Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-25965 | |
Entity Registrant Name | ZIFF DAVIS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-1053457 | |
Entity Address, Address Line One | 114 5th Avenue | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10011 | |
City Area Code | 212 | |
Local Phone Number | 503-3500 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | ZD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 47,282,972 | |
Entity Central Index Key | 0001084048 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 721,502 | $ 652,793 |
Short-term investments | 39,012 | 58,421 |
Accounts receivable, net of allowances of $7,061 and $6,868, respectively | 277,764 | 304,739 |
Prepaid expenses and other current assets | 68,306 | 68,319 |
Total current assets | 1,106,584 | 1,084,272 |
Long-term investments | 116,062 | 127,871 |
Property and equipment, net of accumulated depreciation of $276,760 and $255,586, respectively | 187,025 | 178,184 |
Intangible assets, net | 433,310 | 462,815 |
Goodwill | 1,597,684 | 1,591,474 |
Deferred income taxes | 8,457 | 8,523 |
Other assets | 77,946 | 80,131 |
TOTAL ASSETS | 3,527,068 | 3,533,270 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable | 143,966 | 140,541 |
Accrued employee related costs | 31,838 | 42,178 |
Deferred revenue, current | 200,936 | 187,904 |
Accrued liabilities and other current liabilities | 64,439 | 61,825 |
Total current liabilities | 441,179 | 432,448 |
Long-term debt | 999,617 | 999,053 |
Deferred revenue, noncurrent | 8,861 | 9,103 |
Deferred income taxes | 68,142 | 79,007 |
Other long-term liabilities | 114,654 | 121,048 |
TOTAL LIABILITIES | 1,632,453 | 1,640,659 |
Commitments and contingencies (Note 8) | ||
Preferred stock, $0.01 par value | 0 | 0 |
Common stock, $0.01 par value. Authorized 95,000,000; total issued and outstanding 47,286,093 and 47,269,446 shares at March 31, 2023 and December 31, 2022, respectively. | 473 | 473 |
Additional paid-in capital | 444,813 | 439,681 |
Retained earnings | 1,530,665 | 1,537,830 |
Accumulated other comprehensive loss | (81,336) | (85,373) |
TOTAL STOCKHOLDERS’ EQUITY | 1,894,615 | 1,892,611 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 3,527,068 | 3,533,270 |
Series A Preferred Stock | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value | 0 | 0 |
Series B Preferred Stock | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Allowance for doubtful accounts | $ 7,061 | $ 6,868 |
Accumulated depreciation | $ 276,760 | $ 255,586 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 95,000,000 | 95,000,000 |
Common stock, shares issued (in shares) | 47,286,093 | 47,269,446 |
Common stock, shares outstanding (in shares) | 47,286,093 | 47,269,446 |
Series A Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 6,000 | 6,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series B Preferred Stock | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Total revenues | $ 307,142 | $ 315,068 |
Operating costs and expenses: | ||
Cost of revenues | 45,730 | 46,100 |
Sales and marketing | 115,920 | 117,762 |
Research, development, and engineering | 17,914 | 18,427 |
General and administrative | 101,263 | 102,217 |
Total operating costs and expenses | 280,827 | 284,506 |
Income from operations | 26,315 | 30,562 |
Interest expense, net | (4,480) | (10,290) |
Loss on debt extinguishment, net | 0 | (1,220) |
Unrealized (loss) gain on short-term investments held at the reporting date, net | (20,345) | 8,951 |
Gain on investments, net | 357 | 0 |
Other (loss) income, net | (908) | 2,399 |
Income before income taxes and loss from equity method investment, net | 939 | 30,402 |
Income tax benefit (expense) | 616 | (5,080) |
Loss from equity method investment, net | (9,182) | (785) |
Net (loss) income | $ (7,627) | $ 24,537 |
Net (loss) income per common share: | ||
Basic (in dollars per share) | $ (0.16) | $ 0.52 |
Diluted (in dollars per share) | $ (0.16) | $ 0.51 |
Weighted average shares outstanding: | ||
Basic (in shares) | 46,987,249 | 47,054,411 |
Diluted (in shares) | 46,987,249 | 52,405,317 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (7,627) | $ 24,537 |
Other comprehensive (loss) income, net of tax: | ||
Foreign currency translation adjustment | 3,713 | (6,265) |
Consensus separation adjustment | 0 | 4,056 |
Change in fair value on available-for-sale investments, net of tax expense of $109 for the three months ended March 31, 2023 | 324 | 0 |
Other comprehensive income (loss), net of tax | 4,037 | (2,209) |
Comprehensive (loss) income | $ (3,590) | $ 22,328 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Tax expense (benefit) for unrealized holding gain (loss) on available-for-sale investments | $ 109 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (7,627) | $ 24,537 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 54,623 | 59,071 |
Non-cash operating lease costs | 2,933 | 2,392 |
Share-based compensation | 8,402 | 6,717 |
Provision for credit losses on accounts receivable | 441 | (1,032) |
Deferred income taxes, net | (7,442) | (3,745) |
Loss on extinguishment of debt | 0 | 1,220 |
Loss from equity method investments | 9,182 | 785 |
Unrealized gain (loss) on short-term investments held at the reporting date, net | 20,345 | (8,951) |
Gain on investments, net | (357) | 0 |
Other | 2,776 | 868 |
Decrease (increase) in: | ||
Accounts receivable (includes $0 and $5,278 with related parties) | 27,626 | 57,483 |
Prepaid expenses and other current assets | (7,658) | 10,638 |
Other assets | (2,048) | (5,603) |
Increase (decrease) in: | ||
Accounts payable | 6,922 | (22,501) |
Deferred revenue | 12,085 | 3,061 |
Accrued liabilities and other current liabilities | (4,896) | (8,429) |
Net cash provided by operating activities | 115,307 | 116,511 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (30,017) | (30,502) |
Acquisition of businesses, net of cash received | (8,001) | (28,136) |
Proceeds from sale of equity investments | 3,174 | 0 |
Other | (3,947) | 0 |
Net cash used in investing activities | (38,791) | (58,638) |
Cash flows from financing activities: | ||
Payment of debt | 0 | (54,609) |
Debt extinguishment costs | 0 | (756) |
Repurchase of common stock | (2,875) | (62,810) |
Proceeds from exercise of stock options | 0 | 148 |
Deferred payments for acquisitions | (6,679) | (2,676) |
Other | 71 | (5) |
Net cash used in financing activities | (9,483) | (120,708) |
Effect of exchange rate changes on cash and cash equivalents | 1,676 | (2,977) |
Net change in cash and cash equivalents | 68,709 | (65,812) |
Cash and cash equivalents at beginning of period | 652,793 | 694,842 |
Cash and cash equivalents at end of period | $ 721,502 | $ 629,030 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Statement of Cash Flows [Abstract] | ||
Due from related parties | $ 0 | $ 5,278 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjustment Additional paid-in capital | Cumulative Effect, Period of Adoption, Adjustment Retained earnings |
Beginning balance (in shares) at Dec. 31, 2021 | 47,440,137 | |||||||
Beginning balance at Dec. 31, 2021 | $ 1,967,732 | $ 474 | $ 509,122 | $ 1,515,358 | $ (57,222) | $ (64,701) | $ (88,137) | $ 23,436 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 24,537 | 24,537 | ||||||
Other comprehensive loss, net of tax expense | (6,265) | (6,265) | ||||||
Exercise of stock options (in shares) | 5,439 | |||||||
Exercise of stock options | 148 | 148 | ||||||
Vested restricted stock (in shares) | 101,385 | |||||||
Vested restricted stock | 0 | $ 1 | (1) | |||||
Repurchase and retirement of common stock (in shares) | (594,661) | |||||||
Repurchase and retirement of common stock | (62,810) | $ (5) | (12,180) | (50,625) | ||||
Share-based compensation | 6,717 | 6,717 | ||||||
Other, net | 136 | (16) | (3,904) | 4,056 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 46,952,300 | |||||||
Ending balance at Mar. 31, 2022 | $ 1,865,494 | $ 470 | 415,653 | 1,508,802 | (59,431) | |||
Beginning balance (in shares) at Dec. 31, 2022 | 47,269,446 | 47,269,446 | ||||||
Beginning balance at Dec. 31, 2022 | $ 1,892,611 | $ 473 | 439,681 | 1,537,830 | (85,373) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | (7,627) | (7,627) | ||||||
Other comprehensive loss, net of tax expense | 4,037 | 4,037 | ||||||
Vested restricted stock (in shares) | 53,299 | |||||||
Vested restricted stock | 0 | $ 0 | 0 | |||||
Repurchase and retirement of common stock (in shares) | (36,652) | |||||||
Repurchase and retirement of common stock | (2,875) | $ 0 | (3,336) | 461 | ||||
Share-based compensation | 8,402 | 8,402 | ||||||
Other, net | $ 67 | 66 | 1 | 0 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 47,286,093 | 47,286,093 | ||||||
Ending balance at Mar. 31, 2023 | $ 1,894,615 | $ 473 | $ 444,813 | $ 1,530,665 | $ (81,336) |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Jan. 01, 2022 | Nov. 15, 2019 | |
Tax expense (benefit) for unrealized holding gain (loss) on available-for-sale investments | $ 109 | $ 0 | ||
1.75% Convertible Notes | Convertible Debt | ||||
Stated interest rate | 1.75% | 1.75% |
Basis of Presentation and Overv
Basis of Presentation and Overview | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Overview | Basis of Presentation and Overview The accompanying Condensed Consolidated Financial Statements of Ziff Davis, Inc. and its subsidiaries (“Ziff Davis”, the “Company”, “our”, “us”, or “we”), whether directly or indirectly wholly-owned, were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). The preparation of these Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. All normal recurring adjustments necessary for a fair presentation of these interim Condensed Consolidated Financial Statements were made. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission ("SEC") on March 1, 2023 and other filings with the SEC. The results of operations for this interim period are not necessarily indicative of the operating results for the full year or for any future period. Description of Business Ziff Davis, Inc. is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, shopping, gaming and entertainment, connectivity, health, cybersecurity, and martech. The Company’s Digital Media business specializes in the technology, shopping, gaming and entertainment, connectivity, and healthcare markets, offering content, tools and services to consumers and businesses. The Company’s Cybersecurity and Martech business provides cloud-based subscription services to consumers and businesses including cybersecurity, privacy, and marketing technology. Impairment or Disposal of Long-Lived Assets The Company assesses whether events or changes in circumstances have occurred that potentially indicate the carrying amount of definite-lived assets may not be recoverable. During the three months ended March 31, 2023 and 2022, the Company recorded an impairment of approximately $1.8 million and zero, respectively, primarily related to certain operating lease right-of-use assets. The Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a permanent “remote” or “partial remote” work model. The impairment is presented in general and administrative expense on the Condensed Consolidated Statement of Operations. Recent Accounting Pronouncements Recently issued applicable accounting pronouncements not yet adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This update provides for optional financial reporting alternatives to reduce cost and complexities associated with accounting for contracts, hedging relationships, and other transactions affected by reference rate reform. This update applies only to contracts, hedging relationships, and other transactions that reference London Interbank Offer Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The accommodations were available for all entities through December 31, 2022, with early adoption permitted. This update was later amended by ASU 2022-06. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 . This update defers the expiration date of ASC Topic 848 from December 31, 2022 to December 31, 2024. We are currently evaluating the effect the adoption of this update will have on our condensed consolidated financial statements and related disclosures. Reclassifications Certain prior year reported amounts have been reclassified to conform with 2023 presentation. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Digital Media Digital Media revenues are earned primarily from the delivery of advertising services and from subscriptions to services and information. Revenue is earned from the delivery of advertising services on websites that are owned and operated by us and on those websites that are part of Digital Media’s advertising network. Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when any of the following performance obligations are satisfied: (i) when an advertisement is placed for viewing, (ii) when a qualified sales lead is delivered, (iii) when a visitor “clicks through” on an advertisement or (iv) when commissions are earned upon the sale of an advertised product. Revenue from subscriptions is earned through the granting of access to, or delivery of, data products or services to customers. Subscriptions cover video games and related content, health information, data, and other copyrighted material. Revenues under such agreements are recognized over the contract term for use of the service. Revenues are also earned from listing fees, subscriptions to online publications, and from other sources. Subscription revenues are primarily recognized over time. Revenues related to the provision of access to historical data for certain services are recorded at the time of delivery. We also generate Digital Media subscription revenues through the license of certain assets to clients. Assets are licensed for clients’ use in their own promotional materials or otherwise and may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized over the contract term for use of the asset. In instances when technology assets are licensed to our clients, revenues from the license of these assets are recognized over the term of the access period. The Digital Media business also generates revenue from other sources which include marketing and production services. Such other revenues are generally recognized over the period in which the products or services are delivered. We also generate Digital Media revenues from transactions involving the sale of perpetual software licenses, related software support and maintenance, hardware used in conjunction with its software, and other related services. Revenue is recognized for these software transactions with multiple performance obligations after (i) the contract has been approved and we are committed to perform the respective obligations and (ii) we can identify and quantify each obligation and its respective selling price. Once the respective performance obligations have been identified and quantified, revenue will be recognized when the obligations are met, either over time or at a point in time depending on the nature of the obligation. Revenues from software license performance obligations are generally recognized upfront at the point in time that the software is made available to the customer to download and use. Revenues for related software support and maintenance performance obligations are related to technical support provided to customers as needed and unspecified software product upgrades, maintenance releases, and patches during the term of the support period when they are available. We are obligated to make the support services available continuously throughout the contract period. Therefore, revenues for support contracts are generally recognized ratably over the contractual period the support services are provided. Hardware product and related software performance obligations, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a bundled performance obligation. The revenues for this bundled performance obligation are generally recognized at the point in time that the hardware and software products are delivered and ownership is transferred to the customer. Other service revenues are generally recognized over time as the services are performed. The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned and operated web properties, on third-party sites, or on unaffiliated advertising networks; (ii) through the Company’s lead-generation business; and (iii) through the Company’s subscriptions. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third-party sites. Cybersecurity and Martech The Company’s Cybersecurity and Martech revenues substantially consist of subscription revenues which include subscription and usage-based fees, a significant portion of which are paid in advance. The Company defers the portions of monthly, quarterly, semi-annual, and annual fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned. Along with its numerous proprietary Cybersecurity and Martech solutions, the Company also generates subscription revenues by reselling various third-party solutions, primarily through its email security line of business. These third-party solutions, along with the Company’s proprietary products, allow it to offer customers a variety of solutions to better meet the customer’s needs. The Company records revenue on a gross basis with respect to reseller revenue because the Company has control of the specified good or service prior to transferring control to the customer. Revenues from external customers classified by revenue source are as follows (in thousands). Three months ended March 31, 2023 2022 Digital Media Advertising $ 156,082 $ 170,067 Subscription 69,148 55,576 Other 8,981 9,184 Total Digital Media revenues $ 234,211 $ 234,827 Cybersecurity and Martech Subscription $ 73,016 $ 80,494 Total Cybersecurity and Martech revenues $ 73,016 $ 80,494 Elimination of inter-segment revenues (85) (253) Total Revenues $ 307,142 $ 315,068 Timing of revenue recognition Point in time $ 11,522 $ 8,983 Over time 295,620 306,085 Total $ 307,142 $ 315,068 The Company has recorded $65.1 million and $73.1 million of revenue for the three months ended March 31, 2023 and 2022, respectively, which was previously included in the deferred revenue balance as of the beginning of each respective year. Transaction Price Allocation to Future Performance Obligations As of March 31, 2023, the aggregate amount of transaction price that is allocated to future performance obligations was approximately $15.8 million and is expected to be recognized as follows: 85% by December 31, 2023 and 15% by December 31, 2025. The amount disclosed does not include revenues related to performance obligations that are part of a contract with original expected duration of twelve months or less or portions of the contract that remain subject to cancellations. |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Business Acquisitions The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, and acquire skilled personnel. 2023 Acquisitions The Company completed an immaterial Digital Media acquisition during the three months ended March 31, 2023, paying the purchase price in cash. The Condensed Consolidated Statement of Operations since the date of the acquisition and the Condensed Consolidated Balance Sheets as of March 31, 2023, reflect the results of operations of the 2023 acquisition. The initial accounting for the 2023 acquisition is incomplete due to timing of available information and is subject to change. The Company has recorded provisional amounts which may be based upon past acquisitions with similar attributes for certain intangible assets (including trade names, software and customer relationships), preliminary acquisition date working capital, and related tax items. Goodwill recognized associated with this acquisition during the three months ended March 31, 2023 was $3.8 million, all of which is expected to be deductible for income tax purposes. Approximately $4.2 million of definite-lived intangibles were recorded in connection with the acquisition during the three months ended March 31, 2023. 2022 Acquisitions The Company completed the following acquisitions during the three months ended March 31, 2022, paying the purchase price in cash in each transaction: (a) a purchase of 100% of equity interests of Lifecycle Marketing Group Limited, acquired on January 21, 2022, a United Kingdom-based portfolio of pregnancy and parenting brands, including Emma’s Diary and Health Professional Academy, reported within our Digital Media segment; and (b) two other immaterial Digital Media acquisitions. During the three months ended March 31, 2023, the purchase price accounting was finalized for these acquisitions. The Condensed Consolidated Statement of Operations since the date of each acquisition reflects the results of operations of all 2022 acquisitions. For the three months ended March 31, 2022, these acquisitions contributed $2.1 million to the Company’s revenues. Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide. Total consideration for these transactions was $36.6 million, net of cash acquired and assumed liabilities. The following table summarizes the allocation of the purchase consideration for all 2022 acquisitions as of March 31, 2022 (in thousands): Assets and Liabilities Valuation Accounts receivable $ 4,615 Prepaid expenses and other current assets 231 Property and equipment 307 Trade names 2,302 Customer relationship 9,216 Goodwill 24,156 Other intangibles 3,439 Other long-term assets 11 Accounts payable and accrued expenses (2,551) Deferred revenue (1,697) Deferred tax liability (3,390) Total $ 36,639 The fair value of the assets acquired includes accounts receivable of $4.6 million, of which none is expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions. Goodwill recognized associated with these acquisitions during the three months ended March 31, 2022 was $24.2 million, of which $2.2 million is expected to be deductible for income tax purposes. Unaudited Pro Forma Financial Information for All 2022 Acquisitions The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2022. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects. The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its acquisitions during the three months ended March 31, 2022 as if each acquisition had occurred on January 1, 2022 (in thousands, except per share amounts): Three months ended (unaudited) Revenues $ 316,154 Net income $ 24,815 Income per common share - Basic $ 0.53 Income per common share - Diluted $ 0.52 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments consist primarily of equity and debt securities. Investment in equity securities On October 7, 2021, the Company completed the separation of its cloud fax business (the “Separation”) into an independent publicly traded company, Consensus Cloud Solutions, Inc. (“Consensus”). Following the Separation, the Company retained shares of Consensus common stock and as of March 31, 2023 and December 31, 2022, the Company held approximately 1.0 million and 1.1 million shares, respectively, of the common stock of Consensus. As of March 31, 2023 and December 31, 2022, the carrying value of the investment in Consensus was $35.3 million and $58.4 million, respectively, and was included in ‘Short-term investments’ in the Condensed Consolidated Balance Sheets. The Company accounts for its investment in Consensus at fair value under the fair value option, and the related fair value gains and losses are recognized in earnings. During the three months ended March 31, 2023, the Company sold 52,393 shares of common stock of Consensus in the open market. Gains (losses) on equity securities were recorded in ‘Unrealized (loss) gain on short-term investments held at the reporting date, net’ in the Condensed Consolidated Statements of Operations’ consisted of the following (in thousands): Three months ended March 31, 2023 2022 Net (losses) gains during the period $ (19,988) $ 8,951 Less: gains on securities sold during the period 357 — Unrealized (losses) gains recognized during the period on short-term investments held at the reporting date, net $ (20,345) $ 8,951 Investment in corporate debt security On April 12, 2022, the Company entered into an agreement with an entity to acquire 4% convertible notes with an aggregate value of $15.0 million. This investment is included in ‘Long-term investments, net’ in the Condensed Consolidated Balance Sheets and is classified as available-for-sale. The investment was initially measured at its transaction price and subsequently remeasured at fair value, with unrealized gains and losses reported as a component of other comprehensive income. As of March 31, 2023, both the carrying value and the maximum exposure of the Company’s investment in corporate debt securities was approximately $16.0 million, with a contractual maturity date that is more than one year but less than five years. As of December 31, 2022, both of the carrying value and the maximum exposure of the Company’s equity method investment in corporate debt securities was approximately $15.6 million. Cumulative gross unrealized gains of investment in corporate debt securities as of March 31, 2023 and December 31, 2022 was approximately $1.0 million and $0.6 million, respectively. There were no investments in an unrealized loss position as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, the Company did not recognize any other-than-temporary impairment losses on its debt securities. Equity method investment On September 25, 2017, the Company entered into a commitment to invest in an investment fund (the “OCV Fund”). The primary purpose of the OCV Fund is to provide a limited number of select investors with the opportunity to realize long- term appreciation from public and private companies, with a particular focus on the technology and life science industries. The general activities of the OCV Fund is to buy, sell, hold, and otherwise invest in securities of every kind and nature and rights and options with respect thereto, including, without limitation, stock, notes, bonds, debentures, and evidence of indebtedness; to exercise all rights, powers, privileges, and other incidents of ownership or possession with respect to securities held or owned by the OCV Fund; to enter into, make, and perform all contracts and other undertakings; and to engage in all activities and transactions as may be necessary, advisable, or desirable to carry out the foregoing. During both the three months ended March 31, 2023 and 2022, the Company received no distributions from OCV. The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag (including management fees) due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline. During the three months ended March 31, 2023 and 2022, the Company recognized a loss from equity method investment of $9.2 million and $0.8 million, net of tax benefit, respectively. The loss during the three months ended March 31, 2023 was primarily the result of losses in the underlying investments and the loss during the three months ended March 31, 2022 was related to management fee expense. During the three months ended March 31, 2023 and 2022, the Company recognized expense for management fees of zero and $0.8 million, respectively, net of tax benefit. As of March 31, 2023, both of the carrying value and the maximum exposure of the Company’s equity method investment was $100.0 million. As of December 31, 2022, both of the carrying value and the maximum exposure of the Company’s equity method investment was $112.3 million. These equity securities are included within ‘Long-term investments’ in the Condensed Consolidated Balance Sheets. As a limited partner, the Company’s maximum exposure to loss is limited to its proportional ownership in the partnership. In addition, the Company is not required to contribute any future capital and any expected losses will not be in excess of the capital account. Finally, there are no call or put options, or other types of arrangements, which limit the Company’s ability to participate in losses and returns of the Fund. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. § Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. § Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. § Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s money market funds are classified within Level 1. The Company values these Level 1 investments using quoted market prices. The Company’s investment in Consensus’ common stock for which the Company elected the fair value option, and the fair value of the Company’s investment in Consensus and subsequent fair value changes, are included in our assets and changes in fair value are recognized in earnings. As the initial carrying value of the investment in Consensus was negative immediately following the Separation, the Company elected the fair value option under ASC 825-10-25 to support the initial recognition of the investment in Consensus at fair value and the negative book value was recorded as a gain at the date of Separation. The fair value of the investment in Consensus is determined using quoted market prices, which is a Level 1 input. The Company has investment in a corporate debt security that does not have a readily determinable fair value because acquired securities are privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. The fair value of the corporate debt securities is determined primarily based on significant estimates and assumptions, including Level 3 inputs. As of March 31, 2023 and December 31, 2022, the fair value was determined based upon various probability-weighted scenarios and included an assumption of a 13% discount rate as of March 31, 2023 and December 31, 2022, respectively, and a conversion timeframe of approximately one-year. The fair value of the Company’s 4.625% Senior Notes and 1.75% Convertible Notes (as defined in Note 7 - Debt ) was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 1 inputs. If such information is not available for the 1.75% Convertible Notes, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature. The Company classifies its contingent consideration liability in connection with acquisitions within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not supported by market activity. The valuation approaches used to value Level 3 investments considers unobservable inputs in the market such as time to liquidity, volatility, dividend yield, and breakpoints. Significant increases or decreases in either of the inputs in isolation would result in a significantly lower or higher fair value measurement. As of March 31, 2023 and December 31, 2022, the contingent consideration was determined using a 100% probability of payout, without any other estimates applied. The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands): March 31, 2023 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 292,847 $ — $ — $ 292,847 $ 292,847 Short-term investments: Certificates of deposit — 3,753 — 3,753 3,753 Investment in Consensus 35,259 — — 35,259 35,259 Long-term investments: Investment in corporate debt securities — — 16,019 16,019 16,019 Total assets measured at fair value $ 328,106 $ 3,753 $ 16,019 $ 347,878 $ 347,878 Liabilities: Contingent consideration $ — $ — $ 555 $ 555 $ 555 Debt: 4.625% Senior Notes 399,203 399,203 456,498 1.75% Convertible Notes 540,237 540,237 543,119 Total liabilities measured at fair value $ 939,440 $ — $ 555 $ 939,995 $ 1,000,172 December 31, 2022 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 312,010 $ — $ — $ 312,010 $ 312,010 Short-term investments: Investment in Consensus 58,421 — — 58,421 58,421 Long-term investments: Investment in corporate debt securities — — 15,586 15,586 15,586 Total assets measured at fair value $ 370,431 $ — $ 15,586 $ 386,017 $ 386,017 Liabilities: Contingent consideration $ — $ — $ 555 $ 555 $ 555 Debt: 4.625% Senior Notes 390,908 390,908 456,400 1.75% Convertible Notes 548,411 548,411 542,653 Total liabilities measured at fair value $ 939,319 $ — $ 555 $ 939,874 $ 999,608 At the end of each reporting period, management reviews the inputs to the fair value measurements of financial and non-financial assets and liabilities to determine when transfers between levels are deemed to have occurred. For the three months ended March 31, 2023 and 2022, there were no transfers that occurred between levels. The following table presents a reconciliation of the Company’s Level 3 financial assets related to our investment in corporate debt securities that are measured at fair value on a recurring basis (in thousands): Three months ended 2023 2022 Contingent Consideration Arrangements Corporate Debt Securities Contingent Consideration Arrangements Corporate Debt Securities Balance as of January 1 $ 555 $ 15,586 $ 5,775 $ — Fair value at date of acquisition — — 4,200 — Fair value adjustments (1) — 433 112 — Balance as of March 31 $ 555 $ 16,019 $ 10,087 $ — (1) The fair value adjustments to the contingent consideration arrangements in the table above were recorded within ‘General and administrative’ on the Condensed Consolidated Statements of Operations during the three months ended March 31, 2023 and 2022. The fair value adjustments to the corporate debt securities in the table above were recorded within ‘Change in fair value on available-for-sale investments, net’ on the Condensed Consolidated Statements of Comprehensive (Loss) Income during the three months ended March 31, 2023 and 2022. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The changes in carrying amounts of goodwill for the three months ended March 31, 2023 are as follows (in thousands): Digital Media Cybersecurity and Martech Consolidated Balance as of January 1, 2023 $ 1,065,989 $ 525,485 $ 1,591,474 Goodwill acquired (Note 3) 3,849 — 3,849 Purchase accounting adjustments (1) 513 — 513 Foreign exchange translation 540 1,308 1,848 Balance as of March 31, 2023 $ 1,070,891 $ 526,793 $ 1,597,684 (1) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions. Goodwill as of March 31, 2023 and December 31, 2022 reflects accumulated impairment losses of $27.4 million and $27.4 million, respectively, in the Digital Media reportable segment. Intangible Assets Subject to Amortization As of March 31, 2023, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Historical Accumulated Net Trade names 10 years $ 263,060 $ 130,986 $ 132,074 Customer relationships (1) 8 years 690,363 497,910 192,453 Other purchased intangibles 8 years 482,501 373,718 108,783 Total $ 1,435,924 $ 1,002,614 $ 433,310 (1) The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. As of December 31, 2022, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Accumulated Net Trade names 10 years $ 261,614 $ 125,422 $ 136,192 Customer relationships (1) 8 years 687,798 479,741 208,057 Other purchased intangibles 8 years 481,973 363,407 118,566 Total $ 1,431,385 $ 968,570 $ 462,815 (1) The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. Amortization expense, included in General and administrative expense on the Condensed Consolidated Statements of Operations, was approximately $33.3 million and $41.2 million for the three months ended March 31, 2023 and 2022, respectively. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consists of the following (in thousands): March 31, 2023 December 31, 2022 4.625% Senior Notes $ 460,038 $ 460,038 1.75% Convertible Notes 550,000 550,000 Total Notes 1,010,038 1,010,038 Credit Agreement — — Less: Unamortized discount (2,690) (2,764) Deferred issuance costs (7,731) (8,221) Total long-term debt $ 999,617 $ 999,053 As of March 31, 2023, $550.0 million of principal will mature in 2026 and $460.0 million of principal will mature in 2030. 4.625% Senior Notes On October 7, 2020, the Company completed the issuance and sale of $750.0 million aggregate principal amount of its 4.625% senior notes due 2030 (the “4.625% Senior Notes”) in a private placement offering exempt from the registration requirements of the Securities Act of 1933. The Company received proceeds of $742.7 million after deducting the initial purchasers’ discounts, commissions and offering expenses. The net proceeds were used to redeem all of its outstanding 6.0% Senior Notes due in 2025 and, the remaining net proceeds were available for general corporate purposes which may include acquisitions and the repurchase or redemption of other outstanding indebtedness. These senior notes bear interest at a rate of 4.625% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2021. The 4.625% Senior Notes mature on October 15, 2030, and are senior unsecured obligations of the Company which are guaranteed, jointly and severally, on an unsecured basis by certain of the Company’s existing and future domestic direct and indirect wholly-owned subsidiaries (collectively, the “Guarantors”). If the Company or any of its restricted subsidiaries acquires or creates a domestic restricted subsidiary, other than an Insignificant Subsidiary (as defined in the indenture pursuant to which the 4.625% Senior Notes were issued (the “Indenture”)), after the issue date, or any Insignificant Subsidiary ceases to fit within the definition of Insignificant Subsidiary, such restricted subsidiary is required to unconditionally guarantee, jointly and severally, on an unsecured basis, the Company’s obligations under the 4.625% Senior Notes. The Company may redeem some or all of the 4.625% Senior Notes at any time on or after October 15, 2025 at specified redemption prices plus accrued and unpaid interest, if any, up to, but excluding the redemption date. Before October 15, 2023, and following certain equity offerings, the Company also may redeem up to 40% of the 4.625% Senior Notes at a price equal to 104.625% of the principal amount, plus accrued and unpaid interest, if any, up to, but excluding the redemption date. The Company may make such redemption only if, after such redemption, at least 50% of the aggregate principal amount of the 4.625% Senior Notes remains outstanding. In addition, at any time prior to October 15, 2025, the Company may redeem some or all of the 4.625% Senior Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus an applicable “make-whole” premium. The discount and deferred issuance costs are being amortized, at an effective interest rate of 4.7%, to interest expense through the maturity date. The Indenture contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock or repurchase the Company’s capital stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. These covenants contain certain exceptions. Restricted payments are applicable only if the Company and subsidiaries designated as restricted subsidiaries have a net leverage ratio of greater than 3.5 to 1.0. In addition, if such net leverage ratio is in excess of 3.5 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not exceeding the greater of (A) $250 million and (B) 50.0% of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available. The Company is in compliance with its debt covenants for the 4.625% Senior Notes as of March 31, 2023. Repurchases of 4.625% Senior Notes on the open market were as follows (in thousands): Three months ended March 31, 2022 Principal repurchased $ 54,609 Aggregate purchase price $ 55,365 Gain (loss) on repurchase (1) $ (1,220) (1) Presented within ‘Gain (loss) on debt extinguishment, net” on the Condensed Consolidated Statements of Operations. Cumulatively as of March 31, 2023, the Company repurchased approximately $290.0 million in aggregate principal of its 4.625% Senior Notes. 1.75% Convertible Notes On November 15, 2019, the Company issued $550.0 million aggregate principal amount of 1.75% convertible senior notes due November 1, 2026 (the “1.75% Convertible Notes”). The Company received proceeds of $537.1 million in cash, net of purchasers’ discounts and commissions and other debt issuance costs. A portion of the net proceeds were used to pay off all amounts outstanding under the then-existing Credit Facility. The 1.75% Convertible Notes bear interest at a rate of 1.75% per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2020. The 1.75% Convertible Notes will mature on November 1, 2026, unless earlier converted or repurchased. Holders may surrender their 1.75% Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding July 1, 2026 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding the calendar quarter is greater than 130% of the applicable conversion price of the 1.75% Convertible Notes on each such applicable trading day; (ii) during the five business day period following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 1.75% Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after July 1, 2026, and prior to the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances. The Company will settle conversions of the 1.75% Convertible Notes by paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination thereof at the Company’s election. The Company currently intends to satisfy its conversion obligation by paying and delivering a combination of cash and shares of the Company’s common stock. Holders of the notes will have the right to require the Company to repurchase for cash all or any portion of their notes upon the occurrence of certain corporate events, subject to certain conditions. As of March 31, 2023 and December 31, 2022, the market trigger conditions did not meet the conversion requirements of the 1.75% Convertible Notes and, accordingly, the 1.75% Convertible Notes are classified as long-term debt on our Condensed Consolidated Balance Sheets. As of March 31, 2023, the conversion rate is 9.3783 shares of the Company’s common stock for each $1,000 principal amount of 1.75% Convertible Notes (or 5,158,071 shares), which represents a conversion price of approximately $106.63 per share of the Company’s common stock. The conversion rate is subject to adjustment for certain events as set forth in the indenture governing the 1.75% Convertible Notes, but will not be adjusted for accrued interest. In addition, upon the occurrence of a “Make-Whole Fundamental Change” (as defined in the 1.75% Convertible Note Indenture), the Company will increase the conversion rate for a holder that elects to convert its 1.75% Convertible Notes in connection with such a corporate event in certain circumstances. The Company may not redeem the 1.75% Convertible Notes prior to November 1, 2026, and no sinking fund is provided for the 1.75% Convertible Notes. The 1.75% Convertible Notes are the Company’s general senior unsecured obligations and rank: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 1.75% Convertible Notes; (ii) equal in right of payment to the Company’s existing and future indebtedness that is not so subordinated; (iii) effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all existing and future indebtedness and other liabilities incurred by the Company’s subsidiaries. The fair value of the 1.75% Convertible Notes at each balance sheet date is determined based on recent quoted market prices or dealer quotes for the 1.75% Convertible Notes, which are Level 1 inputs (see Note 5 Fair Value Measurements ). If such information is not available, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature. As of March 31, 2023 and December 31, 2022, the estimated fair value of the 1.75% Convertible Notes was approximately $540.2 million and $548.4 million, respectively. Refer to Note 5 Fair Value Measurements. The following table provides additional information related to the 1.75% Convertible Notes (in thousands): March 31, 2023 December 31, 2022 Principal amount of 1.75% Convertible Notes $ 550,000 $ 550,000 Less: Carrying amount of debt issuance costs (6,881) (7,347) Net carrying amount of 1.75% Convertible Notes $ 543,119 $ 542,653 The following table provides the components of interest expense related to the 1.75% Convertible Notes (in thousands): Three months ended March 31, 2023 2022 Coupon interest expense $ 2,406 $ 2,406 Amortization of debt issuance costs 466 493 Total interest expense related to 1.75% Convertible Notes $ 2,872 $ 2,899 Accounting for the 1.75% Convertible Notes On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective method. As a result of this adoption, the Company de-recognized the remaining unamortized debt discount of $87.3 million on the 1.75% Convertible Notes and therefore no longer recognizes any amortization of debt discounts as interest expense. In connection with the issuance of the 1.75% Convertible Notes, the Company incurred $12.9 million of deferred issuance costs, which primarily consisted of the underwriters’ discount, legal and other professional service fees. Of the total deferred issuance costs incurred, $10.1 million were attributable to the liability component and are being amortized at an effective interest rate of 5.5%, to interest expense through the maturity date. The remaining $2.8 million of the deferred issuance costs were netted with the equity component in additional paid-in capital at the issuance date. Upon adoption of ASU 2020-06, the Company reclassified the $2.8 million from additional paid-in-capital to long-term liability and recorded a cumulative adjustment to retained earnings for amortization from the issuance date through January 1, 2022. Credit Agreement On April 7, 2021, the Company entered into a $100.0 million Credit Agreement (the “Credit Agreement”). Subject to customary conditions, the Company may, from time to time, request increases in the commitments under the Credit Agreement in an aggregate amount up to $250.0 million, for a total aggregate commitment of up to $350.0 million. The final maturity of the Credit Facility will occur on April 7, 2026. At the Company’s option, amounts borrowed under the Credit Agreement will bear interest at either (i) a base rate equal to the greater of (x) the Federal Funds Effective Rate (as defined in the Credit Agreement) in effect on such day plus 0.5% per annum, (y) the rate of interest per annum most recently announced by the Agent (as defined in the Credit Agreement) as its U.S. Dollar “Reference Rate” and (z) one month LIBOR plus 1.00% or (ii) a rate per annum equal to LIBOR divided by 1.00 minus the LIBOR Reserve Requirements (as defined in the Credit Agreement), in each case, plus an applicable margin. The applicable margin relating to any base rate loan will range from 0.50% to 1.25% and the applicable margin relating to any LIBOR loan will range from 1.50% to 2.25%, in each case, depending on the total leverage ratio of the Company. The Company is permitted to make voluntary prepayments of the Credit Facility at any time without payment of a premium or penalty. The Credit Agreement is secured by an associated collateral agreement that provides for a lien on the majority of the Company’s assets and the assets of the guarantors, in each case, subject to customary exceptions. As of March 31, 2023, there were no amounts outstanding under the Credit Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, the Company and its affiliates are involved in litigation and other legal disputes or regulatory inquiries that arise in the ordinary course of business. Any claims or regulatory actions against the Company and its affiliates, whether meritorious or not, could be time consuming and costly, and could divert significant operational resources. The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief. On July 8, 2020, Jeffrey Garcia filed a putative class action lawsuit against the Company in the Central District of California (20-cv-06096), alleging violations of federal securities laws. The court appointed a lead plaintiff. The Company moved to dismiss the consolidated class action complaint. The court granted the motion to dismiss and the plaintiff filed an amended complaint. The Company moved to dismiss the amended complaint. On August 8, 2022, the court granted the Company’s motion to dismiss the amended complaint without leave to amend. The lead plaintiff has filed a notice of appeal and appeal briefs have been filed. On September 24, 2020, International Union of Operating Engineers of Eastern Pennsylvania and Delaware filed a lawsuit in the Delaware Court of Chancery (C.A. No. 2020-0819-VCL) asserting derivative claims for breach of fiduciary duty and related theories against directors of the Company and other third parties relating generally to the investment by the Company in OCV Fund I, L.P. (the “Chancery Court Derivative Action”). On November 17, 2020, the court entered an order allowing Orlando Police Pension Fund to intervene as a plaintiff in the case. The parties reached an agreement to settle the lawsuit, which required court approval. On July 29, 2021, the parties filed a stipulation of settlement that provided the terms of the settlement and began the settlement approval process with the Court. On January 20, 2022 the court approved the settlement. Among other terms of the settlement, no further management fees will be charged and no further capital calls will be made in connection with the Company’s investment in OCV Fund I, L.P. On December 11, 2020, Danning Huang filed a lawsuit in the District of Delaware (20-cv-01687-LPS) asserting derivative claims against directors of the Company and other third parties. The lawsuit alleges violations of Section 14(a), Section 10(b), Section 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, as well as breach of fiduciary duty, unjust enrichment and abuse of control. On March 24, 2021, Fritz Ringling filed a lawsuit in the District of Delaware (21-cv-00421-UNA) asserting substantially similar derivative claims, and on April 8, 2021, the district court consolidated the two actions under the caption In re J2 Global Stockholder Derivative Litigation. No.: 20-cv-01687-LPS. As part of the settlement of the Chancery Court Derivative Action described above, the Company and its directors and officers intend to defend against the remaining claims in other actions. The Company does not believe, based on current knowledge, that the foregoing legal proceedings or claims, after giving effect to existing accrued liabilities, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could have a material effect on the Company’s consolidated financial position, results of operations, or cash flows in a particular period. The Company has not accrued for any material loss contingencies relating to these legal proceedings because materially unfavorable outcomes are not considered probable by management. It is the Company’s policy to expense as incurred legal fees related to various litigations. Non-Income Related Taxes The Company does not collect and remit sales and use, telecommunication, or similar taxes and fees in certain jurisdictions where the Company believes such taxes are not applicable or legally required. Several states and other taxing jurisdictions have presented or threatened the Company with assessments, alleging that the Company is required to collect and remit such taxes there. The Company is currently under audit or is subject to audit for indirect taxes in various states, municipalities and foreign jurisdictions. The Company has $25.5 million and $24.0 million reserve established for these matters as of March 31, 2023 and December 31, 2022, respectively, which is included within ‘Accounts payable’ and ‘Other long-term liabilities’ on the Company’s Condensed Consolidated Balance Sheet. It is reasonably possible that additional liabilities could be incurred resulting in additional expense, which could have a material impact to our financial results. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate adjusted for discrete interim period tax impacts. Each quarter the Company updates its estimated annual effective tax rate and, if the estimate changes, makes a cumulative adjustment. The Company’s effective tax rate was (65.6)% and 16.7% for the three months ended March 31, 2023 and 2022, respectively. The Company’s effective tax rate for the three months ended March 31, 2023 was impacted disproportionately due to the unrealized loss on the Company’s investment in Consensus, net of the gain on investment, during the first quarter of 2023, which resulted in a discrete tax benefit of approximately $5.0 million. Additionally, the Company recognized a discrete tax benefit of approximately $1.0 million related to the release of reserves for uncertain tax positions. Conversely, during the three months ended March 31, 2022, the unrealized gain on the Company’s investment in Consensus resulted in no tax expense recognized. The gain was not subject to tax since the Company had the ability at that time to dispose of the investment in a tax-free manner based on guidance and requirements set out by the Internal Revenue Service, within the one-year anniversary of the Separation. As of March 31, 2023 and December 31, 2022, the Company had $39.8 million and $40.4 million, respectively, in liabilities for uncertain income tax positions included within ‘Other long-term liabilities’ on the Condensed Consolidated Balance Sheets. Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense on the Company’s Condensed Consolidated Statement of Operations. Certain taxes are prepaid during the year and, where appropriate, included within ‘Prepaid expenses and other current assets’ on the Condensed Consolidated Balance Sheets. The Company’s prepaid taxes were $0.8 million and $3.2 million as of March 31, 2023 and December 31, 2022, respectively. The Company had a current portion of income taxes payable of $16.9 million and $19.7 million as of March 31, 2023 and December 31, 2022, respectively, included within ‘Accounts payable’ on the Condensed Consolidated Balance Sheets. The Company had a long-term portion of income taxes payable of $11.7 million and $11.7 million as of March 31, 2023 and December 31, 2022, respectively, included within ‘Other long-term liabilities’ on the Condensed Consolidated Balance Sheets. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity On August 6, 2020, the Company’s Board of Directors approved a program authorizing the repurchase of up to ten million shares of our common stock through August 6, 2025 (the “2020 Program”). The Company entered into certain Rule 10b5-1 trading plans during the years ended December 31, 2021 and 2020 to execute repurchases under the 2020 Program. During the three months ended March 31, 2023 and 2022, the Company repurchased zero and 554,289 shares, respectively, at an aggregate cost of approximately zero and $58.7 million, respectively, (including an immaterial amount of commission fees) under the 2020 Program. These shares were subsequently retired. Cumulatively as of March 31, 2023, 3,672,846 shares were repurchased at an aggregate cost of $296.9 million (including an immaterial amount of commission fees) under the 2020 Program. These shares were subsequently retired. As a result of the repurchases, the number of shares available for purchase as of March 31, 2023 is 6,327,154 shares of the Company’s common stock. Periodically, participants in the Company’s stock plans surrender to the Company shares of stock to pay the exercise price or to satisfy tax withholding obligations arising upon the exercise of stock options or the vesting of restricted stock. During the three months ended March 31, 2023 and 2022, the Company purchased and retired 36,652 and 40,372 shares at an aggregate cost of approximately $2.9 million and $4.1 million , respectively, from plan participants for this purpose. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company’s share-based compensation plans include the 2015 Stock Option Plan (the “2015 Plan”) and 2001 Employee Stock Purchase Plan (the “Purchase Plan”). Each plan is described below. The 2015 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, and other share-based awards. 4,200,000 shares of the Company’s common stock are authorized to be used for 2015 Plan purposes. Options under the 2015 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the higher of the par value or 100% of the fair market value of the Company’s common stock subject to the option on the date the option is granted. As of March 31, 2023, 435,135 shares underlying options and 848,874 shares of restricted stock units were outstanding under the 2015 Plan. Share-Based Compensation Expense The following table presents the effects of share-based compensation expense in the Condensed Consolidated Statements of Operations during the periods presented (in thousands): Three months ended March 31, 2023 2022 Cost of revenues $ 76 $ 84 Sales and marketing 924 569 Research, development and engineering 783 629 General and administrative 6,619 5,435 Total share-based compensation $ 8,402 $ 6,717 As of March 31, 2023, the Company had unrecognized share-based compensation cost of approximately $66.2 million associated with these restricted stock awards and restricted stock units. This cost is expected to be recognized over a weighted-average period of 2.6 for restricted stock awards and 4.2 for restricted stock units. Restricted Stock The Company has awarded restricted stock and restricted stock units to its Board of Directors and senior staff pursuant to certain share-based compensation plans. Compensation expense resulting from restricted stock and restricted unit grants is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period. Vesting periods are approximately one year for awards to members of the Company’s Board of Directors, four four The Company has awarded certain key employees market-based restricted stock and market-based restricted stock units pursuant to the 2015 Plan. The market-based awards have vesting conditions that are based on specified stock price targets of the Company’s common stock. Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets with a 20-days and 30-day lookback (trading days). Stock-based compensation expense related to an award with a market condition will be recognized over the requisite service period using the graded-vesting method regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. During the three months ended March 31, 2023, the Company awarded 167,606 market-based restricted stock units at stock price targets ranging from $83.61 to $103.76 per share. During the three months ended March 31, 2022, the Company awarded 100,193 market-based restricted stock units at stock price targets ranging from $107.97 to $138.73 per share. The per share weighted average grant-date fair values of the market-based restricted stock units granted during the three months ended March 31, 2023 and 2022 were $70.07 and $87.11, respectively. The weighted-average fair values of market-based restricted stock units granted have been estimated utilizing the following assumptions: March 31, 2023 March 31, 2022 Underlying stock price at valuation date $ 77.80 $ 99.32 Expected volatility 32.0 % 36.7 % Risk-free interest rate 4.1 % 1.8 % Restricted stock award activity for the three months ended March 31, 2023 is set forth below: Shares Weighted-Average Nonvested at January 1, 2023 311,281 $ 59.90 Vested (36,380) $ 100.41 Nonvested at March 31, 2023 274,901 $ 58.43 Restricted stock unit activity for the three months ended March 31, 2023 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2023 464,354 Granted 439,220 Vested (53,299) Canceled (1,401) Outstanding at March 31, 2023 848,874 3.4 $ 66,508,434 Vested and expected to vest at March 31, 2023 705,218 3.2 $ 54,788,467 |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Share | (Loss) Earnings Per Share The components of basic and diluted earnings (loss) per share are as follows (in thousands, except share and per share data): Three months ended March 31, 2023 2022 Basic Diluted Basic Diluted Numerator for basic and diluted net (loss) income per common share: Net (loss) income $ (7,627) $ (7,627) $ 24,537 $ 24,537 Net income available to participating securities (1) — — (11) (11) 1.75% Convertible Notes interest expense (after-tax) — — — 2,186 Net (loss) income available to the Company’s common shareholders $ (7,627) $ (7,627) $ 24,526 $ 26,712 Denominator: Basic weighted-average outstanding shares of common stock 46,987,249 46,987,249 47,054,411 47,054,411 Diluted effect of: Equity incentive plans — — — 192,835 Convertible debt — — — 5,158,071 Diluted weighted-average outstanding shares of common stock 46,987,249 46,987,249 47,054,411 52,405,317 Net (loss) income per share $ (0.16) $ (0.16) $ 0.52 $ 0.51 (1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). For the three months ended March 31, 2023 and March 31, 2022, there were 1,830,097 and zero shares, respectively, of stock options and restricted stock excluded from the calculation of diluted shares as they were anti-dilutive. For the three months ended March 31, 2023, there were 5,158,071shares related to convertible debt excluded from the calculation as they were anti-dilutive. For the three months ended March 31, 2022, these shares were included in diluted shares because they were dilutive under the if-converted method for the diluted net income per share calculation of convertible debt instruments. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s businesses are based on the organizational structure used by the chief operating decision maker (“CODM”). The Company aggregates its operating segments into two reportable segments: Digital Media and Cybersecurity and Martech. The accounting policies of the businesses are the same as those described in the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2023. The Company evaluates performance based on revenue and profit or loss from operations. Information on reportable segments and reconciliation to income from operations is as follows (in thousands): Three months ended March 31, 2023 2022 Revenue by reportable segment: Digital Media $ 234,211 $ 234,827 Cybersecurity and Martech 73,016 80,494 Elimination of inter-segment revenues (85) (253) Total segment revenues 307,142 315,068 Corporate (1) — — Total revenues $ 307,142 $ 315,068 Operating costs and expenses by reportable segment (2) : Digital Media 205,742 202,707 Cybersecurity and Martech 61,413 68,166 Elimination of inter-segment operating expenses (85) (253) Total segment operating expenses 267,070 270,620 Corporate (1) 13,757 13,886 Total operating costs and expenses 280,827 284,506 Operating income by reportable segment: Digital Media operating income 28,469 32,120 Cybersecurity and Martech operating income 11,603 12,328 Total segment operating income 40,072 44,448 Corporate (1) (13,757) (13,886) Income from operations $ 26,315 $ 30,562 (1) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Non-cash investing and financing activities were as follows (in thousands): Three months ended March 31, 2023 2022 Non-cash investing activity: Property and equipment, accrued but unpaid $ 55 $ 205 Right-of-use assets acquired in exchange for operating lease obligations $ — $ 2,673 Supplemental data (in thousands): Three months ended March 31, 2023 2022 Interest paid $ — $ 632 Income taxes paid, net of refunds $ 5,329 $ 4,344 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income The following table summarizes the changes in accumulated balances of other comprehensive loss (income), net of tax, for the three months ended March 31, 2023 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Balance as of January 1, 2023 $ 441 $ (85,814) $ (85,373) Other comprehensive income 324 3,713 4,037 Balance as of March 31, 2023 $ 765 $ (82,101) $ (81,336) There were no reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2023 and 2022, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Consensus As of March 31, 2023 and December 31, 2022, the Company held approximately 1.0 million and 1.1 million shares of the common stock of Consensus, respectively, representing approximately 5% of the Consensus outstanding common stock. The Company determined that Consensus was no longer a related party after September 30, 2022. Related party transactions with Consensus through September 30, 2022 are included within the disclosures below. In preparation for and in executing the Separation, the Company incurred transaction-related costs, some of which were, reimbursed by Consensus. These transaction costs primarily related to professional fees associated with preparation of regulatory filings and transaction execution and separation activities within finance, tax, and legal functions. In connection with the Separation, Ziff Davis and Consensus entered into several agreements that govern the relationship of the parties following the Separation, including a separation and distribution agreement, a transition services agreement, a tax matters agreement, an employee matters agreement, an intellectual property license agreement, and a stockholder and registration rights agreement. The transition services agreement governs services including certain information technology services, finance and accounting services, and human resource and employee benefit services. The agreed-upon charges for such services are generally intended to allow the providing company to recover all costs and expenses of providing such services, and nearly all such services were terminated without extension twelve months after the Separation. During the three months ended March 31, 2022, the Company recorded an offset to expense of approximately $1.2 million from Consensus related to the transition services agreement within ‘General and administrative expenses’ within the Condensed Consolidated Statements of Operations. Further, the Company assigned its lease of office space in Los Angeles, California to Consensus. Ziff Davis remained the lessee under this lease and its obligations remained in place through October 7, 2022, after which time Consensus took over the lease in full. During the three months ended March 31, 2022, the Company recorded an offset to lease expense of approximately $0.4 million related to this lease, however, Consensus paid the landlord directly (other than an immaterial amount of sublease payments from Ziff Davis to Consensus). OCV On September 25, 2017, the Company entered into a commitment to invest in the OCV Fund. During the three months ended March 31, 2023 and 2022, the Company recognized expense for management fees of zero and $0.8 million, net of tax benefit, respectively. During both the three months ended March 31, 2023 and 2022, the Company received no distributions from OCV. |
Basis of Presentation and Ove_2
Basis of Presentation and Overview (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Impairment or Disposal of Long-Lived Assets | Impairment or Disposal of Long-Lived AssetsThe Company assesses whether events or changes in circumstances have occurred that potentially indicate the carrying amount of definite-lived assets may not be recoverable. During the three months ended March 31, 2023 and 2022, the Company recorded an impairment of approximately $1.8 million and zero, respectively, primarily related to certain operating lease right-of-use assets. The Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a permanent “remote” or “partial remote” work model. The impairment is presented in general and administrative expense on the Condensed Consolidated Statement of Operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently issued applicable accounting pronouncements not yet adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This update provides for optional financial reporting alternatives to reduce cost and complexities associated with accounting for contracts, hedging relationships, and other transactions affected by reference rate reform. This update applies only to contracts, hedging relationships, and other transactions that reference London Interbank Offer Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The accommodations were available for all entities through December 31, 2022, with early adoption permitted. This update was later amended by ASU 2022-06. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 . This update defers the expiration date of ASC Topic 848 from December 31, 2022 to December 31, 2024. We are currently evaluating the effect the adoption of this update will have on our condensed consolidated financial statements and related disclosures. |
Reclassifications | Reclassifications Certain prior year reported amounts have been reclassified to conform with 2023 presentation. |
Revenue Recognition | Digital Media revenues are earned primarily from the delivery of advertising services and from subscriptions to services and information. Revenue is earned from the delivery of advertising services on websites that are owned and operated by us and on those websites that are part of Digital Media’s advertising network. Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when any of the following performance obligations are satisfied: (i) when an advertisement is placed for viewing, (ii) when a qualified sales lead is delivered, (iii) when a visitor “clicks through” on an advertisement or (iv) when commissions are earned upon the sale of an advertised product. Revenue from subscriptions is earned through the granting of access to, or delivery of, data products or services to customers. Subscriptions cover video games and related content, health information, data, and other copyrighted material. Revenues under such agreements are recognized over the contract term for use of the service. Revenues are also earned from listing fees, subscriptions to online publications, and from other sources. Subscription revenues are primarily recognized over time. Revenues related to the provision of access to historical data for certain services are recorded at the time of delivery. We also generate Digital Media subscription revenues through the license of certain assets to clients. Assets are licensed for clients’ use in their own promotional materials or otherwise and may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized over the contract term for use of the asset. In instances when technology assets are licensed to our clients, revenues from the license of these assets are recognized over the term of the access period. The Digital Media business also generates revenue from other sources which include marketing and production services. Such other revenues are generally recognized over the period in which the products or services are delivered. We also generate Digital Media revenues from transactions involving the sale of perpetual software licenses, related software support and maintenance, hardware used in conjunction with its software, and other related services. Revenue is recognized for these software transactions with multiple performance obligations after (i) the contract has been approved and we are committed to perform the respective obligations and (ii) we can identify and quantify each obligation and its respective selling price. Once the respective performance obligations have been identified and quantified, revenue will be recognized when the obligations are met, either over time or at a point in time depending on the nature of the obligation. Revenues from software license performance obligations are generally recognized upfront at the point in time that the software is made available to the customer to download and use. Revenues for related software support and maintenance performance obligations are related to technical support provided to customers as needed and unspecified software product upgrades, maintenance releases, and patches during the term of the support period when they are available. We are obligated to make the support services available continuously throughout the contract period. Therefore, revenues for support contracts are generally recognized ratably over the contractual period the support services are provided. Hardware product and related software performance obligations, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a bundled performance obligation. The revenues for this bundled performance obligation are generally recognized at the point in time that the hardware and software products are delivered and ownership is transferred to the customer. Other service revenues are generally recognized over time as the services are performed. The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned and operated web properties, on third-party sites, or on unaffiliated advertising networks; (ii) through the Company’s lead-generation business; and (iii) through the Company’s subscriptions. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third-party sites. Cybersecurity and Martech The Company’s Cybersecurity and Martech revenues substantially consist of subscription revenues which include subscription and usage-based fees, a significant portion of which are paid in advance. The Company defers the portions of monthly, quarterly, semi-annual, and annual fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned. Transaction Price Allocation to Future Performance Obligations As of March 31, 2023, the aggregate amount of transaction price that is allocated to future performance obligations was approximately $15.8 million and is expected to be recognized as follows: 85% by December 31, 2023 and 15% by December 31, 2025. The amount disclosed does not include revenues related to performance obligations that are part of a contract with original expected duration of twelve months or less or portions of the contract that remain subject to cancellations. |
Fair Value Measurements | The Company complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. § Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. § Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. § Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s money market funds are classified within Level 1. The Company values these Level 1 investments using quoted market prices. The Company’s investment in Consensus’ common stock for which the Company elected the fair value option, and the fair value of the Company’s investment in Consensus and subsequent fair value changes, are included in our assets and changes in fair value are recognized in earnings. As the initial carrying value of the investment in Consensus was negative immediately following the Separation, the Company elected the fair value option under ASC 825-10-25 to support the initial recognition of the investment in Consensus at fair value and the negative book value was recorded as a gain at the date of Separation. The fair value of the investment in Consensus is determined using quoted market prices, which is a Level 1 input. The Company has investment in a corporate debt security that does not have a readily determinable fair value because acquired securities are privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. The fair value of the corporate debt securities is determined primarily based on significant estimates and assumptions, including Level 3 inputs. As of March 31, 2023 and December 31, 2022, the fair value was determined based upon various probability-weighted scenarios and included an assumption of a 13% discount rate as of March 31, 2023 and December 31, 2022, respectively, and a conversion timeframe of approximately one-year. The fair value of the Company’s 4.625% Senior Notes and 1.75% Convertible Notes (as defined in Note 7 - Debt ) was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 1 inputs. If such information is not available for the 1.75% Convertible Notes, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature. The Company classifies its contingent consideration liability in connection with acquisitions within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not supported by market activity. The valuation approaches used to value Level 3 investments considers unobservable inputs in the market such as time to liquidity, volatility, dividend yield, and breakpoints. Significant increases or decreases in either of the inputs in isolation would result in a significantly lower or higher fair value measurement. As of March 31, 2023 and December 31, 2022, the contingent consideration was determined using a 100% probability of payout, without any other estimates applied. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenues from external customers classified by revenue source are as follows (in thousands). Three months ended March 31, 2023 2022 Digital Media Advertising $ 156,082 $ 170,067 Subscription 69,148 55,576 Other 8,981 9,184 Total Digital Media revenues $ 234,211 $ 234,827 Cybersecurity and Martech Subscription $ 73,016 $ 80,494 Total Cybersecurity and Martech revenues $ 73,016 $ 80,494 Elimination of inter-segment revenues (85) (253) Total Revenues $ 307,142 $ 315,068 Timing of revenue recognition Point in time $ 11,522 $ 8,983 Over time 295,620 306,085 Total $ 307,142 $ 315,068 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Allocation of Aggregate Purchase Price | The following table summarizes the allocation of the purchase consideration for all 2022 acquisitions as of March 31, 2022 (in thousands): Assets and Liabilities Valuation Accounts receivable $ 4,615 Prepaid expenses and other current assets 231 Property and equipment 307 Trade names 2,302 Customer relationship 9,216 Goodwill 24,156 Other intangibles 3,439 Other long-term assets 11 Accounts payable and accrued expenses (2,551) Deferred revenue (1,697) Deferred tax liability (3,390) Total $ 36,639 |
Pro Forma Financial Information | The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its acquisitions during the three months ended March 31, 2022 as if each acquisition had occurred on January 1, 2022 (in thousands, except per share amounts): Three months ended (unaudited) Revenues $ 316,154 Net income $ 24,815 Income per common share - Basic $ 0.53 Income per common share - Diluted $ 0.52 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Debt Securities, Trading, and Equity Securities, FV-NI | Gains (losses) on equity securities were recorded in ‘Unrealized (loss) gain on short-term investments held at the reporting date, net’ in the Condensed Consolidated Statements of Operations’ consisted of the following (in thousands): Three months ended March 31, 2023 2022 Net (losses) gains during the period $ (19,988) $ 8,951 Less: gains on securities sold during the period 357 — Unrealized (losses) gains recognized during the period on short-term investments held at the reporting date, net $ (20,345) $ 8,951 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments Measured On Recurring Basis | The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands): March 31, 2023 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 292,847 $ — $ — $ 292,847 $ 292,847 Short-term investments: Certificates of deposit — 3,753 — 3,753 3,753 Investment in Consensus 35,259 — — 35,259 35,259 Long-term investments: Investment in corporate debt securities — — 16,019 16,019 16,019 Total assets measured at fair value $ 328,106 $ 3,753 $ 16,019 $ 347,878 $ 347,878 Liabilities: Contingent consideration $ — $ — $ 555 $ 555 $ 555 Debt: 4.625% Senior Notes 399,203 399,203 456,498 1.75% Convertible Notes 540,237 540,237 543,119 Total liabilities measured at fair value $ 939,440 $ — $ 555 $ 939,995 $ 1,000,172 December 31, 2022 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 312,010 $ — $ — $ 312,010 $ 312,010 Short-term investments: Investment in Consensus 58,421 — — 58,421 58,421 Long-term investments: Investment in corporate debt securities — — 15,586 15,586 15,586 Total assets measured at fair value $ 370,431 $ — $ 15,586 $ 386,017 $ 386,017 Liabilities: Contingent consideration $ — $ — $ 555 $ 555 $ 555 Debt: 4.625% Senior Notes 390,908 390,908 456,400 1.75% Convertible Notes 548,411 548,411 542,653 Total liabilities measured at fair value $ 939,319 $ — $ 555 $ 939,874 $ 999,608 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents a reconciliation of the Company’s Level 3 financial assets related to our investment in corporate debt securities that are measured at fair value on a recurring basis (in thousands): Three months ended 2023 2022 Contingent Consideration Arrangements Corporate Debt Securities Contingent Consideration Arrangements Corporate Debt Securities Balance as of January 1 $ 555 $ 15,586 $ 5,775 $ — Fair value at date of acquisition — — 4,200 — Fair value adjustments (1) — 433 112 — Balance as of March 31 $ 555 $ 16,019 $ 10,087 $ — |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amounts of Goodwill | The changes in carrying amounts of goodwill for the three months ended March 31, 2023 are as follows (in thousands): Digital Media Cybersecurity and Martech Consolidated Balance as of January 1, 2023 $ 1,065,989 $ 525,485 $ 1,591,474 Goodwill acquired (Note 3) 3,849 — 3,849 Purchase accounting adjustments (1) 513 — 513 Foreign exchange translation 540 1,308 1,848 Balance as of March 31, 2023 $ 1,070,891 $ 526,793 $ 1,597,684 (1) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions. |
Intangible Assets Subject to Amortization | As of March 31, 2023, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Historical Accumulated Net Trade names 10 years $ 263,060 $ 130,986 $ 132,074 Customer relationships (1) 8 years 690,363 497,910 192,453 Other purchased intangibles 8 years 482,501 373,718 108,783 Total $ 1,435,924 $ 1,002,614 $ 433,310 (1) The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. As of December 31, 2022, intangible assets subject to amortization relate primarily to the following (in thousands): Weighted-Average Amortization Period Historical Accumulated Net Trade names 10 years $ 261,614 $ 125,422 $ 136,192 Customer relationships (1) 8 years 687,798 479,741 208,057 Other purchased intangibles 8 years 481,973 363,407 118,566 Total $ 1,431,385 $ 968,570 $ 462,815 (1) The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term debt consists of the following (in thousands): March 31, 2023 December 31, 2022 4.625% Senior Notes $ 460,038 $ 460,038 1.75% Convertible Notes 550,000 550,000 Total Notes 1,010,038 1,010,038 Credit Agreement — — Less: Unamortized discount (2,690) (2,764) Deferred issuance costs (7,731) (8,221) Total long-term debt $ 999,617 $ 999,053 |
Schedule of Repurchase Agreements | Repurchases of 4.625% Senior Notes on the open market were as follows (in thousands): Three months ended March 31, 2022 Principal repurchased $ 54,609 Aggregate purchase price $ 55,365 Gain (loss) on repurchase (1) $ (1,220) (1) Presented within ‘Gain (loss) on debt extinguishment, net” on the Condensed Consolidated Statements of Operations. |
Schedule of Debt | The following table provides additional information related to the 1.75% Convertible Notes (in thousands): March 31, 2023 December 31, 2022 Principal amount of 1.75% Convertible Notes $ 550,000 $ 550,000 Less: Carrying amount of debt issuance costs (6,881) (7,347) Net carrying amount of 1.75% Convertible Notes $ 543,119 $ 542,653 The following table provides the components of interest expense related to the 1.75% Convertible Notes (in thousands): Three months ended March 31, 2023 2022 Coupon interest expense $ 2,406 $ 2,406 Amortization of debt issuance costs 466 493 Total interest expense related to 1.75% Convertible Notes $ 2,872 $ 2,899 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award | The following table presents the effects of share-based compensation expense in the Condensed Consolidated Statements of Operations during the periods presented (in thousands): Three months ended March 31, 2023 2022 Cost of revenues $ 76 $ 84 Sales and marketing 924 569 Research, development and engineering 783 629 General and administrative 6,619 5,435 Total share-based compensation $ 8,402 $ 6,717 |
Market-Based Restricted Stock Awards, Valuation Assumptions | The weighted-average fair values of market-based restricted stock units granted have been estimated utilizing the following assumptions: March 31, 2023 March 31, 2022 Underlying stock price at valuation date $ 77.80 $ 99.32 Expected volatility 32.0 % 36.7 % Risk-free interest rate 4.1 % 1.8 % |
Restricted Stock and Restricted Stock Unit Award Activity | Restricted stock award activity for the three months ended March 31, 2023 is set forth below: Shares Weighted-Average Nonvested at January 1, 2023 311,281 $ 59.90 Vested (36,380) $ 100.41 Nonvested at March 31, 2023 274,901 $ 58.43 Restricted stock unit activity for the three months ended March 31, 2023 is set forth below: Number of Weighted-Average Aggregate Outstanding at January 1, 2023 464,354 Granted 439,220 Vested (53,299) Canceled (1,401) Outstanding at March 31, 2023 848,874 3.4 $ 66,508,434 Vested and expected to vest at March 31, 2023 705,218 3.2 $ 54,788,467 |
(Loss) Earnings Per Share (Tabl
(Loss) Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Components of Basic and Diluted Earnings Per Share | The components of basic and diluted earnings (loss) per share are as follows (in thousands, except share and per share data): Three months ended March 31, 2023 2022 Basic Diluted Basic Diluted Numerator for basic and diluted net (loss) income per common share: Net (loss) income $ (7,627) $ (7,627) $ 24,537 $ 24,537 Net income available to participating securities (1) — — (11) (11) 1.75% Convertible Notes interest expense (after-tax) — — — 2,186 Net (loss) income available to the Company’s common shareholders $ (7,627) $ (7,627) $ 24,526 $ 26,712 Denominator: Basic weighted-average outstanding shares of common stock 46,987,249 46,987,249 47,054,411 47,054,411 Diluted effect of: Equity incentive plans — — — 192,835 Convertible debt — — — 5,158,071 Diluted weighted-average outstanding shares of common stock 46,987,249 46,987,249 47,054,411 52,405,317 Net (loss) income per share $ (0.16) $ (0.16) $ 0.52 $ 0.51 (1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Reconciliation of Total Segment Operating Income to Consolidated Operating Income | Information on reportable segments and reconciliation to income from operations is as follows (in thousands): Three months ended March 31, 2023 2022 Revenue by reportable segment: Digital Media $ 234,211 $ 234,827 Cybersecurity and Martech 73,016 80,494 Elimination of inter-segment revenues (85) (253) Total segment revenues 307,142 315,068 Corporate (1) — — Total revenues $ 307,142 $ 315,068 Operating costs and expenses by reportable segment (2) : Digital Media 205,742 202,707 Cybersecurity and Martech 61,413 68,166 Elimination of inter-segment operating expenses (85) (253) Total segment operating expenses 267,070 270,620 Corporate (1) 13,757 13,886 Total operating costs and expenses 280,827 284,506 Operating income by reportable segment: Digital Media operating income 28,469 32,120 Cybersecurity and Martech operating income 11,603 12,328 Total segment operating income 40,072 44,448 Corporate (1) (13,757) (13,886) Income from operations $ 26,315 $ 30,562 (1) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Other Significant Noncash Transactions | Non-cash investing and financing activities were as follows (in thousands): Three months ended March 31, 2023 2022 Non-cash investing activity: Property and equipment, accrued but unpaid $ 55 $ 205 Right-of-use assets acquired in exchange for operating lease obligations $ — $ 2,673 |
Other Supplemental Data | Supplemental data (in thousands): Three months ended March 31, 2023 2022 Interest paid $ — $ 632 Income taxes paid, net of refunds $ 5,329 $ 4,344 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Balances in Other Comprehensive Income | The following table summarizes the changes in accumulated balances of other comprehensive loss (income), net of tax, for the three months ended March 31, 2023 (in thousands): Unrealized Gains (Losses) on Investments Foreign Currency Translation Total Balance as of January 1, 2023 $ 441 $ (85,814) $ (85,373) Other comprehensive income 324 3,713 4,037 Balance as of March 31, 2023 $ 765 $ (82,101) $ (81,336) |
Basis of Presentation and Ove_3
Basis of Presentation and Overview (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Impairment of intangible assets | $ 1.8 | $ 0 |
Revenues (Disaggregation of Rev
Revenues (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 307,142 | $ 315,068 |
Point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 11,522 | 8,983 |
Over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 295,620 | 306,085 |
Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 307,142 | 315,068 |
Operating Segments | Digital Media | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 234,211 | 234,827 |
Operating Segments | Cybersecurity and Martech | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 73,016 | 80,494 |
Operating Segments | Advertising | Digital Media | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 156,082 | 170,067 |
Operating Segments | Subscription | Digital Media | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 69,148 | 55,576 |
Operating Segments | Subscription | Cybersecurity and Martech | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 73,016 | 80,494 |
Operating Segments | Other | Digital Media | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 8,981 | 9,184 |
Elimination of inter-segment revenues | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ (85) | $ (253) |
Revenues (Narrative) (Details)
Revenues (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Contract liability, revenue recognized | $ 65.1 | $ 73.1 |
Revenue, remaining performance obligation | $ 15.8 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Remaining performance obligation, percent | 85% | |
Remaining performance obligation, period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Remaining performance obligation, percent | 15% | |
Remaining performance obligation, period | 12 months |
Business Acquisitions (Narrativ
Business Acquisitions (Narrative) (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) subsidiary | Dec. 31, 2022 USD ($) | Jan. 21, 2022 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,597,684 | $ 1,591,474 | ||
Fiscal 2023 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 3,800 | |||
Definite-lived intangible assets acquired | $ 4,200 | |||
Lifecycle Marketing Group Limited | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 100% | |||
Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | subsidiary | 2 | |||
Fiscal 2022 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 24,156 | |||
Revenue of acquiree since acquisition date | 2,100 | |||
Total consideration of transactions | 36,600 | |||
Fair value of accounts receivable acquired | 4,600 | |||
Amount expected to be uncollectable | 0 | |||
Expected income tax deductible amount | $ 2,200 |
Business Acquisitions (Allocati
Business Acquisitions (Allocation of Aggregate Purchase Price) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,597,684 | $ 1,591,474 | |
Fiscal 2022 Acquisitions | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 4,615 | ||
Prepaid expenses and other current assets | 231 | ||
Property and equipment | 307 | ||
Goodwill | 24,156 | ||
Other long-term assets | 11 | ||
Accounts payable and accrued expenses | (2,551) | ||
Deferred revenue | (1,697) | ||
Deferred tax liability | (3,390) | ||
Total | 36,639 | ||
Fiscal 2022 Acquisitions | Trade names | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | 2,302 | ||
Fiscal 2022 Acquisitions | Customer relationship | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | 9,216 | ||
Fiscal 2022 Acquisitions | Other intangibles | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | $ 3,439 |
Business Acquisitions (Pro Form
Business Acquisitions (Pro Forma Financial Information) (Details) - Fiscal 2022 Acquisitions $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) $ / shares | |
Business Acquisition [Line Items] | |
Revenues | $ | $ 316,154 |
Net income | $ | $ 24,815 |
(Loss) income per common share from continuing operations - Basic (usd per share) | $ / shares | $ 0.53 |
(Loss) income per common share from continuing operations - Diluted (usd per share) | $ / shares | $ 0.52 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 USD ($) shares | Mar. 31, 2022 USD ($) investment | Dec. 31, 2022 USD ($) investment shares | Apr. 12, 2022 USD ($) | |
Debt Securities, Available-for-sale [Line Items] | ||||
Shares held | shares | 1,000,000 | 1,100,000 | ||
Investment in corporate debt securities | $ 35,300,000 | $ 58,400,000 | ||
Gross unrealized gains | 1,000,000 | $ 600,000 | ||
Investments in an unrealized loss position | investment | 0 | 0 | ||
Impairment losses | 0 | $ 0 | ||
Loss from equity method investment, net | (9,182,000) | $ (785,000) | ||
Management fees recognized | 0 | 800,000 | ||
Equity method investments | 100,000,000 | 112,300,000 | ||
OCV Management, LLC | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Maximum exposure of investment | 100,000,000 | 112,300,000 | ||
Distribution from equity method investment | 0 | $ 0 | ||
Corporate Debt Securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Debt securities, available-for-sale, coupon rate | 4% | |||
Debt securities, available-for-sale | $ 15,000,000 | |||
Carrying value of investment | 16,000,000 | 15,600,000 | ||
Maximum exposure of investment | $ 16,000,000 | $ 15,600,000 | ||
Public Stock Offering | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Shares issued in offering (in shares) | shares | 52,393 |
Investments (Gains (Losses) on
Investments (Gains (Losses) on Equity Securities) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||
Net (losses) gains during the period | $ (19,988) | $ 8,951 |
Less: gains on securities sold during the period | 357 | 0 |
Unrealized (loss) gain on short-term investments held at the reporting date, net | $ (20,345) | $ 8,951 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - factor | Mar. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | Nov. 15, 2019 |
Measurement Input, Discount Rate | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt securities, available-for-sale, measurement input | 0.13 | 0.13 | ||
1.75% Convertible Notes | Convertible Debt | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Stated interest rate | 1.75% | 1.75% |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Values of Financial Instruments Measured On Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | Oct. 07, 2020 | Nov. 15, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Investment in Consensus | $ 35,300 | $ 58,400 | |||
4.625% Senior Notes | Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Stated interest rate | 4.625% | ||||
1.75% Convertible Notes | Convertible Debt | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Stated interest rate | 1.75% | 1.75% | |||
Fair value of debt instruments | 540,200 | 548,400 | |||
Fair Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Certificates of deposit | 3,753 | ||||
Investment in Consensus | 35,259 | 58,421 | |||
Investment in corporate debt securities | 16,019 | 15,586 | |||
Total assets measured at fair value | 347,878 | 386,017 | |||
Contingent consideration | 555 | 555 | |||
Total liabilities measured at fair value | 939,995 | 939,874 | |||
Fair Value | 4.625% Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | 399,203 | 390,908 | |||
Fair Value | 1.75% Convertible Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | 540,237 | 548,411 | |||
Carrying Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Certificates of deposit | 3,753 | ||||
Investment in Consensus | 35,259 | 58,421 | |||
Investment in corporate debt securities | 16,019 | 15,586 | |||
Total assets measured at fair value | 347,878 | 386,017 | |||
Contingent consideration | 555 | 555 | |||
Total liabilities measured at fair value | 1,000,172 | 999,608 | |||
Carrying Value | 4.625% Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | 456,498 | 456,400 | |||
Carrying Value | 1.75% Convertible Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | 543,119 | 542,653 | |||
Money market and other funds | Fair Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Money market and other funds | 292,847 | 312,010 | |||
Money market and other funds | Carrying Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Money market and other funds | 292,847 | 312,010 | |||
Level 1 | Fair Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Certificates of deposit | 0 | ||||
Investment in Consensus | 35,259 | 58,421 | |||
Investment in corporate debt securities | 0 | 0 | |||
Total assets measured at fair value | 328,106 | 370,431 | |||
Contingent consideration | 0 | 0 | |||
Total liabilities measured at fair value | 939,440 | 939,319 | |||
Level 1 | Fair Value | 4.625% Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | 399,203 | 390,908 | |||
Level 1 | Fair Value | 1.75% Convertible Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | 540,237 | 548,411 | |||
Level 1 | Money market and other funds | Fair Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Money market and other funds | 292,847 | 312,010 | |||
Level 2 | Fair Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Certificates of deposit | 3,753 | ||||
Investment in Consensus | 0 | 0 | |||
Investment in corporate debt securities | 0 | 0 | |||
Total assets measured at fair value | 3,753 | 0 | |||
Contingent consideration | 0 | 0 | |||
Total liabilities measured at fair value | 0 | 0 | |||
Level 2 | Fair Value | 4.625% Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | |||||
Level 2 | Fair Value | 1.75% Convertible Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | |||||
Level 2 | Money market and other funds | Fair Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Money market and other funds | 0 | 0 | |||
Level 3 | Fair Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Certificates of deposit | 0 | ||||
Investment in Consensus | 0 | 0 | |||
Investment in corporate debt securities | 16,019 | 15,586 | |||
Total assets measured at fair value | 16,019 | 15,586 | |||
Contingent consideration | 555 | 555 | |||
Total liabilities measured at fair value | 555 | 555 | |||
Level 3 | Fair Value | 4.625% Senior Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | |||||
Level 3 | Fair Value | 1.75% Convertible Notes | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of debt instruments | |||||
Level 3 | Money market and other funds | Fair Value | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Money market and other funds | $ 0 | $ 0 |
Fair Value Measurements (Reconc
Fair Value Measurements (Reconciliation of Level 3 Financial Assets Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Contingent Consideration Arrangements | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Balance as of January 1 | $ 555 | $ 5,775 |
Fair value at date of acquisition | 0 | 4,200 |
Fair value adjustments | 0 | 112 |
Balance as of March 31 | 555 | 10,087 |
Corporate Debt Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Balance as of January 1 | 15,586 | 0 |
Fair value at date of acquisition | 0 | 0 |
Fair value adjustments | 433 | 0 |
Balance as of March 31 | $ 16,019 | $ 0 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 33.3 | $ 41.2 | |
Digital Media | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment on business | $ (27.4) | $ (27.4) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Changes in Carrying Amounts of Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,591,474 |
Goodwill acquired | 3,849 |
Purchase accounting adjustments | 513 |
Foreign exchange translation | 1,848 |
Ending balance | 1,597,684 |
Operating Segments | Digital Media | |
Goodwill [Roll Forward] | |
Beginning balance | 1,065,989 |
Goodwill acquired | 3,849 |
Purchase accounting adjustments | 513 |
Foreign exchange translation | 540 |
Ending balance | 1,070,891 |
Operating Segments | Cybersecurity and Martech | |
Goodwill [Roll Forward] | |
Beginning balance | 525,485 |
Goodwill acquired | 0 |
Purchase accounting adjustments | 0 |
Foreign exchange translation | 1,308 |
Ending balance | $ 526,793 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Intangible Assets Subject to Amortization) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Historical Cost | $ 1,435,924 | $ 1,431,385 |
Accumulated Amortization | 1,002,614 | 968,570 |
Net | $ 433,310 | $ 462,815 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 10 years | 10 years |
Historical Cost | $ 263,060 | $ 261,614 |
Accumulated Amortization | 130,986 | 125,422 |
Net | $ 132,074 | $ 136,192 |
Customer relationship | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 8 years | 8 years |
Historical Cost | $ 690,363 | $ 687,798 |
Accumulated Amortization | 497,910 | 479,741 |
Net | $ 192,453 | $ 208,057 |
Customer relationship | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 4 years | 4 years |
Customer relationship | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 5 years | 5 years |
Other purchased intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 8 years | 8 years |
Historical Cost | $ 482,501 | $ 481,973 |
Accumulated Amortization | 373,718 | 363,407 |
Net | $ 108,783 | $ 118,566 |
Debt (Long-term Debt) (Details)
Debt (Long-term Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | Oct. 07, 2020 | Nov. 15, 2019 |
Debt Instrument [Line Items] | |||||
Less: Unamortized discount | $ (2,690) | $ (2,764) | |||
Deferred issuance costs | (7,731) | (8,221) | |||
Total long-term debt | 999,617 | 999,053 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 0 | 0 | |||
Senior Notes | 4.625% Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 4.625% | ||||
Long-term debt, gross | 460,038 | 460,038 | |||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 1,010,038 | 1,010,038 | |||
Convertible Debt | 1.75% Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 1.75% | 1.75% | |||
Long-term debt, gross | 550,000 | 550,000 | |||
Deferred issuance costs | $ (6,881) | $ (7,347) | $ (2,800) |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 3 Months Ended | |||||||
Oct. 07, 2021 | Apr. 07, 2021 USD ($) | Oct. 07, 2020 USD ($) fiscalQuarterPeriod | Nov. 15, 2019 USD ($) tradingDay | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jan. 01, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Principal maturing in 2026 | $ 550,000,000 | |||||||
Principal maturing in 2030 | 460,000,000 | |||||||
Unamortized discount | 2,690,000 | $ 2,764,000 | ||||||
Deferred issuance costs | 7,731,000 | 8,221,000 | ||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |||||||
Increase available | 250,000,000 | |||||||
Total aggregate commitment | $ 350,000,000 | |||||||
4.625% Senior Notes | Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 4.625% | |||||||
Percentage principal outstanding to be eligible for redemption | 50% | |||||||
Covenant, leverage ratio, minimum | 3.5 | |||||||
Covenant restricted payment threshold | $ 250,000,000 | |||||||
Covenant, EBITDA minimum | 50% | |||||||
Covenant, EBITDA minimum, fiscal quarter period | fiscalQuarterPeriod | 4 | |||||||
Principal repurchased | $ 290,000,000 | $ 54,609,000 | ||||||
Debt instrument, face amount | $ 750,000,000 | |||||||
Proceeds from debt, net of issuance costs | $ 742,700,000 | |||||||
Effective interest rate | 4.70% | |||||||
4.625% Senior Notes | Senior Notes | Debt Instrument, Redemption, Period One | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of principal amount redeemed | 40% | |||||||
Redemption price, percentage | 104.625% | |||||||
4.625% Senior Notes | Senior Notes | Debt Instrument, Redemption, Period Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Redemption price, percentage | 100% | |||||||
6.0% Senior Notes | Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 6% | |||||||
1.75% Convertible Notes | Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 1.75% | 1.75% | ||||||
Debt instrument, face amount | $ 550,000,000 | |||||||
Proceeds from debt, net of issuance costs | 537,100,000 | |||||||
Convertible debt conversion ratio | 0.0093783 | |||||||
Shares issued in debt-for-equity exchange (in shares) | shares | 5,158,071 | |||||||
Convertible debt conversion price (in usd per share) | $ / shares | $ 106.63 | |||||||
Fair value of debt instruments | $ 540,200,000 | 548,400,000 | ||||||
Gross debt issuance costs | 12,900,000 | |||||||
Accumulated amortization of debt issuance costs | $ 10,100,000 | |||||||
Effective interest rate | 5.50% | |||||||
Deferred issuance costs | $ 2,800,000 | $ 6,881,000 | $ 7,347,000 | |||||
1.75% Convertible Notes | Convertible Debt | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Debt Instrument [Line Items] | ||||||||
Unamortized discount | $ 87,300,000 | |||||||
1.75% Convertible Notes | Convertible Debt | Debt Instrument, Redemption, Period One | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible debt threshold trading days | tradingDay | 20 | |||||||
Convertible debt threshold consecutive trading days | tradingDay | 30 | |||||||
Percentage of stock price | 130% | |||||||
1.75% Convertible Notes | Convertible Debt | Debt Instrument, Redemption, Period Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible debt threshold trading days | tradingDay | 5 | |||||||
Convertible debt threshold consecutive trading days | tradingDay | 10 | |||||||
Percentage of product of stock price and conversion rate | 98% | |||||||
Bridge Loan Facility | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.50% | |||||||
Bridge Loan Facility | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.25% | |||||||
Bridge Loan Facility | Base Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Bridge Loan Facility | Base Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.25% | |||||||
Bridge Loan Facility | Bridge Loan | Federal Funds Effective Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
Bridge Loan Facility | Bridge Loan | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1% | |||||||
Calculation denominator | 1 | |||||||
Credit Agreement | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, covenant, leverage ratio, maximum | 4 | |||||||
Debt instrument, covenant, interest coverage ratio, minimum | 3 |
Debt - Repurchases (Details)
Debt - Repurchases (Details) - 4.625% Senior Notes - Senior Notes - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Instrument [Line Items] | ||
Principal repurchased | $ 290,000 | $ 54,609 |
Aggregate purchase price | 55,365 | |
Gain (loss) on repurchase | $ (1,220) |
Debt - Additional Information R
Debt - Additional Information Related to Convertible Notes (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | Nov. 15, 2019 |
Debt Instrument [Line Items] | ||||
Less: Carrying amount of debt issuance costs | $ (7,731) | $ (8,221) | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Principal amount of 1.75% Convertible Notes | 1,010,038 | 1,010,038 | ||
1.75% Convertible Notes | Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 1.75% | 1.75% | ||
Principal amount of 1.75% Convertible Notes | 550,000 | 550,000 | ||
Less: Carrying amount of debt issuance costs | (6,881) | (7,347) | $ (2,800) | |
Long-term debt | $ 543,119 | $ 542,653 |
Debt - Components of Interest E
Debt - Components of Interest Expense Related to Convertible Notes (Details) - 1.75% Convertible Notes - Convertible Debt - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Instrument [Line Items] | ||
Coupon interest expense | $ 2,406 | $ 2,406 |
Amortization of debt issuance costs | 466 | 493 |
Total interest expense related to 1.75% Convertible Notes | $ 2,872 | $ 2,899 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Loss contingencies accrued | $ 25.5 | $ 24 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | (65.60%) | 16.70% | |
Income tax benefit | $ 616 | $ (5,080) | |
Discrete tax benefit from gain on investment | 5,000 | ||
Discrete tax benefit from release of reserves for uncertain tax positions | 1,000 | ||
Unrecognized tax benefits | 39,800 | $ 40,400 | |
Prepaid tax payments | 800 | 3,200 | |
Income taxes payable, current | 16,900 | 19,700 | |
Long-term portion of income taxes payable | $ 11,700 | $ 11,700 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Aug. 06, 2020 | |
Equity, Class of Treasury Stock [Line Items] | |||
Repurchase and retirement of common stock | $ 2,875 | $ 62,810 | |
Number of remaining shares available for purchase (in shares) | 6,327,154 | ||
Number of shares purchased from plan participants (in shares) | 36,652 | 40,372 | |
Tax withholding aggregate cost | $ 2,900 | $ 4,100 | |
2020 Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Maximum number of shares authorized to be repurchased (in shares) | 10,000,000 | ||
Repurchase and retirement of common stock (in shares) | 0 | 554,289 | |
Repurchase and retirement of common stock | $ 0 | $ 58,700 | |
Shares repurchased under the program (in shares) | 3,672,846 | ||
Aggregate cost of shares repurchased | $ 296,900 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) d $ / shares shares | Mar. 31, 2022 $ / shares shares | |
Restricted Stock And Restricted Stock Unit (RSU) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 271,614 | 112,324 |
Restricted Stock And Restricted Stock Unit (RSU) | Board of Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting periods | 1 year | |
Restricted Stock And Restricted Stock Unit (RSU) | Chief Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting periods | 8 years | |
Market-based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 167,606 | 100,193 |
Trading days | d | 20 | |
Trading days, lookback | d | 30 | |
Weighted-average grant-date fair values of restricted stock awards granted (in usd per share) | $ / shares | $ 70.07 | $ 87.11 |
Weighted-average period to recognize compensation cost (in years) | 2 years 7 months 6 days | |
Restricted Stock, Restricted Stock Unit (RSU), Market-based Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested awards granted | $ | $ 66.2 | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 439,220 | |
Weighted-average period to recognize compensation cost (in years) | 4 years 2 months 12 days | |
Minimum | Restricted Stock And Restricted Stock Unit (RSU) | Senior Staff | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting periods | 4 years | |
Minimum | Market-based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair values of restricted stock awards granted (in usd per share) | $ / shares | $ 83.61 | 107.97 |
Maximum | Restricted Stock And Restricted Stock Unit (RSU) | Senior Staff | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting periods | 5 years | |
Maximum | Market-based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant-date fair values of restricted stock awards granted (in usd per share) | $ / shares | $ 103.76 | $ 138.73 |
2015 Stock Option Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum issuance of common stock (in shares) | 4,200,000 | |
Number of options outstanding (in shares) | 435,135 | |
2015 Stock Option Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market value of common stock on the date of grant for incentive stock options | 100% |
Share-Based Compensation (Effec
Share-Based Compensation (Effects of Share-based Compensation expense in the Condensed Consolidated Statements of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 8,402 | $ 6,717 |
Cost of revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 76 | 84 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 924 | 569 |
Research, development and engineering | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 783 | 629 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 6,619 | $ 5,435 |
Share-Based Compensation (Marke
Share-Based Compensation (Market-Based Restricted Stock Awards, Valuation Assumptions) (Details) - Restricted (Performance) Stock - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Underlying stock price at valuation date (in usd per share) | $ 77.80 | $ 99.32 |
Expected/ weighted average volatility | 32% | 36.70% |
Risk-free interest rate | 4.10% | 1.80% |
Share-Based Compensation (Restr
Share-Based Compensation (Restricted Stock and Restricted Stock Unit Award Activity) (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Restricted Stock | |
Shares | |
Nonvested at beginning of period (in shares) | 311,281 |
Vested (in shares) | (36,380) |
Nonvested at end of period (in shares) | 274,901 |
Number of Shares | |
Vested (in shares) | (36,380) |
Weighted-Average Grant-Date Fair Value | |
Nonvested at beginning of period (in usd per share) | $ / shares | $ 59.90 |
Vested (in usd per share) | $ / shares | 100.41 |
Nonvested at end of period (in usd per share) | $ / shares | $ 58.43 |
Restricted Stock Units | |
Shares | |
Vested (in shares) | (53,299) |
Number of Shares | |
Outstanding at beginning of period (in shares) | 464,354 |
Granted (in shares) | 439,220 |
Vested (in shares) | (53,299) |
Canceled (in shares) | (1,401) |
Outstanding at end of period (in shares) | 848,874 |
Vested and expected to vest at end of period (in shares) | 705,218 |
Weighted-Average Remaining Contractual Term (in years) | |
Outstanding at end of period | 3 years 4 months 24 days |
Vested and expected to vest at end of period | 3 years 2 months 12 days |
Aggregate Intrinsic Value | |
Outstanding at end of period | $ | $ 66,508,434 |
Vested and expected to vest at end of period | $ | $ 54,788,467 |
Earnings Per Share (Components
Earnings Per Share (Components of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Jan. 01, 2022 | Nov. 15, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Numerator for basic and diluted net (loss) income per common share: | $ (0.16) | $ 0.52 | ||
Net income from continuing operations - basic | $ (7,627) | $ 24,537 | ||
Net income available to participating securities - basic | 0 | (11) | ||
Net Income (Loss) Available to Common Stockholders, Basic | (7,627) | 24,526 | ||
Net income from continuing operations - diluted | (7,627) | 24,537 | ||
Net income available to participating securities - diluted | 0 | (11) | ||
1.75% Convertible Notes interest expense (after-tax) | 0 | 2,186 | ||
Net income available to the Company’s common shareholders from continuing operations, diluted | $ (7,627) | $ 26,712 | ||
Denominator: | ||||
Basic (in shares) | 46,987,249 | 47,054,411 | ||
Diluted effect of: | ||||
Equity incentive plans (in shares) | 0 | 192,835 | ||
Convertible debt (in shares) | 0 | 5,158,071 | ||
Common stock and common stock equivalents (in shares) | 46,987,249 | 52,405,317 | ||
Net income per share from continuing operations - basic (in dollars per share) | $ (0.16) | $ 0.52 | ||
Net income per share from continuing operations - diluted (in dollars per share) | $ (0.16) | $ 0.51 | ||
1.75% Convertible Notes | Convertible Debt | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Stated interest rate | 1.75% | 1.75% |
(Loss) Earnings Per Share - Nar
(Loss) Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock Options And Restricted Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,830,097 | 0 |
Convertible Debt Securities | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,158,071 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 business | |
Segment Reporting [Abstract] | |
Number of businesses | 2 |
Segment Information (Reconcilia
Segment Information (Reconciliation of Total Segment Operating Income to Consolidated Operating Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 307,142 | $ 315,068 |
Operating expenses | 280,827 | 284,506 |
Operating income | 26,315 | 30,562 |
Reportable segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 307,142 | 315,068 |
Operating expenses | 267,070 | 270,620 |
Operating income | 40,072 | 44,448 |
Elimination of inter-segment revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | (85) | (253) |
Operating expenses | (85) | (253) |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Revenues | 0 | 0 |
Operating expenses | 13,757 | 13,886 |
Operating income | (13,757) | (13,886) |
Digital Media | Reportable segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 234,211 | 234,827 |
Operating expenses | 205,742 | 202,707 |
Operating income | 28,469 | 32,120 |
Cybersecurity and Martech | Reportable segments | ||
Segment Reporting Information [Line Items] | ||
Revenues | 73,016 | 80,494 |
Operating expenses | 61,413 | 68,166 |
Operating income | $ 11,603 | $ 12,328 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Non-Cash) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Non-cash investing activity: | ||
Property and equipment, accrued but unpaid | $ 55 | $ 205 |
Right-of-use assets acquired in exchange for operating lease obligations | $ 0 | $ 2,673 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information (Supplemental Data) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 0 | $ 632 |
Income taxes paid, net of refunds | $ 5,329 | $ 4,344 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 1,892,611,000 | $ 1,967,732,000 |
Ending balance | 1,894,615,000 | 1,865,494,000 |
Other comprehensive loss reclassifications | 0 | 0 |
Accumulated other comprehensive loss | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (85,373,000) | (57,222,000) |
Other comprehensive income | 4,037,000 | |
Ending balance | (81,336,000) | $ (59,431,000) |
Unrealized Gains (Losses) on Investments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | 441,000 | |
Other comprehensive income | 324,000 | |
Ending balance | 765,000 | |
Foreign Currency Translation | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (85,814,000) | |
Other comprehensive income | 3,713,000 | |
Ending balance | $ (82,101,000) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Shares held | 1 | 1.1 | |
Management fees recognized | $ 0 | $ 0.8 | |
Consensus | Separation Transaction | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Related party transaction, ownership percentage | 5% | ||
Consensus | Various Agreements | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 1.2 | ||
Offset to lease expense | 0.4 | ||
OCV Management, LLC | |||
Related Party Transaction [Line Items] | |||
Distribution from equity method investment | $ 0 | $ 0 |
Uncategorized Items - zd-202303
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |