Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q/A | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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, $0.001 par value | |
Trading Symbol | TWKS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 317,728,750 | |
Entity Central Index Key | 0001866550 | |
Amendment Flag | true | |
Amendment Description | Thoughtworks Holding, Inc. (the "Company") is filing this Amendment No. 1 ("Amendment No. 1”) to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (the "Original Filing"), originally filed with the Securities and Exchange Commission (“SEC”) on August 8, 2023 (the “Original Filing Date”) to correct a misstatement in its Condensed Consolidated Statement of Cash Flows (Unaudited) for the period ended June 30, 2023. | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 88,151 | $ 194,294 |
Trade receivables, net of allowance of $7,915 and $9,531, respectively | 154,208 | 201,695 |
Unbilled receivables | 137,089 | 122,499 |
Prepaid expenses and other current assets | 35,262 | 38,202 |
Total current assets | 414,710 | 556,690 |
Property and equipment, net | 32,062 | 38,798 |
Right-of-use assets | 43,577 | 43,123 |
Intangibles and other assets: | ||
Goodwill | 422,313 | 405,017 |
Trademark | 273,000 | 273,000 |
Customer relationships, net | 120,677 | 124,047 |
Other non-current assets | 20,888 | 21,175 |
Total assets | 1,327,227 | 1,461,850 |
Current liabilities: | ||
Accounts payable | 4,555 | 5,248 |
Long-term debt - current | 7,150 | 7,150 |
Income taxes payable | 7,449 | 22,781 |
Accrued compensation | 77,180 | 85,477 |
Deferred revenue | 6,007 | 5,167 |
Value-added tax and sales tax payable | 5,289 | 7,526 |
Accrued expenses | 14,406 | 30,227 |
Lease liabilities, current | 15,594 | 15,994 |
Total current liabilities | 137,630 | 179,570 |
Lease liabilities, non-current | 30,417 | 29,885 |
Long-term debt, less current portion | 289,379 | 391,856 |
Deferred tax liabilities | 54,224 | 62,555 |
Other long-term liabilities | 21,849 | 19,762 |
Total liabilities | 533,499 | 683,628 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Convertible preferred stock, $0.001 par value; 100,000,000 shares authorized, zero issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 0 | 0 |
Common stock, $0.001 par value; 1,000,000,000 shares authorized, 368,253,048 and 366,306,970 issued, 317,647,945 and 315,681,987 outstanding at June 30, 2023 and December 31, 2022, respectively | 368 | 366 |
Treasury stock, 50,605,103 and 50,624,983 shares at June 30, 2023 and December 31, 2022, respectively | (624,687) | (624,934) |
Additional paid-in capital | 1,601,559 | 1,565,514 |
Accumulated other comprehensive loss | (39,619) | (39,210) |
Retained deficit | (143,893) | (123,514) |
Total stockholders' equity | 793,728 | 778,222 |
Total liabilities and stockholders' equity | $ 1,327,227 | $ 1,461,850 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 7,915 | $ 9,531 |
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) | 368,253,048 | 366,306,970 |
Common stock, shares outstanding (in shares) | 317,647,945 | 315,681,987 |
Treasury Stock, Common, Shares | 50,605,103 | 50,624,983 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 287,215 | $ 332,107 | $ 594,271 | $ 653,047 |
Operating expenses: | ||||
Cost of revenues | 196,338 | 250,462 | 405,860 | 500,227 |
Selling, general and administrative expenses | 86,626 | 99,352 | 172,966 | 204,117 |
Depreciation and amortization | 5,874 | 4,215 | 11,416 | 10,061 |
Total operating expenses | 288,838 | 354,029 | 590,242 | 714,405 |
(Loss) income from operations | (1,623) | (21,922) | 4,029 | (61,358) |
Other (expense) income: | ||||
Interest expense | (6,150) | (4,984) | (13,012) | (9,631) |
Net realized and unrealized foreign currency (loss) gain | (30) | (11,512) | 1,155 | (6,774) |
Other income (expense), net | 135 | (413) | (588) | (325) |
Total other (expense) income | (6,045) | (16,909) | (12,445) | (16,730) |
Loss before income taxes | (7,668) | (38,831) | (8,416) | (78,088) |
Income tax expense | 4,604 | 477 | 11,963 | 4,805 |
Net loss | (12,272) | (39,308) | (20,379) | (82,893) |
Other comprehensive (loss), net of tax: | ||||
Foreign currency translation adjustments | (651) | (20,760) | (409) | (26,231) |
Comprehensive loss | $ (12,923) | $ (60,068) | $ (20,788) | $ (109,124) |
Net loss per common share: | ||||
Basic (loss) earnings per common share (in USD per share) | $ (0.04) | $ (0.13) | $ (0.06) | $ (0.27) |
Diluted (loss) earnings per common share (in USD per share) | $ (0.04) | $ (0.13) | $ (0.06) | $ (0.27) |
Weighted average shares outstanding: | ||||
Weighted average shares outstanding, basic (in shares) | 317,341,907 | 310,575,050 | 316,899,214 | 308,394,443 |
Weighted average shares outstanding, diluted (in shares) | 317,341,907 | 310,575,050 | 316,899,214 | 308,394,443 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Deficit | Retained Deficit Cumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2021 | 305,132,181 | |||||||
Beginning balance at Dec. 31, 2021 | $ 701,957 | $ (841) | $ 356 | $ (629,424) | $ 1,359,149 | $ (10,844) | $ (17,280) | $ (841) |
Treasury Shares, Beginning balance (in shares) at Dec. 31, 2021 | 50,985,571 | |||||||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (43,585) | (43,585) | ||||||
Other comprehensive loss, net of tax | (5,471) | (5,471) | ||||||
Issuance of common stock for equity incentive awards, net of withholding taxes (in shares) | 4,736,820 | |||||||
Issuance of common stock for equity incentive awards, net of withholding taxes | (28,042) | $ 5 | (28,047) | |||||
Reissuance of treasury shares for equity incentive awards (in shares) | (155,806) | (155,806) | ||||||
Reissuance of treasury shares for equity incentive awards | 144 | $ 1,940 | (1,796) | |||||
Stock-based compensation expense | 100,183 | 100,183 | ||||||
Ending balance (in shares) at Mar. 31, 2022 | 310,024,807 | |||||||
Ending balance at Mar. 31, 2022 | 724,345 | $ 361 | $ (627,484) | 1,429,489 | (16,315) | (61,706) | ||
Treasury Shares, Ending balance (in shares) at Mar. 31, 2022 | 50,829,765 | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 305,132,181 | |||||||
Beginning balance at Dec. 31, 2021 | 701,957 | (841) | $ 356 | $ (629,424) | 1,359,149 | (10,844) | (17,280) | $ (841) |
Treasury Shares, Beginning balance (in shares) at Dec. 31, 2021 | 50,985,571 | |||||||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (82,893) | |||||||
Ending balance (in shares) at Jun. 30, 2022 | 310,964,304 | |||||||
Ending balance at Jun. 30, 2022 | 735,828 | $ 362 | $ (626,845) | 1,500,400 | (37,075) | (101,014) | ||
Treasury Shares, Ending balance (in shares) at Jun. 30, 2022 | 50,778,454 | |||||||
Beginning balance (in shares) at Mar. 31, 2022 | 310,024,807 | |||||||
Beginning balance at Mar. 31, 2022 | 724,345 | $ 361 | $ (627,484) | 1,429,489 | (16,315) | (61,706) | ||
Treasury Shares, Beginning balance (in shares) at Mar. 31, 2022 | 50,829,765 | |||||||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (39,308) | (39,308) | ||||||
Other comprehensive loss, net of tax | (20,760) | (20,760) | ||||||
Issuance of common stock for equity incentive awards, net of withholding taxes (in shares) | 888,186 | |||||||
Issuance of common stock for equity incentive awards, net of withholding taxes | 2,443 | $ 1 | 2,442 | |||||
Reissuance of treasury shares for equity incentive awards (in shares) | (51,311) | (51,311) | ||||||
Reissuance of treasury shares for equity incentive awards | 143 | $ 639 | (496) | |||||
Stock-based compensation expense | 68,965 | 68,965 | ||||||
Ending balance (in shares) at Jun. 30, 2022 | 310,964,304 | |||||||
Ending balance at Jun. 30, 2022 | 735,828 | $ 362 | $ (626,845) | 1,500,400 | (37,075) | (101,014) | ||
Treasury Shares, Ending balance (in shares) at Jun. 30, 2022 | 50,778,454 | |||||||
Beginning balance (in shares) at Dec. 31, 2022 | 315,681,987 | |||||||
Beginning balance at Dec. 31, 2022 | $ 778,222 | $ 366 | $ (624,934) | 1,565,514 | (39,210) | (123,514) | ||
Treasury Shares, Beginning balance (in shares) at Dec. 31, 2022 | 50,624,983 | 50,624,983 | ||||||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | $ (8,107) | (8,107) | ||||||
Other comprehensive loss, net of tax | 242 | 242 | ||||||
Issuance of common stock for equity incentive awards, net of withholding taxes (in shares) | 1,189,600 | |||||||
Issuance of common stock for equity incentive awards, net of withholding taxes | (179) | $ 1 | (180) | |||||
Reissuance of treasury shares for equity incentive awards (in shares) | (12,798) | (12,798) | ||||||
Reissuance of treasury shares for equity incentive awards | 0 | $ 159 | (159) | |||||
Stock-based compensation expense | 17,679 | 17,679 | ||||||
Ending balance (in shares) at Mar. 31, 2023 | 316,884,385 | |||||||
Ending balance at Mar. 31, 2023 | 787,857 | $ 367 | $ (624,775) | 1,582,854 | (38,968) | (131,621) | ||
Treasury Shares, Ending balance (in shares) at Mar. 31, 2023 | 50,612,185 | |||||||
Beginning balance (in shares) at Dec. 31, 2022 | 315,681,987 | |||||||
Beginning balance at Dec. 31, 2022 | $ 778,222 | $ 366 | $ (624,934) | 1,565,514 | (39,210) | (123,514) | ||
Treasury Shares, Beginning balance (in shares) at Dec. 31, 2022 | 50,624,983 | 50,624,983 | ||||||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | $ (20,379) | |||||||
Ending balance (in shares) at Jun. 30, 2023 | 317,647,945 | |||||||
Ending balance at Jun. 30, 2023 | $ 793,728 | 793,728 | $ 368 | $ (624,687) | 1,601,559 | (39,619) | (143,893) | |
Treasury Shares, Ending balance (in shares) at Jun. 30, 2023 | 50,605,103 | 50,605,103 | ||||||
Beginning balance (in shares) at Mar. 31, 2023 | 316,884,385 | |||||||
Beginning balance at Mar. 31, 2023 | $ 787,857 | $ 367 | $ (624,775) | 1,582,854 | (38,968) | (131,621) | ||
Treasury Shares, Beginning balance (in shares) at Mar. 31, 2023 | 50,612,185 | |||||||
Increase (Decrease in Stockholders' Equity [Roll Forward] | ||||||||
Net loss | (12,272) | (12,272) | ||||||
Other comprehensive loss, net of tax | (651) | (651) | ||||||
Issuance of common stock for equity incentive awards, net of withholding taxes (in shares) | 756,478 | |||||||
Issuance of common stock for equity incentive awards, net of withholding taxes | 1,188 | $ 1 | 1,187 | |||||
Reissuance of treasury shares for equity incentive awards (in shares) | (7,082) | (7,082) | ||||||
Reissuance of treasury shares for equity incentive awards | 0 | $ 88 | (88) | |||||
Stock-based compensation expense | 17,606 | 17,606 | ||||||
Ending balance (in shares) at Jun. 30, 2023 | 317,647,945 | |||||||
Ending balance at Jun. 30, 2023 | $ 793,728 | $ 793,728 | $ 368 | $ (624,687) | $ 1,601,559 | $ (39,619) | $ (143,893) | |
Treasury Shares, Ending balance (in shares) at Jun. 30, 2023 | 50,605,103 | 50,605,103 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (20,379) | $ (82,893) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization expense | 18,220 | 16,656 |
Bad debt expense | 2,596 | 2,038 |
Deferred income tax benefit | (12,033) | (19,618) |
Stock-based compensation expense | 35,285 | 169,148 |
Unrealized foreign currency exchange (gain) loss | (735) | 7,794 |
Non-cash lease expense on right-of-use assets | 9,312 | 8,870 |
Other operating activities, net | 2,018 | 1,134 |
Changes in operating assets and liabilities: | ||
Trade receivables | 47,332 | (20,069) |
Unbilled receivables | (15,276) | (48,629) |
Prepaid expenses and other assets | 2,727 | (2,690) |
Lease liabilities | (9,495) | (6,951) |
Accounts payable | (813) | 1,699 |
Accrued expenses and other liabilities | (28,516) | (5,012) |
Net cash provided by operating activities | 30,243 | 21,477 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (3,681) | (12,459) |
Proceeds from disposal of fixed assets | 221 | 267 |
Acquisitions, net of cash acquired | (15,989) | (65,410) |
Net cash used in investing activities | (19,449) | (77,602) |
Cash flows from financing activities: | ||
Payments of obligations of long-term debt | (103,575) | (3,575) |
Payments of debt issuance costs | (99) | 0 |
Proceeds from issuance of common stock on exercise of options, net of employee tax withholding | 3,816 | 3,928 |
Withholding taxes paid on tender offer | 0 | (15,469) |
Withholding taxes paid on dividends previously declared | 0 | (10,009) |
Withholding taxes paid related to net share settlement of equity awards | (3,261) | (29,026) |
Payment of contingent consideration | (13,996) | 0 |
Other financing activities, net | 80 | (48) |
Net cash used in financing activities | (117,035) | (54,199) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 178 | (8,884) |
Net decrease in cash, cash equivalents and restricted cash | (106,063) | (119,208) |
Cash, cash equivalents and restricted cash at beginning of the period | 195,564 | 394,942 |
Cash, cash equivalents and restricted cash at end of the period | 89,501 | 275,734 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 12,544 | 8,987 |
Income taxes paid | 31,929 | 10,554 |
Withholding taxes payable | (454) | 0 |
Supplemental disclosures of non-cash financing activities: | ||
Withholding taxes payable included within accrued compensation | 0 | 219 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 88,151 | 274,527 |
Restricted cash included in other non-current assets | 1,350 | 1,207 |
Total cash, cash equivalents and restricted cash | $ 89,501 | $ 275,734 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
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 unaudited condensed consolidated financial statements include the accounts of Thoughtworks Holding, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s 2022 Annual Report. Certain amounts in the prior period consolidated financial statements and notes have been reclassified to conform to the 2023 presentation. These reclassifications had no effect on results of operations previously reported. Preparation of Financial Statements and Use of Estimates The preparation of these condensed consolidated financial statements is in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. 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 condensed consolidated financial statements in the future. Operating results for interim periods are not necessarily indicative of results that may be expected to occur for the entire year. In management’s opinion, all adjustments considered necessary for a fair presentation of the accompanying unaudited condensed consolidated financial statements have been included, and all adjustments are of a normal and recurring nature. 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 to secure bank guarantees of amounts related to government requirements and as collateral for a corporate credit card. Allowance for Credit Losses 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): Six Months Ended June 30, 2023 Allowance for credit losses, beginning balance $ (9,531) Current provision for expected credit losses (2,596) Write-offs charged against allowance 4,648 Recoveries of amounts previously written off (96) Changes due to exchange rates (340) Allowance for credit losses, ending balance $ (7,915) Recently Adopted Accounting Standards 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 adopted the standard in the first quarter of 2023. The adoption did not have a material impact on the Company's condensed consolidated financial statements. 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 London Interbank Offer Rate ("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 elected to utilize the temporary optional expedients in connection with the amendment of our credit agreement, which transitioned the Term Loan from LIBOR to the Secured Overnight Financing Rate (“SOFR”) on May 18, 2023. Refer to Note 8, Credit Agreements. Concentration of Credit Risk and Other Risks and Uncertainties Revenue generated from the Company's operations outside of the United States for the three months ended June 30, 2023 and 2022 was 66% and 62%, respectively, and 66% and 63% for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023 and December 31, 2022, 74% and 69%, respectively, of trade receivables and unbilled receivables was due from customers located outside the United States. At June 30, 2023 and December 31, 2022, the Company had net property and equipment of $23.8 million and $30.0 million, respectively, outside the United States. Change in Accounting Principle - Stock-Based Compensation 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 resulting in an increase to net loss of $9.3 million and an increase to basic and diluted loss per share of $0.03 for the three months ended June 30, 2022 and a decrease to net loss of $7.0 million and a decrease to basic and diluted loss per share of $0.02 for the six months ended June 30, 2022. Restatement of Condensed Consolidated Statement of Cash Flows Subsequent to the issuance of the Company's interim condensed consolidated financial statements for the period ended June 30, 2023, management determined that there was a misstatement in its Condensed Consolidated Statement of Cash Flows (Unaudited) for the period ended June 30, 2023. The misstatement was due to an inaccurate presentation of the change in cash flows ascribed to operating and financing activities in the condensed consolidated statement of cash flows. The misstatement relates solely to the inaccurate classification of the payment of contingent consideration. As disclosed in Note 3, Acquisitions, the Company made a payment of contingent consideration related to the acquisition of Connected Lab Inc. of $14.3 million. In the Original Filing, the Company included this payment in the operating activities section of the condensed consolidated statement of cash flows. Of the $14.3 million payment, $14.0 million reflects the fair value of the contingent consideration on the acquisition date and should have been included within the financing activities section, and not within the operating activities section, of the condensed consolidated statement of cash flows. A summary of the impact on the condensed consolidated statements of cash flows is as follows for the six months ended June 30, 2023 (in thousands): Six Months Ended June 30, 2023 As reported Adjustment As restated Cash flows from operating activities: Accrued expenses and other liabilities $ (42,512) $ 13,996 $ (28,516) Net cash provided by operating activities $ 16,247 $ 13,996 $ 30,243 Cash flows from financing activities: Payment of contingent consideration $ — $ (13,996) $ (13,996) Net cash used in financing activities $ (103,039) $ (13,996) $ (117,035) |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2023 | |
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): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 North America (1) $ 105,775 $ 131,486 $ 218,089 $ 253,435 APAC (2) 100,465 109,674 200,627 211,880 Europe (3) 70,182 76,603 153,232 159,529 LATAM 10,793 14,344 22,323 28,203 Total revenues $ 287,215 $ 332,107 $ 594,271 $ 653,047 (1) For the three months ended June 30, 2023 and 2022, the United States re presented 35.8%, or $102.7 million, and 37.2%, or $123.5 million, respectively, of the Company’s total revenues. For the six months ended June 30, 2023 and 2022 , the United States represented 35.5%, or $211.1 million, and 36.5%, or $238.6 million, of the Company’s total revenues, respectively. Canadian operations were determined to be immaterial given revenue as a percentage of total North America revenues was less than 10% for the three and six months ended June 30, 2023 and 2022. (2) For the three months ended June 30, 2023 and 2022 , Australia represented 10.5%, or $30.3 million, and 12.0%, or $39.8 million, respectively, of the Company's total revenues. For the six months ended June 30, 2023 and 2022 , Australia represented 10.0%, or $59.2 million, and 11.7%, or $76.1 million, of the Company's total revenues, respectively. (3) For the three months ended June 30, 2023 and 2022 , revenue in the United Kingdom as a percentage of the Company's total revenues was less than 10%. For the six months ended June 30, 2023 and 2022, the United Kingdom represented 10.0%, or $59.5 million, and 10.8%, or $70.3 million, respectively, of the Company’s total revenues. For the three months ended June 30, 2023, Germany represented 10.6%, or $30.5 million of the Company's total revenues. For the six months ended June 30, 2023, Germany represented 10.7%, or $63.3 million of the Company's total revenues. For the three and six months ended June 30, 2022, revenue in Germany as a percentage of the Company’s total revenues was less than 10%. Other non-U.S. countries were determined to be immaterial given the revenues as a percentage of the Company’s total revenues was less than 10% for the three and six months ended June 30, 2023 and 2022. The following table presents the disaggregation of the Company’s revenues by industry vertical (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Technology and business services $ 69,695 $ 95,247 $ 143,828 $ 180,596 Energy, public and health services 75,313 76,605 159,352 153,715 Retail and consumer 44,485 62,628 92,397 125,063 Financial services and insurance 52,778 59,671 107,933 118,135 Automotive, travel and transportation 44,944 37,956 90,761 75,538 Total revenues $ 287,215 $ 332,107 $ 594,271 $ 653,047 The following table presents the disaggregation of the Company’s revenues by contract type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Time-and-material $ 235,119 $ 275,932 $ 492,369 $ 547,295 Fixed-price 52,096 56,175 101,902 105,752 Total revenues $ 287,215 $ 332,107 $ 594,271 $ 653,047 Contract Balances The following table is a summary of the Company’s contract assets and contract liabilities (in thousands): As of June 30, 2023 As of December 31, 2022 Contract assets included in unbilled receivables $ 39,548 $ 39,941 Contract liabilities included in deferred revenue $ 6,007 $ 5,167 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 three months ended June 30, 2023 and 2022, the Company recognized $0.8 million and $2.5 million, respectively, of revenues that were included in current liabilities at the prior year end. For the six months ended June 30, 2023 and 2022, the Company recognized $4.3 million and $12.6 million, respectively, of revenues that were included in current liabilities at the prior year end. 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. These costs would primarily relate to commissions paid to our account executives and are included in selling, general and administrative ("SG&A") expenses. The following table is a summary of the Company’s costs to obtain contracts and related amortization and impairment where the amortization period of the assets is greater than one year (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Balance at beginning of period $ 1,391 $ 1,814 $ 1,588 $ 2,039 Costs to obtain contracts capitalized 281 147 349 238 Amortization of capitalized costs (859) (310) (1,127) (625) Changes due to exchange rates 12 (9) 15 (10) Balance at end of period $ 825 $ 1,642 $ 825 $ 1,642 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 | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On February 1, 2023, the Company completed the acquisition of ITOC Pty Ltd ("Itoc"), a leading Amazon Web Services Advanced Consulting Partner and Cloud Managed Services Provider in Australia, in an all-cash transaction for a gross purchase price of $17.8 million, or $16.0 million net of cash acquired of $1.8 million. Itoc is now wholly owned by the Company. The acquisition expands Thoughtworks’ capabilities to help modernize and place digital at the center of client operations as they transition to the cloud. 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 condensed consolidated statements of loss and comprehensive loss 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 Itoc of $1.4 million and $2.5 million for the three and six months ended June 30, 2023 were included within SG&A expenses in the condensed consolidated statements of loss and comprehensive loss. The Company's preliminary 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 $ 1,788 Trade receivables, net of allowance 1,251 Customer relationships, net (1) 3,500 Goodwill 13,766 Accounts payable (110) Accrued compensation (363) Accrued expenses (927) Deferred revenue (235) Income taxes payable (178) Lease liabilities, current (173) Deferred tax liabilities (1,050) Other assets/liabilities, net 508 Total gross purchase price $ 17,777 (1) The weighted average amortization period is four years. 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. 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), including the completion or finalization of asset appraisals, the Company will refine its estimates of fair value to allocate the purchase price including finalizing the impact on taxes. In connection with the acquisition of Connected Lab Inc. ("Connected") in the second quarter of 2022, 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 condensed 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 was remeasured to fair value at each reporting date with adjustments recorde d within other income (expense), net in the condensed consolidated statements of loss and comprehensive loss, and the final payout amount of $14.3 million was paid on May 4, 2023. The following table presents the change in the contingent consideration liability (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Balance at beginning of period $ 14,267 $ — $ 14,255 $ — Additions in the period — 13,996 — 13,996 Payments in the period (14,344) — (14,344) — Change in fair value 129 528 129 528 Change due to exchange rates (52) (142) (40) (142) Balance at end of period $ — $ 14,382 $ — $ 14,382 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022 $ 405,017 Additions due to acquisitions 13,766 Changes due to exchange rates 3,530 Balance as of June 30, 2023 $ 422,313 The following is a summary of other intangible assets (in thousands): June 30, 2023 December 31, 2022 Customer relationships $ 196,947 $ 193,447 Less accumulated amortization (66,618) (59,369) Customer relationships, net 130,329 134,078 Trademark 273,000 273,000 Total other intangible assets, after amortization 403,329 407,078 Changes due to exchange rates (9,652) (10,031) Other intangible assets, net $ 393,677 $ 397,047 Other than indefinite-lived trademarks, the Company’s intangible assets have finite lives and, as such, are subject to amortization. Amortization expense related to these intangible assets was $3.7 million and $3.3 million for the three months ended June 30, 2023 and 2022, respectively, and $7.3 million and $6.3 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, estimated amortization expense for the next five years and thereafter is as follows (in thousands): Remainder of 2023 $ 7,755 2024 15,510 2025 15,510 2026 15,510 2027 14,708 Thereafter 61,336 $ 130,329 The weighted average remaining useful life of the Company’s finite-lived intangible assets was 8.6 years as of June 30, 2023 and 9.2 years as of December 31, 2022. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Prior to the Company's initial public offering ("IPO") in September 2021, the Company calculated the provision for income taxes during interim reporting periods by applying an estimate of the effective tax rate for the full year to the pre-tax income or loss for the interim period, adjusting the provision for discrete tax items recorded in the period. Upon the IPO, due to the magnitude of transaction related stock-based compensation costs, the Company's forecasted pre-tax income for the year is causing the tax rate to be highly sensitive, whereby minor changes in forecasted pre-tax income generate significant variability in the estimated annual effective tax rate. This is impacting the customary relationship between income tax expense and pre-tax income in interim periods. Beginning in the third quarter of 2021, the Company concluded that it could not calculate a reliable estimate of the annual effective tax rate due to the range of potential impacts for the aforementioned forecast changes. Accordingly, the Company computed the effective tax rate for the six-month period ended June 30, 2023 using actual results, as allowed by ASC 740-270-30-18, Income Taxes-Interim Reporting. The Company’s effective tax rate for the three months ended June 30, 2023 and June 30, 2022 was (60.0)% and (1.2)%, respectively, and (142.1)% and (6.2)% for the six months ended June 30, 2023 and June 30, 2022, respectively. The effective tax rate in each period differed from the U.S. statutory rate of 21% primarily due to U.S. corporate state income taxation and the effect of foreign operations, which reflects the impact of higher income tax rates in locations outside the United States, the unfavorable impact of valuation allowances on deferred tax assets of select foreign operations, the non-deductibility of China SAFE restricted stock units ("RSUs"), the unfavorable impact of capitalized research and experimental costs under Internal Revenue Code ("IRC") §174 increasing the Company's net global intangible low tax income ("GILTI") inclusion, impacted by excess tax deficiencies unfavorably and excess tax benefits favorably on stock-based compensation for the three and six months ended June 30, 2023 and June 30, 2022, respectively, and the unfavorable impact of providing for and settling of uncertain income tax positions for the three and six months ended June 30, 2023. The change in the effective tax rate for the three and six months ended June 30, 2023, as compared to the prior periods, and the negative effective tax rate for the three and six months ended June 30, 2023 and June 30, 2022 is a result of the aforementioned unique net unfavorable items when compared to the pre-tax loss recorded for the respective periods. |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share The components of basic and diluted loss per share are as follows (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net loss $ (12,272) $ (39,308) $ (20,379) $ (82,893) Denominator: Weighted average shares outstanding – Basic and diluted 317,341,907 310,575,050 316,899,214 308,394,443 Basic and diluted loss per share $ (0.04) $ (0.13) $ (0.06) $ (0.27) The following potentially dilutive securities were excluded from the computation of diluted loss per share because the impact of including them would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Employee stock options, RSUs and performance stock units ("PSUs") 17,170,149 24,376,880 19,018,901 25,847,639 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The following is a summary of the components of stock-based compensation expense for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of revenues $ 10,696 $ 49,573 $ 21,226 $ 119,482 Selling, general and administrative expenses 6,910 19,392 14,059 49,666 Total stock-based compensation expense $ 17,606 $ 68,965 $ 35,285 $ 169,148 Stock Options The following is a summary of performance and time vesting stock option activity for the six months ended June 30, 2023 (in thousands, except share and per share data): Number of Stock Options Weighted Average Exercise Price Aggregate Weighted- Balance at December 31, 2022 21,607,562 $ 3.83 Granted — — Forfeited (217,638) 11.85 Exercised (1,308,049) 2.92 Cancelled — — Expired — — Balance at June 30, 2023 20,081,875 $ 3.81 $ 87,637 5.1 Exercisable at June 30, 2023 19,392,211 $ 3.58 $ 86,927 5 As of June 30, 2023, total compensation cost related to time vesting options not yet recognized was $5.1 million, which will be recognized over a weighted-average period of 1.6 years. Unless otherwise prohibited by law in local jurisdictions, time vesting options will continue to vest according to the 2017 Stock Option Plan (the "2017 Plan") and the applicable award agreements. Restricted Stock Units The following is a summary of RSU activity for the six months ended June 30, 2023: Number of RSUs Weighted Average Grant Date Fair Value Unvested balance at December 31, 2022 13,013,946 $ 17.37 Granted 337,699 8.17 Forfeited (855,232) 17.88 Vested (1) (955,725) 21.93 Unvested balance at June 30, 2023 11,540,688 $ 16.69 (1) Includes 0.3 million shares that were net settled when released and returned to the share pool for future grants. As of June 30, 2023, to tal compensation cost related to RSUs not yet recognized was $112.7 million, of which $93.0 million is primarily related to the annual grant and considered recurring. The remainder of $19.7 million is IPO related or associated with one-time grants and considered non-recurring. The total unamortized expense is anticipated to be recognized over a weighted-average period of 2.4 years. Performance Stock Units The following is a summary of PSU activity for the six months ended June 30, 2023: Number of PSUs Weighted Average Grant Date Fair Value Unvested balance at December 31, 2022 76,697 $ 20.11 Granted (1) 737,483 8.44 Adjustment for PSUs expected to vest as of current period end (725,341) 8.25 Forfeited — — Vested — — Unvested balance at June 30, 2023 88,839 $ 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 June 30, 2023, total compensation co st related to PSUs not yet recognized was $6.0 million. The unamortized expense is anticipated to be recognized over a weighted-average period of 2.2 years. |
Credit Agreements
Credit Agreements | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Credit Agreements | Credit Agreements Our subsidiaries are party to an amended and restated credit agreement, dated December 9, 2022 (as amended, the “Credit Agreement”), among Thoughtworks, Inc., Turing Acquisition LLC and Turing Midco LLC, Turing Topco LLC (“Holdings”), Credit Suisse AG, Cayman Islands Branch, as administrative agent, the lenders party thereto and the other parties from time-to-time party thereto, which provides for a senior secured term loan (the "Term Loan") of $715.0 million and a senior secured revolving credit facility (the "Revolver") of $300.0 million. On February 24, 2023, 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 condensed consolidated statements of loss and comprehensive loss for the six months ended June 30, 2023 . On May 18, 2023, the Company amended and restated its credit agreement (the “Third Amendment and Restatement”) to transition the reference rate for the Term Loan borrowings under the Credit Agreement from LIBOR to SOFR. The following table presents the Company's outstanding debt and borrowing capacity (in thousands, except percentages): June 30, 2023 December 31, 2022 Availability under Revolver (due March 26, 2026) $ 300,000 $ 300,000 Borrowings under Revolver $ — $ — Long-term debt (due March 24, 2028), including current portion (1) $ 296,529 $ 399,006 Interest rate 7.7 % 6.9 % (1) The balance includes deferred financing fees. A reconciliation of gross to net amounts is presented below. The following table presents the carrying value of the Company’s credit facilities (including current maturities) (in thousands): June 30, 2023 December 31, 2022 Long-term debt, less current portion $ 291,763 $ 395,338 Capitalized deferred financing fees (2,384) (3,482) Long-term debt 289,379 391,856 Current portion of long-term debt 7,150 7,150 Total debt carrying value $ 296,529 $ 399,006 The Company estimates the fair value of the Term Loan using current market yields. These current market yields are considered Level 2 inputs. The book value of the Company’s credit facilities is considered to approximate its fair value as of June 30, 2023 as the interest rates are considered in line with current market rates. The fair value of the Term Loan was $392.0 million as of December 31, 2022. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses The following is a summary of the Company’s accrued expenses (in thousands): June 30, 2023 December 31, 2022 Accrued interest expense $ 194 $ 221 Accrued employee expense 1,393 2,016 Accrued travel expense 566 281 Operating lease expenses 406 425 Insurance charges 243 198 Professional fees 5,681 6,321 Withholding taxes payable 178 43 Other taxes payable 896 1,815 Rebates payable 1,116 1,168 Contingent consideration — 14,255 Other accrued expenses 3,733 3,484 Accrued expenses $ 14,406 $ 30,227 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Restructuring Actions On August 8, 2023, the Company announced that its Board of Directors approved and committed to a structural reorganization (the "Reorganization") on August 7, 2023 that will (i) move its operational functions from a geographic to a centralized model, (ii) create a new organizational home for the majority of its client facing workforce, our Digital Engineering Center, and (iii) evolve its regional market structure. Centralizing operations globally is expected to reduce overall costs, better align its resources to strategic priorities, right-size its operations, and increase operational efficiencies. The new Digital Engineering Center will provide supply across the regional markets and is expected to allow the Company to optimize resource allocation globally to better align to clients’ needs. Finally, these changes will enable its regional markets to have a more client and industry-based go-to-market focus while continuing to fund its investments in demand generation. The majority of the actions will be taken in the third quarter of 2023 and are expected to be completed within the next twelve months. The actions are expected to impact approximately 5% to 6% of our employee headcount globally. Thoughtworks expects to incur total pre-tax cash charges of approximately $20 million to $25 million (the “Total Charges”), of which approximately $18 million to $20 million are expected to be recognized in 2023. The Total Charges include $18 million to $22 million in wage-related expenses, such as employee severance and related benefits, and $2 million to $3 million in non-wage related expenses, including costs related to reducing leased office space, vendor contract cancellations and professional fees. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||||
Net loss | $ (12,272) | $ (8,107) | $ (39,308) | $ (43,585) | $ (20,379) | $ (82,893) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 shares | Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | During the three months ended June 30, 2023, the following directors or executive officers of the Company adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933): Name and Position Plan Adoption/Termination Plan Adoption/Termination Date Duration of the Plan (Expiration Date) Number of Shares to be Purchased (Sold) under Plan Rebecca Parsons Adoption May 17, 2023 May 31, 2024 (17,507) CTO Emerita | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Rebecca Parsons [Member] | ||
Trading Arrangements, by Individual | ||
Name | Rebecca Parsons | |
Title | CTO Emerita | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | May 17, 2023 | |
Aggregate Available | (17,507) | (17,507) |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | The accompanying unaudited condensed consolidated financial statements include the accounts of Thoughtworks Holding, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s 2022 Annual Report. Certain amounts in the prior period consolidated financial statements and notes have been reclassified to conform to the 2023 presentation. These reclassifications had no effect on results of operations previously reported. |
Preparation of Financial Statements | The preparation of these condensed consolidated financial statements is in conformity with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. 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. |
Use of Estimates | 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 condensed consolidated financial statements in the future. Operating results for interim periods are not necessarily indicative of results that may be expected to occur for the entire year. In management’s opinion, all adjustments considered necessary for a fair presentation of the accompanying unaudited condensed consolidated financial statements have been included, and all adjustments are of a normal and recurring nature. |
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 to secure bank guarantees of amounts related to government requirements and as collateral for a corporate credit card. |
Allowance for Credit Losses | 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. |
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements Not Yet Adopted | 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 adopted the standard in the first quarter of 2023. The adoption did not have a material impact on the Company's condensed consolidated financial statements. 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 London Interbank Offer Rate ("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 elected to utilize the temporary optional expedients in connection with the amendment of our credit agreement, which transitioned the Term Loan from LIBOR to the Secured Overnight Financing Rate (“SOFR”) on May 18, 2023. Refer to Note 8, Credit Agreements. |
Change in Accounting Principle - Stock-Based Compensation | 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. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounts Receivable, Allowance for Credit Loss | Activity related to the Company’s allowance for credit losses is as follows (in thousands): Six Months Ended June 30, 2023 Allowance for credit losses, beginning balance $ (9,531) Current provision for expected credit losses (2,596) Write-offs charged against allowance 4,648 Recoveries of amounts previously written off (96) Changes due to exchange rates (340) Allowance for credit losses, ending balance $ (7,915) |
Schedule of Error Correction | A summary of the impact on the condensed consolidated statements of cash flows is as follows for the six months ended June 30, 2023 (in thousands): Six Months Ended June 30, 2023 As reported Adjustment As restated Cash flows from operating activities: Accrued expenses and other liabilities $ (42,512) $ 13,996 $ (28,516) Net cash provided by operating activities $ 16,247 $ 13,996 $ 30,243 Cash flows from financing activities: Payment of contingent consideration $ — $ (13,996) $ (13,996) Net cash used in financing activities $ (103,039) $ (13,996) $ (117,035) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 North America (1) $ 105,775 $ 131,486 $ 218,089 $ 253,435 APAC (2) 100,465 109,674 200,627 211,880 Europe (3) 70,182 76,603 153,232 159,529 LATAM 10,793 14,344 22,323 28,203 Total revenues $ 287,215 $ 332,107 $ 594,271 $ 653,047 (1) For the three months ended June 30, 2023 and 2022, the United States re presented 35.8%, or $102.7 million, and 37.2%, or $123.5 million, respectively, of the Company’s total revenues. For the six months ended June 30, 2023 and 2022 , the United States represented 35.5%, or $211.1 million, and 36.5%, or $238.6 million, of the Company’s total revenues, respectively. Canadian operations were determined to be immaterial given revenue as a percentage of total North America revenues was less than 10% for the three and six months ended June 30, 2023 and 2022. (2) For the three months ended June 30, 2023 and 2022 , Australia represented 10.5%, or $30.3 million, and 12.0%, or $39.8 million, respectively, of the Company's total revenues. For the six months ended June 30, 2023 and 2022 , Australia represented 10.0%, or $59.2 million, and 11.7%, or $76.1 million, of the Company's total revenues, respectively. (3) For the three months ended June 30, 2023 and 2022 , revenue in the United Kingdom as a percentage of the Company's total revenues was less than 10%. For the six months ended June 30, 2023 and 2022, the United Kingdom represented 10.0%, or $59.5 million, and 10.8%, or $70.3 million, respectively, of the Company’s total revenues. For the three months ended June 30, 2023, Germany represented 10.6%, or $30.5 million of the Company's total revenues. For the six months ended June 30, 2023, Germany represented 10.7%, or $63.3 million of the Company's total revenues. For the three and six months ended June 30, 2022, revenue in Germany as a percentage of the Company’s total revenues was less than 10%. |
Disaggregation of Revenue | The following table presents the disaggregation of the Company’s revenues by industry vertical (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Technology and business services $ 69,695 $ 95,247 $ 143,828 $ 180,596 Energy, public and health services 75,313 76,605 159,352 153,715 Retail and consumer 44,485 62,628 92,397 125,063 Financial services and insurance 52,778 59,671 107,933 118,135 Automotive, travel and transportation 44,944 37,956 90,761 75,538 Total revenues $ 287,215 $ 332,107 $ 594,271 $ 653,047 The following table presents the disaggregation of the Company’s revenues by contract type (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Time-and-material $ 235,119 $ 275,932 $ 492,369 $ 547,295 Fixed-price 52,096 56,175 101,902 105,752 Total revenues $ 287,215 $ 332,107 $ 594,271 $ 653,047 |
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 June 30, 2023 As of December 31, 2022 Contract assets included in unbilled receivables $ 39,548 $ 39,941 Contract liabilities included in deferred revenue $ 6,007 $ 5,167 |
Schedule of Costs to Obtain Contracts and Related Amortization and Impairment | The following table is a summary of the Company’s costs to obtain contracts and related amortization and impairment where the amortization period of the assets is greater than one year (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Balance at beginning of period $ 1,391 $ 1,814 $ 1,588 $ 2,039 Costs to obtain contracts capitalized 281 147 349 238 Amortization of capitalized costs (859) (310) (1,127) (625) Changes due to exchange rates 12 (9) 15 (10) Balance at end of period $ 825 $ 1,642 $ 825 $ 1,642 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The Company's preliminary 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 $ 1,788 Trade receivables, net of allowance 1,251 Customer relationships, net (1) 3,500 Goodwill 13,766 Accounts payable (110) Accrued compensation (363) Accrued expenses (927) Deferred revenue (235) Income taxes payable (178) Lease liabilities, current (173) Deferred tax liabilities (1,050) Other assets/liabilities, net 508 Total gross purchase price $ 17,777 (1) The weighted average amortization period is four years. |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The following table presents the change in the contingent consideration liability (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Balance at beginning of period $ 14,267 $ — $ 14,255 $ — Additions in the period — 13,996 — 13,996 Payments in the period (14,344) — (14,344) — Change in fair value 129 528 129 528 Change due to exchange rates (52) (142) (40) (142) Balance at end of period $ — $ 14,382 $ — $ 14,382 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022 $ 405,017 Additions due to acquisitions 13,766 Changes due to exchange rates 3,530 Balance as of June 30, 2023 $ 422,313 |
Schedule of Finite-Lived Intangible Assets | The following is a summary of other intangible assets (in thousands): June 30, 2023 December 31, 2022 Customer relationships $ 196,947 $ 193,447 Less accumulated amortization (66,618) (59,369) Customer relationships, net 130,329 134,078 Trademark 273,000 273,000 Total other intangible assets, after amortization 403,329 407,078 Changes due to exchange rates (9,652) (10,031) Other intangible assets, net $ 393,677 $ 397,047 |
Schedule of Indefinite-Lived Intangible Assets | The following is a summary of other intangible assets (in thousands): June 30, 2023 December 31, 2022 Customer relationships $ 196,947 $ 193,447 Less accumulated amortization (66,618) (59,369) Customer relationships, net 130,329 134,078 Trademark 273,000 273,000 Total other intangible assets, after amortization 403,329 407,078 Changes due to exchange rates (9,652) (10,031) Other intangible assets, net $ 393,677 $ 397,047 |
Schedule of Estimated Amortization Expense | As of June 30, 2023, estimated amortization expense for the next five years and thereafter is as follows (in thousands): Remainder of 2023 $ 7,755 2024 15,510 2025 15,510 2026 15,510 2027 14,708 Thereafter 61,336 $ 130,329 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net (Loss) Income Per Common Share | The components of basic and diluted loss per share are as follows (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net loss $ (12,272) $ (39,308) $ (20,379) $ (82,893) Denominator: Weighted average shares outstanding – Basic and diluted 317,341,907 310,575,050 316,899,214 308,394,443 Basic and diluted loss per share $ (0.04) $ (0.13) $ (0.06) $ (0.27) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities were excluded from the computation of diluted loss per share because the impact of including them would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Employee stock options, RSUs and performance stock units ("PSUs") 17,170,149 24,376,880 19,018,901 25,847,639 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of revenues $ 10,696 $ 49,573 $ 21,226 $ 119,482 Selling, general and administrative expenses 6,910 19,392 14,059 49,666 Total stock-based compensation expense $ 17,606 $ 68,965 $ 35,285 $ 169,148 |
Schedule of Option Activity | The following is a summary of performance and time vesting stock option activity for the six months ended June 30, 2023 (in thousands, except share and per share data): Number of Stock Options Weighted Average Exercise Price Aggregate Weighted- Balance at December 31, 2022 21,607,562 $ 3.83 Granted — — Forfeited (217,638) 11.85 Exercised (1,308,049) 2.92 Cancelled — — Expired — — Balance at June 30, 2023 20,081,875 $ 3.81 $ 87,637 5.1 Exercisable at June 30, 2023 19,392,211 $ 3.58 $ 86,927 5 |
Schedule of Restricted Stock Units Activity | The following is a summary of RSU activity for the six months ended June 30, 2023: Number of RSUs Weighted Average Grant Date Fair Value Unvested balance at December 31, 2022 13,013,946 $ 17.37 Granted 337,699 8.17 Forfeited (855,232) 17.88 Vested (1) (955,725) 21.93 Unvested balance at June 30, 2023 11,540,688 $ 16.69 (1) Includes 0.3 million shares that were net settled when released and returned to the share pool for future grants. |
Share-based Payment Arrangement, Performance Shares, Activity | The following is a summary of PSU activity for the six months ended June 30, 2023: Number of PSUs Weighted Average Grant Date Fair Value Unvested balance at December 31, 2022 76,697 $ 20.11 Granted (1) 737,483 8.44 Adjustment for PSUs expected to vest as of current period end (725,341) 8.25 Forfeited — — Vested — — Unvested balance at June 30, 2023 88,839 $ 20.11 (1) Reflects shares granted at 100%. |
Credit Agreements (Tables)
Credit Agreements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facilities | The following table presents the Company's outstanding debt and borrowing capacity (in thousands, except percentages): June 30, 2023 December 31, 2022 Availability under Revolver (due March 26, 2026) $ 300,000 $ 300,000 Borrowings under Revolver $ — $ — Long-term debt (due March 24, 2028), including current portion (1) $ 296,529 $ 399,006 Interest rate 7.7 % 6.9 % (1) The balance includes deferred financing fees. A reconciliation of gross to net amounts is presented below. The following table presents the carrying value of the Company’s credit facilities (including current maturities) (in thousands): June 30, 2023 December 31, 2022 Long-term debt, less current portion $ 291,763 $ 395,338 Capitalized deferred financing fees (2,384) (3,482) Long-term debt 289,379 391,856 Current portion of long-term debt 7,150 7,150 Total debt carrying value $ 296,529 $ 399,006 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | The following is a summary of the Company’s accrued expenses (in thousands): June 30, 2023 December 31, 2022 Accrued interest expense $ 194 $ 221 Accrued employee expense 1,393 2,016 Accrued travel expense 566 281 Operating lease expenses 406 425 Insurance charges 243 198 Professional fees 5,681 6,321 Withholding taxes payable 178 43 Other taxes payable 896 1,815 Rebates payable 1,116 1,168 Contingent consideration — 14,255 Other accrued expenses 3,733 3,484 Accrued expenses $ 14,406 $ 30,227 |
Business and Summary of Signi_4
Business and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Concentration Risk [Line Items] | |||||||
Property and equipment, net | $ 32,062 | $ 32,062 | $ 38,798 | ||||
(Increase) decrease to net loss | $ (12,272) | $ (8,107) | $ (39,308) | $ (43,585) | $ (20,379) | $ (82,893) | |
Basic loss per common share (in USD per share) | $ 0.04 | $ 0.13 | $ 0.06 | $ 0.27 | |||
Diluted loss per common share (in USD per share) | $ 0.04 | $ 0.13 | $ 0.06 | $ 0.27 | |||
Revision of Prior Period, Adjustment | |||||||
Concentration Risk [Line Items] | |||||||
(Increase) decrease to net loss | $ (9,300) | $ 7,000 | |||||
Basic loss per common share (in USD per share) | $ (0.03) | $ 0.02 | |||||
Diluted loss per common share (in USD per share) | $ (0.03) | $ 0.02 | |||||
Non-US | |||||||
Concentration Risk [Line Items] | |||||||
Property and equipment, net | $ 23,800 | $ 23,800 | $ 30,000 | ||||
Non-US | Revenue Benchmark | Geographic Concentration Risk | |||||||
Concentration Risk [Line Items] | |||||||
Concentration risk | 66% | 62% | 66% | 63% | |||
Non-US | Trade Accounts Receivable and Unbilled Accounts Receivable | Geographic Concentration Risk | |||||||
Concentration Risk [Line Items] | |||||||
Concentration risk | 69% | 74% |
Business and Summary of Signi_5
Business and Summary of Significant Accounting Policies - Schedule of Allowance For Credit Losses (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit losses, beginning balance | $ (9,531) | |
Current provision for expected credit losses | (2,596) | $ (2,038) |
Write-offs charged against allowance | 4,648 | |
Recoveries of amounts previously written off | (96) | |
Changes due to exchange rates | (340) | |
Allowance for credit losses, ending balance | $ (7,915) |
Business and Summary of Signi_6
Business and Summary of Significant Accounting Policies - Schedule of Error Correction (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Accrued expenses and other liabilities | $ (28,516) | $ (5,012) |
Net cash provided by operating activities | 30,243 | 21,477 |
Cash flows from financing activities: | ||
Payment of contingent consideration | (13,996) | 0 |
Net cash used in financing activities | (117,035) | $ (54,199) |
As reported | ||
Cash flows from operating activities: | ||
Accrued expenses and other liabilities | (42,512) | |
Net cash provided by operating activities | 16,247 | |
Cash flows from financing activities: | ||
Payment of contingent consideration | 0 | |
Net cash used in financing activities | (103,039) | |
Adjustment | ||
Cash flows from operating activities: | ||
Accrued expenses and other liabilities | 13,996 | |
Net cash provided by operating activities | 13,996 | |
Cash flows from financing activities: | ||
Payment of contingent consideration | (13,996) | |
Net cash used in financing activities | $ (13,996) |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) industryVertical | Jun. 30, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||||
Number of industry verticals | industryVertical | 5 | |||
Revenue recognized | $ | $ 0.8 | $ 2.5 | $ 4.3 | $ 12.6 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue by Geographical Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 287,215 | $ 332,107 | $ 594,271 | $ 653,047 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 105,775 | 131,486 | 218,089 | 253,435 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 102,700 | $ 123,500 | $ 211,100 | $ 238,600 |
United States | Revenue Benchmark | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk | 35.80% | 37.20% | 35.50% | 36.50% |
APAC | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 100,465 | $ 109,674 | $ 200,627 | $ 211,880 |
Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 30,300 | $ 39,800 | $ 59,200 | $ 76,100 |
Australia | Revenue Benchmark | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk | 10.50% | 12% | 10% | 11.70% |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 70,182 | $ 76,603 | $ 153,232 | $ 159,529 |
United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 59,500 | $ 70,300 | ||
United Kingdom | Revenue Benchmark | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk | 10% | 10.80% | ||
Germany | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 30,500 | $ 63,300 | ||
Germany | Revenue Benchmark | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk | 10.60% | 10.70% | ||
LATAM | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 10,793 | $ 14,344 | $ 22,323 | $ 28,203 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Revenue by Industry (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 287,215 | $ 332,107 | $ 594,271 | $ 653,047 |
Technology and business services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 69,695 | 95,247 | 143,828 | 180,596 |
Energy, public and health services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 75,313 | 76,605 | 159,352 | 153,715 |
Retail and consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 44,485 | 62,628 | 92,397 | 125,063 |
Financial services and insurance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 52,778 | 59,671 | 107,933 | 118,135 |
Automotive, travel and transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 44,944 | $ 37,956 | $ 90,761 | $ 75,538 |
Revenue Recognition - Schedul_3
Revenue Recognition - Schedule of Revenue by Contract Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 287,215 | $ 332,107 | $ 594,271 | $ 653,047 |
Time-and-material | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 235,119 | 275,932 | 492,369 | 547,295 |
Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 52,096 | $ 56,175 | $ 101,902 | $ 105,752 |
Revenue Recognition - Schedul_4
Revenue Recognition - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets included in unbilled receivables | $ 39,548 | $ 39,941 |
Contract liabilities included in deferred revenue | $ 6,007 | $ 5,167 |
Revenue Recognition - Schedul_5
Revenue Recognition - Schedule of Costs to Obtain Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Capitalized Contract Cost [Roll Forward] | ||||
Balance at beginning of period | $ 1,391 | $ 1,814 | $ 1,588 | $ 2,039 |
Costs to obtain contracts capitalized | 281 | 147 | 349 | 238 |
Amortization of capitalized costs | (859) | (310) | (1,127) | (625) |
Changes due to exchange rates | 12 | (9) | 15 | (10) |
Balance at end of period | $ 825 | $ 1,642 | $ 825 | $ 1,642 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||||
May 04, 2023 | Feb. 01, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||||||||
Acquisitions, net of cash acquired | $ 15,989 | $ 65,410 | |||||||||
ITOC Pty Ltd | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Gross purchase price | $ 17,800 | ||||||||||
Acquisitions, net of cash acquired | 16,000 | ||||||||||
Cash acquired from acquisition | $ 1,800 | ||||||||||
Acquisition related costs | $ 1,400 | 2,500 | |||||||||
Connected | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Contingent consideration liability | 0 | $ 14,382 | 0 | 14,382 | $ 14,267 | $ 14,255 | $ 14,000 | $ 0 | $ 0 | ||
Payments in the period | $ 14,300 | $ 14,344 | $ 0 | $ 14,344 | $ 0 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisition (Details) - USD ($) $ in Thousands | Feb. 01, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 422,313 | $ 405,017 | |
ITOC Pty Ltd | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 1,788 | ||
Trade receivables, net of allowance | 1,251 | ||
Customer relationships, net | 3,500 | ||
Goodwill | 13,766 | ||
Accounts payable | (110) | ||
Accrued compensation | (363) | ||
Accrued expenses | (927) | ||
Deferred revenue | (235) | ||
Income taxes payable | (178) | ||
Lease liabilities, current | (173) | ||
Deferred tax liabilities | (1,050) | ||
Other assets/liabilities, net | 508 | ||
Total gross purchase price | $ 17,777 | ||
Weighted average useful life | 4 years |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Acquisitions by Acquisition, Contingent Consideration (Details) - Connected - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
May 04, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Business Acquisition, Contingent Consideration [Line Items] | |||||
Balance at beginning of period | $ 14,267 | $ 0 | $ 14,255 | $ 0 | |
Additions in the period | 0 | 13,996 | 0 | 13,996 | |
Payments in the period | $ (14,300) | (14,344) | 0 | (14,344) | 0 |
Change in fair value | 129 | 528 | 129 | 528 | |
Change due to exchange rates | (52) | (142) | (40) | (142) | |
Balance at end of period | $ 0 | $ 14,382 | $ 0 | $ 14,382 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 405,017 |
Additions due to acquisitions | 13,766 |
Changes due to exchange rates | 3,530 |
Ending balance | $ 422,313 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, net | $ 130,329 | |
Trademark | 273,000 | $ 273,000 |
Total other intangible assets, after amortization | 403,329 | 407,078 |
Changes due to exchange rates | (9,652) | (10,031) |
Other intangible assets, net | 393,677 | 397,047 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Trademark | 273,000 | 273,000 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 196,947 | 193,447 |
Less accumulated amortization | (66,618) | (59,369) |
Finite-lived intangible assets, net | $ 130,329 | $ 134,078 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization of intangible assets | $ 3.7 | $ 3.3 | $ 7.3 | $ 6.3 | |
Weighted average remaining useful life | 8 years 7 months 6 days | 8 years 7 months 6 days | 9 years 2 months 12 days |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Schedule of Estimated Amortization (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2023 | $ 7,755 |
2024 | 15,510 |
2025 | 15,510 |
2026 | 15,510 |
2027 | 14,708 |
Thereafter | 61,336 |
Finite-lived intangible assets, net | $ 130,329 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (60.00%) | (1.20%) | (142.10%) | (6.20%) |
Loss Per Share - Schedule of (L
Loss Per Share - Schedule of (Loss) Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||||
Net loss | $ (12,272) | $ (8,107) | $ (39,308) | $ (43,585) | $ (20,379) | $ (82,893) |
Denominator: | ||||||
Weighted average shares outstanding, basic (in shares) | 317,341,907 | 310,575,050 | 316,899,214 | 308,394,443 | ||
Weighted average shares outstanding, diluted (in shares) | 317,341,907 | 310,575,050 | 316,899,214 | 308,394,443 | ||
Basic loss per common share (in USD per share) | $ (0.04) | $ (0.13) | $ (0.06) | $ (0.27) | ||
Diluted loss per common share (in USD per share) | $ (0.04) | $ (0.13) | $ (0.06) | $ (0.27) |
Loss Per Share - Schedule of An
Loss Per Share - Schedule of Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Employee stock options, RSUs and performance stock units ("PSUs") | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of Earnings Per Share (in shares) | 17,170,149 | 24,376,880 | 19,018,901 | 25,847,639 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 17,606 | $ 68,965 | $ 35,285 | $ 169,148 |
Cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | 10,696 | 49,573 | 21,226 | 119,482 |
Selling, general and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 6,910 | $ 19,392 | $ 14,059 | $ 49,666 |
Stock-Based Compensation- Sched
Stock-Based Compensation- Schedule of Option Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | |
Number of Stock Options | |
Beginning balance (in shares) | shares | 21,607,562 |
Granted (in shares) | shares | 0 |
Forfeited (in shares) | shares | (217,638) |
Exercised (in shares) | shares | (1,308,049) |
Cancelled (in shares) | shares | 0 |
Expired (in shares) | shares | 0 |
Ending balance (in shares) | shares | 20,081,875 |
Exercisable (in shares) | shares | 19,392,211 |
Weighted Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 3.83 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 11.85 |
Exercised (in dollars per share) | $ / shares | 2.92 |
Cancelled (in dollars per share) | $ / shares | 0 |
Expired (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | 3.81 |
Weighted average exercise price, Exercisable (in dollars per share) | $ / shares | $ 3.58 |
Aggregate Intrinsic Value and Weighted-Average Remaining Contractual Term (years) | |
Aggregate Intrinsic Value | $ | $ 87,637 |
Aggregate Intrinsic Value, Exercisable | $ | $ 86,927 |
Weighted-average period of recognition | 5 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Exercisable | 5 years |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Time Vesting Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation costs not yet recognized | $ 5,100 |
Compensation costs, weighted average period of recognition | 1 year 7 months 6 days |
RSU's | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation costs, weighted average period of recognition | 2 years 4 months 24 days |
Compensation costs, (other than options) not yet recognized | $ 112,700 |
Cost not yet recognized | 93,000 |
RSU's | IPO | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation costs, (other than options) not yet recognized | $ 19,700 |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation costs, weighted average period of recognition | 2 years 2 months 12 days |
Compensation costs, (other than options) not yet recognized | $ 6,000 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of RSUs | |
Beginning balance (in shares) | 13,013,946 |
Granted (in shares) | 337,699 |
Forfeited (in shares) | (855,232) |
Vested (in shares) | (955,725) |
Ending balance (in shares) | 11,540,688 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 17.37 |
Granted (in dollars per share) | $ / shares | 8.17 |
Forfeited (in dollars per share) | $ / shares | 17.88 |
Vested (in dollars per share) | $ / shares | 21.93 |
Ending balance (in dollars per share) | $ / shares | $ 16.69 |
Net settled (in shares) | 300,000 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Performance Share Units Activity (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of PSUs | |
Performance adjustment (in shares) | shares | (725,341) |
Weighted Average Grant Date Fair Value | |
Performance adjustment (in dollars per share) | $ / shares | $ 8.25 |
Performance Shares | |
Number of PSUs | |
Beginning balance (in shares) | shares | 76,697 |
Granted (in shares) | shares | 737,483 |
Forfeited (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Ending balance (in shares) | shares | 88,839 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 20.11 |
Granted (in dollars per share) | $ / shares | 8.44 |
Forfeited (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 20.11 |
Credit Agreements - Narrative (
Credit Agreements - Narrative (Details) - USD ($) | Feb. 24, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 09, 2022 |
Debt Instrument [Line Items] | ||||
Write off of deferred financing fees | $ 900,000 | |||
Line of Credit | Credit Agreements | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | |
Line of Credit | Credit Agreements | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Term loan | $ 715,000,000 | |||
Repayments of debt | $ 100,000,000 | |||
Term loan, fair value | $ 392,000,000 |
Credit Agreements - Schedule of
Credit Agreements - Schedule of Borrowings (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 09, 2022 |
Debt Instrument [Line Items] | |||
Long-term debt (due March 24, 2028), including current portion | $ 296,529,000 | $ 399,006,000 | |
Interest rate | 7.70% | 6.90% | |
Line of Credit | Credit Agreements | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Availability under Revolver (due March 26, 2026) | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 |
Borrowings under Revolver | $ 0 | $ 0 |
Credit Agreements - Schedule _2
Credit Agreements - Schedule of Credit Facilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Long-term debt, less current portion | $ 291,763 | $ 395,338 |
Capitalized deferred financing fees | (2,384) | (3,482) |
Long-term debt | 289,379 | 391,856 |
Current portion of long-term debt | 7,150 | 7,150 |
Total debt carrying value | $ 296,529 | $ 399,006 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued interest expense | $ 194 | $ 221 |
Accrued employee expense | 1,393 | 2,016 |
Accrued travel expense | 566 | 281 |
Operating lease expenses | 406 | 425 |
Insurance charges | 243 | 198 |
Professional fees | 5,681 | 6,321 |
Withholding taxes payable | 178 | 43 |
Other taxes payable | 896 | 1,815 |
Rebates payable | 1,116 | 1,168 |
Contingent consideration | 0 | 14,255 |
Other accrued expenses | 3,733 | 3,484 |
Accrued expenses | $ 14,406 | $ 30,227 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Reorganization $ in Millions | Aug. 08, 2023 USD ($) |
Minimum | |
Subsequent Event [Line Items] | |
Number of positions expected to be eliminated | 5% |
Expected restructuring costs | $ 20 |
Expected restructuring costs remainder of the year | $ 18 |
Maximum | |
Subsequent Event [Line Items] | |
Number of positions expected to be eliminated | 6% |
Expected restructuring costs | $ 25 |
Expected restructuring costs remainder of the year | 20 |
Employee Severance | Minimum | |
Subsequent Event [Line Items] | |
Expected restructuring costs | 18 |
Employee Severance | Maximum | |
Subsequent Event [Line Items] | |
Expected restructuring costs | 22 |
Other Restructuring | Minimum | |
Subsequent Event [Line Items] | |
Expected restructuring costs | 2 |
Other Restructuring | Maximum | |
Subsequent Event [Line Items] | |
Expected restructuring costs | $ 3 |
Uncategorized Items - twks-2023
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |