☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 11-2617163 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities Registered Pursuant to Section 12(b) of the Act: | ||||||||||
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on which Registered | ||||||||
Common Stock, $0.001 Par Value | BLKB | Nasdaq Global Select Market | ||||||||
Securities Registered Pursuant to Section 12(g) of the Act: None | ||||||||||
Large accelerated filer | ☑ | Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
Emerging growth company | ☐ |
Item 12. | Security ownership of certain beneficial owners and management and related stockholder matters | |||||||
Item 13. | Certain relationships and related transactions, and director independence | |||||||
Item 14. | Principal accountant fees and services | |||||||
1 |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS |
2 |
PART I. |
Description of Business |
Market Overview |
2020 Form 10-K | 3 |
Strategy |
4 | 2020 Form 10-K |
2020 Form 10-K | 5 |
6 |
Solutions and Services |
2020 Form 10-K | 7 |
8 | 2020 Form 10-K |
2020 Form 10-K | 9 |
10 | 2020 Form 10-K |
Customers |
Sales and Marketing |
2020 Form 10-K | 11 |
•Niche products are usually developed as a solution for a single problem at an organization and are adopted by similar organizations to solve a specialized need. These are typically offered by vendors who may have deep industry expertise but may not have the resources to expand beyond a specialized area. We believe we compete against these solutions by offering a set of integrated solutions rather than a single point solution, which we believe improves the overall customer experience. In addition, our open platform allows integration to specialized applications so the opportunity for disruption from these competitors is minimized. •Vertical-specific solutions are offered by competitors seeking to meet the enterprise-wide needs of a specific sub-segment of social good community. Typically, these solutions are offered by vendors who may offer either a point solution or integrated suite of products used by a vertical. We believe we compete successfully against these competitors through a combination of our integrated suite of offerings within verticals where we compete, offering solutions with market leading robustness as well as the scale, reach, and reputation of our organization. • |
General business software vendors, such as Salesforce.com and Oracle, compete with us in certain areas of our business. While there is a growing trend toward social investment that is prompting philanthropic solutions from these general business vendors, most do not have a complete nonprofit specific focus and, therefore, do not offer or intend to offer nonprofit-specific versions for outside sales. However, there is a subset of general business software competitors who have introduced nonprofit-specific versions of their products. These products generally do not satisfy the needs of nonprofits from end-to-end as they were not designed to support the specific needs of nonprofits during the original architecture, design, and requirements elicitation phases; therefore, we believe that because these products were not originally designed for nonprofits, they are not yet fully capable of meeting market needs without significant customization. The significant customization required to transform general business products into nonprofit solutions often requires the use of consultants to guide the implementation, without which, leave the adoption of general business software |
•Consumer-oriented fundraising platforms, such as GoFundMe, Virgin Money Giving and Facebook compete with our business where consumers raise funds directly. To drive adoption of their platforms, these vendors rely on a combination of direct-to-consumer marketing, marketing to nonprofits who in turn market to their supporters, and marketing to intermediate entities such as an event sponsor who will market to participants. We believe we compete well in this market through a combination of positive brand recognition among all three of these groups and the combination of our consumer- and organization-oriented tools relative to those of the competition. |
Technology and Architecture |
12 | 2020 Form 10-K |
Intellectual Property and Other Proprietary Rights |
2020 Form 10-K | 13 |
Seasonality |
Working Capital |
Available Information |
Information About Our Executive Officers |
Name | Age | Title | |||||||||||||
Michael P. Gianoni | President and Chief Executive Officer | ||||||||||||||
Anthony W. Boor | Executive Vice President and Chief Financial Officer | ||||||||||||||
Kevin P. Gregoire | 53 | Executive Vice President and President, Enterprise Markets Group | |||||||||||||
Kevin R. McDearis(1) | 53 | Executive Vice President and Chief Products Officer | |||||||||||||
Kevin W. Mooney | Executive Vice President and President, General Markets Group | ||||||||||||||
Jon W. Olson | Senior Vice President and General Counsel |
14 | 2020 Form 10-K |
2020 Form 10-K | 15 |
Strategic Risks |
16 | 2020 Form 10-K |
2020 Form 10-K | 17 |
18 | 2020 Form 10-K |
Operational Risks |
20 | 2020 Form 10-K |
2020 Form 10-K | 21 |
22 | 2020 Form 10-K |
Financial Risks |
2020 Form 10-K | 23 |
24 | 2020 Form 10-K |
Legal and Compliance Risks |
2020 Form 10-K | 25 |
26 | 2020 Form 10-K |
2020 Form 10-K | 27 |
2020 Form 10-K |
PART II. |
Stock Performance Graph |
December 31, | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||
Blackbaud, Inc. | $ | 100.00 | $ | 153.62 | $ | 150.42 | $ | 223.36 | $ | 149.47 | $ | 190.28 | |||||||||||
Nasdaq Composite Index | 100.00 | 106.96 | 116.45 | 150.96 | 146.67 | 200.49 | |||||||||||||||||
Nasdaq Computer & Data Processing Index | 100.00 | 123.21 | 132.37 | 185.07 | 187.89 | 262.83 |
December 31, | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||||||
Blackbaud, Inc. | $ | 100.00 | $ | 97.92 | $ | 145.40 | $ | 97.30 | $ | 123.87 | $ | 89.73 | |||||||||||||||||||||||
Nasdaq Composite Index | 100.00 | 108.87 | 141.13 | 137.12 | 187.44 | 271.64 | |||||||||||||||||||||||||||||
Nasdaq Computer & Data Processing Index | 100.00 | 107.35 | 150.04 | 152.52 | 213.66 | 305.01 |
2020 Form 10-K | 29 |
Common Stock Acquisitions and Repurchases |
Period | Total number of shares purchased(1) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs(2) | Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) | ||||||||||||||||||||||
Beginning balance, October 1, 2020 | $ | 50,000 | ||||||||||||||||||||||||
October 1, 2020 through October 31, 2020 | — | $ | — | — | 50,000 | |||||||||||||||||||||
November 1, 2020 through November 30, 2020 | 2,733 | 50.01 | — | 250,000 | ||||||||||||||||||||||
December 1, 2020 through December 31, 2020 | 714,049 | 57.42 | 714,000 | 208,999 | ||||||||||||||||||||||
Total | 716,782 | $ | 57.40 | 714,000 | $ | 208,999 |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs(1) | Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) | ||||||||||
Beginning balance, October 1, 2019 | $ | 50,000 | ||||||||||||
October 1, 2019 through October 31, 2019 | 1,870 | $ | 87.33 | — | 50,000 | |||||||||
November 1, 2019 through November 30, 2019 | 4,347 | 84.30 | — | 50,000 | ||||||||||
December 1, 2019 through December 31, 2019 | 37,338 | 79.60 | — | 50,000 | ||||||||||
Total | 43,555 | $ | 80.40 | — | $ | 50,000 |
2020 Form 10-K |
Year ended December 31, | |||||||||||||||||||||||||||||
(in thousands, except per share data) | 2020 | 2019(1) | 2018 | 2017(2) | 2016(2) | ||||||||||||||||||||||||
SUMMARY OF OPERATIONS | |||||||||||||||||||||||||||||
Total revenue | $ | 913,219 | $ | 900,423 | $ | 848,606 | $ | 788,487 | $ | 731,642 | |||||||||||||||||||
Total cost of revenue | 428,065 | 418,424 | 381,742 | 361,904 | 339,220 | ||||||||||||||||||||||||
Gross profit | 485,154 | 481,999 | 466,864 | 426,583 | 392,422 | ||||||||||||||||||||||||
Total operating expenses | 447,911 | 454,854 | 407,447 | 358,405 | 324,198 | ||||||||||||||||||||||||
Income from operations | 37,243 | 27,145 | 59,417 | 68,178 | 68,224 | ||||||||||||||||||||||||
Net income | 7,717 | 11,908 | 44,841 | 73,633 | 45,404 | ||||||||||||||||||||||||
PER SHARE DATA | |||||||||||||||||||||||||||||
Basic net income | $ | 0.16 | $ | 0.25 | $ | 0.95 | $ | 1.58 | $ | 0.98 | |||||||||||||||||||
Diluted net income | 0.16 | 0.25 | 0.93 | 1.54 | 0.96 | ||||||||||||||||||||||||
Cash dividends | 0.12 | 0.48 | 0.48 | 0.48 | 0.48 | ||||||||||||||||||||||||
BALANCE SHEET DATA | |||||||||||||||||||||||||||||
Total assets | $ | 2,044,734 | $ | 1,992,963 | $ | 1,615,305 | $ | 1,797,846 | $ | 1,345,009 | |||||||||||||||||||
Deferred revenue, including current portion | 316,914 | 316,137 | 298,555 | 278,706 | 250,289 | ||||||||||||||||||||||||
Total debt, including current portion | 531,033 | 467,100 | 387,124 | 438,224 | 342,393 | ||||||||||||||||||||||||
Total long-term liabilities | 605,180 | 607,362 | 435,867 | 486,946 | 396,466 |
Year ended December 31, | |||||||||||||||||||
(in thousands, except per share data) | 2019(1) | 2018 | 2017(2) | 2016(2) | 2015 | ||||||||||||||
SUMMARY OF OPERATIONS | |||||||||||||||||||
Total revenue | $ | 900,423 | $ | 848,606 | $ | 788,487 | $ | 731,642 | $ | 637,940 | |||||||||
Total cost of revenue | 418,424 | 381,742 | 361,904 | 339,220 | 304,631 | ||||||||||||||
Gross profit | 481,999 | 466,864 | 426,583 | 392,422 | 333,309 | ||||||||||||||
Total operating expenses | 454,854 | 407,447 | 358,405 | 324,198 | 286,597 | ||||||||||||||
Income from operations | 27,145 | 59,417 | 68,178 | 68,224 | 46,712 | ||||||||||||||
Net income | 11,908 | 44,841 | 73,633 | 45,404 | 25,649 | ||||||||||||||
PER SHARE DATA | |||||||||||||||||||
Basic net income | $ | 0.25 | $ | 0.95 | $ | 1.58 | $ | 0.98 | $ | 0.56 | |||||||||
Diluted net income | 0.25 | 0.93 | 1.54 | 0.96 | 0.55 | ||||||||||||||
Cash dividends | 0.48 | 0.48 | 0.48 | 0.48 | 0.48 | ||||||||||||||
BALANCE SHEET DATA | |||||||||||||||||||
Total assets(3) | $ | 1,992,963 | $ | 1,615,305 | $ | 1,797,846 | $ | 1,345,009 | $ | 1,223,336 | |||||||||
Deferred revenue, including current portion | 316,137 | 298,555 | 278,706 | 250,289 | 237,335 | ||||||||||||||
Total debt, including current portion(3) | 467,100 | 387,124 | 438,224 | 342,393 | 408,087 | ||||||||||||||
Total long-term liabilities(3) | 607,362 | 435,867 | 486,946 | 396,466 | 446,450 |
Executive Summary |
32 | 2020 Form 10-K |
1 | Delight Customers with Innovative Cloud Solutions | |||||||||||||
Drive Sales Effectiveness | ||||||||||||||
3 | Expand Total Addressable Market | |||||||||||||
Improve Operating Efficiency |
2020 Form 10-K | 33 |
Total Revenue ($M) | Income from Operations ($M) | |||||||
YoY Growth (%) | YoY Growth (%) |
+ | |||||||||||
+ | Increase in contractual recurring revenue related to positive demand from customers across our portfolio of cloud solutions | ||||||||||
- | Decrease in one-time consulting revenue primarily from less one-time sales related to | ||||||||||
- | Decrease in one-time analytics revenue as analytics are generally integrated |
34 | 2020 Form 10-K |
+ | Growth in total revenue, as described above | ||||||||||
+ | Decrease in acquisition-related expenses and integration costs of $3.3 million | ||||||||||
- | Increase in stock-based compensation expense of $28.6 million primarily related to the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards | ||||||||||
- | Increase in real estate activity costs of $23.1 million due to our workforce strategy changes in response to the COVID-19 pandemic. For additional details, see "Results of Operations - General and administrative" below. | ||||||||||
- | Increase in corporate costs of $6.3 million primarily related to increases in bad debt expense; for additional details, see Note 2 to our consolidated financial statements in this report | ||||||||||
- | Increase in cost of revenue from a $4.3 million impairment charge during the three months ended June 30, 2020, against certain previously capitalized software development costs, resulting from our decision to accelerate the end of customer support for certain solutions | ||||||||||
- | Other increases in cost of revenue related to increases in data center costs, amortization of software development costs and transaction-based costs |
2020 Form 10-K | 35 |
Customer Retention |
36 | 2020 Form 10-K |
Results of Operations |
Recurring | ||||||||||||||
Revenue ($M) | Cost of revenue ($M) | Gross profit ($M) and gross margin (%) | ||||||||||||
YoY Growth (%) | YoY Growth (%) |
2020 Form 10-K | 37 |
2020 vs. 2019 |
+ | Increase in transactional revenue of $18.3 million, including an accelerated shift toward virtual and online fundraising and charitable giving related to COVID-19 | ||||||||||
+ | Increase in contractual recurring revenue of $15.5 million related to positive demand from customers across our portfolio of cloud solutions | ||||||||||
- | Decrease in maintenance revenue of $14.7 million primarily related to our continuing efforts to migrate customers from legacy on-premises solutions onto our solutions powered by Blackbaud SKY, our modern cloud platform |
+ | Increase in transaction-based costs of $7.5 million related to payment services integrated in our cloud solutions | ||||||||||
+ | Increase in amortization of software development costs of $6.8 million due to investments made on innovation, quality and the integration of our cloud solutions | ||||||||||
+ | Impairment charge of $4.3 million during the three months ended June 30, 2020, against certain previously capitalized software development costs that reduced the carrying value of those assets to zero. The impairment charge resulted primarily from our decision to accelerate the end of customer support for certain solutions. | ||||||||||
+ | Increase in hosting and data center costs of $3.8 million as we are migrating our cloud infrastructure to leading public cloud service providers | ||||||||||
- | Decrease in amortization of intangible assets from business combinations of $5.7 million | ||||||||||
- | Decrease in compensation costs primarily associated with the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards, which are being recognized as stock-based compensation expense between May 1, 2020 and May 1, 2021. These awards may be earned and become eligible for vesting on May 1, 2021 subject to meeting certain performance conditions and the recipient's continued employment with us | ||||||||||
- | Decrease in costs associated with certain retained and managed services contracts for which revenue is included in one-time services and other revenue beginning January 1, 2020, as discussed above |
2019 vs. 2018 |
+ | Increase in subscriptions revenue of $87.8 million related to positive demand across our portfolio of cloud solutions and, to a lesser extent, the inclusion of YourCause, an increase in services embedded in our renewable cloud solution contracts and increased sales of subscription-based retained professional services | ||||||||||
- | Decrease in maintenance revenue of $18.4 million primarily related to our continuing efforts to migrate customers from legacy on-premises solutions onto our solutions powered by Blackbaud SKY, our modern cloud platform |
38 | 2020 Form 10-K |
+ | Increase in transaction-based costs of $13.0 million, related to payment services integrated in our cloud solutions | ||||||||||
+ | Increase in compensation costs of $11.2 million, primarily attributable to an increasing portion of our resources | ||||||||||
+ | Increase in hosting and data center costs of $5.4 million | ||||||||||
+ | Increase in third-party data and tool costs of $5.1 million |
Increase in allocated corporate costs of $5.1 million primarily due to investments in corporate IT, including cyber security and increases in related headcount | |||||||||||
+ | Increase in amortization of software development costs of $4.1 million due to investments made on innovation, quality and the integration of our cloud solutions |
One-time services and other | ||||||||||||||
Revenue ($M) | Cost of revenue ($M) | Gross profit ($M) and gross margin (%) | ||||||||||||
YoY Growth (%) | YoY Growth (%) |
2020 Form 10-K | 39 |
2020 vs. 2019 |
+ | Increase in the mix of retained and managed services contracts we present in one-time services and other. Revenue from retained and managed service contracts that we do not expect to have a term consistent with our cloud solution contracts is included in one-time services and other revenue beginning January 1, 2020. This change in presentation resulted in an increase to one-time services and other revenue and an offsetting decrease in recurring revenue of $16.7 million during the twelve months ended December 31, 2020. | ||||||||||
- | Decrease in one-time consulting revenue of $12.1 million primarily from less one-time sales related to changes in our compensation plans to place greater emphasis on subscription sales of our cloud solutions. Services increasingly being embedded in our renewable cloud solution contracts also contributed to the decrease in one-time services revenue. Our embedded services are recorded as recurring revenue. | ||||||||||
- | Decrease in one-time analytics revenue of $4.2 million as analytics are generally integrated in our cloud solutions | ||||||||||
- | Decrease in conference revenue of $3.6 million as our annual conference, bbcon, was held virtually and provided free of charge | ||||||||||
- | Decrease in onsite training revenue of $1.3 million due to COVID-19 |
+ | Increase in compensation costs of $3.4 million primarily related to an increase in stock-based compensation expense as we replaced our 2020 cash bonus plans and annual merit-based salary increases for our employees with grants of equity awards | ||||||||||
- | Decrease of $4.2 million in costs related to providing our annual user conference, bbcon, virtually | ||||||||||
- | Insignificant decrease in travel costs due to our restriction on non-essential employee travel in response to COVID-19 |
2019 vs. 2018 |
- | Decrease in one-time consulting revenue of $12.6 million. Services are increasingly embedded in our renewable cloud solution contracts and we are selling more subscription-based contracts for retained professional services. | ||||||||||
- | Decrease in one-time analytics revenue of $3.8 million as analytics are generally integrated in our cloud solutions |
40 | 2020 Form 10-K |
Sales, marketing and customer success ($M) | Research and development ($M) | General and administrative ($M) | ||||||||||||
Percentages indicate expenses as a percentage of total revenue |
2020 vs. 2019 |
- | Decrease in compensation costs of $6.5 million primarily related to the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards, which are being recognized as stock-based compensation expense between May 1, 2020 and May 1, 2021. These awards may be earned and become eligible for vesting on May 1, 2021 subject to meeting certain performance conditions and the recipient's continued employment with us | ||||||||||
- | Decrease in travel costs of $5.7 million due to our restriction on non-essential employee travel in response to COVID-19 | ||||||||||
- | Decrease in commissions costs of $1.4 million related to a decrease in commissionable sales |
2019 vs. 2018 |
+ | Increase in compensation costs of $21.2 million primarily associated with our efforts beginning in the second half of 2018 to increase our direct sales force as well as incremental headcount associated with the inclusion of YourCause. As a result, our direct sales headcount increased 8% during 2019. | ||||||||||
+ | Increases in allocated corporate costs of $7.0 million primarily driven by investments made in corporate IT, including cyber security and increases in related headcount | ||||||||||
+ | Increase in commission expense of $2.2 million primarily driven by an increase in commissionable sales |
2020 Form 10-K | 41 |
2020 vs. 2019 |
- | Decrease in travel costs of $1.2 million due to our restriction on non-essential employee travel in response to COVID-19 | ||||||||||
+ | Partially offset by |
2019 vs. 2018 |
+ | Increase in compensation costs of $11.6 million primarily associated with the inclusion of YourCause's engineering resources | ||||||||||
+ | Increases in allocations of depreciation, facilities and IT support costs of $3.5 million primarily driven by investments made in corporate IT, including cyber security and increases in related headcount | ||||||||||
- | Partially offset by an increase in software development costs of $9.5 million that were required to be capitalized under the internal-use software guidance |
42 | 2020 Form 10-K |
2020 vs. 2019 |
+ | Increase in real estate activity costs of $23.1 million due to our workforce strategy changes in response to COVID-19, as discussed above | ||||||||||
+ | Increase in corporate costs $5.9 million primarily related to an increase in bad debt expense; for additional details, see Note 2 to our consolidated financial statements in this report | ||||||||||
- | Decrease in rent expense of $4.1 million primarily related to the purchase of our Global Headquarters Facility, see Note 7 to our consolidated financial statements in this report | ||||||||||
- | Decrease in travel costs of $2.4 million due to our restriction on non-essential employee travel in response to COVID-19 | ||||||||||
- | Decrease in compensation costs of $1.8 million primarily related to the decision to replace our 2020 cash bonus plans with grants of performance-based equity awards, which are being recognized as stock-based compensation expense between May 1, 2020 and May 1, 2021. These awards may be earned and become eligible for vesting on May 1, 2021 subject to meeting certain performance conditions and the recipient's continued employment with us |
2019 vs. 2018 |
+ | Increase in compensation costs of $13.2 million primarily related to stock-based compensation and our acquisition of YourCause. The increase in stock-based compensation was primarily driven by increases in the grant date fair values of our annual equity awards granted to employees | ||||||||||
- | Decrease in acquisition-related expenses and integration costs of $3.0 million related to our purchase of YourCause |
2020 Form 10-K | 43 |
Cumulative costs incurred as of | Costs incurred during the year ended(1) | Cumulative costs incurred as of | |||||||||
(in thousands) | December 31, 2018 | December 31, 2019 | |||||||||
By component: | |||||||||||
Contract termination costs | $ | 4,176 | $ | 4,906 | $ | 9,082 | |||||
Other costs | 1,208 | 902 | 2,110 | ||||||||
Total | $ | 5,384 | $ | 5,808 | $ | 11,192 |
Years ended December 31, | |||||||||||||||||||||||
(dollars in millions) | 2020 | Change | 2019 | Change | 2018 | ||||||||||||||||||
Interest expense | $ | 17.3 | (16.2) | % | $ | 20.6 | 29.7 | % | $ | 15.9 | |||||||||||||
% of total revenue | 1.9 | % | 2.3 | % | 1.9 | % |
2019 |
Accrued at | Increases for incurred costs(1) | Written off upon adoption of ASU 2016-02(2) | Costs paid | Accrued at | |||||||||||||||
(in thousands) | December 31, 2018 | December 31, 2019 | |||||||||||||||||
By component: | |||||||||||||||||||
Contract termination costs | $ | 1,865 | $ | 4,906 | $ | (1,656 | ) | $ | (5,115 | ) | $ | — | |||||||
Other costs | 50 | 902 | — | (952 | ) | — | |||||||||||||
Total | $ | 1,915 | $ | 5,808 | $ | (1,656 | ) | $ | (6,067 | ) | $ | — |
Interest expense | ||||||||
Years ended December 31, | ||||||||
(dollars in millions) | 2019 | 2018 | Change | |||||
Interest expense | $ | 20.6 | $ | 15.9 | 29.7 | % | ||
% of total revenue | 2.3 | % | 1.9 | % |
(dollars in millions) | Timing of recognition | December 31, 2020 | December 31, 2019 | Change | |||||||||||||
Recurring | Over the period billed in advance, generally one year | $ | 303.8 | $ | 302.8 | 0.4 | % | ||||||||||
One-time services and other | As services are delivered | 13.1 | 13.4 | (2.3) | % | ||||||||||||
Total deferred revenue(1) | 316.9 | 316.1 | 0.2 | % | |||||||||||||
Less: Long-term portion | 4.7 | 1.8 | 159.6 | % | |||||||||||||
Current portion(1) | $ | 312.2 | $ | 314.3 | (0.7) | % |
(dollars in millions) | Timing of recognition | December 31, 2019 | December 31, 2018 | Change | |||||
Recurring | Over the period billed in advance, generally one year | $ | 302.8 | $ | 287.0 | 5.5 | % | ||
One-time services and other | As services are delivered | 13.4 | 11.6 | 15.4 | % | ||||
Total deferred revenue(1) | 316.1 | 298.6 | 5.9 | % | |||||
Less: Long-term portion | 1.8 | 2.6 | (29.7 | )% | |||||
Current portion(1) | $ | 314.3 | $ | 296.0 | 6.2 | % |
44 | 2020 Form 10-K |
Years ended December 31, | Years ended December 31, | ||||||||||||||||
(dollars in millions) | 2019 | 2018 | (dollars in millions) | 2020 | 2019 | 2018 | |||||||||||
Income tax benefit | $ | (1.3 | ) | $ | (0.2 | ) | |||||||||||
Income tax expense (benefit) | Income tax expense (benefit) | $ | 13.9 | $ | (1.3) | $ | (0.2) | ||||||||||
Effective income tax rate | (12.5 | )% | (0.5 | )% | Effective income tax rate | 64.3 | % | (12.5) | % | (0.5) | % |
2020 vs. 2019 |
2019 vs. 2018 |
Years ended December 31, | ||||||||||||||||||||||||||
(dollars in millions) | 2020 | Change | 2019 | Change | 2018 | |||||||||||||||||||||
GAAP Revenue | $ | 913.2 | 1.4 | % | $ | 900.4 | 6.1 | % | $ | 848.6 | ||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||
Add: Acquisition-related deferred revenue write-down | — | (100.0) | % | 1.9 | (19.8) | % | 2.4 | |||||||||||||||||||
Non-GAAP revenue(1) | $ | 913.2 | 1.2 | % | $ | 902.4 | 6.0 | % | $ | 851.0 | ||||||||||||||||
GAAP gross profit | $ | 485.2 | 0.7 | % | $ | 482.0 | 3.2 | % | $ | 466.9 | ||||||||||||||||
GAAP gross margin | 53.1 | % | 53.5 | % | 55.0 | % | ||||||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||
Add: Acquisition-related deferred revenue write-down | — | (100.0) | % | 1.9 | (19.8) | % | 2.4 | |||||||||||||||||||
Add: Stock-based compensation expense | 13.4 | 297.3 | % | 3.4 | (35.8) | % | 5.2 | |||||||||||||||||||
Add: Amortization of intangibles from business combinations | 39.0 | (13.0) | % | 44.8 | 6.0 | % | 42.2 | |||||||||||||||||||
Add: Employee severance | 0.9 | (25.7) | % | 1.2 | 33.0 | % | 0.9 | |||||||||||||||||||
Subtotal(1) | 53.2 | 3.8 | % | 51.3 | 0.9 | % | 50.8 | |||||||||||||||||||
Non-GAAP gross profit(1) | $ | 538.4 | 1.0 | % | $ | 533.3 | 3.0 | % | $ | 517.7 | ||||||||||||||||
Non-GAAP gross margin | 59.0 | % | 59.1 | % | 60.8 | % | ||||||||||||||||||||
Years ended December 31, | ||||||||
(dollars in millions) | 2019 | 2018 | Change | |||||
GAAP Revenue | $ | 900.4 | $ | 848.6 | 6.1 | % | ||
Non-GAAP adjustments: | ||||||||
Add: Acquisition-related deferred revenue write-down | 1.9 | 2.4 | (19.8 | )% | ||||
Non-GAAP revenue(1) | $ | 902.4 | $ | 851.0 | 6.0 | % | ||
GAAP gross profit | $ | 482.0 | $ | 466.9 | 3.2 | % | ||
GAAP gross margin | 53.5 | % | 55.0 | % | ||||
Non-GAAP adjustments: | ||||||||
Add: Acquisition-related deferred revenue write-down | 1.9 | 2.4 | (19.8 | )% | ||||
Add: Stock-based compensation expense | 3.4 | 5.2 | (35.8 | )% | ||||
Add: Amortization of intangibles from business combinations | 44.8 | 42.2 | 6.0 | % | ||||
Add: Employee severance | 1.2 | 0.9 | 33.0 | % | ||||
Subtotal(1) | 51.3 | 50.8 | 0.9 | % | ||||
Non-GAAP gross profit(1) | $ | 533.3 | $ | 517.7 | 3.0 | % | ||
Non-GAAP gross margin | 59.1 | % | 60.8 | % |
Years ended December 31, | ||||||||||||||||||||||||||
(dollars in millions, except per share amounts) | 2020 | Change | 2019 | Change | 2018 | |||||||||||||||||||||
GAAP income from operations | $ | 37.2 | 37.2 | % | $ | 27.1 | (54.3) | % | $ | 59.4 | ||||||||||||||||
GAAP operating margin | 4.1 | % | 3.0 | % | 7.0 | % | ||||||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||
Add: Acquisition-related deferred revenue write-down | — | (100.0) | % | 1.9 | (19.8) | % | 2.4 | |||||||||||||||||||
Add: Stock-based compensation expense | 87.3 | 48.8 | % | 58.6 | 21.5 | % | 48.3 | |||||||||||||||||||
Add: Amortization of intangibles from business combinations | 41.9 | (16.4) | % | 50.1 | 6.4 | % | 47.1 | |||||||||||||||||||
Add: Employee severance | 4.9 | 10.2 | % | 4.4 | 97.0 | % | 2.2 | |||||||||||||||||||
Add: Acquisition-related integration costs | (0.1) | (105.6) | % | 2.4 | (35.0) | % | 3.7 | |||||||||||||||||||
Add: Acquisition-related expenses | 0.4 | (69.6) | % | 1.2 | (59.2) | % | 2.8 | |||||||||||||||||||
Add: Restructuring and other real estate activities | 23.3 | 301.0 | % | 5.8 | 26.5 | % | 4.6 | |||||||||||||||||||
Subtotal(1) | 157.5 | 26.6 | % | 124.4 | 12.0 | % | 111.1 | |||||||||||||||||||
Non-GAAP income from operations(1) | $ | 194.8 | 28.5 | % | $ | 151.6 | (11.1) | % | $ | 170.5 | ||||||||||||||||
Non-GAAP operating margin | 21.3 | % | 16.8 | % | 20.0 | % | ||||||||||||||||||||
GAAP income before provision for income taxes | $ | 21.6 | 104.2 | % | $ | 10.6 | (76.3) | % | $ | 44.6 | ||||||||||||||||
GAAP net income | $ | 7.7 | (35.2) | % | $ | 11.9 | (73.4) | % | $ | 44.8 | ||||||||||||||||
Shares used in computing GAAP diluted earnings per share | 48,696,341 | 0.8 | % | 48,312,271 | 0.6 | % | 48,045,084 | |||||||||||||||||||
GAAP diluted earnings per share | $ | 0.16 | (36.0) | % | $ | 0.25 | (73.1) | % | $ | 0.93 | ||||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||||||||
Add: GAAP income tax provision (benefit) | 13.9 | (1,150.4) | % | (1.3) | 504.1 | % | (0.2) | |||||||||||||||||||
Add: Total Non-GAAP adjustments affecting loss from operations | 157.5 | 26.6 | % | 124.4 | 12.0 | % | 111.1 | |||||||||||||||||||
Non-GAAP income before provision for income taxes | 179.1 | 32.7 | % | 135.0 | (13.3) | % | 155.7 | |||||||||||||||||||
Assumed non-GAAP income tax provision(2) | 35.8 | 32.7 | % | 27.0 | (13.3) | % | 31.1 | |||||||||||||||||||
Non-GAAP net income(1) | $ | 143.3 | 32.7 | % | $ | 108.0 | (13.3) | % | $ | 124.6 | ||||||||||||||||
Shares used in computing Non-GAAP diluted earnings per share | 48,696,341 | 0.8 | % | 48,312,271 | 0.6 | % | 48,045,084 | |||||||||||||||||||
Non-GAAP diluted earnings per share | $ | 2.94 | 31.3 | % | $ | 2.24 | (13.5) | % | $ | 2.59 |
Years ended December 31, | ||||||||
(dollars in millions, except per share amounts) | 2019 | 2018 | Change | |||||
GAAP income from operations | $ | 27.1 | $ | 59.4 | (54.3 | )% | ||
GAAP operating margin | 3.0 | % | 7.0 | % | ||||
Non-GAAP adjustments: | ||||||||
Add: Acquisition-related deferred revenue write-down | 1.9 | 2.4 | (19.8 | )% | ||||
Add: Stock-based compensation expense | 58.6 | 48.3 | 21.5 | % | ||||
Add: Amortization of intangibles from business combinations | 50.1 | 47.1 | 6.4 | % | ||||
Add: Employee severance | 4.4 | 2.2 | 97.0 | % | ||||
Add: Acquisition-related integration costs | 2.4 | 3.7 | (35.0 | )% | ||||
Add: Acquisition-related expenses | 1.2 | 2.8 | (59.2 | )% | ||||
Add: Restructuring costs | 5.8 | 4.6 | 26.5 | % | ||||
Subtotal(1) | 124.4 | 111.1 | 12.0 | % | ||||
Non-GAAP income from operations(1) | $ | 151.6 | $ | 170.5 | (11.1 | )% | ||
Non-GAAP operating margin | 16.8 | % | 20.0 | % | ||||
GAAP income before provision for income taxes | $ | 10.6 | $ | 44.6 | (76.3 | )% | ||
GAAP net income | $ | 11.9 | $ | 44.8 | (73.4 | )% | ||
Shares used in computing GAAP diluted earnings per share | 48,312,271 | 48,045,084 | 0.6 | % | ||||
GAAP diluted earnings per share | $ | 0.25 | $ | 0.93 | (73.1 | )% | ||
Non-GAAP adjustments: | ||||||||
Less: GAAP income tax benefit | (1.3 | ) | (0.2 | ) | 504.1 | % | ||
Add: Total Non-GAAP adjustments affecting loss from operations | 124.4 | 111.1 | 12.0 | % | ||||
Non-GAAP income before provision for income taxes | 135.0 | 155.7 | (13.3 | )% | ||||
Assumed non-GAAP income tax provision(2) | 27.0 | 31.1 | (13.3 | )% | ||||
Non-GAAP net income(1) | $ | 108.0 | $ | 124.6 | (13.3 | )% | ||
Shares used in computing Non-GAAP diluted earnings per share | 48,312,271 | 48,045,084 | 0.6 | % | ||||
Non-GAAP diluted earnings per share | $ | 2.24 | $ | 2.59 | (13.5 | )% |
47 |
Years ended December 31, | ||||||||
(dollars in millions) | 2019 | 2018 | Change | |||||
GAAP net cash provided by operating activities | $ | 182.5 | $ | 201.4 | (9.4 | )% | ||
Less: purchase of property and equipment | (11.5 | ) | (14.7 | ) | (21.9 | )% | ||
Less: capitalized software development costs | (46.9 | ) | (37.6 | ) | 24.6 | % | ||
Non-GAAP free cash flow | $ | 124.1 | $ | 149.0 | (16.7 | )% |
Years ended December 31, | ||||||||||||||||||||||||||
(dollars in millions) | 2020 | Change | 2019 | Change | 2018 | |||||||||||||||||||||
GAAP net cash provided by operating activities | $ | 148.0 | (18.9) | % | $ | 182.5 | (9.4) | % | $ | 201.4 | ||||||||||||||||
Less: purchase of property and equipment | (29.7) | 158.4 | % | (11.5) | (21.9) | % | (14.7) | |||||||||||||||||||
Less: capitalized software development costs | (42.2) | (10.1) | % | (46.9) | 24.6 | % | (37.6) | |||||||||||||||||||
Non-GAAP free cash flow | $ | 76.1 | (38.7) | % | $ | 124.1 | (16.7) | % | $ | 149.0 |
Years ended December 31, | ||||||||
(dollars in millions) | 2019 | 2018 | Change | |||||
GAAP revenue | $ | 900.4 | $ | 848.6 | 6.1 | % | ||
(Less) Add: Non-GAAP acquisition-related revenue (1) | (20.1 | ) | 5.6 | |||||
Non-GAAP organic revenue (2) | $ | 880.3 | $ | 854.2 | 3.1 | % | ||
Foreign currency impact on Non-GAAP organic revenue (3) | 6.0 | — | ||||||
Non-GAAP organic revenue on constant currency basis (3) | $ | 886.3 | $ | 854.2 | 3.8 | % | ||
GAAP recurring revenue | $ | 831.6 | $ | 762.2 | 9.1 | % | ||
(Less) Add: Non-GAAP acquisition-related revenue (1) | (19.8 | ) | 5.5 | |||||
Non-GAAP organic recurring revenue | $ | 811.8 | $ | 767.6 | 5.8 | % |
2020 Form 10-K |
Years ended December 31, | ||||||||
(dollars in millions) | 2020 | 2019 | ||||||
GAAP revenue | $ | 913.2 | $ | 900.4 | ||||
GAAP revenue growth | 1.4 | % | ||||||
(Less) Add: Non-GAAP acquisition-related revenue (1) | — | 1.9 | ||||||
Non-GAAP organic revenue (2) | $ | 913.2 | $ | 902.4 | ||||
Non-GAAP organic revenue growth | 1.2 | % | ||||||
Non-GAAP organic revenue (2) | 913.2 | 902.4 | ||||||
Foreign currency impact on Non-GAAP organic revenue (3) | 0.8 | — | ||||||
Non-GAAP organic revenue on constant currency basis (3) | $ | 914.0 | $ | 902.4 | ||||
Non-GAAP organic revenue growth on constant currency basis | 1.3 | % | ||||||
GAAP recurring revenue | $ | 850.7 | $ | 831.6 | ||||
GAAP recurring revenue growth | 2.3 | % | ||||||
(Less) Add: Non-GAAP acquisition-related revenue (1) | — | 1.9 | ||||||
Non-GAAP organic recurring revenue | $ | 850.7 | $ | 833.5 | ||||
Non-GAAP organic recurring revenue growth | 2.1 | % |
49 |
Years ended December 31, | |||||||||||
(dollars in millions) | 2020 | 2019 | |||||||||
GAAP net income | $ | 7.7 | $ | 11.9 | |||||||
Non-GAAP adjustments: | |||||||||||
Add: Interest, net | 15.6 | 17.8 | |||||||||
Add: GAAP income tax provision (benefit) | 13.9 | (1.3) | |||||||||
Add: Depreciation(1) | 14.6 | 15.0 | |||||||||
Add: Amortization of intangibles from business combinations | 41.9 | 50.1 | |||||||||
Add: Amortization of software development costs(2) | 32.5 | 21.0 | |||||||||
Subtotal | 118.5 | 102.6 | |||||||||
Non-GAAP EBITDA | $ | 126.3 | $ | 114.5 | |||||||
Non-GAAP EBITDA margin | 13.8 | % | |||||||||
Non-GAAP adjustments: | |||||||||||
Add: Acquisition-related deferred revenue write-down | — | 1.9 | |||||||||
Add: Stock-based compensation expense | 87.3 | 58.6 | |||||||||
Add: Employee severance | 4.9 | 4.4 | |||||||||
Add: Acquisition-related integration costs | (0.1) | 2.4 | |||||||||
Add: Acquisition-related expenses | 0.4 | 1.2 | |||||||||
Add: Restructuring and other real estate activities | 23.3 | 5.8 | |||||||||
Subtotal | 115.6 | 74.4 | |||||||||
Adjusted Non-GAAP EBITDA | $ | 241.9 | $ | 188.8 | |||||||
Adjusted Non-GAAP EBITDA margin | 26.5 | % | |||||||||
Rule of 40(3) | 27.7 | % | |||||||||
50 | 2020 Form 10-K |
Liquidity and Capital Resources |
(dollars in millions) | December 31, 2019 | December 31, 2018 | Change | (dollars in millions) | December 31, 2020 | December 31, 2019 | Change | ||||||||||||||||||
Cash and cash equivalents | $ | 31.8 | $ | 30.9 | 3.1 | % | Cash and cash equivalents | $ | 35.8 | $ | 31.8 | 12.4 | % | ||||||||||||
Property and equipment, net | 35.5 | 40.0 | (11.2 | )% | Property and equipment, net | 105.2 | 35.5 | 195.9 | % | ||||||||||||||||
Software development costs, net | 101.3 | 75.1 | 34.9 | % | Software development costs, net | 111.8 | 101.3 | 10.4 | % | ||||||||||||||||
Total carrying value of debt | 467.1 | 387.1 | 20.7 | % | Total carrying value of debt | 531.0 | 467.1 | 13.7 | % | ||||||||||||||||
Working capital | (254.3 | ) | (207.7 | ) | (22.5 | )% | Working capital | (194.3) | (254.3) | 23.6 | % |
Years ended December 31, | Years ended December 31, | |||||||||||||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | Change | (dollars in millions) | 2020 | Change | 2019 | Change | 2018 | |||||||||||||||||||||||||
Net cash provided by operating activities | $ | 182.5 | $ | 201.4 | (9.4 | )% | Net cash provided by operating activities | $ | 148.0 | (18.9) | % | $ | 182.5 | (9.4) | % | $ | 201.4 | |||||||||||||||||
Net cash used in investing activities | (167.2 | ) | (97.8 | ) | 71.0 | % | Net cash used in investing activities | (71.8) | (57.0) | % | (167.2) | (71.0) | % | (97.8) | ||||||||||||||||||||
Net cash provided by (used in) financing activities | 111.2 | (291.9 | ) | (138.1 | )% | |||||||||||||||||||||||||||||
Net cash (used in) provided by financing activities | Net cash (used in) provided by financing activities | (10.7) | (109.6) | % | 111.2 | (138.1) | % | (291.9) |
2020 Form 10-K | 51 |
52 | 2020 Form 10-K |
2020 vs. 2019 |
2019 vs. 2018 |
2020 vs. 2019 |
2019 vs. 2018 |
2020 vs. 2019 |
54 | 2020 Form 10-K |
2019 vs. 2018 |
Financial Covenant | Requirement | Ratio as of December 31, | ||||||
Net Leverage Ratio | ≤ | |||||||
Interest Coverage Ratio | ≥ 2.50 to 1.00 |
2020 Form 10-K | 55 |
Payments due by period | |||||||||||||||
(in millions) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||
Recorded contractual obligations: | |||||||||||||||
Debt(1) | $ | 468.3 | $ | 7.5 | $ | 460.8 | $ | — | $ | — | |||||
Operating leases(2) | 161.6 | 26.0 | 39.0 | 22.4 | 74.2 | ||||||||||
Interest payments on debt(3) | 1.8 | 1.0 | 0.7 | — | — | ||||||||||
Unrecorded contractual obligations: | |||||||||||||||
Purchase obligations(4) | 91.7 | 41.6 | 49.2 | 0.8 | — | ||||||||||
Interest payments on debt(5) | 33.7 | 14.0 | 19.7 | — | — | ||||||||||
Debt(6) | 2.2 | 0.5 | 1.1 | 0.5 | — | ||||||||||
Total contractual obligations | $ | 759.1 | $ | 90.7 | $ | 570.5 | $ | 23.8 | $ | 74.2 |
Payments due by period | |||||||||||||||||
(in millions) | Total(1) | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||
Recorded contractual obligations: | |||||||||||||||||
Debt(2) | $ | 534.2 | $ | 12.8 | $ | 25.0 | $ | 443.0 | $ | 53.4 | |||||||
Operating leases(3) | 29.5 | 10.4 | 10.2 | 5.1 | 3.8 | ||||||||||||
Interest payments on debt(4) | 4.5 | 3.4 | 1.1 | — | — | ||||||||||||
Unrecorded contractual obligations: | |||||||||||||||||
Purchase obligations(5) | 94.8 | 59.1 | 34.6 | 1.0 | — | ||||||||||||
Interest payments on debt(6) | 79.5 | 11.5 | 23.4 | 21.0 | 23.6 | ||||||||||||
Total contractual obligations(1) | $ | 742.5 | $ | 97.2 | $ | 94.3 | $ | 470.2 | $ | 80.8 |
(1)The individual amounts for each obligation may not sum to total or total contractual obligations due to rounding. (2)Represents principal payments only, under the following assumptions: (i) that the amounts outstanding under the 2020 Credit Facility, our real estate loans and our other debt at December 31, 2020 will remain outstanding until maturity, with minimum payments occurring as currently scheduled, and (ii) that there are no assumed future borrowings on the 2020 Revolving Facility for the purposes of determining minimum commitment amounts. (3)Our commitments related to operating leases have not been reduced by sublease income, incentive payments, reimbursement of leasehold improvements and the amount representing imputed interest of $2.8 million. (4)Represents interest payment obligations related to our interest rate swap agreements. (5)We have contractual obligations for third-party technology used in our solutions and for other services we purchase as part of our normal operations. In certain cases, these arrangements require a minimum annual purchase commitment by us. (6)The actual interest expense recognized in our consolidated statements of comprehensive income will depend on the amount of debt, the length of time the debt is outstanding and the interest rate, which could be different from our assumptions described in (2) above. |
Off-Balance Sheet Arrangements |
56 | 2020 Form 10-K |
Foreign Currency Exchange Rates |
Inflation |
Critical Accounting Estimates |
Revenue Recognition | ||||||||
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||||||
See Note 2 to our consolidated financial statements in this report for a complete discussion of our revenue recognition policies. Revenues are recognized when control of our services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We determine revenue recognition through the following steps: (1) Identification of the contract, or contracts, with a customer; (2) Identification of the performance obligations in the contract; (3) Determination of the transaction price; (4) Allocation of the transaction price to the performance obligations in the contract; and (5) Recognition of revenue when, or as, we satisfy a performance obligation. | Our revenue recognition accounting methodology contains uncertainties because it requires us to make significant estimates and assumptions, and to apply judgment. For example, for arrangements that have multiple performance obligations, we must exercise judgment and use estimates in order to (1) determine whether performance obligations are distinct and should be accounted for separately; (2) determine the standalone selling price of each performance obligation; (3) allocate the transaction price among the various performance obligations on a relative standalone selling price basis; and (4) determine whether revenue for each performance obligation should be recognized at a point in time or over time. In addition, we exercise judgment in certain transactions when determining whether we should recognize revenue based on the gross amount billed to a customer (as a principal) or the net amount retained (as an agent). These judgments are based on our determination of whether or not we control the service before it is transferred to the customer. | If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of revenue or deferred revenue that we report in a particular period. |
Costs of Obtaining Contracts | ||||||||
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||||||
We pay sales commissions at the time contracts with customers are signed or shortly thereafter, depending on the size and duration of the sales contract. Sales commissions and related fringe benefits earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized in a manner that aligns with the expected period of benefit, which we have determined to be five years. We do not generally pay commissions for contract renewals. The related amortization expense is included in sales, marketing and customer success expense in our consolidated statements of comprehensive income. | Our accounting methodology for determining the period over which we amortize costs of obtaining contracts with customers contains uncertainties because it requires us to make significant estimates and assumptions, and to apply judgment. For example, we must exercise judgment and use estimates in order to determine the expected period of benefit of our sales commissions. We take into consideration our customer contracts, including renewals, retention, our technology and other factors. | If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of assets, operating expenses or income that we report in a particular period. |
Business Combinations | ||||||||
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||||||
We allocate the purchase price of an acquired business to its identifiable assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. The excess of the purchase price over the amount allocated to the identifiable assets acquired and liabilities assumed, if any, is recorded as goodwill. We use available information to estimate fair values. We typically engage outside appraisal firms to assist in the fair value determination of long-lived and identifiable intangible assets, and any other significant assets or liabilities. We adjust the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date as we obtain new information about facts and circumstances that existed as of the closing date. | Our purchase price allocation methodology contains uncertainties because it requires us to make significant estimates and assumptions, and to apply judgment to estimate the fair value of assets acquired and liabilities assumed, especially with respect to long-lived and intangible assets. Management estimates the fair value of assets acquired and liabilities assumed based on quoted market prices, the carrying value of the acquired assets and widely accepted valuation techniques, including discounted cash flows and market multiple analyses. Critical estimates in valuing intangible assets include, but are not limited to, estimates about: expected future cash flows from customers, including revenue and operating expenses; royalty and customer attrition rates; proprietary technology obsolescence curve; the acquired company's brand awareness and market position; the market awareness of the acquired company's branded technology solutions and services; assumptions about the period of time the brands will continue to be valuable; as well as expected costs to develop any in-process research and development into commercially viable solutions and estimated cash flows from the projects when completed, and discount rates. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur. | If actual results are materially different than the assumptions we used to determine fair value of the assets acquired and liabilities assumed through a business combination as well as the estimated useful lives of the acquired intangible assets, it is possible that adjustments to the carrying values of such assets and liabilities will have a material impact on our financial position and results of operations. See Note 3 to our consolidated financial statements in this report for information regarding our business acquisitions. |
Income Taxes | ||||||||
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||||||
We make estimates and judgments in accounting for income taxes. Our income tax returns, like those of most companies, are periodically audited by domestic and foreign tax authorities. We measure and recognize uncertain tax positions. To recognize uncertain tax positions, we must first determine if it is more likely than not that the position will be sustained upon audit. We must then measure the benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. We make estimates in determining tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial reporting purposes. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized. | The calculation of our income tax provision requires estimates due to transactions, credits and calculations where the ultimate tax determination is uncertain. Uncertainties arise as a consequence of the actual source of taxable income between domestic and foreign locations, the outcome of tax audits and the ultimate utilization of tax credits. Our effective income tax rate is also affected by changes in the geographic distribution of our earnings or losses, changes in tax law in jurisdictions where we conduct business. Significant judgment is required in the identification and measurement of uncertain tax positions. Our liability for unrecognized tax benefits contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various filing positions. In assessing the adequacy of a recorded valuation allowance significant judgment is required. We consider all positive and negative evidence and a variety of factors including the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and prudent and feasible tax planning strategies. | Although we believe that the judgments and estimates discussed herein are reasonable, actual results could differ, and we may be exposed to losses or gains that could be material. To the extent actual results differ from estimated amounts recorded, such differences will impact the income tax provision in the period in which the determination is made. If we determine there is less than a 50% likelihood that we will be able to use a deferred tax asset in the future in excess of its net carrying value, then an adjustment to the deferred tax asset valuation allowance is made to increase income tax expense, thereby reducing net income in the period such determination was made. |
Long-lived Assets and Intangible Assets Other Than Goodwill | ||||||||
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||||||
We review our long-lived assets and intangible assets other than goodwill for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. If such events or changes in circumstances occur, we use the undiscounted cash flow method to determine whether our long-lived and intangible assets other than goodwill are impaired. To the extent that the carrying value of the asset exceeds the undiscounted cash flows over the estimated remaining life of the asset, we measure the impairment using discounted cash flows. | When measuring impairment of an asset using discounted cash flows, we make assumptions and apply judgment in estimating future cash flows and asset fair values, including annual revenue growth rates, a terminal year growth rate and selecting a discount rate that reflects the risk inherent in future cash flows. | We have not made any material changes in the accounting methodology we use to assess impairment loss during the year ended December 31, During We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to assess impairment losses. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to an impairment charge that could materially adversely impact our consolidated financial position and results of operations. |
Recently Issued Accounting Pronouncements |
Interest Rate Risk |
Foreign Currency Risk |
Page No. | |||||
2020 Form 10-K | 63 |
2020 Form 10-K |
(dollars in thousands) | December 31, 2019 | December 31, 2018 | ||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 31,810 | $ | 30,866 | ||
Restricted cash due to customers | 545,485 | 418,980 | ||||
Accounts receivable, net of allowance of $5,529 and $4,722 at December 31, 2019 and December 31, 2018, respectively | 88,868 | 86,595 | ||||
Customer funds receivable | 524 | 1,753 | ||||
Prepaid expenses and other current assets | 67,852 | 59,788 | ||||
Total current assets | 734,539 | 597,982 | ||||
Property and equipment, net | 35,546 | 40,031 | ||||
Operating lease right-of-use assets | 104,400 | — | ||||
Software development costs, net | 101,302 | 75,099 | ||||
Goodwill | 634,088 | 545,213 | ||||
Intangible assets, net | 317,895 | 291,617 | ||||
Other assets | 65,193 | 65,363 | ||||
Total assets | $ | 1,992,963 | $ | 1,615,305 | ||
Liabilities and stockholders’ equity | ||||||
Current liabilities: | ||||||
Trade accounts payable | $ | 47,676 | $ | 34,538 | ||
Accrued expenses and other current liabilities | 73,317 | 46,893 | ||||
Due to customers | 546,009 | 420,733 | ||||
Debt, current portion | 7,500 | 7,500 | ||||
Deferred revenue, current portion | 314,335 | 295,991 | ||||
Total current liabilities | 988,837 | 805,655 | ||||
Debt, net of current portion | 459,600 | 379,624 | ||||
Deferred tax liability | 44,594 | 44,291 | ||||
Deferred revenue, net of current portion | 1,802 | 2,564 | ||||
Operating lease liabilities, net of current portion | 95,624 | — | ||||
Other liabilities | 5,742 | 9,388 | ||||
Total liabilities | 1,596,199 | 1,241,522 | ||||
Commitments and contingencies (see Note 11) | ||||||
Stockholders’ equity: | ||||||
Preferred stock; 20,000,000 shares authorized, none outstanding | — | — | ||||
Common stock, $0.001 par value; 180,000,000 shares authorized, 60,206,091 and 59,327,633 shares issued at December 31, 2019 and December 31, 2018, respectively | 60 | 59 | ||||
Additional paid-in capital | 457,804 | 399,241 | ||||
Treasury stock, at cost; 11,066,354 and 10,760,574 shares at December 31, 2019 and December 31, 2018, respectively | (290,665 | ) | (266,884 | ) | ||
Accumulated other comprehensive loss | (5,290 | ) | (5,110 | ) | ||
Retained earnings | 234,855 | 246,477 | ||||
Total stockholders’ equity | 396,764 | 373,783 | ||||
Total liabilities and stockholders’ equity | $ | 1,992,963 | $ | 1,615,305 | ||
The accompanying notes are an integral part of these consolidated financial statements. |
(dollars in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 35,750 | $ | 31,810 | ||||
Restricted cash | 609,219 | 545,485 | ||||||
Accounts receivable, net of allowance of $10,292 and $5,529 at December 31, 2020 and December 31, 2019, respectively | 95,404 | 88,868 | ||||||
Customer funds receivable | 321 | 524 | ||||||
Prepaid expenses and other current assets | 78,366 | 67,852 | ||||||
Total current assets | 819,060 | 734,539 | ||||||
Property and equipment, net | 105,177 | 35,546 | ||||||
Operating lease right-of-use assets | 22,671 | 104,400 | ||||||
Software development costs, net | 111,827 | 101,302 | ||||||
Goodwill | 635,854 | 634,088 | ||||||
Intangible assets, net | 277,506 | 317,895 | ||||||
Other assets | 72,639 | 65,193 | ||||||
Total assets | $ | 2,044,734 | $ | 1,992,963 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 27,836 | $ | 47,676 | ||||
Accrued expenses and other current liabilities | 52,228 | 73,317 | ||||||
Due to customers | 608,264 | 546,009 | ||||||
Debt, current portion | 12,840 | 7,500 | ||||||
Deferred revenue, current portion | 312,236 | 314,335 | ||||||
Total current liabilities | 1,013,404 | 988,837 | ||||||
Debt, net of current portion | 518,193 | 459,600 | ||||||
Deferred tax liability | 54,086 | 44,594 | ||||||
Deferred revenue, net of current portion | 4,678 | 1,802 | ||||||
Operating lease liabilities, net of current portion | 17,357 | 95,624 | ||||||
Other liabilities | 10,866 | 5,742 | ||||||
Total liabilities | 1,618,584 | 1,596,199 | ||||||
Commitments and contingencies (see Note 9) | 0 | |||||||
Stockholders’ equity: | ||||||||
Preferred stock; 20,000,000 shares authorized, 0ne outstanding | 0 | 0 | ||||||
Common stock, $0.001 par value; 180,000,000 shares authorized, 60,904,638 and 60,206,091 shares issued at December 31, 2020 and December 31, 2019, respectively | 61 | 60 | ||||||
Additional paid-in capital | 544,963 | 457,804 | ||||||
Treasury stock, at cost; 12,054,268 and 11,066,354 shares at December 31, 2020 and December 31, 2019, respectively | (353,091) | (290,665) | ||||||
Accumulated other comprehensive loss | (2,497) | (5,290) | ||||||
Retained earnings | 236,714 | 234,855 | ||||||
Total stockholders’ equity | 426,150 | 396,764 | ||||||
Total liabilities and stockholders’ equity | $ | 2,044,734 | $ | 1,992,963 | ||||
The accompanying notes are an integral part of these consolidated financial statements. |
65 |
(dollars in thousands, except per share amounts) | Years ended December 31, | ||||||||
2019 | 2018 | 2017 | |||||||
Revenue | |||||||||
Recurring | $ | 831,609 | $ | 762,181 | $ | 684,583 | |||
One-time services and other | 68,814 | 86,425 | 103,904 | ||||||
Total revenue | 900,423 | 848,606 | 788,487 | ||||||
Cost of revenue | |||||||||
Cost of recurring | 357,988 | 305,481 | 277,639 | ||||||
Cost of one-time services and other | 60,436 | 76,261 | 84,265 | ||||||
Total cost of revenue | 418,424 | 381,742 | 361,904 | ||||||
Gross profit | 481,999 | 466,864 | 426,583 | ||||||
Operating expenses | |||||||||
Sales, marketing and customer success | 224,152 | 192,848 | 169,559 | ||||||
Research and development | 106,164 | 98,811 | 89,911 | ||||||
General and administrative | 113,414 | 106,354 | 94,870 | ||||||
Amortization | 5,316 | 4,844 | 3,271 | ||||||
Restructuring | 5,808 | 4,590 | 794 | ||||||
Total operating expenses | 454,854 | 407,447 | 358,405 | ||||||
Income from operations | 27,145 | 59,417 | 68,178 | ||||||
Interest expense | (20,618 | ) | (15,898 | ) | (12,097 | ) | |||
Other income, net | 4,058 | 1,103 | 2,260 | ||||||
Income before provision for income taxes | 10,585 | 44,622 | 58,341 | ||||||
Income tax benefit | (1,323 | ) | (219 | ) | (15,292 | ) | |||
Net income | $ | 11,908 | $ | 44,841 | $ | 73,633 | |||
Earnings per share | |||||||||
Basic | $ | 0.25 | $ | 0.95 | $ | 1.58 | |||
Diluted | $ | 0.25 | $ | 0.93 | $ | 1.54 | |||
Common shares and equivalents outstanding | |||||||||
Basic weighted average shares | 47,695,383 | 47,206,669 | 46,669,440 | ||||||
Diluted weighted average shares | 48,312,271 | 48,045,084 | 47,775,702 | ||||||
Other comprehensive loss | |||||||||
Foreign currency translation adjustment | 2,641 | (5,218 | ) | (789 | ) | ||||
Unrealized (loss) gain on derivative instruments, net of tax | (2,821 | ) | 583 | 751 | |||||
Total other comprehensive loss | (180 | ) | (4,635 | ) | (38 | ) | |||
Comprehensive income | $ | 11,728 | $ | 40,206 | $ | 73,595 | |||
The accompanying notes are an integral part of these consolidated financial statements. |
(dollars in thousands, except per share amounts) | Years ended December 31, | ||||||||||
2020 | 2019 | 2018 | |||||||||
Revenue | |||||||||||
Recurring | $ | 850,745 | $ | 831,609 | $ | 762,181 | |||||
One-time services and other | 62,474 | 68,814 | 86,425 | ||||||||
Total revenue | 913,219 | 900,423 | 848,606 | ||||||||
Cost of revenue | |||||||||||
Cost of recurring | 369,681 | 357,988 | 305,481 | ||||||||
Cost of one-time services and other | 58,384 | 60,436 | 76,261 | ||||||||
Total cost of revenue | 428,065 | 418,424 | 381,742 | ||||||||
Gross profit | 485,154 | 481,999 | 466,864 | ||||||||
Operating expenses | |||||||||||
Sales, marketing and customer success | 209,762 | 224,152 | 192,848 | ||||||||
Research and development | 100,146 | 106,164 | 98,811 | ||||||||
General and administrative | 134,852 | 113,414 | 106,354 | ||||||||
Amortization | 2,915 | 5,316 | 4,844 | ||||||||
Restructuring | 236 | 5,808 | 4,590 | ||||||||
Total operating expenses | 447,911 | 454,854 | 407,447 | ||||||||
Income from operations | 37,243 | 27,145 | 59,417 | ||||||||
Interest expense | (17,287) | (20,618) | (15,898) | ||||||||
Other income, net | 1,658 | 4,058 | 1,103 | ||||||||
Income before provision for income taxes | 21,614 | 10,585 | 44,622 | ||||||||
Income tax provision (benefit) | 13,897 | (1,323) | (219) | ||||||||
Net income | $ | 7,717 | $ | 11,908 | $ | 44,841 | |||||
Earnings per share | |||||||||||
Basic | $ | 0.16 | $ | 0.25 | $ | 0.95 | |||||
Diluted | $ | 0.16 | $ | 0.25 | $ | 0.93 | |||||
Common shares and equivalents outstanding | |||||||||||
Basic weighted average shares | 48,184,714 | 47,695,383 | 47,206,669 | ||||||||
Diluted weighted average shares | 48,696,341 | 48,312,271 | 48,045,084 | ||||||||
Other comprehensive income (loss) | |||||||||||
Foreign currency translation adjustment | 4,571 | 2,641 | (5,218) | ||||||||
Unrealized (loss) gain on derivative instruments, net of tax | (1,778) | (2,821) | 583 | ||||||||
Total other comprehensive income (loss) | 2,793 | (180) | (4,635) | ||||||||
Comprehensive income | $ | 10,510 | $ | 11,728 | $ | 40,206 | |||||
The accompanying notes are an integral part of these consolidated financial statements. |
2020 Form 10-K |
Years ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | ||||||||
Cash flows from operating activities | |||||||||||
Net income | $ | 7,717 | $ | 11,908 | $ | 44,841 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 92,735 | 85,693 | 79,566 | ||||||||
Provision for credit losses and sales returns | 13,230 | 8,725 | 6,890 | ||||||||
Stock-based compensation expense | 87,257 | 58,633 | 48,274 | ||||||||
Deferred taxes | 8,837 | (3,600) | (619) | ||||||||
Amortization of deferred financing costs and discount | 781 | 752 | 752 | ||||||||
Other non-cash adjustments | 2,958 | 4,906 | (1,912) | ||||||||
Changes in operating assets and liabilities, net of acquisition and disposal of businesses: | |||||||||||
Accounts receivable | (18,414) | (6,569) | 2,166 | ||||||||
Prepaid expenses and other assets | 22,568 | 6,383 | (5,217) | ||||||||
Trade accounts payable | (19,997) | 12,900 | 9,487 | ||||||||
Accrued expenses and other liabilities | (49,232) | (9,718) | (2,027) | ||||||||
Deferred revenue | (485) | 12,464 | 19,184 | ||||||||
Net cash provided by operating activities | 147,955 | 182,477 | 201,385 | ||||||||
Cash flows from investing activities | |||||||||||
Purchase of property and equipment | (29,690) | (11,492) | (14,719) | ||||||||
Capitalized software development costs | (42,157) | (46,874) | (37,629) | ||||||||
Purchase of net assets of acquired companies, net of cash and restricted cash acquired | 0 | (109,353) | (44,943) | ||||||||
Other investing activities | 0 | 500 | (500) | ||||||||
Net cash used in investing activities | (71,847) | (167,219) | (97,791) | ||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of debt | 748,500 | 424,000 | 270,900 | ||||||||
Payments on debt | (747,563) | (344,500) | (322,476) | ||||||||
Debt issuance costs | (4,586) | 0 | 0 | ||||||||
Employee taxes paid for withheld shares upon equity award settlement | (21,425) | (23,781) | (27,685) | ||||||||
Proceeds from exercise of stock options | 4 | 7 | 11 | ||||||||
Change in due to customers | 61,214 | 77,793 | (188,502) | ||||||||
Change in customer funds receivable | 138 | 1,301 | (844) | ||||||||
Purchase of treasury stock | (41,001) | 0 | 0 | ||||||||
Dividend payments to stockholders | (5,960) | (23,607) | (23,312) | ||||||||
Net cash (used in) provided by financing activities | (10,679) | 111,213 | (291,908) | ||||||||
Effect of exchange rate on cash, cash equivalents and restricted cash | 2,245 | 978 | (2,014) | ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 67,674 | 127,449 | (190,328) | ||||||||
Cash, cash equivalents and restricted cash, beginning of year | 577,295 | 449,846 | 640,174 | ||||||||
Cash, cash equivalents and restricted cash, end of year | $ | 644,969 | $ | 577,295 | $ | 449,846 | |||||
Supplemental disclosure of cash flow information | |||||||||||
Cash (paid) received during the year for: | |||||||||||
Interest | $ | (15,716) | $ | (19,926) | $ | (15,261) | |||||
Taxes, net of refunds | (3,563) | (383) | 7,138 | ||||||||
Non-cash investing and financing activities: | |||||||||||
Purchase of property and equipment by assuming directly related liabilities | (61,064) | 0 | 0 | ||||||||
Purchase of equipment and other assets included in accounts payable | (840) | (794) | (882) | ||||||||
Acquired restricted cash liabilities due to customers | 0 | 46,838 | 0 |
Years ended December 31, | |||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | ||||||
Cash flows from operating activities | |||||||||
Net income | $ | 11,908 | $ | 44,841 | $ | 73,633 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 85,693 | 79,566 | 73,948 | ||||||
Provision for doubtful accounts and sales returns | 8,725 | 6,890 | 11,686 | ||||||
Stock-based compensation expense | 58,633 | 48,274 | 40,631 | ||||||
Deferred taxes | (3,600 | ) | (619 | ) | (17,814 | ) | |||
Amortization of deferred financing costs and discount | 752 | 752 | 838 | ||||||
Other non-cash adjustments | 4,906 | (1,912 | ) | 504 | |||||
Changes in operating assets and liabilities, net of acquisition and disposal of businesses: | |||||||||
Accounts receivable | (6,569 | ) | 2,166 | (15,821 | ) | ||||
Prepaid expenses and other assets | 6,383 | (5,217 | ) | (9,550 | ) | ||||
Trade accounts payable | 12,900 | 9,487 | 1,024 | ||||||
Accrued expenses and other liabilities | (9,718 | ) | (2,027 | ) | (4,973 | ) | |||
Deferred revenue | 12,464 | 19,184 | 22,184 | ||||||
Net cash provided by operating activities | 182,477 | 201,385 | 176,290 | ||||||
Cash flows from investing activities | |||||||||
Purchase of property and equipment | (11,492 | ) | (14,719 | ) | (10,208 | ) | |||
Capitalized software development costs | (46,874 | ) | (37,629 | ) | (28,345 | ) | |||
Purchase of net assets of acquired companies, net of cash and restricted cash acquired | (109,353 | ) | (44,943 | ) | (146,789 | ) | |||
Purchase of derivative instruments | — | — | (568 | ) | |||||
Proceeds from settlement of derivative instruments | — | — | 1,030 | ||||||
Other investing activities | 500 | (500 | ) | — | |||||
Net cash used in investing activities | (167,219 | ) | (97,791 | ) | (184,880 | ) | |||
Cash flows from financing activities | |||||||||
Proceeds from issuance of debt | 424,000 | 270,900 | 774,500 | ||||||
Payments on debt | (344,500 | ) | (322,476 | ) | (679,119 | ) | |||
Debt issuance costs | — | — | (3,085 | ) | |||||
Employee taxes paid for withheld shares upon equity award settlement | (23,781 | ) | (27,685 | ) | (23,962 | ) | |||
Proceeds from exercise of stock options | 7 | 11 | 15 | ||||||
Change in due to customers | 77,793 | (188,502 | ) | 226,717 | |||||
Change in customer funds receivable | 1,301 | (844 | ) | 6,644 | |||||
Dividend payments to stockholders | (23,607 | ) | (23,312 | ) | (23,069 | ) | |||
Net cash provided by (used in) financing activities | 111,213 | (291,908 | ) | 278,641 | |||||
Effect of exchange rate on cash, cash equivalents and restricted cash | 978 | (2,014 | ) | (550 | ) | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 127,449 | (190,328 | ) | 269,501 | |||||
Cash, cash equivalents and restricted cash, beginning of year | 449,846 | 640,174 | 370,673 | ||||||
Cash, cash equivalents and restricted cash, end of year | $ | 577,295 | $ | 449,846 | $ | 640,174 | |||
Supplemental disclosure of cash flow information | |||||||||
Cash (paid) received during the year for: | |||||||||
Interest | (19,926 | ) | (15,261 | ) | (10,614 | ) | |||
Taxes, net of refunds | (383 | ) | 7,138 | (5,613 | ) | ||||
Non-cash investing and financing activities: | |||||||||
Purchase of equipment and other assets included in accounts payable | (794 | ) | (882 | ) | (1,546 | ) | |||
Acquired restricted cash liabilities due to customers | 46,838 | — | 31,644 |
(dollars in thousands) | December 31, 2019 | December 31, 2018 | ||||
Cash and cash equivalents | $ | 31,810 | $ | 30,866 | ||
Restricted cash due to customers | 545,485 | 418,980 | ||||
Total cash, cash equivalents and restricted cash in the statement of cash flows | $ | 577,295 | $ | 449,846 | ||
The accompanying notes are an integral part of these consolidated financial statements. |
(dollars in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Cash and cash equivalents | $ | 35,750 | $ | 31,810 | ||||
Restricted cash | 609,219 | 545,485 | ||||||
Total cash, cash equivalents and restricted cash in the statement of cash flows | $ | 644,969 | $ | 577,295 | ||||
The accompanying notes are an integral part of these consolidated financial statements. |
67 |
(dollars in thousands) | Common stock | Additional paid-in capital | Treasury stock | Accumulated other comprehensive loss | Retained earnings | Total stockholders' equity | |||||||||||||||||
Shares | Amount | ||||||||||||||||||||||
Balance at December 31, 2017 | 58,551,761 | $ | 59 | $ | 351,042 | $ | (239,199) | $ | (642) | $ | 225,029 | $ | 336,289 | ||||||||||
Net income | — | — | — | — | — | 44,841 | 44,841 | ||||||||||||||||
Payment of dividends ($0.48 per share) | — | — | — | — | — | (23,312) | (23,312) | ||||||||||||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 349,248 | — | 11 | — | — | — | 11 | ||||||||||||||||
Employee taxes paid for 284,780 withheld shares upon equity award settlement | — | — | — | (27,685) | — | — | (27,685) | ||||||||||||||||
Stock-based compensation | — | — | 48,188 | — | — | 86 | 48,274 | ||||||||||||||||
Restricted stock grants | 541,786 | 0 | — | — | — | — | 0 | ||||||||||||||||
Restricted stock cancellations | (115,162) | — | — | — | — | — | — | ||||||||||||||||
Other comprehensive loss | — | — | — | — | (4,635) | — | (4,635) | ||||||||||||||||
Reclassification upon adoption of ASU 2018-02(1) | — | — | — | — | 167 | (167) | 0 | ||||||||||||||||
Balance at December 31, 2018 | 59,327,633 | $ | 59 | $ | 399,241 | $ | (266,884) | $ | (5,110) | $ | 246,477 | $ | 373,783 | ||||||||||
Net income | — | — | — | — | — | 11,908 | 11,908 | ||||||||||||||||
Payment of dividends ($0.48 per share) | — | — | — | — | — | (23,607) | (23,607) | ||||||||||||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 267,455 | — | 7 | — | — | — | 7 | ||||||||||||||||
Employee taxes paid for 305,780 withheld shares upon equity award settlement | — | — | — | (23,781) | — | — | (23,781) | ||||||||||||||||
Stock-based compensation | — | — | 58,556 | — | — | 77 | 58,633 | ||||||||||||||||
Restricted stock grants | 723,868 | 1 | — | — | — | — | 1 | ||||||||||||||||
Restricted stock cancellations | (112,865) | — | — | — | — | — | — | ||||||||||||||||
Other comprehensive loss | — | — | — | — | (180) | — | (180) | ||||||||||||||||
Balance at December 31, 2019 | 60,206,091 | $ | 60 | $ | 457,804 | $ | (290,665) | $ | (5,290) | $ | 234,855 | $ | 396,764 | ||||||||||
Net income | — | — | — | — | — | 7,717 | 7,717 | ||||||||||||||||
Payment of dividends ($0.12 per share)(2) | — | — | — | — | — | (5,960) | (5,960) | ||||||||||||||||
Purchase of 714,000 treasury shares under stock repurchase program | — | — | — | (41,001) | — | — | (41,001) | ||||||||||||||||
Exercise of stock options and vesting of restricted stock units | 218,141 | — | 4 | — | — | — | 4 | ||||||||||||||||
Employee taxes paid for 273,914 withheld shares upon equity award settlement | — | — | — | (21,425) | — | — | (21,425) | ||||||||||||||||
Stock-based compensation | — | — | 87,155 | — | — | 102 | 87,257 | ||||||||||||||||
Restricted stock grants | 657,483 | 1 | — | — | — | — | 1 | ||||||||||||||||
Restricted stock cancellations | (177,077) | — | — | — | — | — | — | ||||||||||||||||
Other comprehensive income | — | — | — | — | 2,793 | — | 2,793 | ||||||||||||||||
Balance at December 31, 2020 | 60,904,638 | $ | 61 | $ | 544,963 | $ | (353,091) | $ | (2,497) | $ | 236,714 | $ | 426,150 | ||||||||||
(1) Refer to the discussion of recently adopted accounting pronouncements in Note 2 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the SEC on February 20, 2019. | |||||||||||||||||||||||
(2) Represents dividends paid in Q1 2020. See Note 14 of these consolidated financial statements for a discussion of our Board of Directors' decision to discontinue the declaration and payments of all cash dividends beginning in Q2 2020. | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
(dollars in thousands) | Common stock | Additional paid-in capital | Treasury stock | Accumulated other comprehensive loss | Retained earnings | Total stockholders' equity | ||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance at December 31, 2016 | 57,672,401 | $ | 58 | $ | 310,452 | $ | (215,237 | ) | $ | (604 | ) | $ | 174,409 | $ | 269,078 | |||||
Net income | — | — | — | — | — | 73,633 | 73,633 | |||||||||||||
Payment of dividends ($0.48 per share) | — | — | — | — | — | (23,069 | ) | (23,069 | ) | |||||||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 390,291 | — | 15 | — | — | — | 15 | |||||||||||||
Employee taxes paid for 308,993 withheld shares upon equity award settlement | — | — | — | (23,962 | ) | — | — | (23,962 | ) | |||||||||||
Stock-based compensation | — | — | 40,575 | — | — | 56 | 40,631 | |||||||||||||
Restricted stock grants | 570,208 | 1 | — | — | — | — | 1 | |||||||||||||
Restricted stock cancellations | (81,139 | ) | — | — | — | — | — | — | ||||||||||||
Other comprehensive loss | — | — | — | — | (38 | ) | — | (38 | ) | |||||||||||
Balance at December 31, 2017 | 58,551,761 | $ | 59 | $ | 351,042 | $ | (239,199 | ) | $ | (642 | ) | $ | 225,029 | $ | 336,289 | |||||
Net income | — | — | — | — | — | 44,841 | 44,841 | |||||||||||||
Payment of dividends ($0.48 per share) | — | — | — | — | — | (23,312 | ) | (23,312 | ) | |||||||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 349,248 | — | 11 | — | — | — | 11 | |||||||||||||
Employee taxes paid for 284,780 withheld shares upon equity award settlement | — | — | — | (27,685 | ) | — | — | (27,685 | ) | |||||||||||
Stock-based compensation | — | — | 48,188 | — | — | 86 | 48,274 | |||||||||||||
Restricted stock grants | 541,786 | — | — | — | — | — | — | |||||||||||||
Restricted stock cancellations | (115,162 | ) | — | — | — | — | — | — | ||||||||||||
Other comprehensive loss | — | — | — | — | (4,635 | ) | — | (4,635 | ) | |||||||||||
Reclassification upon adoption of ASU 2018-02(1) | — | — | — | — | 167 | (167 | ) | — | ||||||||||||
Balance at December 31, 2018 | 59,327,633 | $ | 59 | $ | 399,241 | $ | (266,884 | ) | $ | (5,110 | ) | $ | 246,477 | $ | 373,783 | |||||
Net income | — | — | — | — | — | 11,908 | 11,908 | |||||||||||||
Payment of dividends ($0.48 per share) | — | — | — | — | — | (23,607 | ) | (23,607 | ) | |||||||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 267,455 | — | 7 | — | — | — | 7 | |||||||||||||
Employee taxes paid for 305,780 withheld shares upon equity award settlement | — | — | — | (23,781 | ) | — | — | (23,781 | ) | |||||||||||
Stock-based compensation | — | — | 58,556 | — | — | 77 | 58,633 | |||||||||||||
Restricted stock grants | 723,868 | 1 | — | — | — | — | 1 | |||||||||||||
Restricted stock cancellations | (112,865 | ) | — | — | — | — | — | — | ||||||||||||
Other comprehensive loss | — | — | — | — | (180 | ) | — | (180 | ) | |||||||||||
Balance at December 31, 2019 | 60,206,091 | $ | 60 | $ | 457,804 | $ | (290,665 | ) | $ | (5,290 | ) | $ | 234,855 | $ | 396,764 | |||||
(1) Refer to the discussion of recently adopted accounting pronouncements in Note 2 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the SEC on February 20, 2019. | ||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
2020 Form 10-K |
1. Organization |
2. Basis of Presentation |
2020 Form 10-K | 69 |
70 | 2020 Form 10-K |
2020 Form 10-K | 71 |
72 | 2020 Form 10-K |
2020 Form 10-K | 73 |
74 | 2020 Form 10-K |
Basis of amortization | Amortization period (in years) | |||||||
Customer relationships | Straight-line and accelerated(1) | 8-17 | ||||||
Marketing assets | Straight-line | 2-15 | ||||||
Acquired software and technology | Straight-line and accelerated(1) | 5-14 | ||||||
2020 Form 10-K | 75 |
76 | 2020 Form 10-K |
Years ended December 31, (in thousands) | Balance at beginning of year | Provision/ adjustment | Write-off | Recovery | Balance at end of year | ||||||||||||
2020(1) | $ | 4,011 | $ | 6,787 | $ | (2,363) | $ | 581 | $ | 9,016 | |||||||
2019 | 1,345 | 2,476 | (2,617) | 679 | 1,883 | ||||||||||||
2018 | 741 | 2,446 | (2,663) | 821 | 1,345 |
Years ended December 31, (in thousands) | Balance at beginning of year | Provision/ adjustment | Deduction | Balance at end of year | ||||||||||
2020(1) | $ | 1,518 | $ | 6,443 | $ | (6,685) | $ | 1,276 | ||||||
2019 | 3,377 | 6,232 | (5,963) | 3,646 | ||||||||||
2018 | 4,400 | 4,952 | (5,975) | 3,377 |
Years ended December 31, (in thousands) | Balance at beginning of year | Provision/ adjustment | Write-off | Balance at end of year | ||||||||
2019 | $ | 3,377 | $ | 6,232 | $ | (5,963 | ) | $ | 3,646 | |||
2018 | 4,400 | 4,952 | (5,975 | ) | 3,377 | |||||||
2017 | 2,704 | 10,511 | (8,815 | ) | 4,400 |
Years ended December 31, (in thousands) | Balance at beginning of year | Provision/ adjustment | Write-off | Balance at end of year | ||||||||
2019 | $ | 1,345 | $ | 2,476 | $ | (1,938 | ) | $ | 1,883 | |||
2018 | 741 | 2,446 | (1,842 | ) | 1,345 | |||||||
2017 | 587 | 1,148 | (994 | ) | 741 |
2020 Form 10-K | 77 |
(in thousands) | Purchase price allocation | ||
Net working capital, excluding deferred revenue | $ | 3,711 | |
Other long-term assets | 2,574 | ||
Identifiable intangible assets | 74,690 | ||
Deferred tax liability | (4,660 | ) | |
Deferred revenue | (4,300 | ) | |
Other long-term liabilities | (1,650 | ) | |
Goodwill | 87,350 | ||
Total purchase price | $ | 157,715 |
Weighted average amortization period | Intangible assets acquired | ||||
YourCause | Valuation Method | (in years) | (in thousands) | ||
Acquired technology | Relief-from-Royalty | 12 | $ | 47,800 | |
Customer relationships | Multi-period Excess Earnings | 15 | 25,900 | ||
Marketing assets | Relief-from-Royalty | 2 | 830 | ||
Non-compete agreements | Comparative (With and Without) | 0 | 160 | ||
Total intangible assets | 13 | $ | 74,690 |
4. Goodwill and Other Intangible Assets |
(dollars in thousands) | Total | ||
Balance at December 31, 2018 | $ | 545,213 | |
Additions related to current year business combinations | 87,350 | ||
Effect of foreign currency translation | 1,525 | ||
Balance at December 31, 2019 | $ | 634,088 |
(dollars in thousands) | Total | ||||
Balance at December 31, 2019 | $ | 634,088 | |||
Effect of foreign currency translation | 1,766 | ||||
Balance at December 31, 2020 | $ | 635,854 |
December 31, | ||||||
(dollars in thousands) | 2019 | 2018 | ||||
Finite-lived gross carrying amount | ||||||
Customer relationships | $ | 286,951 | $ | 280,309 | ||
Marketing assets | 34,246 | 48,484 | ||||
Acquired software and technology | 233,094 | 211,654 | ||||
Non-compete agreements | 2,200 | 2,499 | ||||
Database | — | 4,275 | ||||
Total finite-lived gross carrying amount | 556,491 | 547,221 | ||||
Accumulated amortization | ||||||
Customer relationships | (118,031 | ) | (116,648 | ) | ||
Marketing assets | (3,648 | ) | (16,395 | ) | ||
Acquired software and technology | (115,048 | ) | (118,268 | ) | ||
Non-compete agreements | (1,869 | ) | (1,618 | ) | ||
Database | — | (4,275 | ) | |||
Total accumulated amortization | (238,596 | ) | (257,204 | ) | ||
Indefinite-lived gross carrying amount | ||||||
Marketing assets | — | 1,600 | ||||
Intangible assets, net | $ | 317,895 | $ | 291,617 |
December 31, | ||||||||
(dollars in thousands) | 2020 | 2019 | ||||||
Finite-lived gross carrying amount | ||||||||
Customer relationships | $ | 287,116 | $ | 286,951 | ||||
Marketing assets | 34,642 | 34,246 | ||||||
Acquired software and technology | 232,339 | 233,094 | ||||||
Non-compete agreements | 0 | 2,200 | ||||||
Total finite-lived gross carrying amount | 554,097 | 556,491 | ||||||
Accumulated amortization | ||||||||
Customer relationships | (138,635) | (118,031) | ||||||
Marketing assets | (5,918) | (3,648) | ||||||
Acquired software and technology | (132,038) | (115,048) | ||||||
Non-compete agreements | 0 | (1,869) | ||||||
Total accumulated amortization | (276,591) | (238,596) | ||||||
Intangible assets, net | $ | 277,506 | $ | 317,895 |
Years ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | ||||||||
Included in cost of revenue: | |||||||||||
Cost of recurring | $ | 36,835 | $ | 42,565 | $ | 39,877 | |||||
Cost of one-time services and other | 2,133 | 2,204 | 2,356 | ||||||||
Total included in cost of revenue | 38,968 | 44,769 | 42,233 | ||||||||
Included in operating expenses | 2,915 | 5,316 | 4,844 | ||||||||
Total amortization of intangibles from business combinations | $ | 41,883 | $ | 50,085 | $ | 47,077 |
Years ended December 31, | |||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | ||||||
Included in cost of revenue: | |||||||||
Cost of recurring | $ | 42,565 | $ | 39,877 | $ | 37,557 | |||
Cost of one-time services and other | 2,204 | 2,356 | 2,542 | ||||||
Total included in cost of revenue | 44,769 | 42,233 | 40,099 | ||||||
Included in operating expenses | 5,316 | 4,844 | 3,271 | ||||||
Total amortization of intangibles from business combinations | $ | 50,085 | $ | 47,077 | $ | 43,370 |
80 | 2020 Form 10-K |
Years ending December 31, (dollars in thousands) | Amortization expense | ||
2020 | $ | 41,544 | |
2021 | 37,010 | ||
2022 | 34,671 | ||
2023 | 33,665 | ||
2024 | 33,150 | ||
Total | $ | 180,040 |
Years ending December 31, (dollars in thousands) | Amortization expense | ||||
2021 | 36,933 | ||||
2022 | 34,739 | ||||
2023 | 33,735 | ||||
2024 | 33,222 | ||||
2025 | 30,482 | ||||
Total | $ | 169,111 |
5. Earnings Per Share |
Years ended December 31, | |||||||||
(dollars in thousands, except per share amounts) | 2019 | 2018 | 2017 | ||||||
Numerator: | |||||||||
Net income | $ | 11,908 | $ | 44,841 | $ | 73,633 | |||
Denominator: | |||||||||
Weighted average common shares | 47,695,383 | 47,206,669 | 46,669,440 | ||||||
Add effect of dilutive securities: | |||||||||
Stock-based awards | 616,888 | 838,415 | 1,106,262 | ||||||
Weighted average common shares assuming dilution | 48,312,271 | 48,045,084 | 47,775,702 | ||||||
Earnings per share: | |||||||||
Basic | $ | 0.25 | $ | 0.95 | $ | 1.58 | |||
Diluted | $ | 0.25 | $ | 0.93 | $ | 1.54 | |||
Anti-dilutive shares excluded from calculations of diluted earnings per share | 241,336 | 48,881 | 4,634 |
Years ended December 31, | |||||||||||
(dollars in thousands, except per share amounts) | 2020 | 2019 | 2018 | ||||||||
Numerator: | |||||||||||
Net income | $ | 7,717 | $ | 11,908 | $ | 44,841 | |||||
Denominator: | |||||||||||
Weighted average common shares | 48,184,714 | 47,695,383 | 47,206,669 | ||||||||
Add effect of dilutive securities: | |||||||||||
Stock-based awards | 511,627 | 616,888 | 838,415 | ||||||||
Weighted average common shares assuming dilution | 48,696,341 | 48,312,271 | 48,045,084 | ||||||||
Earnings per share: | |||||||||||
Basic | $ | 0.16 | $ | 0.25 | $ | 0.95 | |||||
Diluted | $ | 0.16 | $ | 0.25 | $ | 0.93 | |||||
Anti-dilutive shares excluded from calculations of diluted earnings per share | 956,303 | 241,336 | 48,881 |
81 |
6. Fair Value Measurements |
Fair value measurement using | |||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Fair value as of December 31, 2019 | |||||||||||||||
Financial liabilities: | |||||||||||||||
Derivative instruments | $ | — | $ | 1,757 | $ | — | $ | 1,757 | |||||||
Total financial liabilities | $ | — | $ | 1,757 | $ | — | $ | 1,757 | |||||||
Fair value as of December 31, 2018 | |||||||||||||||
Financial assets: | |||||||||||||||
Derivative instruments | $ | — | $ | 2,260 | $ | — | $ | 2,260 | |||||||
Total financial assets | $ | — | $ | 2,260 | $ | — | $ | 2,260 | |||||||
Fair value as of December 31, 2018 | |||||||||||||||
Financial liabilities: | |||||||||||||||
Derivative instruments | $ | — | $ | 186 | $ | — | $ | 186 | |||||||
Total financial liabilities | $ | — | $ | 186 | $ | — | $ | 186 |
Fair value measurement using | |||||||||||||||||||||||
(dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Fair value as of December 31, 2020 | |||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Derivative instruments | $ | 0 | $ | 4,159 | $ | 0 | $ | 4,159 | |||||||||||||||
Total financial liabilities | $ | 0 | $ | 4,159 | $ | 0 | $ | 4,159 | |||||||||||||||
Fair value as of December 31, 2019 | |||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Derivative instruments | $ | 0 | $ | 1,757 | $ | 0 | $ | 1,757 | |||||||||||||||
Total financial liabilities | $ | 0 | $ | 1,757 | $ | 0 | $ | 1,757 |
82 | 2020 Form 10-K |
7. Property and Equipment and Software Development Costs |
(dollars in thousands) | Assets acquired | Estimated useful life (years) | ||||||
Land | $ | 9,548 | — | |||||
Building | 61,284 | 39 | ||||||
Building improvements | 4,393 | 7 - 15 | ||||||
Total long-lived assets | $ | 75,225 |
2020 Form 10-K | 83 |
Estimated useful life (years) | December 31, | ||||||||||
(dollars in thousands) | 2020 | 2019 | |||||||||
Land | — | $ | 9,548 | $ | 0 | ||||||
Building | 39 | 61,284 | 0 | ||||||||
Building improvements(1) | 7 - 20 | 9,942 | 0 | ||||||||
Equipment | 1 - 5 | 2,865 | 4,512 | ||||||||
Computer hardware | 1 - 5 | 56,202 | 67,045 | ||||||||
Computer software | 1 - 5 | 23,116 | 35,726 | ||||||||
Construction in progress | — | 3,435 | 213 | ||||||||
Furniture and fixtures | 1 - 7 | 2,796 | 7,823 | ||||||||
Leasehold improvements | Lesser of lease term or estimated useful life | 6,044 | 24,295 | ||||||||
Total property and equipment | 175,232 | 139,614 | |||||||||
Less: accumulated depreciation | (70,055) | (104,068) | |||||||||
Property and equipment, net | $ | 105,177 | $ | 35,546 |
Estimated useful life (years) | December 31, | |||||||
(dollars in thousands) | 2019 | 2018 | ||||||
Equipment | 3 - 5 | $ | 4,512 | $ | 4,243 | |||
Computer hardware | 1 - 5 | 67,045 | 75,060 | |||||
Computer software | 1 - 5 | 35,726 | 34,294 | |||||
Construction in progress | — | 213 | 233 | |||||
Furniture and fixtures | 1 - 7 | 7,823 | 7,004 | |||||
Leasehold improvements | Lesser of lease term or estimated useful life | 24,295 | 26,795 | |||||
Total property and equipment | 139,614 | 147,629 | ||||||
Less: accumulated depreciation | (104,068 | ) | (107,598 | ) | ||||
Property and equipment, net | $ | 35,546 | $ | 40,031 |
Estimated useful life (years) | December 31, | ||||||
(dollars in thousands) | 2019 | 2018 | |||||
Software development costs | 3 - 7 | $ | 139,014 | $ | 121,983 | ||
Less: accumulated amortization | (37,712 | ) | (46,884 | ) | |||
Software development costs, net | $ | 101,302 | $ | 75,099 |
Estimated useful life (years) | December 31, | ||||||||||
(dollars in thousands) | 2020 | 2019 | |||||||||
Software development costs | 3 - 7 | $ | 164,665 | $ | 139,014 | ||||||
Less: accumulated amortization | (52,838) | (37,712) | |||||||||
Software development costs, net | $ | 111,827 | $ | 101,302 |
(dollars in thousands) | December 31, 2019 | December 31, 2018 | ||||
Costs of obtaining contracts(1)(2) | $ | 90,764 | $ | 85,590 | ||
Prepaid software maintenance and subscriptions | 24,678 | 21,134 | ||||
Unbilled accounts receivable | 6,233 | 4,161 | ||||
Prepaid insurance | 1,585 | 1,087 | ||||
Taxes, prepaid and receivable | 849 | 2,055 | ||||
Security deposits | 885 | 1,020 | ||||
Other assets | 8,051 | 10,104 | ||||
Total prepaid expenses and other assets | 133,045 | 125,151 | ||||
Less: Long-term portion | 65,193 | 65,363 | ||||
Prepaid expenses and other current assets | $ | 67,852 | $ | 59,788 |
2020 Form 10-K |
8. Consolidated Financial Statement Details |
(dollars in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Restricted cash due to customers | $ | 607,943 | $ | 545,485 | ||||
Real estate escrow balances | 1,276 | 0 | ||||||
Total restricted cash | $ | 609,219 | $ | 545,485 |
(dollars in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Costs of obtaining contracts(1)(2) | $ | 84,914 | $ | 90,764 | ||||
Prepaid software maintenance and subscriptions(3) | 24,471 | 17,384 | ||||||
Implementation costs for cloud computing arrangements, net(4)(5) | 11,298 | 7,294 | ||||||
Unbilled accounts receivable | 10,385 | 6,233 | ||||||
Receivables for probable insurance recoveries(6) | 6,288 | 0 | ||||||
Prepaid insurance | 1,426 | 1,585 | ||||||
Taxes, prepaid and receivable | 1,891 | 849 | ||||||
Security deposits | 754 | 885 | ||||||
Other assets | 9,578 | 8,051 | ||||||
Total prepaid expenses and other assets | 151,005 | 133,045 | ||||||
Less: Long-term portion | 72,639 | 65,193 | ||||||
Prepaid expenses and other current assets | $ | 78,366 | $ | 67,852 |
(dollars in thousands) | December 31, 2019 | December 31, 2018 | ||||
Operating lease liabilities, current portion(1) | $ | 19,784 | $ | — | ||
Accrued bonuses | $ | 24,617 | $ | 14,868 | ||
Accrued commissions and salaries | 6,980 | 9,934 | ||||
Taxes payable | 6,835 | 6,204 | ||||
Customer credit balances | 4,505 | 4,076 | ||||
Unrecognized tax benefit | 3,758 | 2,719 | ||||
Accrued vacation costs | 2,232 | 2,352 | ||||
Accrued health care costs | 2,399 | 1,497 | ||||
Other liabilities | 7,949 | 14,631 | ||||
Total accrued expenses and other liabilities | 79,059 | 56,281 | ||||
Less: Long-term portion | 5,742 | 9,388 | ||||
Accrued expenses and other current liabilities | $ | 73,317 | $ | 46,893 |
(dollars in thousands) | December 31, 2019 | December 31, 2018 | ||||
Recurring | $ | 302,751 | $ | 286,960 | ||
One-time services and other | 13,386 | 11,595 | ||||
Total deferred revenue | 316,137 | 298,555 | ||||
Less: Long-term portion | 1,802 | 2,564 | ||||
Deferred revenue, current portion | $ | 314,335 | $ | 295,991 |
Years ended December 31, | |||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | ||||||
Interest income | $ | 2,802 | $ | 2,008 | $ | 993 | |||
Gain on derivative instrument | — | — | 462 | ||||||
Loss on debt extinguishment | — | — | (299 | ) | |||||
Other income (expense), net | 1,256 | (905 | ) | 1,104 | |||||
Other income, net | $ | 4,058 | $ | 1,103 | $ | 2,260 |
(dollars in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Operating lease liabilities, current portion | $ | 9,359 | $ | 19,784 | ||||
Accrued bonuses(1) | 0 | 24,617 | ||||||
Taxes payable(2) | 19,577 | 6,835 | ||||||
Customer credit balances | 5,874 | 4,505 | ||||||
Accrued commissions and salaries | 5,010 | 6,980 | ||||||
Accrued legal costs | 4,808 | 87 | ||||||
Derivative instruments | 4,159 | 1,757 | ||||||
Unrecognized tax benefit | 3,351 | 3,758 | ||||||
Accrued health care costs | 2,341 | 2,399 | ||||||
Accrued vacation costs | 2,311 | 2,232 | ||||||
Other liabilities | 6,304 | 6,105 | ||||||
Total accrued expenses and other liabilities | 63,094 | 79,059 | ||||||
Less: Long-term portion | 10,866 | 5,742 | ||||||
Accrued expenses and other current liabilities | $ | 52,228 | $ | 73,317 |
(dollars in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Recurring | $ | 303,840 | $ | 302,751 | ||||
One-time services and other | 13,074 | 13,386 | ||||||
Total deferred revenue | 316,914 | 316,137 | ||||||
Less: Long-term portion | 4,678 | 1,802 | ||||||
Deferred revenue, current portion | $ | 312,236 | $ | 314,335 |
Years ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | ||||||||
Interest income | $ | 1,660 | $ | 2,802 | $ | 2,008 | |||||
Other (expense) income, net | (2) | 1,256 | (905) | ||||||||
Other income, net | $ | 1,658 | $ | 4,058 | $ | 1,103 |
86 | 2020 Form 10-K |
9. Debt |
Debt balance at | Weighted average effective interest rate at | ||||||||||
(dollars in thousands) | December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||
Credit facility: | |||||||||||
Revolving credit loans | $ | 187,000 | $ | 100,000 | 3.11 | % | 4.13 | % | |||
Term loans | 281,250 | 288,750 | 3.22 | % | 3.44 | % | |||||
Total debt | 468,250 | 388,750 | 3.18 | % | 3.61 | % | |||||
Less: Unamortized discount and debt issuance costs | 1,150 | 1,626 | |||||||||
Less: Debt, current portion | 7,500 | 7,500 | 3.05 | % | 3.77 | % | |||||
Debt, net of current portion | $ | 459,600 | $ | 379,624 | 3.18 | % | 3.61 | % |
Debt balance at | Weighted average effective interest rate at | ||||||||||||||||
(dollars in thousands) | December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
Credit facility: | |||||||||||||||||
Revolving credit loans | $ | 69,625 | $ | 187,000 | 1.83 | % | 3.11 | % | |||||||||
Term loans | 400,000 | 281,250 | 3.12 | % | 3.22 | % | |||||||||||
Real estate loans | 60,626 | 0 | 5.22 | % | 0 | % | |||||||||||
Other debt | 3,926 | 0 | 5.00 | % | 0 | % | |||||||||||
Total debt | 534,177 | 468,250 | 3.21 | % | 3.18 | % | |||||||||||
Less: Unamortized discount and debt issuance costs | 3,144 | 1,150 | |||||||||||||||
Less: Debt, current portion | 12,840 | 7,500 | 2.61 | % | 3.05 | % | |||||||||||
Debt, net of current portion | $ | 518,193 | $ | 459,600 | 3.22 | % | 3.18 | % |
2020 Form 10-K | 87 |
88 | 2020 Form 10-K |
Years ending December 31, (dollars in thousands) | Annual maturities | ||
2020 | $ | 7,500 | |
2021 | 7,500 | ||
2022 | 453,250 | ||
2023 | — | ||
2024 | — | ||
Thereafter | — | ||
Total required maturities | $ | 468,250 |
Years ending December 31, (dollars in thousands) | Annual maturities | ||||
2021 | $ | 12,840 | |||
2022 | 12,985 | ||||
2023 | 11,983 | ||||
2024 | 11,609 | ||||
2025 | 431,408 | ||||
Thereafter | 53,352 | ||||
Total required maturities | $ | 534,177 |
10. Derivative Instruments |
(dollars in thousands) | Term of derivative instrument | Notional value | ||||||
Derivative instruments designated as hedging instruments: | ||||||||
Interest rate swap | July 2017 - July 2021 | $ | 150,000 | |||||
Interest rate swap | February 2018 - June 2021 | 50,000 | ||||||
Interest rate swap | June 2019 - June 2021 | 75,000 | ||||||
Interest rate swap | November 2020 - October 2024 | 60,000 | ||||||
Interest rate swap | November 2020 - October 2024 | 60,000 | ||||||
$ | 395,000 | |||||||
Forward-starting interest rate swap | June 2021 - October 2024 | 120,000 | ||||||
Forward-starting interest rate swap | July 2021 - October 2024 | 120,000 | ||||||
$ | 240,000 |
2020 Form 10-K | 89 |
Asset Derivatives | Liability Derivatives | ||||||||||||||
(dollars in thousands) | Balance sheet location | December 31, 2019 | December 31, 2018 | Balance sheet location | December 31, 2019 | December 31, 2018 | |||||||||
Derivative instruments designated as hedging instruments: | |||||||||||||||
Interest rate swaps, current portion | Prepaid expenses and other current assets | $ | — | $ | — | Accrued expenses and other current liabilities | $ | — | $ | — | |||||
Interest rate swaps, long-term portion | Other assets | — | 2,260 | Other liabilities | 1,757 | 186 | |||||||||
Total derivative instruments designated as hedging instruments | $ | — | $ | 2,260 | $ | 1,757 | $ | 186 |
Liability Derivatives | |||||||||||||||||||||||
(dollars in thousands) | Balance sheet location | December 31, 2020 | December 31, 2019 | ||||||||||||||||||||
Derivative instruments designated as hedging instruments: | |||||||||||||||||||||||
Interest rate swaps, current portion | Accrued expenses and other current liabilities | $ | 2,698 | $ | 0 | ||||||||||||||||||
Interest rate swaps, long-term portion | Other liabilities | 1,461 | 1,757 | ||||||||||||||||||||
Total derivative instruments designated as hedging instruments | $ | 4,159 | $ | 1,757 | |||||||||||||||||||
Gain (loss) recognized in accumulated other comprehensive loss as of | Location of gain (loss) reclassified from accumulated other comprehensive loss into income | Gain (loss) reclassified from accumulated other comprehensive loss into income | |||||
(dollars in thousands) | December 31, 2019 | Year ended December 31, 2019 | |||||
Interest rate swaps | $ | (1,757 | ) | Interest expense | $ | 573 | |
December 31, 2018 | Year ended December 31, 2018 | ||||||
Interest rate swaps | $ | 2,074 | Interest expense | $ | 118 | ||
December 31, 2017 | Year ended December 31, 2017 | ||||||
Interest rate swaps | $ | 1,283 | Interest expense | $ | (293 | ) |
Gain (loss) recognized in accumulated other comprehensive loss as of | Location of gain (loss) reclassified from accumulated other comprehensive loss into income | Gain (loss) reclassified from accumulated other comprehensive loss into income | |||||||||
(dollars in thousands) | December 31, 2020 | Year ended December 31, 2020 | |||||||||
Interest rate swaps | $ | (4,159) | Interest expense | $ | (3,827) | ||||||
December 31, 2019 | Year ended December 31, 2019 | ||||||||||
Interest rate swaps | $ | (1,757) | Interest expense | $ | 573 | ||||||
December 31, 2018 | Year ended December 31, 2018 | ||||||||||
Interest rate swaps | $ | 2,074 | Interest expense | $ | 118 |
Location of gain (loss) recognized in income on derivative | Gain (loss) recognized in income | |||
(dollars in thousands) | Year ended December 31, 2017 | |||
Foreign currency option contracts | Other income (expense), net | $ | 513 | |
Foreign currency forward contracts | Other income (expense), net | $ | (51 | ) |
Total gain | $ | 462 |
11. Commitments and Contingencies |
90 | 2020 Form 10-K |
Year ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | |||||||||
Operating lease cost(1) | $ | 41,210 | $ | 27,519 | |||||||
Variable lease cost | 4,266 | 4,035 | |||||||||
Sublease income | (3,120) | (3,189) | |||||||||
Net lease cost | $ | 42,356 | $ | 28,365 |
Year ended December 31, | |||
(dollars in thousands) | 2019 | ||
Operating lease cost(1) | $ | 27,519 | |
Variable lease cost | 4,035 | ||
Sublease income | (3,189 | ) | |
Net lease cost | $ | 28,365 |
Years ending December 31, (dollars in thousands) | Operating leases(1) | ||
2020 | $ | 25,999 | |
2021 | 21,840 | ||
2022 | 17,187 | ||
2023 | 14,651 | ||
2024 | 7,790 | ||
Thereafter | 74,168 | ||
Total lease payments | 161,635 | ||
Less: Amount representing interest | 46,227 | ||
Present value of future payments | $ | 115,408 |
Years ending December 31, (dollars in thousands) | Operating leases | ||||
2021 | 10,353 | ||||
2022 | 5,796 | ||||
2023 | 4,417 | ||||
2024 | 3,211 | ||||
2025 | 1,905 | ||||
Thereafter | 3,847 | ||||
Total lease payments | 29,529 | ||||
Less: Amount representing interest | 2,813 | ||||
Present value of future payments | $ | 26,716 |
Years ending December 31, (dollars in thousands) | Operating leases | ||
2019 | $ | 20,808 | |
2020 | 20,274 | ||
2021 | 16,924 | ||
2022 | 14,391 | ||
2023 | 12,923 | ||
Thereafter | 81,755 | ||
Total minimum lease payments | $ | 167,075 |
(dollars in thousands) | December 31, 2019 | ||
Operating leases | |||
Operating lease right-of-use assets | $ | 104,400 | |
Accrued expenses and other current liabilities | $ | 19,784 | |
Operating lease liabilities, net of current portion | 95,624 | ||
Total operating lease liabilities | $ | 115,408 |
(dollars in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Operating leases | ||||||||
Operating lease right-of-use assets | $ | 22,671 | $ | 104,400 | ||||
Accrued expenses and other current liabilities | $ | 9,359 | $ | 19,784 | ||||
Operating lease liabilities, net of current portion | 17,357 | 95,624 | ||||||
Total operating lease liabilities | $ | 26,716 | $ | 115,408 |
2019 | ||
(dollars in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Operating leases | ||||||||
Weighted average remaining lease term (years) | 4.6 | 12.5 | ||||||
Weighted average discount rate | 5.70 | % | 5.96 | % |
Year ended December 31, | |||
(dollars in thousands) | 2019 | ||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ | 24,569 | |
Right-of-use assets obtained in exchange for lease obligations (non-cash): | |||
Operating leases | 102,245 |
Year ended December 31, | ||||||||
(dollars in thousands) | 2020 | 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | 25,120 | $ | 24,569 | ||||
Right-of-use assets obtained in exchange for lease obligations (non-cash): | ||||||||
Operating leases | 11,002 | 102,245 |
92 | 2020 Form 10-K |
2020 Form 10-K | 93 |
12. Income Taxes |
2020 Form 10-K |
Years ended December 31, | |||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | ||||||
Current taxes: | |||||||||
U.S. Federal | $ | 1,534 | $ | (1,088 | ) | $ | 2,565 | ||
U.S. State and local | 613 | 1,182 | (144 | ) | |||||
International | 130 | 306 | 101 | ||||||
Total current taxes | 2,277 | 400 | 2,522 | ||||||
Deferred taxes: | |||||||||
U.S. Federal | (1,724 | ) | 659 | (17,128 | ) | ||||
U.S. State and local | (2,235 | ) | 45 | 398 | |||||
International | 359 | (1,323 | ) | (1,084 | ) | ||||
Total deferred taxes | (3,600 | ) | (619 | ) | (17,814 | ) | |||
Total income tax benefit | $ | (1,323 | ) | $ | (219 | ) | $ | (15,292 | ) |
Years ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | ||||||||
Current taxes: | |||||||||||
U.S. Federal | $ | (407) | $ | 1,534 | $ | (1,088) | |||||
U.S. State and local | 1,563 | 613 | 1,182 | ||||||||
International | 3,904 | 130 | 306 | ||||||||
Total current taxes | 5,060 | 2,277 | 400 | ||||||||
Deferred taxes: | |||||||||||
U.S. Federal | (1,064) | (1,724) | 659 | ||||||||
U.S. State and local | 7,725 | (2,235) | 45 | ||||||||
International | 2,176 | 359 | (1,323) | ||||||||
Total deferred taxes | 8,837 | (3,600) | (619) | ||||||||
Total income tax provision (benefit) | $ | 13,897 | $ | (1,323) | $ | (219) |
Years ended December 31, | |||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | ||||||
U.S. | $ | 5,149 | $ | 47,532 | $ | 58,547 | |||
International | 5,436 | (2,910 | ) | (206 | ) | ||||
Income before provision for income taxes | $ | 10,585 | $ | 44,622 | $ | 58,341 |
Years ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | ||||||||
U.S. | $ | (4,112) | $ | 5,149 | $ | 47,532 | |||||
International | 25,726 | 5,436 | (2,910) | ||||||||
Income before provision for income taxes | $ | 21,614 | $ | 10,585 | $ | 44,622 |
Years ended December 31, | ||||||
2019 | 2018 | 2017 | ||||
Federal statutory rate | 21.0 | % | 21.0 | % | 35.0 | % |
Effect of: | ||||||
State income taxes, net of federal benefit | (1.7 | ) | 4.1 | 1.8 | ||
Change in federal income tax rate applied to deferred tax balances | — | — | (43.1 | ) | ||
Change in state income tax rate applied to deferred tax balances | (3.1 | ) | (0.4 | ) | — | |
Unrecognized tax benefit | 4.4 | (2.6 | ) | 1.5 | ||
State credits, net of federal benefit | (15.4 | ) | (1.9 | ) | (1.4 | ) |
Change in valuation reserve (primarily state credit reserves) | 3.7 | 0.4 | (1.0 | ) | ||
Federal credits generated | (37.6 | ) | (10.4 | ) | (5.8 | ) |
Foreign tax rate | (6.3 | ) | 0.4 | 0.2 | ||
Acquisition costs | 0.5 | — | 2.2 | |||
Section 162(m) limitation | 30.8 | 4.2 | 2.5 | |||
Stock-based compensation | (20.2 | ) | (17.4 | ) | (18.9 | ) |
GILTI inclusion | 5.9 | — | — | |||
FDII benefit | (1.5 | ) | (0.7 | ) | — | |
Nondeductible meals, entertainment and transportation | 11.3 | 2.6 | 0.8 | |||
Other | (4.3 | ) | 0.2 | — | ||
Income tax benefit effective rate | (12.5 | )% | (0.5 | )% | (26.2 | )% |
Years ended December 31, | |||||||||||
2020 | 2019 | 2018 | |||||||||
Federal statutory rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||
Effect of: | |||||||||||
State income taxes, net of federal benefit | 5.9 | (1.7) | 4.1 | ||||||||
Change in foreign income tax rate applied to deferred tax balances | 4.0 | 2.0 | 0 | ||||||||
Change in state income tax rate applied to deferred tax balances | 0.1 | (3.1) | (0.4) | ||||||||
Change in valuation reserve (primarily state credit reserves) | 38.2 | 3.7 | 0.4 | ||||||||
Section 162(m) limitation | 17.5 | 30.8 | 4.2 | ||||||||
Nondeductible meals, entertainment and transportation | 3.3 | 11.3 | 2.6 | ||||||||
Unrecognized tax benefit | 1.3 | 4.4 | (2.6) | ||||||||
GILTI inclusion | 1.3 | 5.9 | 0 | ||||||||
FDII benefit | 0 | (1.5) | (0.7) | ||||||||
Stock-based compensation | (1.2) | (20.2) | (17.4) | ||||||||
Foreign tax rate | (1.7) | 0.3 | 0.2 | ||||||||
State credits, net of federal benefit | (2.3) | (15.4) | (1.9) | ||||||||
DTA Adjustment – NOLs | (3.3) | 0 | 0 | ||||||||
Return to accrual adjustment | (4.1) | (10.6) | (1.6) | ||||||||
Federal credits generated | (17.4) | (37.6) | (10.4) | ||||||||
Other | 1.7 | (1.8) | 2.0 | ||||||||
Income tax provision (benefit) effective rate | 64.3 | % | (12.5) | % | (0.5) | % |
2020 Form 10-K |
December 31, | ||||||
(dollars in thousands) | 2019 | 2018 | ||||
Deferred tax assets relating to: | ||||||
Federal and state and foreign net operating loss carryforwards | $ | 9,203 | $ | 11,021 | ||
Federal, state and foreign tax credits | 24,435 | 18,936 | ||||
Operating leases | 35,620 | — | ||||
Intangible assets | 1,560 | 1,041 | ||||
Stock-based compensation | 11,717 | 11,462 | ||||
Accrued bonuses | 1,713 | 973 | ||||
Deferred revenue | 682 | 854 | ||||
Allowance for doubtful accounts | 1,374 | 1,242 | ||||
Other | 7,487 | 5,607 | ||||
Total deferred tax assets | 93,791 | 51,136 | ||||
Deferred tax liabilities relating to: | ||||||
Intangible assets | (46,569 | ) | (43,700 | ) | ||
Operating leases | (32,888 | ) | — | |||
Fixed assets | (4,446 | ) | (4,444 | ) | ||
Costs of obtaining contracts | (21,128 | ) | (19,573 | ) | ||
Capitalized software development costs | (26,107 | ) | (19,469 | ) | ||
Other | (315 | ) | (926 | ) | ||
Total deferred tax liabilities | (131,453 | ) | (88,112 | ) | ||
Valuation allowance | (6,453 | ) | (6,855 | ) | ||
Net deferred tax liability | $ | (44,115 | ) | $ | (43,831 | ) |
December 31, | ||||||||
(dollars in thousands) | 2020 | 2019 | ||||||
Deferred tax assets relating to: | ||||||||
Federal and state and foreign net operating loss carryforwards | $ | 5,592 | $ | 9,203 | ||||
Federal, state and foreign tax credits | 42,598 | 24,435 | ||||||
Stock-based compensation | 17,434 | 11,717 | ||||||
Operating leases | 13,375 | 35,620 | ||||||
Allowance for credit losses | 2,399 | 1,374 | ||||||
Intangible assets | 1,663 | 1,560 | ||||||
Deferred revenue | 524 | 682 | ||||||
Accrued bonuses | 0 | 1,713 | ||||||
Other | 9,111 | 7,487 | ||||||
Total deferred tax assets | 92,696 | 93,791 | ||||||
Deferred tax liabilities relating to: | ||||||||
Intangible assets | (45,757) | (46,569) | ||||||
Capitalized software development costs | (28,804) | (26,107) | ||||||
Costs of obtaining contracts | (20,256) | (21,128) | ||||||
Operating leases | (12,333) | (32,888) | ||||||
Fixed assets | (8,458) | (4,446) | ||||||
Other | (398) | (315) | ||||||
Total deferred tax liabilities | (116,006) | (131,453) | ||||||
Valuation allowance | (29,184) | (6,453) | ||||||
Net deferred tax liability | $ | (52,494) | $ | (44,115) |
2020 Form 10-K | 97 |
Years ended December 31, | Balance at beginning of year | Acquisition- related change | Charges to expense | Balance at end of year | ||||||||
(dollars in thousands) | ||||||||||||
2019 | $ | 6,855 | $ | — | $ | (402 | ) | $ | 6,453 | |||
2018 | 7,205 | 16 | (366 | ) | 6,855 | |||||||
2017 | 6,994 | — | 211 | 7,205 |
Years ended December 31, (dollars in thousands) | Balance at beginning of year | Acquisition- related change | Charges to expense | Balance at end of year | ||||||||||
2020 | $ | 6,453 | $ | 0 | $ | 22,731 | $ | 29,184 | ||||||
2019 | 6,855 | 0 | (402) | 6,453 | ||||||||||
2018 | 7,205 | 16 | (366) | 6,855 |
Years ended December 31, | |||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | ||||||
Balance at December 31, 2018 | $ | 3,704 | $ | 5,160 | $ | 3,145 | |||
Increases from prior period positions | 1,183 | 104 | 1,860 | ||||||
Decreases in prior year positions | (385 | ) | (413 | ) | (238 | ) | |||
Increases from current period positions | 456 | 58 | 404 | ||||||
Lapse of statute of limitations | (612 | ) | (1,205 | ) | (11 | ) | |||
Balance at December 31, 2019 | $ | 4,346 | $ | 3,704 | $ | 5,160 |
Years ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | ||||||||
Balance at beginning of year | $ | 4,346 | $ | 3,704 | $ | 5,160 | |||||
Increases from prior period positions | 414 | 1,183 | 104 | ||||||||
Decreases in prior year positions | (614) | (385) | (413) | ||||||||
Increases from current period positions | 491 | 456 | 58 | ||||||||
Lapse of statute of limitations | (12) | (612) | (1,205) | ||||||||
Balance at end of year | $ | 4,625 | $ | 4,346 | $ | 3,704 |
13. Stock-based Compensation |
98 | 2020 Form 10-K |
Outstanding at December 31, | ||||
Award type | 2019 | 2018 | ||
Restricted stock awards | 1,316,764 | 1,263,510 | ||
Restricted stock units | 501,487 | 459,673 | ||
Stock appreciation rights | — | 60,871 | ||
Stock options | 206 | 836 |
Outstanding at December 31, | ||||||||
Award type | 2020 | 2019 | ||||||
Restricted stock awards | 1,277,109 | 1,316,764 | ||||||
Restricted stock units | 1,170,885 | 501,487 | ||||||
Stock options | 0 | 206 |
Years ended December 31, | |||||||||||
(in thousands) | 2020 | 2019 | 2018 | ||||||||
Included in cost of revenue: | |||||||||||
Cost of recurring | $ | 5,793 | $ | 1,879 | $ | 2,464 | |||||
Cost of one-time services and other | 7,581 | 1,487 | 2,778 | ||||||||
Total included in cost of revenue | 13,374 | 3,366 | 5,242 | ||||||||
Included in operating expenses: | |||||||||||
Sales, marketing and customer success | 15,514 | 11,203 | 9,285 | ||||||||
Research and development | 18,527 | 11,115 | 9,048 | ||||||||
General and administrative | 39,842 | 32,949 | 24,699 | ||||||||
Total included in operating expenses | 73,883 | 55,267 | 43,032 | ||||||||
Total stock-based compensation expense | $ | 87,257 | $ | 58,633 | $ | 48,274 |
Years ended December 31, | |||||||||
(in thousands) | 2019 | 2018 | 2017 | ||||||
Included in cost of revenue: | |||||||||
Cost of recurring | $ | 1,879 | $ | 2,464 | $ | 1,627 | |||
Cost of one-time services and other | 1,487 | 2,778 | 1,843 | ||||||
Total included in cost of revenue | 3,366 | 5,242 | 3,470 | ||||||
Included in operating expenses: | |||||||||
Sales, marketing and customer success | 11,203 | 9,285 | 6,381 | ||||||
Research and development | 11,115 | 9,048 | 7,765 | ||||||
General and administrative | 32,949 | 24,699 | 23,015 | ||||||
Total included in operating expenses | 55,267 | 43,032 | 37,161 | ||||||
Total stock-based compensation expense | $ | 58,633 | $ | 48,274 | $ | 40,631 |
2020 Form 10-K | 99 |
Restricted stock awards | Restricted stock awards | Weighted average grant-date fair value | Weighted average remaining contractual term (in years) | Aggregate intrinsic value(1) (in thousands) | |||||||||||||
Unvested at January 1, 2020 | 1,316,764 | $ | 79.92 | ||||||||||||||
Granted | 657,718 | 77.16 | |||||||||||||||
Vested | (520,296) | 76.66 | |||||||||||||||
Forfeited | (177,077) | 80.71 | |||||||||||||||
Unvested at December 31, 2020 | 1,277,109 | 79.54 | 8.4 | $ | 73,510 |
Restricted stock awards | Restricted stock awards | Weighted average grant-date fair value | Weighted average remaining contractual term (in years) | Aggregate intrinsic value(1) (in thousands) | ||||||
Unvested at January 1, 2019 | 1,263,510 | $ | 75.46 | |||||||
Granted | 723,868 | 78.39 | ||||||||
Vested | (557,749 | ) | 67.26 | |||||||
Forfeited | (112,865 | ) | 80.27 | |||||||
Unvested at December 31, 2019 | 1,316,764 | 79.92 | 8.4 | $ | 104,814 |
Restricted stock units | Restricted stock units | Weighted average grant-date fair value | Weighted average remaining contractual term (in years) | Aggregate intrinsic value(1) (in thousands) | |||||||||||||
Unvested at January 1, 2020 | 501,487 | $ | 80.49 | ||||||||||||||
Granted | 1,020,381 | 59.59 | |||||||||||||||
Forfeited | (111,450) | 67.75 | |||||||||||||||
Vested | (239,533) | 78.97 | |||||||||||||||
Unvested at December 31, 2020 | 1,170,885 | 63.62 | 9.0 | $ | 67,396 |
Restricted stock units | Restricted stock units | Weighted average grant-date fair value | Weighted average remaining contractual term (in years) | Aggregate intrinsic value(1) (in thousands) | ||||||
Unvested at January 1, 2019 | 459,673 | $ | 79.78 | |||||||
Granted | 302,719 | 77.90 | ||||||||
Forfeited | (7,201 | ) | 85.63 | |||||||
Vested | (253,704 | ) | 75.68 | |||||||
Unvested at December 31, 2019 | 501,487 | 80.49 | 8.5 | $ | 39,918 |
2020 Form 10-K |
14. Stockholders' Equity |
Declaration Date | Dividend per Share | Record Date | Payable Date | |||
February 6, 2019 | $ | 0.12 | February 27 | March 15 | ||
April 30, 2019 | 0.12 | May 28 | June 14 | |||
July 30, 2019 | 0.12 | August 28 | September 13 | |||
October 28, 2019 | 0.12 | November 27 | December 13 |
Declaration Date | Dividend per Share | Record Date | Payable Date | |||||||||||
$ | 0.12 | February 28 | March 13 | |||||||||||
2020 Form 10-K | 101 |
Years ended December 31, | |||||||||
(in thousands) | 2019 | 2018 | 2017 | ||||||
Accumulated other comprehensive loss, beginning of period | $ | (5,110 | ) | $ | (642 | ) | $ | (604 | ) |
By component: | |||||||||
Gains and losses on cash flow hedges: | |||||||||
Accumulated other comprehensive income (loss) balance, beginning of period | $ | 1,498 | $ | 748 | $ | (3 | ) | ||
Other comprehensive (loss) income before reclassifications, net of tax effects of $860, $(239) and $(374) | (2,399 | ) | 670 | 574 | |||||
Amounts reclassified from accumulated other comprehensive (loss) income to interest expense | (573 | ) | (118 | ) | 293 | ||||
Tax benefit included in provision for income taxes | 151 | 31 | (116 | ) | |||||
Total amounts reclassified from accumulated other comprehensive (loss) income | (422 | ) | (87 | ) | 177 | ||||
Net current-period other comprehensive (loss) income | (2,821 | ) | 583 | 751 | |||||
Reclassification upon adoption of ASU 2018-02 | — | 167 | — | ||||||
Accumulated other comprehensive (loss) income balance, end of period | $ | (1,323 | ) | $ | 1,498 | $ | 748 | ||
Foreign currency translation adjustment: | |||||||||
Accumulated other comprehensive loss balance, beginning of period | $ | (6,608 | ) | $ | (1,390 | ) | $ | (601 | ) |
Translation adjustments | 2,641 | (5,218 | ) | (789 | ) | ||||
Accumulated other comprehensive loss balance, end of period | (3,967 | ) | (6,608 | ) | (1,390 | ) | |||
Accumulated other comprehensive loss, end of period | $ | (5,290 | ) | $ | (5,110 | ) | $ | (642 | ) |
Years ended December 31, | |||||||||||
(in thousands) | 2020 | 2019 | 2018 | ||||||||
Accumulated other comprehensive loss, beginning of period | $ | (5,290) | $ | (5,110) | $ | (642) | |||||
By component: | |||||||||||
Gains and losses on cash flow hedges: | |||||||||||
Accumulated other comprehensive (loss) income balance, beginning of period | $ | (1,323) | $ | 1,498 | $ | 748 | |||||
Other comprehensive (loss) income before reclassifications, net of tax effects of $1,625, $860 and $(239) | (4,602) | (2,399) | 670 | ||||||||
Amounts reclassified from accumulated other comprehensive (loss) income to interest expense | 3,827 | (573) | (118) | ||||||||
Tax (benefit) expense included in provision for income taxes | (1,003) | 151 | 31 | ||||||||
Total amounts reclassified from accumulated other comprehensive (loss) income | 2,824 | (422) | (87) | ||||||||
Net current-period other comprehensive (loss) income | (1,778) | (2,821) | 583 | ||||||||
Reclassification upon adoption of ASU 2018-02 | 0 | 0 | 167 | ||||||||
Accumulated other comprehensive (loss) income balance, end of period | $ | (3,101) | $ | (1,323) | $ | 1,498 | |||||
Foreign currency translation adjustment: | |||||||||||
Accumulated other comprehensive loss balance, beginning of period | $ | (3,967) | $ | (6,608) | $ | (1,390) | |||||
Translation adjustments | 4,571 | 2,641 | (5,218) | ||||||||
Accumulated other comprehensive income (loss) balance, end of period | 604 | (3,967) | (6,608) | ||||||||
Accumulated other comprehensive loss, end of period | $ | (2,497) | $ | (5,290) | $ | (5,110) |
15. Defined Contribution Plan |
102 | 2020 Form 10-K |
16. Segment Information |
Years ended December 31, | ||||||
(dollars in thousands) | 2019 | 2018 | ||||
United States | $ | 32,606 | $ | 37,015 | ||
Other countries | 2,940 | 3,016 | ||||
Total property and equipment | $ | 35,546 | $ | 40,031 |
Years ended December 31, | ||||||||
(dollars in thousands) | 2020 | 2019 | ||||||
United States | $ | 103,123 | $ | 32,606 | ||||
Other countries | 2,054 | 2,940 | ||||||
Total property and equipment | $ | 105,177 | $ | 35,546 |
17. Revenue Recognition |
(in thousands) | December 31, 2019 | December 31, 2018 | ||||
Total deferred revenue | $ | 316,137 | $ | 298,555 |
(in thousands) | December 31, 2020 | December 31, 2019 | ||||||
Total deferred revenue | $ | 316,914 | $ | 316,137 |
Years ended December 31, | |||||||||
(dollars in thousands) | 2019 | 2018 | 2017 | ||||||
United States | $ | 775,308 | $ | 727,366 | $ | 706,904 | |||
Other countries | 125,115 | 121,240 | 81,583 | ||||||
Total revenue | $ | 900,423 | $ | 848,606 | $ | 788,487 |
Years ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | 2018 | ||||||||
United States | $ | 772,188 | $ | 775,308 | $ | 727,366 | |||||
United Kingdom | 84,121 | 65,176 | 59,898 | ||||||||
Other countries | 56,910 | 59,939 | 61,342 | ||||||||
Total revenue | $ | 913,219 | $ | 900,423 | $ | 848,606 |
Years ended December 31, | |||||||||||
(dollars in thousands) | 2020 | 2019 | 2018(2) | ||||||||
GMG | $ | 376,762 | $ | 378,384 | $ | 362,585 | |||||
EMG(1) | 393,061 | 392,258 | 360,873 | ||||||||
IMG | 142,607 | 126,511 | 123,522 | ||||||||
Other | 789 | 3,270 | 1,626 | ||||||||
Total revenue | $ | 913,219 | $ | 900,423 | $ | 848,606 |
Years ended December 31, | |||||||||
(dollars in thousands) | 2019 | 2018(2) | 2017(2) | ||||||
GMG | $ | 378,384 | $ | 362,585 | $ | 353,166 | |||
EMG(1) | 392,258 | 360,873 | 352,034 | ||||||
IMG | 126,511 | 123,522 | 83,217 | ||||||
Other | 3,270 | 1,626 | 70 | ||||||
Total revenue | $ | 900,423 | $ | 848,606 | $ | 788,487 |
(2) |
2020 Form 10-K |
18. Quarterly Results (Unaudited) |
(dollars in thousands, except per share data) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | (dollars in thousands, except per share data) | December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | |||||||||||||||||
Total revenue | $ | 237,839 | $ | 221,120 | $ | 225,634 | $ | 215,830 | Total revenue | $ | 242,606 | $ | 215,001 | $ | 231,991 | $ | 223,621 | |||||||||
Gross profit | 121,302 | 119,323 | 124,827 | 116,547 | Gross profit | 123,030 | 116,316 | 127,052 | 118,756 | |||||||||||||||||
Income from operations | 3,586 | 7,883 | 13,491 | 2,185 | ||||||||||||||||||||||
Income before provision for income taxes | (1,262 | ) | 4,930 | 9,873 | (2,956 | ) | ||||||||||||||||||||
Net income | 1,324 | 4,566 | 7,140 | (1,122 | ) | |||||||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||
(Loss) income from operations | (Loss) income from operations | (850) | 10,087 | 19,582 | 8,424 | |||||||||||||||||||||
(Loss) income before provision for income taxes | (Loss) income before provision for income taxes | (6,672) | 6,632 | 16,319 | 5,335 | |||||||||||||||||||||
Net (loss) income | Net (loss) income | (13,621) | 4,876 | 11,823 | 4,639 | |||||||||||||||||||||
(Loss) earnings per share | (Loss) earnings per share | |||||||||||||||||||||||||
Basic | $ | 0.03 | $ | 0.10 | $ | 0.15 | $ | (0.02 | ) | Basic | $ | (0.28) | $ | 0.10 | $ | 0.25 | $ | 0.10 | ||||||||
Diluted | 0.03 | 0.09 | 0.15 | (0.02 | ) | Diluted | (0.28) | 0.10 | 0.24 | 0.10 | ||||||||||||||||
(dollars in thousands, except per share data) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | (dollars in thousands, except per share data) | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||
Total revenue | $ | 221,218 | $ | 209,532 | $ | 213,672 | $ | 204,184 | Total revenue | $ | 237,839 | $ | 221,120 | $ | 225,634 | $ | 215,830 | |||||||||
Gross profit | 117,922 | 114,295 | 118,500 | 116,147 | Gross profit | 121,302 | 119,323 | 124,827 | 116,547 | |||||||||||||||||
Income from operations | 14,679 | 15,783 | 11,374 | 17,581 | Income from operations | 3,586 | 7,883 | 13,491 | 2,185 | |||||||||||||||||
Income before provision for income taxes | 11,485 | 11,496 | 7,417 | 14,224 | ||||||||||||||||||||||
Net income | 9,334 | 11,164 | 6,592 | 17,751 | ||||||||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||
(Loss) income before provision for income taxes | (Loss) income before provision for income taxes | (1,262) | 4,930 | 9,873 | (2,956) | |||||||||||||||||||||
Net income (loss) | Net income (loss) | 1,324 | 4,566 | 7,140 | (1,122) | |||||||||||||||||||||
Earnings (loss) per share | Earnings (loss) per share | |||||||||||||||||||||||||
Basic | $ | 0.20 | $ | 0.24 | $ | 0.14 | $ | 0.38 | Basic | $ | 0.03 | $ | 0.10 | $ | 0.15 | $ | (0.02) | |||||||||
Diluted | 0.19 | 0.23 | 0.14 | 0.37 | Diluted | 0.03 | 0.09 | 0.15 | (0.02) |
19. Restructuring |
Cumulative costs incurred as of | Costs incurred during the year ended(1) | Cumulative costs incurred as of | |||||||||
(in thousands) | December 31, 2018 | December 31, 2019 | |||||||||
By component: | |||||||||||
Contract termination costs | $ | 4,176 | $ | 4,906 | $ | 9,082 | |||||
Other costs | 1,208 | 902 | 2,110 | ||||||||
Total | $ | 5,384 | $ | 5,808 | $ | 11,192 |
Accrued at | Increases for incurred costs(1) | Written off upon adoption of ASU 2016-02(2) | Costs paid | Accrued at | |||||||||||||||
(in thousands) | December 31, 2018 | December 31, 2019 | |||||||||||||||||
By component: | |||||||||||||||||||
Contract termination costs | $ | 1,865 | $ | 4,906 | $ | (1,656 | ) | $ | (5,115 | ) | $ | — | |||||||
Other costs | 50 | 902 | — | (952 | ) | — | |||||||||||||
Total | $ | 1,915 | $ | 5,808 | $ | (1,656 | ) | $ | (6,067 | ) | $ | — |
Evaluation of Disclosure Controls and Procedures |
Changes in Internal Control Over Financial Reporting |
Management’s Report on Internal Control Over Financial Reporting |
PART III. |
PART IV. |
1.Financial statements |
Filed In | ||||||||||
Exhibit Number | Description of Document | Registrant’s Form | Dated | Exhibit Number | Filed Herewith | |||||
S-1/A | 4/6/2004 | 2.1 | ||||||||
* | 10-Q | 5/10/2011 | 2.3 | |||||||
8-K | 1/17/2012 | 2.4 | ||||||||
10-K | 2/29/2012 | 2.7 | ||||||||
8-K | 10/2/2014 | 10.76 | ||||||||
8-K | 10/8/2015 | 10.78 | ||||||||
8-K | 10/8/2015 | 10.79 | ||||||||
DEF 14A | 4/30/2009 | |||||||||
8-K | 6/14/2019 | 3.1 | ||||||||
X | ||||||||||
† | S-8 | 8/4/2008 | 10.34 |
Filed In | ||||||||||||||||||||||||||||||||
Exhibit Number | Description of Document | Registrant’s Form | Dated | Exhibit Number | Filed Herewith | |||||||||||||||||||||||||||
S-1/A | 4/6/2004 | 2.1 | ||||||||||||||||||||||||||||||
* | 10-Q | 5/10/2011 | 2.3 | |||||||||||||||||||||||||||||
8-K | 1/17/2012 | 2.4 | ||||||||||||||||||||||||||||||
10-K | 2/29/2012 | 2.7 | ||||||||||||||||||||||||||||||
8-K | 10/2/2014 | 10.76 | ||||||||||||||||||||||||||||||
8-K | 10/8/2015 | 10.78 | ||||||||||||||||||||||||||||||
8-K | 10/8/2015 | 10.79 | ||||||||||||||||||||||||||||||
DEF 14A | 4/30/2009 | |||||||||||||||||||||||||||||||
8-K | 6/14/2019 | 3.1 | ||||||||||||||||||||||||||||||
10-K | 2/20/2020 | 4.1 | ||||||||||||||||||||||||||||||
† | S-8 | 8/4/2008 | 10.34 | |||||||||||||||||||||||||||||
Filed In | ||||||||||
Exhibit Number | Description of Document | Registrant’s Form | Dated | Exhibit Number | Filed Herewith | |||||
† | S-8 | 8/4/2008 | 10.35 | |||||||
† | S-8 | 8/4/2008 | 10.36 | |||||||
8-K | 12/11/2008 | 10.37 | ||||||||
†** | S-1/A | 3/19/2010 | 10.1 | |||||||
†** | 8-K | 2/28/2011 | 10.1 | |||||||
†** | 8-K | 2/28/2011 | 10.2 | |||||||
†** | S-1 | 1/22/2010 | 10.2 | |||||||
† | 8-K | 6/26/2012 | 10.59 | |||||||
† | 8-K | 6/26/2012 | 10.60 | X | ||||||
† | 10-K | 2/27/2013 | 10.65 | |||||||
8-K | 3/28/2013 | 10.66 | ||||||||
10-Q | 8/4/2016 | 10.84 | ||||||||
† | DEF 14A | 4/26/2016 | Appendix C | |||||||
10-Q | 11/4/2016 | 10.87 | ||||||||
† | 10-K | 2/27/2013 | 10.65 | |||||||
8-K | 6/5/2017 | 10.90 |
Filed In | ||||||||||||||||||||||||||||||||
Exhibit Number | Description of Document | Registrant’s Form | Dated | Exhibit Number | Filed Herewith | |||||||||||||||||||||||||||
† | S-8 | 8/4/2008 | 10.35 | |||||||||||||||||||||||||||||
† | S-8 | 8/4/2008 | 10.36 | |||||||||||||||||||||||||||||
8-K | 12/11/2008 | 10.37 | ||||||||||||||||||||||||||||||
†** | S-1 | 1/22/2010 | 10.2 | |||||||||||||||||||||||||||||
†** | S-1/A | 3/19/2010 | 10.1 | |||||||||||||||||||||||||||||
†** | 8-K | 2/28/2011 | 10.1 | |||||||||||||||||||||||||||||
†** | 8-K | 2/28/2011 | 10.2 | |||||||||||||||||||||||||||||
† | 8-K | 6/26/2012 | 10.59 | |||||||||||||||||||||||||||||
† | 8-K | 6/26/2012 | 10.60 | |||||||||||||||||||||||||||||
† | 10-K | 2/27/2013 | 10.65 | |||||||||||||||||||||||||||||
† | 10-K | 2/27/2013 | 10.65 | |||||||||||||||||||||||||||||
8-K | 3/28/2013 | 10.66 | ||||||||||||||||||||||||||||||
† | DEF 14A | 4/26/2016 | Appendix C | |||||||||||||||||||||||||||||
10-Q | 8/4/2016 | 10.84 | ||||||||||||||||||||||||||||||
10-Q | 11/4/2016 | 10.87 | ||||||||||||||||||||||||||||||
8-K | 6/5/2017 | 10.90 | ||||||||||||||||||||||||||||||
8-K | 6/5/2017 | 10.91 | ||||||||||||||||||||||||||||||
Filed In | ||||||||||
Exhibit Number | Description of Document | Registrant’s Form | Dated | Exhibit Number | Filed Herewith | |||||
8-K | 6/5/2017 | 10.91 | ||||||||
10-Q | 8/4/2017 | 10.92 | ||||||||
10-K | 2/20/2018 | 10.93 | ||||||||
10-K | 2/20/2018 | 10.94 | ||||||||
10-Q | 5/4/2018 | 10.95 | ||||||||
10-Q | 5/3/2019 | 10.96 | ||||||||
10-Q | 5/3/2019 | 10.97 | ||||||||
10-Q | 8/4/2017 | 10.92 | ||||||||
8-K | 12/13/2019 | 10.99 | ||||||||
X | ||||||||||
X | ||||||||||
X | ||||||||||
X | ||||||||||
X | ||||||||||
X |
Filed In | ||||||||||||||||||||||||||||||||
Exhibit Number | Description of Document | Registrant’s Form | Dated | Exhibit Number | Filed Herewith | |||||||||||||||||||||||||||
† | 10-Q | 8/4/2017 | 10.92 | |||||||||||||||||||||||||||||
† | 10-Q | 8/4/2017 | 10.92 | |||||||||||||||||||||||||||||
10-K | 2/20/2018 | 10.93 | ||||||||||||||||||||||||||||||
10-K | 2/20/2018 | 10.94 | ||||||||||||||||||||||||||||||
10-Q | 5/4/2018 | 10.95 | ||||||||||||||||||||||||||||||
† | DEF 14A | 4/24/2019 | Appendix B | |||||||||||||||||||||||||||||
† | 10-Q | 5/3/2019 | 10.96 | |||||||||||||||||||||||||||||
† | 10-Q | 5/3/2019 | 10.97 | |||||||||||||||||||||||||||||
† | 8-K | 12/13/2019 | 10.99 | |||||||||||||||||||||||||||||
10-Q | 8/4/2020 | 10.1 | ||||||||||||||||||||||||||||||
10-Q | 8/4/2020 | 10.2 | ||||||||||||||||||||||||||||||
10-Q | 8/4/2020 | 10.3 | ||||||||||||||||||||||||||||||
10-Q | 8/4/2020 | 10.4 | ||||||||||||||||||||||||||||||
10-Q | 8/4/2020 | 10.5 | ||||||||||||||||||||||||||||||
10-Q | 8/4/2020 | 10.6 | ||||||||||||||||||||||||||||||
10-Q | 8/4/2020 | 10.7 | ||||||||||||||||||||||||||||||
10-Q | 11/3/2020 | 10.1 | ||||||||||||||||||||||||||||||
10-Q | 11/3/2020 | 10.2 | ||||||||||||||||||||||||||||||
10-Q | 11/3/2020 | 10.3 | ||||||||||||||||||||||||||||||
110 | 2020 Form 10-K |
Filed In | ||||||||||||||||||||||||||||||||
Exhibit Number | Description of Document | Registrant’s Form | Dated | Exhibit Number | Filed Herewith | |||||||||||||||||||||||||||
10-Q | 11/3/2020 | 10.4 | ||||||||||||||||||||||||||||||
10-Q | 11/3/2020 | 10.5 | ||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||
X |
2020 Form 10-K | 111 |
Filed In | ||||||||||||||||||||||||||||||||
Exhibit Number | Description of Document | Registrant’s Form | Dated | Exhibit Number | Filed Herewith | |||||||||||||||||||||||||||
101.INS | Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags | X | ||||||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | X |
* | The registrant has applied for an extension of the confidential treatment it was previously granted with respect to portions of this exhibit. Those portions have been omitted from the exhibit and filed separately with the U.S. Securities and Exchange Commission. |
** | The Convio, Inc. 2009 Amended and Restated Stock Incentive Plan, as amended, and forms of stock option agreements thereunder (“Convio 2009 Original Plan Documents”) and the Convio, Inc. 1999 Stock Option/Stock Issuance Plan, as amended, and forms of stock option agreements thereunder (“Convio 1999 Plan Documents”) were filed by Convio in its Forms S-1/A and S-1, filed March 19, 2010 and January 25, 2010 as exhibits 10.1 and 10.2, respectively. The Convio, Inc. Form of Nonstatutory Stock Option Notice (Double Trigger) and Convio, Inc. Form of Restricted Stock Unit Notice (Double Trigger) and Agreement were filed by Convio in its Form 8-K on February 28, 2011 as exhibits 10.1 and 10.2 (together with the Convio 2009 Original Plan Documents, the “Convio 2009 Plan Documents”). We assumed the Convio 2009 Plan Documents and Convio 1999 Plan Documents when we acquired Convio in May 2012. We filed the Convio 2009 Plan Documents and Convio 1999 Plan Documents by incorporation by reference as exhibits 10.59, 10.60, 10.61 and 10.62 in our Form S-8 on May 7, 2012. |
Indicates management contract or compensatory plan, contract or arrangement. |
2020 Form 10-K |
SIGNATURES |
Blackbaud, Inc. | ||||||||
Signed: | February 23, 2021 | |||||||
/S/ MICHAEL P. GIANONI | ||||||||
President and Chief Executive Officer | ||||||||
(Principal Executive Officer) |
/S/ | MICHAEL P. GIANONI | President, Chief Executive Officer and Director (Principal Executive Officer) | Date: | February | ||||||||||||||||||||||
Michael P. Gianoni | ||||||||||||||||||||||||||
/S/ | ANTHONY W. BOOR | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | Date: | February | ||||||||||||||||||||||
Anthony W. Boor | ||||||||||||||||||||||||||
/S/ | ANDREW M. LEITCH | Chairman of the Board of Directors | Date: | February | ||||||||||||||||||||||
Andrew M. Leitch | ||||||||||||||||||||||||||
Director | Date: | February 23, 2021 | ||||||||||||||||||||||||
Timothy Chou | ||||||||||||||||||||||||||
/S/ | GEORGE H. ELLIS | Director | Date: | February 23, 2021 | ||||||||||||||||||||||
George H. Ellis | ||||||||||||||||||||||||||
/S/ | THOMAS R. ERTEL | Director | Date: | February 23, 2021 | ||||||||||||||||||||||
Thomas R. Ertel | ||||||||||||||||||||||||||
/S/ | SARAH E. NASH | Director | Date: | February 23, 2021 | ||||||||||||||||||||||
Sarah E. Nash | ||||||||||||||||||||||||||
/S/ | JOYCE M. NELSON | Director | Date: | February 23, 2021 | ||||||||||||||||||||||
Joyce M. Nelson |
2020 Form 10-K | 113 |