |
Carrying Value | Line of Credit | Second Amended Revolving Credit Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | 0 | 0 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | 739,070 | 673,617 |
Fair Value | Line of Credit | Second Amended First Lien Term Loan Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | 739,070 | 673,617 |
Fair Value | Line of Credit | Second Amended Revolving Credit Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | $ 0 | $ 0 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Feb. 18, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2018 | |
Derivative [Line Items] | ||||
Payments for termination of interest rate swap | $ 0 | $ 18,445 | ||
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Notional amount | $ 700,000 | |||
Payments for termination of interest rate swap | $ 18,400 | |||
Unrealized gains related to terminated interest rate swap | $ 21,500 |
Derivative Instruments - Intere
Derivative Instruments - Interest Expense Reclassification (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Derivative [Line Items] | |||||
Total reclassification adjustments included in earnings | [1] | $ (2,088) | $ (3,413) | $ (6,890) | $ (7,997) |
Reclassification of the effective portion of the gain on the Interest Rate Swap Agreements into interest expense | |||||
Derivative [Line Items] | |||||
Total reclassification adjustments included in earnings | 0 | 0 | 0 | 1,679 | |
Reclassification of unrealized gains related to terminated Interest Rate Swap Agreements into interest expense | |||||
Derivative [Line Items] | |||||
Total reclassification adjustments included in earnings | $ (2,088) | $ (3,413) | $ (6,890) | $ (9,676) | |
[1]Represents the reclassification of the effective portion of the gain on the Company's interest rate swaps into interest expense. Includes reclassification to earnings as a reduction to interest expense of unrealized gains included in accumulated other comprehensive loss on the condensed consolidated balance sheet related to the interest rate swap agreements terminated on February 18, 2022. See Note 12 for additional information. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 486,399 | $ 478,473 | $ 568,318 | $ 445,717 |
Other comprehensive loss | (6,406) | (15,978) | (6,476) | (26,416) |
Ending balance | 476,877 | 557,702 | 476,877 | 557,702 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (5,014) | 2,182 | (4,944) | 12,620 |
Other comprehensive loss | (6,406) | (15,978) | (6,476) | (26,416) |
Ending balance | (11,420) | $ (13,796) | (11,420) | $ (13,796) |
Derivative Instruments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 8,849 | |||
Other comprehensive loss | (6,890) | |||
Ending balance | 1,959 | 1,959 | ||
Currency Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (13,793) | |||
Other comprehensive loss | 414 | |||
Ending balance | $ (13,379) | $ (13,379) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Narrative (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Equity [Abstract] | |
Interest expense on hedges expected to be reclassified into earnings, next twelve months | $ 2 |
Segment and Geographic Inform_3
Segment and Geographic Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segment and Geographic Inform_4
Segment and Geographic Information -Schedule of Revenues and Property and Equipment by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | $ 188,262 | $ 210,303 | $ 555,833 | $ 631,306 | |
Total long-lived assets | 13,542 | $ 13,542 | $ 17,468 | ||
Geographic Concentration Risk | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | $ 188,262 | $ 210,303 | |||
Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Percentage of revenue by geographic region | 100% | 100% | 100% | 100% | |
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total long-lived assets | $ 7,739 | $ 7,739 | 10,811 | ||
United States | Geographic Concentration Risk | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | $ 174,632 | $ 194,081 | $ 513,592 | $ 582,817 | |
United States | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Percentage of revenue by geographic region | 92.80% | 92.30% | 92.40% | 92.30% | |
International | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total long-lived assets | $ 5,803 | $ 5,803 | $ 6,657 | ||
International | Geographic Concentration Risk | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | $ 13,630 | $ 16,222 | $ 42,241 | $ 48,489 | |
International | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Percentage of revenue by geographic region | 7.20% | 7.70% | 7.60% | 7.70% |
Legal Proceedings (Details)
Legal Proceedings (Details) $ in Millions | Sep. 14, 2023 USD ($) | Nov. 15, 2021 USD ($) | Nov. 06, 2020 individual lawsuit | Mar. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | ||||
Number of lawsuits filed | lawsuit | 24 | |||
Number of individuals alleging violation | individual | 1,400 | |||
Initial payment legal settlement | $ 11.2 | |||
Litigation settlements accrued | $ 0.3 | |||
Litigation settlement, amount awarded from insurer | $ 7 | |||
Recovery of net of settlement fees paid | $ 5.9 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 188,262 | $ 210,303 | $ 555,833 | $ 631,306 |
Service revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 135,922 | 151,256 | 396,794 | 451,184 |
Surcharge revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 52,340 | $ 59,047 | $ 159,039 | $ 180,122 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Amortization of contract assets | $ 1,300 | $ 1,100 | $ 3,742 | $ 3,312 |
Income Taxes -Schedule of Incom
Income Taxes -Schedule of Income Tax Expense (Benefit) and Effective Tax Rates (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income (loss) before income taxes | $ 2,861 | $ 23,585 | $ (6,125) | $ 60,843 |
Income tax expense (benefit) | $ 4,450 | $ (69,704) | $ 863 | $ (68,456) |
Effective tax rate | 155.50% | (295.50%) | (14.10%) | (112.50%) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Income Tax Disclosure [Abstract] | |
Excise taxes collected | $ 1.1 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Mar. 20, 2023 | Sep. 30, 2023 | |
Omnibus incentive plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized to issue (in shares) | 14,200,000 | |
Available for issuance (in shares) | 7,900,000 | |
Number of options granted (in shares) | 46,081 | |
Weighted-average grant date fair value for options granted (in dollars per share) | $ 3.96 | |
Time Vesting, Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense not yet recognized | $ 4.9 | |
Compensation expense not yet recognized, weighted-average period | 2 years 2 months 12 days | |
Options | Omnibus incentive plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense not yet recognized | $ 4.9 | |
Compensation expense not yet recognized, weighted-average period | 2 years 2 months 12 days | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense not yet recognized | $ 31.2 | |
Compensation expense not yet recognized, weighted-average period | 2 years 4 months 24 days | |
Granted in period (in shares) | 3,389,064 | |
Granted, weighted average grant date fair value (in dollars per share) | $ 9.11 | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted in period (in shares) | 2,561,275 | |
Performance Shares, Market Conditions | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted in period (in shares) | 1,116,323 | |
Granted, weighted average grant date fair value (in dollars per share) | $ 5.67 | |
Equity-based compensation expense (benefit) | $ 6.3 | |
Performance Shares, AEBITDA Performance | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted in period (in shares) | 1,444,952 | |
Granted, weighted average grant date fair value (in dollars per share) | $ 10.90 | |
Equity-based compensation expense (benefit) | $ 15.8 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense (benefit) | $ 4,818 | $ 1,282 | $ 13,889 | $ 8,587 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense (benefit) | 4,691 | 1,089 | 12,844 | 8,083 |
Cost of services (exclusive of depreciation and amortization) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense (benefit) | $ 127 | $ 193 | $ 1,045 | $ 504 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 7 Months Ended | ||||
Sep. 30, 2023 | Jun. 22, 2023 | Jun. 21, 2023 | Sep. 12, 2023 | Nov. 14, 2022 | |
Initial Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 100 | ||||
Repurchase of common stock (in shares) | 9.3 | ||||
Shares acquired, average cost per share (in dollars per share) | $ 10.79 | ||||
Second Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Repurchase of common stock (in shares) | 2.4 | ||||
Shares acquired, average cost per share (in dollars per share) | $ 10.82 | ||||
Stock repurchase program, additional authorized amount | $ 25 | ||||
Third Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Repurchase of common stock (in shares) | 0.1 | ||||
Shares acquired, average cost per share (in dollars per share) | $ 9.57 | ||||
Stock repurchase program, additional authorized amount | $ 25 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 24.3 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per unit (in shares) | 6,274,784 | 6,630,588 | 9,136,703 | 6,799,424 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net income (loss) attributable to HireRight Holdings Corporation | $ (1,655) | $ 93,289 | $ (7,054) | $ 129,299 |
Denominator: | ||||
Weighted average shares outstanding - basic (in shares) | 69,090,882 | 79,459,633 | 73,080,851 | 79,419,725 |
Effect of dilutive equity awards (in shares) | 0 | 83,082 | 0 | 56,849 |
Weighted average shares outstanding - diluted (in shares) | 69,090,882 | 79,542,715 | 73,080,851 | 79,476,574 |
Net income (loss) per share attributable to HireRight Holdings Corporation: | ||||
Basic (in dollars per share) | $ (0.02) | $ 1.17 | $ (0.10) | $ 1.63 |
Diluted (in dollars per share) | $ (0.02) | $ 1.17 | $ (0.10) | $ 1.63 |
Restructuring and Related Cha_3
Restructuring and Related Charges - Narrative (Details) - Global Restructuring Plan $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 4,600 | $ 15,300 |
Professional fees | 1,373 | 8,628 |
Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, expected cost remaining | 6,000 | 6,000 |
Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, expected cost remaining | $ 8,000 | $ 8,000 |
Restructuring and Related Cha_4
Restructuring and Related Charges - Schedule of Restructuring Charges (Details) - Global Restructuring Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Severance and benefits | $ 3,325 | $ 11,152 |
Accelerated expense on abandoned right-of-use assets | 350 | 2,560 |
Professional fees | 1,373 | 8,628 |
Other | 927 | 1,624 |
Total restructuring charges | 5,975 | 23,964 |
Cost of Goods and Service, Excluding Depreciation, Depletion, and Amortization | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and benefits | 1,000 | 4,200 |
Selling, general and administrative | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and benefits | $ 2,400 | $ 7,000 |
Restructuring and Related Cha_5
Restructuring and Related Charges - Changes in Restructuring and Related Charges (Details) - Global Restructuring Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring Reserve | ||
Beginning Balance | $ 0 | |
Charges incurred | 21,404 | |
Payments | (18,176) | |
Ending Balance | $ 3,228 | 3,228 |
Severance and benefits | 3,325 | 11,152 |
Employee Severance | ||
Restructuring Reserve | ||
Ending Balance | $ 1,900 | $ 1,900 |