Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 03, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Definitive Healthcare Corp. | |
Entity Central Index Key | 0001861795 | |
Entity Tax Identification Number | 86-3988281 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity File Number | 001-40815 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 550 Cochituate Road | |
Entity Address, City or Town | Framingham | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01701 | |
City Area Code | 508 | |
Local Phone Number | 720-4224 | |
Trading Symbol | DH | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock Shares Outstanding | 97,660,738 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 229,795 | $ 387,498 |
Short-term investments | 109,027 | |
Accounts receivable, net | 38,465 | 43,336 |
Prepaid expenses and other current assets | 7,208 | 6,518 |
Current portion of deferred contract costs | 7,657 | 6,880 |
Total current assets | 392,152 | 444,232 |
Property and equipment, net | 4,818 | 5,069 |
Operating lease right-of-use assets | 18,811 | 0 |
Other assets | 2,876 | 8,273 |
Deferred contract costs, net of current portion | 12,314 | 11,667 |
Deferred tax asset | 158 | |
Investment in equity securities | 32,675 | |
Intangible assets, net | 387,241 | 352,470 |
Goodwill | 1,323,516 | 1,261,444 |
Total assets | 2,141,728 | 2,115,988 |
Current liabilities: | ||
Accounts payable | 6,207 | 4,651 |
Accrued expenses and other current liabilities | 12,837 | 22,658 |
Current portion of deferred revenue | 93,574 | 83,611 |
Current portion of term loan | 6,875 | 6,875 |
Operating lease liabilities current | 2,522 | 0 |
Total current liabilities | 122,015 | 117,795 |
Long term liabilities: | ||
Deferred revenue | 387 | 412 |
Term loan, net of current portion | 262,226 | 263,808 |
Operating lease liabilities, net of current portion | 17,728 | |
Tax receivable agreements liability | 154,673 | 153,529 |
Deferred tax liabilities | 86,144 | 75,888 |
Other long-term liabilities | 1,290 | 1,294 |
Total liabilities | 644,463 | 612,726 |
Equity: | ||
Additional paid-in capital | 899,485 | 890,724 |
Accumulated other comprehensive income | 918 | 62 |
Accumulated deficit | (26,301) | (17,677) |
Noncontrolling interests | 623,065 | 630,056 |
Total equity | 1,497,265 | 1,503,262 |
Total liabilities and equity | 2,141,728 | 2,115,988 |
Common Class A | ||
Equity: | ||
Common stock, value | 98 | 97 |
Common Class B | ||
Equity: | ||
Common stock, value | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Common Class A | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 97,574,397 | 97,030,095 |
Common stock, shares outstanding | 97,574,397 | 97,030,095 |
Common Class B | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, shares issued | 57,666,776 | 58,244,627 |
Common stock, shares outstanding | 55,040,110 | 55,488,221 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Income Statement [Abstract] | |||
Revenue | $ 50,124 | $ 36,936 | |
Cost of revenue: | |||
Cost of revenue exclusive of amortization shown below | 5,950 | 4,196 | |
Amortization | 5,378 | 5,241 | |
Gross profit | 38,796 | 27,499 | |
Operating expenses: | |||
Sales and marketing | 21,293 | 11,743 | |
Product development | 6,850 | 3,794 | |
General and administrative | 10,454 | 4,636 | |
Depreciation and amortization | 9,874 | 9,446 | |
Transaction expenses | 1,310 | 38 | |
Total operating expenses | 49,781 | 29,657 | |
Loss from operations | (10,985) | (2,158) | |
Other expense, net: | |||
Other (expense) income, net | (101) | 124 | |
Interest expense, net | (1,884) | (8,454) | |
Total other expense, net | (1,985) | (8,330) | |
Net loss before income taxes | (12,970) | (10,488) | |
Provision for income taxes | (87) | 0 | |
Net loss | (13,057) | (10,488) | |
Less: Net loss attributable to Definitive OpCo prior to the Reorganization Transactions | 0 | (10,488) | |
Less: Net loss attributable to noncontrolling interests | (4,433) | 0 | |
Net loss attributable to Definitive Healthcare Corp. | $ (8,624) | $ 0 | |
Net loss per share of Class A common stock: | |||
Basic and diluted | [1] | $ (0.09) | |
Weighted average Common Stock outstanding: | |||
Basic and diluted | [1] | 97,158,823 | |
[1] | (1) Basic and diluted net loss per share of Class A Common Stock is applicable only for the periods beginning from September 15, 2021, which is the period following the IPO and related Reorganization Transactions. See Note 18 for the number of shares used in the computation of net loss per share of Class A Common Stock and the basis for the computation of net loss per share. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (13,057) | $ (10,488) |
Other comprehensive loss: | ||
Foreign currency translation adjustments | 6 | 163 |
Unrealized loss on available-for-sale securities | (309) | 0 |
Unrealized gain on interest rate hedging instruments | 1,646 | 0 |
Comprehensive loss | (11,714) | (10,325) |
Less: Comprehensive loss attributable to Definitive OpCo prior to the Reorganization Transactions | 0 | (10,325) |
Less: Comprehensive loss attributable to noncontrolling interests | (3,946) | 0 |
Comprehensive loss attributable to Definitive Healthcare Corp. | $ (7,768) | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS' EQUITY AND TOTAL EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Reorganization Transactions [Member] | Class A Units | Class B Units | Members Equity | Members EquityReorganization Transactions [Member] | Additional Paid In Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) IncomeReorganization Transactions [Member] | Noncontrolling Interest |
Beginning Balance at Dec. 31, 2020 | $ 1,195,563 | $ 1,195,694 | $ (131) | ||||||||
Net loss | (10,488) | ||||||||||
Net loss | 0 | ||||||||||
Net loss prior to Reorganization Transactions | (10,325) | $ (10,488) | $ (10,488) | $ 0 | |||||||
Other comprehensive income | $ 163 | $ 163 | |||||||||
Equity-based compensation | 406 | 406 | 0 | ||||||||
Ending Balance at Mar. 31, 2021 | 1,185,644 | $ 1,185,612 | 32 | ||||||||
Beginning Balance at Dec. 31, 2021 | 1,503,262 | $ 97 | $ 890,724 | $ (17,677) | 62 | $ 630,056 | |||||
Beginning Balance (in shares) at Dec. 31, 2021 | 97,030,095 | 58,244,627 | |||||||||
Net loss | (13,057) | ||||||||||
Net loss | (8,624) | (8,624) | (4,433) | ||||||||
Net loss prior to Reorganization Transactions | 0 | ||||||||||
Other comprehensive income | 1,343 | 856 | 487 | ||||||||
Effect of LLC unit exchanges | (897) | $ 1 | 5,080 | (5,978) | |||||||
Effect of LLC unit exchanges, shares | 544,302 | (544,302) | |||||||||
Equity-based compensation | 6,872 | 4,377 | 2,495 | ||||||||
Distributions to noncontrolling interests | (258) | (258) | |||||||||
Forfeited unvested incentive units | (33,549) | ||||||||||
Vested incentive units | (696) | 696 | |||||||||
Ending Balance at Mar. 31, 2022 | $ 1,497,265 | $ 98 | $ 899,485 | $ (26,301) | $ 918 | $ 623,065 | |||||
Ending Balance (in shares) at Mar. 31, 2022 | 97,574,397 | 57,666,776 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Cash flows provided by operating activities: | |||
Net loss | $ (13,057) | $ (10,488) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 525 | 341 | |
Amortization of intangible assets | 14,727 | 14,346 | |
Amortization of deferred contract costs | 1,875 | 843 | |
Equity-based compensation | 6,872 | 406 | |
Amortization of debt issuance costs | 176 | 523 | |
Provision for doubtful accounts receivable | 9 | 35 | |
Tax receivable agreement remeasurement | 248 | 0 | |
Deferred income taxes | 69 | 0 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 8,526 | 4,399 | |
Prepaid expenses and other current assets | 692 | (559) | |
Deferred contract costs | (3,299) | (2,854) | |
Contingent consideration | (6,400) | 0 | |
Accounts payable, accrued expenses and other current liabilities | (3,579) | (3,908) | |
Deferred revenue | 6,249 | 10,443 | |
Net cash provided by operating activities | 13,633 | 13,527 | |
Cash flows used in investing activities: | |||
Purchases of property, equipment, and other assets | (794) | (3,842) | |
Purchases of short-term investments | (109,559) | 0 | |
Cash paid for acquisitions, net of cash acquired | (56,499) | 0 | |
Net cash used in investing activities | (166,852) | (3,842) | |
Cash flows used in financing activities: | |||
Repayments of term loans | (1,719) | (1,170) | |
Payment of contingent consideration | (1,100) | 0 | |
Payments of equity offering issuance costs | (1,299) | (126) | |
Member distributions | (258) | 0 | |
Net cash used in financing activities | (4,376) | (1,296) | |
Net (decrease) increase in cash and cash equivalents | (157,595) | 8,389 | |
Effect of exchange rate changes on cash and cash equivalents | (108) | (84) | |
Cash and cash equivalents, beginning of period | 387,498 | 24,774 | $ 24,774 |
Cash and cash equivalents, end of period | 229,795 | 33,079 | $ 387,498 |
Supplemental cash flow disclosures: | |||
Interest | 1,771 | 8,039 | |
Acquisitions: | |||
Net assets acquired, net of cash acquired | 97,499 | 0 | |
Initial cash investment in prior year | (40,000) | 0 | |
Contingent consideration | (1,000) | 0 | |
Net cash paid for acquisitions | 56,499 | 0 | |
Supplemental disclosure of non-cash investing activities: | |||
Capital expenditures included in accrued expenses | $ 3,500 | $ 0 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business Definitive Healthcare Corp., through its operating subsidiary, Definitive OpCo, provides comprehensive and up-to-date hospital and healthcare-related information and insight across the entire healthcare continuum via a multi-tenant software-as-a-service (“SaaS”) platform which combines proprietary and public sources to deliver insights. Unless otherwise stated, references to “we,” “us,” “our,” “Definitive Healthcare” and the “Company” refer (1) prior to the consummation of the Reorganization Transactions (as defined below), to Definitive OpCo and its consolidated subsidiaries, and (2) after the consummation of the Reorganization Transactions, to Definitive Healthcare Corp. and its consolidated subsidiaries. Organization Definitive Healthcare Corp. was formed on May 5, 2021 as a Delaware corporation to facilitate an initial public offering (“IPO”) and other related transactions to carry on the business of Definitive OpCo, a Delaware limited liability company. Following consummation of the Reorganization Transactions, Definitive OpCo became an indirect subsidiary of Definitive Healthcare Corp. The Company is headquartered in Framingham, MA. Initial Public Offering On September 17, 2021, Definitive Healthcare completed its IPO, in which it sold 17,888,888 shares of Class A Common Stock (including shares issued pursuant to the exercise in full of the underwriters’ option to purchase additional shares) at a public offering price of $ 27.00 per share for net proceeds of $ 452.8 million, after deducting underwriters’ discounts and commissions (but excluding other offering expenses and reimbursements). Definitive Healthcare used net proceeds from the IPO to (i) acquire 14,222,222 newly issued limited liability company interests (“LLC Units”) from Definitive OpCo; (ii) purchase 1,169,378 LLC Units from certain holders of LLC Units prior to the IPO; and (iii) repurchase 2,497,288 shares of Class A Common Stock received by the former shareholders of certain Blocker Companies (as defined below). Definitive OpCo used proceeds from the IPO to pay fees and expenses of approximately $ 11.4 million incurred in connection with the IPO and the Reorganization Transactions and to repay $ 199.6 million, inclusive of accrued interest expense, of the outstanding borrowings under our 2019 Credit Agreement, with the remaining proceeds intended to be used for general corporate purposes. Reorganization Transactions In connection with the IPO, the Company completed the following transactions (the “Reorganization Transactions”). Definitive OpCo entered into a second amended and restated limited liability company agreement (the “Amended LLC Agreement”) pursuant to which members of Definitive OpCo prior to the IPO who continue to hold LLC Units have the right to require Definitive OpCo to exchange all or a portion of their LLC Units for newly issued shares of Class A Common Stock. Until exchanged, each LLC Unit is coupled with one share of Definitive Healthcare Corp. Class B Common Stock. The total amount of shares of Class B Common Stock outstanding is equal to the number of vested LLC Units outstanding. Entities treated as corporations for U.S. tax purposes that held LLC Units (individually, a “Blocker Company” and collectively, the "Blocker Companies") each merged with a merger subsidiary and subsequently merged into Definitive Healthcare Corp. and are now holders of Class A Common Stock. Following the Reorganization Transactions, Definitive Healthcare Corp. became a holding company, with its sole material asset being a controlling equity interest in Definitive OpCo. Definitive Healthcare Corp. operates and controls all of the business and affairs of Definitive OpCo, and through Definitive OpCo and its subsidiaries, conducts its business. Accordingly, Definitive Healthcare Corp. consolidates the financial results of Definitive OpCo, and reports the noncontrolling interests of unexchanged LLC Unit holders on its consolidated financial statements. In connection with the Reorganization Transactions and the IPO, Definitive Healthcare Corp entered into a tax receivable agreement. See Note 17. Income Taxes . Follow-On Offering On November 22, 2021, Definitive Healthcare Corp. completed a follow-on offering, in which it sold 11,000,000 shares of Class A Common Stock at a public offering price of $ 36.00 per share for net proceeds of $ 382.1 million, after deducting underwriters’ discounts and commissions (but excluding other offering expenses and reimbursements). Definitive Healthcare Corp. used net proceeds from the follow-on offering to (i) acquire 7,000,000 newly issued LLC Units from Definitive OpCo; (ii) purchase 1,766,762 LLC Units from certain unitholders; and (iii) repurchase 2,233,238 shares of Class A Common Stock received by the former shareholders of certain Blocker Companies. Definitive OpCo used net proceeds from the follow-on offering to pay fees and expenses of approximately $ 1.6 million incurred in connection with the follow-on offering, with the remaining proceeds intended to be used for general corporate purposes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with rules applicable to quarterly financial information. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative nongovernmental GAAP as found in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The condensed consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 are unaudited. Amounts for the period from January 1, 2021 through March 31, 2021 presented in the condensed consolidated financial statements and notes to the condensed consolidated financial statements herein represent the historical operations of Definitive OpCo. The amounts as of March 31, 2022 and December 31, 2021 and for the period from January 1, 2022 through March 31, 2022 reflect the consolidated operations of Definitive Healthcare Corp. and its consolidated subsidiaries. All adjustments, consisting of normal recurring adjustments, except as otherwise noted, considered necessary for a fair presentation of the unaudited interim condensed consolidated financial statements for these interim periods have been included. Refer below and to Note 2. Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for the Company’s significant accounting policies and estimates. Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates relate, but are not limited to, revenue recognition, allowance for doubtful accounts, contingencies, valuations and useful lives of intangible assets acquired in business combinations, equity-based compensation, and income taxes. Actual results could differ from those estimates. Leases Effective January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02— Leases (Topic 842) (“ASC 842”) . In accordance with ASC 842, the Company, at the inception of the contract, determines whether a contract is or contains a lease. For leases with terms greater than 12 months, the Company records the related operating or finance right of use asset and lease liability at the present value of lease payments over the lease term. The Company is generally not able to readily determine the implicit rate in the lease and therefore uses the determined incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate represents an estimate of the market interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. Renewal options are not included in the measurement of the right of use assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Some leases also include early termination options, which can be exercised under specific conditions. Additionally, certain leases contain incentives, such as construction allowances from landlords. These incentives reduce the right-of-use asset related to the lease. Some of the Company's leases contain rent escalations over the lease term. The Company recognizes expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements contain variable lease payments for common area maintenance, utility, and taxes. The Company has elected the practical expedient to combine lease and non-lease components for all asset categories. Therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with fixed non-lease component charges. The Company does not have significant residual value guarantees or restrictive covenants in the lease portfolio. Derivative Instruments and Hedging Activities FASB Accounting Standards Codification (“ASC”) 815— Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance in ASU 2011-04— Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASC 820”), th e Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Adoption of Recently Issued Financial Accounting Standards In October 2021, the FASB issued ASU No. 2021-08— Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This new accounting standard requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606— Revenue from Contracts with Customers . The standard requires the acquirer to recognize contract assets and contract liabilities at the same amounts recorded by the acquiree. The new accounting guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted this new accounting guidance effective January 1, 2022. In connection with the acquisition of Analytical Wizards completed in the first quarter of 2022, the Company recorded contract liabilities of $ 3.7 million. Refer to Note 3. Acquisitions for further details. In December 2019, the FASB issued ASU No. 2019-12— Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. This standard removes certain exceptions for investments, intra-period allocations and interim tax calculations and adds guidance to reduce complexity in accounting for income taxes. The amendment is effective for fiscal years beginning after December 15, 2021. The Company adopted this new accounting guidance effective January 1, 2022, but the adoption did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02— Leases . The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The FASB subsequently issued supplemental and/or clarifying ASUs inclusive of ASU 2020-05, which updated the effective date for certain non-public companies to annual reporting periods beginning after December 15, 2021. A modified retrospective transition approach is required for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, or by not adjusting the comparative periods and recording a cumulative effect adjustment as of the adoption date, with certain practical expedients available. The Company, as an Emerging Growth Company as defined by the JOBS Act of 2012, elected to take the extended transition period and adopt the standard following guidance for non-public entities. The Company adopted ASU No. 2016-02— Leases effective January 1, 2022 using the modified retrospective transition method. Prior period results will continue to be presented under ASC 840 as it was the accounting standard in effect for such periods. The Company elected to apply the package of practical expedients that allows entities to forgo reassessing at the transition date: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) whether unamortized initial direct costs for existing leases meet the definition of initial direct costs under the new guidance. The Company did not elect the hindsight practical expedient. The Company elected to use the practical expedient that allows the combination of lease and non-lease contract components in all of its underlying asset categories. Finally, the Company also elected a policy of not recording leases on its condensed consolidated balance sheets when the leases have a term of 12 months or less and the Company is not reasonably certain to elect an option to renew the leased asset. Due to the adoption of this guidance, the Company recognized operating right-of-use assets of $ 12.7 million and operating lease liabilities of $ 14.0 million as of the date of adoption. The difference between the right-of-use assets and lease liabilities on the accompanying consolidated balance sheet is primarily due to the accrual for lease payments as a result of straight-line lease expense and unamortized tenant incentive liability balances. The Company did not have any impact to opening retained earnings as a result of the adoption of the guidance. The adoption of this new guidance did not have a material impact on the Company’s results of operations, comprehensive loss, cash flows, liquidity or the Company’s covenant compliance under its existing credit agreement. Recently-Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13 —Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments. This standard is intended to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope, such as trade receivables. The amendment is effective for fiscal years beginning after December 15, 2022. The Company will adopt the update effective January 1, 2023 and does not expect the adoption of the standard to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04— Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendments of ASU No. 2020-04 are effective for companies as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The amendments in this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The Company is evaluating the impact that the amendments of this standard would have on its consolidated financial position or results of operations upon adoption. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisitions On December 22, 2021, the Definitive Healthcare, LLC (“DH, LLC”), an indirect wholly-owned subsidiary of Definitive Healthcare Corp. made a $ 40.0 million investment in Analytical Wizards Inc. (“AW”), a privately-held company. Analytical Wizards automates complex analytic models using tools that expedite efficient big data mining through artificial intelligence ("A.I.") and machine learning ("M.L.") power to uncover deep insights. In the transaction the Company purchased Series B Convertible Preferred Stock of AW (“Series B Preferred Stock”), representing 35 % ownership of AW, and an option to acquire the remaining 65 % ownership (the "Purchase Option") for $ 65.0 million. As of December 31, 2021, the Company determined it did not have a controlling financial interest in AW at transaction close as the Company did not have the right to control the governing body of AW or have control through other contractual rights. At December 31, 2021, the Series B Preferred Stock and the Purchase Option did not have readily determinable fair values, the Company elected to apply the measurement alternative and adjust the carrying value of the investments in AW for impairments and observable prices in identical or similar equity securities of AW. The Company paid $ 40.0 million for the Series B Preferred Stock and Purchase Option, which was allocated on a relative fair value basis such that the Series B Preferred Stock and Purchase Option had carrying values of $ 32.7 million and $ 7.3 million at the time of the transaction, respectively. The Series B Preferred Stock was recorded in Investments in equity securities and the Purchase Option was recorded in Other assets in the accompanying consolidated balance sheet as of December 31, 2021. On February 18, 2022, the Company purchased the remaining 65 % of AW’s equity for $ 65.0 million, net of cash acquired and an estimated working capital adjustment and other customary purchase price adjustments (the “AW acquisition”). The Company’s previously-held investment and Purchase Option were remeasured at fair value as of the date the Purchase Option was exercised. The remeasurement had an immaterial impact on the consolidated condensed statements of operations for the three months ended March 31, 2022. The Company has included the financial results of Analytical Wizards in the consolidated financial statements from February 18, 2022 , the date of acquisition. Upon the consummation of the AW acquisition, AW became an indirect wholly-owned subsidiary of Definitive Healthcare Corp. The total consideration for the initial investment and subsequent exercise of the Purchase Option was $ 99.6 million, consisting of $ 40.0 million for the initial investment paid in December 2021, approximately $ 58.6 million of cash paid at closing, and up to $ 5.0 million of contingent consideration. The contingent consideration, which relates to earn-out payments that may be paid out, subject to meeting certain expense control metrics during the two-year period following the closing of the AW acquisition, has an estimated fair value of $ 1.0 million as of the acquisition date. Pursuant to the Stock Purchase Agreement governing the AW acquisition, $ 10.0 million of the consideration was deposited into an escrow account to secure certain indemnification claims of DH, LLC. The assets acquired and liabilities assumed were recorded at their estimated preliminary fair values and the results of operations were included in the Company’s condensed consolidated results as of the acquisition date. The consideration transferred for the transaction is summarized as follows: (in thousands) Initial cash investment in December 2021 $ 40,000 Cash consideration paid at closing 58,645 Contingent consideration 1,000 Purchase price $ 99,645 The contingent consideration is based on the achievement of certain expense control metrics during the two-year period following the AW acquisition date, with potential earn-out payouts ranging from $ 0 to $ 5.0 million. The Company estimated the fair value of the contingent consideration to be $ 1.0 million as of February 18, 2022, based on the estimated achievement of the expense control metrics, time to payment and market participant cost of debt. The contingent consideration was recorded in Other liabilities in the accompanying consolidated balance sheet as of March 31, 2022. Refer to Note 12. Fair Value Measurements . The purchase price allocations for the AW acquisition are provisional and are based on the information that was available as of the acquisition date to estimate the fair values of assets acquired and liabilities assumed. The purchase price allocations for this acquisition, reported as of March 31, 2022, represent the Company’s best estimates of the fair values and were based upon the information available to us. The Company is gathering and reviewing additional information necessary to finalize the values assigned to the acquired assets and liabilities assumed, as well as acquired identified intangible assets and goodwill. Therefore, the provisional measurements of fair values reported as of March 31, 2022 are subject to change. The Company is expected to finalize the purchase price allocations as soon as practicable, but no later than one year from the respective acquisition date. The preliminary allocation of the acquisition-date fair values of assets and liabilities pertaining to this business combination as of February 18, 2022, was as follows: (in thousands) Preliminary allocation: February 18, 2022 Cash $ 2,146 Accounts receivable 3,575 Prepaid expenses and other current assets 506 Property and equipment 134 Intangible assets 46,000 Right-of-use asset, operating leases 832 Accounts payable and accrued expenses ( 485 ) Deferred revenue ( 3,691 ) Right-of-use liability, operating leases ( 832 ) Deferred taxes ( 10,345 ) Other liabilities ( 267 ) Total assets acquired and liabilities assumed 37,573 Goodwill 62,072 Purchase price $ 99,645 As a result of the AW acquisition, the Company recorded goodwill, customer relationships, developed software, and tradename of $ 62.1 million, $ 39.4 million, $ 6.1 million, and $ 0.5 million, respectively, as of the acquisition date. The goodwill recognized includes the fair value of the assembled workforce, which is not recognized as an intangible asset separable from goodwill, and any expected synergies gained through the acquisition. The Company determined that the goodwill resulting from the acquisition is not deductible for tax purposes. All goodwill has been allocated to the Company’s one reportable segment. Customer relationships represent the estimated fair value of the underlying relationships with the acquired entity’s business customers. The Company valued customer relationships using the income approach, specifically the multi-period excess earnings method. Significant assumptions include estimated attrition rates, discount rates, and tax rates reflecting the different risk profiles of the asset depending upon the acquisition. The value assigned to customer relationships is $ 39.4 million and is amortized using the annual pattern of cash flows (economic value method) over the estimated 20 -year life of this asset. The developed software represents AW’s two software modules. Passport Promotional Analytics helps customers to optimize internal investment and business management by focusing on driving incremental efficiencies in sales, cost management, profit optimization, and productive gains. Passport Planning and Performance helps customers to analyze large data sets in order to proactively predict business outcomes. The Company used the income approach, specifically the relief-from-royalty method, to determine the value of developed software. Significant assumptions include forecast of royalty rate, tax rate, and discount rate. The developed software was valued at $ 6.1 million and is amortized using the straight-line method over the estimated remaining useful life of 6 years. The tradename represents the estimated fair value of the registered trade name associated with the AW corporate brand. The Company estimated the fair value of the trademark using a relief from royalty method of the income approach. Significant assumptions include forecast of royalty rate, tax rate, and discount rate. The trademark was valued at $ 0.5 million and is amortized using the straight-line method over the estimated remaining useful life of 5 years. The amortization periods for the customer relationships, developed software, and tradenames are 20 years, 6 years, and 5 years, respectively. See Note 9 for the estimated total intangible amortization expense during the next five years. In connection with the acquisition, the Company recognized acquisition related costs of $ 1.0 million which were recorded within transaction expenses in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2022. During the three months ended March 31, 2022, AW’s post-acquisition revenue and net loss on a standalone basis were not material . Unaudited Pro Forma Supplementary Data: Three Months Ended March 31, (in thousands) 2022 2021 Revenue $ 51,601 $ 39,440 Net loss ( 13,654 ) ( 11,576 ) The unaudited pro forma supplementary data presented in the table above shows the effect of the AW acquisitions as if the transaction had occurred on January 1, 2021. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 4. Revenue The Company disaggregates revenue from its arrangements with customers by type of service as it believes these categories best depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following table represents a disaggregation of revenue from arrangements with customers for the three months ended March 31, 2022 and 2021, respectively: Three Months Ended March 31, (in thousands) 2022 2021 Platform subscriptions $ 49,769 $ 36,365 Professional services 355 571 Total revenue $ 50,124 $ 36,936 The opening and closing balances of the Company’s receivables, deferred contract costs and contract liabilities from contracts with customers are as follows: (in thousands) March 31, December 31, Accounts receivable, net $ 38,465 $ 43,336 Deferred contract costs 7,657 6,880 Long-term deferred contract costs 12,314 11,667 Deferred revenues 93,961 84,023 Deferred Contract Costs A summary of the activity impacting the deferred contract costs for the three months ended March 31, 2022 and the year ended December 31, 2021 is presented below: (in thousands) Three Months Ended March 31, 2022 Twelve Months Ended December 31, 2021 Balance at beginning of period $ 18,547 $ 8,899 Costs amortized ( 1,875 ) ( 4,792 ) Additional amounts deferred 3,299 14,440 Balance at end of period 19,971 18,547 Classified as: Current 7,657 6,880 Non-current 12,314 11,667 Total deferred contract costs (deferred commissions) $ 19,971 $ 18,547 Contract Liabilities A summary of the activity impacting deferred revenue balances during the three months ended March 31, 2022 and for the year ended December 31, 2021 is presented below: (in thousands) Three Months Ended March 31, 2022 Twelve Months Ended December 31, 2021 Balance at beginning of period $ 84,023 $ 61,200 Revenue recognized ( 50,124 ) ( 166,154 ) Additional amounts deferred 60,062 188,977 Balance at end of period $ 93,961 $ 84,023 Remaining Performance Obligations ASC 606 introduced the concept of transaction price allocated to the remaining performance obligations of a contract, which is different than unbilled deferred revenue under ASC 605. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to remaining performance obligations is influenced by several factors, including seasonality, the timing of renewals, and disparate contract terms. Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and backlog. The Company’s backlog represents installment billings for periods beyond the current billing cycle. The majority of the Company’s noncurrent remaining performance obligations will be recognized in the next 13 to 36 months. The remaining performance obligations consisted of the following: (in thousands) March 31, December 31, Current $ 164,461 $ 155,134 Non-current 96,519 95,354 Total $ 260,980 $ 250,488 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | 5. Leases The Company leases real estate in the form of office space facilities. Generally, the term for real estate leases ranges from 1 to 9 years at inception of the contract. Some real estate leases include options to renew that can extend the original term by 5 to 10 years. Operating lease costs are allocated according to headcount to cost of revenue, sales and marketing, product development and general and administrative expenses in the condensed consolidated statements of operations. As of March 31, 2022, the Company does no t have any finance leases. During the quarter ended March 31, 2022, the Company exercised an extension of one of its office lease facilities, which extended the lease term for an additional five-year period commencing on January 1, 2023 . The extension was accounted for as a lease modification under ASC 842. Accordingly, the Company recorded a right-of-use asset and corresponding operating lease liability of $ 6.0 million, which represents the present value of the future minimum lease payments. Also during the quarter, the Company completed the acquisition of Analytical Wizards, which has two office leases that will be accounted for under ASC 842. Accordingly, the Company recorded right-of-use assets and corresponding lease liabilities of $ 0.8 million associated with these two facilities. The Company recorded the following lease costs for the three months ended March 31, 2022: (in thousands) Three Months Ended March 31, 2022 Lease Cost Capitalized operating lease cost $ 835 Variable lease cost 1 Total lease cost $ 836 Supplemental Cash Flow and Other Information Cash paid for amounts included in measurement of lease liabilities and capitalized operating leases: Operating cash flows $ 750 Right-of-use assets obtained in exchange for lease liabilities: Capitalized operating leases $ 6,832 Lease term and discount rate consisted of the following at March 31, 2022: March 31, 2022 Weighted-average remaining lease term (in years): Capitalized operating leases 6.26 Weighted-average discount rate: Capitalized operating leases 3.9 % The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the condensed consolidated balance sheets as of March 31, 2022. (in thousands) Capitalized Operating Lease 2022, excluding the three months ended March 31, 2022 $ 2,425 2023 3,295 2024 3,846 2025 3,597 2026 3,545 Thereafter 6,227 $ 22,935 Imputed interest 2,685 Lease liability balance at March 31, 2022 $ 20,250 Future aggregate minimum annual lease payments as of December 31, 2021 reported in our 2021 Form 10-K under the previous lease accounting standard were as follows: (in thousands) Operating Lease 2022 $ 3,120 2023 1,895 2024 2,282 2025 2,174 2026 2,165 Thereafter 4,805 $ 16,441 Total rent expense, which was allocated according to headcount to cost of revenue, sales and marketing, product development and general and administrative expenses in the condensed consolidated statements of operations, was $ 0.8 million and $ 0.6 million in the three months ended March 31, 2022 and 2021, respectively. |
Short-term Investments
Short-term Investments | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term Investments | 6. Short-term Investments Short-term investments classified as available-for-sale consisted of the following: March 31, 2022 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: US Treasuries $ 55,359 $ — $ ( 272 ) $ 55,087 Commercial paper 53,977 — ( 37 ) 53,940 Total short-term investments $ 109,336 $ — $ ( 309 ) $ 109,027 All short-term investments had stated maturity dates of less than one year. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Accounts Receivable | 7. Accounts Receivable Accounts receivable consisted of the following: (in thousands) March 31, December 31, Accounts receivable $ 38,656 $ 44,303 Unbilled receivable 1,099 430 39,755 44,733 Less: allowance for doubtful accounts ( 1,290 ) ( 1,397 ) Accounts receivable, net $ 38,465 $ 43,336 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 8. Property and Equipment Property and equipment consisted of the following: (in thousands) March 31, December 31, Computers and software $ 4,959 $ 4,744 Furniture and equipment 1,638 1,580 Leasehold improvements 3,349 3,348 9,946 9,672 Less: accumulated depreciation and amortization ( 5,128 ) ( 4,603 ) Property and equipment, net $ 4,818 $ 5,069 Depreciation and amortization expense associated with property and equipment was $ 0.5 million and $ 0.3 million for the three months ended March 31, 2022 and 2021 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 9. Goodwill and Intangible Assets The carrying amounts of goodwill and intangible assets, as of March 31, 2022 and December 31, 2021, consist of the following: March 31, 2022 (in thousands) Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 409,430 $ ( 101,770 ) $ 307,660 Developed technologies 57,200 ( 19,383 ) 37,817 Tradenames 36,000 ( 5,556 ) 30,444 Database 46,580 ( 35,260 ) 11,320 Total finite-lived intangible assets 549,210 ( 161,969 ) 387,241 Goodwill 1,323,516 — 1,323,516 Total goodwill and Intangible assets $ 1,872,726 $ ( 161,969 ) $ 1,710,757 December 31, 2021 (in thousands) Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 370,030 $ ( 92,942 ) $ 277,088 Developed technologies 51,100 ( 17,475 ) 33,625 Tradenames 35,500 ( 5,034 ) 30,466 Database 43,080 ( 31,789 ) 11,291 Total finite-lived intangible assets 499,710 ( 147,240 ) 352,470 Goodwill 1,261,444 — 1,261,444 Total goodwill and Intangible assets $ 1,761,154 $ ( 147,240 ) $ 1,613,914 Amortization expense associated with finite-lived intangible assets wa s $ 14.7 m illion and $ 14.3 million for the three months ended March 31, 2022 and 2021, respectively, of which $ 5.4 million and $ 5.2 million was included in cost of revenue for the respective periods. Estimated total intangible amortization expense during the next five years and thereafter is as follows: (in thousands) 2022, excluding the three months ended March 31, 2022 $ 40,564 2023 48,216 2024 45,369 2025 41,415 2026 34,874 Thereafter 176,803 Total $ 387,241 The carrying amount of goodwill increased by $ 62.1 million during the three months ended March 31, 2022 as a result of the of AW acquisition (Note 3). The Company determined it had one reporting unit. There was no impairment of goodwill in the three months ended March 31, 2022 or 2021 . |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | 10. Derivative Instruments and Hedging Activities Risk Management Objective of Using Derivatives The Company is exposed to risks from changes in interest rates related to the term loan (See Note 11. Long-Term Debt ). The Company may use derivative financial instruments, specifically, interest rate swap contracts, in order to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Our primary objective in holding derivatives is to reduce the volatility of cash flows associated with changes in interest rates. We do not enter into derivative transactions for speculative or trading purposes. Cash Flow Hedges of Interest Rate Risk In March of 2022, the Company entered into two interest rate swap agreements. As of March 31, 2022 , the two outstanding interest rate swap agreements each had a notional value of $ 67.9 million. We have not recorded any amounts due to ineffectiveness for the three months ended March 31, 2022 . The notional value of each interest rate swap agreement is expected to match the corresponding principal amount of a portion of our borrowings under the term loan. The swap agreements are effective as of March 31, 2022 and mature on March 31, 2025 . During this period, the two notional amounts will have fixed interest rates of 2.0135 % and 2.012 %, and the counterparties to each of the agreements will pay the Company interest at a floating rate based on the one month USD-LIBOR swap rate on the notional amounts. Interest payments will be made monthly on a net settlement basis. The derivative interest rate swaps are designated and qualify as cash flow hedges. Consequently, the change in the estimated fair value of the effective portion of the derivative is recognized in accumulated other comprehensive income (“AOCI”) on our Condensed Consolidated Balance Sheets and reclassified to interest expense, net, when the underlying transaction has an impact on earnings. The Company expects to recognize approximately $ 0.3 million of net pre-tax gains from accumulated other comprehensive income to interest expense in the next twelve months associated with its interest rate swap. The Company recognizes derivative instruments and hedging activities on a gross basis as either assets or liabilities on the Company’s Condensed Consolidated Balance Sheets and measures them at fair value. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the earnings effect of the hedged forecasted transactions in a cash flow hedge. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. The fair values of the interest rate swaps and their respective locations in our consolidated balance sheets at March 31, 2022 were as follows: (in thousands) Description Balance Sheet Location March 31, 2022 Long-term derivative asset Other assets $ 1,966 Short-term derivative liability Accrued expenses and other current liabilities 320 The following table presents the effect of the derivative interest rate swaps in our consolidated statement of comprehensive loss for the three months ended March 31, 2022: (in thousands) Three Months Ended March 31, 2022 Gain in AOCI, beginning of period, net of tax $ — Amount of gain recognized in other comprehensive loss, net of tax 1,646 Amount of gain reclassified from AOCI into net loss, net of tax — Gain in AOCI, end of period, net of tax $ 1,646 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Long-term Debt, Unclassified [Abstract] | |
Long-term Debt | 11. Long-Term Debt Long-term debt consisted of the following as of March 31, 2022 and December 31, 2021, respectively: March 31, 2022 (in thousands) Principal Unamortized debt Total debt, 2021 Term Loan $ 271,562 $ ( 2,461 ) $ 269,101 Less: current portion of long-term debt 6,875 Long-term debt $ 262,226 December 31, 2021 (in thousands) Principal Unamortized debt Total debt, 2021 Term Loan $ 273,282 $ ( 2,599 ) $ 270,683 Less: current portion of long-term debt 6,875 Long-term debt $ 263,808 During the first quarter of 2022, the Company repaid $ 1.7 million in outstanding principal of the 2021 Term Loan, and related accrued interest payable of $ 1.8 million. 2021 Credit Agreement In September 2021, Definitive Healthcare Holdings, LLC, a Delaware limited liability company ("DH Holdings"), an indirect subsidiary of Definitive Healthcare Corp., entered into a credit agreement (the "2021 Credit Agreement") with Bank of America, N.A., as administrative agent, the other lenders party thereto and the other parties specified therein. The 2021 Credit Agreement provides for (i) a $275.0 million term loan A facility (the "2021 Term Loan") and (ii) a $ 75.0 million revolving credit facility (the "2021 Revolving Line of Credit" and, together with the 2021 Term Loan, collectively, the "2021 Credit Facilities"), the proceeds of which were used to repay a portion of the indebtedness outstanding under a previous credit agreement. Both the 2021 Term Loan and the 2021 Revolving Line of Credit mature on September 17, 2026 . The 2021 Credit Facilities include customary affirmative, negative and financial covenants. The 2021 Credit Facilities are guaranteed by all of DH Holdings' wholly-owned domestic restricted subsidiaries and AIDH Buyer, LLC, a Delaware limited liability company and the direct parent company of DH Holdings, in each case, subject to customary exceptions, and are secured by a lien on substantially all of the assets of DH Holdings and the guarantors, including a pledge of the equity of DH Holdings, in each case, subject to customary exceptions. The 2021 Term Loan is subject to annual amortization of principal, payable in equal quarterly installments on the last day of each fiscal quarter, commencing on December 31, 2021 (the "Initial Amortization Date"), equal to approximately 2.5% per annum of the principal amount of the term loans in the first year and second year after the Initial Amortization Date and approximately 5.0% per annum of the principal amount of the term loans in the third year, fourth year and fifth year after the Initial Amortization Date. A balloon payment of approximately $ 220.0 million will be due at the maturity of the 2021 Term Loan. There was $ 271.6 million outstanding on the 2021 Term Loan at March 31, 2022. DH Holdings is required to pay the lenders under the 2021 Credit Agreement an unused commitment fee of between 0.25 % and 0.30 % per annum on the undrawn commitments under the 2021 Revolving Line of Credit, depending on the total net leverage ratio, quarterly in arrears. The expense is included in interest expense in the statements of operations. There was no outstanding balance on the 2021 Revolving Line of Credit at March 31, 2022. For both the 2021 Term Loan and 2021 Revolving Line of Credit, DH Holdings may elect from several interest rate options based on the LIBO Rate or the Base Rate plus an applicable margin. The applicable margin will be based on the total leverage ratio beginning in the fiscal year ended December 31, 2022. As of March 31, 2022, the effective interest rate was 2.71 %. In connection with the 2021 Credit Agreement, the Company capitalized financing costs totaling $ 3.5 million, $ 2.8 million for the 2021 Term Loan facility and $ 0.8 million for the 2021 Revolving Line of Credit. The financing costs associated with the 2021 Term Loan facility are recorded as a contra-debt balance in Term loan, net of current portion in the condensed consolidated balance sheets and are amortized over the remaining life of the loan using the effective interest method. The financing costs associated with the 2021 Revolving Line of Credit are recorded in Other assets in the condensed consolidated balance sheet are amortized over the life of the arrangement. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 12. Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date, and establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value as follows: Level 1 - Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs that are supported by little or no market activity, including the Company’s own assumptions in determining fair value. The Company’s financial assets and liabilities subject to the three-level fair value hierarchy consist principally of cash and equivalents, short-term investments, accounts receivable, accounts payable, long-term and short-term debt and contingent consideration payable. The estimated fair value of cash included in cash and cash equivalents, accounts receivable and accounts payable approximates their carrying value due to due to their short maturities (less than 12 months). Debt The Company’s short- and long-term debt are recorded at their carrying values in the consolidated balance sheets, which may differ from their respective fair values. The carrying values and estimated fair values of the Company’s short- and long-term debt approximate their carrying values as of March 31, 2022, and December 31, 2021, based on interest rates currently available to the Company for similar borrowings. Money market funds (included in cash and cash equivalents) Money market funds are recorded at fair value using quoted market prices in active markets and are classified as Level 1 in the fair value hierarchy. Short-term investments The Company utilizes a third party pricing service for the valuation of its short-term investments. U.S. treasuries consist of short-term treasury bills that are recorded at fair value using market information obtained from dealers and brokers and classified in Level 2 of the fair value hierarchy. Commercial paper is carried at fair value, which is determined using a market yield curve-based approach based on observable inputs. Commercial paper is classified as Level 2 in the fair value hierarchy. Derivative financial instruments Currently, the Company uses interest rate swaps to manage interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of its derivatives held as of March 31, 2022 were classified as Level 2 in the fair value hierarchy. Contingent consideration The deferred consideration that resulted from the acquisition of Analytical Wizards in the first quarter of 2022, which is subject to the meeting of certain expense control metrics during the two-year period following the AW acquisition, is measured at fair value on a recurring basis. The fair value was estimated based on the present value of the amount expected to be paid at the end of the measurement period . At March 31, 2022, the fair value of the contingent consideration was estimated to be $ 1.0 million and is included in other long-term liabilities on the condensed consolidated balance sheet. The contingent consideration that resulted from the earn-outs associated with the acquisition of Monocl Holding Company in October of 2020, which was included in accrued expense and other current liabilities in the condensed consolidated balance sheet as of December 31, 2021 was paid in the first quarter of 2022. Earnout liabilities are classified within Level 3 in the fair value hierarchy because the methodology used to develop the estimated fair value includes significant unobservable inputs reflecting management’s own assumptions. The table below presents a reconciliation of earnout liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3): (in thousands) March 31, December 31, Balance at beginning of period $ 7,500 $ 5,236 Additions 1,000 — Net change in fair value and other adjustments — 3,764 Payments ( 7,500 ) ( 1,500 ) Balance at end of period $ 1,000 $ 7,500 Certain assets and liabilities, including property, plant and equipment, goodwill and other intangible assets, are measured at fair value on a non-recurring basis. These assets are remeasured when the derived fair value is below the carrying value on the Company’s consolidated balance sheet. For these assets, the Company does not periodically adjust carrying value to fair value except in the event of impairment. When impairment has occurred, the Company measures the required charges and adjusts the carrying value as discussed in Note 2. Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements in the Company’s 2021 Form 10-K. At March 31, 2022, additional assets and liabilities measured at fair value on a recurring basis were as follows: (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Money market funds $ 504 $ 504 $ — $ — Short-term investments: U.S. Treasuries 55,087 — 55,087 — Commercial paper 53,940 — 53,940 — Other Assets: Interest rate swap contracts 1,966 — 1,966 — Liabilities: Accrued expenses and other current liabilities: Interest rate swap contracts 320 — 320 — Contingent consideration $ 1,000 $ — $ — $ 1,000 At December 31, 2021, except for the contingent consideration noted above, the estimated fair values of all of the Company’s financial assets and liabilities subject to the three-level fair value hierarchy approximated their carrying values due to their short-term maturities (less than 12 months). |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Current Liabilities | 13. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: (in thousands) March 31, December 31, Payroll and payroll-related $ 6,293 $ 10,311 Contingent consideration, current — 7,500 Sales, franchise and other taxes 2,850 1,785 Deferred rent — 91 Other 3,694 2,971 Accrued expenses and other current liabilities $ 12,837 $ 22,658 |
Noncontrolling Interest
Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | 14. Noncontrolling Interest Definitive Healthcare Corp. operates and controls all of the business and affairs of Definitive OpCo, and through Definitive OpCo and its subsidiaries, conducts its business. Accordingly, Definitive Healthcare Corp. consolidates the financial results of Definitive OpCo, and reports the noncontrolling interests of its consolidated subsidiaries on its consolidated financial statements based on the Definitive OpCo Units held by Continuing LLC Members. Changes in Definitive Healthcare Corp.'s ownership interest in its consolidated subsidiaries are accounted for as equity transactions. As such, future redemptions or direct exchanges of Definitive OpCo Units by Continuing LLC Members will result in a change in ownership and reduce or increase the amount recorded as noncontrolling interests and increase or decrease additional paid-in capital in the Company’s Condensed Consolidated Balance Sheets. During the three months ended March 31, 2022 , 544,302 Definitive OpCo Units held by Continuing LLC Members were exchanged for shares of Class A Common Stock of Definitive Healthcare pursuant to the terms of the Amended LLC Agreement. As of March 31, 2022 , Definitive Healthcare Corp. held 97,574,397 units in the Definitive OpCo resulting in an ownership interest of 63.9 % and a noncontrolling interest of 36.1 % . |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | 15. Equity-Based Compensation Equity-based compensation expense is allocated to all departments in the accompanying condensed consolidated statements of operations based on the recipients of the compensation. A summary of the expense by line item in the consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively, is provided in the following table. Three Months Ended March 31, (in thousands) 2022 2021 Cost of revenue $ 232 $ 15 Sales and marketing 3,746 102 Product development 1,289 76 General and administrative 1,605 213 Total compensation expense $ 6,872 $ 406 2021 Equity Incentive Plan The Definitive Healthcare Corp. 2021 Equity Incentive Plan (the “2021 Plan”) was adopted in September 2021. The types of grants available under the 2021 Plan include stock options (both incentive and non-qualified), stock appreciation rights ("SARs"), restricted stock awards ("RSAs"), restricted stock units ("RSUs"), and stock-based awards. The aggregate number of shares of Class A Common Stock available for grant under the 2021 Plan was 5,890,775 shares at March 31, 2022. As of March 31, 2022 , 3,098,264 RSUs have been granted under the 2021 Plan, net of forfeitures. The outstanding RSUs have time-based and/or performance-based vesting criteria. Outstanding time-based RSUs generally vest partially on the one year anniversary of each grant and quarterly over the subsequent two- or three-year period. Outstanding performance-based RSUs ("PSUs") vest annually over three years upon the achievement of certain performance targets and continued service. Expense for these awards is recognized when it becomes probable that performance measures triggering vesting will be achieved. The following table summarizes the Company’s unvested time-based and performance-based RSU activity for the three months ended March 31, 2022. Time-Based Performance-Based Weighted Weighted Restricted Average Grant Restricted Average Grant Stock Units Date Fair Value Stock Units Date Fair Value Non-vested at December 31, 2021 1,935,899 $ 32.59 164,351 $ 27.00 Granted 1,065,897 22.31 — — Vested — — — — Forfeited ( 58,624 ) 26.90 ( 9,259 ) 27.00 Non-vested at March 31, 2022 2,943,172 $ 28.98 155,092 $ 27.00 The Company recognized $ 5.3 million in stock-based compensation expense associated with RSUs and PSUs in the three months ended March 31, 2022 . Total unrecognized expense was estimated to be $ 78.5 million for both time-based vesting and performance-based vesting awards at March 31, 2022, to be recognized over a weighted-average period of approximately 3.0 years . 2019 Equity Incentive Plan The AIDH Topco, LLC 2019 Equity Incentive Plan (the “2019 Plan”) was utilized prior to the Reorganization Transactions and the IPO for the issuance of equity awards in the form of Class B units to employees, consultants, directors, managers, or others providing services to the Company. In connection with the Reorganization Transactions and the IPO, unvested Class B Units held directly by employees of the Company or indirectly through Definitive OpCo, were exchanged for unvested Definitive OpCo units based on their respective participation thresholds and the IPO price of $ 27.00 per share. T he Company no longer grants any awards under the 2019 Plan, though previously granted awards under the 2019 Plan remain outstanding and governed by the 2019 Plan, including those units that remain unvested. The following table summarizes the Company’s unvested unit activity. Time-Based Weighted Non-Vested Average Grant Units Date Fair Value Non-vested at December 31, 2021 2,756,406 $ 2.02 Granted — — Vested ( 96,191 ) 1.45 Forfeited ( 33,549 ) 1.05 Non-vested at March 31, 2022 2,626,666 $ 2.06 The Company recorded $ 1.6 m illion and $ 0.4 million in stock-based compensation expense associated with these units in the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022, the Company had approximately $ 13.7 million of unrecognized unit-based compensation expense for unvested units, which is expected to be recognized over a weighted-average period of approximately 2.4 y ears. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Plans | 16. Retirement Plan The Company has a 401(k) plan covering all employees who have met certain eligibility requirements. The Company made matching contributions in accordance with the plan documents. The Company incurred $ 1.1 million and $ 0.6 million in employer matching contributions during the three months ended March 31, 2022 and 2021, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17. Income Taxes During the three months ended March 31, 2022, management performed an assessment of the recoverability of deferred tax assets. Management determined, based on the accounting standards applicable to such assessment, that there was sufficient negative evidence as a result of the Company’s scheduled reversal of deferred tax liabilities and cumulative losses to conclude it was more likely than not that its deferred tax assets would not be realized and has recorded a valuation allowance against its deferred tax assets that are not more likely than not to be realized. In the event that management was to determine that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, an adjustment to the valuation allowance would be made which would reduce the provision for income taxes. As of March 31, 2022 , the Company has recorded a net deferred tax liability of $ 86.1 million, of which $ 10.3 million was recorded as a result of the AW acquisition. The net deferred tax liability reflects a valuation allowance against deferred tax assets that are more likely than not to not be realized as well as reversing taxable temporary differences that will not provide a source of taxable income due to attribute limitation rules. The Company recognizes uncertain income tax positions when it is more-likely-than-not the position will be sustained upon examination. As of March 31, 2022 and December 31, 2021 , the Company has no t identified any uncertain tax positions and has not recognized any related reserves. The Company's effective tax rate for the three months ended three months ended March 31, 2022 and 2021 was ( 0.7 )% and 0.0 % respectively. The Company’s effective tax rate differs from the statutory tax rate of 21 % due to the valuation allowance recorded, foreign tax rates that differ from the U.S. statutory tax rate, and partnership income that is not taxed. Tax Receivable Agreement Pursuant to the Company's election under Section 754 of the Internal Revenue Code (the "Code"), the Company expects to obtain an increase in its share of the tax basis in the net assets of AIDH Topco, LLC when LLC Interests are redeemed or exchanged by other members. The Company plans to make an election under Section 754 of the Code for each taxable year in which a redemption of exchange of LLC Interest occurs. The Company intends to treat any redemptions and exchanges of LLC Interest as direct purchases of LLC Interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that would otherwise be paid in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. In connection with the IPO, the Company entered into a Tax Receivable Agreement ("TRA") and has recorded a liability under the TRA of $ 154.7 million as of March 31, 2022 . Under the TRA, the Company generally will be required to pay to the Original LLC Unitholders 85 % of the amount of cash savings, if any, in U.S. federal, state, or local tax that the Company actually realizes directly or indirectly (or are deemed to realize in certain circumstances) as a result of (i) certain tax attributes created as a result of any sales or exchanges (as determined for U.S. federal income tax purposes) to or with the Company of their interests in AIDH TopCo, LLC, including any basis adjustment relating to the assets of AIDH TopCo, LLC, (ii) existing tax attributes acquired by the Company in the pre-IPO restructuring, and (iii) tax benefits attributable to payments made under the TRA. The Company expects to benefit from the remaining 15 % of any tax benefits that it may actually realize. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid. No amounts are expected to be paid within the next 12 months. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 18. Loss Per Share Basic net loss per share of Class A Common Stock is computed by dividing net income attributable to Definitive Healthcare Corp. by the weighted-average number of shares of Class A Common Stock outstanding during the period, excluding unvested equity awards and subsidiary member units not exchanged. Diluted earnings per share of Class A Common Stock is calculated by dividing net income attributable to Definitive Healthcare Corp, adjusted for the assumed exchange of all potentially dilutive securities by the weighted-average number of shares of Class A Common Stock outstanding. Prior to the IPO, the Definitive OpCo membership structure included Class A and Class B member units. The Company analyzed the calculation of earnings per unit for periods prior to the IPO and determined that it resulted in values that would not be meaningful to the users of these unaudited consolidated financial statements. Therefore, earnings per share information has not been presented for the three months ended March 31, 2021. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net loss per share of Class A Common Stock for the three months ended March 31, 2022 . (in thousands) Three Months Ended March 31, 2022 Numerator: Net loss $ ( 13,057 ) Less: Net loss attributable to noncontrolling interests ( 4,433 ) Net loss attributable to Definitive Healthcare Corp. $ ( 8,624 ) The following table sets forth the computation of basic and diluted net loss per share of Class A Common Stock (per share amounts unaudited): (in thousands, except number of shares and per share amounts) Three Months Ended March 31, 2022 Basic net loss per share attributable to common stockholders Numerator: Allocation of net loss attributable to Definitive Healthcare Corp. $ ( 8,624 ) Weighted average number of shares of Class A outstanding 97,158,823 Net loss per share, basic and diluted $ ( 0.09 ) Shares of the Company’s Class B Common Stock do not participate in the earnings or losses of Definitive Healthcare Corp. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B Common Stock under the two-class method has not been presented. The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the period presented because their effect would have been anti-dilutive: Three Months Ended March 31, 2022 Definitive OpCo Units (vested and unvested) 57,666,776 Restricted Stock Units 3,098,264 |
Segment and Geographic Data
Segment and Geographic Data | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment and Geographic Data | 19. Segment and Geographic Data The Company operates as one operating segment. Operating segments are defined as components of the Company for which separate financial information is available and evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker for the Company is the chief executive officer. The chief executive officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by type of service and geographic region, for purposes of allocating resources and evaluating financial performance. Revenues by geographic area presented based upon the location of the customer are as follows: For the Three Months Ended March 31, (in thousands) 2022 2021 United States $ 47,580 $ 35,697 Rest of world 2,544 1,239 Total revenues $ 50,124 $ 36,936 For a summary of our revenue disaggregated by service, refer to Note 4. Revenue . Long-lived assets by geographical region are based on the location of the legal entity that owns the assets. Long-lived assets by geographic area presented based upon the location of the assets are as follows: (in thousands) March 31, December 31, United States $ 4,391 $ 4,705 Rest of world 427 364 Total long-lived assets $ 4,818 $ 5,069 |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | 20. Related Parties The Company has engaged in revenue transactions within the ordinary course of business with entities affiliated with its private equity Sponsors and with members of the Company’s board of directors. During each of the three months ended March 31, 2022 and 2021 the Company recorded revenue of $ 0.2 million. The associated receivable for the revenue transactions amounted to $ 0.1 million and $ 0.6 million at March 31, 2022 and December 31, 2021, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with rules applicable to quarterly financial information. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative nongovernmental GAAP as found in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The condensed consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 are unaudited. Amounts for the period from January 1, 2021 through March 31, 2021 presented in the condensed consolidated financial statements and notes to the condensed consolidated financial statements herein represent the historical operations of Definitive OpCo. The amounts as of March 31, 2022 and December 31, 2021 and for the period from January 1, 2022 through March 31, 2022 reflect the consolidated operations of Definitive Healthcare Corp. and its consolidated subsidiaries. All adjustments, consisting of normal recurring adjustments, except as otherwise noted, considered necessary for a fair presentation of the unaudited interim condensed consolidated financial statements for these interim periods have been included. Refer below and to Note 2. Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for the Company’s significant accounting policies and estimates. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates relate, but are not limited to, revenue recognition, allowance for doubtful accounts, contingencies, valuations and useful lives of intangible assets acquired in business combinations, equity-based compensation, and income taxes. Actual results could differ from those estimates. |
Leases | Leases Effective January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02— Leases (Topic 842) (“ASC 842”) . In accordance with ASC 842, the Company, at the inception of the contract, determines whether a contract is or contains a lease. For leases with terms greater than 12 months, the Company records the related operating or finance right of use asset and lease liability at the present value of lease payments over the lease term. The Company is generally not able to readily determine the implicit rate in the lease and therefore uses the determined incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate represents an estimate of the market interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. Renewal options are not included in the measurement of the right of use assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Some leases also include early termination options, which can be exercised under specific conditions. Additionally, certain leases contain incentives, such as construction allowances from landlords. These incentives reduce the right-of-use asset related to the lease. Some of the Company's leases contain rent escalations over the lease term. The Company recognizes expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements contain variable lease payments for common area maintenance, utility, and taxes. The Company has elected the practical expedient to combine lease and non-lease components for all asset categories. Therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with fixed non-lease component charges. The Company does not have significant residual value guarantees or restrictive covenants in the lease portfolio. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities FASB Accounting Standards Codification (“ASC”) 815— Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. In accordance with the FASB’s fair value measurement guidance in ASU 2011-04— Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASC 820”), th e Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. |
Adoption of Recently Issued Financial Accounting Standards | Adoption of Recently Issued Financial Accounting Standards In October 2021, the FASB issued ASU No. 2021-08— Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This new accounting standard requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606— Revenue from Contracts with Customers . The standard requires the acquirer to recognize contract assets and contract liabilities at the same amounts recorded by the acquiree. The new accounting guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted this new accounting guidance effective January 1, 2022. In connection with the acquisition of Analytical Wizards completed in the first quarter of 2022, the Company recorded contract liabilities of $ 3.7 million. Refer to Note 3. Acquisitions for further details. In December 2019, the FASB issued ASU No. 2019-12— Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. This standard removes certain exceptions for investments, intra-period allocations and interim tax calculations and adds guidance to reduce complexity in accounting for income taxes. The amendment is effective for fiscal years beginning after December 15, 2021. The Company adopted this new accounting guidance effective January 1, 2022, but the adoption did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02— Leases . The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The FASB subsequently issued supplemental and/or clarifying ASUs inclusive of ASU 2020-05, which updated the effective date for certain non-public companies to annual reporting periods beginning after December 15, 2021. A modified retrospective transition approach is required for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, or by not adjusting the comparative periods and recording a cumulative effect adjustment as of the adoption date, with certain practical expedients available. The Company, as an Emerging Growth Company as defined by the JOBS Act of 2012, elected to take the extended transition period and adopt the standard following guidance for non-public entities. The Company adopted ASU No. 2016-02— Leases effective January 1, 2022 using the modified retrospective transition method. Prior period results will continue to be presented under ASC 840 as it was the accounting standard in effect for such periods. The Company elected to apply the package of practical expedients that allows entities to forgo reassessing at the transition date: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) whether unamortized initial direct costs for existing leases meet the definition of initial direct costs under the new guidance. The Company did not elect the hindsight practical expedient. The Company elected to use the practical expedient that allows the combination of lease and non-lease contract components in all of its underlying asset categories. Finally, the Company also elected a policy of not recording leases on its condensed consolidated balance sheets when the leases have a term of 12 months or less and the Company is not reasonably certain to elect an option to renew the leased asset. Due to the adoption of this guidance, the Company recognized operating right-of-use assets of $ 12.7 million and operating lease liabilities of $ 14.0 million as of the date of adoption. The difference between the right-of-use assets and lease liabilities on the accompanying consolidated balance sheet is primarily due to the accrual for lease payments as a result of straight-line lease expense and unamortized tenant incentive liability balances. The Company did not have any impact to opening retained earnings as a result of the adoption of the guidance. The adoption of this new guidance did not have a material impact on the Company’s results of operations, comprehensive loss, cash flows, liquidity or the Company’s covenant compliance under its existing credit agreement. Recently-Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13 —Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments. This standard is intended to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope, such as trade receivables. The amendment is effective for fiscal years beginning after December 15, 2022. The Company will adopt the update effective January 1, 2023 and does not expect the adoption of the standard to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04— Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendments of ASU No. 2020-04 are effective for companies as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The amendments in this update apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The Company is evaluating the impact that the amendments of this standard would have on its consolidated financial position or results of operations upon adoption. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Summary of Transaction Transferred | The consideration transferred for the transaction is summarized as follows: (in thousands) Initial cash investment in December 2021 $ 40,000 Cash consideration paid at closing 58,645 Contingent consideration 1,000 Purchase price $ 99,645 |
Summary of Allocation of Purchase Price to the Fair Value of Assets Acquired | The preliminary allocation of the acquisition-date fair values of assets and liabilities pertaining to this business combination as of February 18, 2022, was as follows: (in thousands) Preliminary allocation: February 18, 2022 Cash $ 2,146 Accounts receivable 3,575 Prepaid expenses and other current assets 506 Property and equipment 134 Intangible assets 46,000 Right-of-use asset, operating leases 832 Accounts payable and accrued expenses ( 485 ) Deferred revenue ( 3,691 ) Right-of-use liability, operating leases ( 832 ) Deferred taxes ( 10,345 ) Other liabilities ( 267 ) Total assets acquired and liabilities assumed 37,573 Goodwill 62,072 Purchase price $ 99,645 |
Schedule of Business Acquisition, Pro Forma Information | Unaudited Pro Forma Supplementary Data: Three Months Ended March 31, (in thousands) 2022 2021 Revenue $ 51,601 $ 39,440 Net loss ( 13,654 ) ( 11,576 ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table represents a disaggregation of revenue from arrangements with customers for the three months ended March 31, 2022 and 2021, respectively: Three Months Ended March 31, (in thousands) 2022 2021 Platform subscriptions $ 49,769 $ 36,365 Professional services 355 571 Total revenue $ 50,124 $ 36,936 |
Summary of Receivables, Deferred Contract Costs and Contract Liabilities from Contract with Customers | The opening and closing balances of the Company’s receivables, deferred contract costs and contract liabilities from contracts with customers are as follows: (in thousands) March 31, December 31, Accounts receivable, net $ 38,465 $ 43,336 Deferred contract costs 7,657 6,880 Long-term deferred contract costs 12,314 11,667 Deferred revenues 93,961 84,023 Deferred Contract Costs A summary of the activity impacting the deferred contract costs for the three months ended March 31, 2022 and the year ended December 31, 2021 is presented below: (in thousands) Three Months Ended March 31, 2022 Twelve Months Ended December 31, 2021 Balance at beginning of period $ 18,547 $ 8,899 Costs amortized ( 1,875 ) ( 4,792 ) Additional amounts deferred 3,299 14,440 Balance at end of period 19,971 18,547 Classified as: Current 7,657 6,880 Non-current 12,314 11,667 Total deferred contract costs (deferred commissions) $ 19,971 $ 18,547 |
Summary of Deferred Revenue Balances | A summary of the activity impacting deferred revenue balances during the three months ended March 31, 2022 and for the year ended December 31, 2021 is presented below: (in thousands) Three Months Ended March 31, 2022 Twelve Months Ended December 31, 2021 Balance at beginning of period $ 84,023 $ 61,200 Revenue recognized ( 50,124 ) ( 166,154 ) Additional amounts deferred 60,062 188,977 Balance at end of period $ 93,961 $ 84,023 |
Summary of Remaining Performance Obligation | The remaining performance obligations consisted of the following: (in thousands) March 31, December 31, Current $ 164,461 $ 155,134 Non-current 96,519 95,354 Total $ 260,980 $ 250,488 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease Costs | The Company recorded the following lease costs for the three months ended March 31, 2022: (in thousands) Three Months Ended March 31, 2022 Lease Cost Capitalized operating lease cost $ 835 Variable lease cost 1 Total lease cost $ 836 Supplemental Cash Flow and Other Information Cash paid for amounts included in measurement of lease liabilities and capitalized operating leases: Operating cash flows $ 750 Right-of-use assets obtained in exchange for lease liabilities: Capitalized operating leases $ 6,832 |
Schedule of Leases Term and Discount Rate | Lease term and discount rate consisted of the following at March 31, 2022: March 31, 2022 Weighted-average remaining lease term (in years): Capitalized operating leases 6.26 Weighted-average discount rate: Capitalized operating leases 3.9 % |
Schedule of Operating Lease Liabilities | The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the condensed consolidated balance sheets as of March 31, 2022. (in thousands) Capitalized Operating Lease 2022, excluding the three months ended March 31, 2022 $ 2,425 2023 3,295 2024 3,846 2025 3,597 2026 3,545 Thereafter 6,227 $ 22,935 Imputed interest 2,685 Lease liability balance at March 31, 2022 $ 20,250 |
Schedule of Maturities of Lease Liabilities | Future aggregate minimum annual lease payments as of December 31, 2021 reported in our 2021 Form 10-K under the previous lease accounting standard were as follows: (in thousands) Operating Lease 2022 $ 3,120 2023 1,895 2024 2,282 2025 2,174 2026 2,165 Thereafter 4,805 $ 16,441 |
Short-term Investments (Tables)
Short-term Investments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of short-term investments | Short-term investments classified as available-for-sale consisted of the following: March 31, 2022 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term investments: US Treasuries $ 55,359 $ — $ ( 272 ) $ 55,087 Commercial paper 53,977 — ( 37 ) 53,940 Total short-term investments $ 109,336 $ — $ ( 309 ) $ 109,027 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: (in thousands) March 31, December 31, Accounts receivable $ 38,656 $ 44,303 Unbilled receivable 1,099 430 39,755 44,733 Less: allowance for doubtful accounts ( 1,290 ) ( 1,397 ) Accounts receivable, net $ 38,465 $ 43,336 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: (in thousands) March 31, December 31, Computers and software $ 4,959 $ 4,744 Furniture and equipment 1,638 1,580 Leasehold improvements 3,349 3,348 9,946 9,672 Less: accumulated depreciation and amortization ( 5,128 ) ( 4,603 ) Property and equipment, net $ 4,818 $ 5,069 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The carrying amounts of goodwill and intangible assets, as of March 31, 2022 and December 31, 2021, consist of the following: March 31, 2022 (in thousands) Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 409,430 $ ( 101,770 ) $ 307,660 Developed technologies 57,200 ( 19,383 ) 37,817 Tradenames 36,000 ( 5,556 ) 30,444 Database 46,580 ( 35,260 ) 11,320 Total finite-lived intangible assets 549,210 ( 161,969 ) 387,241 Goodwill 1,323,516 — 1,323,516 Total goodwill and Intangible assets $ 1,872,726 $ ( 161,969 ) $ 1,710,757 December 31, 2021 (in thousands) Gross Accumulated Net Carrying Finite-lived intangible assets: Customer relationships $ 370,030 $ ( 92,942 ) $ 277,088 Developed technologies 51,100 ( 17,475 ) 33,625 Tradenames 35,500 ( 5,034 ) 30,466 Database 43,080 ( 31,789 ) 11,291 Total finite-lived intangible assets 499,710 ( 147,240 ) 352,470 Goodwill 1,261,444 — 1,261,444 Total goodwill and Intangible assets $ 1,761,154 $ ( 147,240 ) $ 1,613,914 |
Schedule of Future Amortization Expense | Estimated total intangible amortization expense during the next five years and thereafter is as follows: (in thousands) 2022, excluding the three months ended March 31, 2022 $ 40,564 2023 48,216 2024 45,369 2025 41,415 2026 34,874 Thereafter 176,803 Total $ 387,241 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Fair Values of the Interest Rate Swap | The fair values of the interest rate swaps and their respective locations in our consolidated balance sheets at March 31, 2022 were as follows: (in thousands) Description Balance Sheet Location March 31, 2022 Long-term derivative asset Other assets $ 1,966 Short-term derivative liability Accrued expenses and other current liabilities 320 |
Summary of Effect of Derivative Interest Rate Swap and Related Tax Effects in AOCI | The following table presents the effect of the derivative interest rate swaps in our consolidated statement of comprehensive loss for the three months ended March 31, 2022: (in thousands) Three Months Ended March 31, 2022 Gain in AOCI, beginning of period, net of tax $ — Amount of gain recognized in other comprehensive loss, net of tax 1,646 Amount of gain reclassified from AOCI into net loss, net of tax — Gain in AOCI, end of period, net of tax $ 1,646 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following as of March 31, 2022 and December 31, 2021, respectively: March 31, 2022 (in thousands) Principal Unamortized debt Total debt, 2021 Term Loan $ 271,562 $ ( 2,461 ) $ 269,101 Less: current portion of long-term debt 6,875 Long-term debt $ 262,226 December 31, 2021 (in thousands) Principal Unamortized debt Total debt, 2021 Term Loan $ 273,282 $ ( 2,599 ) $ 270,683 Less: current portion of long-term debt 6,875 Long-term debt $ 263,808 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | |
Schedule of Reconciliation of Earnout Liabilities Measured at Fair Value on a Recurring Basis Unobservable Inputs | The table below presents a reconciliation of earnout liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3): (in thousands) March 31, December 31, Balance at beginning of period $ 7,500 $ 5,236 Additions 1,000 — Net change in fair value and other adjustments — 3,764 Payments ( 7,500 ) ( 1,500 ) Balance at end of period $ 1,000 $ 7,500 |
Schedule of Fair Value of Additional Assets and Liabilities Measured at Fair Value on Recurring Basis | At March 31, 2022, additional assets and liabilities measured at fair value on a recurring basis were as follows: (in thousands) Total Level 1 Level 2 Level 3 Assets: Cash and cash equivalents: Money market funds $ 504 $ 504 $ — $ — Short-term investments: U.S. Treasuries 55,087 — 55,087 — Commercial paper 53,940 — 53,940 — Other Assets: Interest rate swap contracts 1,966 — 1,966 — Liabilities: Accrued expenses and other current liabilities: Interest rate swap contracts 320 — 320 — Contingent consideration $ 1,000 $ — $ — $ 1,000 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: (in thousands) March 31, December 31, Payroll and payroll-related $ 6,293 $ 10,311 Contingent consideration, current — 7,500 Sales, franchise and other taxes 2,850 1,785 Deferred rent — 91 Other 3,694 2,971 Accrued expenses and other current liabilities $ 12,837 $ 22,658 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Equity Based Compensation Expense Recognized | A summary of the expense by line item in the consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively, is provided in the following table. Three Months Ended March 31, (in thousands) 2022 2021 Cost of revenue $ 232 $ 15 Sales and marketing 3,746 102 Product development 1,289 76 General and administrative 1,605 213 Total compensation expense $ 6,872 $ 406 |
IPO [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Company’s Unvested Time-Based and Performance-Based Unit Activity | The following table summarizes the Company’s unvested unit activity. Time-Based Weighted Non-Vested Average Grant Units Date Fair Value Non-vested at December 31, 2021 2,756,406 $ 2.02 Granted — — Vested ( 96,191 ) 1.45 Forfeited ( 33,549 ) 1.05 Non-vested at March 31, 2022 2,626,666 $ 2.06 |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Company’s Unvested Time-Based and Performance-Based Unit Activity | The following table summarizes the Company’s unvested time-based and performance-based RSU activity for the three months ended March 31, 2022. Time-Based Performance-Based Weighted Weighted Restricted Average Grant Restricted Average Grant Stock Units Date Fair Value Stock Units Date Fair Value Non-vested at December 31, 2021 1,935,899 $ 32.59 164,351 $ 27.00 Granted 1,065,897 22.31 — — Vested — — — — Forfeited ( 58,624 ) 26.90 ( 9,259 ) 27.00 Non-vested at March 31, 2022 2,943,172 $ 28.98 155,092 $ 27.00 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net loss per share of Class A Common Stock for the three months ended March 31, 2022 . (in thousands) Three Months Ended March 31, 2022 Numerator: Net loss $ ( 13,057 ) Less: Net loss attributable to noncontrolling interests ( 4,433 ) Net loss attributable to Definitive Healthcare Corp. $ ( 8,624 ) The following table sets forth the computation of basic and diluted net loss per share of Class A Common Stock (per share amounts unaudited): (in thousands, except number of shares and per share amounts) Three Months Ended March 31, 2022 Basic net loss per share attributable to common stockholders Numerator: Allocation of net loss attributable to Definitive Healthcare Corp. $ ( 8,624 ) Weighted average number of shares of Class A outstanding 97,158,823 Net loss per share, basic and diluted $ ( 0.09 ) |
Schedule of Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share | The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the period presented because their effect would have been anti-dilutive: Three Months Ended March 31, 2022 Definitive OpCo Units (vested and unvested) 57,666,776 Restricted Stock Units 3,098,264 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Areas | Revenues by geographic area presented based upon the location of the customer are as follows: For the Three Months Ended March 31, (in thousands) 2022 2021 United States $ 47,580 $ 35,697 Rest of world 2,544 1,239 Total revenues $ 50,124 $ 36,936 |
Schedule of Long-Lived Assets by Geographic Areas | Long-lived assets by geographical region are based on the location of the legal entity that owns the assets. Long-lived assets by geographic area presented based upon the location of the assets are as follows: (in thousands) March 31, December 31, United States $ 4,391 $ 4,705 Rest of world 427 364 Total long-lived assets $ 4,818 $ 5,069 |
Description of Business - Addit
Description of Business - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Nov. 22, 2021 | Sep. 17, 2021 | Mar. 31, 2022 |
Entity Incorporation, Date of Incorporation | May 5, 2021 | ||
Acquisition of Limited Liability Company (LLC) | 14,222,222 | ||
Purchase Of Limited Liability Company (LLC) Unit | 1,169,378 | ||
Noninterest Expense Offering Cost | $ 11.4 | ||
Fees and Expense | 11.4 | ||
Common Class A [Member] | |||
Issuance of Class A common stock in IPO net of costs, Share | 17,888,888 | ||
Share Price | $ 27 | ||
Proceeds from Issuance Initial Public Offering | $ 452.8 | ||
Repurchase of share, Shares | 2,497,288 | ||
Follow-On Offering [Member] | Common Class A [Member] | |||
Issuance of Class A common stock in IPO net of costs, Share | 11,000,000 | ||
Share Price | $ 36 | ||
Proceeds from Issuance Initial Public Offering | $ 382.1 | ||
IPO [Member] | |||
Proceeds to repay outstanding debt | $ 199.6 | ||
Definitive OpCo [Member] | Follow-On Offering [Member] | |||
Acquisition of Limited Liability Company (LLC) | 7,000,000 | ||
Purchase Of Limited Liability Company (LLC) Unit | 1,766,762 | ||
Noninterest Expense Offering Cost | $ 1.6 | ||
Fees and Expense | $ 1.6 | ||
Definitive OpCo [Member] | Follow-On Offering [Member] | Common Class A [Member] | |||
Repurchase of share, Shares | 2,233,238 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Additional Information) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure Summary Of Significant Accounting Policies Additional Information Details [Line Items] | |||
Contract liabilities | $ 93,961 | $ 84,023 | $ 61,200 |
Operating Lease, Liability | 20,250 | ||
Operating lease right of use asset | 18,811 | $ 0 | |
AW acquisition | |||
Disclosure Summary Of Significant Accounting Policies Additional Information Details [Line Items] | |||
Contract liabilities | $ 3,700 | ||
ASU 2016-02 [Member] | |||
Disclosure Summary Of Significant Accounting Policies Additional Information Details [Line Items] | |||
Operating lease term of contract | 12 months | ||
Operating Lease, Liability | $ 14,000 | ||
Operating lease right of use asset | $ 12,700 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ in Thousands | Feb. 18, 2022USD ($) | Dec. 22, 2021USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) |
Investment | $ 40,000 | |||
Purchase option ownership percentage | 65.00% | |||
Purchase of Ownership percentage | 65 | |||
Cash consideration paid at closing | $ 58,600 | $ 58,645 | ||
Purchase price | 99,645 | |||
Contingent consideration | 5,000 | 1,000 | ||
Fair value of the contingent consideration | 1,000 | |||
Initial cash investment in December 2021 | 40,000 | $ 40,000 | ||
Escrow deposit | 10,000 | |||
Purchase price consideration | 65,000 | |||
Developed software | ||||
Other assets | 6,100 | |||
Analytical Wizards Acquisition [Member] | ||||
Purchase price | 99,600 | |||
Trade Names [Member] | ||||
Other assets | 500 | |||
Customer Relationships [Member] | ||||
Other assets | 39,400 | |||
Goodwill [Member] | ||||
Other assets | 62,100 | |||
Series Of Individually Immaterial Business Acquisitions Member | ||||
Potential payouts range, Low | 0 | |||
Potential payouts range, High | 5,000 | |||
AW acquisition | ||||
Fair value of the contingent consideration | $ 1,000 | |||
Weighted average amortization period | 20 years | |||
Business combination, Acquisition related costs | $ 1,000 | |||
Date of acquisition | Feb. 18, 2022 | |||
AW acquisition | Developed software | ||||
Other assets | $ 6,100 | |||
Weighted average amortization period | 6 years | |||
AW acquisition | Trade Names [Member] | ||||
Weighted average amortization period | 5 years | |||
AW acquisition | Trademarks Member | ||||
Other assets | $ 500 | |||
Customer relationships | 5 years | |||
AW acquisition | Customer Relationships [Member] | ||||
Other assets | $ 39,400 | |||
Weighted average amortization period | 20 years | |||
Call Option [Member] | ||||
Stock issued during period value stock options exercised | $ 65,000 | |||
Option indexed to issuers equity settlement alternatives cash at fair value | $ 7,300 | |||
Series B Preferred Stock [Member] | ||||
Preferred stock convertible conversion ratio | 0.35 | |||
Option indexed to issuers equity settlement alternatives cash at fair value | $ 32,700 | |||
Series B Preferred Stock [Member] | Purchase Option [Member] | ||||
Option indexed to issuers equity settlement alternatives cash at fair value | $ 40,000 |
Acquisitions - Summary of Trans
Acquisitions - Summary of Transaction Transferred (Details) - USD ($) $ in Thousands | Feb. 18, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Business Combinations [Abstract] | |||
Initial cash investment in December 2021 | $ 40,000 | $ 40,000 | |
Cash consideration paid at closing | 58,600 | $ 58,645 | |
Contingent consideration | $ 5,000 | 1,000 | |
Purchase price | $ 99,645 |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price to the Fair Value of Assets Acquired (Details) - AW acquisition $ in Thousands | Feb. 18, 2022USD ($) |
Cash | $ 2,146 |
Accounts receivable | 3,575 |
Prepaid expenses and other current assets | 506 |
Property and equipment | 134 |
Intangible assets | 46,000 |
Right-of-use asset, operating leases | 832 |
Accounts payable and accrued expenses | (485) |
Deferred revenue | (3,691) |
Right-of-use liability, operating leases | (832) |
Deferred taxes | (10,345) |
Other liabilities | (267) |
Total assets acquired and liabilities assumed | 37,573 |
Goodwill | 62,072 |
Purchase price | $ 99,645 |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Acquisition, Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Business Combinations [Abstract] | ||
Revenue | $ 51,601 | $ 39,440 |
Net loss | $ (13,654) | $ (11,576) |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 50,124 | $ 36,936 |
Platform Subscriptions [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | 49,769 | 36,365 |
Professional Services [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenue | $ 355 | $ 571 |
Revenue - Summary of Receivable
Revenue - Summary of Receivables, Deferred Contract Costs and Contract Liabilities from Contract with Customers (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 38,465 | $ 43,336 |
Current portion of deferred contract costs | 7,657 | 6,880 |
Long-term deferred contract costs | 12,314 | 11,667 |
Deferred revenues | $ 93,961 | $ 84,023 |
Revenue - Summary of Deferred C
Revenue - Summary of Deferred Contract Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Additional amounts deferred | $ 60,062 | $ 188,977 | |
Deferred contract costs, net of current portion | 12,314 | 11,667 | |
Deferred contract costs | (3,299) | $ (2,854) | |
Deferred Contract Costs [Member] | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Balance at beginning of period | 18,547 | $ 8,899 | 8,899 |
Costs amortized | (1,875) | (4,792) | |
Additional amounts deferred | 3,299 | 14,440 | |
Balance at end of period | 19,971 | 18,547 | |
Deferred contract costs, net of current portion | 7,657 | 6,880 | |
Non-current | 12,314 | 11,667 | |
Deferred contract costs | $ 19,971 | $ 18,547 |
Revenue - Summary of Deferred R
Revenue - Summary of Deferred Revenue Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Balance at beginning of period | $ 84,023 | $ 61,200 |
Revenue recognized | (50,124) | (166,154) |
Additional amounts deferred | 60,062 | 188,977 |
Balance at end of period | $ 93,961 | $ 84,023 |
Revenue - Summary of Remaining
Revenue - Summary of Remaining Performance Obligation (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Current | $ 164,461 | $ 155,134 |
Noncurrent | 96,519 | 95,354 |
Total | $ 260,980 | $ 250,488 |
Leases (Additional Information)
Leases (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Finance lease liability | $ 0 | ||
Option to extend lease term | the Company exercised an extension of one of its office lease facilities, which extended the lease term for an additional five-year period commencing on January 1, 2023 | ||
Operating lease commencement date | Jan. 1, 2023 | ||
Lease existence of option to extend | true | ||
Additional lease term period | 5 years | ||
Operating lease liabilities current | $ 2,522 | $ 0 | |
Operating lease right-of-use assets | 18,811 | $ 0 | |
Operating right-of-use assets | 800 | ||
Operating lease liabilities | 6,832 | ||
Operating lease liability to be paid | 22,935 | ||
Selling and Marketing Expense [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Rent expense | 800 | $ 600 | |
General and Administrative Expense [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Rent expense | 800 | 600 | |
Product Development [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Rent expense | 800 | $ 600 | |
Office Space Facilities | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease liability to be paid | $ 6,000 | ||
Office Space Facilities | Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term of contract | 9 years | ||
Operating lease, renewal term | 10 years | ||
Office Space Facilities | Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease term of contract | 1 year | ||
Operating lease, renewal term | 5 years |
Leases - Schedule of lease cost
Leases - Schedule of lease costs (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Lease, Cost [Abstract] | |
Capitalized operating lease cost | $ 835 |
Variable Lease, Cost | 1 |
Total lease cost | $ 836 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information related to leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities and capitalized operating leases. | |
Operating cash flows | $ 750 |
Right Of Use Assets Obtained In Exchange For New Lease Liabilities Abstract | |
Capitalized operating leases | $ 6,832 |
Leases - Schedule of lease term
Leases - Schedule of lease term and discount rate (Details) | Mar. 31, 2022 |
Weighted-Average Remaining Lease Term Abstract | |
Capitalized operating leases | 6 years 3 months 3 days |
Weighted-Average Discount Rate Abstract | |
Capitalized operating leases | 3.90% |
Leases - Schedule of operating
Leases - Schedule of operating lease liabilities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Leases [Abstract] | |
2022, excluding the three months ended March 31, 2022 | $ 2,425 |
2023 | 3,295 |
2024 | 3,846 |
2025 | 3,597 |
2026 | 3,545 |
Thereafter | 6,227 |
Total undiscounted future minimum lease payments | 22,935 |
Imputed interest | (2,685) |
Operating lease liability | $ 20,250 |
Leases - Schedule of maturities
Leases - Schedule of maturities of lease liabilities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 3,120 |
2023 | 1,895 |
2024 | 2,282 |
2025 | 2,174 |
2026 | 2,165 |
Thereafter | 4,805 |
Total | $ 16,441 |
Short-term Investments - Schedu
Short-term Investments - Schedule of short-term Investments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Debt Securities, Available-for-sale [Line Items] | |
Amortized Cost | $ 109,336 |
Gross unrealized gains | 0 |
Gross unrealized losses | (309) |
Fair Value | 109,027 |
Commercial Paper [Member] | |
Debt Securities, Available-for-sale [Line Items] | |
Amortized Cost | 53,977 |
Gross unrealized gains | 0 |
Gross unrealized losses | (37) |
Fair Value | 53,940 |
U.S. Treasuries [Member] | |
Debt Securities, Available-for-sale [Line Items] | |
Amortized Cost | 55,359 |
Gross unrealized gains | 0 |
Gross unrealized losses | (272) |
Fair Value | $ 55,087 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts and Financing Receivable, after Allowance for Credit Loss, Current [Abstract] | ||
Accounts receivable | $ 38,656 | $ 44,303 |
Unbilled receivable | 1,099 | 430 |
Accounts receivable, gross | 39,755 | 44,733 |
Less: allowance for doubtful accounts | (1,290) | (1,397) |
Accounts receivable, net | $ 38,465 | $ 43,336 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 9,946 | $ 9,672 |
Less: accumulated depreciation and amortization | (5,128) | (4,603) |
Property and equipment, net | 4,818 | 5,069 |
Computers and Software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 4,959 | 4,744 |
Furniture and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,638 | 1,580 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 3,349 | $ 3,348 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property Plant And Equipment [Line Items] | ||
Depreciation and amortization | $ 9,874 | $ 9,446 |
Property And Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Depreciation and amortization | $ 500 | $ 300 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 549,210 | $ 499,710 |
Accumulated Amortization | (161,969) | (147,240) |
Net Carrying Amount | 387,241 | 352,470 |
Goodwill [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,323,516 | 1,261,444 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | 1,323,516 | 1,261,444 |
Goodwill And Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,872,726 | 1,761,154 |
Accumulated Amortization | (161,969) | (147,240) |
Net Carrying Amount | 1,710,757 | 1,613,914 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 409,430 | 370,030 |
Accumulated Amortization | (101,770) | (92,942) |
Net Carrying Amount | 307,660 | 277,088 |
Developed Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 57,200 | 51,100 |
Accumulated Amortization | (19,383) | (17,475) |
Net Carrying Amount | 37,817 | 33,625 |
Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 36,000 | 35,500 |
Accumulated Amortization | (5,556) | (5,034) |
Net Carrying Amount | 30,444 | 30,466 |
Databases [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 46,580 | 43,080 |
Accumulated Amortization | (35,260) | (31,789) |
Net Carrying Amount | $ 11,320 | $ 11,291 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)Segment | Mar. 31, 2021USD ($) | |
Finite Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 14,727,000 | $ 14,346,000 |
Amortization | $ 5,378,000 | 5,241,000 |
Number of Reporting Units | Segment | 1 | |
Impairment of goodwill | $ 0 | 0 |
AW acquisition | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill, Period Increase (Decrease) | 62,100,000 | |
Finite Lived Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 14,700,000 | 14,300,000 |
Amortization | $ 5,400,000 | $ 5,200,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022, excluding the three months ended March 31, 2022 | $ 40,564 | |
2023 | 48,216 | |
2024 | 45,369 | |
2025 | 41,415 | |
2026 | 34,874 | |
Thereafter | 176,803 | |
Net Carrying Amount | $ 387,241 | $ 352,470 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)Segment | Dec. 31, 2021USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Net pre-tax gains | $ 0 | $ 0 |
Interest Rate Swaps [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative, Number of Instruments Held | Segment | 2 | |
Notional amount | $ 67,900,000 | |
Maturity date | Mar. 31, 2025 | |
Net pre-tax gains | $ 300,000 | |
Interest Rate Swaps [Member] | Goldman Sachs Bank USA [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fixed interest rates | 2.0135% | |
Interest Rate Swaps [Member] | Bank of America N.A [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Fixed interest rates | 2.012% |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Summary of Fair Values of the Interest Rate Swap (Details) - Interest Rate Swap [Member] $ in Thousands | Mar. 31, 2022USD ($) |
Other Assets [Member] | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Long-term derivative asset | $ 1,966 |
Accrued Expenses and Other Current Liabilities [Member] | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Short-term derivative liability | $ 320 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Summary of Effect of Derivative Interest Rate Swap and Related Tax Effects in AOCI (Details) - Interest Rate Swaps [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Gain in AOCI, beginning of period, net of tax | $ 0 |
Amount of gain recognized in other comprehensive loss, net of tax | 1,646 |
Amount of gain reclassified from AOCI into net loss, net of tax | 0 |
Gain in AOCI, end of period, net of tax | $ 1,646 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Less: current portion of long-term debt | $ 6,875 | $ 6,875 |
Long-term debt | 262,226 | 263,808 |
2021 Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Principal | 271,562 | 273,282 |
Unamortized debt issuance costs / financing costs | (2,461) | (2,599) |
Total debt, net | $ 269,101 | $ 270,683 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) - USD ($) $ in Thousands | Sep. 17, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Debt Instrument [Line Items] | ||||
Frequency of payment | The 2021 Term Loan is subject to annual amortization of principal, payable in equal quarterly installments on the last day of each fiscal quarter, commencing on December 31, 2021 (the "Initial Amortization Date"), equal to approximately 2.5% per annum of the principal amount of the term loans in the first year and second year after the Initial Amortization Date and approximately 5.0% per annum of the principal amount of the term loans in the third year, fourth year and fifth year after the Initial Amortization Date. | |||
Financing costs | $ 3,500 | |||
2021 Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayment of debt | 1,700 | |||
Outstanding principal balance | 271,562 | $ 273,282 | ||
Balloon payment | $ 220,000 | |||
Financing costs | 2,800 | |||
PaidInKindInterestOnTwoThousandTwentyOneTermLoan[Member] | ||||
Debt Instrument [Line Items] | ||||
Interest payable | $ 1,800 | |||
2021 Revolving Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | Sep. 17, 2026 | |||
Line of credit | $ 75,000 | |||
Interest rate | 2.71% | |||
Financing costs | $ 800 | |||
2021 Revolving Line of Credit [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Unused commitment fee percentage | 0.25% | |||
2021 Revolving Line of Credit [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Unused commitment fee percentage | 0.30% |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | Mar. 31, 2022USD ($) |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Business combination, Contingent consideration, Liability | $ 1 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Reconciliation of Earnout Liabilities Measured at Fair Value on a Recurring Basis Unobservable Inputs (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Balance at beginning of period | $ 7,500 | $ 5,236 |
Additions | 1,000 | 0 |
Net change in fair value and other adjustments | 0 | 3,764 |
Payments | (7,500) | (1,500) |
Balance at end of period | $ 1,000 | $ 7,500 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value of Additional Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ (1,000) | $ 0 |
Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 1,000 | |
Recurring [Member] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 55,087 | |
Recurring [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 53,940 | |
Recurring [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,966 | |
Liabilities | 320 | |
Recurring [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 504 | |
Level 1 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | |
Level 1 [Member] | Recurring [Member] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 1 [Member] | Recurring [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 1 [Member] | Recurring [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Liabilities | 0 | |
Level 1 [Member] | Recurring [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 504 | |
Level 2 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | |
Level 2 [Member] | Recurring [Member] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 55,087 | |
Level 2 [Member] | Recurring [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 53,940 | |
Level 2 [Member] | Recurring [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,966 | |
Liabilities | 320 | |
Level 2 [Member] | Recurring [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 1,000 | |
Level 3 [Member] | Recurring [Member] | U.S. Treasuries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Recurring [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Level 3 [Member] | Recurring [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Liabilities | 0 | |
Level 3 [Member] | Recurring [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses And Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Payroll and payroll-related | $ 6,293 | $ 10,311 |
Contingent consideration, current | 0 | 7,500 |
Sales, franchise and other taxes | 2,850 | 1,785 |
Deferred rent | 0 | 91 |
Other | 3,694 | 2,971 |
Accrued expenses and other current liabilities | $ 12,837 | $ 22,658 |
Stockholders' Equity and Member
Stockholders' Equity and Members' Equity - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Class Of Stock [Line Items] | ||
Equity-based compensation | $ 6,872 | $ 406 |
Equity-Based Compensation Expen
Equity-Based Compensation Expense - Summary of Equity Based Compensation Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 6,872 | $ 406 |
Cost of Revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 232 | 15 |
Sales and Marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 3,746 | 102 |
Product Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 1,289 | 76 |
General And Administrative Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 1,605 | $ 213 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 6,872 | $ 406 |
Equity-based compensation | 6,872 | 406 |
Time Based Unit | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,600 | 400 |
Unrecognized expense related to unit-based compensation | $ 13,700 | |
Weighted-average period over which cost not yet recognized is expected to be recognized | 2 years 4 months 24 days | |
General And Administrative Expense | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1,605 | $ 213 |
2021 Equity Incentive Plan | Restricted Stock Unit [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 5,300 | |
2021 Equity Incentive Plan | Performance-Based | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized expense related to unit-based compensation | $ 78,500 | |
Weighted-average period over which cost not yet recognized is expected to be recognized | 3 years | |
2021 Equity Incentive Plan | Restricted Stock | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,098,264 | |
2021 Equity Incentive Plan | Common Class A | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,890,775 | |
IPO | 2019 Equity Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Issue price per share | $ 27 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Company's Unvested Time-Based and Performance-Based Unit Activity (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Time-Based RSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Non-vested at December 31, 2021 | shares | 1,935,899 |
Granted | shares | 1,065,897 |
Vested | shares | 0 |
Forfeited | shares | (58,624) |
Non-vested at March 31, 2022 | shares | 2,943,172 |
Non vested weighted average grant date fair value | $ / shares | $ 32.59 |
Non vested weighted average grant date fair value, Granted | $ / shares | 22.31 |
Non vested weighted average grant date fair value, vested | $ / shares | 0 |
Non vested weighted average grant date fair value, forfeited | $ / shares | 26.90 |
Non vested weighted average grant date fair value | $ / shares | $ 28.98 |
Performance-Based RSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Non-vested at December 31, 2021 | shares | 164,351 |
Granted | shares | 0 |
Vested | shares | 0 |
Forfeited | shares | (9,259) |
Non-vested at March 31, 2022 | shares | 155,092 |
Non vested weighted average grant date fair value | $ / shares | $ 27 |
Non vested weighted average grant date fair value, Granted | $ / shares | 0 |
Non vested weighted average grant date fair value, vested | $ / shares | 0 |
Non vested weighted average grant date fair value, forfeited | $ / shares | 27 |
Non vested weighted average grant date fair value | $ / shares | $ 27 |
Time Based Unit | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Non-vested at December 31, 2021 | shares | 2,756,406 |
Granted | shares | 0 |
Vested | shares | (96,191) |
Forfeited | shares | (33,549) |
Non-vested at March 31, 2022 | shares | 2,626,666 |
Non vested weighted average grant date fair value | $ / shares | $ 2.02 |
Non vested weighted average grant date fair value, Granted | $ / shares | 0 |
Non vested weighted average grant date fair value, vested | $ / shares | 1.45 |
Non vested weighted average grant date fair value, forfeited | $ / shares | 1.05 |
Non vested weighted average grant date fair value | $ / shares | $ 2.06 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Employer matching contributions, amount | $ 1.1 | $ 0.6 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Tax Credit Carryforward [Table] | |||
Unrecognized tax benefits | $ 0 | $ 0 | |
Effective tax rate | (0.70%) | (0.00%) | |
Deferred Tax Liability Due to Acquisition | $ 10,300,000 | ||
Deferred tax liability | 86,100,000 | ||
Tax receivable agreement liability | $ 154,700,000 | ||
Tax receivable agreement realized tax benefits payable to related parties percent | 85.00% | ||
Tax Receivable Agreement Benefit percentage | 15.00% | ||
Tax Receivable Agreement Realized Tax Benefits Payable To Related Parties | $ 0 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Loss Per Share - Schedule of Ne
Loss Per Share - Schedule of Net Loss Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Net loss | $ (13,057) | $ (10,488) | |
Less: Net loss attributable to Definitive OpCo prior to the Reorganization Transactions | 0 | (10,488) | |
Less: Net loss attributable to noncontrolling interests | (4,433) | 0 | |
Net loss attributable to Definitive Healthcare Corp. | (8,624) | 0 | |
Basic net loss per share attributable to common stockholders [Abstract] | |||
Allocation of net loss attributable to Definitive Healthcare Corp. | $ (8,624) | $ 0 | |
Weighted average number of shares of Class A outstanding | [1] | 97,158,823 | |
Net loss per share, basic and diluted | [1] | $ (0.09) | |
Common Class A [Member] | |||
Net loss | $ (13,057) | ||
Less: Net loss attributable to noncontrolling interests | (4,433) | ||
Net loss attributable to Definitive Healthcare Corp. | (8,624) | ||
Basic net loss per share attributable to common stockholders [Abstract] | |||
Allocation of net loss attributable to Definitive Healthcare Corp. | $ (8,624) | ||
Weighted average number of shares of Class A outstanding | 97,158,823 | ||
Net loss per share, basic and diluted | $ (0.09) | ||
[1] | (1) Basic and diluted net loss per share of Class A Common Stock is applicable only for the periods beginning from September 15, 2021, which is the period following the IPO and related Reorganization Transactions. See Note 18 for the number of shares used in the computation of net loss per share of Class A Common Stock and the basis for the computation of net loss per share. |
Loss Per Share - Schedule of Di
Loss Per Share - Schedule of Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) | 3 Months Ended |
Mar. 31, 2022shares | |
Vested and Unvested Units [Member] | |
Antidilutive securities excluded from computation of earnings per share, amount | 57,666,776 |
Restricted Stock Unit [Member] | |
Antidilutive securities excluded from computation of earnings per share, amount | 3,098,264 |
Segment and Geographic Data - S
Segment and Geographic Data - Schedule of Revenue by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Entity Wide Revenue Major Customer [Line Items] | ||
Revenue | $ 50,124 | $ 36,936 |
United States [Member] | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Revenue | 47,580 | 35,697 |
Rest of World [Member] | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Revenue | $ 2,544 | $ 1,239 |
Segment and Geographic Data -_2
Segment and Geographic Data - Schedule of Long-Lived Assets by Geographic Areas) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Mar. 31, 2021 |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total long-lived assets | $ 4,818 | $ 5,069 |
United States [Member] | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total long-lived assets | 4,391 | 4,705 |
Rest of World [Member] | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total long-lived assets | $ 427 | $ 364 |
Related parties - Additional In
Related parties - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 0.2 | $ 0.2 | |
Receivable, related parties | $ 0.1 | $ 0.6 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Details) - shares | Mar. 31, 2022 | Dec. 31, 2021 |
Common Class A | ||
Noncontrolling Interest [Line Items] | ||
Common stock, shares outstanding | 97,574,397 | 97,030,095 |
Definitive OpCo [Member] | ||
Noncontrolling Interest [Line Items] | ||
Number of shares held | 97,574,397 | |
Ownership interest (as a percent) | 63.90% | |
Noncontrolling interest | 36.10% | |
Definitive OpCo [Member] | Common Class A | ||
Noncontrolling Interest [Line Items] | ||
Common stock, shares outstanding | 544,302 |