Summary of Significant Accounting Policies | Note 3 Summary of Significant Accounting Policies A description of the Company’s significant accounting policies is included in the audited financial statements within its Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2022. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an initial maturity date of three months or less to be cash equivalents. Funds held as investments in money market funds are included within cash and cash equivalents. As of September 30, 2022, the Company had approximately $55 million invested in money market accounts. Financial Instruments and Fair Value Measurements The Company has investments in money market accounts, which are included in cash and cash equivalents on the condensed consolidated balance sheets. Fair value inputs for these investments are considered Level 1 measurements within the Fair Value Hierarchy, as money market account fair values are known and observable through daily published floating net asset values. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification 606 (“ASC 606”), Revenue from Contracts with Customers. The Company derives its revenues primarily from fees for platform subscription and managed services provided to clients. Revenues are recognized when control of these services are transferred to the Company’s clients in an amount that reflects the consideration the Company expects to be entitled to in exchange for these services. Revenues are recognized net of taxes that will be remitted to governmental agencies applicable to service contacts. Historically, platform subscription contracts have typically had a one-year term and were cancellable with 30 days’ notice. Beginning in the first quarter of 2021, our default platform subscription contract has had a multi-year term and did not allow termination for convenience, though each contract has and can be negotiated with varying term lengths, with or without a termination for convenience clause. Clients are invoiced each month for the services provided in accordance with the stated terms of their service contracts. Fees for partial term service contracts are prorated, as applicable. Payment of fees are due from clients within 30 days of the invoice date. The Company does not provide financing to clients. The Company determines revenue recognition through the following five-step framework: ● Identification of the contract, or contracts, with a client; ● Identification of the performance obligation in the contract; ● Determination of transaction price; ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when, or as, performance obligations are satisfied. Platform subscription revenues Platform subscription revenues consist primarily of fees for providing clients with access to the Company’s cloud-based platform. Platform subscription clients do not have the right to take possession of the platform’s software, and do not have any general return rights. Platform subscription revenues are recognized ratably over the period of contractually enforceable rights and obligations, beginning on the date that the client gains access to the platform. Installment payments are invoiced at the end of each calendar month during the subscription term. Managed services revenues Managed services revenues primarily consist of client-selected middle and back-office services provided on our clients’ behalf using the Company’s platform. Revenue is recognized monthly as the managed services are performed, with invoicing occurring at the end of the calendar month. Other revenues Other revenues consists of non-subscription-based revenues, such as data conversion and services that integrate a client’s historical data into our solution. The Company recognizes revenues as these services are performed with invoicing occurring at the end of each month. Service contracts with multiple performance obligations Our service contracts with clients can include multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. However, all distinct performance obligations within a contract are satisfied over a similar period of time with the same measure of progress. Accordingly, each distinct performance obligation within a contract has the same pattern of revenue recognition. The Company has determined that implementation services are not distinct from the ongoing platform subscription services due to the highly specialized knowledge required to execute on our solution. Such services are recognized with the platform subscription services revenue over time. Remaining performance obligations For the Company’s contracts that exceed one year and do not include a termination for convenience clause, the amount of the transaction price allocated to remaining performance obligations as of September 30, 2022 and December 31, 2021 was $32.1 million and $23.4 million, respectively. The Company expects to recognize this amount over the next one Disaggregation of revenue The Company’s total revenues by geographic region, based on the client’s physical location is presented in the following tables (in thousands): Three Months Ended September 30, 2022 2021 Geographic Region Amount Percent Amount Percent Americas* $ 25,109 64.1 % $ 18,821 64.8 % Europe, Middle East and Africa (EMEA) 5,113 13.1 % 3,631 12.5 % Asia Pacific (APAC) 8,929 22.8 % 6,593 22.7 % Total revenues $ 39,151 100.0 % $ 29,045 100.0 % * The Company’s total revenues in the United States were $24.5 million and $18.4 million for the three months ended September 30, 2022 and 2021, respectively. Nine Months Ended September 30, 2022 2021 Geographic Region Amount Percent Amount Percent Americas* $ 70,386 64.1 % $ 52,220 65.4 % Europe, Middle East and Africa (EMEA) 14,063 12.8 % 9,607 12.0 % Asia Pacific (APAC) 25,383 23.1 % 18,020 22.6 % Total revenues $ 109,832 100.0 % $ 79,847 100.0 % * The Company’s total revenues in the United States were $68.8 million and $51.0 million for the nine months ended September 30, 2022 and 2021, respectively. Accounts Receivable As of September 30, 2022 and December 31, 2021, no individual client represented more than 10% of accounts receivable. For the three and nine months ended September 30, 2022 and 2021, respectively, no individual client represented more than 10% of the Company’s total revenues. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02 , Leases Leases Codification Improvements to Topic 842, Leases Leases In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting December 31, 2022. The guidance has not impacted the condensed consolidated financial statements to date. The Company will continue to monitor the impact of the ASU on our consolidated financial statements in the future. |