Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35940 | |
Entity Registrant Name | CHANNELADVISOR CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 56-2257867 | |
Entity Address, Address Line One | 3025 Carrington Mill Boulevard | |
Entity Address, City or Town | Morrisville | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27560 | |
City Area Code | 919 | |
Local Phone Number | 228-4700 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | ECOM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 30,475,830 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001169652 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 106,906 | $ 100,567 |
Accounts receivable, net of allowance of $318 and $279 as of March 31, 2022 and December 31, 2021, respectively | 26,951 | 28,886 |
Prepaid expenses and other current assets | 14,745 | 15,497 |
Total current assets | 148,602 | 144,950 |
Operating lease right of use assets | 1,923 | 2,856 |
Property and equipment, net | 8,168 | 7,682 |
Goodwill | 29,762 | 30,042 |
Intangible assets, net | 2,875 | 3,079 |
Deferred contract costs, net of current portion | 18,562 | 17,951 |
Long-term deferred tax assets, net | 31,460 | 32,616 |
Other assets | 705 | 796 |
Total assets | 242,057 | 239,972 |
Current liabilities: | ||
Accounts payable | 746 | 1,457 |
Accrued expenses | 12,761 | 12,644 |
Deferred revenue | 31,395 | 29,942 |
Other current liabilities | 3,634 | 4,831 |
Total current liabilities | 48,536 | 48,874 |
Long-term operating leases, net of current portion | 832 | 1,182 |
Other long-term liabilities | 1,407 | 1,718 |
Total liabilities | 50,775 | 51,774 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.001 par value, 100,000,000 shares authorized, 30,475,830 and 30,188,595 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 30 | 30 |
Additional paid-in capital | 302,551 | 300,875 |
Accumulated other comprehensive loss | (2,653) | (2,237) |
Accumulated deficit | (108,646) | (110,470) |
Total stockholders' equity | 191,282 | 188,198 |
Total liabilities and stockholders' equity | $ 242,057 | $ 239,972 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Allowance for doubtful accounts receivable, current | $ 318 | $ 279 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 30,475,830 | 30,188,595 |
Common stock, shares outstanding (in shares) | 30,475,830 | 30,188,595 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue | $ 42,297 | $ 39,166 |
Cost of revenue | 10,382 | 8,408 |
Gross profit | 31,915 | 30,758 |
Operating expenses: | ||
Sales and marketing | 15,946 | 14,632 |
Research and development | 5,423 | 5,527 |
General and administrative | 7,222 | 4,882 |
Total operating expenses | 28,591 | 25,041 |
Income from operations | 3,324 | 5,717 |
Other expense: | ||
Interest expense | 28 | 33 |
Other expense | 35 | 130 |
Total other expense | 63 | 163 |
Income before income taxes | 3,261 | 5,554 |
Income tax expense | 1,437 | 97 |
Net income | $ 1,824 | $ 5,457 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.06 | $ 0.19 |
Diluted (in dollars per share) | $ 0.06 | $ 0.18 |
Weighted average common shares outstanding: | ||
Basic | 30,273,338 | 29,294,130 |
Diluted | 31,656,555 | 31,138,533 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,824 | $ 5,457 |
Other comprehensive loss: | ||
Foreign currency translation adjustments | (416) | (150) |
Total comprehensive income | $ 1,408 | $ 5,307 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 1,824 | $ 5,457 |
Adjustments to reconcile net income to cash and cash equivalents provided by operating activities: | ||
Depreciation and amortization | 1,470 | 1,832 |
Bad debt expense (recovery) | 85 | (4) |
Stock-based compensation expense | 3,132 | 3,048 |
Deferred income taxes | 1,106 | 97 |
Other items, net | (302) | (1,536) |
Changes in assets and liabilities: | ||
Accounts receivable | 1,660 | (1,060) |
Prepaid expenses and other assets | 1,032 | 1,290 |
Deferred contract costs | (986) | (1,131) |
Accounts payable and accrued expenses | (2,457) | (2,203) |
Deferred revenue | 1,354 | 2,589 |
Cash and cash equivalents provided by operating activities | 7,918 | 8,379 |
Cash flows from investing activities | ||
Purchases of property and equipment | (957) | (225) |
Payment of software development costs | (939) | (749) |
Cash and cash equivalents used in investing activities | (1,896) | (974) |
Cash flows from financing activities | ||
Repayment of finance leases | (4) | (4) |
Proceeds from exercise of stock options | 362 | 3,587 |
Payment of statutory tax withholding related to net-share settlement of restricted stock units | (75) | (66) |
Cash and cash equivalents provided by financing activities | 283 | 3,517 |
Effect of currency exchange rate changes on cash and cash equivalents | 34 | (83) |
Net increase in cash and cash equivalents | 6,339 | 10,839 |
Cash and cash equivalents, beginning of period | 100,567 | 71,545 |
Cash and cash equivalents, end of period | 106,906 | 82,384 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 32 | 30 |
Cash paid for income taxes, net | 12 | 1 |
Supplemental disclosure of noncash investing and financing activities | ||
Accrued statutory tax withholding related to net-share settlement of restricted stock units | 1,743 | 1,995 |
Accrued capital expenditures | $ 8 | $ 2 |
Description of the Business
Description of the Business | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS | DESCRIPTION OF THE BUSINESSChannelAdvisor Corporation ("ChannelAdvisor" or the "Company") was incorporated in the state of Delaware and capitalized in June 2001. The Company began operations in July 2001. ChannelAdvisor is a leading provider of cloud-based e-commerce solutions whose mission is to connect and optimize the world's commerce. For over two decades, ChannelAdvisor has helped brands and retailers worldwide to streamline their e-commerce operations, expand to new channels and grow sales. Thousands of customers depend on ChannelAdvisor to securely power their e-commerce operations on hundreds of channels, including Amazon, eBay, Facebook, Google, Shopify, Walmart and Zalando. The Company is headquartered in Morrisville, North Carolina and maintains sales, service, support and research and development offices in various domestic and international locations. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Interim Condensed Consolidated Financial Information The accompanying condensed consolidated financial statements and footnotes have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, as contained in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of financial position, the results of operations, comprehensive income and cash flows. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results for the full year or the results for any future periods, especially in light of the ongoing impacts, and potential future effects of, the COVID-19 pandemic on the Company’s business, operations and financial performance. These unaudited interim financial statements should be read in conjunction with the audited financial statements and related footnotes for the year ended December 31, 2021, or fiscal 2021, which are included in the Company's Annual Report on Form 10-K for fiscal 2021. There have been no material changes to the Company's significant accounting policies from those described in the footnotes to the audited financial statements contained in the Company's Annual Report on Form 10-K for fiscal 2021. Recent Accounting Pronouncements The Company has reviewed new accounting pronouncements that were issued during the three months ended March 31, 2022 and does not believe that these pronouncements are applicable to the Company, or that they will have a material impact on its financial position or results of operations. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable allowance, the useful lives of long-lived assets and other intangible assets, income taxes, assumptions used for purposes of determining stock-based compensation, leases, including estimating lease terms and extensions, and revenue recognition, including standalone selling prices for contracts with multiple performance obligations and the expected period of benefit for deferred contract costs, among others. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY The following tables summarize quarterly stockholders' equity activity for the three months ended March 31, 2022 and 2021 (in thousands, except number of shares): Quarterly Activity For The Three Months Ended March 31, 2022 Common Stock Additional Accumulated Accumulated Total Shares Amount Balance, December 31, 2021 30,188,595 $ 30 $ 300,875 $ (2,237) $ (110,470) $ 188,198 Exercise of stock options and vesting of restricted stock units 388,551 — 362 — — 362 Stock-based compensation expense — — 3,132 — — 3,132 Statutory tax withholding related to net-share settlement of restricted stock units (101,316) — (1,818) — — (1,818) Net income — — — — 1,824 1,824 Foreign currency translation adjustments — — — (416) — (416) Balance, March 31, 2022 30,475,830 $ 30 $ 302,551 $ (2,653) $ (108,646) $ 191,282 Quarterly Activity For The Three Months Ended March 31, 2021 Common Stock Additional Accumulated Accumulated Total Shares Amount Balance, December 31, 2020 29,020,424 $ 29 $ 288,842 $ (1,095) $ (157,685) $ 130,091 Exercise of stock options and vesting of restricted stock units 802,270 1 3,586 — — 3,587 Stock-based compensation expense — — 3,048 — — 3,048 Statutory tax withholding related to net-share settlement of restricted stock units (89,842) — (2,061) — — (2,061) Net income — — — — 5,457 5,457 Foreign currency translation adjustments — — — (150) — (150) Balance, March 31, 2021 29,732,852 $ 30 $ 293,415 $ (1,245) $ (152,228) $ 139,972 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS The Company has acquired intangible assets in connection with its business acquisitions. These assets were recorded at their estimated fair values at the acquisition date and are being amortized over their respective estimated useful lives using the straight-line method. The estimated useful lives and amortization methodology used in computing amortization are as follows: Estimated Useful Life Amortization Methodology Customer relationships 7 years Straight-line Acquired technology 7 years Straight-line Amortization expense associated with the Company's intangible assets was $0.1 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively. The following table summarizes the changes in the carrying amount of goodwill during the three months ended March 31, 2022 (in thousands): Balance, December 31, 2021 $ 30,042 Effects of foreign currency translation (280) Balance, March 31, 2022 $ 29,762 |
Capitalized Software Developmen
Capitalized Software Development Costs | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS | CAPITALIZED SOFTWARE DEVELOPMENT COSTSCapitalized software development costs related to creating internally developed software and implementing software purchased for internal use are included in property and equipment in the accompanying condensed consolidated balance sheets. The Company capitalized software development costs of $0.9 million and $0.7 million during the three months ended March 31, 2022 and 2021, respectively. Amortization expense related to capitalized internally developed software was $0.8 million and $0.6 million for the three months ended March 31, 2022 and 2021, respectively, and is included in cost of revenue or general and administrative expense in the accompanying condensed consolidated statements of operations, depending upon the nature of the software development project. The net book value of capitalized internally developed software was $4.9 million and $4.8 million at March 31, 2022 and December 31, 2021, respectively. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition and Disaggregation of Revenue The Company derives the majority of its revenue from subscription fees paid for access to and usage of its software solutions for a specified contract term. A customer typically pays a recurring subscription fee based on a specified minimum amount of gross merchandise value, or GMV, or advertising spend that the customer expects to process through the Company's platform. Subscription fees may also include implementation fees such as launch assistance and training fees. The remaining portion of a customer's fee is variable and is based on a specified percentage of GMV or advertising spend processed through the Company's platform in excess of the customer's specified minimum GMV or advertising spend amount. In most cases, the specified percentage of excess GMV or advertising spend on which the variable fee is based is fixed and does not vary depending on the amount of the excess. Subscription fees are billed in advance of the subscription term and are due in accordance with contract terms, which generally provide for payment within 30 days. Variable fees are subject to the same payment terms, although they are generally billed at the end of the period in which they are incurred. The Company also generates revenue from its solutions that allow brands to direct potential consumers from their websites and digital marketing campaigns to authorized resellers. The majority of the Company's contracts have a one year term. The Company's contractual arrangements include performance, termination and cancellation provisions, but do not provide for refunds. Customers do not have the contractual right to take possession of the Company's software at any time. Sales taxes collected from customers and remitted to government authorities are excluded from revenue. The Company's customers are categorized as follows: Brands. The Company generally categorizes a customer as a brand if it primarily focuses on selling its own proprietary products. Retailers. The Company generally categorizes a customer as a retailer if it primarily focuses on selling third-party products. Other. Other is primarily comprised of strategic partnerships. The following table summarizes revenue disaggregation by customer type for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 Percentage of Total 2021 Percentage of Total Brands $ 18,835 45 % $ 14,249 36 % Retailers 21,246 50 % 21,777 56 % Other 2,216 5 % 3,140 8 % $ 42,297 $ 39,166 Contracts with Multiple Performance Obligations Customers may elect to purchase a subscription to multiple modules, multiple modules with multiple service levels, or, for certain of the Company's solutions, multiple brands or geographies. The Company evaluates such contracts to determine whether the services to be provided are distinct and accordingly should be accounted for as separate performance obligations. If the Company determines that a contract has multiple performance obligations, the transaction price, which is the total price of the contract, is allocated to each performance obligation based on a relative standalone selling price method. The Company estimates standalone selling price based on observable prices in past transactions for which the product offering subject to the performance obligation has been sold separately. As the performance obligations are satisfied, revenue is recognized as discussed above. Transaction Price Allocated to Future Performance Obligations As the Company typically enters into contracts with customers for a twelve-month subscription term, a substantial majority of its performance obligations that have not yet been satisfied as of March 31, 2022 are part of a contract that has an original expected duration of one year or less. For contracts with an original expected duration of greater than one year, the aggregate transaction price allocated to the unsatisfied performance obligations was $42.1 million as of March 31, 2022, of which $25.0 million is expected to be recognized as revenue over the next twelve months. Deferred Revenue Deferred revenue generally represents the unearned portion of subscription fees. Deferred revenue is recorded when fees are invoiced in advance of performance. Deferred amounts are generally recognized within one year. Deferred revenue is included in the accompanying condensed consolidated balance sheets under "Total current liabilities," net of any long-term portion that is included in "Other long-term liabilities." The following table summarizes deferred revenue activity for the three months ended March 31, 2022 (in thousands): Balance, beginning of period Net additions Revenue recognized from deferred revenue Balance, end of period Deferred revenue $ 30,868 36,654 (35,511) $ 32,011 Of the $42.3 million of revenue recognized in the three months ended March 31, 2022, $18.4 million was included in deferred revenue at January 1, 2022. Costs to Obtain Contracts The Company capitalizes sales commissions and a portion of other incentive compensation costs that are directly related to obtaining customer contracts and that would not have been incurred if the contract had not been obtained. These costs are included in the accompanying condensed consolidated balance sheets and are classified as "Prepaid expenses and other current assets," net of any long-term portion that is included in "Deferred contract costs, net of current portion." As of March 31, 2022, $9.2 million was included in "Prepaid expenses and other current assets." Deferred contract costs are amortized to sales and marketing expense over the expected period of benefit, which the Company has determined to be five years based on the estimated customer relationship period. The following table summarizes deferred contract cost activity for the three months ended March 31, 2022 (in thousands): Balance, beginning of period Additions Amortized costs (1) Balance, end of period Deferred contract costs $ 26,959 3,482 (2,640) $ 27,801 (1) Includes contract costs amortized to sales and marketing expense during the period and the impact from foreign currency exchange rate fluctuations. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company recognizes stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. Stock-based compensation expense is included in the following line items in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Cost of revenue $ 159 $ 232 Sales and marketing 822 820 Research and development 417 612 General and administrative 1,734 1,384 Total stock-based compensation expense $ 3,132 $ 3,048 During the three months ended March 31, 2022, the Company granted the following share-based awards: Number of Shares Underlying Grant Weighted Average Grant Date Fair Value Service-based restricted stock units 700,046 $ 17.78 Performance-based restricted stock units 185,154 $ 17.78 Total share-based awards 885,200 |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET INCOME PER SHARE Basic net income per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share is calculated giving effect to all potentially dilutive shares of common stock, including stock options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method. The following table summarizes the calculation of basic and diluted net income per share (in thousands, except share and per share data): Three Months Ended March 31, 2022 2021 Basic: Net income $ 1,824 $ 5,457 Weighted average common shares outstanding, basic 30,273,338 29,294,130 Basic net income per share $ 0.06 $ 0.19 Diluted: Net income $ 1,824 $ 5,457 Weighted average common shares outstanding, basic 30,273,338 29,294,130 Dilutive effect of: Stock options 396,450 631,657 Unvested service-based restricted stock units 848,411 1,212,746 Unvested performance-based restricted stock units 138,356 — Weighted average common shares outstanding, diluted 31,656,555 31,138,533 Diluted net income per share $ 0.06 $ 0.18 The following equity instruments have been excluded from the calculation of diluted net income per share because the effect is anti-dilutive: Three Months Ended March 31, 2022 2021 Stock options 22,830 22,856 Restricted stock units 253,889 84,147 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods. The Company's effective tax rate was 44.1% and 1.7% for the three months ended March 31, 2022 and 2021, respectively. The tax expense for each of the periods was based on U.S. federal, state, local and foreign income taxes. The Company’s effective tax rate for the three months ended March 31, 2022 was higher than the U.S. federal statutory rate of 21% primarily due to the generation of foreign operating loss carryforwards which were subject to a valuation allowance. The Company’s effective tax rate for the three months ended March 31, 2021 was lower than the U.S. federal statutory rate of 21% primarily due to the utilization of U.S. federal and state operating loss carryforwards which were subject to a valuation |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, or CODM, for purposes of allocating resources and evaluating financial performance. The Company's CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company's operations constitute a single operating segment and one reportable segment. Substantially all assets were held in the United States during the three months ended March 31, 2022 and the year ended December 31, 2021. The Company categorizes domestic and international revenue from customers based on their billing address. The following table summarizes revenue by geography for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Domestic $ 29,875 $ 28,511 International 12,422 10,655 Total revenue $ 42,297 $ 39,166 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Interim Condensed Consolidated Financial Information | The accompanying condensed consolidated financial statements and footnotes have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, as contained in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of financial position, the results of operations, comprehensive income and cash flows. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results for the full year or the results for any future periods, especially in light of the ongoing impacts, and potential future effects of, the COVID-19 pandemic on the Company’s business, operations and financial performance. These unaudited interim financial statements should be read in conjunction with the audited financial statements and related footnotes for the year ended December 31, 2021, or fiscal 2021, which are included in the Company's Annual Report on Form 10-K for fiscal 2021. There have been no material changes to the Company's significant accounting policies from those described in the footnotes to the audited financial statements contained in the Company's Annual Report on Form 10-K for fiscal 2021. |
Recent Accounting Pronouncements | The Company has reviewed new accounting pronouncements that were issued during the three months ended March 31, 2022 and does not believe that these pronouncements are applicable to the Company, or that they will have a material impact on its financial position or results of operations. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable allowance, the useful lives of long-lived assets and other intangible assets, income taxes, assumptions used for purposes of determining stock-based compensation, leases, including estimating lease terms and extensions, and revenue recognition, including standalone selling prices for contracts with multiple performance obligations and the expected period of benefit for deferred contract costs, among others. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities. |
Deferred Revenue | Deferred revenue generally represents the unearned portion of subscription fees. Deferred revenue is recorded when fees are invoiced in advance of performance. Deferred amounts are generally recognized within one year. Deferred revenue is included in the accompanying condensed consolidated balance sheets under "Total current liabilities," net of any long-term portion that is included in "Other long-term liabilities." |
Costs to Obtain Contracts | The Company capitalizes sales commissions and a portion of other incentive compensation costs that are directly related to obtaining customer contracts and that would not have been incurred if the contract had not been obtained. These costs are included in the accompanying condensed consolidated balance sheets and are classified as "Prepaid expenses and other current assets," net of any long-term portion that is included in "Deferred contract costs, net of current portion." As of March 31, 2022, $9.2 million was included in "Prepaid expenses and other current assets." Deferred contract costs are amortized to sales and marketing expense over the expected period of benefit, which the Company has determined to be five years based on the estimated customer relationship period. |
Stock-Based Compensation | The Company recognizes stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. |
Earnings Per Share | Basic net income per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share is calculated giving effect to all potentially dilutive shares of common stock, including stock options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method. |
Income Taxes | At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used to determine the income tax provision or benefit on a year-to-date basis and may change in subsequent interim periods. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Schedule of Stockholders Equity | The following tables summarize quarterly stockholders' equity activity for the three months ended March 31, 2022 and 2021 (in thousands, except number of shares): Quarterly Activity For The Three Months Ended March 31, 2022 Common Stock Additional Accumulated Accumulated Total Shares Amount Balance, December 31, 2021 30,188,595 $ 30 $ 300,875 $ (2,237) $ (110,470) $ 188,198 Exercise of stock options and vesting of restricted stock units 388,551 — 362 — — 362 Stock-based compensation expense — — 3,132 — — 3,132 Statutory tax withholding related to net-share settlement of restricted stock units (101,316) — (1,818) — — (1,818) Net income — — — — 1,824 1,824 Foreign currency translation adjustments — — — (416) — (416) Balance, March 31, 2022 30,475,830 $ 30 $ 302,551 $ (2,653) $ (108,646) $ 191,282 Quarterly Activity For The Three Months Ended March 31, 2021 Common Stock Additional Accumulated Accumulated Total Shares Amount Balance, December 31, 2020 29,020,424 $ 29 $ 288,842 $ (1,095) $ (157,685) $ 130,091 Exercise of stock options and vesting of restricted stock units 802,270 1 3,586 — — 3,587 Stock-based compensation expense — — 3,048 — — 3,048 Statutory tax withholding related to net-share settlement of restricted stock units (89,842) — (2,061) — — (2,061) Net income — — — — 5,457 5,457 Foreign currency translation adjustments — — — (150) — (150) Balance, March 31, 2021 29,732,852 $ 30 $ 293,415 $ (1,245) $ (152,228) $ 139,972 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The estimated useful lives and amortization methodology used in computing amortization are as follows: Estimated Useful Life Amortization Methodology Customer relationships 7 years Straight-line Acquired technology 7 years Straight-line |
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill during the three months ended March 31, 2022 (in thousands): Balance, December 31, 2021 $ 30,042 Effects of foreign currency translation (280) Balance, March 31, 2022 $ 29,762 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes revenue disaggregation by customer type for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 Percentage of Total 2021 Percentage of Total Brands $ 18,835 45 % $ 14,249 36 % Retailers 21,246 50 % 21,777 56 % Other 2,216 5 % 3,140 8 % $ 42,297 $ 39,166 |
Deferred Revenue | The following table summarizes deferred revenue activity for the three months ended March 31, 2022 (in thousands): Balance, beginning of period Net additions Revenue recognized from deferred revenue Balance, end of period Deferred revenue $ 30,868 36,654 (35,511) $ 32,011 |
Deferred Contract Costs | The following table summarizes deferred contract cost activity for the three months ended March 31, 2022 (in thousands): Balance, beginning of period Additions Amortized costs (1) Balance, end of period Deferred contract costs $ 26,959 3,482 (2,640) $ 27,801 (1) Includes contract costs amortized to sales and marketing expense during the period and the impact from foreign currency exchange rate fluctuations. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock-Based Compensation Expense | Stock-based compensation expense is included in the following line items in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Cost of revenue $ 159 $ 232 Sales and marketing 822 820 Research and development 417 612 General and administrative 1,734 1,384 Total stock-based compensation expense $ 3,132 $ 3,048 |
Summary of Awards Granted in Period | During the three months ended March 31, 2022, the Company granted the following share-based awards: Number of Shares Underlying Grant Weighted Average Grant Date Fair Value Service-based restricted stock units 700,046 $ 17.78 Performance-based restricted stock units 185,154 $ 17.78 Total share-based awards 885,200 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table summarizes the calculation of basic and diluted net income per share (in thousands, except share and per share data): Three Months Ended March 31, 2022 2021 Basic: Net income $ 1,824 $ 5,457 Weighted average common shares outstanding, basic 30,273,338 29,294,130 Basic net income per share $ 0.06 $ 0.19 Diluted: Net income $ 1,824 $ 5,457 Weighted average common shares outstanding, basic 30,273,338 29,294,130 Dilutive effect of: Stock options 396,450 631,657 Unvested service-based restricted stock units 848,411 1,212,746 Unvested performance-based restricted stock units 138,356 — Weighted average common shares outstanding, diluted 31,656,555 31,138,533 Diluted net income per share $ 0.06 $ 0.18 |
Schedule of Securities Excluded from Calculation of Weighted Average Common Shares Outstanding | The following equity instruments have been excluded from the calculation of diluted net income per share because the effect is anti-dilutive: Three Months Ended March 31, 2022 2021 Stock options 22,830 22,856 Restricted stock units 253,889 84,147 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Revenue by Geography | The following table summarizes revenue by geography for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Domestic $ 29,875 $ 28,511 International 12,422 10,655 Total revenue $ 42,297 $ 39,166 |
Stockholders' Equity (Detail)
Stockholders' Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | $ 188,198 | $ 130,091 | |
Exercise of stock options and vesting of restricted stock units | 362 | 3,587 | |
Stock-based compensation expense | 3,132 | 3,048 | |
Statutory tax withholding related to net-share settlement of restricted stock units | (1,818) | (2,061) | |
Net income | 1,824 | 5,457 | |
Foreign currency translation adjustments | (416) | (150) | |
Ending balance | 191,282 | $ 139,972 | |
Accumulated deficit | $ (108,646) | $ (110,470) | |
Common Stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance (in shares) | 30,188,595 | 29,020,424 | |
Beginning balance | $ 30 | $ 29 | |
Exercise of stock options and vesting of restricted stock units (in shares) | 388,551 | 802,270 | |
Exercise of stock options and vesting of restricted stock units | $ 0 | $ 1 | |
Statutory tax withholding related to net-share settlement of restricted stock units (in shares) | (101,316) | (89,842) | |
Ending balance (in shares) | 30,475,830 | 29,732,852 | 30,188,595 |
Ending balance | $ 30 | $ 30 | |
Additional Paid-in Capital | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 300,875 | 288,842 | |
Exercise of stock options and vesting of restricted stock units | 362 | 3,586 | |
Stock-based compensation expense | 3,132 | 3,048 | |
Statutory tax withholding related to net-share settlement of restricted stock units | (1,818) | (2,061) | |
Ending balance | 302,551 | 293,415 | |
Accumulated Other Comprehensive Loss | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (2,237) | (1,095) | |
Foreign currency translation adjustments | (416) | (150) | |
Ending balance | (2,653) | (1,245) | |
Accumulated Deficit | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (110,470) | (157,685) | |
Net income | 1,824 | 5,457 | |
Ending balance | $ (108,646) | $ (152,228) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Estimated Useful Lives and Amortization Methodology (Detail) | 3 Months Ended |
Mar. 31, 2022 | |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life of intangible asset (in years) | 7 years |
Acquired technology | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life of intangible asset (in years) | 7 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Goodwill and Intangible Assets Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 100 | $ 300 | |
Goodwill [Roll Forward] | |||
Goodwill | 29,762 | $ 30,042 | |
Change in goodwill | $ (280) |
Capitalized Software Developm_2
Capitalized Software Development Costs - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Capitalized software development costs | $ 900,000 | $ 700,000 | |
Capitalized software development costs amortization | 800,000 | $ 600,000 | |
Capitalized software development costs, net | $ 4,900,000 | $ 4,800,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 42,297 | $ 39,166 |
Brands | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 18,835 | $ 14,249 |
Revenue, percent | 45.00% | 36.00% |
Retailers | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 21,246 | $ 21,777 |
Revenue, percent | 50.00% | 56.00% |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 2,216 | $ 3,140 |
Revenue, percent | 5.00% | 8.00% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Contract period | 12 months |
Payment period | 30 days |
Revenue | $ 42.3 |
Deferred contract costs, current | $ 9.2 |
Capitalized contract cost, amortization period | 5 years |
Recognized previously deferred revenue | $ 18.4 |
BrandsRetailersOther | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Contract period | 1 year |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Transaction Price Allocated to Future Performance Obligations (Detail) $ in Millions | Mar. 31, 2022USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 42.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 25 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation period | 12 months |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Deferred Revenue (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Deferred revenue | |
Balance, beginning of period | $ 30,868 |
Net additions | 36,654 |
Revenue recognized from deferred revenue | (35,511) |
Balance, end of period | $ 32,011 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Costs to Obtain Contracts (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Deferred contract costs | |
Balance, beginning of period | $ 26,959 |
Additions | 3,482 |
Amortized costs | (2,640) |
Balance, end of period | $ 27,801 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock-Based Compensation [Line Items] | ||
Stock-based compensation expense | $ 3,132 | $ 3,048 |
Cost of revenue | ||
Stock-Based Compensation [Line Items] | ||
Stock-based compensation expense | 159 | 232 |
Sales and marketing | ||
Stock-Based Compensation [Line Items] | ||
Stock-based compensation expense | 822 | 820 |
Research and development | ||
Stock-Based Compensation [Line Items] | ||
Stock-based compensation expense | 417 | 612 |
General and administrative | ||
Stock-Based Compensation [Line Items] | ||
Stock-based compensation expense | $ 1,734 | $ 1,384 |
Stock-Based Compensation - Gran
Stock-Based Compensation - Grants in Period (Detail) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Number of Shares Underlying Grant | |
Restricted stock units (RSUs) (in shares) | 885,200 |
Service-based restricted stock units | |
Number of Shares Underlying Grant | |
Restricted stock units (RSUs) (in shares) | 700,046 |
Weighted Average Grant Date Fair Value | |
Restricted stock units (RSUs) (in dollars per share) | $ / shares | $ 17.78 |
Performance-based restricted stock units | |
Number of Shares Underlying Grant | |
Restricted stock units (RSUs) (in shares) | 185,154 |
Weighted Average Grant Date Fair Value | |
Restricted stock units (RSUs) (in dollars per share) | $ / shares | $ 17.78 |
Net Income Per Share - Calculat
Net Income Per Share - Calculation of Basic and Diluted Net Income (Loss) per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net income | $ 1,824 | $ 5,457 |
Weighted average common shares outstanding, basic | 30,273,338 | 29,294,130 |
Basic net income (loss) per share (in dollars per share) | $ 0.06 | $ 0.19 |
Weighted average common shares outstanding, diluted (in shares) | 31,656,555 | 31,138,533 |
Diluted net income (loss) per share (in dollars per share) | $ 0.06 | $ 0.18 |
Stock options | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive effect (in shares) | 396,450 | 631,657 |
Service-based restricted stock units | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive effect (in shares) | 848,411 | 1,212,746 |
Performance-based restricted stock units | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive effect (in shares) | 138,356 | 0 |
Net Income Per Share - Antidilu
Net Income Per Share - Antidilutive Equity Instruments (Detail) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of weighted average common shares outstanding (in shares) | 22,830 | 22,856 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from calculation of weighted average common shares outstanding (in shares) | 253,889 | 84,147 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 44.10% | 1.70% |
U.S. taxing authority [Member] | ||
Statutory Tax Rate [Line Items] | ||
Statutory tax rate | 21.00% | 21.00% |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2022segment | |
Segment Reporting [Abstract] | |
Number of reportable segment | 1 |
Number of operating segment | 1 |
Segment and Geographic Inform_4
Segment and Geographic Information - Summary of Revenue by Geography (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 42,297 | $ 39,166 |
Domestic | ||
Segment Reporting Information [Line Items] | ||
Revenue | 29,875 | 28,511 |
International | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 12,422 | $ 10,655 |