Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | EngageSmart, Inc. | |
Entity Central Index Key | 0001863105 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 165,481,995 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 001-40835 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-2785225 | |
Entity Address, Address Line One | 30 Braintree Hill Office Park | |
Entity Address, Address Line Two | Suite 101 | |
Entity Address, City or Town | Braintree | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02184 | |
City Area Code | 781 | |
Local Phone Number | 848-3733 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Security 12b Title | Common stock, $0.001 par value per share | |
Trading Symbol | ESMT | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 293,456 | $ 254,294 |
Accounts receivable, net of allowance for credit losses of $255 and $203 as of September 30, 2022 and December 31, 2021, respectively | 12,372 | 10,266 |
Unbilled receivables | 5,722 | 3,441 |
Prepaid expenses and other current assets | 11,190 | 7,617 |
Total current assets | 322,740 | 275,618 |
Operating lease right-of-use assets | 28,024 | |
Property and equipment, net | 13,426 | 10,968 |
Goodwill | 425,677 | 425,677 |
Acquired intangible assets, net | 76,219 | 87,920 |
Other assets | 5,018 | 3,811 |
Total assets | 871,104 | 803,994 |
Current liabilities: | ||
Accounts payable | 759 | 2,090 |
Accrued expenses and other current liabilities | 33,621 | 25,229 |
Contingent consideration liability | 2,800 | |
Deferred revenue | 7,819 | 6,792 |
Operating lease liabilities | 4,557 | |
Total current liabilities | 46,756 | 36,911 |
Long-term operating lease liabilities | 28,450 | |
Deferred income taxes | 1,324 | 4,224 |
Deferred revenue, net of current portion | 285 | 232 |
Other long-term liabilities | 188 | 5,528 |
Total liabilities | 77,003 | 46,895 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.001 per share, 10,000,000 shares authorized and no shares issued and outstanding as of September 30, 2022 and December 31, 2021 | ||
Common stock, par value $0.001 per share, 650,000,000 shares authorized and 165,268,125 and 161,860,980 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 165 | 162 |
Additional paid-in capital | 808,334 | 787,043 |
Accumulated stockholders' deficit | (14,398) | (30,106) |
Total stockholders equity | 794,101 | 757,099 |
Total liabilities and stockholders equity | $ 871,104 | $ 803,994 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Allowance for credit losses | $ 255 | $ 203 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 650,000,000 | 650,000,000 |
Common stock, shares, issued | 165,268,125 | 161,860,980 |
Common stock, shares, outstanding | 165,268,125 | 161,860,980 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 78,796 | $ 55,493 | $ 220,020 | $ 154,664 |
Cost of revenue | 18,845 | 14,237 | 52,687 | 39,735 |
Gross profit | 59,951 | 41,256 | 167,333 | 114,929 |
Operating expenses: | ||||
General and administrative | 13,986 | 15,287 | 42,270 | 31,990 |
Selling and marketing | 25,906 | 19,096 | 72,262 | 51,224 |
Research and development | 12,978 | 9,132 | 34,011 | 23,947 |
Contingent consideration expense | 1,157 | 1,370 | ||
Restructuring charges | (330) | (241) | ||
Amortization of intangible assets | 2,363 | 2,362 | 7,087 | 7,086 |
Total operating expenses | 55,233 | 46,704 | 155,630 | 115,376 |
Income (loss) from operations | 4,718 | (5,448) | 11,703 | (447) |
Other income (expense), net: | ||||
Interest expense, including related party interest (Note 15) | (121) | (3,487) | (361) | (8,087) |
Other income (expense), net | 1,116 | (28) | 1,466 | (107) |
Total other income (expense), net | 995 | (3,515) | 1,105 | (8,194) |
Income (loss) before income taxes | 5,713 | (8,963) | 12,808 | (8,641) |
Benefit from income taxes | (1,057) | (671) | (2,900) | (623) |
Net income (loss) and comprehensive income (loss) | $ 6,770 | $ (8,292) | $ 15,708 | $ (8,018) |
Net income (loss) per share: | ||||
Basic | $ 0.04 | $ (0.06) | $ 0.10 | $ (0.05) |
Diluted | $ 0.04 | $ (0.06) | $ 0.09 | $ (0.05) |
Weighted-average number of common shares outstanding: | ||||
Basic | 164,427,770 | 149,031,242 | 163,195,976 | 148,200,589 |
Diluted | 169,222,794 | 149,031,242 | 169,064,015 | 148,200,589 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Members' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Common Stock Class A-1 Common Shares | Common Stock Class A-2 Common Shares | Common Stock Class A-3 Common Shares | Additional Paid-in Capital | Accumulated Stockholders'/Members' Deficit |
Balances at Dec. 31, 2020 | $ 428,660 | $ 293,286 | $ 136,559 | $ 19,956 | $ (21,141) | ||
Balance, shares at Dec. 31, 2020 | 97,209,436 | 45,262,340 | 5,010,888 | ||||
Exercise of equity-based options | 552 | $ 552 | |||||
Exercise of equity-based options, shares | 306,762 | ||||||
Equity/Stock-based compensation expense | 222 | $ 222 | |||||
Net income (loss) | 485 | 485 | |||||
Balances at Mar. 31, 2021 | 429,919 | $ 293,286 | $ 136,559 | $ 20,730 | (20,656) | ||
Balance, shares at Mar. 31, 2021 | 97,209,436 | 45,262,340 | 5,317,650 | ||||
Balances at Dec. 31, 2020 | 428,660 | $ 293,286 | $ 136,559 | $ 19,956 | (21,141) | ||
Balance, shares at Dec. 31, 2020 | 97,209,436 | 45,262,340 | 5,010,888 | ||||
Net income (loss) | (8,018) | ||||||
Balances at Sep. 30, 2021 | 755,144 | $ 162 | $ 784,141 | (29,159) | |||
Balance, common, shares at Sep. 30, 2021 | 161,601,915 | ||||||
Balances at Mar. 31, 2021 | 429,919 | $ 293,286 | $ 136,559 | $ 20,730 | (20,656) | ||
Balance, shares at Mar. 31, 2021 | 97,209,436 | 45,262,340 | 5,317,650 | ||||
Exercise of equity-based options | 296 | $ 296 | |||||
Exercise of equity-based options, shares | 167,104 | ||||||
Equity/Stock-based compensation expense | 338 | $ 338 | |||||
Net income (loss) | (211) | (211) | |||||
Balances at Jun. 30, 2021 | 430,342 | $ 293,286 | $ 136,559 | $ 21,364 | (20,867) | ||
Balance, shares at Jun. 30, 2021 | 97,209,436 | 45,262,340 | 5,484,754 | ||||
Exercise of equity-based options | 215 | $ 215 | |||||
Exercise of equity-based options, shares | 99,860 | ||||||
Repurchase and retirement of common shares, shares | (74,529) | ||||||
Repurchase and retirement of common shares | (51) | $ (51) | |||||
Conversion of Class A-1, A-2 and A-3 common shares into common stock in connection with initial public offering (Note 10) | $ 148 | $ (293,286) | $ (136,559) | $ (21,528) | 451,225 | ||
Conversion of Class A-1, A-2 and A-3 common shares into common stock in connection with initial public offering (Note 10), shares | 147,981,861 | (97,209,436) | (45,262,340) | (5,510,085) | |||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions | 331,989 | $ 14 | 331,975 | ||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions, shares | 13,620,054 | ||||||
Costs incurred in connection with initial public offering | (5,662) | (5,662) | |||||
Stock-based compensation expense | 6,603 | 6,603 | |||||
Net income (loss) | (8,292) | (8,292) | |||||
Balances at Sep. 30, 2021 | 755,144 | $ 162 | 784,141 | (29,159) | |||
Balance, common, shares at Sep. 30, 2021 | 161,601,915 | ||||||
Exercise of equity-based options | 1,897 | 1,897 | |||||
Exercise of equity-based options, shares | 561,581 | ||||||
Stock-based compensation expense | 2,987 | 2,987 | |||||
Net income (loss) | 2,059 | 2,059 | |||||
Balances at Mar. 31, 2022 | 763,910 | $ 162 | 791,795 | (28,047) | |||
Balance, common, shares at Mar. 31, 2022 | 162,434,392 | ||||||
Net income (loss) | 15,708 | ||||||
Balances at Sep. 30, 2022 | 794,101 | $ 165 | 808,334 | (14,398) | |||
Balance, common, shares at Sep. 30, 2022 | 165,268,125 | ||||||
Exercise of equity-based options | 3,691 | $ 2 | 3,689 | ||||
Exercise of equity-based options, shares | 1,162,554 | ||||||
Stock-based compensation expense | 3,327 | 3,327 | |||||
Net income (loss) | 6,879 | 6,879 | |||||
Balances at Jun. 30, 2022 | 778,136 | $ 164 | 799,140 | (21,168) | |||
Balance, common, shares at Jun. 30, 2022 | 163,634,818 | ||||||
Exercise of equity-based options | 5,599 | $ 1 | 5,598 | ||||
Exercise of equity-based options, shares | 1,605,814 | ||||||
Stock-based compensation expense | 3,798 | 3,798 | |||||
Net income (loss) | 6,770 | 6,770 | |||||
Balances at Sep. 30, 2022 | $ 794,101 | $ 165 | $ 808,334 | $ (14,398) | |||
Balance, common, shares at Sep. 30, 2022 | 165,268,125 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Stockholders' Deficit |
Balances at Dec. 31, 2021 | $ 757,099 | $ 162 | $ 787,043 | $ (30,106) |
Balance, common, shares at Dec. 31, 2021 | 161,860,980 | |||
Issuance of common stock upon exercise of stock options | 1,897 | 1,897 | ||
Issuance of common stock upon exercise of stock options, shares | 561,581 | |||
Vesting of restricted stock units, shares | 17,302 | |||
Shares withheld for employee taxes | (132) | (132) | ||
Shares withheld for employee taxes, shares | (5,471) | |||
Stock-based compensation expense | 2,987 | 2,987 | ||
Net income | 2,059 | 2,059 | ||
Balances at Mar. 31, 2022 | 763,910 | $ 162 | 791,795 | (28,047) |
Balance, common, shares at Mar. 31, 2022 | 162,434,392 | |||
Balances at Dec. 31, 2021 | 757,099 | $ 162 | 787,043 | (30,106) |
Balance, common, shares at Dec. 31, 2021 | 161,860,980 | |||
Net income | 15,708 | |||
Balances at Sep. 30, 2022 | 794,101 | $ 165 | 808,334 | (14,398) |
Balance, common, shares at Sep. 30, 2022 | 165,268,125 | |||
Balances at Mar. 31, 2022 | 763,910 | $ 162 | 791,795 | (28,047) |
Balance, common, shares at Mar. 31, 2022 | 162,434,392 | |||
Issuance of common stock upon exercise of stock options | 3,691 | $ 2 | 3,689 | |
Issuance of common stock upon exercise of stock options, shares | 1,162,554 | |||
Issuance of common stock in connection with employee stock purchase plan | 463 | 463 | ||
Issuance of common stock in connection with employee stock purchase plan, shares | 25,930 | |||
Vesting of restricted stock units, shares | 18,018 | |||
Shares withheld for employee taxes | (134) | (134) | ||
Shares withheld for employee taxes, shares | (6,076) | |||
Stock-based compensation expense | 3,327 | 3,327 | ||
Net income | 6,879 | 6,879 | ||
Balances at Jun. 30, 2022 | 778,136 | $ 164 | 799,140 | (21,168) |
Balance, common, shares at Jun. 30, 2022 | 163,634,818 | |||
Issuance of common stock upon exercise of stock options | 5,599 | $ 1 | 5,598 | |
Issuance of common stock upon exercise of stock options, shares | 1,605,814 | |||
Vesting of restricted stock units, shares | 38,777 | |||
Shares withheld for employee taxes | (202) | (202) | ||
Shares withheld for employee taxes, shares | (11,284) | |||
Stock-based compensation expense | 3,798 | 3,798 | ||
Net income | 6,770 | 6,770 | ||
Balances at Sep. 30, 2022 | $ 794,101 | $ 165 | $ 808,334 | $ (14,398) |
Balance, common, shares at Sep. 30, 2022 | 165,268,125 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 15,708 | $ (8,018) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 13,989 | 13,620 |
Stock/equity-based compensation expense | 10,112 | 7,163 |
Contingent consideration expense | 1,370 | |
Non-cash operating lease expense | 3,385 | |
Deferred income taxes | (2,900) | (623) |
Loss on disposal of property and equipment | 22 | 43 |
Non-cash interest expense, including loss on extinguishment of debt | 175 | 4,066 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (3,573) | (3,194) |
Accounts receivable, net | (2,106) | (2,195) |
Unbilled receivables | (2,281) | (931) |
Other assets | (1,382) | (484) |
Accounts payable | (1,253) | 3,622 |
Accrued expenses and other current liabilities | 7,227 | 5,475 |
Deferred revenue | 1,080 | 1,142 |
Operating lease liabilities | (4,115) | |
Other long-term liabilities | 26 | (702) |
Net cash provided by operating activities | 34,114 | 20,354 |
Cash flows from investing activities: | ||
Purchases of property and equipment, including costs capitalized for development of internal-use software | (4,759) | (3,190) |
Net cash used in investing activities | (4,759) | (3,190) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions | 331,989 | |
Proceeds from issuance of common stock to General Atlantic (IC), L.P. in connection with the Corporate Conversion (Note 10) | 43,236 | |
Payment to settle fractional shares related to Class A-2 shareholders in connection with the Corporate Conversion (Note 10) | (43,236) | |
Repayment of long-term debt | (114,174) | |
Payment of debt issuance costs | (23) | (747) |
Payment of debt extinguishment costs | (90) | |
Payments of related party notes | (5,900) | |
Payments of contingent consideration | (1,066) | (1,868) |
Proceeds from exercise of stock/equity-based options | 11,187 | 1,063 |
Repurchase and retirement of common shares | (51) | |
Payments of taxes related to net share settlement of equity awards | (468) | |
Proceeds from issuance of common stock under employee stock purchase plan | 463 | |
Payment of initial public offering costs | (286) | (2,912) |
Net cash provided by financing activities | 9,807 | 207,310 |
Net increase in cash, cash equivalents and restricted cash | 39,162 | 224,474 |
Cash, cash equivalents and restricted cash at beginning of period | 254,594 | 29,650 |
Cash, cash equivalents and restricted cash at end of period | 293,756 | 254,124 |
Reconciliation of cash, cash equivalents, and restricted cash: | ||
Cash and cash equivalents | 293,456 | 253,824 |
Restricted cash within other assets | $ 300 | $ 300 |
Restricted Cash and Cash Equivalents, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Total cash, cash equivalents, and restricted cash | $ 293,756 | $ 254,124 |
Supplemental cash flow information: | ||
Cash paid for interest | 181 | 5,310 |
Cash paid for taxes | 4,330 | 35 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Additions to property and equipment included in accounts payable and accrued expenses | $ 189 | 187 |
Deferred initial public offering costs included in accrued expenses | 2,750 | |
Debt issuance costs included in accrued expenses | $ 450 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation EngageSmart, Inc. and its subsidiaries (together referred to herein as the “Company” or “EngageSmart”) is a leading provider of vertically tailored customer engagement software and integrated payments solutions. EngageSmart offers single instance, multi-tenant, true Software-as-a-Service (“SaaS”) vertical solutions, including SimplePractice, InvoiceCloud, HealthPay24 and DonorDrive, that are designed to simplify the Company's customers' engagement with its clients by driving digital adoption and self-service. The Company serves customers across several core verticals: Health & Wellness, Government, Utilities, Financial Services, Healthcare and Giving. EngageSmart's solutions are purpose-built for each of the Company's verticals and they simplify and automate mission-critical workflows such as scheduling, client onboarding, client communication, paperless billing, and electronic payment processing. EngageSmart is headquartered in Braintree, Massachusetts with additional locations throughout the United States. Initial Public Offering On September 27, 2021, the Company completed its initial public offering ("IPO"), in which the Company issued and sold 13,620,054 shares of common stock at a public offering price of $ 26.00 per share, including 620,054 shares issued upon the exercise of the underwriters' option to purchase additional shares. The Company raised net proceeds of $ 326.4 million, after deducting the underwriting discount of $ 22.1 million and offering expenses of $ 5.6 million. Additionally, certain existing shareholders sold an aggregate of 3,112,446 shares in the IPO at the same price, resulting in net proceeds to the selling stockholders of $ 75.9 million. On September 27, 2021, the Company used a portion of the net proceeds from its IPO to repay in full the outstanding borrowings of $ 114.2 million under its Credit Facilities, as defined below under Note 9 - Debt . Following the Company's IPO, General Atlantic (IC), L.P. ("General Atlantic") controls more than 50 % of the combined voting power of the Company's outstanding common stock, and the Company is considered a "controlled company" within the meaning of the corporate governance standards of the New York Stock Exchange ("NYSE"). Corporate Conversion Immediately prior to effectiveness of the Company's IPO registration statement on Form S-1, EngageSmart, LLC, a Delaware limited liability company, converted into a Delaware corporation pursuant to a statutory conversion, which changed the Company's name to EngageSmart, Inc. ("Corporate Conversion"). Refer to Note 10 - Stockholders' Equity for further discussion. Stock Split On September 10, 2021, the Company effected a 1-for- 3 forward stock split of its common shares. In connection with the forward stock split, each issued and outstanding common share, automatically and without action on the part of the holders, became three common shares. All share, per share and related information presented in the consolidated financial statements and accompanying notes have been retroactively adjusted, where applicable, to reflect the impact of the forward stock split. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation. For all the periods reported in these condensed consolidated financial statements, the Company has not and does not have any material revenue-generating operations on a standalone basis, and all the material revenue-generating operations of the Company are carried out by its subsidiaries. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021, included in the Company's 2021 Form 10-K. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position for the periods presented. The results for the interim periods presented are not necessarily indicative of future results. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The Company’s significant accounting policies are discussed in Note 2 - Summary of Significant Accounting Policies within the notes to consolidated financial statements for the year ended December 31, 2021, included in the Company's 2021 Form 10-K. There have been no significant changes to these policies during the nine months ended September 30, 2022, except as noted below. Risk of Concentrations of Credit and Significant Customers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. At times, the Company may maintain cash balances in excess of federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Significant customers are those that accounted for 10% or more of the Company’s total revenue or accounts receivable during any period presented herein. During the three and nine months ended September 30, 2022 and 2021, no customer accounted for 10 % or more of revenue. As of September 30, 2022, the Company had one customer that accounted for 10 % or more of its accounts receivable balance. As of December 31, 2021, no customer accounted for 10 % or more of accounts receivable. Recently Adopted Accounting Prono uncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize assets and liabilities on their balance sheet for the rights and obligations created by leases and to continue to recognize related expenses on their income statements over the lease term. It also requires disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted this standard effective January 1, 2022 using the modified retrospective transition method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of transition practical expedients for existing contracts. Adoption of the new standard resulted in the recording of operating lease right-of-use assets of $ 31.4 million and operating lease liabilities of $ 37.1 million, as of January 1, 2022 . The difference between the operating lease right-of-use assets and operating lease liabilities relates to deferred rent balances, lease incentives, and liabilities recognized under Accounting Standards Codification ("ASC") 420, Exit or Disposal Cost Obligations , the net impact of which reduced the right-of-use assets. The adoption of the standard did not impact the Company's consolidated net earnings and had no impact on cash flows. Refer to Note 5 - Leases for additional information related to the Company’s lease obligations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. Effective January 1, 2022 , the Company adopted ASU 2016-13 on a modified retrospective basis. The adoption of ASU 2016-13 did no t have a material impact on the Company's condensed consolidated balance sheets, statements of operations and comprehensive income (loss), or cash flows. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles as well as clarifying and amending existing guidance to improve consistent application. Effective January 1, 2022 , the Company adopted ASU 2019-12 on a modified retrospective basis. The adoption of ASU 2019-12 did no t have a material impact on the Company's condensed consolidated balance sheets, statements of operations and comprehensive income (loss), or cash flows. Recently Issued Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"), which requires the recognition and measurement of contract assets and liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"). ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and, if adopted early, requires the retrospective method of transition applied to transactions occurring on or after the beginning of the fiscal year of adoption. The Company is currently evaluating the timing of adoption of ASU 2021-08. The Company does not believe the adoption of ASU 2021-08 will have a material impact on its consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. Revenue Revenue Disaggregated The Company disaggregates revenue from contracts with customers by reportable segment and revenue type, as the Company believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors and is consistent with the manner in which the Company operates the business. The Company generates a significant majority of its revenue in the Enterprise Solutions segment from transaction and usage-based revenue and a significant majority of its revenue in the SMB Solutions segment from subscription revenue. The following table depicts disaggregated revenue by segment and revenue type (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Enterprise Solutions Transaction and usage-based $ 32,620 $ 24,977 $ 90,928 $ 69,517 Subscription 2,280 1,946 6,517 5,663 Other 966 354 2,298 1,811 Total Enterprise Solutions revenue 35,866 27,277 99,743 76,991 SMB Solutions Transaction and usage-based 11,349 8,580 33,613 23,884 Subscription 31,216 19,324 85,493 52,980 Other 365 312 1,171 809 Total SMB Solutions revenue 42,930 28,216 120,277 77,673 Total revenue $ 78,796 $ 55,493 $ 220,020 $ 154,664 Contract Assets and Liabilities Contract assets are rights to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditional on something other than the passage of time. Contract assets are transferred to accounts receivable once the rights become unconditional. The Company did no t have contract assets as of September 30, 2022 or December 31, 2021. Contract liabilities (deferred revenue) primarily consist of billings and payments received in advance of revenue recognition. The Company primarily bills and collects payments from customers for its services in advance on a monthly, quarterly or annual basis. Contract liabilities are recognized as revenue when services are performed and all other revenue recognition criteria have been met. Amounts expected to be recognized as revenue within 12 months of the balance sheet date are classified as current deferred revenue and amounts expected to be re cognized as revenue beyond 12 months of the balance sheet date are classified as non-current deferred revenue. The Company had current deferred revenue of $ 7.8 million and $ 6.8 million as of September 30, 2022 and December 31, 2021, respectively. Non-current deferred revenue was $ 0.3 million as of September 30, 2022 and $ 0.2 million as of December 31, 2021. During the nine months ended September 30, 2022, the Company recognized revenue of $ 6.5 million from the deferred revenue balance as of December 31, 2021. During the nine months ended September 30, 2021, the Company recognized revenue of $ 4.7 million from the deferred revenue balance as of December 31, 2020. Remaining Performance Obligations ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. As permitted by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. For contracts greater than one year in length, the Company's most significant performance obligations consist of variable consideration. Such variable consideration meets the specified criteria for the disclosure exclusion; therefore, the majority of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied is variable consideration that is not required for this disclosure. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 4. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the sum of the weighted average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method. For the periods in which the Company incurs a net loss, the dilutive effect of the Company’s outstanding common stock equivalents is not included in the calculation as the effect would be anti-dilutive. The following table sets forth the computation of basic and diluted net income (loss) per share: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands, except share and per share amounts) Numerator: Net income (loss) $ 6,770 $ ( 8,292 ) $ 15,708 $ ( 8,018 ) Denominator: Weighted average common shares outstanding, basic 164,427,770 149,031,242 163,195,976 148,200,589 Effect of potential dilutive common shares 4,795,024 — 5,868,039 — Weighted average common shares outstanding, diluted 169,222,794 149,031,242 169,064,015 148,200,589 Net income (loss) per share, basic $ 0.04 $ ( 0.06 ) $ 0.10 $ ( 0.05 ) Net income (loss) per share, diluted $ 0.04 $ ( 0.06 ) $ 0.09 $ ( 0.05 ) The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net income (loss) per share for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Options to purchase common shares 383,666 11,205,066 473,392 11,205,066 Unvested restricted stock units 1,535,412 288,455 913,466 288,455 Total 1,919,078 11,493,521 1,386,858 11,493,521 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | 5. Leases On January 1, 2022 , the Company adopted ASU 2016-02, using the modified retrospective transition method. The Company has elected to adopt the package of practical expedients which apply to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not reassess: whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, and the initial direct costs for any existing leases. The Company has also elected to combine lease and non-lease components when calculating minimum lease payments on new leases for all asset classes. The Company has elected an accounting policy to forgo the recognition of lease assets or liabilities for short-term leases. Short-term leases are defined, in accordance with the standard, as those with terms of one year or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. The Company determines if an arrangement is or contains a lease at contract inception. The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of right-of-use ("ROU") assets and lease liabilities at the lease commencement date and thereafter at the modification date, if modified. ROU assets represent the Company's right to control the underlying assets under lease, and the lease liability is the Company's obligation to make the lease payments related to the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of future minimum fixed lease payments to be made over the lease term. The Company uses the non-cancellable lease term unless it is reasonably certain that a renewal or termination option will be exercised. When available, the Company will use the rate implicit in the lease to discount lease payments to present value. As most leases do not provide an implicit rate, the Company will estimate the incremental borrowing rate to discount the lease payments. The Company estimates the incremental borrowing rate based on the rates of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis, over a similar term, and in a similar economic environment. The ROU asset also includes any lease prepayments and initial direct costs, offset by lease incentives. Certain lease agreements contain variable lease payments which are not included in the measurement of the lease liability. Variable lease payments relate to taxes, insurance, utilities, and common area maintenance ("CAM"). These variable lease payments are recognized in the condensed consolidated statements of operations and comprehensive income (loss) in the period in which the obligation for those payments is incurred. The Company has operating leases for office spac e to support business operations. The Company's office leases expire at varying dates from 2023 through 2030 . The Com pany's leases do not contain any material residual value guarantees or restrictive covenants. Operating leases are recognized on the condensed consolidated balance sheets as operating lease right-of-use assets, operating lease liabilities and long-term operating lease liabilities. Operating lease expense is recognized on a straight-line basis over the lease term within the Company’s condensed consolidated statements of operations and comprehensive income (loss). Lease Costs and Other Information The following table summarizes the components of operating lease expense (in thousands): Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Operating lease cost $ 1,184 $ 3,549 Variable lease cost 79 224 Total $ 1,263 $ 3,773 The weighted average remaining lease term (in years) and discount rate were as follows: As of September 30, 2022 Weighted-Average remaining lease term 7.0 Weighted-Average discount rate 2.26 % Supplemental Cash Flow Information The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease cost and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below (in thousands): Nine Months Ended September 30, 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 4,246 Right of use assets obtained in exchange for new operating lease liabilities $ 31,409 Maturity of Lease Liabilities The following table presents the future minimum lease payments under the Company's operating leases liabilities as of September 30, 2022 (in thousands): Remainder of 2022 $ 958 2023 5,741 2024 5,750 2025 4,489 2026 4,079 Thereafter 14,810 Total lease payments $ 35,827 Less: imputed interest ( 2,820 ) Lease liabilities $ 33,007 The Com pany has subleased certain office space for which incoming sublease amounts will offset the future lease payments in the table above. Under the executed sublease agreement, the Company expects to receive future sublease payments of $ 0.2 million over the remainder of 2022 and $ 1.5 million thereafter. ASC 840 Disclosures Under the previous lease accounting standard, ASC 840, Leases , (“ASC 840”), as previously disclosed in the 2021 Form 10-K for the year ended December 31, 2021, the total future minimum payments under non-cancellable operating leases as of December 31, 2021 were as follows (in thousands): 2022 $ 5,674 2023 5,716 2024 5,743 2025 4,481 2026 4,071 Thereafter 14,766 Total $ 40,451 Rent expense was $ 0.8 million and $ 3.1 million for the three and nine months ended September 30, 2021, respectively. As of December 31, 2021, the Company had total deferred rent of $ 4.5 million, which was included in accrued expenses and other current liabilities and other long-term liabilities on the Company’s condensed consolidated balance sheets |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements The following tables present the Company’s fair value hierarchy for its assets and liabilities that were measured at fair value on a recurring basis (in thousands): September 30, 2022 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 224,064 $ — $ — $ 224,064 Liabilities: Contingent consideration liability $ — $ — $ — $ — December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 205,010 $ — $ — $ 205,010 Liabilities: Contingent consideration liability $ — $ — $ 2,800 $ 2,800 Money market funds held as of September 30, 2022 and December 31, 2021 were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. The carrying values of the Company’s accounts receivable, unbilled receivables, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. There were no transfers into or out of Level 3 during the periods presented. The Company’s recurring fair value measurements using Level 3 inputs relate to the Company’s contingent consideration liability, as the significant inputs to the valuation are not observable in the market. The Company determined the fair value of the contingent consideration liability using a Monte Carlo simulation model, and the significant assumptions and estimates utilized in the model include forecasted net recurring revenue, net recurring revenue volatility, and discount rate. Changes in the fair value of the Company’s contingent consideration liability were as follows (in thousands): Balance as of December 31, 2021 $ 2,800 Payment of contingent consideration ( 2,800 ) Change in fair value — Balance as of September 30, 2022 $ — |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | 7. Goodwill and Acquired Intangible Assets The carrying amount of goodwill was $ 425.7 million as of September 30, 2022 and December 31, 2021, rel ated to goodwill from the Company’s acquisitions. Changes in the carrying amount of goodwill by reportable segment through September 30, 2022 are as follows (in thousands): Enterprise Solutions SMB Solutions Total Balance as of December 31, 2021 $ 218,658 $ 207,019 $ 425,677 Goodwill acquired — — — Balance as of September 30, 2022 $ 218,658 $ 207,019 $ 425,677 Acquired intangible assets of the Company consisted of the following (in thousands): September 30, 2022 Weighted Average Gross Carrying Value Accumulated Amortization Net Carrying Value (in years) Customer relationships 10.0 $ 82,841 $ ( 29,273 ) $ 53,568 Developed technology 7.0 42,913 ( 21,925 ) 20,988 Tradenames 5.0 5,824 ( 4,161 ) 1,663 Total $ 131,578 $ ( 55,359 ) $ 76,219 December 31, 2021 Weighted Average Gross Carrying Value Accumulated Amortization Net Carrying Value (in years) Customer relationships 10.0 $ 82,841 $ ( 23,059 ) $ 59,782 Developed technology 7.0 42,913 ( 17,311 ) 25,602 Tradenames 5.0 5,824 ( 3,288 ) 2,536 Total $ 131,578 $ ( 43,658 ) $ 87,920 The Company rec orded amortization expense of $ 3.9 million for each of the three month periods ended September 30, 2022 and 2021, and $ 11.7 million for each of the nine month periods ended September 30, 2022 and 2021. Amortizat ion of developed technology is recorded within cost of revenue, while amortization of customer relationships and tradenames is recorded within amortization of intangible assets within the Company’s condensed consolidated statements of operations and comprehensive income (loss). Future estimated amortization expense of the Company’s intangible assets as of September 30, 2022 is expected to be as follows (in thousands): Remainder of 2022 $ 3,900 2023 15,601 2024 14,640 2025 14,383 2026 9,335 Thereafter 18,360 Total $ 76,219 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 8. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Accrued employee compensation and benefits $ 13,494 $ 12,437 Accrued consulting and professional fees 3,147 2,619 Accrued processing fees 3,471 1,626 Accrued channel partner fees 2,495 2,081 Accrued license fees 2,955 1,154 Accrued marketing 1,552 926 Accrued sales tax 656 615 Accrued restructuring — 387 Other 5,851 3,384 Total $ 33,621 $ 25,229 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt As of September 30, 2022 and December 31, 2021, the Company had no long-term debt outstanding. 2021 Revolving Credit Facility On September 27, 2021, the Company entered into a revolving credit agreement (“2021 Revolving Credit Facility”) with JPMorgan Chase Bank, N.A. as administrative agent and certain other lenders. The 2021 Revolving Credit Facility allows the Company to borrow up to $ 75.0 million, $ 7.5 million of which may be comprised of a letter of credit facility. The 2021 Revolving Credit Facility will mature on September 27, 2026 and proceeds of the borrowings under the 2021 Revolving Credit Facility will be used for general corporate purposes. In conjunction with the 2021 Revolving Credit Facility, the Company incurred debt issuance costs in the amount of $ 1.2 million, which were recorded within other assets on the condensed consolidated balance sheets and are being amortized into interest expense over the life of the 2021 Revolving Credit Facility. The 2021 Revolving Credit Facility requires the Company to pay a commitment fee in respect to unused revolving credit facility commitments of 0.25 % per annum. The commitment fee is recorded as a component of interest expense o n the Company's condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2022, the Company has not yet drawn upon the 2021 Revolving Credit Facility, although $ 2.1 million has been utilized against the 2021 Revolving Credit Facility in the form of a line of credit, reducing the Company's borrowing capacity to $ 72.9 million. The 2021 Revolving Credit Facility contains certain financial maintenance covenants, which require the Company to not exceed certain specified total net leverage ratios at the end of each fiscal quarter. Credit Facilities On February 11, 2019, the Company entered into a credit agreement (“Credit Agreement”) with Ares Capital Corporation as administrative agent and collateral agent, and certain other lenders, which provided for a $ 75.0 million aggregate principal amount senior secured term loan facility, a $ 35.0 million senior secured delayed draw term loan facility, and a $ 7.5 million senior secured revolving credit facility, collectively referred to as the Credit Facilities. On September 27, 2021, the Company used a portion of the net proceeds from its IPO to repay in full the outstanding borrowings of $ 114.2 million under the Credit Facilities. In connection with this repayment, the Company incurred a loss on debt extinguishment of $ 1.2 million. The loss on debt extinguishment primarily consists of a write-off of unamortized debt issuance costs associated with the Credit Facilities. In September 2019, under the Credit Facilities, a letter of credit was issued related to one of the Company’s leases in the amount of $ 2.1 million. As of September 27, 2021, the Credit Agreement was terminated and the outstanding letter of credit was cash collateralized. In December 2021, the cash collateral was returned along with the cancellation of the prior letter of credit, and a new letter of credit for $ 2.1 million was issued under the 2021 Revolving Credit Facility. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 10. Stockholders' Equity Initial Public Offering On September 27, 2021, the Company completed its IPO, in which the Company issued and sold 13,620,054 shares of common stock at a public offering price of $ 26.00 per share, including 620,054 shares issued upon the exercise of the underwriters' option to purchase additional shares. The Company raised net proceeds of $ 326.4 million after deducting the underwriting discounts of $ 22.1 million and offering expenses of $ 5.6 million. Corporate Conversion Immediately prior to effectiveness of the Company’s IPO registration statement on Form S-1, EngageSmart, LLC, a Delaware limited liability company, converted into a Delaware corporation pursuant to a statutory conversion, which changed the Company’s name to EngageSmart, Inc. As part of the Corporate Conversion, each Class A-1 share, Class A-2 share, and Class A-3 share, in each case, of EngageSmart, LLC was converted on a 1:1 basis into Class A-1 common stock, Class A-2 common stock and Class A-3 common stock, in each case, of the Company, respectively, with the same rights and obligations that existed under the limited liability company agreement of EngageSmart, LLC (the “LLC Agreement”). Under the LLC Agreement, Class A-2 holders, were entitled to certain cash distributions that General Atlantic would have otherwise been entitled to receive if General Atlantic had received a pre-established dollar threshold in connection with and/or following certain exit events (“CVR Obligation”). Following the Corporate Conversion, each share of (i) Class A-1 common stock was reclassified into 0.9398 shares of common stock, (ii) Class A-2 common stock was reclassified into 1.1102 shares of common stock, and (iii) Class A-3 common stock was reclassified into 1 share of common stock (collectively, the “Common Stock Reclassifications”). The conversion ratio for each Common Stock Reclassification reflected the difference in value of the shares as a result of the CVR Obligation. Pursuant to the Company’s amended and restated certificate of incorporation, no fractional shares resulting from the conversion of Class A-2 common stock to common stock were to be issued and, in lieu of the fractional shares, each holder of Class A-2 common stock who would otherwise be entitled to fractional shares were entitled to an amount in cash (the “Fractional Share Payout”). Following the Common Stock Reclassifications, General Atlantic, the sole former holder of Class A-1 common stock (which were formerly Class A-1 shares of EngageSmart, LLC) subscribed for 1,662,917 additional shares of common stock in the Company, with the value of each share based on the public offering price of the shares of common stock sold by the Company in the IPO. As consideration for the additional shares of common stock, General Atlantic contributed capital to the Company in an amount equal to $ 43.2 million in order for the Company to satisfy its obligation in full for the Fractional Share Payout. The Fractional Share Payout settled the former CVR Obligation of the Company under the LLC Agreement. Additionally, certain of the Company's executive officers and other employees, among others, currently hold CVR Unit Awards ("CVR Units"), under the CVR Bonus Award Plan (the "CVR Plan"). The CVR Plan was amended to reflect the Corporate Conversion and the CVR Units will otherwise remain subject to the same terms and conditions applicable to the CVR Units immediately prior to the Company’s IPO. Following the Common Stock Reclassifications, General Atlantic subscribed for 288,344 additional shares of common stock in the Company, with the value of each share based on the public offering price of the shares of common stock sold by the Company in the IPO. As consideration for the additional shares of common stock, General Atlantic entered into a promissory note with the Company which requires General Atlantic to make a capital contribution to the Company equal to the amount of any payments made by the Company to holders of CVR Units pursuant to the CVR Plan, which such payments would be triggered by the same exit events specified under the LLC Agreement. Stock Split On September 10, 2021, the Company effected a 1-for- 3 forward stock split of its common shares. In connection with the forward stock split, each issued and outstanding common share, automatically became three common shares. Preferred Stock In connection with the C ompany's IPO in September 2021, the Company's amended and restated certificate of incorporation and amended and restated bylaws became effective, which authorized the issuance of 10,000,000 shares of preferred stock with a par value of $ 0.001 with rights and preferences, including voting rights, designated from time to time by the Board of Directors. As of September 30, 2022, no shares of preferred stock were issued or outstanding. Common Stock In connection with the Company's IPO in September 2021, the Company's amended and restated certificate of incorporat ion and amended and restated bylaws became effective, which authorized the issuance of 650,000,000 shares of common stock with a par value of $ 0.001 . As of September 30, 2022, there were 165,268,125 shares of common stock issued and outstanding. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | 11. Stock-based Compensation 2021 Incentive Award Plan In September 2021, the Company’s Board of Directors adopted, and its stockholders approved, the 2021 Incentive Award Plan (“2021 Plan”), which became effective in connection with the IPO. The 2021 Plan provides for granting stock options, including incentive stock options ("ISOs") and nonqualified stock options ("NSOs"), restricted stock, dividend equivalents, restricted stock units ("RSUs"), other stock-based awards, and cash awards to eligible employees, consultants and directors. A total of 14,798,186 shares of the Company’s common stock have been reserved for issuance under the 2021 Plan. The number of shares initially available for issuance will be increased annually on January 1 of each calendar year beginning in 2022 and ending in 20 31 by an amount equal to the lesser of (i) 5 % of the shares of the Company's common stock outstanding on the final day of the immediately preceding calendar year or (ii) a smaller number of shares as determined by the Company's Board of Directors. As of September 30, 2022, there were 12,486,500 remaining shares available for the Company to grant under the 2021 Plan. The Company’s Amended and Restated 2015 Stock Option Plan ("2015 Plan”) provided for the granting of ISOs and NSOs to the Company's employees, consultants, and nonemployee directors. In conjunction with the effectiveness of the 2021 Plan, the Company’s Board of Directors voted that no further awards would be granted under the 2015 Plan but any awards under the 2015 Plan that were outstanding as of the date of the IPO shall remain outstanding and continue to be subject to the terms and conditions of the 2015 Plan. Stock-based awards granted to employees generally vest over a four-year period, and, in the case of stock options, expire ten years from the date of grant. 2021 Employee Stock Purchase Plan In September 2021, the Company’s Board of Directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (“2021 ESPP”), which became effective in connection with the IPO. The 2021 ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. A total of 2,219,728 shares of the Company’s common stock have been reserved for future issuance under the 2021 ESPP. The number of shares available for issuance under the 2021 ESPP will be annually increased on January 1 of each calendar year beginning in 2022 and ending in 2031, by an amount equal to the lesser of: (i) 1 % of the aggregate number of shares of the Company's common stock outstanding on the final day of the immediately preceding calendar year or (ii) such smaller number of shares as is determined by the Company's Board of Directors. The 2021 ESPP permits eligible participants to purchase common stock through payroll deductions of up to 15 % of their eligible compensation during the offering period. The purchase price of the shares will be 85 % of the lesser of the fair market value of the Company's common stock on the first day of the offering period or the fair market value on the last day of the offering period. The Company's first offering period commenced on February 1, 2022 and ended on May 31, 2022. Following the completion of the first offering period, the 2021 ESPP will typically be administered through consecutive six-m onth offering perio ds. As of September 30, 2022, there were 2,193,798 shares of common stock available for issuance under the 2021 ESPP. Stock-based Compensation Expense Stock-based compensation expense is reflected in the condensed consolidated statements of operations and comprehensive income (loss) as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of revenue $ 397 $ 152 $ 660 $ 160 General and administrative 1,832 5,738 6,528 6,192 Selling and marketing 869 506 1,829 569 Research and development 700 207 1,095 242 Total $ 3,798 $ 6,603 $ 10,112 $ 7,163 Award Modification and Acceleration of Expense In June 2021, the Company entered into an amended employment agreement with an employee. Under the terms of the amended agreement, the employee would continue to vest in his outstanding equity awards, despite changes to his day-to-day responsibilities over time. As a result of the employment change, certain awards were considered to be modified in accordance with ASC 718, Compensation - Stock Compensatio n. As of the modification date, this resulted in a $ 12.1 million increase in unamortized stock-based compensation expense. Upon the Company's IPO in September 2021, as specified in the 2015 Plan, all awards with performance-based vesting conditions converted into awards with service-based vesting, with vesting measured from each awards' respective grant date. During the third quarter of 2021, the Company recognized $ 5.7 million of accelerated stock-based compensation expense related to awards with performance-based vesting conditions that converted into service-based vesting, of which $ 3.6 million related to the above-mentioned modified awards. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The Company's effective income tax rate s were ( 18.5 )% and 7.5 % for the three months ended September 30, 2022 and 2021, respectively. The Company's effective income tax rates were ( 22.6 )% and 7.2 % for the nine months ended September 30, 2022 and 2021, respectively. The effective tax rates for the three and nine months ended September 30, 2022 were lower than the statutory rate of 21.0 % primarily due to excess benefits from stock-based compensation. The effective tax rates for the three and nine months ended September 30, 2021 were lower than the statutory rate of 21.0 % due to stock-based compensation adjustments, acquisition earnout payments, and other permanent items. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Non-Cancellable Commitments As of September 30, 2022, the Company had non-cancellable commitments to vendors primarily consisting of subscriptions to third party software products. Obligations under contracts that are cancellable or with a remaining term of 12 months or less are not included. As of September 30, 2022, future minimum payments under other non-cancellable agreements were as follows (in thousands): Remainder of 2022 $ 1,275 2023 3,445 2024 1,652 2025 140 2026 83 Thereafter — Total $ 6,595 Contingent Value Payments In 2019, the CVR Plan was established for the benefit of option holders as of February 11, 2019 in the event that holders of the Company’s Class A-1 common shares receive cash distributions in connection with certa in exit events specified under the LLC Agreement of at least $ 889.1 million (the “Performance Threshold”). Subject to the achievement of the Performance Threshold, CVR Units entitle the holder, subject generally to the holder’s continued employment through the date of payment, to a pro-rata portion of a bonus pool (based on a participant’s share of CVR Units held). The maximum amount of this bonus pool was capped at $ 9.5 million, of which, $ 6.2 million remains outstanding as of September 30, 2022. No compensation expense has been recognized in relation to the CVR Plan as the Company has determined that certain exit events specified under the LLC Agreement are not probable as of September 30, 2022. In connection with the Company’s IPO, the CVR Plan was amended to reflect the Corporate Conversion (refer to Note 10 - Stockholders' Equity ) and the CVR Units will remain subject to the same terms and conditions applicable immediately prior to the Company’s IPO. Following the Common Stock Reclassifications, General Atlantic subscribed and received 288,344 additional shares of common stock in the Company, with the value of each share based on the public offering price of the shares of common stock sold by the Company in the IPO. As consideration for the additional shares of common stock, General Atlantic entered into a promissory note with the Company, which requires General Atlantic to make a capital contribution to the Company equal to the amount of any future payments to be made by the Company to holders of CVR Units pursuant to the CVR Plan, which such payments would be triggered by the same exit events specified under the LLC Agreement. In the event the CVR Units are forfeited or the Performance Threshold is not met, General Atlantic will not be required to make any payments under the promissory note and will keep the shares issued. Indemnification Agreements In the normal course of business, the Company may provide indemnification of varying scope and terms to third parties and may enter into commitments and guarantees (“Agreements”) under which it may be required to make payments. The duration of these Agreements varies, and in certain cases, may be indefinite with no limit to the Company’s maximum potential payment exposure. In addition, the Company has obligations with certain members of its board of directors and certain executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of September 30, 2022 and December 31, 2021. Legal Proceedings The Company is from time to time subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. The Company routinely assesses its current litigation and/or threatened litigation as to the probability of ultimately incurring a liability. In situations where the Company assesses the likelihood of loss as probable, the Company records its best estimate of the ultimate loss if reasonably possible to estimate. While the outcome of these claims cannot be predicted with certainty, the Company believes that these pending or threatened legal proceedings or claims could not have a material impact on the Company’s condensed consolidated financial statements. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 14. Restructuring In 2020, the Company relocated certain of its operations and abandoned office space in Los Angeles, California. During the nine months ended September 30, 2021, the Company recorded a reversal of restructuring expense of $ 0.2 million, associated with a change to sublease assumptions, following the execution of a sublease agreement in August 2021. Upon adoption of ASU 2016-12 on January 1, 2022, the outstanding restructuring liability was reclassified as a reduction to the Company's operating lease right-of-use asset. There were no restructuring charges recorded during the three and nine months ended September 30, 2022. As of December 31, 2021, the restructuring liability was $ 1.2 million, of which $ 0.4 million was included within accrued expenses and other current liabilities and $ 0.8 million was included within other long-term liabilities within the Company’s condensed consolidated balance sheets. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | 15. Related Parties In 2019, the Company assumed unsecured notes payable in the aggregate amount of $ 3.0 million (the “GC Notes”) and $ 2.9 million (“IVR Note”), respectively, with two individuals that are former shareholders, one of which is a former employee and the other is a current employee of Global Cloud, Ltd. (“GC”) and individuals that are former shareholders and former employees of IVR Technologies Group, LLC (“IVR”), respectively. The GC Notes and IVR Note bore interest at a rate of 7 % and 8 % per annum, respectively, and required interest-only payments with the outstanding principal amount and any accrued but unpaid interest due on the maturity date of March 12, 2021 and January 16, 2021 , respectively. During the nine months ended September 30, 2021, the Company repaid in full the outstanding principal balance of the GC Notes and IVR Note, which totaled $ 5.9 million. These amounts are disclosed within cash flows from financing activities within the condensed consolidated statements of cash flows. Within its condensed consolidated statements of operations and comprehensive income (loss), the Company recognized interest expense related to the GC Notes and IVR Note of less than $ 0.1 million during the nine months ended September 30, 2021. The Company made cash interest payments related to the GC Notes and IVR Note of $ 0.2 million during the nine months ended September 30, 2021. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 16. Segment and Geographic Information Segment Information The Company has determined that its chief executive officer is its chief operating decision maker (“CODM”) and the Company is organized into two reportable segments: Enterprise Solutions and SMB Solutions. The reportable segments were determined based on how the CODM reviews business performance and makes decisions about resources to be allocated. The Enterprise Solutions segment is primarily engaged in providing SaaS solutions that simplify customer-client engagement primarily through electronic billing and digital payments. Enterprise solutions are built to address the unique needs of specific verticals: Government, Utilities, Financial Services, Healthcare and Giving. For the Enterprise Solutions segme nt, the Company integrates directly with its customers’ core software systems and utilizes a partner-assisted direct sales model for purposes of its go-to-market strategy. The Company generates a significant majority of its revenue in this segment from transaction and usage-based revenue. For the nine months ended September 30, 2022, this segment generated 45 % of total revenue. The SMB Solutions segment is primarily engaged in providing end-to-end practice management solutions geared toward the Health & Wellness industry. For the Company's SMB Solutions segment, the Company primarily relies on a free trial to paid customer sales model. The Company generates interest for its offerings in the Company's SMB Solutions segment through a combination of search engine optimization, word-of-mouth, paid customer referrals, and search engine marketing. The Company generates a majority of its revenue in this segment from subscription revenue. For the nine months ended September 30, 2022, this segment generated 55 % of total revenue. The CODM evaluates segment operating performance using revenue and Adjusted EBITDA, as defined below, from reportable segments to make resource allocation decisions and to evaluate segment performance. Adjusted EBITDA assists management in comparing the Company’s performance on a consistent basis for purposes of business decision-making. The Company defines Adjusted EBITDA as net income (loss) excluding interest income (expense), net; benefit from income taxes; depreciation; and amortization of intangible assets, as further adjusted for transaction-related expenses, fair value adjustment of acquired deferred revenue, stock/equity-based compensation and restructuring charges. Adjusted EBITDA from reportable segments excludes unallocated corporate costs which are primarily comprised of costs for accounting, finance, legal, human resources and costs for certain executives supporting overall business strategy and execution. The following table sets forth the revenue and Adjusted EBITDA results attributable to each reportable segment and includes a reconciliation of the totals reported for the reportable segments to the applicable line items in the Company’s accompanying condensed consolidated statements of operations and comprehensive income (loss) (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue Enterprise Solutions $ 35,866 $ 27,277 $ 99,743 $ 76,991 SMB Solutions 42,930 28,216 120,277 77,673 Total revenue 78,796 55,493 220,020 154,664 Adjusted EBITDA Enterprise Solutions 4,577 3,119 13,338 9,695 SMB Solutions 16,314 10,080 45,239 27,402 Total Adjusted EBITDA from reportable segments 20,891 13,199 58,577 37,097 Unallocated corporate expenses ( 7,669 ) ( 4,527 ) ( 22,833 ) ( 12,742 ) Total Adjusted EBITDA 13,222 8,672 35,744 24,355 Reconciling items: Interest income (expense), net 1,005 ( 3,486 ) 1,127 ( 8,086 ) Amortization of intangible assets ( 3,900 ) ( 3,901 ) ( 11,700 ) ( 11,701 ) Depreciation ( 816 ) ( 933 ) ( 2,289 ) ( 1,919 ) Transaction-related expenses — ( 3,014 ) 38 ( 4,246 ) Fair value adjustment of acquired deferred revenue — ( 28 ) — ( 122 ) Stock/equity-based compensation ( 3,798 ) ( 6,603 ) ( 10,112 ) ( 7,163 ) Restructuring charges — 330 — 241 Income (loss) before income taxes 5,713 ( 8,963 ) 12,808 ( 8,641 ) Benefit from income taxes ( 1,057 ) ( 671 ) ( 2,900 ) ( 623 ) Net income (loss) $ 6,770 $ ( 8,292 ) $ 15,708 $ ( 8,018 ) The Company’s CODM does not separately evaluate assets by segment, and therefore assets by segment are not presented. Geographic Information For the nine months ended September 30, 2022 and 2021, revenues by geographic region are not disclosed as revenue outside the United States does not exceed 10 % of total revenue. The Company does not disclose geographic information for long-lived assets as long-lived assets located outside the United States do not exceed 10 % of total assets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Risk of Concentrations of Credit and Significant Customers | Risk of Concentrations of Credit and Significant Customers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. At times, the Company may maintain cash balances in excess of federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Significant customers are those that accounted for 10% or more of the Company’s total revenue or accounts receivable during any period presented herein. During the three and nine months ended September 30, 2022 and 2021, no customer accounted for 10 % or more of revenue. As of September 30, 2022, the Company had one customer that accounted for 10 % or more of its accounts receivable balance. As of December 31, 2021, no customer accounted for 10 % or more of accounts receivable. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Prono uncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize assets and liabilities on their balance sheet for the rights and obligations created by leases and to continue to recognize related expenses on their income statements over the lease term. It also requires disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted this standard effective January 1, 2022 using the modified retrospective transition method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of transition practical expedients for existing contracts. Adoption of the new standard resulted in the recording of operating lease right-of-use assets of $ 31.4 million and operating lease liabilities of $ 37.1 million, as of January 1, 2022 . The difference between the operating lease right-of-use assets and operating lease liabilities relates to deferred rent balances, lease incentives, and liabilities recognized under Accounting Standards Codification ("ASC") 420, Exit or Disposal Cost Obligations , the net impact of which reduced the right-of-use assets. The adoption of the standard did not impact the Company's consolidated net earnings and had no impact on cash flows. Refer to Note 5 - Leases for additional information related to the Company’s lease obligations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. Effective January 1, 2022 , the Company adopted ASU 2016-13 on a modified retrospective basis. The adoption of ASU 2016-13 did no t have a material impact on the Company's condensed consolidated balance sheets, statements of operations and comprehensive income (loss), or cash flows. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles as well as clarifying and amending existing guidance to improve consistent application. Effective January 1, 2022 , the Company adopted ASU 2019-12 on a modified retrospective basis. The adoption of ASU 2019-12 did no t have a material impact on the Company's condensed consolidated balance sheets, statements of operations and comprehensive income (loss), or cash flows. Recently Issued Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"), which requires the recognition and measurement of contract assets and liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"). ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and, if adopted early, requires the retrospective method of transition applied to transactions occurring on or after the beginning of the fiscal year of adoption. The Company is currently evaluating the timing of adoption of ASU 2021-08. The Company does not believe the adoption of ASU 2021-08 will have a material impact on its consolidated financial statements. |
Leases | On January 1, 2022 , the Company adopted ASU 2016-02, using the modified retrospective transition method. The Company has elected to adopt the package of practical expedients which apply to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not reassess: whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, and the initial direct costs for any existing leases. The Company has also elected to combine lease and non-lease components when calculating minimum lease payments on new leases for all asset classes. The Company has elected an accounting policy to forgo the recognition of lease assets or liabilities for short-term leases. Short-term leases are defined, in accordance with the standard, as those with terms of one year or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. The Company determines if an arrangement is or contains a lease at contract inception. The Company accounts for a contract as a lease when it has the right to direct the use of the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of right-of-use ("ROU") assets and lease liabilities at the lease commencement date and thereafter at the modification date, if modified. ROU assets represent the Company's right to control the underlying assets under lease, and the lease liability is the Company's obligation to make the lease payments related to the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of future minimum fixed lease payments to be made over the lease term. The Company uses the non-cancellable lease term unless it is reasonably certain that a renewal or termination option will be exercised. When available, the Company will use the rate implicit in the lease to discount lease payments to present value. As most leases do not provide an implicit rate, the Company will estimate the incremental borrowing rate to discount the lease payments. The Company estimates the incremental borrowing rate based on the rates of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis, over a similar term, and in a similar economic environment. The ROU asset also includes any lease prepayments and initial direct costs, offset by lease incentives. Certain lease agreements contain variable lease payments which are not included in the measurement of the lease liability. Variable lease payments relate to taxes, insurance, utilities, and common area maintenance ("CAM"). These variable lease payments are recognized in the condensed consolidated statements of operations and comprehensive income (loss) in the period in which the obligation for those payments is incurred. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue by Segment and Revenue Type | The following table depicts disaggregated revenue by segment and revenue type (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Enterprise Solutions Transaction and usage-based $ 32,620 $ 24,977 $ 90,928 $ 69,517 Subscription 2,280 1,946 6,517 5,663 Other 966 354 2,298 1,811 Total Enterprise Solutions revenue 35,866 27,277 99,743 76,991 SMB Solutions Transaction and usage-based 11,349 8,580 33,613 23,884 Subscription 31,216 19,324 85,493 52,980 Other 365 312 1,171 809 Total SMB Solutions revenue 42,930 28,216 120,277 77,673 Total revenue $ 78,796 $ 55,493 $ 220,020 $ 154,664 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands, except share and per share amounts) Numerator: Net income (loss) $ 6,770 $ ( 8,292 ) $ 15,708 $ ( 8,018 ) Denominator: Weighted average common shares outstanding, basic 164,427,770 149,031,242 163,195,976 148,200,589 Effect of potential dilutive common shares 4,795,024 — 5,868,039 — Weighted average common shares outstanding, diluted 169,222,794 149,031,242 169,064,015 148,200,589 Net income (loss) per share, basic $ 0.04 $ ( 0.06 ) $ 0.10 $ ( 0.05 ) Net income (loss) per share, diluted $ 0.04 $ ( 0.06 ) $ 0.09 $ ( 0.05 ) |
Schedule of Common Shares Excluded from Computation of Diluted Net Income (Loss) Per Share | The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net income (loss) per share for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Options to purchase common shares 383,666 11,205,066 473,392 11,205,066 Unvested restricted stock units 1,535,412 288,455 913,466 288,455 Total 1,919,078 11,493,521 1,386,858 11,493,521 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Components of Operating Lease Expense | The following table summarizes the components of operating lease expense (in thousands): Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Operating lease cost $ 1,184 $ 3,549 Variable lease cost 79 224 Total $ 1,263 $ 3,773 |
Schedule of Weighted Average Remaining Lease Term and Discount Rate | The weighted average remaining lease term (in years) and discount rate were as follows: As of September 30, 2022 Weighted-Average remaining lease term 7.0 Weighted-Average discount rate 2.26 % |
Schedule of Supplemental Cash Flow Information from Lease Transaction | The following table presents supplemental information relating to cash flows arising from lease transactions. Cash payments made for variable lease cost and short-term leases are not included in the measurement of operating lease liabilities, and, as such, are excluded from the amounts below (in thousands): Nine Months Ended September 30, 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 4,246 Right of use assets obtained in exchange for new operating lease liabilities $ 31,409 |
Schedule of Future Minimum Lease Payments | The following table presents the future minimum lease payments under the Company's operating leases liabilities as of September 30, 2022 (in thousands): Remainder of 2022 $ 958 2023 5,741 2024 5,750 2025 4,489 2026 4,079 Thereafter 14,810 Total lease payments $ 35,827 Less: imputed interest ( 2,820 ) Lease liabilities $ 33,007 |
Schedule of Future Minimum Payments under Non-cancellable Operating Leases | Under the previous lease accounting standard, ASC 840, Leases , (“ASC 840”), as previously disclosed in the 2021 Form 10-K for the year ended December 31, 2021, the total future minimum payments under non-cancellable operating leases as of December 31, 2021 were as follows (in thousands): 2022 $ 5,674 2023 5,716 2024 5,743 2025 4,481 2026 4,071 Thereafter 14,766 Total $ 40,451 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present the Company’s fair value hierarchy for its assets and liabilities that were measured at fair value on a recurring basis (in thousands): September 30, 2022 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 224,064 $ — $ — $ 224,064 Liabilities: Contingent consideration liability $ — $ — $ — $ — December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 205,010 $ — $ — $ 205,010 Liabilities: Contingent consideration liability $ — $ — $ 2,800 $ 2,800 |
Changes in Fair Value of Contingent Consideration Liability | Changes in the fair value of the Company’s contingent consideration liability were as follows (in thousands): Balance as of December 31, 2021 $ 2,800 Payment of contingent consideration ( 2,800 ) Change in fair value — Balance as of September 30, 2022 $ — |
Goodwill and Acquired Intangi_2
Goodwill and Acquired Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill by Reportable Segment | Changes in the carrying amount of goodwill by reportable segment through September 30, 2022 are as follows (in thousands): Enterprise Solutions SMB Solutions Total Balance as of December 31, 2021 $ 218,658 $ 207,019 $ 425,677 Goodwill acquired — — — Balance as of September 30, 2022 $ 218,658 $ 207,019 $ 425,677 |
Schedule of Acquired Intangible Assets | Acquired intangible assets of the Company consisted of the following (in thousands): September 30, 2022 Weighted Average Gross Carrying Value Accumulated Amortization Net Carrying Value (in years) Customer relationships 10.0 $ 82,841 $ ( 29,273 ) $ 53,568 Developed technology 7.0 42,913 ( 21,925 ) 20,988 Tradenames 5.0 5,824 ( 4,161 ) 1,663 Total $ 131,578 $ ( 55,359 ) $ 76,219 December 31, 2021 Weighted Average Gross Carrying Value Accumulated Amortization Net Carrying Value (in years) Customer relationships 10.0 $ 82,841 $ ( 23,059 ) $ 59,782 Developed technology 7.0 42,913 ( 17,311 ) 25,602 Tradenames 5.0 5,824 ( 3,288 ) 2,536 Total $ 131,578 $ ( 43,658 ) $ 87,920 |
Schedule of Future Estimated Amortization Expense of Intangible Assets | Future estimated amortization expense of the Company’s intangible assets as of September 30, 2022 is expected to be as follows (in thousands): Remainder of 2022 $ 3,900 2023 15,601 2024 14,640 2025 14,383 2026 9,335 Thereafter 18,360 Total $ 76,219 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Accrued employee compensation and benefits $ 13,494 $ 12,437 Accrued consulting and professional fees 3,147 2,619 Accrued processing fees 3,471 1,626 Accrued channel partner fees 2,495 2,081 Accrued license fees 2,955 1,154 Accrued marketing 1,552 926 Accrued sales tax 656 615 Accrued restructuring — 387 Other 5,851 3,384 Total $ 33,621 $ 25,229 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Based Compensation Expense | Stock-based compensation expense is reflected in the condensed consolidated statements of operations and comprehensive income (loss) as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of revenue $ 397 $ 152 $ 660 $ 160 General and administrative 1,832 5,738 6,528 6,192 Selling and marketing 869 506 1,829 569 Research and development 700 207 1,095 242 Total $ 3,798 $ 6,603 $ 10,112 $ 7,163 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligation Future Minimum Payments Under Other Non-Cancellable Agreements | As of September 30, 2022, future minimum payments under other non-cancellable agreements were as follows (in thousands): Remainder of 2022 $ 1,275 2023 3,445 2024 1,652 2025 140 2026 83 Thereafter — Total $ 6,595 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Revenue and Adjusted EBITDA for Reportable Segments | The following table sets forth the revenue and Adjusted EBITDA results attributable to each reportable segment and includes a reconciliation of the totals reported for the reportable segments to the applicable line items in the Company’s accompanying condensed consolidated statements of operations and comprehensive income (loss) (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue Enterprise Solutions $ 35,866 $ 27,277 $ 99,743 $ 76,991 SMB Solutions 42,930 28,216 120,277 77,673 Total revenue 78,796 55,493 220,020 154,664 Adjusted EBITDA Enterprise Solutions 4,577 3,119 13,338 9,695 SMB Solutions 16,314 10,080 45,239 27,402 Total Adjusted EBITDA from reportable segments 20,891 13,199 58,577 37,097 Unallocated corporate expenses ( 7,669 ) ( 4,527 ) ( 22,833 ) ( 12,742 ) Total Adjusted EBITDA 13,222 8,672 35,744 24,355 Reconciling items: Interest income (expense), net 1,005 ( 3,486 ) 1,127 ( 8,086 ) Amortization of intangible assets ( 3,900 ) ( 3,901 ) ( 11,700 ) ( 11,701 ) Depreciation ( 816 ) ( 933 ) ( 2,289 ) ( 1,919 ) Transaction-related expenses — ( 3,014 ) 38 ( 4,246 ) Fair value adjustment of acquired deferred revenue — ( 28 ) — ( 122 ) Stock/equity-based compensation ( 3,798 ) ( 6,603 ) ( 10,112 ) ( 7,163 ) Restructuring charges — 330 — 241 Income (loss) before income taxes 5,713 ( 8,963 ) 12,808 ( 8,641 ) Benefit from income taxes ( 1,057 ) ( 671 ) ( 2,900 ) ( 623 ) Net income (loss) $ 6,770 $ ( 8,292 ) $ 15,708 $ ( 8,018 ) |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 27, 2021 USD ($) $ / shares shares | Sep. 10, 2021 | Sep. 30, 2021 shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Subsidiary Sale Of Stock [Line Items] | |||||
Payment of offering expenses | $ 286 | $ 2,912 | |||
Forward stock split, description | 1-for-3 | ||||
Forward stock split | 0.3333 | ||||
General Atlantic, L.P. | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Voting power | 50% | ||||
Credit Facilities | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Repayments of outstanding borrowings | $ 114,200 | ||||
Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock shares issued and sold | shares | 13,620,054 | ||||
IPO | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Net proceeds | 326,400 | ||||
Underwriting discounts | 22,100 | ||||
Payment of offering expenses | $ 5,600 | ||||
IPO | Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock shares issued and sold | shares | 13,620,054 | ||||
Share price per share | $ / shares | $ 26 | ||||
Over Allotment Option | Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock shares issued and sold | shares | 620,054 | ||||
Existing Shareholders | Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Sale of stock, shares issued | shares | 3,112,446 | ||||
Net proceeds | $ 75,900 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 USD ($) Customer | Sep. 30, 2021 Customer | Sep. 30, 2022 USD ($) Customer | Sep. 30, 2021 Customer | Dec. 31, 2021 USD ($) Customer | Jan. 01, 2022 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Operating lease right-of-use assets | $ | $ 28,024 | $ 28,024 | $ 31,400 | |||
Operating lease liabilities | $ | $ 33,007 | $ 33,007 | $ 37,100 | |||
ASU 2016-02 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Change in accounting principle, accounting standards update, adopted [true false] | true | true | ||||
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2022 | Jan. 01, 2022 | ||||
ASU 2016-13 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Change in accounting principle, accounting standards update, adopted [true false] | true | true | ||||
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2022 | Jan. 01, 2022 | ||||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | true | ||||
ASU 2019-12 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Change in accounting principle, accounting standards update, adopted [true false] | true | true | ||||
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2022 | Jan. 01, 2022 | ||||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | true | ||||
Customer Concentration | Sales Revenue | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Number of customers accounted for 10% or more in Revenue | 0 | 0 | 0 | 0 | ||
Concentration risk percentage | 10% | 10% | 10% | 10% | ||
Customer Concentration | Accounts Receivable | One Customer | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Number of customers accounted for 10% or more | 1 | 1 | ||||
Concentration risk percentage | 10% | |||||
Credit Concentration | Accounts Receivable | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Number of customers accounted for 10% or more | 0 | |||||
Concentration risk percentage | 10% |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue by Segment and Revenue Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 78,796 | $ 55,493 | $ 220,020 | $ 154,664 |
Enterprise Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 35,866 | 27,277 | 99,743 | 76,991 |
SMB Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 42,930 | 28,216 | 120,277 | 77,673 |
Transaction and Usage-Based | Enterprise Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 32,620 | 24,977 | 90,928 | 69,517 |
Transaction and Usage-Based | SMB Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,349 | 8,580 | 33,613 | 23,884 |
Subscription | Enterprise Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,280 | 1,946 | 6,517 | 5,663 |
Subscription | SMB Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 31,216 | 19,324 | 85,493 | 52,980 |
Other | Enterprise Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 966 | 354 | 2,298 | 1,811 |
Other | SMB Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 365 | $ 312 | $ 1,171 | $ 809 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Contract assets | $ 0 | $ 0 | |
Deferred revenue current | 7,800,000 | 6,800,000 | |
Deferred revenue, non-current | 300,000 | $ 200,000 | |
Deferred revenue, revenue recognized | $ 6,500,000 | $ 4,700,000 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||||||
Net income (loss) | $ 6,770 | $ 6,879 | $ 2,059 | $ (8,292) | $ (211) | $ 485 | $ 15,708 | $ (8,018) |
Denominator: | ||||||||
Weighted average common shares outstanding, basic | 164,427,770 | 149,031,242 | 163,195,976 | 148,200,589 | ||||
Effect of potential dilutive common shares | 4,795,024 | 5,868,039 | ||||||
Weighted average common shares outstanding, diluted | 169,222,794 | 149,031,242 | 169,064,015 | 148,200,589 | ||||
Net income (loss) per share, basic | $ 0.04 | $ (0.06) | $ 0.10 | $ (0.05) | ||||
Net income (loss) per share, diluted | $ 0.04 | $ (0.06) | $ 0.09 | $ (0.05) |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Common Shares Excluded from Computation of Diluted Net Income (Loss) Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Common shares excluded from computation of diluted net income (loss) per share | 1,919,078 | 11,493,521 | 1,386,858 | 11,493,521 |
Options to Purchase Common Shares | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Common shares excluded from computation of diluted net income (loss) per share | 383,666 | 11,205,066 | 473,392 | 11,205,066 |
Unvested Restricted Stock Units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Common shares excluded from computation of diluted net income (loss) per share | 1,535,412 | 288,455 | 913,466 | 288,455 |
Leases - Schedule of Components
Leases - Schedule of Components of Operating Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,184 | $ 3,549 |
Variable lease cost | 79 | 224 |
Total | $ 1,263 | $ 3,773 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2022 |
Leases [Abstract] | |
Weighted-Average remaining lease term | 7 years |
Weighted-Average discount rate | 2.26% |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information from Lease Transaction (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 4,246 |
Right of use assets obtained in exchange for new operating lease liabilities | $ 31,409 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 01, 2022 |
Leases [Abstract] | ||
Remainder of 2022 | $ 958 | |
2023 | 5,741 | |
2024 | 5,750 | |
2025 | 4,489 | |
2026 | 4,079 | |
Thereafter | 14,810 | |
Total lease payments | 35,827 | |
Less: imputed interest | (2,820) | |
Lease liabilities | $ 33,007 | $ 37,100 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Future sublease receipts, Remainder of 2022 | $ 0.2 | |||
Future sublease receipts, Thereafter | $ 1.5 | |||
Rent expense | $ 0.8 | $ 3.1 | ||
Deferred rent | $ 4.5 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease expiration, year | 2023 | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease expiration, year | 2030 | |||
ASU 2016-02 | ||||
Lessee, Lease, Description [Line Items] | ||||
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 01, 2022 |
Leases - Schedule of Future M_2
Leases - Schedule of Future Minimum Payments under Non-cancellable Operating Leases (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Leases [Abstract] | |
2022 | $ 5,674 |
2023 | 5,716 |
2024 | 5,743 |
2025 | 4,481 |
2026 | 4,071 |
Thereafter | 14,766 |
Total | $ 40,451 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities: | ||
Contingent consideration liability | $ 2,800 | |
Recurring Basis | ||
Liabilities: | ||
Contingent consideration liability | 2,800 | |
Recurring Basis | Level 3 | ||
Liabilities: | ||
Contingent consideration liability | 2,800 | |
Recurring Basis | Money Market Funds | ||
Assets: | ||
Cash equivalents - money market funds | 224,064 | 205,010 |
Recurring Basis | Money Market Funds | Level 1 | ||
Assets: | ||
Cash equivalents - money market funds | $ 224,064 | $ 205,010 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value of Contingent Consideration Liability (Details) - Contingent Consideration Liability - Level 3 $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance as of December 31, 2021 | $ 2,800 |
Payment of contingent consideration | (2,800) |
Change in fair value | 0 |
Balance as of September 30, 2022 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Asset transfers into or out of Level 3 | $ 0 |
Liabilities transfers into or out of Level 3 | $ 0 |
Goodwill and Acquired Intangi_3
Goodwill and Acquired Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 425,677 | $ 425,677 | $ 425,677 | ||
Amortization expense | $ 3,900 | $ 3,900 | $ 11,700 | $ 11,700 |
Goodwill and Acquired Intangi_4
Goodwill and Acquired Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill by Reportable Segment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 425,677 |
Goodwill acquired | 0 |
Ending balance | 425,677 |
Enterprise Solutions | |
Goodwill [Line Items] | |
Beginning balance | 218,658 |
Goodwill acquired | 0 |
Ending balance | 218,658 |
SMB Solutions | |
Goodwill [Line Items] | |
Beginning balance | 207,019 |
Goodwill acquired | 0 |
Ending balance | $ 207,019 |
Goodwill and Acquired Intangi_5
Goodwill and Acquired Intangible Assets - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Gross Carrying Value | $ 131,578 | $ 131,578 |
Accumulated Amortization | (55,359) | (43,658) |
Net Carrying Value | $ 76,219 | $ 87,920 |
Customer Relationships | ||
Weighted Average Useful Life | 10 years | 10 years |
Gross Carrying Value | $ 82,841 | $ 82,841 |
Accumulated Amortization | (29,273) | (23,059) |
Net Carrying Value | $ 53,568 | $ 59,782 |
Developed Technology | ||
Weighted Average Useful Life | 7 years | 7 years |
Gross Carrying Value | $ 42,913 | $ 42,913 |
Accumulated Amortization | (21,925) | (17,311) |
Net Carrying Value | $ 20,988 | $ 25,602 |
Trade Names | ||
Weighted Average Useful Life | 5 years | 5 years |
Gross Carrying Value | $ 5,824 | $ 5,824 |
Accumulated Amortization | (4,161) | (3,288) |
Net Carrying Value | $ 1,663 | $ 2,536 |
Goodwill and Acquired Intangi_6
Goodwill and Acquired Intangible Assets - Schedule of Future Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2022 | $ 3,900 | |
2023 | 15,601 | |
2024 | 14,640 | |
2025 | 14,383 | |
2026 | 9,335 | |
Thereafter | 18,360 | |
Net Carrying Value | $ 76,219 | $ 87,920 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued employee compensation and benefits | $ 13,494 | $ 12,437 |
Accrued consulting and professional fees | 3,147 | 2,619 |
Accrued processing fees | 3,471 | 1,626 |
Accrued channel partner fees | 2,495 | 2,081 |
Accrued license fees | 2,955 | 1,154 |
Accrued marketing | 1,552 | 926 |
Accrued sales tax | 656 | 615 |
Accrued restructuring | 387 | |
Other | 5,851 | 3,384 |
Total | $ 33,621 | $ 25,229 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 9 Months Ended | |||||
Sep. 27, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2019 | Feb. 11, 2019 | |
Debt Instrument [Line Items] | ||||||
Long-term debt outstanding | $ 0 | $ 0 | ||||
Senior secured revolving credit facility | $ 7,500,000 | |||||
Repayments of outstanding borrowings | $ 114,174,000 | |||||
Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Loss on debt extinguishment | $ 1,200,000 | |||||
Repayments of outstanding borrowings | 114,200,000 | |||||
Letter of Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding borrowings | $ 2,100,000 | |||||
Letter of Credit Facility | JPMorgan Chase Bank, N.A. | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility maximum borrowing capacity | 7,500,000 | |||||
Initial Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | 75,000,000 | |||||
Delayed Draw Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 35,000,000 | |||||
2021 Revolving Credit Facility | JPMorgan Chase Bank, N.A. | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility maximum borrowing capacity | $ 75,000,000 | |||||
Credit facility maturity date | Sep. 27, 2026 | |||||
Credit facility commitment percentage | 0.25% | |||||
Credit facility available to be drawn | 72,900,000 | |||||
Debt issuance costs | $ 1,200,000 | |||||
2021 Revolving Credit Facility | Credit Facilities | JPMorgan Chase Bank, N.A. | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding borrowings | $ 2,100,000 | $ 2,100,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 27, 2021 USD ($) $ / shares shares | Sep. 10, 2021 | Sep. 30, 2021 shares | Sep. 30, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Class Of Stock [Line Items] | |||||
Forward stock split, description | 1-for-3 | ||||
Forward stock split | 0.3333 | ||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | |||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Common stock, shares authorized | 650,000,000 | 650,000,000 | |||
Common stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | |||
Common stock, shares, issued | 165,268,125 | 161,860,980 | |||
Common stock, shares, outstanding | 165,268,125 | 161,860,980 | |||
General Atlantic, L.P. | |||||
Class Of Stock [Line Items] | |||||
Proceeds from capital contribution | $ | $ 43.2 | ||||
Class A-1 Common Shares | |||||
Class Of Stock [Line Items] | |||||
Stock conversion basis | 1:1 | ||||
Common stock reclassified | 0.9398 | ||||
Additional shares of common stock subscribed | 1,662,917 | ||||
Class A-2 Common Shares | |||||
Class Of Stock [Line Items] | |||||
Stock conversion basis | 1:1 | ||||
Common stock reclassified | 1.1102 | ||||
Class A-3 Common Shares | |||||
Class Of Stock [Line Items] | |||||
Stock conversion basis | 1:1 | ||||
Common stock reclassified | 1 | ||||
Common Stock | |||||
Class Of Stock [Line Items] | |||||
Common stock shares issued and sold | 13,620,054 | ||||
IPO | |||||
Class Of Stock [Line Items] | |||||
Net proceeds | $ | $ 326.4 | ||||
Underwriting discounts | $ | 22.1 | ||||
Offering expenses | $ | $ 5.6 | ||||
IPO | General Atlantic, L.P. | |||||
Class Of Stock [Line Items] | |||||
Additional shares of common stock subscribed | 288,344 | ||||
IPO | Common Stock | |||||
Class Of Stock [Line Items] | |||||
Common stock shares issued and sold | 13,620,054 | ||||
Share price per share | $ / shares | $ 26 | ||||
Over Allotment Option | Common Stock | |||||
Class Of Stock [Line Items] | |||||
Common stock shares issued and sold | 620,054 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock based compensation expense | $ 3,798 | $ 6,603 | $ 10,112 | $ 7,163 | ||
2021 Incentive Award Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock-based awards granted to employees vesting period | 4 years | |||||
Stock-based awards expired from date of grant | 10 years | |||||
2021 Employee Stock Purchase Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares of common stock reserved for future issuance (in shares) | 2,219,728 | 2,219,728 | ||||
Offering period | 6 months | |||||
Award Modification | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Increase in unamortized stock-based compensation expense | $ 12,100 | |||||
Award Modification | Performance - based Vesting | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock based compensation expense | 3,600 | |||||
Award Acceleration | Performance - based Vesting | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock based compensation expense | $ 5,700 | |||||
Common Stock | 2021 Incentive Award Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares available for issuance increase each annual by percentage of common stock shares outstanding | 5% | |||||
Common Stock | 2021 Employee Stock Purchase Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares available to grant | 2,193,798 | 2,193,798 | ||||
Number of shares available for issuance increase each annual by percentage of common stock shares outstanding | 1% | |||||
Eligible participants to purchase common stock through payroll deductions, percentage | 15% | 15% | 15% | |||
Percentage of purchase price of shares lesser than fair market value of common stock | 85% | |||||
Restricted Stock Units | Common Stock | 2021 Incentive Award Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares of common stock reserved for future issuance (in shares) | 14,798,186 | 14,798,186 | ||||
Shares available to grant | 12,486,500 | 12,486,500 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock based compensation expense | $ 3,798 | $ 6,603 | $ 10,112 | $ 7,163 |
Cost of Revenue | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock based compensation expense | 397 | 152 | 660 | 160 |
General and Administrative | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock based compensation expense | 1,832 | 5,738 | 6,528 | 6,192 |
Selling and Marketing | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock based compensation expense | 869 | 506 | 1,829 | 569 |
Research and Development | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock based compensation expense | $ 700 | $ 207 | $ 1,095 | $ 242 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (18.50%) | 7.50% | (22.60%) | 7.20% |
Statutory rate | 21% | 21% | 21% | 21% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 27, 2021 | Feb. 11, 2019 | |
Class A-1 Common Shares | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Additional shares of common stock subscribed | 1,662,917 | ||
CVR Plan | Invoice Cloud, Inc. | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Maximum bonus pool amount | $ 9,500,000 | ||
Bonus pool amount outstanding | 6,200,000 | ||
Compensation related bonus expense | $ 0 | ||
CVR Plan | Invoice Cloud, Inc. | Class A-1 Common Shares | Minimum | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Cash distribution upon achievement of performance threshold | $ 889,100,000 | ||
General Atlantic, L.P. | IPO | |||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |||
Additional shares of common stock subscribed | 288,344 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Contractual Obligation Future Minimum Payments Under Other Non-Cancellable Agreements (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Contractual Obligation, Fiscal Year Maturity Schedule [Abstract] | |
Remainder of 2022 | $ 1,275 |
2023 | 3,445 |
2024 | 1,652 |
2025 | 140 |
2026 | 83 |
Thereafter | 0 |
Total | $ 6,595 |
Restructuring - Additional Info
Restructuring - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring expense | $ 0 | $ 0 | $ 200,000 | |
Restructuring liability | $ 1,200,000 | |||
Accrued Expenses and Other Current Liabilities | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring liability | 400,000 | |||
Other Long-Term Liabilities | ||||
Restructuring Cost And Reserve [Line Items] | ||||
Restructuring liability | $ 800,000 |
Related Parties - Additional In
Related Parties - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||
Repayment of notes | $ 5,900 | |
Interest expense | 100 | |
Cash interest payments | $ 200 | |
IVR Technologies Group, LLC | ||
Related Party Transaction [Line Items] | ||
Unsecured notes payable aggregate amount | $ 2,900 | |
Interest rate | 8% | |
Interest due maturity date | Jan. 16, 2021 | |
Global Cloud, Ltd. | ||
Related Party Transaction [Line Items] | ||
Unsecured notes payable aggregate amount | $ 3,000 | |
Interest rate | 7% | |
Interest due maturity date | Mar. 12, 2021 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) - Segment | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 2 | |
Maximum | ||
Segment Reporting Information [Line Items] | ||
Percentage of revenue generated from outside the United States | 10% | 10% |
Percentage of long-lived assets located outside of United States | 10% | 10% |
Enterprise Solutions | ||
Segment Reporting Information [Line Items] | ||
Percentage of revenue generated | 45% | |
SMB Solutions | ||
Segment Reporting Information [Line Items] | ||
Percentage of revenue generated | 55% |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Reconciliation of Revenue and Adjusted EBITDA for Reportable Segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | ||||||||
Total revenue | $ 78,796,000 | $ 55,493,000 | $ 220,020,000 | $ 154,664,000 | ||||
Adjusted EBITDA | ||||||||
Unallocated corporate expenses | (7,669,000) | (4,527,000) | (22,833,000) | (12,742,000) | ||||
Total Adjusted EBITDA | 13,222,000 | 8,672,000 | 35,744,000 | 24,355,000 | ||||
Amortization of intangible assets | (3,900,000) | (3,900,000) | (11,700,000) | (11,700,000) | ||||
Stock/equity-based compensation | (3,798,000) | (6,603,000) | (10,112,000) | (7,163,000) | ||||
Restructuring charges | 0 | 0 | 200,000 | |||||
Income (loss) before income taxes | 5,713,000 | (8,963,000) | 12,808,000 | (8,641,000) | ||||
Benefit from income taxes | (1,057,000) | (671,000) | (2,900,000) | (623,000) | ||||
Net income (loss) and comprehensive income (loss) | 6,770,000 | $ 6,879,000 | $ 2,059,000 | (8,292,000) | $ (211,000) | $ 485,000 | 15,708,000 | (8,018,000) |
Reportable Segment | ||||||||
Revenue | ||||||||
Total revenue | 78,796,000 | 55,493,000 | 220,020,000 | 154,664,000 | ||||
Adjusted EBITDA | ||||||||
Total Adjusted EBITDA from reportable segments | 20,891,000 | 13,199,000 | 58,577,000 | 37,097,000 | ||||
Segment Reconciling Items | ||||||||
Adjusted EBITDA | ||||||||
Interest income (expense), net | 1,005,000 | (3,486,000) | 1,127,000 | (8,086,000) | ||||
Amortization of intangible assets | (3,900,000) | (3,901,000) | (11,700,000) | (11,701,000) | ||||
Depreciation | (816,000) | (933,000) | (2,289,000) | (1,919,000) | ||||
Transaction-related expenses | (3,014,000) | 38,000 | (4,246,000) | |||||
Fair value adjustment of acquired deferred revenue | (28,000) | (122,000) | ||||||
Stock/equity-based compensation | (3,798,000) | (6,603,000) | (10,112,000) | (7,163,000) | ||||
Restructuring charges | 330,000 | 241,000 | ||||||
Enterprise Solutions | ||||||||
Revenue | ||||||||
Total revenue | 35,866,000 | 27,277,000 | 99,743,000 | 76,991,000 | ||||
Enterprise Solutions | Reportable Segment | ||||||||
Revenue | ||||||||
Total revenue | 35,866,000 | 27,277,000 | 99,743,000 | 76,991,000 | ||||
Adjusted EBITDA | ||||||||
Total Adjusted EBITDA from reportable segments | 4,577,000 | 3,119,000 | 13,338,000 | 9,695,000 | ||||
SMB Solutions | ||||||||
Revenue | ||||||||
Total revenue | 42,930,000 | 28,216,000 | 120,277,000 | 77,673,000 | ||||
SMB Solutions | Reportable Segment | ||||||||
Revenue | ||||||||
Total revenue | 42,930,000 | 28,216,000 | 120,277,000 | 77,673,000 | ||||
Adjusted EBITDA | ||||||||
Total Adjusted EBITDA from reportable segments | $ 16,314,000 | $ 10,080,000 | $ 45,239,000 | $ 27,402,000 |