Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 23, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-40812 | ||
Entity Registrant Name | THOUGHTWORKS HOLDING, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-2668392 | ||
Entity Address, Address Line One | 200 East Randolph Street, 25th Floor | ||
Entity Address, City or Town | Chicago | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60601 | ||
City Area Code | 312 | ||
Local Phone Number | 373-1000 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | TWKS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,600 | ||
Entity Common Stock, Shares Outstanding | 316,540,810 | ||
Documents Incorporated by Reference | The information required by Items 10, 11, 12, 13 and 14 will be filed (and is hereby incorporated) by an amendment hereto or pursuant to a definitive proxy statement pursuant to Regulation 14A that will contain such information. | ||
Entity Central Index Key | 0001866550 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Chicago, Illinois |
Auditor Firm ID | 42 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 194,294 | $ 368,209 |
Trade receivables, net of allowance of $9,531 and $8,916, respectively | 201,695 | 145,874 |
Unbilled receivables | 122,499 | 104,057 |
Prepaid expenses | 19,353 | 15,994 |
Other current assets | 18,849 | 44,805 |
Total current assets | 556,690 | 678,939 |
Property and equipment, net | 38,798 | 34,500 |
Right-of-use assets | 43,123 | 0 |
Intangibles and other assets: | ||
Goodwill | 405,017 | 346,719 |
Trademark | 273,000 | 273,000 |
Customer relationships, net | 124,047 | 125,867 |
Other non-current assets | 21,175 | 22,838 |
Total assets | 1,461,850 | 1,481,863 |
Current liabilities: | ||
Accounts payable | 5,248 | 4,773 |
Long-term debt - current | 7,150 | 7,150 |
Income taxes payable | 22,781 | 15,693 |
Accrued compensation | 85,477 | 87,059 |
Deferred revenue | 5,167 | 13,807 |
Value-added tax and sales tax payable | 7,526 | 7,954 |
Accrued expenses | 30,227 | 44,094 |
Lease liabilities, current | 15,994 | 0 |
Total current liabilities | 179,570 | 180,530 |
Lease liabilities, non-current | 29,885 | 0 |
Long-term debt, less current portion | 391,856 | 497,380 |
Deferred tax liabilities | 62,555 | 83,191 |
Other long-term liabilities | 19,762 | 18,805 |
Total liabilities | 683,628 | 779,906 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Convertible preferred stock, $0.001 par value; 100,000,000 shares authorized, zero issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 0 | 0 |
Common Stock | 366 | 356 |
Treasury stock, 50,624,983 and 50,985,571 shares at December 31, 2022 and December 31, 2021, respectively | (624,934) | (629,424) |
Additional paid-in capital | 1,565,514 | 1,359,149 |
Accumulated other comprehensive loss | (39,210) | (10,844) |
Retained deficit | (123,514) | (17,280) |
Total stockholders' equity | 778,222 | 701,957 |
Total liabilities and stockholders' equity | $ 1,461,850 | $ 1,481,863 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 9,531 | $ 8,916 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 366,306,970 | 356,117,752 |
Common stock, shares outstanding (in shares) | 315,681,987 | 305,132,181 |
Treasury stock (in shares) | 50,624,983 | 50,985,571 |
CONSOLIDATED STATEMENTS OF (LOS
CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenues | $ 1,296,238 | $ 1,069,945 | $ 803,375 |
Operating expenses: | |||
Cost of revenues | 950,305 | 669,681 | 475,560 |
Selling, general and administrative expenses | 372,761 | 333,904 | 189,850 |
Depreciation and amortization | 20,484 | 17,599 | 17,479 |
Total operating expenses | 1,343,550 | 1,021,184 | 682,889 |
(Loss) income from operations | (47,312) | 48,761 | 120,486 |
Other (expense) income: | |||
Interest expense | (22,461) | (25,456) | (25,767) |
Net realized and unrealized foreign currency (loss) gain | (5,405) | (5,469) | 7,175 |
Other income (expense), net | 610 | (1,671) | 185 |
Total other (expense) income | (27,256) | (32,596) | (18,407) |
(Loss) income before income taxes | (74,568) | 16,165 | 102,079 |
Income tax expense | 30,825 | 16,740 | 23,106 |
Net (loss) income | (105,393) | (575) | 78,973 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (28,366) | (9,270) | 8,493 |
Comprehensive (loss) income | $ (133,759) | $ (9,845) | $ 87,466 |
Net (loss) earnings per common share: | |||
Basic (loss) earnings per common share (in USD per share) | $ (0.34) | $ (0.24) | $ 0.26 |
Diluted (loss) earnings per common share (in USD per share) | $ (0.34) | $ (0.24) | $ 0.26 |
Weighted average shares outstanding: | |||
Weighted average shares outstanding, basic (in shares) | 310,911,526 | 254,271,997 | 278,225,009 |
Weighted average shares outstanding, diluted (in shares) | 310,911,526 | 254,271,997 | 284,615,995 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative effect from change in accounting principle | IPO | Common Stock | Common Stock IPO | Treasury | Additional Paid-In Capital | Additional Paid-In Capital Cumulative effect from change in accounting principle | Additional Paid-In Capital IPO | Accumulated Other Comprehensive Loss | Retained Earnings (Deficit) | Retained Earnings (Deficit) Cumulative effect from change in accounting principle |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | |||||||||||
Beginning balance at Dec. 31, 2019 | $ 0 | |||||||||||
Redeemable, Convertible Preferred Stock | ||||||||||||
Issuance of Series A Redeemable Convertible Preferred Stock, net of issuance costs (in shares) | 23,493,546 | |||||||||||
Issuance of Redeemable Convertible Preferred Stock, net of issuance costs | $ 322,800 | |||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 23,493,546 | |||||||||||
Ending balance at Dec. 31, 2020 | $ 322,800 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 278,193,711 | 572,711 | ||||||||||
Beginning balance at Dec. 31, 2019 | 394,988 | $ 0 | $ 279 | $ (1,608) | $ 379,209 | $ (2,190) | $ (10,067) | $ 27,175 | $ 2,190 | |||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||||||
Net (loss) income | 78,973 | 78,973 | ||||||||||
Other comprehensive income (loss), net of tax | 8,493 | 8,493 | ||||||||||
Issuance of common stock on exercise of options , net of withholding taxes (in shares) | 129,005 | |||||||||||
Issuance of common stock on exercise of options, net of withholding taxes | 296 | 296 | ||||||||||
Stock-based compensation expense | 2,020 | 2,020 | ||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 278,322,716 | 572,711 | ||||||||||
Ending balance at Dec. 31, 2020 | $ 484,770 | $ 279 | $ (1,608) | 379,335 | (1,574) | 108,338 | ||||||
Redeemable, Convertible Preferred Stock | ||||||||||||
Issuance of Series A Redeemable Convertible Preferred Stock, net of issuance costs (in shares) | 35,996,412 | |||||||||||
Issuance of Redeemable Convertible Preferred Stock, net of issuance costs | $ 503,222 | |||||||||||
Conversion of redeemable convertible preferred stock on exercise of options (in shares) | (59,489,958) | |||||||||||
Conversion of redeemable convertible preferred stock to common stock | $ (826,022) | |||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | |||||||||||
Ending balance at Dec. 31, 2021 | $ 0 | |||||||||||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||||||
Net (loss) income | (575) | (575) | ||||||||||
Other comprehensive income (loss), net of tax | (9,270) | (9,270) | ||||||||||
Issuance of common stock (in shares) | 133,313 | 16,429,964 | ||||||||||
Issuance of common stock | 1,873 | $ 314,716 | $ 16 | 1,873 | $ 314,700 | |||||||
Conversion of redeemable convertible preferred stock to common stock (in shares) | 59,489,958 | |||||||||||
Conversion of redeemable convertible preferred stock to common stock | 826,022 | $ 60 | 825,962 | |||||||||
Issuance of common stock on exercise of options , net of withholding taxes (in shares) | 1,169,090 | |||||||||||
Issuance of common stock on exercise of options, net of withholding taxes | (851) | $ 1 | (852) | |||||||||
Dividends | (325,012) | (279,191) | (45,821) | |||||||||
Tender Offer (in shares) | (50,412,860) | 50,412,860 | ||||||||||
Tender Offer | (717,429) | $ (627,816) | (10,391) | (79,222) | ||||||||
Stock-based compensation expense | $ 127,713 | 127,713 | ||||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | |||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 305,132,181 | 50,985,571 | ||||||||||
Ending balance at Dec. 31, 2021 | $ 701,957 | $ (841) | $ 356 | $ (629,424) | 1,359,149 | (10,844) | (17,280) | $ (841) | ||||
Ending balance (in shares) at Dec. 31, 2022 | 0 | |||||||||||
Ending balance at Dec. 31, 2022 | $ 0 | |||||||||||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||||||
Net (loss) income | (105,393) | (105,393) | ||||||||||
Other comprehensive income (loss), net of tax | (28,366) | (28,366) | ||||||||||
Issuance of common stock for equity incentive awards, net of withholding taxes (in shares) | 10,189,218 | |||||||||||
Issuance of common stock for equity incentive awards, net of withholding taxes | (40,076) | $ 10 | (40,086) | |||||||||
Reissuance of treasury shares for equity incentive awards (in shares) | 360,588 | (360,588) | ||||||||||
Reissuance of treasury shares for equity incentive awards | 436 | $ 4,490 | (4,054) | |||||||||
Stock-based compensation expense | 250,505 | 250,505 | ||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 315,681,987 | 50,624,983 | ||||||||||
Ending balance at Dec. 31, 2022 | $ 778,222 | $ 366 | $ (624,934) | $ 1,565,514 | $ (39,210) | $ (123,514) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Redeemable Convertible Preferred Stock, issuance costs | $ 11.8 | $ 7.2 |
IPO | ||
Common Stock, issuance costs | $ 30.3 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Cash flows from operating activities: | |||
Net (loss) income | $ (105,393) | $ (575) | $ 78,973 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization expense | 34,446 | 29,528 | 26,528 |
Bad debt expense (recovery) | 2,002 | (601) | 7,685 |
Deferred income tax (benefit) expense | (19,425) | (22,369) | 2,085 |
Stock-based compensation expense | 250,505 | 127,713 | 2,020 |
Unrealized foreign currency exchange loss (gain) | 10,106 | 5,028 | (5,336) |
Non-cash lease expense on right-of-use assets | 18,597 | 0 | 0 |
Other operating activities, net | 3,300 | 3,642 | 1,831 |
Changes in operating assets and liabilities: | |||
Trade receivables | (61,877) | (32,139) | 3,977 |
Unbilled receivables | (20,711) | (16,733) | (16,794) |
Prepaid expenses | (3,567) | (6,542) | 308 |
Other assets | 2,657 | (31,111) | (5,742) |
Lease liabilities | (16,721) | 0 | 0 |
Accounts payable | 144 | 309 | (700) |
Accrued expenses and other liabilities | (4,674) | 62,154 | 30,461 |
Net cash provided by operating activities | 89,389 | 118,304 | 125,296 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (24,505) | (26,068) | (15,125) |
Proceeds from disposal of fixed assets | 571 | 518 | 132 |
Acquisitions, net of cash acquired | (70,011) | (44,759) | 0 |
Net cash used in investing activities | (93,945) | (70,309) | (14,993) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of issuance costs and underwriting discounts | 0 | 314,716 | 0 |
Payments of obligations of long-term debt | (107,150) | (336,709) | (4,565) |
Payments of debt issuance costs | (3,635) | (7,098) | (111) |
Proceeds from borrowings on revolving credit facility | 0 | 0 | 29,000 |
Payments on revolving credit facility | 0 | 0 | (29,000) |
Proceeds from borrowings on long-term debt | 0 | 401,285 | 0 |
Proceeds from issuance of common stock on exercise of options, net of employee tax withholding | 6,766 | (851) | 296 |
Shares and options purchased under tender offer | 0 | (701,960) | 0 |
Proceeds from issuance of common stock | 0 | 1,873 | 0 |
Dividends paid | 0 | (315,003) | 0 |
Withholding taxes paid on tender offer | (15,469) | 0 | 0 |
Withholding taxes paid on dividends previously declared | (10,009) | 0 | 0 |
Withholding taxes paid related to net share settlement of equity awards | (45,643) | 0 | 0 |
Other financing activities, net | 15 | (105) | (223) |
Net cash (used in) provided by financing activities | (175,125) | (140,630) | 318,197 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (19,697) | (4,622) | 6,543 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (199,378) | (97,257) | 435,043 |
Cash, cash equivalents and restricted cash at beginning of the period | 394,942 | 492,199 | 57,156 |
Cash, cash equivalents and restricted cash at end of the period | 195,564 | 394,942 | 492,199 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 20,984 | 23,611 | 23,861 |
Income taxes paid | 30,283 | 33,344 | 13,909 |
Withholding taxes payable included within accrued expenses | 0 | 25,956 | 0 |
Withholding taxes payable included within accrued compensation | 1,020 | 0 | 0 |
Option costs receivable included within other current assets | 257 | 0 | 0 |
Supplemental disclosures of non-cash financing activities: | |||
Conversion of convertible preferred stock to common stock | 0 | 826,022 | 0 |
Net settlement on exercise of shares | 0 | 3,611 | 0 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 194,294 | 368,209 | 490,841 |
Total cash, cash equivalents and restricted cash | 195,564 | 394,942 | 492,199 |
Other Current Assets | |||
Reconciliation of cash, cash equivalents and restricted cash: | |||
Restricted cash | 0 | 25,478 | 0 |
Other Noncurrent Assets | |||
Reconciliation of cash, cash equivalents and restricted cash: | |||
Restricted cash | 1,270 | 1,255 | 1,358 |
Series A, Redeemable Convertible Preferred Stock | |||
Cash flows from financing activities: | |||
Proceeds from issuance of Redeemable Convertible Preferred Stock, net of issuance costs | 0 | 380,994 | 322,800 |
Series B, Redeemable Convertible Preferred Stock | |||
Cash flows from financing activities: | |||
Proceeds from issuance of Redeemable Convertible Preferred Stock, net of issuance costs | $ 0 | $ 122,228 | $ 0 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Summary of Significant Accounting Policies | Business and Summary of Significant Accounting Policies Thoughtworks Holding, Inc. (together with its subsidiaries, the “Company”) develops, implements, and services complex enterprise application software and provides business technology consulting. The Company conducts business in Australia, Brazil, Canada, Chile, China, Ecuador, Finland, Germany, Hong Kong, India, Italy, the Netherlands, Romania, Singapore, Spain, Thailand, the United Kingdom, the United States and Vietnam. Thoughtworks Holding, Inc. is the ultimate parent holding company of Thoughtworks, Inc. among other subsidiaries. Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of Thoughtworks Holding, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain amounts in the prior period consolidated financial statements and notes have been reclassified to conform to the 2022 presentation. These reclassifications had no effect on results of operations previously reported. Preparation of Financial Statements and Use of Estimates The preparation of these consolidated financial statements is in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to allowance for credit losses, valuation and impairment of goodwill and long-lived assets, income taxes, accrued bonus, contingencies, stock-based compensation and litigation costs. The Company bases its estimates on current expectations and historical experience and on other assumptions that its management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities when those values are not readily apparent from other sources. Actual results can differ from those estimates, and such differences may be material to the consolidated financial statements in the future. In management’s opinion, all adjustments considered necessary for a fair presentation of the accompanying consolidated financial statements have been included, and all adjustments are of a normal and recurring nature. Segments The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and assess performance. While the Company has offerings in multiple modern digital businesses and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company's service offerings are delivered and supported on a global basis and are deployed in a nearly identical way. The Company’s CODM evaluates the Company’s financial information, allocates resources and assesses the performance of these resources on a consolidated basis. Long-Lived Assets The North America geographic region encompasses the Company’s country of domicile (United States) and Canada, of which long-lived assets including property and equipment, net of depreciation, are principally held within the United States. Canadian long-lived assets were determined to be immaterial given property, and equipment was less than 10% of the Company's long-lived assets as of December 31, 2022 and 2021. Th e Company holds material long-lived assets in the foreign geographic locations of Brazil, China, and India. The following table presents long-lived assets by location (in thousands): As of December 31, 2022 2021 United States $ 8,774 22.6 % $ 7,920 23.0 % Brazil 5,732 14.8 % 5,100 14.8 % China 6,725 17.4 % 7,321 21.2 % India 8,010 20.6 % 7,477 21.7 % All other (1) 9,557 24.6 % 6,682 19.3 % Total long-lived assets $ 38,798 100.0 % $ 34,500 100.0 % (1) All other foreign geographic locations hold long-lived assets of less than 10% of the Company's consolidated total. Revenue Recognition The Company recognizes revenues when control of services is passed to a customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Such control may be transferred over time or at a point in time, depending on satisfaction of obligations stipulated by the contract. The Company records sales and other taxes collected from customers and remitted to governmental authorities on a net basis. The Company generates revenue from a variety of professional service arrangements. Fees for these contracts may be in the form of time-and-materials and fixed price. The Company also reports gross reimbursable expenses incurred as both revenue and cost of revenues in the consolidated statements of (loss) income and comprehensive (loss) income. Revenue is measured based on consideration specified in a contract with a customer, which may consist of both fixed and variable components, and the consideration expected to be received is allocated to each separately identifiable performance obligation based on the performance obligation’s relative stand-alone selling price. The standalone selling prices are generally determined based on the prices at which the Company separately sells the services. Contracts may include variable consideration, which usually takes the form of volume-based discounts, service level credits, price concessions, or incentives. To the extent that variable consideration is not constrained, the Company includes the expected amount within the total transaction price and updates its assumptions over the duration of the contract. Determining the estimated amount of such variable consideration involves assumptions and judgment that can have an impact on the amount of revenues reported. The amount of variable consideration is estimated utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. Time-and-Material Revenue The Company generates the majority of its revenues under time-and-material contracts, which are billed using hourly, daily, or monthly rates to determine the amounts to be charged directly to the customer. Revenue from time-and-material contracts is based on the number of hours worked and at contractually agreed-upon hourly rates and is recognized as those services are rendered as control of the services passes to the customer over time. Fixed-Price Revenue Fixed-price contracts include application development arrangements, where progress towards satisfaction of the performance obligation is measured using input methods as there is a direct correlation between hours incurred and the end product delivered to the customer. Assumptions, risks, and uncertainties inherent in the estimates used to measure progress could affect the amount of revenues, receivables, and deferred revenues at each reporting period. Revenues under these contracts are recognized using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying performance obligations. Principal vs Agent Consideration From time to time, the Company may enter into arrangements with third-party suppliers to sell services. In such cases, the Company evaluates whether it is the principal (i.e., reports revenues on a gross basis) or the agent (i.e., reports revenues on a net basis). In doing so, the Company first evaluates whether it has control of the service before it is transferred to the customer. If the Company controls the service before it is transferred to the customer, the Company is the principal; if not, the Company is the agent. Determining whether the Company controls the service before it is transferred to the customer may require judgment. Contract Balances A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets primarily relate to unbilled amounts on fixed-price contracts. Contract assets are recorded when services have been provided but the Company does not have an unconditional right to receive consideration. Professional services performed on or prior to the balance sheet date, but invoiced thereafter, are reflected in unbilled receivables. Contract liabilities, or deferred revenue, consist of advance payments from clients and billings in excess of revenues recognized. The Company classifies deferred revenue as current on the consolidated balance sheet and is recognized as revenue as the Company performs under the contract. These balances are generally short-term in nature and are recognized as revenue within one year. Costs to Obtain a Customer Contract The Company incurs certain incremental costs to obtain a contract that the Company expects to recover. The Company applies a practical expedient and recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. The Company capitalizes incremental costs of obtaining contracts where the contract term is greater than one year. These costs primarily relate to commissions paid to the account executives and are included in SG&A expenses in the consolidated statements of (loss) income and comprehensive (loss) income for contracts one year or less and other current assets and other non-current assets on the consolidated balance sheets for contracts greater than one year. Costs capitalized are amortized on a straight-line basis over the period of benefit. Amortization of capitalized costs to obtain contracts is included in SG&A expenses in the consolidated statements of (loss) income and comprehensive (loss) income. The Company determined the period of benefit by taking into consideration standard contract terms, renewals and amendments, if applicable. The capitalized amounts are recoverable through future revenue streams under all non-cancelable customer contracts. The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. The following table is a summary of the Company’s costs to obtain contracts and related amortization where the amortization period of the assets is greater than one year (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of period $ 2,039 $ — $ — Costs to obtain contracts capitalized 811 2,318 — Amortization of capitalized costs (1265) (277) — Changes due to exchange rates 3 (2) — Balance at end of period $ 1,588 $ 2,039 $ — Cost of Revenues Consists primarily of personnel and related costs directly associated with professional services, including salaries, bonuses, fringe benefits, stock-based compensation, project related travel costs, and costs of contracted third-party vendors. Also included in cost of revenues is depreciation attributable to the portion of our property and equipment utilized in the delivery of services to our clients. Selling, General and Administrative Expenses Consists of expenses associated with promoting and selling the Company’s services and general and administrative functions of the business. These expenses include the costs of salaries, bonuses, fringe benefits, commissions, stock-based compensation, severance, bad debt, travel, legal and accounting services, insurance, facilities including operating leases, advertising and other promotional activities. Advertising costs consist of marketing, advertising through print and other media, professional event sponsorship, and public relations. These costs are expensed as incurred. Advertising costs totaled $4.1 million, $2.3 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in SG&A expenses in the consolidated statements of (loss) income and comprehensive (loss) income. Other (Expense) Income Other (expense) income consists of interest expense, impacts from foreign exchange transactions, gains (losses) on the sale of assets, gains related to the sale and settlement of trade receivables, change in fair value of contingent consideration and the write-off of deferred financing fees. Cash and Cash Equivalents Cash equivalents are short-term, highly liquid investments and deposits that are readily converted into cash, with maturities of three months or less . Restricted Cash Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Restricted cash is restricted as to withdrawal or use. The Company has restricted cash held on deposit at various financial institutions. The amounts are held in escrow for income tax withholdings, to secure bank guarantees of amounts related to government requirements, and as collateral for a corporate credit card. Accounts Receivable and Allowance for Credit Losses Accounts receivable are uncollateralized customer obligations due under normal trade terms. Payment terms with customers are generally 30 to 90 days from the invoice date. Accounts receivable are recorded at the invoiced amount net of an allowance for credit loss. The Company analyzes its historical credit loss experience and considers current conditions and reasonable and supportable forecasts in developing the expected credit loss rates. Interest is not generally accrued on outstanding balances as the balances are considered short-term in nature. Activity related to the Company’s allowance for credit losses is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Allowance for credit losses, beginning balance $ (8,916) $ (10,385) $ (2,733) Impact of accounting standard adoption (1) (841) — — Current provision for expected credit losses (2,002) (281) (8,305) Write-offs charged against allowance 2,351 882 620 Changes due to exchange rates (123) 868 33 Allowance for credit losses, ending balance $ (9,531) $ (8,916) $ (10,385) (1) The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in the first quarter of 2022. See Recently Adopted Accounting Standards below for further discussion. Business Combinations The Company accounts for business combinations using the acquisition method of accounting which requires it to allocate the fair value of purchase consideration to the assets acquired and liabilities assumed based on the estimated fair values at the acquisition date. The fair value of the net assets acquired for the business is determined utilizing expectations and assumptions believed reasonable by management. The excess of the purchase consideration transferred over the fair values of assets acquired and liabilities assumed is recorded as goodwill. As additional information is obtained about the assets and liabilities of the acquisition during the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed with an offset to goodwill. After the measurement period, any adjustments are recorded in the consolidated statements of (loss) income and comprehensive (loss) income. Acquisition costs are expensed as incurred. Some business combinations may include a contingent consideration agreement. The Company determines the fair value of the contingent consideration liability using a Monte Carlo Simulation. The liability is remeasured to fair value at each reporting date with adjustments recorded within other income (expense), net in the consolidated statements of (loss) income and comprehensive (loss) income. Government Assistance The Company has historically received government subsidies in the form of cash in China and Singapore related to expenses such as rent, wages, training benefits and taxes. The subsidies are recorded against the related expense within SG&A expense or cost of revenues in the consolidated statements of (loss) income and comprehensive (loss) income. The Company recorded $1.3 million to cost of revenues SG&A expense Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows: Office furniture and equipment 7 years Computer equipment 3 years Software, including internal-use software 3 to 5 years Automobiles 7 years Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases. The Company reviews long-lived assets, including property and equipment and finite-lived intangible assets, for realizability on an ongoing basis. Changes in depreciation, generally accelerated depreciation, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the asset group may not be fully recoverable. In those circumstances, the Company performs an undiscounted operating cash flow analysis to determine if an impairment exists. When testing for asset impairment, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Internal-Use Software In accordance with ASC 350-40, Internal-Use Software, certain costs incurred in the planning and evaluation stage of internal-use computer software are expensed as incurred. Certain costs incurred during the application development stage are capitalized and included in property and equipment. Capitalized costs are depreciated over the expected economic useful life of three Capitalized internal-use software asset depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $4.7 million, $2.2 million and $3.5 million, respectively, and is included in depreciation and amortization in the consolidated statements of (loss) income and comprehensive (loss) income. As of December 31, 2022 and 2021, the net book value of internal-use software was $6.5 million and $5.6 million, respectively. Goodwill Goodwill represents the excess of cost over the fair value of the net assets acquired in a business combination. When the Company acquires a business, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. During the measurement period, which may be up to one year from the acquisition date, adjustments to the fair value of assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statement of operations. The Company performs an annual impairment review of goodwill in its fiscal fourth quarter and additional impairment reviews when events and circumstances indicate it is more likely than not that an impairment may have occurred. The Company assesses goodwill for impairment at the reporting unit level. In evaluating goodwill for impairment, the Company has the option to first perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of the reporting units to their carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. Qualitative factors include macroeconomic conditions, industry and market conditions, cost factors, and overall financial performance, among others. Under a quantitative assessment, fair value of the Company’s reporting units are estimated using a weighted methodology considering the output from both the income and market approaches. The income approach incorporates the use of a discounted cash flow (DCF) analysis. A number of judgments are involved in the application of the DCF model, including projections of business performance, weighted average cost of capital, and terminal values. The market approach is performed using the Guideline Public Companies method which is based on earnings multiple data derived from publicly traded peer group companies. The Company elected to perform a qualitative assessment during fiscal 2022 and 2021 and determined for both periods that the fair value of the Company’s respective reporting units exceeded their carrying amounts. Other Intangible Assets In accordance with ASC 350, Intangibles – Goodwill and Other, the Company amortizes its finite-lived intangible assets over their respective estimated useful lives. The Company reviews both indefinite-lived intangibles and finite-lived intangibles for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that they may be impaired. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated statements of (loss) income and comprehensive (loss) income. The Company’s other intangible assets consist of indefinite-lived trademarks and finite-lived customer relationships. Customer relationships have an estimated useful life of 15 years and are being amortized using the straight-line method. Income Taxes The Company is subject to both the United States of America (U.S.) and foreign income taxes. A current tax asset or liability is recognized for the estimated taxes payable or refundable on tax returns for the year. Deferred income taxes are recorded to reflect the tax consequences on future years of the difference between the tax bases of assets and liabilities for income taxes and for financial reporting purposes using enacted tax rates in effect for the year in which differences are expected to reverse. The Company nets the deferred tax assets and deferred tax liabilities from temporary differences arising within the same tax jurisdiction and presents the net asset or liability as long term. The Company assesses the need to account for deferred taxes on unremitted earnings of its foreign subsidiaries on an individual country basis according to management’s assertions regarding repatriation or permanent investment of each country’s accumulated earnings. A valuation allowance is established when necessary to reduce deferred income tax assets to the amounts expected to be realized. The Company classifies interest and penalties associated with tax liabilities as income tax expense in the consolidated statements of (loss) income and comprehensive (loss) income. The Company provides for tax expense related to Global Intangible Low-Tax Income ("GILTI") in the year the tax is incurred. The Company’s provision for income taxes includes the impact of provisions established for uncertain income tax positions, as well as any related interest and penalties. These reserves are adjusted given changing facts and circumstances, such as the closing of a tax audit, statute of limitation lapse or the refinement of an estimate. To the extent the final outcome of an uncertain income tax position differs from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consists solely of foreign currency translation adjustments. Foreign Currency Assets and liabilities of consolidated foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at period-end exchange rates and revenues and expenses are translated into U.S. dollars at average exchange rates for the applicable period. The adjustment resulting from translating the financial statements of such foreign subsidiaries into U.S. dollars is reflected as a cumulative translation adjustment and reported as a component of accumulated other comprehensive income. For consolidated foreign subsidiaries whose functional currency is the U.S. dollar, transactions and balances denominated in the local currency are foreign currency transactions. Foreign currency transactions and balances related to non-monetary assets and liabilities are remeasured to the functional currency of the subsidiary at historical exchange rates while monetary assets and liabilities are remeasured to the functional currency of the subsidiary at period-end exchange rates. Foreign currency exchange gains or losses from remeasurement are included in income in the period in which they occur. Commitments and Contingencies Certain conditions may exist as of the date of the consolidated financial statements which may result in a loss to the Company but will only be resolved when one or more future events occur or fail to occur. Such liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources, are recorded when the Company assesses that it is probable that a future liability has been incurred and the amount can be reasonably estimated. Recoveries of costs from third parties, which the Company assesses as being probable of realization, are recorded to the extent of related contingent liabilities accrued. Legal costs incurred in connection with matters relating to contingencies are expensed in the period incurred. The Company records gain contingencies when realized. Deferred Financing Fees Deferred financing fees represent third-party debt issuance costs associated with the related debt facility. Deferred financing fees associated with the Company’s debt agreements are treated as a discount on the outstanding debt balance and amortized over the term of the respective debt facility, using the effective interest rate method and reported as a component of interest expense. Debt discounts on the Company’s debt are reflected as a direct deduction from the carrying amount of the long-term portion of the related debt liability. The Company recorded interest expense as it relates to deferred financing fees of $1.6 million, $1.6 million and $1.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. Fair Value Measurements The Company determines the fair values of its financial instruments based on the fair value hierarchy. ASC 820, Fair Value Measurement, includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: • Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data. • Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The fair value of certain assets, such as nonfinancial assets, primarily long-lived assets, goodwill, intangible assets and certain other assets, are recognized or disclosed in connection with impairment evaluations. All non-recurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable, and accounts payable approximated fair value as of December 31, 2022 and 2021, because of the relatively short maturity of these instruments. Additionally, the Company estimates the fair value of the Term Loan, discussed in Note 12, Credit Agreements , using current market yields. These current market yields are considered Level 2 inputs. The fair value of the Term Loan was $392.0 million a nd $485.0 million at December 31, 2022 and 2021, respectively. Stock-Based Compensation The Company accounts for employee and Director equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Accordingly, compensation expense is based on the grant date fair value of those awards and is recognized over the requisite service period for the respective award. The Company’s equity-based awards granted to employees include service-based stock option awards, RSUs and PSUs, both market and non-market based. In April 2022, the Board approved the grant of EBITDA PSUs and rTSR PSUs to certain executives and employees under the Omnibus Plan. The EBITDA PSUs are earned based on the Company’s achievement of specified adjusted EBITDA targets. The rTSR PSUs are earned based on the Company's achievement of specified rTSR targets. Both types of PSUs vest over a three-year service period, subject to the participant’s continued employment with us or our affiliate, as applicable. The fair value of the options, RSUs, and EBITDA PSUs is determined using the grant date stock price of the Company’s common stock. The fair value for the rTSR PSUs is determined using a Monte-Carlo simulation. Compensation expense for awards solely subject to time-based vesting conditions (i.e., options and RSUs), will be recognized over their requisite service period (typically one At the time of grant, the Company takes into consideration the timing of the equity award and evaluates for conditions that could result in the award being considered spring loaded awards. The Company did not grant equity awards that would be considered spring loaded awards in 2022. Refer to Note 10, Stock-Based Compensation , for more information on equity-based awards. Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), which amends existing accounting standards for lease accounting and requires lessees to recognize virtually all leases on the balance sheet by recording a right-of-use asset and a lease liability (for other than short term leases). The Company early adopted the standard effective January 1, 2022. The Company elected the modified retrospective transition method, and as a result, the Company did not adjust its comparative period financial information or make the new required lease disclosures for periods before the date of adoption. The Company elected to use the package of practical expedients, which permits the Company to not reassess: (i) whether a contract is or contains a lease, (ii) lease classification, and (iii) initial direct costs resulting from the lease. The Company did not elect the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The Company |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company disaggregates revenues from contracts with customers by geographic customer location, industry vertical and revenue contract types. Geographic customer location is pertinent to understanding the Company's revenues, as the Company generates its revenues from providing professional services to customers in various regions across the world. The Company groups customers into one of five industry verticals. Revenue contract types are differentiated by the type of pricing structure for customer contracts, which is predominantly time-and-materials, but also includes fixed price contracts. Disaggregation of Revenues The following table presents the disaggregation of the Company’s revenues by customer location (in thousands): Year Ended December 31, 2022 2021 2020 North America (1) $ 503,948 $ 396,491 $ 321,237 APAC (2) 419,982 358,596 248,776 Europe (3) 315,875 267,121 195,372 LATAM 56,433 47,737 37,990 Total revenues $ 1,296,238 $ 1,069,945 $ 803,375 (1) For the years ended December 31, 2022, 2021 and 2020, the United States represented 36.6%, or $474.3 million; 34.8%, or $372.8 million; and 38.2%, or $307.2 million, respectively, of the Company’s total revenues. Canadian operations were determined to be immaterial given the revenues as a percentage of total North America revenues was less than 10% for each of the years. (2) For the years ended December 31, 2022 and 2021, Australia represented 11.4% , or $148.3 million , and 10.9%, or $116.5 million , respectively, of the Company's total revenues. For the year ended December 31, 2020, the revenues in Australia as a percentage of the Company’s total revenues was less than 10%. For the years ended December 31, 2022 and 2021, revenues in China as a percentage of the Company’s total revenues was less than 10% . For the year ended December 31, 2020, revenues in China were 10.4%, or $83.5 million, respectively, of the Company's total revenues. (3) For the years ended December 31, 2022, 2021 and 2020, the United Kingdom represented 10.2% , or $132.6 million; 10.8%, or $115.2 million; and 11.1%, or $89.2 million, respectively, of the Company’s total revenues. For the year ended December 31, 2022, revenues in Germany as a percentage of the Company's total revenues was less than 10%. For the years ended December 31, 2021 and 2020, revenues in Germany represented 10.6%, or $113.8 million, and 10.1%, or $81.5 million, respectively, of the Company’s total revenues. Other foreign countries were determined to be immaterial given the revenues as a percentage of the Company’s total revenues was less than 10% for the years ended December 31, 2022, 2021 and 2020. The following table presents the disaggregation of the Company’s revenues by industry vertical (in thousands): Year Ended December 31, 2022 2021 2020 Technology and business services $ 360,117 $ 288,709 $ 228,514 Energy, public and health services 316,478 275,279 200,785 Retail and consumer 236,731 203,193 141,729 Financial services and insurance 221,748 170,492 123,291 Automotive, travel and transportation 161,164 132,272 108,656 Other — — 400 Total revenues $ 1,296,238 $ 1,069,945 $ 803,375 The following table presents the disaggregation of the Company’s revenues by contract type (in thousands): Year Ended December 31, 2022 2021 2020 Time-and-material $ 1,085,533 $ 872,271 $ 675,715 Fixed-price 210,705 197,674 127,313 Licensing — — 347 Total revenues $ 1,296,238 $ 1,069,945 $ 803,375 Contract Balances The following table is a summary of the Company’s contract assets and contract liabilities (in thousands): As of December 31, 2022 2021 Contract assets included in unbilled receivables $ 39,941 $ 25,408 Contract liabilities included in deferred revenue $ 5,167 $ 13,807 Contract assets primarily relate to unbilled amounts on fixed-price contracts. Contract assets are recorded when services have been provided but the Company does not have an unconditional right to receive consideration. Professional services performed on or prior to the balance sheet date, but invoiced thereafter, are reflected in unbilled receivables. Contract liabilities represent amounts collected from the Company’s customers for revenues not yet earned. Such amounts are anticipated to be recorded as revenues when services are performed in subsequent periods. For the years ended December 31, 2022 and 2021, the Company recognized $13.7 million and $11.4 million, respectively, of revenues that were included in current liabilities at the prior year end. Transaction Price Allocated to Remaining Performance Obligations The Company does not have material future performance obligations that extend beyond one year. Accordingly, the Company has applied the optional exemption for contracts that have an original expected duration of one year or less. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On April 26, 2022, the Company completed the acquisition of Connected Lab Inc. ("Connected"), an end-to-end product design and development firm that partners with their clients to discover and deliver products that drive business impact, in an all-cash transaction for a gross purchase price of $83.8 million, or $79.4 million net of cash acquired of $4.4 million, which is inclusive of a $14.0 million contingent consideration liability as discussed below and other adjustments. Connected is now wholly owned by the Company. The acquisition will advance the Company's capabilities in solving business problems through product-led design processes, from defining the strategy to discovery and delivery and enhance the Thoughtworks customer experience, product and design service line in North America. In connection with the acquisition, the Company recorded a liability of $14.0 million of contingent consideration, which is included within the total purchase price and classified within accrued expenses in the consolidated balance sheet. The present value of the contingent consideration liability was determined using a Monte Carlo Simulation that calculated the average present value of the earnout payment. The fair value measurement of the earnout includes a performance metric which is an unobservable Level 3 input. The contingent consideration is payable in cash dependent upon achievement of the performance metric. The liability is remeasured to fair value at each reporting date with adjustments recorded within other income (expense), net in the consolidated statements of (loss) income and comprehensive (loss) income. The final payout amount of $14.3 million was determined as of December 31, 2022 and is expected to occur in the second quarter of 2023. The following table presents the change in the contingent consideration liability (in thousands): Year Ended December 31, 2022 Balance at beginning of period $ — Additions in the period 13,996 Change in fair value 1,027 Change due to exchange rates (768) Balance at end of period $ 14,255 The Company accounted for the acquisition under ASC 805, Business Combinations . The goodwill recognized in connection with the acquisition reflects the benefits expected to be derived from certain operational synergies. The fair value of the net assets acquired for the business was determined using Level 3 inputs, for which little or no market data exists, requiring the Company to develop assumptions regarding future cash flow projections. The results of operations of the acquired business have been included in the consolidated statements of (loss) income and comprehensive (loss) income from the acquisition date. Pro forma results of operations for the acquisition are not presented because the pro forma effects were not material to the Company's consolidated results of operations. Aggregate acquisition-related costs related to Connected of $3.4 million for the year ended December 31, 2022 were included within SG&A expenses in the consolidated statements of (loss) income and comprehensive (loss) income. The Company's final allocation of the fair value of underlying assets acquired and liabilities assumed as of the acquisition date is as follows (in thousands): Total Cash and cash equivalents $ 4,394 Trade receivables, net of allowance 3,678 Unbilled receivables 2,594 Customer relationships, net 15,800 Goodwill 66,191 Accrued compensation (1,364) Accrued expenses (3,733) Other assets/liabilities, net (3,759) Total gross purchase price $ 83,801 Cash consideration paid $ 69,805 Fair value of contingent consideration 13,996 Total gross purchase price $ 83,801 Goodwill represents the excess of the purchase price over the fair values of assets acquired and liabilities assumed. The changes in fair value allocated to goodwill, tangible and intangible assets are not deductible for tax purposes. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The following is a summary of the changes in the carrying value of goodwill (in thousands): Total Balance as of December 31, 2020 $ 318,151 Additions due to acquisitions 32,615 Changes due to exchange rates (4,047) Balance as of December 31, 2021 346,719 Additions due to acquisitions 71,700 Changes due to exchange rates (13,402) Balance as of December 31, 2022 $ 405,017 The following is a summary of other intangible assets (in thousands): As of December 31, 2022 2021 Customer relationships $ 193,447 $ 177,100 Less accumulated amortization (59,369) (46,184) Customer relationships, net 134,078 130,916 Trademark 273,000 273,000 Total other intangible assets, after amortization 407,078 403,916 Changes due to exchange rates (10,031) (5,049) Other intangible assets, net $ 397,047 $ 398,867 Other than indefinite-lived trademarks, the Company’s intangible assets have finite lives and, as such, are subject to amortization. The weighted average remaining useful life of the Company’s finite-lived intangible assets was 9.2 years and 10.6 years as of December 31, 2022 and 2021, respectively. Amortization expense related to these intangible assets was $13.1 million , $12.0 million and $10.5 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, estimated amortization expense for the next five years and thereafter is as follows (in thousands): Total 2023 $ 14,635 2024 14,635 2025 14,635 2026 14,635 2027 14,635 Thereafter 60,903 $ 134,078 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes (Loss)/Income Before Provision for Income Taxes (Loss)/income before provision for income taxes based on geographic location is as follows (in thousands): Year Ended December 31, 2022 2021 2020 (Loss)/income before provision for income taxes: United States $ (48,578) $ (27,630) $ 45,393 Foreign (25,990) 43,795 56,686 Total $ (74,568) $ 16,165 $ 102,079 Provision for Income Taxes The provision/(benefit) for income taxes is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Current: Federal $ 32,746 $ 9,839 $ 704 State 9,259 5,071 2,316 Foreign 8,245 24,199 18,001 Total current 50,250 39,109 21,021 Deferred: Federal (15,379) (9,088) 5,914 State (3,228) (2,457) 862 Foreign (818) (10,824) (4,691) Total deferred (19,425) (22,369) 2,085 Total income tax expense $ 30,825 $ 16,740 $ 23,106 As part of the U.S. Tax Act, beginning in 2022, IRC §174 research and experimental expenditures are to be capitalized and amortized over a period of 5 and 15 years for US and non-US expenditures. This change unfavorably impacts the Company's GILTI inclusion, resulting in a $12.5 million tax expense recorded for the year ended December 31, 2022 as compared to tax expense of $9.0 million and $6.7 million recorded for the years ended December 31, 2021 and 2020, respectively. On February 25, 2022, the Company granted 4.4 million RSUs that were contingent upon the successful and active registration with the State Administration of Foreign Exchange of the People's Republic of China ("China SAFE RSUs"). As tax deductibility is contingent upon reimbursement and local regulations do not specifically allow for recharge payments, the Company recorded a $15.3 million tax expense for the year ended December 31, 2022. On June 10, 2021, the United Kingdom enacted legislation increasing its corporate income tax rate from 19% to 25% beginning April 1, 2023. As a change in tax law is accounted for in the period of enactment, the Company recorded a $(0.3) million tax benefit and $0.9 million tax expense on the remeasurement of the Company’s United Kingdom net deferred tax liabilities for the years ended December 31, 2022 and 2021, respectively. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) Act was enacted and signed into law. The CARES Act, among other things, permits U.S. federal net operating loss (“NOL”) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. Further, the CARES Act permits modifications to the limitation of business interest (“Section 163(j)”) for tax years beginning in 2019 and 2020. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. In 2020, the Company completed its analysis to determine the effect of the CARES Act and recorded a $4.2 million tax benefit as of December 31, 2020 from the carryback of 2018 U.S. federal net operating losses to the 2014 taxable year. The Company recorded the refund as an income tax receivable, of which $1.9 million was received in 2022. Effective Tax Rate Reconciliation A reconciliation of the Company’s provision for income taxes to income taxes computed at the U.S. federal statutory income tax rate of 21% is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Provision for income taxes at federal statutory rate $ (15,659) $ 3,395 $ 21,437 Increase/(decrease) in taxes resulting from: Non deductible expenses 4,713 3,008 1,297 Research and development and foreign tax credits (9,419) (16,311) (13,251) Effect of foreign taxes and foreign exchange rates 81 5,695 4,082 GILTI and related international adjustments 12,528 8,972 6,714 §162(m) limitation on executive compensation 2,759 7,396 — Stock compensation excess tax benefits 2,739 (8,206) (22) China non-deductible stock compensation expense 15,329 — — US state income taxes, net of federal tax benefit 3,811 1,072 2,892 Change in deferred tax valuation allowance 11,919 10,060 4,145 CARES Act US federal net operating loss carryback benefit — — (4,188) U.K. rate change (313) 855 — Adjustments of prior year estimates and other (1,044) (2,330) (1,566) Adjustments associated with income tax uncertainties 3,381 3,134 1,566 Total income tax expense $ 30,825 $ 16,740 $ 23,106 Deferred Income Taxes The components of the Company’s deferred tax assets and liabilities include the following (in thousands): As of December 31, 2022 2021 Deferred tax assets: Accrued expenses $ 23,572 $ 6,650 Goodwill 850 1,305 Net operating loss carryforwards 20,409 6,492 Research and development and foreign tax credit carryforwards 1,350 1,505 Allowance for doubtful accounts 2,772 2,717 Fixed assets 2,526 1,817 Stock-based compensation 22,533 30,322 Business interest 9,685 6,727 Other assets 4,790 1,768 Total deferred tax assets 88,487 59,303 Total valuation allowance (28,510) (16,703) Total deferred tax assets $ 59,977 $ 42,600 As of December 31, 2022 2021 Deferred tax liabilities: Unremitted earnings of subsidiaries and unrealized translation gains $ (2,793) $ (3,877) Prepaid expenses (3,545) (2,597) Fixed assets (649) (1,071) Deferred revenue (460) — Customer relationships (32,844) (33,500) Trademark (73,028) (73,028) Internally developed software (1,565) (1,280) Other liabilities (192) (932) Total deferred tax liabilities (115,076) (116,285) Total deferred tax liabilities, net $ (55,099) $ (73,685) Management believes that it is more likely than not that certain deferred tax assets will not be realized. At December 31, 2022 and 2021, the Company established a full valuation allowance for deferred tax assets in select non-US jurisdictions of approximately $14.5 million and $7.1 million, respectively. The Company established a valuation allowance of approximately $13.1 million and $8.9 million at December 31, 2022 and 2021, respectively, for a separate company U.S. federal net operating loss carryforward and separate company U.S. federal limitation of business interest. The Company established a valuation allowance of approximately $1.0 million and $0.8 million for certain foreign tax credits at December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021, the Company had U.S. state net operating loss carryforward benefits of $0.1 million and $0.5 million, respectively. The majority of U.S. state net operating loss carryforwards have expiration periods that range from 10 to 20 years. At December 31, 2022 and 2021, the Company had foreign net operating loss carryforwards of approximately $68.2 million and $15.6 million, respectively. For material APAC jurisdictions, the net operating loss carryforward period is 5 years, and for all other material jurisdictions, the net operating loss carryforward period is indefinite. As of December 31, 2022 and 2021, the Company does not assert permanent reinvestment on previously taxed foreign earnings with the exception of India, where the Company is permanently reinvested. Deferred tax liabilities of $2.1 million and $3.0 million, respectively, have been accrued on the foreign withholding taxes due upon repatriation. At December 31, 2022 and 2021 a deferred tax asset of $3.3 million and $0.1 million, respectively, has been accrued and recorded to other comprehensive income for cumulative foreign currency translation on previously-taxed earnings and profits of the Company’s controlled foreign corporations. Additional tax implications of future repatriations were considered and deemed immaterial. For share-based payment awards that are expected to result in a tax deduction, the Company records a deferred tax asset related to the compensation expense that is recognized. In adjusting the compensation expense in the retrospective application of the straight-line method, the Company appropriately adjusted related deferred tax assets. Further, the Company considered whether adjustments to deferred tax assets would require adjustments to valuation allowances and concluded that there were no material valuation allowance adjustments to be recorded. Unrecognized Tax Benefits As of December 31, 2022, 2021 and 2020, the Company recorded $14.5 million, $11.3 million and $8.1 million, respectively, of unrecognized tax benefits, which if recognized, would favorably affect the Company’s effective tax rate. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 11,609 $ 8,123 $ 6,557 Additions for tax positions related to the current year — 2,068 1,219 Additions for tax positions related to prior years 3,424 1,923 706 Reductions for tax positions related to prior years (43) (505) (316) Statute of limitations expirations — — (43) Settlements with tax authorities — — — Balance, end of year $ 14,990 $ 11,609 $ 8,123 The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. For the years ended December 31, 2022, 2021 and 2020, the income tax expense/(benefit) recognized for interest and penalties related to unrecognized tax benefits was $0.4 million, $0.3 million and $0.1 million, respectively. At December 31, 2022, 2021 and 2020, the Company had cumulative liabilities for penalties and interest related to unrecognized tax benefits of approximately $2.0 million, $1.6 million and $1.3 million, respectively. There were no tax positions for which it was reasonably possible that unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date. The Company files tax returns in the U.S. federal, various U.S. states, and various foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2019. The Company’s India subsidiary is no longer subject to income tax examinations by tax authorities in India for years before 2005. For the remaining foreign tax jurisdictions, with few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2017. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment consisted of the following (in thousands): As of December 31, 2022 2021 Automobiles $ 5 $ 38 Computer equipment 46,300 37,847 Software, including internal-use 19,170 13,575 Leasehold improvements 22,245 20,425 Office furniture and equipment 6,561 7,968 94,281 79,853 Less: accumulated depreciation and amortization (55,483) (45,353) Property and equipment, net $ 38,798 $ 34,500 Depreciation and amortization expense for property and equipment was $21.3 million , $17.5 million and $16.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
(Loss) Earnings Per Common Shar
(Loss) Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Common Share | (Loss) Earnings Per Common Share Basic (loss) earnings per common share is computed by dividing the net (loss) income allocated to common shareholders by the weighted average common shares outstanding for the period. Diluted (loss) earnings per common share is computed by giving effect to all potential shares of common stock, including outstanding stock options, unvested RSUs and unvested PSUs, to the extent the shares are dilutive. PSU shares are not included in dilution during the performance period. Once the performance period is complete, the PSU shares are included in dilution during the remaining service period, to the extent they are dilutive. Basic and diluted loss per common share are the same for the years ended December 31, 2022 and 2021, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. The components of basic and diluted (loss) earnings per common share are as follows (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 Basic (loss) earnings per common share: Net (loss) income $ (105,393) $ (575) $ 78,973 Preferred stock dividends — (59,642) — Earnings allocated to Preferred Stock — — (6,150) Net (loss) income allocated to common shareholders – Basic $ (105,393) $ (60,217) $ 72,823 Weighted average common shares outstanding – Basic 310,911,526 254,271,997 278,225,009 Basic (loss) earnings per common share $ (0.34) $ (0.24) $ 0.26 Diluted (loss) earnings per common share: Net (loss) income allocated to common shareholders – Basic $ (105,393) $ (60,217) $ 72,823 Weighted average shares outstanding – Basic 310,911,526 254,271,997 278,225,009 Dilutive effect of: Employee stock options, RSUs and PSUs (1) — — 6,390,986 Weighted average common shares outstanding – Diluted 310,911,526 254,271,997 284,615,995 Diluted (loss) earnings per common share $ (0.34) $ (0.24) $ 0.26 (1) Reflects the dilutive effects of applying the treasury stock method to all potential common shares. For periods where the Company was in a net loss, the potential common shares were excluded but would have been dilutive if the Company was not in a net loss. The following potentially dilutive securities were excluded from the computation of diluted (loss) earnings per common share because the impact of including them would have been anti-dilutive: Year Ended December 31, 2022 2021 2020 Employee stock options, RSUs and PSUs 26,802,540 23,435,860 444,215 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company leases facilities (office space and corporate apartments) and equipment (IT equipment) under various non-cancelable operating leases that expire through September 2032, some of which include one or more options to extend the leases, generally at rates to be determined in accordance with the agreements. The Company's facility leases generally provide for periodic rent increases and may contain escalation clauses and renewal options. The Company's lease terms include options to extend the lease if they are reasonably certain of being exercised. The Company recognizes operating lease expense on a straight-line basis over the lease term and variable lease payments are expensed as incurred. Operating lease expense and the related variable lease expense is recorded within SG&A expenses in the Company's consolidated statements of (loss) income and comprehensive (loss) income. As of December 31, 2022, the Company's finance leases were immaterial. The Company determines if a contract contains a lease at lease inception. If the borrowing rate implicit in the lease is not determinable, the Company uses its incremental borrowing rate ("IBR") based on information available at lease commencement including prevailing financial market conditions to determine the present value of future lease payments. The Company has elected the option to combine lease and non-lease components as a single component for the Company's entire population of lease assets. Operating lease assets and lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, and lease incentives. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leased assets are presented net of accumulated amortization. Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities; instead, these are expensed as incurred and recorded as variable lease expense. Adoption of Topic 842 resulted in the initial recognition of ROU assets of $40.9 million and lease liabilities of $43.7 million. As of December 31, 2022, the Company does not have any leases that create significant rights and obligations that have not yet commenced. The following table presents total lease cost (in thousands): Year Ended December 31, 2022 Operating lease cost $ 19,818 Variable lease cost 2,908 Short-term lease cost 614 Total lease cost $ 23,340 The following table presents supplemental cash flow information (in thousands): Year Ended December 31, 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 19,779 ROU assets obtained in exchange for new operating lease liabilities 21,819 The following table presents average lease terms and discount rates: As of December 31, 2022 Weighted-average remaining lease term (years) 4.7 Weighted average discount rate 5.3 % As of December 31, 2022, the aggregate future lease payments under all operating leases are as follows (in thousands): Operating 2023 $ 17,938 2024 10,763 2025 6,945 2026 5,506 2027 2,769 Thereafter 7,750 Total lease payments 51,671 Less: imputed interest 5,809 Present value of lease liabilities $ 45,862 ASC 840 Disclosures Prior to the adoption of Topic 842, aggregate future minimum lease payments, net of sublease income, under all operating leases were as follows as of December 31, 2021 (in thousands): 2022 $ 17,557 2023 11,690 2024 6,849 2025 3,955 2026 3,027 Thereafter 6,088 Total future minimum lease payments $ 49,166 Total rent expense for all operating leases for the year ended December 31, 2021 was $19.4 million. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Redeemable Convertible Preferred Stock In September 2021, upon the closing of the Company's IPO, all outstanding shares of redeemable convertible preferred stock were converted into an aggregate of 1,365,058 shares (pre-stock split) of common stock. Further, in connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 100,000,000 shares of undesignated preferred stock with a par value of $0.001 per share with rights and preferences, including voting rights, designated from time to time by the Board of Directors. Common Stock In connection with the IPO, all classes of shares of the Company's common stock then outstanding were converted into 5,259,163 shares (pre-stock split) of common stock on a one-to-one basis. As a result, the securities of the Company are represented by shares of common stock with a par value of $0.001 per share. Each share of common stock is entitled to one vote. With respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, all shares of common stock will participate pro rata in such payment whenever funds are legally available and when declared by the Board, subject to the prior rights of holders of all classes of stock outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plans On October 12, 2017, the Company approved the 2017 Plan for the purpose of providing an incentive compensation structure to participants. Under the 2017 Plan, the Company may make awards to such present and future officers, directors, employees, consultants and advisors of the Company as may be selected at the sole discretion of the Board. The option awards gave the participant the right to purchase the Company's former Class C common stock for a prespecified exercise price. As a result of the IPO, the Company no longer grants awards under the 2017 Plan, and all previously awarded options can now be exercised for only the Company's current common stock when vested and exercisable. In September 2021, the Board approved the Omnibus Plan to assist the Company in attracting, retaining, motivating, and rewarding certain employees, officers, directors, and consultants of the Company and its Affiliates and promoting the creation of long-term value for stockholders, which became effective in connection with the IPO. A total of 62,048,123 shares of the Company’s common stock have been reserved for issuance under the Omnibus Plan. The following is a summary of the components of stock-based compensation expense for the periods indicated (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenues $ 176,046 $ 60,678 $ — Selling, general and administrative expenses 73,869 67,624 2,020 Total stock-based compensation expense $ 249,915 $ 128,302 $ 2,020 The income tax expense/(benefit) recognized for the years ended December 31, 2022, 2021 and 2020 was $20.6 million, $(0.8) million and nil, respectively. Stock Options Under the 2017 Plan, eligible employees received non-qualified stock options as a portion of their total compensation. The options vest on a graded time vesting schedule (“Time Vesting Options”) over a vesting term of four years and a contractual term of 10 years, with 37.5% vesting on the 18-month anniversary and 6.25% vesting every three months for the remainder of the 48-month period. Upon a change of control, 100% of the time-vesting options will vest immediately. Any unvested options will be forfeited upon termination of employment. The Company's 2017 Plan permits imposing lock-up restrictions on participants in connection with the IPO. Pursuant to the 2017 Plan, the Company imposed a lock-up restriction, subject to limited exceptions, on selling, transferring or otherwise disposing of options and shares of common stock issuable pursuant to the exercise of options, for a period of one year following the consummation of the IPO, provided that such restriction will lapse as to 50% of such options and shares after six months following the consummation of the offering. The lockup period restrictions have ended as of September 17, 2022. The following is a summary of performance and time vesting option activity for the year ended December 31, 2022 (in thousands, except share and per share data): Number of Stock Options Weighted Average Exercise Price Aggregate Weighted- Balance at December 31, 2021 24,097,082 $ 3.79 Granted — — Forfeited (140,597) 10.77 Exercised (2,348,923) 2.99 Cancelled — — Expired — — Balance at December 31, 2022 21,607,562 $ 3.83 $ 145,393 5.5 Exercisable at December 31, 2022 20,588,419 $ 3.54 $ 142,895 5.4 As of December 31, 2022, total compensation cost related to Time Vesting Options not yet recognized was $7.2 million, which will be recognized over a weighted-average period of 2.1 years. Unless otherwise prohibited by law in local jurisdictions, Time Vesting Options will continue to vest according to the 2017 Plan and the applicable award agreements. The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $29.6 million, $24.9 million and $0.8 million, respectively. The weighted-average grant date fair value of options granted during the years ended December 31, 2021 and 2020 was $10.32 and $5.71, respectively. No options were granted during the year ended December 31, 2022. The following table summarizes the weighted-average assumptions used in estimating the fair value of stock options granted to employees: Year Ended December 31, 2021 (1) 2020 (1) Risk-free interest rate 0.1 % 0.1 % Dividend yield — % — % Expected volatility 55.0 % 55.0 % Expected term (years) 1 2 (1) The risk-free interest rate is based on the rates of U.S. Treasury securities with a maturity similar to the term to liquidity, continuously compounded. The expected equity volatility is estimated based on an analysis of guideline public companies’ historical volatility. As these stock options were awarded prior to the IPO, the expected term was estimated based on management’s assumptions of time to a liquidity event. Restricted Stock Units In September 2021, the Board approved the Omnibus Plan . Under the Omnibus Plan, RSUs are awarded to eligible employees and entitle the grantee to receive shares of common stock at the end of a vesting period. Unvested RSUs as of December 31, 2022 have varying vesting schedules, with the majority of shares vesting evenly over four years. All RSUs granted as a result of the IPO included a lock-up period of 6 months, ending March 17, 2022, before the participants could redeem the shares. Throughout the vesting period and the lock-up period, shareholders are subject to the market risk on the value of their shares. The following is a summary of RSU activity for the year ended December 31, 2022: Number of RSUs Weighted Average Grant Date Fair Value Unvested balance at December 31, 2021 14,128,722 $ 23.39 Granted (1) 11,505,096 14.97 Forfeited (1,622,736) 22.96 Vested (2) (10,997,136) 21.77 Unvested balance at December 31, 2022 13,013,946 $ 17.37 (1) Includes 4.4 million RSUs that were contingent upon the successful and active registration with the State Administration of Foreign Exchange of the People's Republic of China (“China SAFE”), which occurred on February 25, 2022. The amount also includes 0.1 million RSUs granted in relation to the Connected acquisition. (2) Includes 2.8 million shares that were net settled when released and returned to the share pool for future grants. The total fair value of RSUs vested during the year ended December 31, 2022 was $189.6 million. No RSUs vested during the years ended December 31, 2021 and 2020. As of December 31, 2022, total compensation cost related to all RSUs not yet recognized was $157.5 million, of which $114.3 million is IPO related or associated with one-time grants and considered nonrecurring. The remainder of $43.2 million is primarily related to the annual grant and considered recurring. The total unamortized expense is anticipated to be recognized over a weighted-average period of 2.7 years . Performance Stock Units In April 2022, the Board of Directors approved the grant of PSUs to certain executives and employees under the Omnibus Plan. Awards with a performance and time-based vesting as well as awards with market-based performance vesting components were granted. The performance and time-based PSUs, or non-market-based PSUs, are subject to the Company’s achievement of specified profit targets. The market-based awards are tied to the Company's performance against relative total shareholder return ("rTSR") targets. Both types of PSUs vest at the end of a three-year service period. The following is a summary of PSU activity for the year ended December 31, 2022: Number of PSUs Weighted Average Grant Date Fair Value Unvested balance at December 31, 2021 — $ — Granted (1) 269,586 24.15 Adjustment for PSUs expected to vest as of current period end (192,889) 25.76 Forfeited — — Vested — — Unvested balance at December 31, 2022 76,697 $ 20.11 (1) Reflects shares granted at 100%. For compensation expense purposes, the fair value of the non-market-based PSUs was determined using the closing stock price on the grant date, and the fair value for the market-based PSUs was determined using a Monte-Carlo simulation. As of December 31, 2022, total compensation co st related to PSUs not yet recognized was $4.1 million. The unamortized expense is anticipated to be recognized over a weighted-average period of 2.3 years. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Benefits Plan | Benefit Plans The Company sponsors a 401(k) plan for substantially all U.S. employees. Employees are allowed to make contributions to the plan through withholdings of their salary. The plan provides for the Company to make a discretionary matching contribution. Contributions to the plan for the years ended December 31, 2022, 2021 and 2020, totaled $5.8 million , $4.5 million and $3.8 million, respectively. The Company also maintains similar defined contribution plans in the United Kingdom, Canada, Spain, Italy, Singapore, and Thailand. Total employer contributions under these plans for the years ended December 31, 2022, 2021 and 2020 were $11.0 million , $8.8 million and $7.3 million, respectively. |
Credit Agreements
Credit Agreements | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Credit Agreements | Credit Agreements The Company entered into a Senior Secured Credit Facilities (the “Term Loan”), dated October 12, 2017, most recently amended as of December 9, 2022, among the Company, the syndicate lenders thereto and Credit Suisse, AG, Cayman Islands Branch, as administrative agent, to finance, in part, the acquisition of all of the outstanding common stock of the Company. The Term Loan and the Revolver, together with any subsequent amendments, are collectively referred to as the Credit Agreement. On March 26, 2021, the Company amended and restated its credit agreement (the “Amendment and Restatement”) to increase the term loan facility to a total of $715.0 million. Also, as part of the facility, the aggregate revolving credit facility was increased to $165.0 million from $85.0 million. On December 9, 2022, the Company amended and restated its credit agreement (the “Second Amendment and Restatement”) to (i) increase the amount of revolving credit commitments from $165.0 million to $300.0 million and (ii) transition the reference rate for the revolving borrowings under the Credit Agreement from LIBOR to SOFR and amend the applicable margins as specified therein. Borrowings under the Term Loan bear interest at a rate per annum equal to an applicable margin based on the Company’s leverage ratio, plus either (a) a base rate or (b) a LIBOR rate, at the Company's option, subject to interest rate floors. For the first full quarter after the Amendment and Restatement date, the interest rate per annum is equal to (a) 3.25% for LIBOR based borrowings and (b) 2.25% for base rate borrowings, subject to interest rate floors. The interest rate reduced by 0.25% upon the completion of the IPO for both LIBOR and base rate borrowings. The interest rate was further reduced by 0.25% upon the change in corporate family rating in November 2022. Borrowings under the Revolver bear interest at a rate per annum equal to an applicable margin based on the Company’s leverage ratio, plus either (a) a base rate or (b) the SOFR rate at the Company's option. In addition to paying interest on outstanding borrowings under the Revolver, the Company is required to pay a commitment fee to the lenders under the Revolver in respect of unutilized commitments thereunder and customary letter of credit fees. All obligations of the Company under the Senior Secured Credit Facilities provided by any lender party to the Senior Secured Credit Facilities or any of its affiliates and certain other persons are unconditionally guaranteed by a wholly owned subsidiary of Thoughtworks Holding, Inc., and each existing and subsequently acquired or organized direct or indirect wholly owned domestic restricted subsidiary of the Company, with customary exceptions including, among other things, where providing such guarantees is not permitted by law, regulation or contract or would result in material adverse tax consequences. All obligations under the Senior Secured Credit Facilities provided by any lender party to the Senior Secured Credit Facilities or any of its affiliates and certain other persons, and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, as outlined in the Senior Secured Credit Facilities. The Term Loans and borrowings under our Revolver contain a number of financial and non-financial covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability and the ability of the Company’s restricted subsidiaries to engage in certain activities, such as incur indebtedness or permit to exist any lien on any property or asset now owned or hereafter acquired, as specified in the debt facility. The Credit Agreement requires compliance with certain covenants customary for agreements of this type. As of December 31, 2022, the Company was in compliance with its debt covenants. The Company incurred and capitalized deferred financing fees, or third-party debt issuance costs, of $3.6 million and $7.1 million related to the restated credit agreement for the years ended December 31, 2022 and 2021, respectively. The debt issuance costs are recorded as reductions of the outstanding long-term indebtedness. The Term Loan is paid in equal quarterly installments in aggregate annual amounts equal to 1% of the original principal amount of the Term Loan. On July 21, 2022, the Company made a voluntary prepayment of $100.0 million on outstanding amounts owed on the Term Loan. As a result of the prepayment, the Company wrote off $0.9 million of deferred financing fees, which is reflected in other (expense) income, net in the consolidated statements of (loss) income and comprehensive (loss) income for the year ended December 31, 2022. The following table presents the Company's outstanding debt and borrowing capacity (in thousands): As of December 31, 2022 2021 Availability under revolving credit facility (due March 26, 2026) $ 300,000 $ 165,000 Borrowings under revolving credit facility — — Long-term debt (due March 24, 2028), including current portion (1) 399,006 504,530 Interest rate 6.9 % 3.5 % (1) The balance includes deferred financing fees. A reconciliation of gross to net amounts is presented below. The carrying value of the Company’s credit facilities (including current maturities) is as follows (in thousands): As of December 31, 2022 2021 Long-term debt, less current portion $ 395,338 $ 502,488 Capitalized deferred financing fees (3,482) (5,108) Long-term debt 391,856 497,380 Current portion of long-term debt 7,150 7,150 Total debt carrying value $ 399,006 $ 504,530 As of December 31, 2022, the Company’s future principal cash payments for the Term Loan are as follows (in thousands): Total 2023 $ 7,150 2024 7,150 2025 7,150 2026 7,150 2027 7,150 2028 366,738 Total future principal cash payments $ 402,488 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses The following is a summary of the Company’s accrued expenses (in thousands): As of December 31, 2022 2021 Accrued interest expense $ 221 $ 76 Accrued employee expense 2,016 2,320 Accrued travel expense 281 514 Operating lease expenses 425 262 Insurance charges 198 170 Professional fees 6,321 5,188 Withholding taxes payable 43 26,077 Other taxes payable 1,815 1,803 Rebates payable 1,168 943 Contingent consideration 14,255 — Other accrued expenses 3,484 6,741 Accrued expenses $ 30,227 $ 44,094 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2022 | |
Text Block [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated balance for each component of accumulated other comprehensive loss (in thousands): Year Ended December 31, 2022 2021 2020 Foreign currency translation: Beginning balance $ (10,844) $ (1,574) $ (10,067) Foreign currency translation (loss)/gain (31,569) (8,221) 8,743 Income tax benefit (expense) 3,203 (1,049) (250) Foreign currency translation, net of tax (28,366) (9,270) 8,493 Ending balance (39,210) (10,844) (1,574) Accumulated other comprehensive loss $ (39,210) $ (10,844) $ (1,574) |
Quarterly Selected Financial Da
Quarterly Selected Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Selected Financial Data (unaudited) | Quarterly Selected Financial Data (unaudited) The following tables include quarterly selected financial information for 2022 and 2021 (in thousands, except per share amounts) and reflect the retrospective adjustment for the change in accounting principle related to the recognition of stock-based compensation, as discussed in Note 1, Business and Summary of Significant Accounting Policies . For the Quarter Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Revenues $ 320,940 $ 332,107 $ 332,447 $ 310,744 Cost of revenues 249,765 250,462 244,139 205,939 Selling, general and administrative expenses 104,765 99,352 91,682 76,962 (Loss) income from operations (39,436) (21,922) (8,677) 22,723 Net (loss) income (43,585) (39,308) (38,608) 16,108 Basic (loss) earnings per common share $ (0.14) $ (0.13) $ (0.12) $ 0.05 Diluted (loss) earnings per common share $ (0.14) $ (0.13) $ (0.12) $ 0.05 For the Quarter Ended March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 Revenues $ 237,662 $ 260,432 $ 285,051 $ 286,800 Cost of revenues 134,443 152,191 180,344 202,703 Selling, general and administrative expenses 66,511 68,514 111,289 87,590 Income (loss) from operations 32,362 35,239 (10,755) (8,085) Net income (loss) 18,790 18,326 (20,840) (16,851) Basic earnings (loss) per common share $ 0.06 $ (0.18) $ (0.09) $ (0.06) Diluted earnings (loss) per common share $ 0.06 $ (0.18) $ (0.09) $ (0.06) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 24, 2023, the Company made a voluntary prepayment of $100.0 million on outstanding amounts owed on the Term Loan disclosed in Note 12, Credit Agreements . |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | The accompanying consolidated financial statements include the accounts of Thoughtworks Holding, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Reclassification and Change in Accounting Principle - Stock-based Compensation | Certain amounts in the prior period consolidated financial statements and notes have been reclassified to conform to the 2022 presentation. These reclassifications had no effect on results of operations previously reported.In the fourth quarter of 2022, the Company changed its stock-based compensation policy for recognizing expense for graded vesting awards with only service conditions from the accelerated attribution method to the straight-line attribution method. The Company believes the straight-line attribution method for stock-based compensation expense for awards solely subject to time-based vesting conditions is the preferable accounting policy in accordance with ASC 250, Accounting Changes and Error Corrections, because it more accurately reflects how the award is earned over the service period and is the predominant method used in its industry. The Company applied the change retrospectively adjusting all periods presented and recorded a cumulative effect adjustment to Additional paid-in capital and Retained earnings as of January 1, 2020, resulting in a decrease to Additional paid-in capital of $2.2 million and an increase to Retained earnings of $2.2 million. |
Preparation of Financial Statements | The preparation of these consolidated financial statements is in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC. |
Use of Estimates | GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to allowance for credit losses, valuation and impairment of goodwill and long-lived assets, income taxes, accrued bonus, contingencies, stock-based compensation and litigation costs. The Company bases its estimates on current expectations and historical experience and on other assumptions that its management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities when those values are not readily apparent from other sources. Actual results can differ from those estimates, and such differences may be material to the consolidated financial statements in the future. In management’s opinion, all adjustments considered necessary for a fair presentation of the accompanying consolidated financial statements have been included, and all adjustments are of a normal and recurring nature. |
Segments | The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and assess performance. While the Company has offerings in multiple modern digital businesses and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company's service offerings are delivered and supported on a global basis and are deployed in a nearly identical way. The Company’s CODM evaluates the Company’s financial information, allocates resources and assesses the performance of these resources on a consolidated basis. |
Long-Lived Assets | The North America geographic region encompasses the Company’s country of domicile (United States) and Canada, of which long-lived assets including property and equipment, net of depreciation, are principally held within the United States. Canadian long-lived assets were determined to be immaterial given property, and equipment was less than 10% of the Company's long-lived assets as of December 31, 2022 and 2021. Th e Company holds material long-lived assets in the foreign geographic locations of Brazil, China, and India. |
Revenue Recognition | The Company recognizes revenues when control of services is passed to a customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Such control may be transferred over time or at a point in time, depending on satisfaction of obligations stipulated by the contract. The Company records sales and other taxes collected from customers and remitted to governmental authorities on a net basis. The Company generates revenue from a variety of professional service arrangements. Fees for these contracts may be in the form of time-and-materials and fixed price. The Company also reports gross reimbursable expenses incurred as both revenue and cost of revenues in the consolidated statements of (loss) income and comprehensive (loss) income. Revenue is measured based on consideration specified in a contract with a customer, which may consist of both fixed and variable components, and the consideration expected to be received is allocated to each separately identifiable performance obligation based on the performance obligation’s relative stand-alone selling price. The standalone selling prices are generally determined based on the prices at which the Company separately sells the services. Contracts may include variable consideration, which usually takes the form of volume-based discounts, service level credits, price concessions, or incentives. To the extent that variable consideration is not constrained, the Company includes the expected amount within the total transaction price and updates its assumptions over the duration of the contract. Determining the estimated amount of such variable consideration involves assumptions and judgment that can have an impact on the amount of revenues reported. The amount of variable consideration is estimated utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. Time-and-Material Revenue The Company generates the majority of its revenues under time-and-material contracts, which are billed using hourly, daily, or monthly rates to determine the amounts to be charged directly to the customer. Revenue from time-and-material contracts is based on the number of hours worked and at contractually agreed-upon hourly rates and is recognized as those services are rendered as control of the services passes to the customer over time. Fixed-Price Revenue Fixed-price contracts include application development arrangements, where progress towards satisfaction of the performance obligation is measured using input methods as there is a direct correlation between hours incurred and the end product delivered to the customer. Assumptions, risks, and uncertainties inherent in the estimates used to measure progress could affect the amount of revenues, receivables, and deferred revenues at each reporting period. Revenues under these contracts are recognized using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying performance obligations. Principal vs Agent Consideration From time to time, the Company may enter into arrangements with third-party suppliers to sell services. In such cases, the Company evaluates whether it is the principal (i.e., reports revenues on a gross basis) or the agent (i.e., reports revenues on a net basis). In doing so, the Company first evaluates whether it has control of the service before it is transferred to the customer. If the Company controls the service before it is transferred to the customer, the Company is the principal; if not, the Company is the agent. Determining whether the Company controls the service before it is transferred to the customer may require judgment. Contract Balances A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets primarily relate to unbilled amounts on fixed-price contracts. Contract assets are recorded when services have been provided but the Company does not have an unconditional right to receive consideration. Professional services performed on or prior to the balance sheet date, but invoiced thereafter, are reflected in unbilled receivables. Contract liabilities, or deferred revenue, consist of advance payments from clients and billings in excess of revenues recognized. The Company classifies deferred revenue as current on the consolidated balance sheet and is recognized as revenue as the Company performs under the contract. These balances are generally short-term in nature and are recognized as revenue within one year. Costs to Obtain a Customer Contract The Company incurs certain incremental costs to obtain a contract that the Company expects to recover. The Company applies a practical expedient and recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. The Company capitalizes incremental costs of obtaining contracts where the contract term is greater than one year. These costs primarily relate to commissions paid to the account executives and are included in SG&A expenses in the consolidated statements of (loss) income and comprehensive (loss) income for contracts one year or less and other current assets and other non-current assets on the consolidated balance sheets for contracts greater than one year. Costs capitalized are amortized on a straight-line basis over the period of benefit. Amortization of capitalized costs to obtain contracts is included in SG&A expenses in the consolidated statements of (loss) income and comprehensive (loss) income. The Company determined the period of benefit by taking into consideration standard contract terms, renewals and amendments, if applicable. The capitalized amounts are recoverable through future revenue streams under all non-cancelable customer contracts. The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. Cost of Revenues Consists primarily of personnel and related costs directly associated with professional services, including salaries, bonuses, fringe benefits, stock-based compensation, project related travel costs, and costs of contracted third-party vendors. Also included in cost of revenues is depreciation attributable to the portion of our property and equipment utilized in the delivery of services to our clients. |
Selling, General and Administrative Expenses | Consists of expenses associated with promoting and selling the Company’s services and general and administrative functions of the business. These expenses include the costs of salaries, bonuses, fringe benefits, commissions, stock-based compensation, severance, bad debt, travel, legal and accounting services, insurance, facilities including operating leases, advertising and other promotional activities. Advertising costs consist of marketing, advertising through print and other media, professional event sponsorship, and public relations. These costs are expensed as incurred. Advertising costs totaled $4.1 million, $2.3 million and $0.9 million for the years ended December 31, 2022, 2021 and 2020, respectively, and are included in SG&A expenses in the consolidated statements of (loss) income and comprehensive (loss) income. |
Other (Expense) Income | Other (expense) income consists of interest expense, impacts from foreign exchange transactions, gains (losses) on the sale of assets, gains related to the sale and settlement of trade receivables, change in fair value of contingent consideration and the write-off of deferred financing fees. |
Cash and Cash Equivalents | Cash equivalents are short-term, highly liquid investments and deposits that are readily converted into cash, with maturities of three months or less . |
Restricted Cash | Restricted cash is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Restricted cash is restricted as to withdrawal or use. The Company has restricted cash held on deposit at various financial institutions. The amounts are held in escrow for income tax withholdings, to secure bank guarantees of amounts related to government requirements, and as collateral for a corporate credit card. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are uncollateralized customer obligations due under normal trade terms. Payment terms with customers are generally 30 to 90 days from the invoice date. Accounts receivable are recorded at the invoiced amount net of an allowance for credit loss. The Company analyzes its historical credit loss experience and considers current conditions and reasonable and supportable forecasts in developing the expected credit loss rates. Interest is not generally accrued on outstanding balances as the balances are considered short-term in nature. |
Business Combinations | The Company accounts for business combinations using the acquisition method of accounting which requires it to allocate the fair value of purchase consideration to the assets acquired and liabilities assumed based on the estimated fair values at the acquisition date. The fair value of the net assets acquired for the business is determined utilizing expectations and assumptions believed reasonable by management. The excess of the purchase consideration transferred over the fair values of assets acquired and liabilities assumed is recorded as goodwill. As additional information is obtained about the assets and liabilities of the acquisition during the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed with an offset to goodwill. After the measurement period, any adjustments are recorded in the consolidated statements of (loss) income and comprehensive (loss) income. Acquisition costs are expensed as incurred. Some business combinations may include a contingent consideration agreement. The Company determines the fair value of the contingent consideration liability using a Monte Carlo Simulation. The liability is remeasured to fair value at each reporting date with adjustments recorded within other income (expense), net in the consolidated statements of (loss) income and comprehensive (loss) income. |
Government Assistance | The Company has historically received government subsidies in the form of cash in China and Singapore related to expenses such as rent, wages, training benefits and taxes. The subsidies are recorded against the related expense within SG&A expense or cost of revenues in the consolidated statements of (loss) income and comprehensive (loss) income. |
Property and Equipment, net | Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows: Office furniture and equipment 7 years Computer equipment 3 years Software, including internal-use software 3 to 5 years Automobiles 7 years Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases. |
Internal-Use Software | In accordance with ASC 350-40, Internal-Use Software, certain costs incurred in the planning and evaluation stage of internal-use computer software are expensed as incurred. Certain costs incurred during the application development stage are capitalized and included in property and equipment. Capitalized costs are depreciated over the expected economic useful life of three Capitalized internal-use software asset depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $4.7 million, $2.2 million and $3.5 million, respectively, and is included in depreciation and amortization in the consolidated statements of (loss) income and comprehensive (loss) income. As of December 31, 2022 and 2021, the net book value of internal-use software was $6.5 million and $5.6 million, respectively. |
Goodwill | Goodwill represents the excess of cost over the fair value of the net assets acquired in a business combination. When the Company acquires a business, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. During the measurement period, which may be up to one year from the acquisition date, adjustments to the fair value of assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statement of operations. The Company performs an annual impairment review of goodwill in its fiscal fourth quarter and additional impairment reviews when events and circumstances indicate it is more likely than not that an impairment may have occurred. The Company assesses goodwill for impairment at the reporting unit level. In evaluating goodwill for impairment, the Company has the option to first perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of the reporting units to their carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. Qualitative factors include macroeconomic conditions, industry and market conditions, cost factors, and overall financial performance, among others. Under a quantitative assessment, fair value of the Company’s reporting units are estimated using a weighted methodology considering the output from both the income and market approaches. The income approach incorporates the use of a discounted cash flow (DCF) analysis. A number of judgments are involved in the application of the DCF model, including projections of business performance, weighted average cost of capital, and terminal values. The market approach is performed using the Guideline Public Companies method which is based on earnings multiple data derived from publicly traded peer group companies. The Company elected to perform a qualitative assessment during fiscal 2022 and 2021 and determined for both periods that the fair value of the Company’s respective reporting units exceeded their carrying amounts. |
Intangible Assets, net | In accordance with ASC 350, Intangibles – Goodwill and Other, the Company amortizes its finite-lived intangible assets over their respective estimated useful lives. The Company reviews both indefinite-lived intangibles and finite-lived intangibles for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that they may be impaired. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated statements of (loss) income and comprehensive (loss) income. The Company’s other intangible assets consist of indefinite-lived trademarks and finite-lived customer relationships. Customer relationships have an estimated useful life of 15 years and are being amortized using the straight-line method. |
Income Taxes | The Company is subject to both the United States of America (U.S.) and foreign income taxes. A current tax asset or liability is recognized for the estimated taxes payable or refundable on tax returns for the year. Deferred income taxes are recorded to reflect the tax consequences on future years of the difference between the tax bases of assets and liabilities for income taxes and for financial reporting purposes using enacted tax rates in effect for the year in which differences are expected to reverse. The Company nets the deferred tax assets and deferred tax liabilities from temporary differences arising within the same tax jurisdiction and presents the net asset or liability as long term. The Company assesses the need to account for deferred taxes on unremitted earnings of its foreign subsidiaries on an individual country basis according to management’s assertions regarding repatriation or permanent investment of each country’s accumulated earnings. A valuation allowance is established when necessary to reduce deferred income tax assets to the amounts expected to be realized. The Company classifies interest and penalties associated with tax liabilities as income tax expense in the consolidated statements of (loss) income and comprehensive (loss) income. The Company provides for tax expense related to Global Intangible Low-Tax Income ("GILTI") in the year the tax is incurred. The Company’s provision for income taxes includes the impact of provisions established for uncertain income tax positions, as well as any related interest and penalties. These reserves are adjusted given changing facts and circumstances, such as the closing of a tax audit, statute of limitation lapse or the refinement of an estimate. To the extent the final outcome of an uncertain income tax position differs from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. |
Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss consists solely of foreign currency translation adjustments. |
Foreign Currency | Assets and liabilities of consolidated foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at period-end exchange rates and revenues and expenses are translated into U.S. dollars at average exchange rates for the applicable period. The adjustment resulting from translating the financial statements of such foreign subsidiaries into U.S. dollars is reflected as a cumulative translation adjustment and reported as a component of accumulated other comprehensive income.For consolidated foreign subsidiaries whose functional currency is the U.S. dollar, transactions and balances denominated in the local currency are foreign currency transactions. Foreign currency transactions and balances related to non-monetary assets and liabilities are remeasured to the functional currency of the subsidiary at historical exchange rates while monetary assets and liabilities are remeasured to the functional currency of the subsidiary at period-end exchange rates. Foreign currency exchange gains or losses from remeasurement are included in income in the period in which they occur. |
Commitments and Contingencies | Certain conditions may exist as of the date of the consolidated financial statements which may result in a loss to the Company but will only be resolved when one or more future events occur or fail to occur. Such liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources, are recorded when the Company assesses that it is probable that a future liability has been incurred and the amount can be reasonably estimated. Recoveries of costs from third parties, which the Company assesses as being probable of realization, are recorded to the extent of related contingent liabilities accrued. Legal costs incurred in connection with matters relating to contingencies are expensed in the period incurred. The Company records gain contingencies when realized. |
Deferred Financing Fees | Deferred financing fees represent third-party debt issuance costs associated with the related debt facility. Deferred financing fees associated with the Company’s debt agreements are treated as a discount on the outstanding debt balance and amortized over the term of the respective debt facility, using the effective interest rate method and reported as a component of interest expense. Debt discounts on the Company’s debt are reflected as a direct deduction from the carrying amount of the long-term portion of the related debt liability. |
Fair Value Measurements | The Company determines the fair values of its financial instruments based on the fair value hierarchy. ASC 820, Fair Value Measurement, includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels: • Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data. • Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The fair value of certain assets, such as nonfinancial assets, primarily long-lived assets, goodwill, intangible assets and certain other assets, are recognized or disclosed in connection with impairment evaluations. All non-recurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable, and accounts payable approximated fair value as of December 31, 2022 and 2021, because of the relatively short maturity of these instruments. Additionally, the Company estimates the fair value of the Term Loan, discussed in Note 12, Credit Agreements , using current market yields. These current market yields are considered Level |
Stock-Based Compensation | The Company accounts for employee and Director equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Accordingly, compensation expense is based on the grant date fair value of those awards and is recognized over the requisite service period for the respective award. The Company’s equity-based awards granted to employees include service-based stock option awards, RSUs and PSUs, both market and non-market based. In April 2022, the Board approved the grant of EBITDA PSUs and rTSR PSUs to certain executives and employees under the Omnibus Plan. The EBITDA PSUs are earned based on the Company’s achievement of specified adjusted EBITDA targets. The rTSR PSUs are earned based on the Company's achievement of specified rTSR targets. Both types of PSUs vest over a three-year service period, subject to the participant’s continued employment with us or our affiliate, as applicable. The fair value of the options, RSUs, and EBITDA PSUs is determined using the grant date stock price of the Company’s common stock. The fair value for the rTSR PSUs is determined using a Monte-Carlo simulation. Compensation expense for awards solely subject to time-based vesting conditions (i.e., options and RSUs), will be recognized over their requisite service period (typically one At the time of grant, the Company takes into consideration the timing of the equity award and evaluates for conditions that could result in the award being considered spring loaded awards. The Company did not grant equity awards that would be considered spring loaded awards in 2022. Refer to Note 10, Stock-Based Compensation , for more information on equity-based awards. |
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements Not Yet Adopted | In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), which amends existing accounting standards for lease accounting and requires lessees to recognize virtually all leases on the balance sheet by recording a right-of-use asset and a lease liability (for other than short term leases). The Company early adopted the standard effective January 1, 2022. The Company elected the modified retrospective transition method, and as a result, the Company did not adjust its comparative period financial information or make the new required lease disclosures for periods before the date of adoption. The Company elected to use the package of practical expedients, which permits the Company to not reassess: (i) whether a contract is or contains a lease, (ii) lease classification, and (iii) initial direct costs resulting from the lease. The Company did not elect the hindsight practical expedient, which permits the use of hindsight when determining lease term and impairment of operating lease assets. The Company is electing not to apply the recognition requirements to short-term leases of 12 months or less and instead will recognize lease payments as expense on a straight-line basis over the lease term. The Company also elected the option to combine lease and non-lease components as a single component for the Company's entire population of lease assets. Upon adoption, the Company recorded $40.9 million of right-of-use assets ("ROU") and $43.7 million of lease liabilities. Refer to Note 8, Leases , for further discussion. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions, and reasonable and supportable forecasts, or a current expected credit loss (“CECL”) model. For trade receivables, loans, and other financial instruments, companies are required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. In November 2019, the FASB issued ASU 2019-10 which delayed the effective date for the CECL standard. The guidance and related amendments are effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company early adopted the accounting standard by recording a cumulative effect adjustment to retained earnings as of January 1, 2022 using a modified retrospective approach. The adoption mainly impacts trade receivables and unbilled receivables. The Company analyzed its historical credit loss experience and considered current conditions and reasonable forecasts in developing the expected credit loss rates. The adoption of this new standard did not have a material impact on the Company's consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Disclosures by Business Entities About Government Assistance (Topic 832), which requires business entities to provide certain disclosures when they (1) have received government assistance and (2) use a grant or contribution accounting model by analogy to other accounting guidance. The guidance is effective for all entities for fiscal years beginning after December 15, 2021. Entities may apply the ASU’s provisions either (1) prospectively to all transactions within the scope of Accounting Standards Codification ("ASC") 832 that are reflected in the financial statements as of the adoption date and all new transactions entered into after the date of adoption or (2) retrospectively. The Company adopted the standard on January 1, 2022 on a prospective basis. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions to ease the financial reporting burdens related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The optional amendments are effective as of March 12, 2020 through December 31, 2024, and upon adoption may be applied prospectively through December 31, 2024. The Company is currently assessing the impact of this ASU on the consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, which amends ASC 805 to require acquiring entities to apply ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to recognize and measure contract assets and contract liabilities in a business combination. The guidance is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Entities should apply the ASU’s provisions prospectively to business combinations occurring on or after the effective date of the amendments. The Company does not expect the ASU to have a material impact on the consolidated financial statements and will adopt this new standard in the fiscal year beginning January 1, 2023. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Long-Lived Assets by Geographic Areas | The following table presents long-lived assets by location (in thousands): As of December 31, 2022 2021 United States $ 8,774 22.6 % $ 7,920 23.0 % Brazil 5,732 14.8 % 5,100 14.8 % China 6,725 17.4 % 7,321 21.2 % India 8,010 20.6 % 7,477 21.7 % All other (1) 9,557 24.6 % 6,682 19.3 % Total long-lived assets $ 38,798 100.0 % $ 34,500 100.0 % (1) All other foreign geographic locations hold long-lived assets of less than 10% of the Company's consolidated total. |
Schedule of Capitalized Contract Cost | The following table is a summary of the Company’s costs to obtain contracts and related amortization where the amortization period of the assets is greater than one year (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of period $ 2,039 $ — $ — Costs to obtain contracts capitalized 811 2,318 — Amortization of capitalized costs (1265) (277) — Changes due to exchange rates 3 (2) — Balance at end of period $ 1,588 $ 2,039 $ — |
Activity Related to the Allowance For Doubtful Accounts | Activity related to the Company’s allowance for credit losses is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Allowance for credit losses, beginning balance $ (8,916) $ (10,385) $ (2,733) Impact of accounting standard adoption (1) (841) — — Current provision for expected credit losses (2,002) (281) (8,305) Write-offs charged against allowance 2,351 882 620 Changes due to exchange rates (123) 868 33 Allowance for credit losses, ending balance $ (9,531) $ (8,916) $ (10,385) (1) The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in the first quarter of 2022. See Recently Adopted Accounting Standards below for further discussion. |
Property and Equipment Useful Lives | The estimated useful lives, by asset class, are as follows: Office furniture and equipment 7 years Computer equipment 3 years Software, including internal-use software 3 to 5 years Automobiles 7 years Property and equipment consisted of the following (in thousands): As of December 31, 2022 2021 Automobiles $ 5 $ 38 Computer equipment 46,300 37,847 Software, including internal-use 19,170 13,575 Leasehold improvements 22,245 20,425 Office furniture and equipment 6,561 7,968 94,281 79,853 Less: accumulated depreciation and amortization (55,483) (45,353) Property and equipment, net $ 38,798 $ 34,500 |
Schedule of Change in Accounting Estimate | The following tables present the effect of the change in accounting policy and the impact on the Company’s consolidated financial statements (in thousands, except per share data): As of December 31, 2022 As Computed Under Accelerated Attribution Method As Computed Under Straight-line Attribution Method Effect of Change Other non-current assets $ 22,992 $ 21,175 $ (1,817) Deferred tax liabilities 57,923 62,555 4,632 Additional paid-in capital 1,597,654 1,565,514 (32,140) Accumulated other comprehensive loss (37,321) (39,210) (1,889) Retained deficit (151,094) (123,514) 27,580 As of December 31, 2021 As Computed Under Accelerated Attribution Method As Computed Under Straight-line Attribution Method Effect of Change Other non-current assets $ 25,125 $ 22,838 $ (2,287) Deferred tax liabilities 78,944 83,191 4,247 Additional paid-in capital 1,390,630 1,359,149 (31,481) Accumulated other comprehensive loss (10,863) (10,844) 19 Retained deficit (42,208) (17,280) 24,928 Year Ended December 31, 2022 As Computed Under Accelerated Attribution Method As Computed Under Straight-line Attribution Method Effect of Change Cost of revenues $ 947,464 $ 950,305 $ 2,841 Selling, general and administrative expenses 376,261 372,761 (3,500) Loss from operations (47,971) (47,312) 659 Net realized and unrealized foreign currency loss (7,624) (5,405) 2,219 Income tax expense 30,599 30,825 226 Net loss $ (108,045) $ (105,393) $ 2,652 Other comprehensive loss, net of tax: Foreign currency translation adjustments $ (26,458) $ (28,366) $ (1,908) Comprehensive loss $ (134,503) $ (133,759) $ 744 Net loss per common share: Basic and diluted loss per common share $ (0.35) $ (0.34) $ 0.01 Year Ended December 31, 2021 As Computed Under Accelerated Attribution Method As Computed Under Straight-line Attribution Method Effect of Change Cost of revenues $ 689,443 $ 669,681 $ (19,762) Selling, general and administrative expenses 343,786 333,904 (9,882) Income from operations 19,117 48,761 29,644 Net realized and unrealized foreign currency loss (5,465) (5,469) (4) Income tax expense 10,148 16,740 6,592 Net (loss) income $ (23,623) $ (575) $ 23,048 Other comprehensive loss, net of tax: Foreign currency translation adjustments $ (9,274) $ (9,270) $ 4 Comprehensive loss $ (32,897) $ (9,845) $ 23,052 Net loss per common share: Basic and diluted loss per common share $ (0.33) $ (0.24) $ 0.09 Net loss allocated to common shareholders $ (83,265) $ (60,217) $ 23,048 Year Ended December 31, 2020 As Computed Under Accelerated Attribution Method As Computed Under Straight-line Attribution Method Effect of Change Selling, general and administrative expenses $ 189,497 $ 189,850 $ 353 Income from operations 120,839 120,486 (353) Net realized and unrealized foreign currency gain 7,190 7,175 (15) Income tax expense 23,164 23,106 (58) Net income $ 79,283 $ 78,973 $ (310) Other comprehensive income, net of tax: Foreign currency translation adjustments $ 8,478 $ 8,493 $ 15 Comprehensive income $ 87,761 $ 87,466 $ (295) Net earnings per common share: Basic earnings per common share $ 0.26 $ 0.26 $ — Diluted earnings per common share $ 0.26 $ 0.26 $ — Earnings allocated to Preferred Stock (6,171) (6,150) 21 Net income allocated to common shareholders $ 73,112 $ 72,823 $ (289) Year Ended December 31, 2022 As Computed Under Accelerated Attribution Method As Computed Under Straight-line Attribution Method Effect of Change Cash flows from operating activities: Net loss $ (108,045) $ (105,393) $ 2,652 Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization expense 34,446 34,446 — Bad debt expense 2,002 2,002 — Deferred income tax benefit (19,651) (19,425) 226 Stock-based compensation expense 251,164 250,505 (659) Unrealized foreign currency exchange loss 12,325 10,106 (2,219) Non-cash lease expense on right-of-use assets 18,597 18,597 — Other operating activities, net 3,300 3,300 — Changes in operating assets and liabilities: — Trade receivables (61,877) (61,877) — Unbilled receivables (20,711) (20,711) — Prepaid expenses (3,567) (3,567) — Other assets 2,657 2,657 — Lease liabilities (16,721) (16,721) — Accounts payable 144 144 — Accrued expenses and other liabilities (4,674) (4,674) — Net cash provided by operating activities $ 89,389 $ 89,389 $ — Year Ended December 31, 2021 As Computed Under Accelerated Attribution Method As Computed Under Straight-line Attribution Method Effect of Change Cash flows from operating activities: Net (loss) income $ (23,623) $ (575) $ 23,048 Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization expense 29,528 29,528 — Bad debt recovery (601) (601) — Deferred income tax benefit (28,961) (22,369) 6,592 Stock-based compensation expense 157,357 127,713 (29,644) Unrealized foreign currency exchange loss 5,024 5,028 4 Other operating activities, net 3,642 3,642 — Changes in operating assets and liabilities: Trade receivables (32,139) (32,139) — Unbilled receivables (16,733) (16,733) — Prepaid expenses (6,542) (6,542) — Other assets (31,111) (31,111) — Accounts payable 309 309 — Accrued expenses and other liabilities 62,154 62,154 — Net cash provided by operating activities $ 118,304 $ 118,304 $ — Year Ended December 31, 2020 As Computed Under Accelerated Attribution Method As Computed Under Straight-line Attribution Method Effect of Change Cash flows from operating activities: Net income $ 79,283 $ 78,973 $ (310) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 26,528 26,528 — Bad debt expense 7,685 7,685 — Deferred income tax benefit 2,143 2,085 (58) Stock-based compensation expense 1,667 2,020 353 Unrealized foreign currency exchange gains (5,351) (5,336) 15 Other operating activities, net 1,831 1,831 — Changes in operating assets and liabilities: Trade receivables 3,977 3,977 — Unbilled receivables (16,794) (16,794) — Prepaid expenses 308 308 — Other assets (5,742) (5,742) — Accounts payable (700) (700) — Accrued expenses and other liabilities 30,461 30,461 — Net cash provided by operating activities $ 125,296 $ 125,296 $ — |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from External Customers by Geographic Areas | The following table presents the disaggregation of the Company’s revenues by customer location (in thousands): Year Ended December 31, 2022 2021 2020 North America (1) $ 503,948 $ 396,491 $ 321,237 APAC (2) 419,982 358,596 248,776 Europe (3) 315,875 267,121 195,372 LATAM 56,433 47,737 37,990 Total revenues $ 1,296,238 $ 1,069,945 $ 803,375 (1) For the years ended December 31, 2022, 2021 and 2020, the United States represented 36.6%, or $474.3 million; 34.8%, or $372.8 million; and 38.2%, or $307.2 million, respectively, of the Company’s total revenues. Canadian operations were determined to be immaterial given the revenues as a percentage of total North America revenues was less than 10% for each of the years. (2) For the years ended December 31, 2022 and 2021, Australia represented 11.4% , or $148.3 million , and 10.9%, or $116.5 million , respectively, of the Company's total revenues. For the year ended December 31, 2020, the revenues in Australia as a percentage of the Company’s total revenues was less than 10%. For the years ended December 31, 2022 and 2021, revenues in China as a percentage of the Company’s total revenues was less than 10% . For the year ended December 31, 2020, revenues in China were 10.4%, or $83.5 million, respectively, of the Company's total revenues. (3) For the years ended December 31, 2022, 2021 and 2020, the United Kingdom represented 10.2% , or $132.6 million; 10.8%, or $115.2 million; and 11.1%, or $89.2 million, respectively, of the Company’s total revenues. For the year ended December 31, 2022, revenues in Germany as a percentage of the Company's total revenues was less than 10%. For the years ended December 31, 2021 and 2020, revenues in Germany represented 10.6%, or $113.8 million, and 10.1%, or $81.5 million, respectively, of the Company’s total revenues. |
Disaggregation of Revenue | The following table presents the disaggregation of the Company’s revenues by industry vertical (in thousands): Year Ended December 31, 2022 2021 2020 Technology and business services $ 360,117 $ 288,709 $ 228,514 Energy, public and health services 316,478 275,279 200,785 Retail and consumer 236,731 203,193 141,729 Financial services and insurance 221,748 170,492 123,291 Automotive, travel and transportation 161,164 132,272 108,656 Other — — 400 Total revenues $ 1,296,238 $ 1,069,945 $ 803,375 The following table presents the disaggregation of the Company’s revenues by contract type (in thousands): Year Ended December 31, 2022 2021 2020 Time-and-material $ 1,085,533 $ 872,271 $ 675,715 Fixed-price 210,705 197,674 127,313 Licensing — — 347 Total revenues $ 1,296,238 $ 1,069,945 $ 803,375 |
Schedule of Contract Assets and Liabilities | The following table is a summary of the Company’s contract assets and contract liabilities (in thousands): As of December 31, 2022 2021 Contract assets included in unbilled receivables $ 39,941 $ 25,408 Contract liabilities included in deferred revenue $ 5,167 $ 13,807 Contract assets primarily relate to unbilled amounts on fixed-price contracts. Contract assets are recorded when services have been provided but the Company does not have an unconditional right to receive consideration. Professional services performed on or prior to the balance sheet date, but invoiced thereafter, are reflected in unbilled receivables. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table presents the change in the contingent consideration liability (in thousands): Year Ended December 31, 2022 Balance at beginning of period $ — Additions in the period 13,996 Change in fair value 1,027 Change due to exchange rates (768) Balance at end of period $ 14,255 |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The Company's final allocation of the fair value of underlying assets acquired and liabilities assumed as of the acquisition date is as follows (in thousands): Total Cash and cash equivalents $ 4,394 Trade receivables, net of allowance 3,678 Unbilled receivables 2,594 Customer relationships, net 15,800 Goodwill 66,191 Accrued compensation (1,364) Accrued expenses (3,733) Other assets/liabilities, net (3,759) Total gross purchase price $ 83,801 Cash consideration paid $ 69,805 Fair value of contingent consideration 13,996 Total gross purchase price $ 83,801 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following is a summary of the changes in the carrying value of goodwill (in thousands): Total Balance as of December 31, 2020 $ 318,151 Additions due to acquisitions 32,615 Changes due to exchange rates (4,047) Balance as of December 31, 2021 346,719 Additions due to acquisitions 71,700 Changes due to exchange rates (13,402) Balance as of December 31, 2022 $ 405,017 |
Schedule of Finite-Lived Intangible Assets | The following is a summary of other intangible assets (in thousands): As of December 31, 2022 2021 Customer relationships $ 193,447 $ 177,100 Less accumulated amortization (59,369) (46,184) Customer relationships, net 134,078 130,916 Trademark 273,000 273,000 Total other intangible assets, after amortization 407,078 403,916 Changes due to exchange rates (10,031) (5,049) Other intangible assets, net $ 397,047 $ 398,867 |
Schedule of Indefinite-Lived Intangible Assets | The following is a summary of other intangible assets (in thousands): As of December 31, 2022 2021 Customer relationships $ 193,447 $ 177,100 Less accumulated amortization (59,369) (46,184) Customer relationships, net 134,078 130,916 Trademark 273,000 273,000 Total other intangible assets, after amortization 407,078 403,916 Changes due to exchange rates (10,031) (5,049) Other intangible assets, net $ 397,047 $ 398,867 |
Schedule of Estimated Amortization Expense | As of December 31, 2022, estimated amortization expense for the next five years and thereafter is as follows (in thousands): Total 2023 $ 14,635 2024 14,635 2025 14,635 2026 14,635 2027 14,635 Thereafter 60,903 $ 134,078 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | (Loss)/income before provision for income taxes based on geographic location is as follows (in thousands): Year Ended December 31, 2022 2021 2020 (Loss)/income before provision for income taxes: United States $ (48,578) $ (27,630) $ 45,393 Foreign (25,990) 43,795 56,686 Total $ (74,568) $ 16,165 $ 102,079 |
Schedule of Provision (Benefit) for Income Taxes | The provision/(benefit) for income taxes is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Current: Federal $ 32,746 $ 9,839 $ 704 State 9,259 5,071 2,316 Foreign 8,245 24,199 18,001 Total current 50,250 39,109 21,021 Deferred: Federal (15,379) (9,088) 5,914 State (3,228) (2,457) 862 Foreign (818) (10,824) (4,691) Total deferred (19,425) (22,369) 2,085 Total income tax expense $ 30,825 $ 16,740 $ 23,106 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the Company’s provision for income taxes to income taxes computed at the U.S. federal statutory income tax rate of 21% is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Provision for income taxes at federal statutory rate $ (15,659) $ 3,395 $ 21,437 Increase/(decrease) in taxes resulting from: Non deductible expenses 4,713 3,008 1,297 Research and development and foreign tax credits (9,419) (16,311) (13,251) Effect of foreign taxes and foreign exchange rates 81 5,695 4,082 GILTI and related international adjustments 12,528 8,972 6,714 §162(m) limitation on executive compensation 2,759 7,396 — Stock compensation excess tax benefits 2,739 (8,206) (22) China non-deductible stock compensation expense 15,329 — — US state income taxes, net of federal tax benefit 3,811 1,072 2,892 Change in deferred tax valuation allowance 11,919 10,060 4,145 CARES Act US federal net operating loss carryback benefit — — (4,188) U.K. rate change (313) 855 — Adjustments of prior year estimates and other (1,044) (2,330) (1,566) Adjustments associated with income tax uncertainties 3,381 3,134 1,566 Total income tax expense $ 30,825 $ 16,740 $ 23,106 |
Schedule of Deferred Tax Assets and Liabilities | Deferred Income Taxes The components of the Company’s deferred tax assets and liabilities include the following (in thousands): As of December 31, 2022 2021 Deferred tax assets: Accrued expenses $ 23,572 $ 6,650 Goodwill 850 1,305 Net operating loss carryforwards 20,409 6,492 Research and development and foreign tax credit carryforwards 1,350 1,505 Allowance for doubtful accounts 2,772 2,717 Fixed assets 2,526 1,817 Stock-based compensation 22,533 30,322 Business interest 9,685 6,727 Other assets 4,790 1,768 Total deferred tax assets 88,487 59,303 Total valuation allowance (28,510) (16,703) Total deferred tax assets $ 59,977 $ 42,600 As of December 31, 2022 2021 Deferred tax liabilities: Unremitted earnings of subsidiaries and unrealized translation gains $ (2,793) $ (3,877) Prepaid expenses (3,545) (2,597) Fixed assets (649) (1,071) Deferred revenue (460) — Customer relationships (32,844) (33,500) Trademark (73,028) (73,028) Internally developed software (1,565) (1,280) Other liabilities (192) (932) Total deferred tax liabilities (115,076) (116,285) Total deferred tax liabilities, net $ (55,099) $ (73,685) |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Balance, beginning of year $ 11,609 $ 8,123 $ 6,557 Additions for tax positions related to the current year — 2,068 1,219 Additions for tax positions related to prior years 3,424 1,923 706 Reductions for tax positions related to prior years (43) (505) (316) Statute of limitations expirations — — (43) Settlements with tax authorities — — — Balance, end of year $ 14,990 $ 11,609 $ 8,123 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | The estimated useful lives, by asset class, are as follows: Office furniture and equipment 7 years Computer equipment 3 years Software, including internal-use software 3 to 5 years Automobiles 7 years Property and equipment consisted of the following (in thousands): As of December 31, 2022 2021 Automobiles $ 5 $ 38 Computer equipment 46,300 37,847 Software, including internal-use 19,170 13,575 Leasehold improvements 22,245 20,425 Office furniture and equipment 6,561 7,968 94,281 79,853 Less: accumulated depreciation and amortization (55,483) (45,353) Property and equipment, net $ 38,798 $ 34,500 |
(Loss) Earnings Per Common Sh_2
(Loss) Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net (Loss) Income Per Common Share | The components of basic and diluted (loss) earnings per common share are as follows (in thousands, except share and per share data): Year Ended December 31, 2022 2021 2020 Basic (loss) earnings per common share: Net (loss) income $ (105,393) $ (575) $ 78,973 Preferred stock dividends — (59,642) — Earnings allocated to Preferred Stock — — (6,150) Net (loss) income allocated to common shareholders – Basic $ (105,393) $ (60,217) $ 72,823 Weighted average common shares outstanding – Basic 310,911,526 254,271,997 278,225,009 Basic (loss) earnings per common share $ (0.34) $ (0.24) $ 0.26 Diluted (loss) earnings per common share: Net (loss) income allocated to common shareholders – Basic $ (105,393) $ (60,217) $ 72,823 Weighted average shares outstanding – Basic 310,911,526 254,271,997 278,225,009 Dilutive effect of: Employee stock options, RSUs and PSUs (1) — — 6,390,986 Weighted average common shares outstanding – Diluted 310,911,526 254,271,997 284,615,995 Diluted (loss) earnings per common share $ (0.34) $ (0.24) $ 0.26 (1) Reflects the dilutive effects of applying the treasury stock method to all potential common shares. For periods where the Company was in a net loss, the potential common shares were excluded but would have been dilutive if the Company was not in a net loss. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities were excluded from the computation of diluted (loss) earnings per common share because the impact of including them would have been anti-dilutive: Year Ended December 31, 2022 2021 2020 Employee stock options, RSUs and PSUs 26,802,540 23,435,860 444,215 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | The following table presents total lease cost (in thousands): Year Ended December 31, 2022 Operating lease cost $ 19,818 Variable lease cost 2,908 Short-term lease cost 614 Total lease cost $ 23,340 The following table presents supplemental cash flow information (in thousands): Year Ended December 31, 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 19,779 ROU assets obtained in exchange for new operating lease liabilities 21,819 The following table presents average lease terms and discount rates: As of December 31, 2022 Weighted-average remaining lease term (years) 4.7 Weighted average discount rate 5.3 % |
Schedule of Future Lease Payments | As of December 31, 2022, the aggregate future lease payments under all operating leases are as follows (in thousands): Operating 2023 $ 17,938 2024 10,763 2025 6,945 2026 5,506 2027 2,769 Thereafter 7,750 Total lease payments 51,671 Less: imputed interest 5,809 Present value of lease liabilities $ 45,862 ASC 840 Disclosures Prior to the adoption of Topic 842, aggregate future minimum lease payments, net of sublease income, under all operating leases were as follows as of December 31, 2021 (in thousands): 2022 $ 17,557 2023 11,690 2024 6,849 2025 3,955 2026 3,027 Thereafter 6,088 Total future minimum lease payments $ 49,166 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Components of Stock-based Compensation Expense | The following is a summary of the components of stock-based compensation expense for the periods indicated (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenues $ 176,046 $ 60,678 $ — Selling, general and administrative expenses 73,869 67,624 2,020 Total stock-based compensation expense $ 249,915 $ 128,302 $ 2,020 |
Schedule of Option Activity | The following is a summary of performance and time vesting option activity for the year ended December 31, 2022 (in thousands, except share and per share data): Number of Stock Options Weighted Average Exercise Price Aggregate Weighted- Balance at December 31, 2021 24,097,082 $ 3.79 Granted — — Forfeited (140,597) 10.77 Exercised (2,348,923) 2.99 Cancelled — — Expired — — Balance at December 31, 2022 21,607,562 $ 3.83 $ 145,393 5.5 Exercisable at December 31, 2022 20,588,419 $ 3.54 $ 142,895 5.4 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table summarizes the weighted-average assumptions used in estimating the fair value of stock options granted to employees: Year Ended December 31, 2021 (1) 2020 (1) Risk-free interest rate 0.1 % 0.1 % Dividend yield — % — % Expected volatility 55.0 % 55.0 % Expected term (years) 1 2 (1) The risk-free interest rate is based on the rates of U.S. Treasury securities with a maturity similar to the term to liquidity, continuously compounded. The expected equity volatility is estimated based on an analysis of guideline public companies’ historical volatility. As these stock options were awarded prior to the IPO, the expected term was estimated based on management’s assumptions of time to a liquidity event. |
Schedule of Restricted Stock Units Activity | The following is a summary of RSU activity for the year ended December 31, 2022: Number of RSUs Weighted Average Grant Date Fair Value Unvested balance at December 31, 2021 14,128,722 $ 23.39 Granted (1) 11,505,096 14.97 Forfeited (1,622,736) 22.96 Vested (2) (10,997,136) 21.77 Unvested balance at December 31, 2022 13,013,946 $ 17.37 (1) Includes 4.4 million RSUs that were contingent upon the successful and active registration with the State Administration of Foreign Exchange of the People's Republic of China (“China SAFE”), which occurred on February 25, 2022. The amount also includes 0.1 million RSUs granted in relation to the Connected acquisition. (2) Includes 2.8 million shares that were net settled when released and returned to the share pool for future grants. |
Schedule of Performance Units Activity | The following is a summary of PSU activity for the year ended December 31, 2022: Number of PSUs Weighted Average Grant Date Fair Value Unvested balance at December 31, 2021 — $ — Granted (1) 269,586 24.15 Adjustment for PSUs expected to vest as of current period end (192,889) 25.76 Forfeited — — Vested — — Unvested balance at December 31, 2022 76,697 $ 20.11 (1) Reflects shares granted at 100%. |
Credit Agreements (Tables)
Credit Agreements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facilities | The following table presents the Company's outstanding debt and borrowing capacity (in thousands): As of December 31, 2022 2021 Availability under revolving credit facility (due March 26, 2026) $ 300,000 $ 165,000 Borrowings under revolving credit facility — — Long-term debt (due March 24, 2028), including current portion (1) 399,006 504,530 Interest rate 6.9 % 3.5 % (1) The balance includes deferred financing fees. A reconciliation of gross to net amounts is presented below. The carrying value of the Company’s credit facilities (including current maturities) is as follows (in thousands): As of December 31, 2022 2021 Long-term debt, less current portion $ 395,338 $ 502,488 Capitalized deferred financing fees (3,482) (5,108) Long-term debt 391,856 497,380 Current portion of long-term debt 7,150 7,150 Total debt carrying value $ 399,006 $ 504,530 |
Schedule of Future Cash Payments For Term Loan | As of December 31, 2022, the Company’s future principal cash payments for the Term Loan are as follows (in thousands): Total 2023 $ 7,150 2024 7,150 2025 7,150 2026 7,150 2027 7,150 2028 366,738 Total future principal cash payments $ 402,488 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | The following is a summary of the Company’s accrued expenses (in thousands): As of December 31, 2022 2021 Accrued interest expense $ 221 $ 76 Accrued employee expense 2,016 2,320 Accrued travel expense 281 514 Operating lease expenses 425 262 Insurance charges 198 170 Professional fees 6,321 5,188 Withholding taxes payable 43 26,077 Other taxes payable 1,815 1,803 Rebates payable 1,168 943 Contingent consideration 14,255 — Other accrued expenses 3,484 6,741 Accrued expenses $ 30,227 $ 44,094 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Text Block [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in accumulated balance for each component of accumulated other comprehensive loss (in thousands): Year Ended December 31, 2022 2021 2020 Foreign currency translation: Beginning balance $ (10,844) $ (1,574) $ (10,067) Foreign currency translation (loss)/gain (31,569) (8,221) 8,743 Income tax benefit (expense) 3,203 (1,049) (250) Foreign currency translation, net of tax (28,366) (9,270) 8,493 Ending balance (39,210) (10,844) (1,574) Accumulated other comprehensive loss $ (39,210) $ (10,844) $ (1,574) |
Quarterly Selected Financial _2
Quarterly Selected Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The following tables include quarterly selected financial information for 2022 and 2021 (in thousands, except per share amounts) and reflect the retrospective adjustment for the change in accounting principle related to the recognition of stock-based compensation, as discussed in Note 1, Business and Summary of Significant Accounting Policies . For the Quarter Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Revenues $ 320,940 $ 332,107 $ 332,447 $ 310,744 Cost of revenues 249,765 250,462 244,139 205,939 Selling, general and administrative expenses 104,765 99,352 91,682 76,962 (Loss) income from operations (39,436) (21,922) (8,677) 22,723 Net (loss) income (43,585) (39,308) (38,608) 16,108 Basic (loss) earnings per common share $ (0.14) $ (0.13) $ (0.12) $ 0.05 Diluted (loss) earnings per common share $ (0.14) $ (0.13) $ (0.12) $ 0.05 For the Quarter Ended March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 Revenues $ 237,662 $ 260,432 $ 285,051 $ 286,800 Cost of revenues 134,443 152,191 180,344 202,703 Selling, general and administrative expenses 66,511 68,514 111,289 87,590 Income (loss) from operations 32,362 35,239 (10,755) (8,085) Net income (loss) 18,790 18,326 (20,840) (16,851) Basic earnings (loss) per common share $ 0.06 $ (0.18) $ (0.09) $ (0.06) Diluted earnings (loss) per common share $ 0.06 $ (0.18) $ (0.09) $ (0.06) |
Business and Summary of Signi_4
Business and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jan. 01, 2022 USD ($) | Dec. 31, 2019 USD ($) | |
Concentration Risk [Line Items] | |||||||||||||
Number of operating segments | segment | 1 | ||||||||||||
Advertising costs | $ 4,100 | $ 2,300 | $ 900 | ||||||||||
Selling, general and administrative expenses | $ 76,962 | $ 91,682 | $ 99,352 | $ 104,765 | $ 87,590 | $ 111,289 | $ 68,514 | $ 66,511 | 372,761 | 333,904 | 189,850 | ||
Depreciation | 21,300 | 17,500 | 16,000 | ||||||||||
Fixed assets | 38,798 | 34,500 | 38,798 | 34,500 | |||||||||
Deferred financing fees | 1,600 | 1,600 | 1,800 | ||||||||||
Right-of-use assets | 43,123 | 0 | 43,123 | 0 | $ 40,900 | ||||||||
Operating lease, liability | 45,862 | 45,862 | $ 43,700 | ||||||||||
Total stockholders' equity | 778,222 | 701,957 | 778,222 | 701,957 | 484,770 | $ 394,988 | |||||||
Cost of revenues | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Government subsidies | $ 1,300 | ||||||||||||
Government Assistance, Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of revenues | ||||||||||||
Selling, general and administrative expenses | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Government subsidies | $ 700 | ||||||||||||
Government Assistance, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, general and administrative expenses | ||||||||||||
Additional Paid-In Capital | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Total stockholders' equity | 1,565,514 | 1,359,149 | $ 1,565,514 | 1,359,149 | 379,335 | 379,209 | |||||||
Retained Earnings (Deficit) | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Total stockholders' equity | (123,514) | (17,280) | $ (123,514) | (17,280) | $ 108,338 | 27,175 | |||||||
Cumulative effect from change in accounting principle | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Total stockholders' equity | (841) | (841) | 0 | ||||||||||
Cumulative effect from change in accounting principle | Additional Paid-In Capital | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Total stockholders' equity | (2,190) | ||||||||||||
Cumulative effect from change in accounting principle | Retained Earnings (Deficit) | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Total stockholders' equity | (841) | (841) | $ 2,190 | ||||||||||
Performance Vesting Shares | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Service period | 3 years | ||||||||||||
Non-US | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Fixed assets | 30,000 | 26,600 | $ 30,000 | $ 26,600 | |||||||||
Non-US | Revenue Benchmark | Geographic Concentration Risk | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Concentration risk | 63% | 65% | 61% | ||||||||||
Non-US | Trade Accounts Receivable and Unbilled Accounts Receivable | Geographic Concentration Risk | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Concentration risk | 69% | 73% | |||||||||||
Internally developed software | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Depreciation | $ 4,700 | $ 2,200 | $ 3,500 | ||||||||||
Fixed assets | 6,500 | 5,600 | $ 6,500 | 5,600 | |||||||||
Customer relationships | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Estimated useful lives | 15 years | ||||||||||||
Secured Debt | Term Loan | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Fair value of Term Loan | $ 392,000 | $ 485,000 | $ 392,000 | $ 485,000 | |||||||||
Minimum | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Accounts receivable, payment terms | 30 days | ||||||||||||
Service period | 1 year | ||||||||||||
Minimum | Internally developed software | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Estimated useful lives | 3 years | ||||||||||||
Maximum | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Accounts receivable, payment terms | 90 days | ||||||||||||
Service period | 4 years | ||||||||||||
Maximum | Internally developed software | |||||||||||||
Concentration Risk [Line Items] | |||||||||||||
Estimated useful lives | 5 years |
Business and Summary of Signi_5
Business and Summary of Significant Accounting Policies - Schedule of Long-lived Assets by Geographic Location (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Long-lived assets | $ 38,798 | $ 34,500 |
Assets, Noncurrent | Geographic Concentration Risk | ||
Property, Plant and Equipment [Line Items] | ||
Concentration risk | 100% | 100% |
Other foreign countries | ||
Property, Plant and Equipment [Line Items] | ||
Long-lived assets | $ 9,557 | $ 6,682 |
Other foreign countries | Assets, Noncurrent | Geographic Concentration Risk | ||
Property, Plant and Equipment [Line Items] | ||
Concentration risk | 24.60% | 19.30% |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Long-lived assets | $ 8,774 | $ 7,920 |
United States | Assets, Noncurrent | Geographic Concentration Risk | ||
Property, Plant and Equipment [Line Items] | ||
Concentration risk | 22.60% | 23% |
Brazil | ||
Property, Plant and Equipment [Line Items] | ||
Long-lived assets | $ 5,732 | $ 5,100 |
Brazil | Assets, Noncurrent | Geographic Concentration Risk | ||
Property, Plant and Equipment [Line Items] | ||
Concentration risk | 14.80% | 14.80% |
China | ||
Property, Plant and Equipment [Line Items] | ||
Long-lived assets | $ 6,725 | $ 7,321 |
China | Assets, Noncurrent | Geographic Concentration Risk | ||
Property, Plant and Equipment [Line Items] | ||
Concentration risk | 17.40% | 21.20% |
India | ||
Property, Plant and Equipment [Line Items] | ||
Long-lived assets | $ 8,010 | $ 7,477 |
India | Assets, Noncurrent | Geographic Concentration Risk | ||
Property, Plant and Equipment [Line Items] | ||
Concentration risk | 20.60% | 21.70% |
Business and Summary of Signi_6
Business and Summary of Significant Accounting Policies - Schedule of Capitalized Contract Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Capitalized Contract Cost [Roll Forward] | |||
Capitalized contract cost, beginning balance | $ 2,039 | $ 0 | $ 0 |
Costs to obtain contracts capitalized | 811 | 2,318 | 0 |
Amortization of capitalized costs | (1,265) | (277) | 0 |
Changes due to exchange rates | 3 | (2) | 0 |
Capitalized contract cost, ending balance | $ 1,588 | $ 2,039 | $ 0 |
Business and Summary of Signi_7
Business and Summary of Significant Accounting Policies - Schedule Of Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ (8,916) | $ (10,385) | $ (2,733) |
Current provision for expected credit losses | (2,002) | (281) | (8,305) |
Write-offs charged against allowance | 2,351 | 882 | 620 |
Changes due to exchange rates | (123) | 868 | 33 |
Ending balance | (9,531) | (8,916) | (10,385) |
Cumulative effect from change in accounting principle | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ (841) | 0 | 0 |
Ending balance | $ (841) | $ 0 |
Business and Summary of Signi_8
Business and Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment, Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture And Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Internally developed software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Internally developed software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Automobiles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Business and Summary of Signi_9
Business and Summary of Significant Accounting Policies - Schedule Of Changes In Accounting Policy (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statements of (Loss) Income and Comprehensive (Loss) Income | |||||||||||
Cost of revenues | $ 205,939 | $ 244,139 | $ 250,462 | $ 249,765 | $ 202,703 | $ 180,344 | $ 152,191 | $ 134,443 | $ 950,305 | $ 669,681 | $ 475,560 |
Selling, general and administrative expenses | 76,962 | 91,682 | 99,352 | 104,765 | 87,590 | 111,289 | 68,514 | 66,511 | 372,761 | 333,904 | 189,850 |
Income from operations | 22,723 | (8,677) | (21,922) | (39,436) | (8,085) | (10,755) | 35,239 | 32,362 | (47,312) | 48,761 | 120,486 |
Net realized and unrealized foreign currency (loss) gain | (5,405) | (5,469) | 7,175 | ||||||||
Income tax expense | 30,825 | 16,740 | 23,106 | ||||||||
Net loss | $ 16,108 | $ (38,608) | $ (39,308) | $ (43,585) | $ (16,851) | $ (20,840) | $ 18,326 | $ 18,790 | (105,393) | (575) | 78,973 |
Other comprehensive loss, net of tax: | |||||||||||
Foreign currency translation adjustments | (28,366) | (9,270) | 8,493 | ||||||||
Comprehensive loss | $ (133,759) | $ (9,845) | $ 87,466 | ||||||||
Net (loss) earnings per common share: | |||||||||||
Basic loss per common share (in shares) | $ 0.05 | $ (0.12) | $ (0.13) | $ (0.14) | $ (0.06) | $ (0.09) | $ (0.18) | $ 0.06 | $ (0.34) | $ (0.24) | $ 0.26 |
Diluted loss per common share (in shares) | $ 0.05 | $ (0.12) | $ (0.13) | $ (0.14) | $ (0.06) | $ (0.09) | $ (0.18) | $ 0.06 | $ (0.34) | $ (0.24) | $ 0.26 |
Earnings allocated to Preferred Stock | $ 0 | $ 0 | $ (6,150) | ||||||||
Earnings allocated to Preferred Stock, diluted | (6,150) | ||||||||||
Net loss allocated to common shareholders, basic | (105,393) | (60,217) | 72,823 | ||||||||
Net loss allocated to common shareholders, diluted | (60,217) | 72,823 | |||||||||
Balance Sheets | |||||||||||
Other non-current assets | $ 21,175 | $ 22,838 | 21,175 | 22,838 | |||||||
Deferred tax liabilities | 62,555 | 83,191 | 62,555 | 83,191 | |||||||
Additional paid-in capital | 1,565,514 | 1,359,149 | 1,565,514 | 1,359,149 | |||||||
Accumulated other comprehensive loss | (39,210) | (10,844) | (39,210) | (10,844) | (1,574) | ||||||
Retained deficit | (123,514) | (17,280) | (123,514) | (17,280) | |||||||
Statement of Cash Flows | |||||||||||
Net (loss) income | 16,108 | $ (38,608) | $ (39,308) | $ (43,585) | (16,851) | $ (20,840) | $ 18,326 | $ 18,790 | (105,393) | (575) | 78,973 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | 34,446 | 29,528 | 26,528 | ||||||||
Bad debt expense (recovery) | 2,002 | (601) | 7,685 | ||||||||
Deferred income tax (benefit) expense | (19,425) | (22,369) | 2,085 | ||||||||
Stock-based compensation expense | 250,505 | 127,713 | 2,020 | ||||||||
Unrealized foreign currency exchange loss (gain) | 10,106 | 5,028 | (5,336) | ||||||||
Non-cash lease expense on right-of-use assets | 18,597 | 0 | 0 | ||||||||
Other operating activities, net | 3,300 | 3,642 | 1,831 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Trade receivables | (61,877) | (32,139) | 3,977 | ||||||||
Unbilled receivables | (20,711) | (16,733) | (16,794) | ||||||||
Prepaid expenses | (3,567) | (6,542) | 308 | ||||||||
Other assets | 2,657 | (31,111) | (5,742) | ||||||||
Lease liabilities | (16,721) | 0 | 0 | ||||||||
Accounts payable | 144 | 309 | (700) | ||||||||
Accrued expenses and other liabilities | (4,674) | 62,154 | 30,461 | ||||||||
Net cash provided by operating activities | 89,389 | 118,304 | 125,296 | ||||||||
As Computed Under Accelerated Attribution Method | |||||||||||
Statements of (Loss) Income and Comprehensive (Loss) Income | |||||||||||
Cost of revenues | 947,464 | 689,443 | |||||||||
Selling, general and administrative expenses | 376,261 | 343,786 | 189,497 | ||||||||
Income from operations | (47,971) | 19,117 | 120,839 | ||||||||
Net realized and unrealized foreign currency (loss) gain | (7,624) | (5,465) | 7,190 | ||||||||
Income tax expense | 30,599 | 10,148 | 23,164 | ||||||||
Net loss | (108,045) | (23,623) | 79,283 | ||||||||
Other comprehensive loss, net of tax: | |||||||||||
Foreign currency translation adjustments | (26,458) | (9,274) | 8,478 | ||||||||
Comprehensive loss | $ (134,503) | $ (32,897) | $ 87,761 | ||||||||
Net (loss) earnings per common share: | |||||||||||
Basic loss per common share (in shares) | $ (0.35) | $ (0.33) | $ 0.26 | ||||||||
Diluted loss per common share (in shares) | $ (0.35) | $ (0.33) | $ 0.26 | ||||||||
Earnings allocated to Preferred Stock | $ (6,171) | ||||||||||
Earnings allocated to Preferred Stock, diluted | (6,171) | ||||||||||
Net loss allocated to common shareholders, basic | $ (83,265) | 73,112 | |||||||||
Net loss allocated to common shareholders, diluted | (83,265) | 73,112 | |||||||||
Balance Sheets | |||||||||||
Other non-current assets | 22,992 | 25,125 | $ 22,992 | 25,125 | |||||||
Deferred tax liabilities | 57,923 | 78,944 | 57,923 | 78,944 | |||||||
Additional paid-in capital | 1,597,654 | 1,390,630 | 1,597,654 | 1,390,630 | |||||||
Accumulated other comprehensive loss | (37,321) | (10,863) | (37,321) | (10,863) | |||||||
Retained deficit | (151,094) | (42,208) | (151,094) | (42,208) | |||||||
Statement of Cash Flows | |||||||||||
Net (loss) income | (108,045) | (23,623) | 79,283 | ||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | 34,446 | 29,528 | 26,528 | ||||||||
Bad debt expense (recovery) | 2,002 | (601) | 7,685 | ||||||||
Deferred income tax (benefit) expense | (19,651) | (28,961) | 2,143 | ||||||||
Stock-based compensation expense | 251,164 | 157,357 | 1,667 | ||||||||
Unrealized foreign currency exchange loss (gain) | 12,325 | 5,024 | (5,351) | ||||||||
Non-cash lease expense on right-of-use assets | 18,597 | ||||||||||
Other operating activities, net | 3,300 | 3,642 | 1,831 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Trade receivables | (61,877) | (32,139) | 3,977 | ||||||||
Unbilled receivables | (20,711) | (16,733) | (16,794) | ||||||||
Prepaid expenses | (3,567) | (6,542) | 308 | ||||||||
Other assets | 2,657 | (31,111) | (5,742) | ||||||||
Lease liabilities | (16,721) | ||||||||||
Accounts payable | 144 | 309 | (700) | ||||||||
Accrued expenses and other liabilities | (4,674) | 62,154 | 30,461 | ||||||||
Net cash provided by operating activities | 89,389 | 118,304 | 125,296 | ||||||||
Effect of Change | |||||||||||
Statements of (Loss) Income and Comprehensive (Loss) Income | |||||||||||
Cost of revenues | 2,841 | (19,762) | |||||||||
Selling, general and administrative expenses | (3,500) | (9,882) | 353 | ||||||||
Income from operations | 659 | 29,644 | (353) | ||||||||
Net realized and unrealized foreign currency (loss) gain | 2,219 | (4) | (15) | ||||||||
Income tax expense | 226 | 6,592 | (58) | ||||||||
Net loss | 2,652 | 23,048 | (310) | ||||||||
Other comprehensive loss, net of tax: | |||||||||||
Foreign currency translation adjustments | (1,908) | 4 | 15 | ||||||||
Comprehensive loss | $ 744 | $ 23,052 | $ (295) | ||||||||
Net (loss) earnings per common share: | |||||||||||
Basic loss per common share (in shares) | $ 0.01 | $ 0.09 | $ 0 | ||||||||
Diluted loss per common share (in shares) | $ 0.01 | $ 0.09 | $ 0 | ||||||||
Earnings allocated to Preferred Stock | $ 21 | ||||||||||
Earnings allocated to Preferred Stock, diluted | 21 | ||||||||||
Net loss allocated to common shareholders, basic | $ 23,048 | (289) | |||||||||
Net loss allocated to common shareholders, diluted | 23,048 | (289) | |||||||||
Balance Sheets | |||||||||||
Other non-current assets | (1,817) | (2,287) | $ (1,817) | (2,287) | |||||||
Deferred tax liabilities | 4,632 | 4,247 | 4,632 | 4,247 | |||||||
Additional paid-in capital | (32,140) | (31,481) | (32,140) | (31,481) | |||||||
Accumulated other comprehensive loss | (1,889) | 19 | (1,889) | 19 | |||||||
Retained deficit | $ 27,580 | $ 24,928 | 27,580 | 24,928 | |||||||
Statement of Cash Flows | |||||||||||
Net (loss) income | 2,652 | 23,048 | (310) | ||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | 0 | 0 | 0 | ||||||||
Bad debt expense (recovery) | 0 | 0 | 0 | ||||||||
Deferred income tax (benefit) expense | 226 | 6,592 | (58) | ||||||||
Stock-based compensation expense | (659) | (29,644) | 353 | ||||||||
Unrealized foreign currency exchange loss (gain) | (2,219) | 4 | 15 | ||||||||
Non-cash lease expense on right-of-use assets | 0 | ||||||||||
Other operating activities, net | 0 | 0 | 0 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Trade receivables | 0 | 0 | 0 | ||||||||
Unbilled receivables | 0 | 0 | 0 | ||||||||
Prepaid expenses | 0 | 0 | 0 | ||||||||
Other assets | 0 | 0 | 0 | ||||||||
Lease liabilities | 0 | ||||||||||
Accounts payable | 0 | 0 | 0 | ||||||||
Accrued expenses and other liabilities | 0 | 0 | 0 | ||||||||
Net cash provided by operating activities | $ 0 | $ 0 | $ 0 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) industryVertical | Dec. 31, 2021 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of industry verticals | industryVertical | 5 | |
Revenue recognized | $ | $ 13.7 | $ 11.4 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue by Geographical Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 310,744 | $ 332,447 | $ 332,107 | $ 320,940 | $ 286,800 | $ 285,051 | $ 260,432 | $ 237,662 | $ 1,296,238 | $ 1,069,945 | $ 803,375 |
North America | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 503,948 | 396,491 | 321,237 | ||||||||
United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 474,300 | $ 372,800 | $ 307,200 | ||||||||
United States | Revenue Benchmark | Geographic Concentration Risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Concentration risk | 36.60% | 34.80% | 38.20% | ||||||||
APAC | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 419,982 | $ 358,596 | $ 248,776 | ||||||||
Australia | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 148,300 | $ 116,500 | |||||||||
Australia | Revenue Benchmark | Geographic Concentration Risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Concentration risk | 11.40% | 10.90% | |||||||||
China | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 83,500 | ||||||||||
China | Revenue Benchmark | Geographic Concentration Risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Concentration risk | 10.40% | ||||||||||
Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 315,875 | $ 267,121 | $ 195,372 | ||||||||
Germany | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 113,800 | $ 81,500 | |||||||||
Germany | Revenue Benchmark | Geographic Concentration Risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Concentration risk | 10.60% | 10.10% | |||||||||
United Kingdom | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 132,600 | $ 115,200 | $ 89,200 | ||||||||
United Kingdom | Revenue Benchmark | Geographic Concentration Risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Concentration risk | 10.20% | 10.80% | 11.10% | ||||||||
LATAM | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 56,433 | $ 47,737 | $ 37,990 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Revenue by Industry Vertical (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 310,744 | $ 332,447 | $ 332,107 | $ 320,940 | $ 286,800 | $ 285,051 | $ 260,432 | $ 237,662 | $ 1,296,238 | $ 1,069,945 | $ 803,375 |
Technology and business services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 360,117 | 288,709 | 228,514 | ||||||||
Energy, public and health services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 316,478 | 275,279 | 200,785 | ||||||||
Retail and consumer | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 236,731 | 203,193 | 141,729 | ||||||||
Financial services and insurance | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 221,748 | 170,492 | 123,291 | ||||||||
Automotive, travel and transportation | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 161,164 | 132,272 | 108,656 | ||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 0 | $ 0 | $ 400 |
Revenue Recognition - Schedul_3
Revenue Recognition - Schedule of Revenue by Contract Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 310,744 | $ 332,447 | $ 332,107 | $ 320,940 | $ 286,800 | $ 285,051 | $ 260,432 | $ 237,662 | $ 1,296,238 | $ 1,069,945 | $ 803,375 |
Time-and-material | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 1,085,533 | 872,271 | 675,715 | ||||||||
Fixed-price | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 210,705 | 197,674 | 127,313 | ||||||||
Licensing | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 0 | $ 0 | $ 347 |
Revenue Recognition - Schedul_4
Revenue Recognition - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets included in unbilled receivables | $ 39,941 | $ 25,408 |
Contract liabilities included in deferred revenue | $ 5,167 | $ 13,807 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Apr. 26, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Acquisitions, net of cash acquired | $ 70,011 | $ 44,759 | $ 0 | |
Connected | ||||
Business Acquisition [Line Items] | ||||
Gross purchase price | $ 83,801 | |||
Acquisitions, net of cash acquired | 79,400 | |||
Cash acquired from acquisition | 4,400 | |||
Additions in the period | $ 14,000 | 13,996 | ||
Maximum potential payout | 14,300 | |||
Acquisition related costs | $ 3,400 |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Acquisitions by Acquisition, Contingent Consideration (Details) - Connected - USD ($) $ in Thousands | 12 Months Ended | |
Apr. 26, 2022 | Dec. 31, 2022 | |
Business Acquisition, Contingent Consideration [Roll Forward] | ||
Balance at beginning of period | $ 0 | |
Additions in the period | $ 14,000 | 13,996 |
Change in fair value | 1,027 | |
Change due to exchange rates | (768) | |
Balance at end of period | $ 14,255 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisition (Details) - USD ($) $ in Thousands | Apr. 26, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 405,017 | $ 346,719 | $ 318,151 | |
Connected | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 4,394 | |||
Trade receivables, net of allowance | 3,678 | |||
Unbilled receivables | 2,594 | |||
Cash and cash equivalents | 15,800 | |||
Goodwill | 66,191 | |||
Accrued compensation | (1,364) | |||
Accrued expenses | (3,733) | |||
Other assets/liabilities, net | (3,759) | |||
Total gross purchase price | 83,801 | |||
Cash consideration paid | 69,805 | |||
Fair value of contingent consideration | 13,996 | |||
Total gross purchase price | $ 83,801 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 346,719 | $ 318,151 |
Additions due to acquisitions | 71,700 | 32,615 |
Changes due to exchange rates | (13,402) | (4,047) |
Ending balance | $ 405,017 | $ 346,719 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Trademark | $ 273,000 | $ 273,000 |
Total other intangible assets, after amortization | 407,078 | 403,916 |
Changes due to exchange rates | (10,031) | (5,049) |
Customer relationships, net | 397,047 | 398,867 |
Trademark | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademark | 273,000 | 273,000 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 193,447 | 177,100 |
Less accumulated amortization | (59,369) | (46,184) |
Finite-lived intangible assets, net | $ 134,078 | $ 130,916 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Weighted average remaining useful life | 9 years 2 months 12 days | 10 years 7 months 6 days | |
Amortization of intangible assets | $ 13.1 | $ 12 | $ 10.5 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Estimated Amortization (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 14,635 |
2024 | 14,635 |
2025 | 14,635 |
2026 | 14,635 |
2027 | 14,635 |
Thereafter | 60,903 |
Intangible assets | $ 134,078 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (Loss) Before Income Tax Provision by Geographical Location (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (48,578) | $ (27,630) | $ 45,393 |
Foreign | (25,990) | 43,795 | 56,686 |
(Loss) income before income taxes | $ (74,568) | $ 16,165 | $ 102,079 |
Income Taxes - Schedule of In_2
Income Taxes - Schedule of Income Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 32,746 | $ 9,839 | $ 704 |
State | 9,259 | 5,071 | 2,316 |
Foreign | 8,245 | 24,199 | 18,001 |
Total current | 50,250 | 39,109 | 21,021 |
Deferred: | |||
Federal | (15,379) | (9,088) | 5,914 |
State | (3,228) | (2,457) | 862 |
Foreign | (818) | (10,824) | (4,691) |
Total deferred | (19,425) | (22,369) | 2,085 |
Income tax expense | $ 30,825 | $ 16,740 | $ 23,106 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | |||
Feb. 25, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Examination [Line Items] | ||||
GILTI and related international adjustments | $ 12,528 | $ 8,972 | $ 6,714 | |
China non-deductible stock compensation expense | 15,329 | 0 | 0 | |
Tax expense on increase in tax rate | (313) | 855 | 0 | |
CARES Act US federal net operating loss carryback benefit | 0 | 0 | 4,188 | |
Proceeds from income tax refunds | 1,900 | |||
Valuation allowance | 28,510 | 16,703 | ||
Deferred tax liability, foreign withholding taxes | 2,100 | 3,000 | ||
Foreign currency translation on previously-taxed earnings | 3,300 | 100 | ||
Unrecognized tax benefits that would impact effective tax rate | 14,500 | 11,300 | 8,100 | |
Unrecognized tax benefits, income tax penalties and interest expense (benefit) | 400 | 300 | 100 | |
Unrecognized tax benefits, income tax penalties and interest accrued | 2,000 | 1,600 | $ 1,300 | |
RSU's, China SAFE | ||||
Income Tax Examination [Line Items] | ||||
Granted (in shares) | 4.4 | |||
Separate U.S. Federal Net Operating Loss Carryforwards and Federal Limitation Of Business Interest | ||||
Income Tax Examination [Line Items] | ||||
Valuation allowance | 13,100 | 8,900 | ||
Certain Foreign Tax Credits | ||||
Income Tax Examination [Line Items] | ||||
Valuation allowance | 1,000 | 800 | ||
State and Local Jurisdiction | ||||
Income Tax Examination [Line Items] | ||||
Net operating loss carryforward benefits | 100 | 500 | ||
Foreign Tax Authority | ||||
Income Tax Examination [Line Items] | ||||
Valuation allowance | 14,500 | 7,100 | ||
Net operating loss carryforward benefits | $ 68,200 | $ 15,600 | ||
Minimum | State and Local Jurisdiction | ||||
Income Tax Examination [Line Items] | ||||
Operating loss carryforward, expiration period | 10 years | |||
Maximum | State and Local Jurisdiction | ||||
Income Tax Examination [Line Items] | ||||
Operating loss carryforward, expiration period | 20 years |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Provision for Income Taxes to Federal Statutory Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Provision for income taxes at federal statutory rate | $ (15,659) | $ 3,395 | $ 21,437 |
Non deductible expenses | 4,713 | 3,008 | 1,297 |
Research and development and foreign tax credits | (9,419) | (16,311) | (13,251) |
Effect of foreign taxes and foreign exchange rates | 81 | 5,695 | 4,082 |
GILTI and related international adjustments | 12,528 | 8,972 | 6,714 |
§162(m) limitation on executive compensation | 2,759 | 7,396 | 0 |
Stock compensation excess tax benefits | 2,739 | (8,206) | (22) |
China non-deductible stock compensation expense | 15,329 | 0 | 0 |
US state income taxes, net of federal tax benefit | 3,811 | 1,072 | 2,892 |
Change in deferred tax valuation allowance | 11,919 | 10,060 | 4,145 |
CARES Act US federal net operating loss carryback benefit | 0 | 0 | (4,188) |
U.K. rate change | (313) | 855 | 0 |
Adjustments of prior year estimates and other | (1,044) | (2,330) | (1,566) |
Adjustments associated with income tax uncertainties | 3,381 | 3,134 | 1,566 |
Income tax expense | $ 30,825 | $ 16,740 | $ 23,106 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Accrued expenses | $ 23,572 | $ 6,650 |
Goodwill | 850 | 1,305 |
Net operating loss carryforwards | 20,409 | 6,492 |
Research and development and foreign tax credit carryforwards | 1,350 | 1,505 |
Allowance for doubtful accounts | 2,772 | 2,717 |
Fixed assets | 2,526 | 1,817 |
Stock-based compensation | 22,533 | 30,322 |
Business interest | 9,685 | 6,727 |
Other assets | 4,790 | 1,768 |
Total deferred tax assets | 88,487 | 59,303 |
Total valuation allowance | (28,510) | (16,703) |
Total deferred tax assets | 59,977 | 42,600 |
Deferred tax liabilities: | ||
Unremitted earnings of subsidiaries and unrealized translation gains | (2,793) | (3,877) |
Prepaid expenses | (3,545) | (2,597) |
Fixed assets | (649) | (1,071) |
Deferred revenue | (460) | 0 |
Internally developed software | (1,565) | (1,280) |
Other liabilities | (192) | (932) |
Total deferred tax liabilities | (115,076) | (116,285) |
Total deferred tax liabilities, net | (55,099) | (73,685) |
Trademark | ||
Deferred tax liabilities: | ||
Intangible assets | (73,028) | (73,028) |
Customer relationships | ||
Deferred tax liabilities: | ||
Intangible assets | $ (32,844) | $ (33,500) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance, beginning of year | $ 11,609 | $ 8,123 | $ 6,557 |
Additions for tax positions related to the current year | 0 | 2,068 | 1,219 |
Additions for tax positions related to prior years | 3,424 | 1,923 | 706 |
Reductions for tax positions related to prior years | (43) | (505) | (316) |
Statute of limitations expirations | 0 | 0 | (43) |
Settlements with tax authorities | 0 | 0 | 0 |
Balance, end of year | $ 14,990 | $ 11,609 | $ 8,123 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 94,281 | $ 79,853 |
Less: accumulated depreciation and amortization | (55,483) | (45,353) |
Property and equipment, net | 38,798 | 34,500 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5 | 38 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 46,300 | 37,847 |
Internally developed software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 19,170 | 13,575 |
Property and equipment, net | 6,500 | 5,600 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 22,245 | 20,425 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 6,561 | $ 7,968 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $ 21.3 | $ 17.5 | $ 16 |
(Loss) Earnings Per Common Sh_3
(Loss) Earnings Per Common Share - Schedule of (Loss) Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic (loss) earnings per common share: | |||||||||||
Net (loss) income | $ 16,108 | $ (38,608) | $ (39,308) | $ (43,585) | $ (16,851) | $ (20,840) | $ 18,326 | $ 18,790 | $ (105,393) | $ (575) | $ 78,973 |
Preferred stock dividends | 0 | (59,642) | 0 | ||||||||
Earnings allocated to Preferred Stock | 0 | 0 | (6,150) | ||||||||
Net (loss) income allocated to common shareholders – Basic | $ (105,393) | $ (60,217) | $ 72,823 | ||||||||
Weighted average shares outstanding, basic (in shares) | 310,911,526 | 254,271,997 | 278,225,009 | ||||||||
Basic (loss) earnings per common share (in USD per share) | $ 0.05 | $ (0.12) | $ (0.13) | $ (0.14) | $ (0.06) | $ (0.09) | $ (0.18) | $ 0.06 | $ (0.34) | $ (0.24) | $ 0.26 |
Diluted (loss) earnings per common share: | |||||||||||
Net (loss) income allocated to common shareholders – Basic | $ (105,393) | $ (60,217) | $ 72,823 | ||||||||
Weighted average shares outstanding, basic (in shares) | 310,911,526 | 254,271,997 | 278,225,009 | ||||||||
Dilutive effect of: | |||||||||||
Employee stock options and common shares (in shares) | 0 | 0 | 6,390,986 | ||||||||
Weighted average shares outstanding, diluted (in shares) | 310,911,526 | 254,271,997 | 284,615,995 | ||||||||
Diluted (loss) earnings per common share (in USD per share) | $ 0.05 | $ (0.12) | $ (0.13) | $ (0.14) | $ (0.06) | $ (0.09) | $ (0.18) | $ 0.06 | $ (0.34) | $ (0.24) | $ 0.26 |
(Loss) Earnings Per Common Sh_4
(Loss) Earnings Per Common Share - Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of Earnings Per Share (in shares) | 26,802,540 | 23,435,860 | 444,215 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2022 | Jan. 01, 2022 | |
Leases [Abstract] | |||
Right-of-use assets | $ 0 | $ 43,123 | $ 40,900 |
Operating lease, liability | $ 45,862 | $ 43,700 | |
Operating leases, rent expense | $ 19,400 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Costs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 19,818 |
Variable lease cost | 2,908 |
Short-term lease cost | 614 |
Total lease cost | $ 23,340 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Lease Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 19,779 |
ROU assets obtained in exchange for new operating lease liabilities | $ 21,819 |
Weighted-average remaining lease term (years) | 4 years 8 months 12 days |
Weighted average discount rate | 5.30% |
Leases - Schedule of Operatin_2
Leases - Schedule of Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Jan. 01, 2022 |
Leases [Abstract] | ||
2023 | $ 17,938 | |
2024 | 10,763 | |
2025 | 6,945 | |
2026 | 5,506 | |
2027 | 2,769 | |
Thereafter | 7,750 | |
Total lease payments | 51,671 | |
Less: imputed interest | 5,809 | |
Present value of lease liabilities | $ 45,862 | $ 43,700 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments Before Adoption of ASC 842 (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Leases [Abstract] | |
2023 | $ 17,557 |
2024 | 11,690 |
2025 | 6,849 |
2026 | 3,955 |
2027 | 3,027 |
Thereafter | 6,088 |
Total lease payments | $ 49,166 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Sep. 17, 2021 $ / shares shares | Sep. 16, 2021 shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares |
Equity [Abstract] | ||||
Conversion of convertible securities, before stock split (in shares) | 1,365,058 | |||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock redesignated (in shares) | 5,259,163 | |||
Stock redesignation, conversion ratio | 1 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||
Common stock, shares outstanding (in shares) | 315,681,987 | 305,132,181 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 12 Months Ended | |||
Mar. 17, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, shares reserved for future issuance (in shares) | 62,048,123 | |||
Stock-based compensation income tax benefit | $ 20,600,000 | $ (800,000) | $ 0 | |
Lock-up restriction period | 1 year | |||
Lock-up restrictions, percent of option that will lapse | 50% | |||
Lock-up restriction, period following offering | 6 months | |||
Options, intrinsic value | $ 29,600,000 | $ 24,900,000 | $ 800,000 | |
Options, weighted average grand date fair value (in USD per share) | $ 10.32 | $ 5.71 | ||
Time Vesting Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Contractual term | 10 years | |||
Company repurchase, exercisable period | 48 months | |||
Compensation costs not yet recognized | $ 7,200,000 | |||
Compensation costs, weighted average period of recognition | 2 years 1 month 6 days | |||
Time Vesting Shares | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 37.50% | |||
Service period | 18 months | |||
Time Vesting Shares | Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Four | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Five | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Six | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Seven | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Eight | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Nine | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Ten | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Tranche Eleven | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 6.25% | |||
Service period | 3 months | |||
Time Vesting Shares | Vesting Upon Change Of Control | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance vesting option | 100% | |||
RSU's | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Compensation costs, weighted average period of recognition | 2 years 8 months 12 days | |||
Compensation award lock up period | 6 months | |||
Compensation costs, (other than options) not yet recognized | $ 189,600,000 | |||
Compensation costs (other than options) not yet recognized, nonrecurring | 157,500,000 | |||
Compensation costs (other than options) not yet recognized, reoccurring | 43,200,000 | |||
RSU's | IPO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation costs (other than options) not yet recognized, nonrecurring | $ 114,300,000 | |||
Performance Vesting Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period | 3 years | |||
Compensation costs, weighted average period of recognition | 2 years 3 months 18 days | |||
Compensation costs, (other than options) not yet recognized | $ 4,100,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 249,915 | $ 128,302 | $ 2,020 |
Cost of revenues | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 176,046 | 60,678 | 0 |
Selling, general and administrative expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 73,869 | $ 67,624 | $ 2,020 |
Stock-Based Compensation- Sched
Stock-Based Compensation- Schedule of Option Activity (Details) - Time Vesting Shares $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Options | |
Beginning balance (in shares) | 24,097,082 |
Granted (in shares) | 0 |
Forfeited (in shares) | (140,597) |
Exercised (in shares) | (2,348,923) |
Cancelled (in shares) | 0 |
Expired (in shares) | 0 |
Ending balance (in shares) | 21,607,562 |
Vested and exercisable (in shares) | 20,588,419 |
Weighted Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 3.79 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 10.77 |
Exercised (in dollars per share) | $ / shares | 2.99 |
Cancelled (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | 3.83 |
Weighted average exercise price, Vested and exercisable (in dollars per share) | $ / shares | $ 3.54 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Aggregate Intrinsic Value | $ | $ 145,393 |
Aggregate Intrinsic Value, Exercisable | $ | $ 142,895 |
Weighted Average Remaining Contractual Term, Outstanding | 5 years 6 months |
Weighted Average Remaining Contractual Term, Exercisable | 5 years 4 months 24 days |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Valuation Assumptions (Details) - Employee stock options, RSUs and PSUs | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.10% | 0.10% |
Dividend yield | 0% | 0% |
Expected volatility | 55% | 55% |
Expected term (years) | 1 year | 2 years |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Restricted Stock Units Activity (Details) - $ / shares | 12 Months Ended | |
Feb. 25, 2022 | Dec. 31, 2022 | |
RSU's | ||
Number of RSUs | ||
Beginning balance (in shares) | 14,128,722 | |
Granted (in shares) | 11,505,096 | |
Forfeited (in shares) | (1,622,736) | |
Vested (in shares) | 10,997,136 | |
Ending balance (in shares) | 13,013,946 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 23.39 | |
Granted (in dollars per share) | 14.97 | |
Forfeited (in dollars per share) | 22.96 | |
Vested (in dollars per share) | 21.77 | |
Ending balance (in dollars per share) | $ 17.37 | |
Net settled shares (in shares) | 2,800,000 | |
RSU's | Connected | ||
Number of RSUs | ||
Granted (in shares) | 100,000 | |
RSU's, China SAFE | ||
Number of RSUs | ||
Granted (in shares) | 4,400,000 |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Performance Based Stock Activity (Details) - Performance Vesting Shares - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of PSUs | ||
Beginning balance (in shares) | 76,697 | 0 |
Granted (in shares) | 269,586 | |
Adjustment for PSUs expected to vest as of current period end (in shares) | (192,889) | |
Forfeited (in shares) | 0 | |
Vested (in shares) | 0 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 24.15 | |
Adjustment for PSUs expected to vest as of current period end (in dollars per share) | 25.76 | |
Forfeited (in dollars per share) | 0 | |
Vested (in dollars per share) | 0 | |
Ending balance (in dollars per share) | $ 20.11 |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
United States | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer discretionary contribution | $ 5.8 | $ 4.5 | $ 3.8 |
Foreign Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer discretionary contribution | $ 11 | $ 8.8 | $ 7.3 |
Credit Agreements - Narrative (
Credit Agreements - Narrative (Details) - Credit Agreements - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Jul. 21, 2022 | Mar. 26, 2021 | Nov. 30, 2022 | Dec. 31, 2022 | Dec. 09, 2022 | Dec. 31, 2021 | Mar. 25, 2021 | |
Debt Instrument [Line Items] | |||||||
Debt issuance costs, gross | $ 3,600,000 | $ 7,100,000 | |||||
Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 715,000,000 | ||||||
Installment payments, percent of original principal amount | 1% | ||||||
Repayments of debt | $ 100,000,000 | ||||||
Write off of deferred financing and debt discount | $ 900,000 | ||||||
London Interbank Offered Rate (LIBOR) | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate | 3.25% | ||||||
Decrease in interest rate | (0.25%) | 0.25% | |||||
Base Rate | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate | 2.25% | ||||||
Revolving Credit Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility | $ 165,000,000 | $ 300,000,000 | $ 300,000,000 | $ 165,000,000 | $ 85,000,000 |
Credit Agreements - Schedule of
Credit Agreements - Schedule of Outstanding Debt Borrowing Capacity (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 09, 2022 | Mar. 26, 2021 | Mar. 25, 2021 | |
Debt Instrument [Line Items] | |||||
Long-term debt (due March 24, 2028), including current portion (1) | $ 399,006,000 | $ 504,530,000 | |||
Interest rate | 6.90% | 3.50% | |||
Line of Credit | Credit Agreements | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Availability under revolving credit facility (due March 26, 2026) | $ 300,000,000 | $ 165,000,000 | $ 300,000,000 | $ 165,000,000 | $ 85,000,000 |
Borrowings under revolving credit facility | $ 0 | $ 0 |
Credit Agreements - Schedule _2
Credit Agreements - Schedule of Credit Facilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Long-term debt, less current portion | $ 395,338 | $ 502,488 |
Capitalized deferred financing fees | (3,482) | (5,108) |
Long-term debt | 391,856 | 497,380 |
Current portion of long-term debt | 7,150 | 7,150 |
Total debt carrying value | $ 399,006 | $ 504,530 |
Credit Agreements - Schedule _3
Credit Agreements - Schedule of Future Cash Payments for Term Loan (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 7,150 |
2024 | 7,150 |
2025 | 7,150 |
2026 | 7,150 |
2027 | 7,150 |
2028 | 366,738 |
Total future principal cash payments | $ 402,488 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued interest expense | $ 221 | $ 76 |
Accrued employee expense | 2,016 | 2,320 |
Accrued travel expense | 281 | 514 |
Operating lease expenses | 425 | 262 |
Insurance charges | 198 | 170 |
Professional fees | 6,321 | 5,188 |
Withholding taxes payable | 43 | 26,077 |
Other taxes payable | 1,815 | 1,803 |
Rebates payable | 1,168 | 943 |
Contingent consideration | 14,255 | 0 |
Other accrued expenses | 3,484 | 6,741 |
Accrued expenses | $ 30,227 | $ 44,094 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Increase (Decrease in Stockholders' Equity [Roll Forward] | |||
Beginning balance | $ 701,957 | $ 484,770 | $ 394,988 |
Foreign currency translation adjustments | (28,366) | (9,270) | 8,493 |
Ending balance | 778,222 | 701,957 | 484,770 |
Accumulated other comprehensive loss | (39,210) | (10,844) | (1,574) |
Foreign Currency Translation | |||
Increase (Decrease in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (10,844) | (1,574) | (10,067) |
Foreign currency translation (loss)/gain | (31,569) | (8,221) | 8,743 |
Income tax benefit (expense) | 3,203 | (1,049) | (250) |
Foreign currency translation adjustments | (28,366) | (9,270) | 8,493 |
Ending balance | $ (39,210) | $ (10,844) | $ (1,574) |
Quarterly Selected Financial _3
Quarterly Selected Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 310,744 | $ 332,447 | $ 332,107 | $ 320,940 | $ 286,800 | $ 285,051 | $ 260,432 | $ 237,662 | $ 1,296,238 | $ 1,069,945 | $ 803,375 |
Cost of revenues | 205,939 | 244,139 | 250,462 | 249,765 | 202,703 | 180,344 | 152,191 | 134,443 | 950,305 | 669,681 | 475,560 |
Selling, general and administrative expenses | 76,962 | 91,682 | 99,352 | 104,765 | 87,590 | 111,289 | 68,514 | 66,511 | 372,761 | 333,904 | 189,850 |
Operating Income (Loss) | 22,723 | (8,677) | (21,922) | (39,436) | (8,085) | (10,755) | 35,239 | 32,362 | (47,312) | 48,761 | 120,486 |
Net Income (Loss) Attributable to Parent | $ 16,108 | $ (38,608) | $ (39,308) | $ (43,585) | $ (16,851) | $ (20,840) | $ 18,326 | $ 18,790 | $ (105,393) | $ (575) | $ 78,973 |
Basic (loss) earnings per common share (in USD per share) | $ 0.05 | $ (0.12) | $ (0.13) | $ (0.14) | $ (0.06) | $ (0.09) | $ (0.18) | $ 0.06 | $ (0.34) | $ (0.24) | $ 0.26 |
Diluted (loss) earnings per common share (in USD per share) | $ 0.05 | $ (0.12) | $ (0.13) | $ (0.14) | $ (0.06) | $ (0.09) | $ (0.18) | $ 0.06 | $ (0.34) | $ (0.24) | $ 0.26 |
Subsequent Events (Details)
Subsequent Events (Details) - Credit Agreements - Secured Debt - USD ($) $ in Millions | Feb. 24, 2023 | Jul. 21, 2022 |
Subsequent Event [Line Items] | ||
Repayments of debt | $ 100 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Repayments of debt | $ 100 |