Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document type | 10-K | ||
Document annual report | true | ||
Document period end date | Dec. 31, 2022 | ||
Current fiscal year end date | --12-31 | ||
Document transition report | false | ||
Entity file number | 000-50600 | ||
Entity registrant name | Blackbaud, Inc. | ||
Entity incorporation, state or country code | DE | ||
Entity tax identification number | 11-2617163 | ||
Entity address, address line one | 65 Fairchild Street | ||
Entity address, city or town | Charleston | ||
Entity address, state or province | SC | ||
Entity address, postal zip code | 29492 | ||
City area code | 843 | ||
Local phone number | 216-6200 | ||
Entity well-known seasoned issuer | Yes | ||
Entity voluntary filers | No | ||
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 | ||
ICFR auditor attestation flag | true | ||
Entity shell company | false | ||
Entity public float | $ 2,497,064,121 | ||
Entity common stock, shares outstanding | 53,215,892 | ||
Documents incorporated by reference | Portions of the registrant's definitive Proxy Statement for the 2023 Annual Meeting of Stockholders currently scheduled to be held June 14, 2023 are incorporated by reference into Part III hereof. Such definitive Proxy Statement will be filed with the U.S. Securities and Exchange Commission no later than 120 days after the conclusion of the registrant's fiscal year ended December 31, 2022. | ||
Amendment flag | false | ||
Document fiscal year focus | 2022 | ||
Document fiscal period focus | FY | ||
Entity central index key | 0001280058 | ||
Common stock [Member] | |||
Document Information [Line Items] | |||
Title of 12(b) security | Common Stock, $0.001 Par Value | ||
Trading symbol | BLKB | ||
Security exchange name | NASDAQ | ||
Preferred stock purchase rights [Member] | |||
Document Information [Line Items] | |||
Title of 12(b) security | Preferred Stock Purchase Rights | ||
Security exchange name | NASDAQ | ||
No Trading Symbol Flag | true |
Audit Information
Audit Information | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Audit Information [Abstract] | ||
Auditor Firm ID | 42 | 238 |
Auditor Name | Ernst & Young LLP | PricewaterhouseCoopers LLP |
Auditor Location | Raleigh, North Carolina | Atlanta, Georgia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 31,691 | $ 55,146 |
Total restricted cash | 702,240 | 596,616 |
Accounts receivable, net of allowance of $7,318 and $11,155 at December 31, 2022 and December 31, 2021, respectively | 102,809 | 102,726 |
Customer funds receivable | 249 | 977 |
Prepaid expenses and other current assets | 81,654 | 95,506 |
Total current assets | 918,643 | 850,971 |
Property and equipment, net | 107,426 | 111,428 |
Operating lease right-of-use assets | 45,899 | 53,883 |
Software development costs, net | 141,023 | 121,377 |
Goodwill | 1,050,272 | 1,058,640 |
Intangible assets, net | 635,136 | 698,052 |
Other assets | 94,304 | 77,266 |
Total assets | 2,992,703 | 2,971,617 |
Current liabilities: | ||
Trade accounts payable | 42,559 | 22,067 |
Accrued expenses and other current liabilities | 86,002 | 100,096 |
Due to customers | 700,860 | 594,273 |
Debt, current portion | 18,802 | 18,697 |
Deferred revenue, current portion | 382,419 | 374,499 |
Total current liabilities | 1,230,642 | 1,109,632 |
Debt, net of current portion | 840,241 | 937,483 |
Deferred tax liability | 125,759 | 148,465 |
Deferred revenue, net of current portion | 2,817 | 4,247 |
Operating lease liabilities, net of current portion | 44,918 | 53,386 |
Other liabilities | 4,294 | 1,344 |
Total liabilities | 2,248,671 | 2,254,557 |
Commitments and contingencies (see Note 11) | ||
Stockholders' equity: | ||
Preferred stock; 20,000,000 shares authorized, none outstanding | $ 0 | $ 0 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, $0.001 par value; 180,000,000 shares authorized, 67,814,044 and 66,165,666 shares issued at December 31, 2022 and December 31, 2021, respectively | $ 68 | $ 66 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 67,814,044 | 66,165,666 |
Additional paid-in capital | $ 1,075,264 | $ 968,927 |
Treasury stock, at cost; 14,745,230 and 14,182,805 shares at December 31, 2022 and December 31, 2021, respectively | $ (537,287) | $ (500,911) |
Treasury stock, shares | 14,745,230 | 14,182,805 |
Accumulated other comprehensive income | $ 8,938 | $ 6,522 |
Retained earnings | 197,049 | 242,456 |
Total stockholders' equity | 744,032 | 717,060 |
Total liabilities and stockholders' equity | $ 2,992,703 | $ 2,971,617 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 7,318 | $ 11,155 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | |||
Revenue | $ 1,058,105 | $ 927,740 | $ 913,219 |
Cost of revenue | |||
Cost of revenue | 505,389 | 443,195 | 428,065 |
Gross profit | 552,716 | 484,545 | 485,154 |
Operating expenses | |||
Sales, marketing and customer success | 221,455 | 186,314 | 209,762 |
Research and development | 156,913 | 124,573 | 100,146 |
General and administrative | 199,908 | 146,262 | 134,852 |
Amortization | 2,925 | 2,227 | 2,915 |
Restructuring | 0 | 263 | 236 |
Total operating expenses | 581,201 | 459,639 | 447,911 |
(Loss) income from operations | (28,485) | 24,906 | 37,243 |
Interest expense | (35,803) | (18,003) | (17,287) |
Other income, net | 8,713 | 180 | 1,658 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (55,575) | 7,083 | 21,614 |
Income tax (benefit) provision | (10,168) | 1,385 | 13,897 |
Net (loss) income | $ (45,407) | $ 5,698 | $ 7,717 |
(Loss) earnings per share | |||
Basic earnings per share | $ (0.88) | $ 0.12 | $ 0.16 |
Diluted earnings per share | $ (0.88) | $ 0.12 | $ 0.16 |
Common shares and equivalents outstanding | |||
Basic weighted average shares | 51,569,148 | 47,412,306 | 48,184,714 |
Diluted weighted average shares | 51,569,148 | 48,230,438 | 48,696,341 |
Other comprehensive income | |||
Foreign currency translation adjustment | $ (16,160) | $ 661 | $ 4,571 |
Unrealized gain (loss) on derivative instruments, net of tax | 18,576 | 8,358 | (1,778) |
Total other comprehensive income | 2,416 | 9,019 | 2,793 |
Comprehensive (loss) income | (42,991) | 14,717 | 10,510 |
Recurring [Member] | |||
Revenue | |||
Revenue | 1,011,733 | 880,850 | 850,745 |
Cost of revenue | |||
Cost of revenue | 463,449 | 390,803 | 369,681 |
Cost of one-time services and other [Member] | |||
Revenue | |||
Revenue | 46,372 | 46,890 | 62,474 |
Cost of revenue | |||
Cost of revenue | $ 41,940 | $ 52,392 | $ 58,384 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net (loss) income | $ (45,407) | $ 5,698 | $ 7,717 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization | 102,369 | 82,410 | 92,735 |
Provision for credit losses and sales returns | 6,066 | 11,450 | 13,230 |
Stock-based compensation expense | 110,294 | 120,379 | 87,257 |
Deferred taxes | (26,644) | (2,429) | 8,837 |
Amortization of deferred financing costs and discount | 2,364 | 1,570 | 781 |
Other non-cash adjustments | 5,676 | 10,490 | 2,958 |
Changes in operating assets and liabilities, net of acquisition and disposal of businesses: | |||
Accounts receivable | (7,340) | (6,525) | (18,414) |
Prepaid expenses and other assets | 26,235 | (2,048) | 22,568 |
Trade accounts payable | 21,607 | (9,670) | (19,997) |
Accrued expenses and other liabilities | (2,386) | (8,190) | (49,232) |
Deferred revenue | 11,059 | 10,526 | (485) |
Net cash provided by operating activities | 203,893 | 213,661 | 147,955 |
Cash flows from investing activities | |||
Purchase of property and equipment | (12,289) | (11,664) | (29,690) |
Capitalized software and content development costs | (58,774) | (40,489) | (42,157) |
Purchase of net assets of acquired companies, net of cash and restricted cash acquired | (20,912) | (419,120) | 0 |
Cash received in sale of business | 6,426 | 0 | 0 |
Net cash used in investing activities | (85,549) | (471,273) | (71,847) |
Cash flows from financing activities | |||
Proceeds from issuance of debt | 211,000 | 582,200 | 748,500 |
Payments on debt | (310,740) | (152,971) | (747,563) |
Debt issuance costs | 0 | (3,106) | (4,586) |
Stock issuance costs | (1,339) | 0 | 0 |
Employee taxes paid for withheld shares upon equity award settlement | (36,376) | (39,404) | (21,425) |
Proceeds from exercise of stock options | 0 | 0 | 4 |
Change in due to customers | 111,386 | (13,464) | 61,214 |
Change in customer funds receivable | 380 | (731) | 138 |
Purchase of treasury stock | 0 | (108,416) | (41,001) |
Dividend payments to stockholders | 0 | 0 | (5,960) |
Net cash (used in) provided by financing activities | (25,689) | 264,108 | (10,679) |
Effect of exchange rate on cash, cash equivalents and restricted cash | (10,486) | 297 | 2,245 |
Net increase in cash, cash equivalents and restricted cash | 82,169 | 6,793 | 67,674 |
Cash, cash equivalents and restricted cash, beginning of year | 651,762 | 644,969 | 577,295 |
Cash, cash equivalents and restricted cash, end of year | 733,931 | 651,762 | 644,969 |
Cash paid during the year for: | |||
Interest | (33,371) | (16,386) | (15,716) |
Taxes, net of refunds | (9,670) | (10,073) | (3,563) |
Purchase of EVERFI through the issuance of stock (see Note 3) | 0 | (303,633) | 0 |
Purchase of equipment and other assets included in accounts payable | (158) | (1,747) | (840) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||
Cash and cash equivalents | 31,691 | 55,146 | |
Total restricted cash | 702,240 | 596,616 | |
Total cash, cash equivalents and restricted cash in the statement of cash flows | 733,931 | 651,762 | |
Real estate loans [Member] | |||
Purchases by assuming directly related liabilities | 0 | 0 | (61,064) |
Other debt [Member] | |||
Purchases by assuming directly related liabilities | $ (1,710) | $ 0 | $ (5,620) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock [Member] | Additional paid-in capital [Member] | Treasury stock [Member] | Accumulated other comprehensive loss [Member] | Retained earnings [Member] | |
Balance (in shares) at Dec. 31, 2019 | 60,206,091 | ||||||
Balance at Dec. 31, 2019 | $ 396,764 | $ 60 | $ 457,804 | $ (290,665) | $ (5,290) | $ 234,855 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | $ 7,717 | 7,717 | |||||
Dividends per share (in dollars per share) | $ 0.12 | ||||||
Payment of dividends | [1] | $ (5,960) | (5,960) | ||||
Purchase of treasury shares under stock repurchase program (in shares) | 714,000 | ||||||
Purchase of treasury shares under stock repurchase program, cost method | $ (41,001) | (41,001) | |||||
Exercise of stock options and vesting of restricted stock units (in shares) | 218,141 | ||||||
Exercise of stock options and vesting of restricted stock units | $ 4 | 4 | |||||
Employee taxes paid for withheld shares upon equity award settlement (in shares) | 273,914 | ||||||
Employee taxes paid for withheld shares upon equity award settlement | $ (21,425) | (21,425) | |||||
Stock-based compensation | 87,257 | 87,155 | 102 | ||||
Restricted stock grants (in shares) | 657,483 | ||||||
Restricted stock grants | 1 | $ 1 | |||||
Restricted stock cancellations (in shares) | (177,077) | ||||||
Other comprehensive income | 2,793 | 2,793 | |||||
Balance (in shares) at Dec. 31, 2020 | 60,904,638 | ||||||
Balance at Dec. 31, 2020 | 426,150 | $ 61 | 544,963 | (353,091) | (2,497) | 236,714 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | $ 5,698 | 5,698 | |||||
Purchase of treasury shares under stock repurchase program (in shares) | 1,592,933 | ||||||
Purchase of treasury shares under stock repurchase program, cost method | $ (108,416) | (108,416) | |||||
Exercise of stock options and vesting of restricted stock units (in shares) | 1,014,562 | ||||||
Exercise of stock options and vesting of restricted stock units | $ 1 | $ 1 | 0 | ||||
Employee taxes paid for withheld shares upon equity award settlement (in shares) | 535,604 | ||||||
Employee taxes paid for withheld shares upon equity award settlement | $ (39,404) | (39,404) | |||||
Stock-based compensation | 120,379 | 120,335 | 44 | ||||
Restricted stock grants (in shares) | 596,763 | ||||||
Restricted stock grants | 0 | $ 0 | |||||
Restricted stock cancellations (in shares) | (194,720) | ||||||
Other comprehensive income | 9,019 | 9,019 | |||||
Stock Issued During Period, Shares, Acquisitions | 3,844,423 | ||||||
Stock Issued During Period, Value, Acquisitions | 303,633 | $ 4 | 303,629 | ||||
Balance (in shares) at Dec. 31, 2021 | 66,165,666 | ||||||
Balance at Dec. 31, 2021 | 717,060 | $ 66 | 968,927 | (500,911) | 6,522 | 242,456 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | $ (45,407) | (45,407) | |||||
Purchase of treasury shares under stock repurchase program (in shares) | 0 | ||||||
Exercise of stock options and vesting of restricted stock units (in shares) | 1,015,304 | ||||||
Exercise of stock options and vesting of restricted stock units | $ 0 | 0 | |||||
Employee taxes paid for withheld shares upon equity award settlement (in shares) | 562,425 | ||||||
Employee taxes paid for withheld shares upon equity award settlement | $ (36,376) | (36,376) | |||||
Stock-based compensation | 110,294 | 110,294 | 0 | ||||
Restricted stock grants (in shares) | 846,295 | ||||||
Restricted stock grants | 2 | $ 2 | |||||
Restricted stock cancellations (in shares) | (179,686) | ||||||
Other comprehensive income | 2,416 | 2,416 | |||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | (1,352) | (1,352) | |||||
Retirements of Common Stock, Shares | [2] | (33,535) | |||||
Adjustments to Additional Paid in Capital, Stock Issued, Retirements | [2] | (2,605) | (2,605) | ||||
Balance (in shares) at Dec. 31, 2022 | 67,814,044 | ||||||
Balance at Dec. 31, 2022 | $ 744,032 | $ 68 | $ 1,075,264 | $ (537,287) | $ 8,938 | $ 197,049 | |
[1]Represents dividends paid in Q1 2020. Refer to the discussion of our Board of Directors' decision to discontinue the declaration and payments of all cash dividends beginning in Q2 2020 in Note 14 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on February 23, 2021.[2]Represents shares retired after determining certain EVERFI's selling shareholders would be paid in cash, rather than shares of our common stock. See Note 3 for additional information regarding our acquisition of EVERFI. |
Organization
Organization | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization We are the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, higher education institutions, K–12 schools, healthcare organizations, faith communities, arts and cultural organizations, foundations, companies and individual change agents—we connect and empower organizations to increase their impact through cloud software, services, expertise and data intelligence. Our portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and CRM, marketing, advocacy, peer-to-peer fundraising, corporate social responsibility (CSR) and environmental, social and governance (ESG), school management, ticketing, grantmaking, financial management, payment processing and analytics. Serving the industry for more than four decades, we are a remote-first company headquartered in Charleston, South Carolina, with operations in the United States, Australia, Canada, Costa Rica and the United Kingdom. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2. Basis of Presentation Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Basis of consolidation The consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions, including those that impact revenue recognition, long-lived and intangible assets, income taxes, business combinations, stock-based compensation, capitalization of software development costs, our allowances for credit losses and sales returns, costs of obtaining contracts, valuation of derivative instruments, loss contingencies and insurance recoveries, among others. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could materially differ from these estimates. Recently adopted accounting pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") . This update provides for optional financial reporting alternatives to reduce cost and complexity 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 the London Interbank Offer Rate ("LIBOR") or other reference rates expected to be discontinued because of reference rate reform. The accommodations are available for all entities through December 31, 2022, with early adoption permitted. We adopted ASU 2020-04 prospectively as of July 1, 2022, and the adoption did not have a material impact on our consolidated financial statements. Recently issued accounting pronouncements There are no recently issued accounting pronouncements that are expected to have a material impact on our financial position or results of operations when adopted in the future. Summary of significant accounting policies Revenue recognition Our revenue is primarily generated from the following sources: (i) charging for the use of our software solutions in cloud and hosted environments; (ii) providing payment and transaction services; (iii) providing software maintenance and support services; and (iv) providing professional services, including implementation, consulting, training, analytic and other services. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, we satisfy a performance obligation. Recurring Recurring revenue represents stand-ready performance obligations in which we are making our solutions or services available to our customers continuously over time or the value of the contract renews. Therefore, recurring revenue is generally recognized over time on a ratable basis over the contract term, beginning on the date that the solution or service is made available to the customer. Our recurring revenue contracts are generally for a term of 3 years at contract inception with 1 to 3-year renewals thereafter, billed annually in advance and non-cancelable. Recurring revenue is comprised of fees for the use of our subscription-based software solutions, which includes providing access to cloud solutions, hosting services, payment services, online training programs, and subscription-based analytic services, such as donor insight and data enrichment services. Recurring revenue also includes fees from maintenance services for our on-premises solutions, services included in our renewable subscription contracts, retained and managed services contracts that we expect to have a term consistent with our cloud solution contracts, and variable transaction revenue associated with the use of our solutions. Our payment services are offered with the assistance of third-party vendors. In general, when we are the principal in a transaction based on the factors identified in ASC 606-10-55-36 through 55-40, we record the revenue and related costs on a gross basis. Otherwise, we net the cost of revenue associated with the service against the gross revenue (amount withheld for the transaction fees) and record the net amount as revenue. For payment and transaction services, we have the right to invoice the customer in an amount that directly corresponds with the value to the customer of our performance to date. Therefore, we recognize revenue for these services over time based on the amount we withhold for the transaction fees in accordance with the 'as invoiced' practical expedient in ASC 606-10-55-18. One-time services and other One-time services and other revenue is primarily comprised of fees for one-time consulting, analytic and onsite training services and fees for retained and managed services contracts that we do not expect to have a term consistent with our cloud solution contracts. We generally bill consulting services based on hourly rates plus reimbursable travel-related expenses. Fixed price consulting engagements are generally billed as milestones towards completion are reached. Revenue for one-time consulting services is generally recognized over time as the services are performed. Fees for retained and managed services contracts are generally billed in advance and recognized over time on a ratable basis over the contract term, beginning on the date the service is made available to the customer. Contracts with multiple performance obligations Some of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis. Costs of obtaining contracts, contract assets and deferred revenue We pay sales commissions at the time contracts with customers are signed or shortly thereafter, depending on the size and duration of the sales contract. Sales commissions and related fringe benefits earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized in a manner that aligns with the expected period of benefit, which we have primarily determined to be 5 years. We determined the period of benefit by taking into consideration our customer contracts, including renewals, retention, our technology and other factors. We generally do not pay commissions for contract renewals that are commensurate with the commission paid on the initial contract. The related amortization expense is included in sales, marketing and customer success expense in our consolidated statements of comprehensive income. A contract asset is recorded when revenue is recognized in advance of our right to receive consideration (i.e., we must satisfy additional performance obligations in order to receive consideration). Amounts are recorded as receivables when our right to consideration is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Our contract assets are recorded within prepaid expenses and other current assets on our consolidated balance sheets. To the extent that our customers are billed for our solutions and services in advance of us satisfying the related performance obligations, we record such amounts in deferred revenue. Sales taxes We present sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, exclude them from revenues. Fair value measurements We measure certain financial assets and liabilities at fair value on a recurring basis, including derivative instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. An active market is defined as a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. We use a three-tier fair value hierarchy to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1 - Quoted prices for identical assets or liabilities in active markets; • Level 2 - Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Our financial assets and liabilities are classified in their entirety within the hierarchy based on the lowest level of input that is significant to fair value measurement. Changes to a financial asset's or liability's level within the fair value hierarchy are determined as of the end of a reporting period. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized. Derivative instruments We generally use derivative instruments to manage interest rate and foreign currency exchange risk. We view derivative instruments as risk management tools and do not use them for trading or speculative purposes. Our policy requires that derivatives used for hedging purposes be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in the fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. We record all derivative instruments on our consolidated balance sheets at fair value as either an asset or liability. If the derivative is designated as a cash flow hedge, the effective portions of the changes in fair value of the derivative are recorded in other comprehensive income and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. If the derivative is designated as a net investment hedge, the effective portions of the changes in fair value of the derivative are recorded to translation adjustment, a component of other comprehensive income, and recognized in earnings only when the hedged investment is liquidated. Ineffective portions of the changes in the fair value of cash flow hedges are recognized currently in earnings. See Note 10 to these consolidated financial statements for further discussion of our derivative instruments. Cash and cash equivalents We consider all highly liquid investments purchased with an original maturity of three months or less and cash items in transit to be cash equivalents. Restricted cash due to customers; Customer funds receivable; Due to customers Restricted cash due to customers consists of monies collected by us (or in transit) and payable to our customers, net of the associated transaction fees earned. Monies associated with amounts due to customers are segregated in separate bank accounts and used exclusively for the payment of amounts due to customers. This usage restriction is either legally or internally imposed and reflects our intention with regard to such deposits. Customer funds receivable consists of monies we expect to collect and remit to our customers. Concentration of credit risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents, restricted cash due to customers and accounts receivable. Our cash and cash equivalents and restricted cash due to customers are placed with high credit-quality financial institutions. Our accounts receivable is derived from sales to customers. With respect to accounts receivable, we perform ongoing evaluations of our customers and maintain an allowance for credit losses based on historical experience and our expectations of future credit losses. As of and for the years ended December 31, 2022, 2021 and 2020, there were no significant concentrations with respect to our consolidated revenues or accounts receivable. Property and equipment We record property and equipment assets at cost and depreciate them over their estimated useful lives using the straight-line method. Leasehold improvements are depreciated over the lesser of the term of the lease or the estimated useful life of the asset. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to earnings. Repair and maintenance costs are expensed as incurred. Construction-in-progress primarily related to purchases of facilities and information technology assets which had not been placed in service at the respective balance sheet dates. We transfer these assets to the applicable property and equipment category on the date they are placed in service. There was no capitalized interest applicable to construction-in-progress for the years ended December 31, 2022, 2021 and 2020. Business combinations We include the operating results of acquired companies as well as the net assets acquired and liabilities assumed in our consolidated financial statements from the date of acquisition. We are required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. Goodwill as of the acquisition date represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired and liabilities assumed. We apply significant judgement in estimating the fair value of intangible assets acquired, which involves the use of significant assumptions. Significant assumptions used in the valuation of customer relationships include future revenue and operating expenses, customer attrition rates, contributory asset charges, tax amortization benefit, and discount rates. Significant assumptions used in the valuation of certain developed technology assets include future revenue, proprietary technology obsolescence curve, royalty rate, and discount rate. Significant assumptions used in the valuation of marketing assets include assumptions about the period of time the brand will continue to be valuable, royalty rate, and discount rate. Significant assumptions used in the valuation of content intangible assets include cost-based assumptions. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable, and unanticipated events and changes in circumstances may occur. Goodwill Goodwill represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed by us in a business combination. Goodwill is not amortized, but tested annually for impairment on the first day of our fourth quarter, or more frequently if indicators of potential impairment arise. Accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis to determine whether it is necessary to perform the quantitative impairment test. Significant judgment is required in the assessment of qualitative factors, including but not limited to an evaluation of macroeconomic conditions as they relate to our business, industry and market trends, as well as the overall future financial performance of identified reporting units and future opportunities in the markets in which we operate. The quantitative impairment test compares the fair values of identified reporting units with their respective carrying amounts. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Based on our current internal reporting structure, we currently have one operating segment, one reportable segment, and one reporting unit. In each of 2022, 2021 and 2020, we performed the quantitative impairment test, which indicated that the estimated fair values of the identified reporting units significantly exceeded their respective carrying values. There was no impairment of goodwill during 2022, 2021 and 2020. Intangible assets other than goodwill We amortize finite-lived intangible assets over their estimated useful lives as follows. Basis of amortization Amortization Customer relationships Straight-line and accelerated (1) 8-17 Marketing assets Straight-line and accelerated (1) 14-15 Developed technology Straight-line and accelerated (1) 3-14 Content Straight-line 9 (1) Certain of the customer relationships, marketing assets and developed technology assets are amortized on an accelerated basis. We write off the gross carrying amount and accumulated amortization balances for all fully amortized intangible assets. We evaluate the estimated useful lives and the potential for impairment of finite and indefinite-lived intangible assets on an annual basis or more frequently if events or circumstances indicate revised estimates of useful lives may be appropriate or that the carrying amount may be impaired. If the carrying amount of a finite-lived intangible asset is no longer recoverable based upon the undiscounted cash flows of the asset, the amount of impairment is the difference between the carrying amount and the fair value of the asset. Substantially all of our intangible assets were acquired in business combinations. See Note 6 to these consolidated financial statements for a discussion of our impairment of certain intangible assets during 2022. There were no impairments of acquired intangible assets during 2021 and 2020. Impairment of long-lived assets We review long-lived assets for impairment when events change or circumstances indicate the carrying amount may not be recoverable. Events or changes in circumstances that indicate the carrying amount may not be recoverable include, but are not limited to, a significant decrease in the market value of the business or asset acquired, a significant adverse change in the extent or manner in which the business or asset acquired is used or significant adverse change in the business climate. If such events or changes in circumstances are present, the undiscounted cash flow method is used to determine whether the asset or asset group is impaired. See Note 6 to these consolidated financial statements for a discussion of our impairment of certain long-lived assets during 2022, 2021 and 2020. Deferred financing costs and debt discount Deferred financing costs included in other assets represent the direct third-party costs of entering into the revolving (line-of-credit) portion of our credit facility in October 2020 and portions of the unamortized deferred financing costs from prior facilities. These costs are amortized ratably over the term of the credit facility as interest expense. Other debt issuance costs, as well as the debt discount associated with our 2021 Incremental Term Loan (as defined below), 2020 Credit facility (as defined below) and portions of the unamortized balances from prior facilities, are recorded as a direct deduction from debt. These costs are amortized over the term of the credit facility as interest expense. Stock-based compensation We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense over the requisite service period, which is the vesting period. We recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, we recognize the effect of forfeitures in compensation cost when they occur). Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Income tax benefits resulting from the vesting and exercise of stock-based compensation awards are recognized in the period the unit or award is vested or option or right is exercised. Income taxes We make estimates and judgments in accounting for income taxes. The calculation of the income tax provision requires estimates due to transactions, credits and calculations where the ultimate tax determination is uncertain. Uncertainties arise as a consequence of the actual source of taxable income between domestic and foreign locations, the outcome of tax audits and the ultimate utilization of tax credits. To the extent actual results differ from estimated amounts recorded, such differences will impact the income tax provision in the period in which the determination is made. We make estimates in determining tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized. In assessing the adequacy of a recorded valuation allowance significant judgment is required. We consider all positive and negative evidence and a variety of factors including the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and prudent and feasible tax planning strategies. If we determine there is less than a 50% likelihood that we will be able to use a deferred tax asset in the future in excess of its net carrying value, then an adjustment to the deferred tax asset valuation allowance is made to increase income tax expense, thereby reducing net income in the period such determination was made. We measure and recognize uncertain tax positions. To recognize such positions, we must first determine if it is more likely than not that the position will be sustained upon audit. We must then measure the benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. Significant judgment is required in the identification and measurement of uncertain tax positions. Foreign currency Net assets recorded in a foreign currency are translated at the exchange rate on the balance sheet date. Revenue and expense items are translated using an average of monthly exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income. Gains and losses resulting from foreign currency transactions denominated in currency other than the functional currency are recorded at the approximate rate of exchange at the transaction date in other income, net. For the year ended December 31, 2022, we recorded a net foreign currency gain of $4.6 million. During the years ended December 31, 2021 and 2020, we recorded net foreign currency losses that were $1.6 million and $1.1 million, respectively. Research and development Research and development costs are expensed as incurred except as noted below under Software and content development costs . These costs include compensation costs for engineering and product management personnel, third-party contractor expenses, software development tools and other expenses related to researching and developing new solutions or upgrading and enhancing existing solutions that do not qualify for capitalization, and allocated depreciation, facilities and IT support costs. Software and content development costs We incur certain costs associated with the development of internal-use software and content, which are primarily related to activities performed to develop our cloud solutions and the development of online education curriculum to be delivered on the Company's cloud platform. Internal and external costs incurred in the preliminary project stage of internal-use software development and content are expensed as incurred. Once the software or content being developed has reached the application development stage, qualifying internal costs including payroll and payroll-related costs of employees who are directly associated with and devote time to the software or content project as well as external direct costs of materials and services are capitalized. Capitalization ceases at the point at which the developed software or content is substantially complete and ready for its intended use, which is typically upon completion of all substantial testing. Qualifying costs capitalized during the application development stage include those related to specific upgrades and enhancements when it is probable that those costs incurred will result in additional functionality. Overhead costs, including general and administrative costs, as well as maintenance, training and all other costs associated with post-implementation stage activities are expensed as incurred. In addition, internal costs that cannot be reasonably separated between maintenance and relatively minor upgrades and enhancements are expensed as incurred. In certain circumstances, content development costs are considered deferred costs, when ownership of developed content belongs to the customer. Qualifying capitalized software and content development costs are amortized on a straight-line basis over the software asset's estimated useful life, which is generally 3 to 7 years. We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. See Note 6 to these consolidated financial statements for a discussion of our impairment of certain capitalized software development costs during 2022 and 2020. There were no impairment charges related to capitalized software or content development costs during 2021. We write off the gross carrying amount and accumulated amortization balances for all fully amortized software and content development cost assets. Allowance for credit losses Our accounts receivable consist of a single portfolio segment. Accounts receivable are recorded at original invoice amounts less an allowance for credit losses, an amount we estimate to be sufficient to provide adequate protection against lifetime expected losses resulting from extending credit to our customers. In judging the adequacy of the allowance for credit losses, we consider multiple factors including historical bad debt experience, the current aging of our receivables and current economic conditions that may affect our customers' ability to pay. A considerable amount of judgment is required in assessing these factors and if any receivables were to deteriorate, an additional provision for credit losses could be required. Accounts are written off after all means of collection are exhausted and recovery is considered remote. Provisions for credit losses are recorded in general and administrative expense. Below is a summary of the changes in our allowance for credit losses. Years ended December 31, Balance at Provision/ Write-off Recovery Balance at 2022 $ 9,375 $ 1,281 $ (5,162) $ 528 $ 6,022 2021 9,016 4,483 (4,565) 441 9,375 2020 4,011 6,787 (2,363) 581 9,016 Our allowance for credit losses decreased during the year ended December 31, 2022, primarily due to improvement in the aging of accounts receivable and write-offs during 2022 of aged receivables primarily generated during the COVID-19 pandemic. The amount of write-offs during the year ended December 31, 2021 was higher than during 2020 as we temporarily suspended sending past due customer accounts to collections during the second and third quarters of 2020 due to payment delays related to COVID-19. Allowance for sales returns We maintain a reserve for returns and credits which is estimated based on several factors including historical experience, known credits yet to be issued, the aging of customer accounts and the nature of service level commitments. A considerable amount of judgment is required in assessing these factors. Provisions for sales returns and credits are charged against the related revenue items. Below is a summary of the changes in our allowance for sales returns. Years ended December 31, Balance at Provision/ Deduction Balance at 2022 $ 1,780 $ 4,785 $ (5,269) $ 1,296 2021 1,276 6,967 (6,463) 1,780 2020 1,518 6,443 (6,685) 1,276 Advertising costs We expense advertising costs as incurred, which were $16.5 million, $7.1 million and $3.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. Restructuring costs Restructuring costs include charges for the costs of exit or disposal activities. The liability for costs associated with exit or disposal activities is measured initially at fair value and only recognized when the liability is incurred. Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets, accrued expense and other current liabilities, and operating lease liabilities, net of current portion in our consolidated balance sheet as of December 31, 2022 and 2021. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate in determining the present value of lease payments. Our incremental borrowing rate is based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any initial direct costs and lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments related to our operating leases is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. We do not recognize short-term leases (those that, at the commencement date, have a lease term of 12 months or less) on our consolidated balance sheets. Variable lease payments, which are primarily comprised of common-area maintenance, utilities and real estate taxes that are passed on from the lessor in proportion to the space leased by us, are recognized in operating expenses in the period in which the obligation for those payments is incurred. Loss contingencies We are subject to the possibility of various loss contingencies, including legal proceedings and claims, that arise in the normal course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described in Note 11 to these consolidated financial statements. We record an accrual for a loss contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Often these issues are subject to substantial uncertainties and, therefore, the probability of loss and the estimation of damages are difficult to ascertain. These assessments can involve a series of complex judgments about future events and can rely heavily on estimates and assu |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations and Dispositions 2022 Disposition Blackbaud FIMS™ and DonorCentral® NXT On September 9, 2022, we sold our Foundation Information Management System ("FIMS") and DonorCentral NXT solutions to Fusion Laboratories, LLC for cash proceeds of approximately $6.4 million, subject to closing adjustments. We expect the sale of these solutions to allow us to reduce complexity and focus on innovation within our core products as we execute our strategic growth plans. During the year ended December 31, 2022, we recognized a noncash impairment charge of $2.0 million against certain insignificant FIMS customer relationship intangible assets that were then held for sale. The impairment charge was recorded in general and administrative expense in our consolidated statements of comprehensive loss. During the year ended December 31, 2022, we recognized an insignificant loss on the disposal of FIMS held for sale assets and liabilities. 2022 Acquisition Kilter On August 19, 2022, we acquired all of the outstanding stock of Kilter, Inc., a Delaware corporation, pursuant to an agreement and plan of merger, for approximately $2.9 million in cash, subject to closing adjustments. The acquisition of Kilter's mobile application will allow us to expand activity-based peer-to-peer fundraising engagement, to support activity-based health and wellness initiatives for socially responsible companies, and to grow the ways individuals can connect with the causes they care about most through the activities they love. In addition to the consideration paid at closing, we may be required to pay up to a maximum of $3.0 million in additional cash consideration if during the two-year period commencing January 1, 2023 Kilter meets certain application participation targets. A liability for the contingent consideration was recorded at its acquisition-date fair value of $2.7 million in other liabilities in our consolidated balance sheet. Any change in the fair value of the contingent liability, or any change upon final settlement, will be recognized in income from operations. Fair values were also assigned to the other assets acquired and liabilities assumed, primarily consisting of goodwill and a finite-lived developed technology intangible asset, which will be amortized over an estimated useful life of three years. The fair values are based on our best estimates and assumptions as of the reporting date and are considered preliminary pending finalization. Insignificant acquisition-related costs, which primarily consisted of legal services, were recorded as general and administrative expense during the year ended December 31, 2022. 2021 Acquisition EVERFI On December 31, 2021, we acquired all of the outstanding equity securities, including all voting equity interests, of EVERFI, Inc., a Delaware corporation, pursuant to an agreement and plan of merger. The acquisition advanced our position as a leader in the rapidly evolving ESG and CSR spaces. We acquired the equity securities for approximately $441.8 million in cash consideration and 3,810,888 shares of our common stock, valued at approximately $301.0 million, for an aggregate purchase price of approximately $742.8 million, net of closing adjustments. The cash consideration and related expenses were funded primarily through cash on hand and new borrowings under the 2020 Credit Facility (as defined below). As a result of the acquisition, EVERFI has become a wholly owned subsidiary of ours. The operating results of EVERFI have been included in our consolidated financial statements from the date of acquisition. During the year ended December 31, 2021, we incurred insignificant acquisition-related expenses associated with the acquisition, which were recorded in general and administrative expense. In accordance with applicable accounting rules, we determined that the impact of this acquisition was not material to our consolidated financial statements; therefore, revenue and earnings since the acquisition date and pro forma information are not required or presented. We finalized the purchase price allocation of EVERFI, including the valuation of assets acquired and liabilities assumed, during the fourth quarter of 2022. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 4. Goodwill and Other Intangible Assets The change in goodwill during 2022 consisted of the following: (dollars in thousands) Total Balance at December 31, 2021 $ 1,058,640 Additions related to business combination (1) 3,610 Adjustments related to prior year business combination (2) (2,232) Adjustments related to dispositions (3) (2,501) Effect of foreign currency translation (7,245) Balance at December 31, 2022 $ 1,050,272 (1) See Note 3 to these consolidated financial statements for a discussion of our acquisition of Kilter. (2) See Note 3 to these consolidated financial statements for a discussion of the measurement period adjustments during the year ended December 31, 2022 to the estimated fair value of the EVERFI assets acquired and liabilities assumed. (3) See Note 3 to these consolidated financial statements for a summary of our disposition of Blackbaud FIMS and DonorCentral NXT. We have recorded intangible assets acquired in various business combinations based on their fair values at the date of acquisition. The table below sets forth the balances of each class of intangible asset and related amortization as of: December 31, (dollars in thousands) 2022 2021 Finite-lived gross carrying amount Customer relationships $ 569,009 $ 606,409 Marketing assets 69,643 74,731 Developed technology 182,463 211,552 Content 17,900 17,900 Total finite-lived gross carrying amount 839,015 910,592 Accumulated amortization Customer relationships (146,948) (151,258) Marketing assets (8,371) (7,269) Developed technology (46,571) (54,013) Content (1,989) — Total accumulated amortization (203,879) (212,540) Intangible assets, net $ 635,136 $ 698,052 During the year ended December 31, 2022, changes to the gross carrying amounts of intangible asset classes were primarily related to our business acquisitions and disposals as described in Note 3 to these consolidated financial statements, write-offs of fully amortized intangible assets and the effect of foreign currency translation. Amortization expense Amortization expense related to finite-lived intangible assets acquired in business combinations is allocated to cost of revenue on the consolidated statements of comprehensive income based on the revenue stream to which the asset contributes, except for marketing assets and non-compete agreements, for which the associated amortization expense is included in operating expenses. The following table summarizes amortization expense of our finite-lived intangible assets: Years ended December 31, (dollars in thousands) 2022 2021 2020 Included in cost of revenue: Cost of recurring $ 47,085 $ 33,132 $ 36,835 Cost of one-time services and other 1,407 1,680 2,133 Total included in cost of revenue 48,492 34,812 38,968 Included in operating expenses 2,925 2,227 2,915 Total amortization of intangibles from business combinations $ 51,417 $ 37,039 $ 41,883 The following table outlines the estimated future amortization expense for each of the next five years for our finite-lived intangible assets as of December 31, 2022: Years ending December 31, Amortization 2023 55,426 2024 62,015 2025 65,552 2026 63,915 2027 59,755 Total $ 306,663 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 5. (Loss) Earnings Per Share The following table sets forth the computation of basic and diluted (loss) earnings per share: Years ended December 31, (dollars in thousands, except per share amounts) 2022 2021 2020 Numerator: Net (loss) income $ (45,407) $ 5,698 $ 7,717 Denominator: Weighted average common shares 51,569,148 47,412,306 48,184,714 Add effect of dilutive securities: Stock-based awards — 818,132 511,627 Weighted average common shares assuming dilution 51,569,148 48,230,438 48,696,341 (Loss) earnings per share: Basic $ (0.88) $ 0.12 $ 0.16 Diluted $ (0.88) $ 0.12 $ 0.16 Anti-dilutive shares excluded from calculations of diluted (loss) earnings per share 1,046,307 974,110 956,303 Diluted loss per share for the year ended December 31, 2022 was the same as basic loss per share as there was a net loss in the period and inclusion of potentially dilutive securities was anti-dilutive. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements Recurring fair value measurements Financial assets and liabilities that are measured at fair value on a recurring basis consisted of the following, as of the dates indicated below: Fair value measurement using (dollars in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total Fair value as of December 31, 2022 Derivative instruments: Interest rate swaps $ — $ 31,870 $ — $ 31,870 Foreign currency forward contracts — 247 — 247 Total financial assets $ — $ 32,117 $ — $ 32,117 Fair value as of December 31, 2022 Derivative instruments: Foreign currency forward contracts $ — $ 323 $ — $ 323 Contingent consideration obligations — — 2,710 2,710 Total financial liabilities $ — $ 323 $ 2,710 $ 3,033 Fair value as of December 31, 2021 Derivative instruments: Interest rate swaps $ — $ 7,160 $ — $ 7,160 Total financial assets $ — $ 7,160 $ — $ 7,160 Our derivative instruments within the scope of Accounting Standards Codification ("ASC") 815, Derivatives and Hedging , are required to be recorded at fair value. Our derivative instruments that are recorded at fair value include interest rate swaps and foreign currency forward contracts. See Note 10 to these consolidated financial statements for additional information about our derivative instruments. The fair value of our interest rate swaps and foreign currency forward contracts are based on model-driven valuations using Secured Overnight Financing Rate ("SOFR") rates and foreign currency forward rates, respectively, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps and foreign currency forward contracts are classified within Level 2 of the fair value hierarchy. Our financial contracts that were indexed to LIBOR were modified to reference SOFR during the three months ended September 30, 2022. These modifications did not have a significant financial impact. Contingent consideration obligations arise from business acquisitions. The fair values are based on discounted cash flow analyses reflecting a probability-weighted assessment approach derived from the likelihood of possible achievement of specified performance measures or events and captures the contractual nature of the contingencies, commercial risk, and the time value of money. As the fair value measurements for our contingent consideration obligations contain significant unobservable inputs, they are classified within Level 3 of the fair value hierarchy. See Note 3 to these consolidated financial statements for additional information about our contingent consideration obligations. We believe the carrying amounts of our cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, accrued expenses and other current liabilities and due to customers approximate their fair values at December 31, 2022 and December 31, 2021, due to the immediate or short-term maturity of these instruments. We believe the carrying amount of our debt approximates its fair value at December 31, 2022 and December 31, 2021, as the debt bears interest rates that approximate market value. As SOFR and LIBOR rates are observable at commonly quoted intervals, our debt under the 2020 Credit Facility (as defined below) is classified within Level 2 of the fair value hierarchy. Our fixed rate debt is also classified within Level 2 of the fair value hierarchy. We did not transfer any assets or liabilities among the levels within the fair value hierarchy during the years ended December 31, 2022, 2021 and 2020. Non-recurring fair value measurements Assets and liabilities that are measured at fair value on a non-recurring basis include long-lived assets, intangible assets, goodwill and operating lease ROU assets. These assets are recognized at fair value during the period in which an acquisition is completed or at lease commencement, from updated estimates and assumptions during the measurement period, or when they are considered to be impaired. These non-recurring fair value measurements, primarily for long-lived assets, intangible assets acquired and operating lease ROU assets, are based on Level 3 unobservable inputs. In the event of an impairment, we determine the fair value of these assets other than goodwill using a discounted cash flow approach, which contains significant unobservable inputs and, therefore, is considered a Level 3 fair value measurement. The unobservable inputs in the analysis generally include future cash flow projections and a discount rate. For goodwill impairment testing, we estimate fair value using market-based methods including the use of market capitalization and consideration of a control premium. As more fully described in Note 7 and Note 11 to these consolidated financial statements, during the year ended December 31, 2022, we recorded noncash impairment charges of $2.3 million against certain previously capitalized software development costs, $2.0 million against certain insignificant customer relationship intangible assets that were held for sale, $1.0 million against certain operating lease ROU assets and insignificant impairment charges against certain property and equipment assets. During the year ended December 31, 2021, we recorded impairment charges of $1.7 million against certain property and equipment assets and $3.6 million against certain operating lease ROU assets. See Notes 7 and 11, respectively, to these consolidated financial statements for additional details. During the year ended December 31, 2020, we recorded impairment charges of $4.3 million against certain previously capitalized software development costs and $4.0 million against our operating lease ROU assets. See Notes 7 and 11, respectively, to these consolidated financial statements for additional details. There were no other non-recurring fair value adjustments during 2022, 2021 and 2020 except for certain business combination accounting adjustments to the initial fair value estimates of the assets acquired and liabilities assumed at the acquisition date from updated estimates and assumptions during the measurement period. See Note 3 to these consolidated financial statements for additional details. |
Property and Equipment and Soft
Property and Equipment and Software and Content Development Costs | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment and Software Development Costs | 7. Property and Equipment and Software and Content Development Costs Property and equipment Property and equipment consisted of the following as of: Estimated December 31, (dollars in thousands) 2022 2021 Land — $ 9,548 $ 9,548 Building 39 61,284 61,284 Building improvements 7 - 20 10,874 10,874 Equipment 1 - 5 2,312 2,320 Computer hardware 1 - 5 47,886 47,768 Computer software 1 - 5 20,299 21,347 Construction in progress — 3,500 2,135 Furniture and fixtures 2 - 7 3,264 2,658 Leasehold improvements Lesser of lease term or estimated useful life 11,822 12,086 Total property and equipment 170,789 170,020 Less: accumulated depreciation (63,363) (58,592) Property and equipment, net $ 107,426 $ 111,428 Depreciation expense was $14.1 million, $14.4 million and $19.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. During the year ended December 31, 2022, we recorded insignificant noncash impairment char ges against certain property and equipment assets. These impairment charges resulted primarily from our decision to cease using a portion of our leased office space and are reflected in general and administrative expense on the statements of comprehensive income. During the year ended December 31, 2021, we recorded impairment char ges of $1.7 million against certain property and equipment assets. These impairment charges resulted primarily from our decision to close our Austin office and are reflected in general and administrative expense on the statements of comprehensive income. Software and content development costs Software and content development costs consisted of the following as of: Estimated December 31, (dollars in thousands) 2022 2021 Software development costs 3 - 7 $ 250,551 $ 196,337 Content development costs 5 3,409 — Less: accumulated amortization (112,937) (74,960) Software and content development costs, net $ 141,023 $ 121,377 During the years ended December 31, 2022 and 2020, we recorded noncash impairment charges of $2.3 million and $4.3 million, respectively, against certain previously capitalized software development costs that reduced the carrying value of those assets to zero. The impairment charges were reflected in general and administrative expense and cost of recurring revenue, respectively, on the statements of comprehensive income. These impairment charges resulted primarily from our decision to accelerate the end of customer support for certain solutions. Other changes to the gross carrying amount of software and content development costs were primarily related to qualifying costs associated with development activities that are required to be capitalized under the internal-use software accounting guidance such as those for our cloud solutions and online education curriculum, write-offs of fully amortized assets, and the effect of foreign currency translation. Amortization expense related to software and content development costs was $36.8 million, $31.0 million and $31.7 million for the years ended December 31, 2022, 2021 and 2020, respectively, and is included primarily in cost of recurring. |
Consolidated Financial Statemen
Consolidated Financial Statement Details | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Financial Statement Details | 8. Consolidated Financial Statement Details Restricted cash (dollars in thousands) December 31, December 31, Restricted cash due to customers $ 700,611 $ 593,296 Letters of credit for operating leases — 2,186 Real estate escrow balances and other 1,629 1,134 Total restricted cash $ 702,240 $ 596,616 Prepaid expenses and other assets (dollars in thousands) December 31, December 31, Costs of obtaining contracts (1)(2) $ 74,272 $ 78,465 Prepaid software maintenance and subscriptions (3) 34,766 28,880 Derivative instruments 32,117 7,160 Implementation costs for cloud computing arrangements, net (4)(5) 10,189 11,892 Unbilled accounts receivable 5,775 5,443 Prepaid insurance 4,902 5,363 Taxes, prepaid and receivable 1,855 3,986 Deferred tax assets 1,153 1,546 Receivables for probable insurance recoveries (6)(7) — 18,202 Other assets 10,929 11,835 Total prepaid expenses and other assets 175,958 172,772 Less: Long-term portion 94,304 77,266 Prepaid expenses and other current assets $ 81,654 $ 95,506 (1) Amortization expense from costs of obtaining contracts was $33.6 million, $35.5 million and $37.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, and is included in sales, marketing and customer success expense in our consolidated statements of comprehensive income. (2) The current portion of costs of obtaining contracts as of December 31, 2022 and 2021 was $29.1 million and $30.2 million, respectively. (3) The current portion of prepaid software maintenance and subscriptions as of December 31, 2022 and December 31, 2021 was $31.7 million and $24.7 million, respectively. (4) These costs primarily relate to the multi-year implementations of our new global enterprise resource planning and customer relationship management systems. (5) Amortization expense from capitalized cloud computing implementation costs was $2.2 million, $1.9 million and $0.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. Accumulated amortization for these costs was $5.2 million and $3.0 million as of December 31, 2022 and 2021, respectively. (6) All receivables for probable insurance recoveries were classified as current. (7) See discussion of the Security Incident at Note 11 to these consolidated financial statements. Accrued expenses and other liabilities (dollars in thousands) December 31, December 31, Accrued legal costs (1) $ 28,448 $ 11,724 Taxes payable (2) 16,667 19,777 Customer credit balances 8,257 8,403 Operating lease liabilities, current portion 7,723 9,170 Accrued commissions and salaries 6,944 7,872 Accrued transaction-based costs related to payments services 5,059 5,427 Contingent consideration liability (3) 2,710 — Accrued health care costs 2,467 3,042 Accrued vacation costs 2,156 2,234 Accrued bonuses 2,026 5,829 Unrecognized tax benefit 266 1,248 Amounts payable to former EVERFI option holders (4) — 17,404 Other liabilities 7,573 9,310 Total accrued expenses and other liabilities 90,296 101,440 Less: Long-term portion 4,294 1,344 Accrued expenses and other current liabilities $ 86,002 $ 100,096 (1) All accrued legal costs are classified as current. (2) We deferred payments of the employer's portion of Social Security taxes during 2020 under the Coronavirus, Aid, Relief and Economic Security Act ("CARES Act"), half of which was due by the end of calendar year 2021 with the remainder due by the end of calendar year 2022. (3) See discussion of our acquisition of Kilter at Note 3 to these consolidated financial statements. (4) Represents amounts that had not been paid by EVERFI to its former option holders as of December 31, 2021, solely due to the timing of the acquisition on the last day of 2021. See Note 3 to these consolidated financial statements for additional information regarding our acquisition of EVERFI. Other income, net Years ended December 31, (dollars in thousands) 2022 2021 2020 Interest income $ 1,746 $ 392 $ 1,660 Currency revaluation gains (losses) 4,635 (1,644) (1,065) Other income, net 2,332 1,432 1,063 Other income, net $ 8,713 $ 180 $ 1,658 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 9. Debt The following table summarizes our debt balances and the related weighted average effective interest rates, which includes the effect of interest rate swap agreements. Debt balance at Weighted average (dollars in thousands) December 31, December 31, December 31, December 31, Credit facility: Revolving credit loans $ 177,800 $ 260,000 5.18 % 3.27 % Term loans 623,750 640,000 4.26 % 3.02 % Real estate loans 58,189 59,480 5.22 % 5.22 % Other debt 2,247 1,694 7.38 % 5.00 % Total debt 861,986 961,174 4.52 % 3.23 % Less: Unamortized discount and debt issuance costs 2,943 4,994 Less: Debt, current portion 18,802 18,697 6.45 % 3.11 % Debt, net of current portion $ 840,241 $ 937,483 4.48 % 3.23 % 2020 refinancing We were previously party to a 5-year $700.0 million credit facility entered into during June 2017. The credit facility included: a dollar and a designated currency revolving credit facility with sublimits for letters of credit, swingline loans and multicurrency borrowings (the “2017 Revolving Facility”) and a term loan (the “2017 Term Loan”) together, (the “2017 Credit Facility”). In October 2020, we entered into a 5-year $900.0 million Amended and Restated Credit Agreement (the “2020 Credit Facility”). The 2020 Credit Facility matures in October 2025 and replaced the 2017 Credit Facility by amending and restating it to include a $500.0 million revolving credit facility (the “2020 Revolving Facility”) and a $400.0 million term loan facility (the “2020 Term Loan”). Upon closing, we borrowed $400.0 million pursuant to the 2020 Term Loan and used the proceeds to repay the outstanding principal balance of the term loan under the 2017 Credit Facility, and repay $124.4 million of outstanding revolving credit loans under the 2017 Revolving Facility. In connection with the amendment and restatement of the 2017 Credit Facility, the existing Pledge Agreement dated June 2, 2017, by us in favor of Bank of Am erica, N.A., as administrative agent, was likewise amended and restated. Certain lenders of the 2020 Term Loan participated in the 2017 Term Loan and the change in present value of our future cash flows to these lenders under the 2017 Term Loan and under the 2020 Term Loan was less than 10%. Accordingly, we accounted for the refinancing event as a debt modification. Certain lenders of the 2017 Term Loan did not participate in the 2020 Term Loan. Accordingly, we accounted for the refinancing event for these lenders as a debt extinguishment. Certain lenders of the 2017 Revolving Facility participated in the 2020 Revolving Facility and provided increased borrowing capacities. Accordingly, we accounted for the refinancing event for these lenders as a debt modification. Certain lenders of the 2017 Revolving Facility did not participate in the 2020 Revolving Facility. Accordingly, we accounted for the refinancing event for these lenders as a debt extinguishment. We recorded an insignificant loss on debt extinguishment related to the write-off of debt discount and deferred financing costs for the portions of t he 2017 Credit Facility considered to be extinguished. This loss was recognized in the consolidated statements of comprehensive income within other income, net. Summary of the 2020 Credit Facility The 2020 Revolving Facility includes (i) a $50.0 million sublimit available for the issuance of standby letters of credit, (ii) a $50.0 million sublimit available for swingline loans, and (iii) a $100.0 million sublimit available for multicurrency borrowings. Our obligations under the 2020 Credit Facility are secured by the stock and limited liability company interests of certain of our direct subsidiaries and any of our material domestic subsidiaries, if any, and the proceeds therefrom pledged pursuant to an Amended and Restated Pledge Agreement dated as of October 30, 2020, by us in favor of Bank of America, N.A., as administrative agent, for the ratable benefit of itself and the secured parties referred to therein. The term loan under the 2020 Credit Facility requires periodic principal payments. The balance of the term loan and any amounts drawn on the revolving credit loans are due upon maturity of the 2020 Credit Facility in October 2025. We evaluate the classification of our debt as current or non-current based on the required annual maturities of the 2020 Credit Facility. We may prepay the 2020 Credit Facility in whole or in part at any time without premium or penalty, other than customary breakage costs with respect to certain types of loans. The 2020 Credit Facility contains various representations, warranties and affirmative, negative and financial covenants customary for financings of this type. Financial covenants include a net leverage ratio and an interest coverage ratio. At December 31, 2022, we were in compliance with our debt covenants under the 2020 Credit Facility. Under the terms of the 2020 Credit Facility, we are entitled on one or more occasions, subject to the satisfaction of certain conditions, to request an increase in the commitments under the Revolving Credit Facility and/or request additional incremental term loans in the aggregate principal amount of up to $250.0 million plus an amount, if any, such that the net leverage ratio shall be no greater than 3.25 to 1.00. At December 31, 2022, our available borrowing capacity under the 2020 Credit Facility was $319.8 million. First Amendment to 2020 Credit Facility On January 31, 2022, we entered into the First Amendment to Credit Agreement (the “Amendment”). The Amendment amended the 2020 Credit Facility to, among other things, (i) modify the definition of “Applicable Margin”, (ii) modify the net leverage ratio financial covenant to require a net leverage ratio of (A) 4.00:1.00 or less for the fiscal quarter ended December 31, 2021 and for fiscal quarters ending thereafter through December 31, 2023 and (B) 3.75:1.00 or less for the fiscal quarters ending March 31, 2024 and thereafter, (iii) reset the $250.0 million fixed dollar basket with respect to the accordion feature and (iv) modify certain negative covenants to provide additional operational flexibility. LIBOR Transition Amendment On August 26, 2022, we entered into a LIBOR Transition Amendment (the "LIBOR Amendment"). The LIBOR Amendment amended the 2020 Credit Facility, as previously amended, to change the interest rate benchmark from LIBOR to SOFR (as defined therein). The LIBOR Amendment did not change any terms of the 2020 Credit Facility unrelated to reference rate reform. After giving effect to both the First Amendment and the LIBOR Transition Amendment, dollar denominated loans under the 2020 Revolving Facility and the 2020 Term Loan bear interest based on, at our election, either (a) the Base Rate (as defined below) or (b) Term SOFR (as defined below), in each case, plus an applicable margin. "Base Rate" is defined as a rate per annum equal to the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the prime rate announced by Bank of America, N.A., and (iii) Term SOFR plus 1.00%. "Term SOFR" is defined as a rate per annum equal to the forward-looking term rate based on the secured overnight financing rate plus a credit sensitive adjustment of 0.11448% for a one month tenor, 0.26161% for a three month tenor or 0.42826% for a six month tenor, as applicable, in each case, per annum. The applicable margin is adjusted quarterly based on our net leverage ratio and ranges from 0.375% to 1.50% for Base Rate loans and 1.375% to 2.50% for Term SOFR loans, in each case, per annum. Sterling denominated loans under the 2020 Revolving Facility bear interest based on SONIA plus an applicable margin. "SONIA" is defined as a rate per annum equal to the Sterling Overnight Index Average Reference Rate published on the fifth Business Day preceding such date on the applicable Reuters screen page plus a credit sensitive adjustment of 0.0326% per annum. The applicable margin is adjusted quarterly based on our net leverage ratio and ranges from 1.375% to 2.50% per annum. We also pay a quarterly commitment fee on the unused portion of the 2020 Revolving Facility from 0.250% to 0.50% per annum, depending on our net leverage ratio. At December 31, 2022, the applicable margin for Term SOFR, SONIA and other Eurocurrency Rate loans under the 2020 Credit Facility was 2.125% and the commitment fee applicable to the 2020 Revolving Facility was 0.375%. First Incremental Term Loan On December 31, 2021, we entered into the First Incremental Term Loan Agreement (the "Incremental Amendment"). The Incremental Amendment amends the 2020 Credit Facility and, among other things, provides for a $250.0 million incremental term loan (the “2021 Incremental Term Loan”). The 2021 Incremental Term Loan bears interest based on, at our election, either (a) the Base Rate (2021 Incremental) (as defined below), (b) Daily SOFR Rate (as defined below) or (c) Term SOFR (2021 Incremental) (as defined below), in each case, plus an applicable margin. "Base Rate (2021 Incremental)" is defined as a rate per annum equal to the highest of (i) the Federal Funds Rate plus 0.50%, (ii) the prime rate announced by Bank of America, N.A., and (iii) Daily SOFR Rate plus 1.00%. “Daily SOFR Rate” is defined as a rate per annum equal to secured overnight financing rate plus a credit sensitive adjustment of 0.10%. "Term SOFR (2021 Incremental)" is defined as a rate per annum equal to the forward-looking term rate based on the secured overnight financing rate plus a credit sensitive adjustment of 0.10% for a one month tenor, 0.15% for a three month tenor or 0.25% for a six month tenor, as applicable, in each case, per annum. The applicable margin is adjusted quarterly based on our net leverage ratio and ranges from 0.375% to 1.50% for Base Rate (2021 Incremental) loans and 1.375% to 2.50% for Daily SOFR Rate loans and Term SOFR (2021 Incremental) loans, in each case, per annum. The 2021 Incremental Term Loan matures in October 2025, which is the maturity date of the existing term loan under the 2020 Credit Facility, and is otherwise subject to substantially the same terms and conditions as the existing term loan under the 2020 Credit Facility. Financing costs In connection with our entry into the 2020 Credit Facility, we paid $4.0 million in financing costs, of which $1.2 million were capitalized in other assets and, together with a portion of the unamortized deferred financing costs from the 2017 Credit Facility and prior facilities, are being amortized into interest expense over the term of the new facility. We recorded aggregate financing costs of $2.0 million as a direct deduction from the carrying amount of our debt liability, which related to debt discount (fees paid to lenders) and debt issuance costs for the 2020 Term Loan. In connection with our entry into the 2021 Incremental Term Loan, we paid $3.1 million in financing costs which were recorded as a direct deduction from the carrying amount of our debt liability. As of December 31, 2022, deferred financing costs totaling $0.9 million were included in other assets on our consolidated balance sheets. Financing for EVERFI acquisition On December 31, 2021, we acquired EVERFI for approximately $441.8 million in cash consideration and 3,810,888 shares of the company's common stock, valued at approximately $301.0 million, for an aggregate purchase price of approximately $742.8 million, net of closing adjustments. We financed the cash consideration and related expenses through cash on hand and new borrowings u nder the 2020 Credit Facility , including $250.0 million under the First Incremental Term Loan (as defined above). Real estate loans In August 2020, we completed the purchase of our global headquarters facility. As part of the purchase price, we assumed the Seller’s obligations under (i) a 5.12% Senior Secured Note, Series A1, in the outstanding principal amount of $49.1 million, dated May 2, 2018, and (ii) a 5.61% Senior Secured Note, Series A2, in the outstanding principal amount of $12.0 million, dated May 2, 2018, or an aggregate outstanding principal amount of $61.1 million (collectively, the “Real Estate Loans”). The Series A1 Note provides that we will pay the remaining principal amount due thereunder together with interest thereon at the rate indicated above, in monthly installments until it matures in April 2038. The Series A2 Note provides that we pay interest only in monthly installments at the rate indicated above with the principal amount due at maturity in April 2038. The Real Estate Loans are secured by a first priority lien on the real property constituting the global headquarters facility. Our assumption of the Real Estate Loans was a noncash investing and financing transaction and is reflected in our supplemental disclosure of cash flow information. At December 31, 2022, we were in compliance with our debt covenants under the Real Estate Loans. Other debt From time to time, we enter into third-party financing agreements for purchases of software and related services for our internal use. Generally, the agreements are non-interest-bearing notes requiring annual payments. Interest associated with the notes is imputed at the rate we would incur for amounts borrowed under our then-existing credit facility at the inception of the notes. Our assumption of these loans are noncash financing transactions and are reflected in our supplemental disclosure of cash flow information. The following table summarizes our currently effective financing agreements as of December 31, 2022: (dollars in thousands) Term Number of First Annual Original Loan Effective dates of agreements: December 2019 51 4 January 2020 $ 2,150 December 2022 39 3 January 2023 1,710 As of December 31, 2022, the required annual maturities related to the 2020 Credit Facility, the Real Estate Loans and our other debt were as follows: Years ending December 31, Annual 2023 $ 18,802 2024 18,429 2025 771,403 2026 1,969 2027 2,166 Thereafter 49,217 Total required maturities $ 861,986 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Instruments | 10. Derivative Instruments We generally use derivative instruments to manage our interest rate and foreign currency exchange risk. We currently have derivatives classified as cash flow hedges and net investment hedges. We do not enter into any derivatives for trading or speculative purposes. All of our derivative instruments are governed by International Swap Dealers Association, Inc. ("ISDA") master agreements with our counterparties. As of December 31, 2022 and December 31, 2021, we have presented the fair value of our derivative instruments at the gross amounts in the consolidated balance sheet as the gross fair values of our derivative instruments equaled their net fair values. Cash flow hedges We have entered into interest rate swap agreements, which effectively convert portions of our variable rate debt under the 2020 Credit Facility to a fixed rate for the term of the swap agreements. We designated each of the interest rate swaps as cash flow hedges at the inception of the contracts. As of December 31, 2022 and December 31, 2021, the aggregate notional values of the interest rate swaps were $435.0 million. All of the contracts have maturities on or before October 2024. During the three months ended September 30, 2022, we entered into foreign currency forward contracts to hedge revenues denominated in the Canadian Dollar ("CAD") against changes in the exchange rate with the United States Dollar ("USD"). We designated each of the forwards as cash flow hedges at the inception of the contracts. As of December 31, 2022, the aggregate notional values of the foreign currency forward contracts designated as cash flow hedges that we held to buy USD in exchange for Canadian Dollars were $22.6 million CAD. All of the contracts have maturities of 12 months or less. We did not have foreign currency forward contracts as of December 31, 2021. Net investment hedges We have entered into foreign currency forward contracts to hedge a portion of the foreign currency exposure that arises on translation of our investments denominated in British Pounds ("GBP") into USD. We designated each of these foreign currency forward contracts as net investment hedges at the inception of the contracts. As of December 31, 2022, we had £11.2 million of foreign currency forward contracts designated as net investment hedges to reduce the volatility of the U.S. dollar value of a portion of our GBP-denominated investments. The fair values of our derivative instruments were as follows as of: Asset derivatives Liability Derivatives (dollars in thousands) Balance sheet location December 31, December 31, Balance sheet location December 31, December 31, Derivative instruments designated as hedging instruments: Foreign currency forward contracts, current portion Prepaid expenses $ 247 $ — Accrued expenses $ 323 $ — Interest rate swaps, long-term Other assets 31,870 7,160 Other liabilities — — Total derivative instruments designated as hedging instruments $ 32,117 $ 7,160 $ 323 $ — The effects of derivative instruments in cash flow hedging relationships were as follows: Gain (loss) recognized in accumulated other comprehensive income as of Location of gain (loss) reclassified from accumulated other comprehensive income into (loss) income Gain (loss) reclassified from accumulated other comprehensive income into (loss) income (dollars in thousands) December 31, Year ended Cash Flow Hedges Interest rate swaps $ 31,870 Interest expense $ 5,520 Foreign currency forward contracts $ 247 Revenue $ 165 Net Investment Hedge Foreign currency forward contracts $ (323) $ — December 31, Year ended Cash Flow Hedges Interest rate swaps $ 7,160 Interest expense $ (3,714) December 31, Year ended Interest rate swaps $ (4,159) Interest expense $ (3,827) Our policy requires that derivatives used for hedging purposes be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accumulated other comprehensive income (loss) includes unrealized gains or losses from the change in fair value measurement of our derivative instruments each reporting period and the related income tax expense or benefit. Excluding net investment hedges, changes in the fair value measurements of the derivative instruments and the related income tax expense or benefit are reflected as adjustments to accumulated other comprehensive income (loss) until the actual hedged expense is incurred or until the hedge is terminated at which point the unrealized gain (loss) is reclassified from accumulated other comprehensive income (loss) to current earnings. For net investment hedges, changes in the fair value measurements of the derivative instruments and the related income tax expense or benefit are reflected as adjustments to translation adjustment, a component of accumulated other comprehensive income (loss), and recognized in earnings only when the hedged GBP investment is liquidated. The estimated accumulated other comprehensive income as of December 31, 2022 that is expected to be reclassified into earnings within the next twelve months is $19.5 million. There were no ineffective portions of our interest rate swap or foreign currency forward derivatives during the years ended December 31, 2022, 2021 and 2020. See Note 14 to these consolidated financial statements for a summary of the changes in accumulated other comprehensive income (loss) by component. We classify cash flows related to derivative instruments as operating activities in the consolidated statements of cash flows. We did not have any undesignated derivative instruments during 2022, 2021 and 2020. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Leases We have operating leases for corporate offices, subleased offices and certain equipment and furniture. In August 2020, we completed the purchase of our global headquarters facility that we previously leased. As of December 31, 2022, we had operating leases for equipment that had not yet commenced with future rent payments of $3.1 million. These operating leases are expected to commence during 2023 with lease terms of 3 years. With the acquisition of EVERFI, we assumed a lease for office space in Washington, D.C. At December 31, 2022, we had a standby letter of credit of $2.1 million for a security deposit for this lease. The following table summarizes the components of our lease expense: Year ended (dollars in thousands) 2022 2021 2020 Operating lease cost (1) $ 9,501 $ 9,636 $ 41,210 Variable lease cost 1,670 2,478 4,266 Sublease income (2,763) (1,516) (3,120) Net lease cost $ 8,408 $ 10,598 $ 42,356 (1) Includes short-term lease costs, which were immaterial. During the twelve months ended December 31, 2022, we recorded noncash impairment charges of $1.0 million against certain operating lease ROU assets resulting primarily from our decision to cease using a portion of our leased office space. These charges are reflected in general and administrative expense on the statements of comprehensive income. In October 2021, we made the decision to permanently close our fixed office locations (with the exception of our global headquarters facility in Charleston, South Carolina), effective in December 2021. This change was intended to align our real estate footprint with our transition to a remote-first workforce. We enter into arrangements for smaller more flexible workspaces where ne cessary. As a result, during the twelve months ended December 31, 2021, we reduced the estimated useful lives of our operating lease ROU assets for certain of our office locations we expected to exit. We recorded $5.3 million in incremental operating lease costs during 2021 related to this change in accounting estimate. For these same office locations, we also reduced the estimated useful lives of certain facilities-related fixed assets, which resulted in incremental depreciation expense of $1.7 million during 2021 (see Note 7 to these consolidated financial statements). During the twelve months ended December 31, 2021, we also recorded $3.6 million in impairments of op erating lease ROU assets associated with certain leased office spaces we have ceased using as a result of our adjusted workforce strategy. These impairment charges are reflected in general and administrative expense. During the twelve months ended December 31, 2020, we reduced the estimated useful lives of our operating lease ROU assets for certain of our office locations we expected to exit. We recorded $16.2 million in incremental operating lease costs during 2020 related to this change in accounting estimate, which accounts for a substantial portion of the increase in operating lease costs during 2020. For these same office locations, we also reduced the estimated useful lives of certain facilities-related fixed assets, which resulted in incremental depreciation expense of $4.6 million during 2020 (see Note 7 to these consolidated financial statements). During the twelve months ended December 31, 2020 , we also recorded $4.0 million in impairments of op erating lease ROU assets associated with certain leased office spaces we ceased using. These impairment charges are reflected in general and administrative expense. Maturities of our operating lease liabilities as of December 31, 2022 were as follows: Years ending December 31, Operating leases 2023 $ 9,978 2024 7,699 2025 6,659 2026 6,104 2027 6,207 Thereafter 26,790 Total lease payments 63,437 Less: Amount representing interest 10,796 Present value of future payments $ 52,641 Our ROU assets and lease liabilities are included in the following line items in our consolidated balance sheet: (dollars in thousands) December 31, December 31, Operating leases Operating lease ROU assets $ 45,899 $ 53,883 Accrued expenses and other current liabilities $ 7,723 $ 9,170 Operating lease liabilities, net of current portion 44,918 53,386 Total operating lease liabilities $ 52,641 $ 62,556 The weighted average remaining lease terms and discount rates were as follows: (dollars in thousands) December 31, December 31, December 31, Operating leases Weighted average remaining lease term (years) 8.5 8.9 4.6 Weighted average discount rate 4.63 % 4.68 % 5.70 % Supplemental cash flow information related to leases was as follows: Year ended (dollars in thousands) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1) $ 11,439 $ 11,338 $ 26,713 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases — 5,358 11,002 (1) The 2020 amount was revised to correct an immaterial disclosure error in the previously filed consolidated financial statements. Other commitments The term loans under the 2020 Credit Facility require periodic principal payments. The balance of the term loans and any amounts drawn on the revolving credit loans are due upon maturity of the 2020 Credit Facility in October 2025. The Real Estate Loans also require periodic principal payments and the balance of the Real Estate Loans are due upon maturity in April 2038. We have contractual obligations for third-party technology used in our solutions and for other services we purchase as part of our normal operations. In certain cases, these arrangements require a minimum annual purchase commitment by us. As of December 31, 2022, the remaining aggregate minimum purchase commitment under these arrangements was approximately $294.4 million through 2027. Solution and service indemnifications In the ordinary course of business, we provide certain indemnifications of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our solutions or services. We have not identified any losses that might be covered by these indemnifications Legal proceedings We are subject to legal proceedings and claims that arise in the ordinary course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described below. We record an accrual for a loss contingency when it is both probable that a material liability has been incurred and the amount of the loss can be reasonably estimated. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, we disclose such an estimate, if material. If such a loss or range of losses is not reasonably estimable, we disclose that fact. We review any such loss contingency accruals at least quarterly and adjust them to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. We recognize insurance recoveries, if any, when they are probable of receipt. All associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. Legal proceedings are inherently unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending or threatened against us and intend to defend ourselves vigorously against all claims asserted. It is possible that our consolidated financial position, results of operations or cash flows could be materially negatively affected in any particular period by an unfavorable resolution of one or more of such legal proceedings. Security incident As previously disclosed, we are subject to risks and uncertainties as a result of a ransomware attack against us in May 2020 in which a cybercriminal removed a copy of a subset of data from our self-hosted environment (the "Security Incident"). Based on the nature of the Security Incident, our research and third party (including law enforcement) investigation, we do not believe that any data went beyond the cybercriminal, has been misused, or has been disseminated or otherwise made available publicly. Our investigation into the Security Incident by our cybersecurity team and third-party forensic advisors remains ongoing. As a result of the Security Incident, we are currently subject to certain legal proceedings, claims and investigations, as discussed below, and could be the subject of additional legal proceedings, claims, inquiries and investigations in the future that might result in adverse judgments, settlements, fines, penalties or other resolution. To limit our exposure to losses related to claims against us, including data breaches such as the Security Incident, we maintain $50 million of insurance abo ve a $250 thousand deductible payable by us. As noted below, this coverage has reduced our financial exposure related to the Security Incident. We recorded expenses and offsetting probable insurance recoveries related to the Security Incident as follows: Years ended December 31, (dollars in thousands) 2022 2021 2020 Gross expense $ 57,614 $ 40,561 $ 9,830 Offsetting probable insurance recoveries (1,891) (38,745) (9,364) Net expense $ 55,723 $ 1,816 $ 466 The following summarizes our cumulative expenses, insurance recoveries recognized and insurance recoveries paid as of: (dollars in thousands) December 31, December 31, December 31, 2020 Cumulative gross expense $ 108,005 $ 50,391 $ 9,830 Cumulative offsetting insurance recoveries recognized (50,000) (48,109) (9,364) Cumulative net expense $ 58,005 $ 2,282 $ 466 Cumulative offsetting insurance recoveries paid $ (50,000) $ (29,968) $ (3,075) Recorded expenses have consisted primarily of payments to third-party service providers and consultants, including legal fees, as well as settlements of customer claims and accruals for certain loss contingencies. Not included in the expenses discussed above were costs associated with enhancements to our cybersecurity program. We present expenses and insurance recoveries related to the Security Incident in general and administrative expense on o ur consolidated statements of comprehensive income and as operating activities on our consolidated statements of cash flows. Total costs related to the Security Incident exceeded the limit of our insurance coverage during the first quarter of 2022. We expect to continue to experience significant expenses related to our response to the Security Incident, resolution of legal proceedings, claims and investigations, including those discussed below, and our efforts to further enhance our cybersecurity measures. For full year 2022, we incurred net pre-tax expense of $32.7 million and had net cash outlays of $20.9 million for ongoing legal fees related to the Security Incident. In line with our policy, legal fees, are expensed as incurred. For full year 2023, we currently expect net pre-tax expense of approximately $20.0 million to $30.0 million and net cash outlays of approximately $25.0 million to $35.0 million for ongoing legal fees related to the Security Incident. As of December 31, 2022, we have recorded approximately $23.0 million in aggregate liabilities for loss contingencies based primarily on recent negotiations with certain governmental agencies related to the Security Incident that we believe we can reasonably estimate. It is reasonably possible that our estimated or actual losses may change in the near term for those matters and be materially in excess of the amounts accrued, but we are unable at this time to reasonably estimate the possible additional loss. There are other Security Incident-related matters, including customer claims, customer constituent class actions and governmental investigations, for which we have not recorded a liability for a loss contingency as of December 31, 2022 because we are unable at this time to reasonably estimate the possible loss or range of loss. Each of these matters could, separately or in the aggregate, result in an adverse judgement, settlement, fine, penalty or other resolution, the amount, scope and timing of which we are currently unable to predict, but could have a material adverse impact on our results of operations, cash flows or financial condition. Customer claims. To date, we have received approximately 260 specific requests for reimbursement of expenses, approximately 200 (or 77%) of which have been fully resolved and closed. We have also received approximately 400 reservations of the right to seek expense recovery in the future from customers or their attorneys in the U.S., U.K. and Canada related to the Security Incident. We have also received notices of proposed claims on behalf of a number of UK data subjects, which we are reviewing. In addition, insurance companies representing various customers’ interests through subrogation claims have contacted us, and certain insurance companies have filed subrogation claims in court. Customer and insurer subrogation claims generally seek reimbursement of their costs and expenses associated with notifying their own customers of the Security Incident and taking steps to assure that personal information has not been compromised as a result of the Security Incident. Our review of customer and subrogation claims includes analyzing individual customer contracts into which we have entered, the specific claims made and applicable law. Customer constituent class actions . Presently, we are a defendant in 19 putative consumer class action cases [17 in U.S. federal courts (which have been consolidated under multi district litigation to a single federal court) and 2 in Canadian courts] alleging harm from the Security Incident. The plaintiffs in these cases, who purport to represent various classes of individual constituents of our customers, generally claim to have been harmed by alleged actions and/or omissions by us in connection with the Security Incident and assert a variety of common law and statutory claims seeking monetary damages, injunctive relief, costs and attorneys’ fees and other related relief. Lawsuits that are putative class actions require a plaintiff to satisfy a number of procedural requirements before proceeding to trial. These requirements include, among others, demonstration to a court that the law proscribes in some manner our activities, the making of factual allegations sufficient to suggest that our activities exceeded the limits of the law and a determination by the court—known as class certification—that the law permits a group of individuals to pursue the case together as a class. If these procedural requirements are not met, the lawsuit cannot proceed as a class action and the plaintiff may lose the financial incentive to proceed with the case. We are currently engaged in court proceedings to determine whether this will proceed as a class action. Frequently, a court’s determination as to these procedural requirements is subject to appeal to a higher court. As a result of these uncertainties, we may be unable to determine the probability of loss until, or after, a court has finally determined that a plaintiff has satisfied the applicable class action procedural requirements. Furthermore, for putative class actions, it is often not possible to reasonably estimate the possible loss or a range of loss amounts, even where we have determined that a loss is reasonably possible. Generally, class actions involve a large number of people and raise complex legal and factual issues that result in uncertainty as to their outcome and, ultimately, making it difficult for us to estimate the amount of damages that a plaintiff might successfully prove. This analysis is further complicated by the fact that the plaintiffs lack contractual privity with us. Governmental investigations. To date, we have received a consolidated, multi-state Civil Investigative Demand issued on behalf of 49 state Attorneys General and the District of Columbia, a separate Civil Investigative Demand from the office of the Indiana Attorney General and a separate Civil Investigative Demand from the office of the California Attorney General relating to the Security Incident. We have been in discussions, directly with certain Attorneys General or indirectly through an executive committee of the multi-state group of Attorneys General, about potential resolution of issues arising from these investigations. Although we are hopeful that we can resolve these matters on acceptable terms, there is no assurance that we will be able to do so on terms acceptable to us and to any or all such states. We also are subject to the following pending governmental actions: • an investigation by the U.S. Federal Trade Commission; • a formal investigation by the SEC; • an investigation by the U.S. Department of Health and Human Services; • an investigation by the Office of the Australian Information Commissioner; and • an investigation by the Office of the Privacy Commissioner of Canada. We have been in discussions with the SEC Staff about potential resolution of issues arising from their investigation. Although we are hopeful that we can resolve the matter on acceptable terms, there is no assurance that we will be able to resolve the matter on terms acceptable to us and the SEC. On September 28, 2021, the Information Commissioner’s Office in the United Kingdom under the U.K. Data Protection Act 2018 (the "ICO") notified us that it has closed its investigation of the Security Incident. Based on its investigation and having considered our actions before, during and after the Security Incident, the ICO issued our European subsidiary a reprimand in accordance with Article 58(2)(b) of the U.K. General Data Protection Regulation ("U.K. GDPR") due to our non-compliance, in the ICO's view, with the requirements set out in Article 32 of the U.K. GDPR regarding the processing of personal data. The ICO did not impose a penalty related to the Security Incident, nor did it impose any requirements for further action by us. On September 24, 2021, we received notice from the Spanish Data Protection Authority that it has concluded its investigation of the Security Incident, pursuant to which our European subsidiary paid a penalty of €60,000 in relation to the alleged late notification of two Spanish data controllers regarding the Security Incident. On January 15, 2021, we were notified by the Data Protection Commission of Ireland that it has concluded its investigation of the Security Incident without taking any action against us. We continue to cooperate with all ongoing investigations, which include various requests for documents, policies, narratives and communications, as well as requests to interview or depose various Company-related personnel. As noted above, each of these separate governmental investigations could result in adverse judgements, settlements, fines, penalties or other resolution, the amount, scope and timing of which we are currently unable to predict, but could have a material adverse impact on our results of operations, cash flows or financial condition. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes We file income tax returns in the U.S. for federal and various state jurisdictions as well as in foreign jurisdictions including Canada, the U.K., Australia, Ireland and Costa Rica. We are generally subject to U.S. federal income tax examination for calendar tax years 2019 through 2022 as well as state and foreign income tax examinations for various years depending on statutes of limitations of those jurisdictions. The following summarizes the components of income tax expense (benefit): Years ended December 31, (dollars in thousands) 2022 2021 2020 Current taxes: U.S. Federal $ 3,485 $ (2,499) $ (407) U.S. State and local 5,708 (257) 1,563 International 7,283 6,570 3,904 Total current taxes 16,476 3,814 5,060 Deferred taxes: U.S. Federal (16,880) (4,615) (1,064) U.S. State and local (9,319) 222 7,725 International (445) 1,964 2,176 Total deferred taxes (26,644) (2,429) 8,837 Total income tax (benefit) provision $ (10,168) $ 1,385 $ 13,897 The following summarizes the components of income before provision for income taxes: Years ended December 31, (dollars in thousands) 2022 2021 2020 U.S. $ (91,493) $ (23,180) $ (4,112) International 35,918 30,263 25,726 Income before provision for income taxes $ (55,575) $ 7,083 $ 21,614 A reconciliation between the effect of applying the federal statutory rate and the effective income tax rate used to calculate our income tax provision (benefit) is as follows: Years ended December 31, 2022 2021 2020 Federal statutory rate 21.0 % 21.0 % 21.0 % Effect of: State income taxes, net of federal benefit 1.5 4.4 5.9 Change in foreign income tax rate applied to deferred tax balances 0.1 42.6 4.0 Change in state income tax rate applied to deferred tax balances 1.8 2.3 0.1 Nondeductible security incident-related fines or penalties (8.7) — — Section 162(m) limitation (6.4) 75.0 17.5 Stock-based compensation (6.3) (36.2) (1.2) Change in valuation reserve (primarily state credit reserves) (5.4) 26.1 38.2 GILTI inclusion (2.6) — 1.3 Nondeductible meals, entertainment and transportation (0.7) 1.1 3.3 Acquisition costs — 8.7 — DTA Adjustment – NOLs — — (3.3) Unrecognized tax benefit 0.5 (32.7) 1.3 Foreign tax rate 1.0 (6.0) (1.7) Return to accrual adjustment 1.4 (4.2) (4.1) FDII benefit 2.3 — — State credits, net of federal benefit 7.2 (32.6) (2.3) Federal credits generated 11.5 (54.5) (17.4) Other 0.1 4.6 1.7 Income tax provision effective rate 18.3 % 19.6 % 64.3 % The decrease in our effective income tax rate for year ended December 31, 2022, when compared to the same period in 2021, was primarily attributable to current-year non-deductible accruals for loss contingencies related to the Security Incident, stock-based compensation shortfall partially offset by increased tax credits and impact of tax rate decreases. The 2021 effective income tax rate was positively impacted by benefit attributable to stock-based compensation windfall net of tax expense resulting from impact of UK corporate rate increase. The year-on-year comparison is further impacted by 2022 pre-tax loss versus income in prior periods. The significant components of our deferred tax assets and liabilities were as follows: December 31, (dollars in thousands) 2022 2021 Deferred tax assets relating to: Federal and state and foreign net operating loss carryforwards $ 10,369 $ 21,456 Federal, state and foreign tax credits 50,194 52,283 Stock-based compensation 21,166 21,432 Operating leases 14,024 23,795 Allowance for credit losses 1,803 2,524 Intangible assets 561 1,070 Deferred revenue 1,820 1,057 Accrued bonuses 455 218 Capitalized R&D and software costs 12,166 — Other 6,293 13,515 Total deferred tax assets 118,851 137,350 Deferred tax liabilities relating to: Intangible assets (161,836) (168,392) Capitalized software and content development costs — (31,326) Costs of obtaining contracts (16,287) (18,046) Operating leases (11,721) (23,582) Fixed assets (9,827) (8,483) Other (9,016) (2,515) Total deferred tax liabilities (208,687) (252,344) Valuation allowance (34,769) (31,974) Net deferred tax liability $ (124,605) $ (146,968) As of December 31, 2022, our federal, foreign and state net operating loss carryforwards for income tax purposes were approximately $31.1 million, $5.3 million and $38.3 million, respectively. Of our federal net operating loss carryforwards, $13.8 million are subject to expiration beginning in 2023 while the remainder have an unlimited carryforward period. The state net operating loss carryforwards are subject to various applicable state tax laws. If not utilized, the state net operating loss carryforwards will expire over various periods beginning in 2023. Of our foreign net operating loss carryforwards, $62 thousand expires in 2024 with the remainder having an unlimited carryforward period. Our federal tax credit carryforwards for income tax purposes were approximately $16.9 million. Our state tax credit carryforwards for income tax purposes were approximately $36.1 million, net of federal benefit. If not utilized, the federal tax credit carryforwards will begin to expire in 2039 and the state tax credit carryforwards will begin to expire in 2023. A portion of the foreign and state net operating loss carryforwards and state credit carryforwards have a valuation reserve due to management's uncertainty regarding the future ability to use such carryforwards. The Tax Cuts and Jobs Act requires taxpayers to capitalize and amortize research and experimental expenditures under Section 174 of the Internal Revenue Code for tax years beginning after December 31, 2021. Accordingly, our historic deferred tax liability attributable to capitalized software has become a deferred tax asset as a result of capitalization for tax purposes. The following table illustrates the change in our deferred tax asset valuation allowance: Years ended December 31, Balance Acquisition- Charges to Balance at 2022 $ 31,974 $ — $ 2,795 $ 34,769 2021 29,184 893 1,897 31,974 2020 6,453 — 22,731 29,184 The following table sets forth the change to our unrecognized tax benefit for the years ended December 31, 2022, 2021 and 2020: Years ended December 31, (dollars in thousands) 2022 2021 2020 Balance at beginning of year $ 3,651 $ 4,625 $ 4,346 Increases from prior period positions 89 6 414 Decreases in prior year positions (908) (57) (614) Increases from current period positions 629 1,751 491 Settlements (payments) — (1,192) — Lapse of statute of limitations (378) (1,482) (12) Balance at end of year $ 3,083 $ 3,651 $ 4,625 The total amount of unrecognized tax benefit that, if recognized, would favorably affect the effective tax rate was $3.1 million at December 31, 2022. Certain prior period amounts relating to our 2014 acquisitions were covered under indemnification agreements and, therefore, had a corresponding indemnification asset. Due to lapse of statute of limitations, the indemnified unrecognized tax benefit was released in 2022 resulting in income tax benefit with offsetting expense included in pretax income from corresponding release of indemnification asset. We recognize accrued interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense. The total amount of accrued interest and penalties included in the consolidated balance sheet as of December 31, 2022 and December 31, 2021 was insignificant. The total amount of interest and penalties included in the consolidated statements of comprehensive income as an increase or decrease in income tax expense for 2022, 2021 and 2020 was insignificant. We have taken federal and state tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits might decrease within the next twelve months. This possible decrease could result from the expiration of statutes of limitations. The reasonably possible decrease at December 31, 2022 was insignificant. For our undistributed earnings of foreign subsidiaries, which we do not consider to be significant, we concluded that these earnings would be permanently reinvested in the local jurisdictions and not repatriated to the United States. Accordingly, we have not provided for U.S. state income taxes and foreign withholding taxes on those undistributed earnings of our foreign subsidiaries. If some or all of such earnings were to be remitted, the amount of taxes payable would be insignificant. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 13. Stock-based Compensation Employee stock-based compensation plans Under the 2016 Equity and Incentive Compensation Plan Amended and Restated as of June 9, 2022 (the "2016 Equity Plan"), we may grant incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards and cash incentive awards to employees, directors and consultants. Our Compensation Committee of the Board of Directors administers this plan and the stock-based awards are granted under terms determined by it. The total number of authorized stock-based awards available under our plan was 2,875,892 as of December 31, 2022. We issue common stock from our pool of authorized stock upon exercise of stock options and stock appreciation rights, vesting of restricted stock units or upon granting of restricted stock. Recently, we have issued three types of awards under our plans: restricted stock awards, time-based restricted stock units, and performance-based restricted stock units. The following table sets forth the number of awards outstanding for each award type as of: Outstanding at December 31, Award type 2022 2021 Restricted stock awards 1,345,608 1,192,810 Time-based restricted stock units 455,708 336,199 Performance-based restricted stock units 1,104,260 943,071 Awards granted to our executive officers and certain members of management are subject to accelerated vesting upon a change in control as defined in the employees’ retention agreement. Expense recognition We recognize compensation expense associated with stock options and awards with performance or market based vesting conditions on an accelerated basis over the requisite service period of the individual grantees, which generally equals the vesting period. We recognize compensation expense associated with restricted stock awards and SARs on a straight-line basis over the requisite service period of the individual grantees, which generally equals the vesting period. We recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, we recognize the effect of forfeitures in compensation cost when they occur). Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Stock-based compensation expense is allocated to cost of revenue and operating expenses on the consolidated statements of comprehensive income based on where the associated employee’s compensation is recorded. The following table summarizes stock-based compensation expense: Years ended December 31, (in thousands) 2022 2021 2020 Included in cost of revenue: Cost of recurring $ 11,258 $ 12,405 $ 5,793 Cost of one-time services and other 3,178 7,547 7,581 Total included in cost of revenue 14,436 19,952 13,374 Included in operating expenses: Sales, marketing and customer success 21,409 20,283 15,514 Research and development 24,207 27,080 18,527 General and administrative 50,242 53,064 39,842 Total included in operating expenses 95,858 100,427 73,883 Total stock-based compensation expense $ 110,294 $ 120,379 $ 87,257 The total amount of compensation cost related to unvested awards not recognized was $93.0 million at December 31, 2022. It is expected that this amount will be recognized over a weighted average period of 1.3 years. Restricted stock awards We have granted shares of common stock subject to certain restrictions under the 2016 Equity Plan. Restricted stock awards granted to employees vest in equal annual installments generally over 3 years from the grant date subject to the recipient’s continued employment with us. Restricted stock awards granted to non-employee directors vest after one year from the date of grant or, if earlier, immediately prior to the next annual election of directors, provided the non-employee director is serving as a director at that time. The fair market value of the stock at the time of the grant is amortized on a straight-line basis to expense over the period of vesting. Recipients of restricted stock awards have the right to vote such shares and receive dividends, if declared. The following table summarizes our unvested restricted stock awards as of December 31, 2022, and changes during the year then ended: Restricted stock awards Restricted Weighted Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2022 1,192,810 $ 78.73 Granted 846,295 60.90 Forfeited (179,686) 69.29 Vested (513,811) 79.83 Unvested at December 31, 2022 1,345,608 68.09 $ 79,202 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. The total fair value of restricted stock awards that vested during the years ended December 31, 2022, 2021 and 2020 was $41.0 million, $38.5 million and $39.9 million, respectively. The weighted average grant-date fair value of restricted stock awards granted during the years ended December 31, 2021 and 2020 was $77.39 and $77.16, respectively. Restricted stock units We have also granted restricted stock units subject to certain restrictions under the 2016 Equity Plan. Restricted stock units granted to employees vest in equal annual installments generally over 3 years from the grant date subject to the recipient’s continued employment with us. We have also granted restricted stock units for which vesting is subject to meeting certain performance conditions. The fair market value of the stock at the time of the grant is amortized to expense on a straight-line basis over the period of vesting except for awards with performance conditions, which are amortized on an accelerated basis over the period of vesting. The following table summarizes our unvested, time-based restricted stock units as of December 31, 2022, and changes during the year then ended: Time-based restricted stock units Restricted Weighted Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2022 336,199 $ 77.99 Granted 287,198 62.38 Forfeited (48,343) 65.80 Vested (119,346) 77.59 Unvested at December 31, 2022 455,708 68.81 $ 26,823 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. The total fair value of time-based restricted stock units that vested during the years ended December 31, 2022, 2021 and 2020 was $9.3 million, $9.4 million and $1.7 million, respectively. The weighted average grant date fair value of time-based restricted stock units granted for the years ended December 31, 2021 and 2020 was $77.74 and $56.66, respectively. The following table summarizes our unvested, performance-based restricted stock units as of December 31, 2022, and changes during the year then ended: Performance-based restricted stock units Restricted Weighted Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2022 943,071 $ 73.62 Granted 977,377 61.79 Forfeited (114,071) 63.47 Vested (702,117) 71.93 Unvested at December 31, 2022 1,104,260 64.94 $ 64,997 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. The total fair value of performance-based restricted stock units that vested during the years ended December 31, 2022, 2021 and 2020 was $50.5 million, $44.9 million, and $17.2 million, respectively. The weighted average grant date fair value of performance-based restricted stock units granted for the years ended December 31, 2021 and 2020 was $71.91 and $60.21, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 14. Stockholders' Equity Preferred stock Our Board of Directors may fix the relative rights and preferences of each series of preferred stock in a resolution of the Board of Directors. Stock repurchase program Under our stock repurchase program, we are authorized to repurchase shares from time to time in accordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and in privately negotiated transactions. The timing and amount of repurchases depends on several factors, including market and business conditions, the trading price of our common stock and the nature of other investment opportunities. The repurchase program does not have an expiration date and may be limited, suspended or discontinued at any time without prior notice. Under the 2020 Credit Facility, we have restrictions on our ability to repurchase shares of our common stock, which are summarized on page 56 We account for purchases of treasury stock under the cost method. During the year ended December 31, 2022, we did not purchase any shares. In December 2021, our Board of Directors reauthorized and replenished our stock repurchase program that authorizes us to purchase up to $250.0 million of our outstanding shares of common stock. The remaining amount available to purchase stock under the stock repurchase program was $250.0 million as of December 31, 2022. Changes in accumulated other comprehensive loss by component The changes in accumulated other comprehensive loss by component, consisted of the following: Years ended December 31, (in thousands) 2022 2021 2020 Accumulated other comprehensive income (loss), beginning of period $ 6,522 $ (2,497) $ (5,290) By component: Gains and losses on cash flow hedges: Accumulated other comprehensive income (loss) balance, beginning of period $ 5,257 $ (3,101) $ (1,323) Other comprehensive (loss) income before reclassifications, net of tax effects of $(8,068), $(1,982) and $1,625 22,772 5,617 (4,602) Amounts reclassified from accumulated other comprehensive income (loss) (5,685) 3,714 3,827 Tax expense (benefit) included in provision for income taxes 1,489 (973) (1,003) Total amounts reclassified from accumulated other comprehensive income (loss) (4,196) 2,741 2,824 Net current-period other comprehensive income (loss) 18,576 8,358 (1,778) Accumulated other comprehensive income (loss) balance, end of period $ 23,833 $ 5,257 $ (3,101) Foreign currency translation adjustment: Accumulated other comprehensive income (loss) balance, beginning of period $ 1,265 $ 604 $ (3,967) Translation adjustment (16,160) 661 4,571 Accumulated other comprehensive (loss) income balance, end of period (14,895) 1,265 604 Accumulated other comprehensive income (loss), end of period $ 8,938 $ 6,522 $ (2,497) |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | 15. Defined Contribution Plan We have a defined contribution 401(k) plan (the "401K Plan") covering substantially all employees. Employees were able to contribute between 1% and 75% of their salaries in 2022, 2021 and 2020. We match 50% of qualified employees’ contributions up to 6% of their salary. The 401K Plan also provides for additional employer contributions to be made at our discretion. We suspended our 401(k) match program between April 1, 2020 and December 31, 2020 in response to COVID-19. Total matching contributions to the 401K Plan for the years ended December 31, 2022, 2021 and 2020 were $9.3 million, $6.5 million and $1.9 million, respectively. In December 2020, we made a discretionary matching contribution to eligible employees 401(k) plans totaling $1.2 million, given our financial performance during the fourth quarter. There were no discretionary contributions by us to the 401K Plan in 2022 and 2021. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 16. Segment Information Our chief operating decision maker is our chief executive officer ("CEO"). Our chief operating decision maker uses consolidated financial information to make operating decisions, assess financial performance and allocate resources. We have one operating segment and one reportable segment. The following table presents long-lived assets by geographic region based on the location of the assets. For purposes of this disclosure, long-lived assets includes property and equipment, net and operating lease ROU assets. Years ended (dollars in thousands) 2022 2021 United States $ 151,656 $ 163,241 Other countries 1,669 2,070 Total long-lived assets $ 153,325 $ 165,311 See Note 17 to these consolidated financial statements for information about our revenues by geographic region. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | 17. Revenue Recognition Transaction price allocated to the remaining performance obligations As of December 31, 2022, approximately $1.0 billion of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 60% of these remaining performance obligations over the next 12 months, with the remainder recognized thereafter. We applied the practical expedient in ASC 606-10-50-14 and have excluded the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less (one-time services); and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed (transactional revenue). We also applied the practical expedient in ASC 606-10-65-1-(f)(3), whereby the transaction price allocated to the remaining performance obligations, or an explanation of when we expect to recognize that amount as revenue for all reporting periods presented before the date of the initial application, is not disclosed. Contract balances Our contract assets as of December 31, 2022 and December 31, 2021 were insignificant. Our closing balances of deferred revenue were as follows: (in thousands) December 31, December 31, Total deferred revenue $ 385,236 $ 378,746 The increase in deferred revenue during 2022 was primarily due to new subscription sales of our cloud solutions and, to a lesser extent, progress in initiatives to bring our pricing in line with the market. The amount of revenue recognized during 2022 that was included in the deferred revenue balance at the beginning of the period was approximately $339 million . The amount of revenue recognized during 2022 from performance obligations satisfied in prior periods was insignificant . Disaggregation of revenue We sell our cloud solutions and related services in three primary geographical markets: to customers in the United States, to customers in the United Kingdom and to customers located in other countries. The following table presents our revenue by geographic area based on the address of our customers: Years ended (dollars in thousands) 2022 2021 2020 United States $ 896,116 $ 777,333 $ 772,188 United Kingdom 101,026 89,688 84,121 Other countries 60,963 60,719 56,910 Total revenue $ 1,058,105 $ 927,740 $ 913,219 During the third quarter of 2022, we reorganized our market groups. The Social Sector and Corporate Sector market groups comprised our go-to-market organizations as of December 31, 2022. The following is a description of each market group as of that date: • The Social Sector market group focuses on sales to customers and prospects in the social sector, such as nonprofits, foundations, education institutions, healthcare organizations and other not-for-profit entities globally, and includes JustGiving from Blackbaud; and • The Corporate Sector market group focuses on sales to customers and prospects in the corporate sector globally, and includes EVERFI from Blackbaud and YourCause from Blackbaud. The following table presents our revenue by market group: Years ended (dollars in thousands) 2022 2021 (1) 2020 (1) Social Sector $ 907,197 $ 889,755 $ 873,878 Corporate Sector 150,908 37,985 39,341 Total revenue $ 1,058,105 $ 927,740 $ 913,219 (1) Due to the market group changes discussed above, we have recast our revenue by market group for the years ended December 31, 2021 and 2020 to present them on a consistent basis with the current year. The following table presents our recurring revenue by type: Years ended (dollars in thousands) 2022 2021 2020 Contractual recurring $ 709,097 $ 601,397 $ 591,272 Transactional recurring 302,636 279,453 259,473 Total recurring revenue $ 1,011,733 $ 880,850 $ 850,745 |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the accounts of Blackbaud, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions, including those that impact revenue recognition, long-lived and intangible assets, income taxes, business combinations, stock-based compensation, capitalization of software development costs, our allowances for credit losses and sales returns, costs of obtaining contracts, valuation of derivative instruments, loss contingencies and insurance recoveries, among others. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could materially differ from these estimates. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") . This update provides for optional financial reporting alternatives to reduce cost and complexity 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 the London Interbank Offer Rate ("LIBOR") or other reference rates expected to be discontinued because of reference rate reform. The accommodations are available for all entities through December 31, 2022, with early adoption permitted. We adopted ASU 2020-04 prospectively as of July 1, 2022, and the adoption did not have a material impact on our consolidated financial statements. |
Revenue recognition | Revenue recognition Our revenue is primarily generated from the following sources: (i) charging for the use of our software solutions in cloud and hosted environments; (ii) providing payment and transaction services; (iii) providing software maintenance and support services; and (iv) providing professional services, including implementation, consulting, training, analytic and other services. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, we satisfy a performance obligation. Recurring Recurring revenue represents stand-ready performance obligations in which we are making our solutions or services available to our customers continuously over time or the value of the contract renews. Therefore, recurring revenue is generally recognized over time on a ratable basis over the contract term, beginning on the date that the solution or service is made available to the customer. Our recurring revenue contracts are generally for a term of 3 years at contract inception with 1 to 3-year renewals thereafter, billed annually in advance and non-cancelable. Recurring revenue is comprised of fees for the use of our subscription-based software solutions, which includes providing access to cloud solutions, hosting services, payment services, online training programs, and subscription-based analytic services, such as donor insight and data enrichment services. Recurring revenue also includes fees from maintenance services for our on-premises solutions, services included in our renewable subscription contracts, retained and managed services contracts that we expect to have a term consistent with our cloud solution contracts, and variable transaction revenue associated with the use of our solutions. Our payment services are offered with the assistance of third-party vendors. In general, when we are the principal in a transaction based on the factors identified in ASC 606-10-55-36 through 55-40, we record the revenue and related costs on a gross basis. Otherwise, we net the cost of revenue associated with the service against the gross revenue (amount withheld for the transaction fees) and record the net amount as revenue. For payment and transaction services, we have the right to invoice the customer in an amount that directly corresponds with the value to the customer of our performance to date. Therefore, we recognize revenue for these services over time based on the amount we withhold for the transaction fees in accordance with the 'as invoiced' practical expedient in ASC 606-10-55-18. One-time services and other One-time services and other revenue is primarily comprised of fees for one-time consulting, analytic and onsite training services and fees for retained and managed services contracts that we do not expect to have a term consistent with our cloud solution contracts. We generally bill consulting services based on hourly rates plus reimbursable travel-related expenses. Fixed price consulting engagements are generally billed as milestones towards completion are reached. Revenue for one-time consulting services is generally recognized over time as the services are performed. Fees for retained and managed services contracts are generally billed in advance and recognized over time on a ratable basis over the contract term, beginning on the date the service is made available to the customer. Contracts with multiple performance obligations Some of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis. Costs of obtaining contracts, contract assets and deferred revenue We pay sales commissions at the time contracts with customers are signed or shortly thereafter, depending on the size and duration of the sales contract. Sales commissions and related fringe benefits earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized in a manner that aligns with the expected period of benefit, which we have primarily determined to be 5 years. We determined the period of benefit by taking into consideration our customer contracts, including renewals, retention, our technology and other factors. We generally do not pay commissions for contract renewals that are commensurate with the commission paid on the initial contract. The related amortization expense is included in sales, marketing and customer success expense in our consolidated statements of comprehensive income. A contract asset is recorded when revenue is recognized in advance of our right to receive consideration (i.e., we must satisfy additional performance obligations in order to receive consideration). Amounts are recorded as receivables when our right to consideration is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Our contract assets are recorded within prepaid expenses and other current assets on our consolidated balance sheets. To the extent that our customers are billed for our solutions and services in advance of us satisfying the related performance obligations, we record such amounts in deferred revenue. |
Sales taxes | Sales taxes We present sales taxes and other taxes collected from customers and remitted to governmental authorities on a net basis and, as such, exclude them from revenues. |
Fair value measurements | Fair value measurements We measure certain financial assets and liabilities at fair value on a recurring basis, including derivative instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. An active market is defined as a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. We use a three-tier fair value hierarchy to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: • Level 1 - Quoted prices for identical assets or liabilities in active markets; • Level 2 - Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Our financial assets and liabilities are classified in their entirety within the hierarchy based on the lowest level of input that is significant to fair value measurement. Changes to a financial asset's or liability's level within the fair value hierarchy are determined as of the end of a reporting period. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized. |
Derivative instruments | Derivative instruments We generally use derivative instruments to manage interest rate and foreign currency exchange risk. We view derivative instruments as risk management tools and do not use them for trading or speculative purposes. Our policy requires that derivatives used for hedging purposes be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in the fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. |
Cash and cash equivalents | Cash and cash equivalents We consider all highly liquid investments purchased with an original maturity of three months or less and cash items in transit to be cash equivalents. |
Restricted cash due to customers; customer funds receivable; due to customers | Restricted cash due to customers; Customer funds receivable; Due to customers Restricted cash due to customers consists of monies collected by us (or in transit) and payable to our customers, net of the associated transaction fees earned. Monies associated with amounts due to customers are segregated in separate bank accounts and used exclusively for the payment of amounts due to customers. This usage restriction is either legally or internally imposed and reflects our intention with regard to such deposits. Customer funds receivable consists of monies we expect to collect and remit to our customers. |
Concentration of credit risk | Concentration of credit riskFinancial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents, restricted cash due to customers and accounts receivable. Our cash and cash equivalents and restricted cash due to customers are placed with high credit-quality financial institutions. Our accounts receivable is derived from sales to customers. With respect to accounts receivable, we perform ongoing evaluations of our customers and maintain an allowance for credit losses based on historical experience and our expectations of future credit losses. |
Property and equipment | Property and equipment We record property and equipment assets at cost and depreciate them over their estimated useful lives using the straight-line method. Leasehold improvements are depreciated over the lesser of the term of the lease or the estimated useful life of the asset. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to earnings. Repair and maintenance costs are expensed as incurred. |
Business combinations | Business combinations We include the operating results of acquired companies as well as the net assets acquired and liabilities assumed in our consolidated financial statements from the date of acquisition. We are required to allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. Goodwill as of the acquisition date represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired and liabilities assumed. |
Goodwill | Goodwill Goodwill represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed by us in a business combination. Goodwill is not amortized, but tested annually for impairment on the first day of our fourth quarter, or more frequently if indicators of potential impairment arise. Accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis to determine whether it is necessary to perform the quantitative impairment test. Significant judgment is required in the assessment of qualitative factors, including but not limited to an evaluation of macroeconomic conditions as they relate to our business, industry and market trends, as well as the overall future financial performance of identified reporting units and future opportunities in the markets in which we operate. |
Intangible assets | Intangible assets other than goodwill We amortize finite-lived intangible assets over their estimated useful lives as follows. Basis of amortization Amortization Customer relationships Straight-line and accelerated (1) 8-17 Marketing assets Straight-line and accelerated (1) 14-15 Developed technology Straight-line and accelerated (1) 3-14 Content Straight-line 9 (1) Certain of the customer relationships, marketing assets and developed technology assets are amortized on an accelerated basis. |
Impairment of long-lived assets | Impairment of long-lived assetsWe review long-lived assets for impairment when events change or circumstances indicate the carrying amount may not be recoverable. Events or changes in circumstances that indicate the carrying amount may not be recoverable include, but are not limited to, a significant decrease in the market value of the business or asset acquired, a significant adverse change in the extent or manner in which the business or asset acquired is used or significant adverse change in the business climate. If such events or changes in circumstances are present, the undiscounted cash flow method is used to determine whether the asset or asset group is impaired. |
Deferred financing costs | Deferred financing costs and debt discount Deferred financing costs included in other assets represent the direct third-party costs of entering into the revolving (line-of-credit) portion of our credit facility in October 2020 and portions of the unamortized deferred financing costs from prior facilities. These costs are amortized ratably over the term of the credit facility as interest expense. Other debt issuance costs, as well as the debt discount associated with our 2021 Incremental Term Loan (as defined below), 2020 Credit facility (as defined below) and portions of the unamortized balances from prior facilities, are recorded as a direct deduction from debt. These costs are amortized over the term of the credit facility as interest expense. |
Stock-based compensation | Stock-based compensation We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense over the requisite service period, which is the vesting period. We recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, we recognize the effect of forfeitures in compensation cost when they occur). Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Income tax benefits resulting from the vesting and exercise of stock-based compensation awards are recognized in the period the unit or award is vested or option or right is exercised. |
Income taxes | Income taxes We make estimates and judgments in accounting for income taxes. The calculation of the income tax provision requires estimates due to transactions, credits and calculations where the ultimate tax determination is uncertain. Uncertainties arise as a consequence of the actual source of taxable income between domestic and foreign locations, the outcome of tax audits and the ultimate utilization of tax credits. To the extent actual results differ from estimated amounts recorded, such differences will impact the income tax provision in the period in which the determination is made. We make estimates in determining tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. We record valuation allowances to reduce our deferred tax assets to the amount expected to be realized. In assessing the adequacy of a recorded valuation allowance significant judgment is required. We consider all positive and negative evidence and a variety of factors including the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and prudent and feasible tax planning strategies. If we determine there is less than a 50% likelihood that we will be able to use a deferred tax asset in the future in excess of its net carrying value, then an adjustment to the deferred tax asset valuation allowance is made to increase income tax expense, thereby reducing net income in the period such determination was made. We measure and recognize uncertain tax positions. To recognize such positions, we must first determine if it is more likely than not that the position will be sustained upon audit. We must then measure the benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. Significant judgment is required in the identification and measurement of uncertain tax positions. |
Foreign currency | Foreign currency Net assets recorded in a foreign currency are translated at the exchange rate on the balance sheet date. Revenue and expense items are translated using an average of monthly exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income. |
Research and development | Research and development Research and development costs are expensed as incurred except as noted below under Software and content development costs . These costs include compensation costs for engineering and product management personnel, third-party contractor expenses, software development tools and other expenses related to researching and developing new solutions or upgrading and enhancing existing solutions that do not qualify for capitalization, and allocated depreciation, facilities and IT support costs. |
Software development costs, software for internal use | Software and content development costs We incur certain costs associated with the development of internal-use software and content, which are primarily related to activities performed to develop our cloud solutions and the development of online education curriculum to be delivered on the Company's cloud platform. Internal and external costs incurred in the preliminary project stage of internal-use software development and content are expensed as incurred. Once the software or content being developed has reached the application development stage, qualifying internal costs including payroll and payroll-related costs of employees who are directly associated with and devote time to the software or content project as well as external direct costs of materials and services are capitalized. Capitalization ceases at the point at which the developed software or content is substantially complete and ready for its intended use, which is typically upon completion of all substantial testing. Qualifying costs capitalized during the application development stage include those related to specific upgrades and enhancements when it is probable that those costs incurred will result in additional functionality. Overhead costs, including general and administrative costs, as well as maintenance, training and all other costs associated with post-implementation stage activities are expensed as incurred. In addition, internal costs that cannot be reasonably separated between maintenance and relatively minor upgrades and enhancements are expensed as incurred. In certain circumstances, content development costs are considered deferred costs, when ownership of developed content belongs to the customer. |
Software development costs, software to be sold | Qualifying capitalized software and content development costs are amortized on a straight-line basis over the software asset's estimated useful life, which is generally 3 to 7 years. We evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. See Note 6 to these consolidated financial statements for a discussion of our impairment of certain capitalized software development costs during 2022 and 2020. |
Credit losses and sales returns | Allowance for credit losses Our accounts receivable consist of a single portfolio segment. Accounts receivable are recorded at original invoice amounts less an allowance for credit losses, an amount we estimate to be sufficient to provide adequate protection against lifetime expected losses resulting from extending credit to our customers. In judging the adequacy of the allowance for credit losses, we consider multiple factors including historical bad debt experience, the current aging of our receivables and current economic conditions that may affect our customers' ability to pay. A considerable amount of judgment is required in assessing these factors and if any receivables were to deteriorate, an additional provision for credit losses could be required. Accounts are written off after all means of collection are exhausted and recovery is considered remote. Provisions for credit losses are recorded in general and administrative expense. Below is a summary of the changes in our allowance for credit losses. Years ended December 31, Balance at Provision/ Write-off Recovery Balance at 2022 $ 9,375 $ 1,281 $ (5,162) $ 528 $ 6,022 2021 9,016 4,483 (4,565) 441 9,375 2020 4,011 6,787 (2,363) 581 9,016 Our allowance for credit losses decreased during the year ended December 31, 2022, primarily due to improvement in the aging of accounts receivable and write-offs during 2022 of aged receivables primarily generated during the COVID-19 pandemic. The amount of write-offs during the year ended December 31, 2021 was higher than during 2020 as we temporarily suspended sending past due customer accounts to collections during the second and third quarters of 2020 due to payment delays related to COVID-19. Allowance for sales returns We maintain a reserve for returns and credits which is estimated based on several factors including historical experience, known credits yet to be issued, the aging of customer accounts and the nature of service level commitments. A considerable amount of judgment is required in assessing these factors. Provisions for sales returns and credits are charged against the related revenue items. |
Advertising costs | Advertising costsWe expense advertising costs as incurred |
Restructuring costs | Restructuring costs Restructuring costs include charges for the costs of exit or disposal activities. The liability for costs associated with exit or disposal activities is measured initially at fair value and only recognized when the liability is incurred. |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets, accrued expense and other current liabilities, and operating lease liabilities, net of current portion in our consolidated balance sheet as of December 31, 2022 and 2021. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate in determining the present value of lease payments. Our incremental borrowing rate is based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any initial direct costs and lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments related to our operating leases is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. We do not recognize short-term leases (those that, at the commencement date, have a lease term of 12 months or less) on our consolidated balance sheets. Variable lease payments, which are primarily comprised of common-area maintenance, utilities and real estate taxes that are passed on from the lessor in proportion to the space leased by us, are recognized in operating expenses in the period in which the obligation for those payments is incurred. |
Contingencies | Loss contingencies We are subject to the possibility of various loss contingencies, including legal proceedings and claims, that arise in the normal course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described in Note 11 to these consolidated financial statements. We record an accrual for a loss contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Often these issues are subject to substantial uncertainties and, therefore, the probability of loss and the estimation of damages are difficult to ascertain. These assessments can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions that have been deemed reasonable by us. Although we believe we have substantial defenses in these matters, we could incur judgments or enter into settlements of claims that could have a material adverse effect on our consolidated financial position, results of operations or cash flows in any particular period. |
Earnings per share | (Loss) earnings per share We compute basic (loss) earnings per share by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted (loss) earnings per share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of common shares and dilutive potential common shares outstanding during the period. Diluted (loss) earnings per share reflect the assumed exercise, settlement and vesting of all dilutive securities using the “treasury stock method” except when the effect is anti-dilutive. Potentially dilutive securities consist of shares issuable upon the exercise of stock options and stock appreciation rights and vesting of restricted stock awards and units. |
Legal contingencies | Legal proceedings We are subject to legal proceedings and claims that arise in the ordinary course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described below. We record an accrual for a loss contingency when it is both probable that a material liability has been incurred and the amount of the loss can be reasonably estimated. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, we disclose such an estimate, if material. If such a loss or range of losses is not reasonably estimable, we disclose that fact. We review any such loss contingency accruals at least quarterly and adjust them to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. We recognize insurance recoveries, if any, when they are probable of receipt. All associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Finite-Lived Intangible Assets | We amortize finite-lived intangible assets over their estimated useful lives as follows. Basis of amortization Amortization Customer relationships Straight-line and accelerated (1) 8-17 Marketing assets Straight-line and accelerated (1) 14-15 Developed technology Straight-line and accelerated (1) 3-14 Content Straight-line 9 (1) Certain of the customer relationships, marketing assets and developed technology assets are amortized on an accelerated basis. |
Accounts Receivable, Allowance for Credit Loss | Below is a summary of the changes in our allowance for credit losses. Years ended December 31, Balance at Provision/ Write-off Recovery Balance at 2022 $ 9,375 $ 1,281 $ (5,162) $ 528 $ 6,022 2021 9,016 4,483 (4,565) 441 9,375 2020 4,011 6,787 (2,363) 581 9,016 Our allowance for credit losses decreased during the year ended December 31, 2022, primarily due to improvement in the aging of accounts receivable and write-offs during 2022 of aged receivables primarily generated during the COVID-19 pandemic. The amount of write-offs during the year ended December 31, 2021 was higher than during 2020 as we temporarily suspended sending past due customer accounts to collections during the second and third quarters of 2020 due to payment delays related to COVID-19. Allowance for sales returns We maintain a reserve for returns and credits which is estimated based on several factors including historical experience, known credits yet to be issued, the aging of customer accounts and the nature of service level commitments. A considerable amount of judgment is required in assessing these factors. Provisions for sales returns and credits are charged against the related revenue items. Below is a summary of the changes in our allowance for sales returns. Years ended December 31, Balance at Provision/ Deduction Balance at 2022 $ 1,780 $ 4,785 $ (5,269) $ 1,296 2021 1,276 6,967 (6,463) 1,780 2020 1,518 6,443 (6,685) 1,276 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in Goodwill | The change in goodwill during 2022 consisted of the following: (dollars in thousands) Total Balance at December 31, 2021 $ 1,058,640 Additions related to business combination (1) 3,610 Adjustments related to prior year business combination (2) (2,232) Adjustments related to dispositions (3) (2,501) Effect of foreign currency translation (7,245) Balance at December 31, 2022 $ 1,050,272 |
Fair Values Of Intangible Assets Acquired In Various Business Combinations By Class | The table below sets forth the balances of each class of intangible asset and related amortization as of: December 31, (dollars in thousands) 2022 2021 Finite-lived gross carrying amount Customer relationships $ 569,009 $ 606,409 Marketing assets 69,643 74,731 Developed technology 182,463 211,552 Content 17,900 17,900 Total finite-lived gross carrying amount 839,015 910,592 Accumulated amortization Customer relationships (146,948) (151,258) Marketing assets (8,371) (7,269) Developed technology (46,571) (54,013) Content (1,989) — Total accumulated amortization (203,879) (212,540) Intangible assets, net $ 635,136 $ 698,052 |
Summary of Amortization Expense | The following table summarizes amortization expense of our finite-lived intangible assets: Years ended December 31, (dollars in thousands) 2022 2021 2020 Included in cost of revenue: Cost of recurring $ 47,085 $ 33,132 $ 36,835 Cost of one-time services and other 1,407 1,680 2,133 Total included in cost of revenue 48,492 34,812 38,968 Included in operating expenses 2,925 2,227 2,915 Total amortization of intangibles from business combinations $ 51,417 $ 37,039 $ 41,883 |
Future Amortization Expense for Finite-Lived Intangible Assets | The following table outlines the estimated future amortization expense for each of the next five years for our finite-lived intangible assets as of December 31, 2022: Years ending December 31, Amortization 2023 55,426 2024 62,015 2025 65,552 2026 63,915 2027 59,755 Total $ 306,663 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted (loss) earnings per share: Years ended December 31, (dollars in thousands, except per share amounts) 2022 2021 2020 Numerator: Net (loss) income $ (45,407) $ 5,698 $ 7,717 Denominator: Weighted average common shares 51,569,148 47,412,306 48,184,714 Add effect of dilutive securities: Stock-based awards — 818,132 511,627 Weighted average common shares assuming dilution 51,569,148 48,230,438 48,696,341 (Loss) earnings per share: Basic $ (0.88) $ 0.12 $ 0.16 Diluted $ (0.88) $ 0.12 $ 0.16 Anti-dilutive shares excluded from calculations of diluted (loss) earnings per share 1,046,307 974,110 956,303 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities that are measured at fair value on a recurring basis consisted of the following, as of the dates indicated below: Fair value measurement using (dollars in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total Fair value as of December 31, 2022 Derivative instruments: Interest rate swaps $ — $ 31,870 $ — $ 31,870 Foreign currency forward contracts — 247 — 247 Total financial assets $ — $ 32,117 $ — $ 32,117 Fair value as of December 31, 2022 Derivative instruments: Foreign currency forward contracts $ — $ 323 $ — $ 323 Contingent consideration obligations — — 2,710 2,710 Total financial liabilities $ — $ 323 $ 2,710 $ 3,033 Fair value as of December 31, 2021 Derivative instruments: Interest rate swaps $ — $ 7,160 $ — $ 7,160 Total financial assets $ — $ 7,160 $ — $ 7,160 |
Property and Equipment and So_2
Property and Equipment and Software and Content Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of: Estimated December 31, (dollars in thousands) 2022 2021 Land — $ 9,548 $ 9,548 Building 39 61,284 61,284 Building improvements 7 - 20 10,874 10,874 Equipment 1 - 5 2,312 2,320 Computer hardware 1 - 5 47,886 47,768 Computer software 1 - 5 20,299 21,347 Construction in progress — 3,500 2,135 Furniture and fixtures 2 - 7 3,264 2,658 Leasehold improvements Lesser of lease term or estimated useful life 11,822 12,086 Total property and equipment 170,789 170,020 Less: accumulated depreciation (63,363) (58,592) Property and equipment, net $ 107,426 $ 111,428 |
Software and content development | |
Property, Plant and Equipment [Line Items] | |
Schedule of Property and Equipment | Software and content development costs consisted of the following as of: Estimated December 31, (dollars in thousands) 2022 2021 Software development costs 3 - 7 $ 250,551 $ 196,337 Content development costs 5 3,409 — Less: accumulated amortization (112,937) (74,960) Software and content development costs, net $ 141,023 $ 121,377 |
Consolidated Financial Statem_2
Consolidated Financial Statement Details (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Restricted Cash | Restricted cash (dollars in thousands) December 31, December 31, Restricted cash due to customers $ 700,611 $ 593,296 Letters of credit for operating leases — 2,186 Real estate escrow balances and other 1,629 1,134 Total restricted cash $ 702,240 $ 596,616 |
Components of Prepaid Expenses and Other Assets | Prepaid expenses and other assets (dollars in thousands) December 31, December 31, Costs of obtaining contracts (1)(2) $ 74,272 $ 78,465 Prepaid software maintenance and subscriptions (3) 34,766 28,880 Derivative instruments 32,117 7,160 Implementation costs for cloud computing arrangements, net (4)(5) 10,189 11,892 Unbilled accounts receivable 5,775 5,443 Prepaid insurance 4,902 5,363 Taxes, prepaid and receivable 1,855 3,986 Deferred tax assets 1,153 1,546 Receivables for probable insurance recoveries (6)(7) — 18,202 Other assets 10,929 11,835 Total prepaid expenses and other assets 175,958 172,772 Less: Long-term portion 94,304 77,266 Prepaid expenses and other current assets $ 81,654 $ 95,506 (1) Amortization expense from costs of obtaining contracts was $33.6 million, $35.5 million and $37.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, and is included in sales, marketing and customer success expense in our consolidated statements of comprehensive income. (2) The current portion of costs of obtaining contracts as of December 31, 2022 and 2021 was $29.1 million and $30.2 million, respectively. (3) The current portion of prepaid software maintenance and subscriptions as of December 31, 2022 and December 31, 2021 was $31.7 million and $24.7 million, respectively. (4) These costs primarily relate to the multi-year implementations of our new global enterprise resource planning and customer relationship management systems. (5) Amortization expense from capitalized cloud computing implementation costs was $2.2 million, $1.9 million and $0.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. Accumulated amortization for these costs was $5.2 million and $3.0 million as of December 31, 2022 and 2021, respectively. (6) All receivables for probable insurance recoveries were classified as current. (7) See discussion of the Security Incident at Note 11 to these consolidated financial statements. |
Components of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities (dollars in thousands) December 31, December 31, Accrued legal costs (1) $ 28,448 $ 11,724 Taxes payable (2) 16,667 19,777 Customer credit balances 8,257 8,403 Operating lease liabilities, current portion 7,723 9,170 Accrued commissions and salaries 6,944 7,872 Accrued transaction-based costs related to payments services 5,059 5,427 Contingent consideration liability (3) 2,710 — Accrued health care costs 2,467 3,042 Accrued vacation costs 2,156 2,234 Accrued bonuses 2,026 5,829 Unrecognized tax benefit 266 1,248 Amounts payable to former EVERFI option holders (4) — 17,404 Other liabilities 7,573 9,310 Total accrued expenses and other liabilities 90,296 101,440 Less: Long-term portion 4,294 1,344 Accrued expenses and other current liabilities $ 86,002 $ 100,096 (1) All accrued legal costs are classified as current. (2) We deferred payments of the employer's portion of Social Security taxes during 2020 under the Coronavirus, Aid, Relief and Economic Security Act ("CARES Act"), half of which was due by the end of calendar year 2021 with the remainder due by the end of calendar year 2022. (3) See discussion of our acquisition of Kilter at Note 3 to these consolidated financial statements. (4) Represents amounts that had not been paid by EVERFI to its former option holders as of December 31, 2021, solely due to the timing of the acquisition on the last day of 2021. See Note 3 to these consolidated financial statements for additional information regarding our acquisition of EVERFI. |
Components of Other Income (Expense) | Other income, net Years ended December 31, (dollars in thousands) 2022 2021 2020 Interest income $ 1,746 $ 392 $ 1,660 Currency revaluation gains (losses) 4,635 (1,644) (1,065) Other income, net 2,332 1,432 1,063 Other income, net $ 8,713 $ 180 $ 1,658 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following table summarizes our debt balances and the related weighted average effective interest rates, which includes the effect of interest rate swap agreements. Debt balance at Weighted average (dollars in thousands) December 31, December 31, December 31, December 31, Credit facility: Revolving credit loans $ 177,800 $ 260,000 5.18 % 3.27 % Term loans 623,750 640,000 4.26 % 3.02 % Real estate loans 58,189 59,480 5.22 % 5.22 % Other debt 2,247 1,694 7.38 % 5.00 % Total debt 861,986 961,174 4.52 % 3.23 % Less: Unamortized discount and debt issuance costs 2,943 4,994 Less: Debt, current portion 18,802 18,697 6.45 % 3.11 % Debt, net of current portion $ 840,241 $ 937,483 4.48 % 3.23 % |
Schedule of Currently Effective Financing Agreements | The following table summarizes our currently effective financing agreements as of December 31, 2022: (dollars in thousands) Term Number of First Annual Original Loan Effective dates of agreements: December 2019 51 4 January 2020 $ 2,150 December 2022 39 3 January 2023 1,710 |
Annual Maturities Related to Credit Facility, Real Estate Loans and Other Debt | As of December 31, 2022, the required annual maturities related to the 2020 Credit Facility, the Real Estate Loans and our other debt were as follows: Years ending December 31, Annual 2023 $ 18,802 2024 18,429 2025 771,403 2026 1,969 2027 2,166 Thereafter 49,217 Total required maturities $ 861,986 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Values of Derivative Instruments | Asset derivatives Liability Derivatives (dollars in thousands) Balance sheet location December 31, December 31, Balance sheet location December 31, December 31, Derivative instruments designated as hedging instruments: Foreign currency forward contracts, current portion Prepaid expenses $ 247 $ — Accrued expenses $ 323 $ — Interest rate swaps, long-term Other assets 31,870 7,160 Other liabilities — — Total derivative instruments designated as hedging instruments $ 32,117 $ 7,160 $ 323 $ — |
Effects of Derivative Instruments in Cash Flow Hedging Relationships | The effects of derivative instruments in cash flow hedging relationships were as follows: Gain (loss) recognized in accumulated other comprehensive income as of Location of gain (loss) reclassified from accumulated other comprehensive income into (loss) income Gain (loss) reclassified from accumulated other comprehensive income into (loss) income (dollars in thousands) December 31, Year ended Cash Flow Hedges Interest rate swaps $ 31,870 Interest expense $ 5,520 Foreign currency forward contracts $ 247 Revenue $ 165 Net Investment Hedge Foreign currency forward contracts $ (323) $ — December 31, Year ended Cash Flow Hedges Interest rate swaps $ 7,160 Interest expense $ (3,714) December 31, Year ended Interest rate swaps $ (4,159) Interest expense $ (3,827) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of Lease Expense | The following table summarizes the components of our lease expense: Year ended (dollars in thousands) 2022 2021 2020 Operating lease cost (1) $ 9,501 $ 9,636 $ 41,210 Variable lease cost 1,670 2,478 4,266 Sublease income (2,763) (1,516) (3,120) Net lease cost $ 8,408 $ 10,598 $ 42,356 (1) Includes short-term lease costs, which were immaterial. |
Schedule of Maturities of Operating Lease Liabilities | Maturities of our operating lease liabilities as of December 31, 2022 were as follows: Years ending December 31, Operating leases 2023 $ 9,978 2024 7,699 2025 6,659 2026 6,104 2027 6,207 Thereafter 26,790 Total lease payments 63,437 Less: Amount representing interest 10,796 Present value of future payments $ 52,641 |
Schedule Of Supplemental Balance Sheet Information Related To Leases | Our ROU assets and lease liabilities are included in the following line items in our consolidated balance sheet: (dollars in thousands) December 31, December 31, Operating leases Operating lease ROU assets $ 45,899 $ 53,883 Accrued expenses and other current liabilities $ 7,723 $ 9,170 Operating lease liabilities, net of current portion 44,918 53,386 Total operating lease liabilities $ 52,641 $ 62,556 The weighted average remaining lease terms and discount rates were as follows: (dollars in thousands) December 31, December 31, December 31, Operating leases Weighted average remaining lease term (years) 8.5 8.9 4.6 Weighted average discount rate 4.63 % 4.68 % 5.70 % |
Schedule Of Supplemental Cash Flow Information Related To Leases | Supplemental cash flow information related to leases was as follows: Year ended (dollars in thousands) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1) $ 11,439 $ 11,338 $ 26,713 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases — 5,358 11,002 (1) The 2020 amount was revised to correct an immaterial disclosure error in the previously filed consolidated financial statements. |
Schedule of Security Incident Expense and Probable Insurance Recoveries | We recorded expenses and offsetting probable insurance recoveries related to the Security Incident as follows: Years ended December 31, (dollars in thousands) 2022 2021 2020 Gross expense $ 57,614 $ 40,561 $ 9,830 Offsetting probable insurance recoveries (1,891) (38,745) (9,364) Net expense $ 55,723 $ 1,816 $ 466 The following summarizes our cumulative expenses, insurance recoveries recognized and insurance recoveries paid as of: (dollars in thousands) December 31, December 31, December 31, 2020 Cumulative gross expense $ 108,005 $ 50,391 $ 9,830 Cumulative offsetting insurance recoveries recognized (50,000) (48,109) (9,364) Cumulative net expense $ 58,005 $ 2,282 $ 466 Cumulative offsetting insurance recoveries paid $ (50,000) $ (29,968) $ (3,075) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The following summarizes the components of income tax expense (benefit): Years ended December 31, (dollars in thousands) 2022 2021 2020 Current taxes: U.S. Federal $ 3,485 $ (2,499) $ (407) U.S. State and local 5,708 (257) 1,563 International 7,283 6,570 3,904 Total current taxes 16,476 3,814 5,060 Deferred taxes: U.S. Federal (16,880) (4,615) (1,064) U.S. State and local (9,319) 222 7,725 International (445) 1,964 2,176 Total deferred taxes (26,644) (2,429) 8,837 Total income tax (benefit) provision $ (10,168) $ 1,385 $ 13,897 |
Schedule of Income Before Provision for Income Taxes | The following summarizes the components of income before provision for income taxes: Years ended December 31, (dollars in thousands) 2022 2021 2020 U.S. $ (91,493) $ (23,180) $ (4,112) International 35,918 30,263 25,726 Income before provision for income taxes $ (55,575) $ 7,083 $ 21,614 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation between the effect of applying the federal statutory rate and the effective income tax rate used to calculate our income tax provision (benefit) is as follows: Years ended December 31, 2022 2021 2020 Federal statutory rate 21.0 % 21.0 % 21.0 % Effect of: State income taxes, net of federal benefit 1.5 4.4 5.9 Change in foreign income tax rate applied to deferred tax balances 0.1 42.6 4.0 Change in state income tax rate applied to deferred tax balances 1.8 2.3 0.1 Nondeductible security incident-related fines or penalties (8.7) — — Section 162(m) limitation (6.4) 75.0 17.5 Stock-based compensation (6.3) (36.2) (1.2) Change in valuation reserve (primarily state credit reserves) (5.4) 26.1 38.2 GILTI inclusion (2.6) — 1.3 Nondeductible meals, entertainment and transportation (0.7) 1.1 3.3 Acquisition costs — 8.7 — DTA Adjustment – NOLs — — (3.3) Unrecognized tax benefit 0.5 (32.7) 1.3 Foreign tax rate 1.0 (6.0) (1.7) Return to accrual adjustment 1.4 (4.2) (4.1) FDII benefit 2.3 — — State credits, net of federal benefit 7.2 (32.6) (2.3) Federal credits generated 11.5 (54.5) (17.4) Other 0.1 4.6 1.7 Income tax provision effective rate 18.3 % 19.6 % 64.3 % |
Schedule of Deferred Tax Assets and Liabilities | The significant components of our deferred tax assets and liabilities were as follows: December 31, (dollars in thousands) 2022 2021 Deferred tax assets relating to: Federal and state and foreign net operating loss carryforwards $ 10,369 $ 21,456 Federal, state and foreign tax credits 50,194 52,283 Stock-based compensation 21,166 21,432 Operating leases 14,024 23,795 Allowance for credit losses 1,803 2,524 Intangible assets 561 1,070 Deferred revenue 1,820 1,057 Accrued bonuses 455 218 Capitalized R&D and software costs 12,166 — Other 6,293 13,515 Total deferred tax assets 118,851 137,350 Deferred tax liabilities relating to: Intangible assets (161,836) (168,392) Capitalized software and content development costs — (31,326) Costs of obtaining contracts (16,287) (18,046) Operating leases (11,721) (23,582) Fixed assets (9,827) (8,483) Other (9,016) (2,515) Total deferred tax liabilities (208,687) (252,344) Valuation allowance (34,769) (31,974) Net deferred tax liability $ (124,605) $ (146,968) |
Summary of Changes in Deferred Tax Asset Valuation Allowance | The following table illustrates the change in our deferred tax asset valuation allowance: Years ended December 31, Balance Acquisition- Charges to Balance at 2022 $ 31,974 $ — $ 2,795 $ 34,769 2021 29,184 893 1,897 31,974 2020 6,453 — 22,731 29,184 |
Summary of Changes in Unrecognized Tax Benefits | The following table sets forth the change to our unrecognized tax benefit for the years ended December 31, 2022, 2021 and 2020: Years ended December 31, (dollars in thousands) 2022 2021 2020 Balance at beginning of year $ 3,651 $ 4,625 $ 4,346 Increases from prior period positions 89 6 414 Decreases in prior year positions (908) (57) (614) Increases from current period positions 629 1,751 491 Settlements (payments) — (1,192) — Lapse of statute of limitations (378) (1,482) (12) Balance at end of year $ 3,083 $ 3,651 $ 4,625 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Awards Outstanding by Each Award Type | The following table sets forth the number of awards outstanding for each award type as of: Outstanding at December 31, Award type 2022 2021 Restricted stock awards 1,345,608 1,192,810 Time-based restricted stock units 455,708 336,199 Performance-based restricted stock units 1,104,260 943,071 |
Summary of Stock-Based Compensation Expense | The following table summarizes stock-based compensation expense: Years ended December 31, (in thousands) 2022 2021 2020 Included in cost of revenue: Cost of recurring $ 11,258 $ 12,405 $ 5,793 Cost of one-time services and other 3,178 7,547 7,581 Total included in cost of revenue 14,436 19,952 13,374 Included in operating expenses: Sales, marketing and customer success 21,409 20,283 15,514 Research and development 24,207 27,080 18,527 General and administrative 50,242 53,064 39,842 Total included in operating expenses 95,858 100,427 73,883 Total stock-based compensation expense $ 110,294 $ 120,379 $ 87,257 |
Summary of Unvested Restricted Stock Awards, Activity | The following table summarizes our unvested restricted stock awards as of December 31, 2022, and changes during the year then ended: Restricted stock awards Restricted Weighted Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2022 1,192,810 $ 78.73 Granted 846,295 60.90 Forfeited (179,686) 69.29 Vested (513,811) 79.83 Unvested at December 31, 2022 1,345,608 68.09 $ 79,202 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. |
Summary of Unvested Restricted Stock Units, Activity | The following table summarizes our unvested, time-based restricted stock units as of December 31, 2022, and changes during the year then ended: Time-based restricted stock units Restricted Weighted Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2022 336,199 $ 77.99 Granted 287,198 62.38 Forfeited (48,343) 65.80 Vested (119,346) 77.59 Unvested at December 31, 2022 455,708 68.81 $ 26,823 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. The following table summarizes our unvested, performance-based restricted stock units as of December 31, 2022, and changes during the year then ended: Performance-based restricted stock units Restricted Weighted Aggregate intrinsic value (1) (in thousands) Unvested at January 1, 2022 943,071 $ 73.62 Granted 977,377 61.79 Forfeited (114,071) 63.47 Vested (702,117) 71.93 Unvested at December 31, 2022 1,104,260 64.94 $ 64,997 (1) The intrinsic value is calculated as the market value as of the end of the fiscal period. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | The changes in accumulated other comprehensive loss by component, consisted of the following: Years ended December 31, (in thousands) 2022 2021 2020 Accumulated other comprehensive income (loss), beginning of period $ 6,522 $ (2,497) $ (5,290) By component: Gains and losses on cash flow hedges: Accumulated other comprehensive income (loss) balance, beginning of period $ 5,257 $ (3,101) $ (1,323) Other comprehensive (loss) income before reclassifications, net of tax effects of $(8,068), $(1,982) and $1,625 22,772 5,617 (4,602) Amounts reclassified from accumulated other comprehensive income (loss) (5,685) 3,714 3,827 Tax expense (benefit) included in provision for income taxes 1,489 (973) (1,003) Total amounts reclassified from accumulated other comprehensive income (loss) (4,196) 2,741 2,824 Net current-period other comprehensive income (loss) 18,576 8,358 (1,778) Accumulated other comprehensive income (loss) balance, end of period $ 23,833 $ 5,257 $ (3,101) Foreign currency translation adjustment: Accumulated other comprehensive income (loss) balance, beginning of period $ 1,265 $ 604 $ (3,967) Translation adjustment (16,160) 661 4,571 Accumulated other comprehensive (loss) income balance, end of period (14,895) 1,265 604 Accumulated other comprehensive income (loss), end of period $ 8,938 $ 6,522 $ (2,497) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Long-Lived Assets By Geographic Region | The following table presents long-lived assets by geographic region based on the location of the assets. For purposes of this disclosure, long-lived assets includes property and equipment, net and operating lease ROU assets. Years ended (dollars in thousands) 2022 2021 United States $ 151,656 $ 163,241 Other countries 1,669 2,070 Total long-lived assets $ 153,325 $ 165,311 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contract Balances | Our closing balances of deferred revenue were as follows: (in thousands) December 31, December 31, Total deferred revenue $ 385,236 $ 378,746 |
Disaggregation of Revenue | The following table presents our revenue by geographic area based on the address of our customers: Years ended (dollars in thousands) 2022 2021 2020 United States $ 896,116 $ 777,333 $ 772,188 United Kingdom 101,026 89,688 84,121 Other countries 60,963 60,719 56,910 Total revenue $ 1,058,105 $ 927,740 $ 913,219 The following table presents our revenue by market group: Years ended (dollars in thousands) 2022 2021 (1) 2020 (1) Social Sector $ 907,197 $ 889,755 $ 873,878 Corporate Sector 150,908 37,985 39,341 Total revenue $ 1,058,105 $ 927,740 $ 913,219 |
Disaggregation Of Revenue, Recurring | The following table presents our recurring revenue by type: Years ended (dollars in thousands) 2022 2021 2020 Contractual recurring $ 709,097 $ 601,397 $ 591,272 Transactional recurring 302,636 279,453 259,473 Total recurring revenue $ 1,011,733 $ 880,850 $ 850,745 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basis of Presentation [Line Items] | |||
Contract term of recurring revenue contracts at contract inception (years) | 3 years | ||
Capitalized interest applicable to construction-in-progress | $ 0 | $ 0 | $ 0 |
Impairment of goodwill | 0 | 0 | 0 |
Impairment charges against certain finite-lived intangible assets | 2,000 | 0 | 0 |
Currency revaluations gains (losses) | 4,635 | (1,644) | (1,065) |
Impairment of capitalized software dev costs | 0 | ||
Advertising costs | $ 16,500 | $ 7,100 | $ 3,000 |
Minimum [Member] | |||
Basis of Presentation [Line Items] | |||
Contract term of recurring revenue contracts at renewal (years) | 1 year | ||
Maximum [Member] | |||
Basis of Presentation [Line Items] | |||
Contract term of recurring revenue contracts at renewal (years) | 3 years | ||
Expected period of benefit | 5 years | ||
Software and content development | Minimum [Member] | |||
Basis of Presentation [Line Items] | |||
Estimated useful life (years) | 3 years | ||
Software and content development | Maximum [Member] | |||
Basis of Presentation [Line Items] | |||
Estimated useful life (years) | 7 years |
Basis of Presentation (Finite-L
Basis of Presentation (Finite-Lived Intangible Assets by Major Class) (Details) | 12 Months Ended | |
Dec. 31, 2022 | ||
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line and accelerated(1) | [1] |
Customer relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 8 years | |
Customer relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 17 years | |
Marketing assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line and accelerated(1) | [1] |
Marketing assets [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 14 years | |
Marketing assets [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 15 years | |
Acquired software and technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line and accelerated(1) | [1] |
Acquired software and technology [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 3 years | |
Acquired software and technology [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 14 years | |
Content [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, amortization method | Straight-line | |
Content [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, useful life | 9 years | |
[1]Certain of the customer relationships, marketing assets and developed technology assets are amortized on an accelerated basis. |
Basis of Presentation (Changes
Basis of Presentation (Changes in Allowance for Sales Returns and Doubtful Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for credit losses [Member] | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | $ 9,375 | $ 9,016 | $ 4,011 |
Provision/adjustment | 1,281 | 4,483 | 6,787 |
Write-off | 5,162 | 4,565 | 2,363 |
Recovery | 528 | 441 | 581 |
Balance at end of year | 6,022 | 9,375 | 9,016 |
Allowance for sales returns [Member] | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of year | 1,780 | 1,276 | 1,518 |
Provision/adjustment | 4,785 | 6,967 | 6,443 |
Write-off | 5,269 | 6,463 | 6,685 |
Balance at end of year | $ 1,296 | $ 1,780 | $ 1,276 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Sep. 09, 2022 | Aug. 19, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Business Acquisition [Line Items] | |||||||
Cash received in sale of business | $ 6,400 | $ 6,426 | $ 0 | $ 0 | |||
Impairment charges against certain finite-lived intangible assets | 2,000 | 0 | $ 0 | ||||
Contingent consideration obligations | [1] | $ 0 | $ 2,710 | 0 | |||
Contingent consideration, liability, noncurrent | $ 2,700 | ||||||
Kilter [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Total cash consideration paid for the acquisition | 2,900 | ||||||
Contingent consideration obligations | $ 3,000 | ||||||
EVERFI [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Total cash consideration paid for the acquisition | $ 441,800 | ||||||
Shares of company's common stock, shares | 3,810,888 | ||||||
Shares of company's common stock, value assigned | $ 301,000 | $ 301,000 | |||||
Aggregate purchase price | $ 742,800 | ||||||
[1]See discussion of our acquisition of Kilter at Note 3 to these consolidated financial statements. |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment charges against certain finite-lived intangible assets | $ 2 | $ 0 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Change in Goodwill) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) | ||
Goodwill [Line Items] | ||
Balance at December 31, 2021 | $ 1,058,640 | |
Adjustments related to dispositions | (2,501) | [1] |
Effect of foreign currency translation | (7,245) | |
Balance at December 31, 2022 | 1,050,272 | |
Kilter [Member] | ||
Goodwill [Line Items] | ||
Additions related to business combination | 3,610 | [2] |
EVERFI [Member] | ||
Goodwill [Line Items] | ||
Adjustments related to prior year business combination | $ (2,232) | [3] |
[1]See Note 3 to these consolidated financial statements for a summary of our disposition of Blackbaud FIMS and DonorCentral NXT.[2]See Note 3 to these consolidated financial statements for a discussion of our acquisition of Kilter.[3]See Note 3 to these consolidated financial statements for a discussion of the measurement period adjustments during the year ended December 31, 2022 to the estimated fair value of the EVERFI assets acquired and liabilities assumed. |
Goodwill And Other Intangible_5
Goodwill And Other Intangible Assets (Fair Values Of Intangible Assets Acquired In Various Business Combinations By Class) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | $ 839,015 | $ 910,592 |
Finite-lived intangible assets, accumulated amortization | (203,879) | (212,540) |
Intangible assets, net (excluding goodwill) | 635,136 | 698,052 |
Customer relationships [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 569,009 | 606,409 |
Finite-lived intangible assets, accumulated amortization | (146,948) | (151,258) |
Marketing assets [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 69,643 | 74,731 |
Finite-lived intangible assets, accumulated amortization | (8,371) | (7,269) |
Developed technology [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 182,463 | 211,552 |
Finite-lived intangible assets, accumulated amortization | (46,571) | (54,013) |
Content [Member] | ||
Schedule of Acquired Intangible Assets by Major Class [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 17,900 | 17,900 |
Finite-lived intangible assets, accumulated amortization | $ (1,989) | $ 0 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets (Summary of Amortization Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | $ 51,417 | $ 37,039 | $ 41,883 |
Cost of recurring [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | 47,085 | 33,132 | 36,835 |
Cost of one-time services and other [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | 1,407 | 1,680 | 2,133 |
Total included in cost of revenue [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | 48,492 | 34,812 | 38,968 |
Included in operating expenses [Member] | |||
Amortization of Intangible Assets Acquired by Income Statement Location [Line Items] | |||
Amortization | $ 2,925 | $ 2,227 | $ 2,915 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets (Future Amortization Expense for Finite-Lived Intangible Assets) (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Future amortization expense for finite-lived intangible assets: | |
2023 | $ 55,426 |
2024 | 62,015 |
2025 | 65,552 |
2026 | 63,915 |
2027 | 59,755 |
Total | $ 306,663 |
Earnings Per Share (Computation
Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net (loss) income | $ (45,407) | $ 5,698 | $ 7,717 |
Weighted average common shares | 51,569,148 | 47,412,306 | 48,184,714 |
Stock-based awards | 0 | 818,132 | 511,627 |
Weighted average common shares assuming dilution | 51,569,148 | 48,230,438 | 48,696,341 |
Basic earnings per share | $ (0.88) | $ 0.12 | $ 0.16 |
Diluted earnings per share | $ (0.88) | $ 0.12 | $ 0.16 |
Shares excluded from calculations of diluted earnings per share | 1,046,307 | 974,110 | 956,303 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |||
Capitalized software development costs, impairments | $ 2.3 | $ 4.3 | |
Impairment charges against certain finite-lived intangible assets | 2 | $ 0 | 0 |
Operating lease right-of-use assets, impairments | $ 1 | 3.6 | $ 4 |
Impairment charges against certain property and equipment assets | $ 1.7 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration obligations | [1] | $ 2,710 | $ 0 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | ||
Fair value measurements, recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | $ 31,870 | 7,160 | |
Foreign currency forward contracts | 247 | ||
Total financial assets | 32,117 | 7,160 | |
Foreign currency forward contracts | 323 | ||
Contingent consideration obligations | 2,710 | ||
Total financial liabilities | 3,033 | ||
Fair value measurements, recurring [Member] | Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | 0 | 0 | |
Foreign currency forward contracts | 0 | ||
Total financial assets | 0 | 0 | |
Foreign currency forward contracts | 0 | ||
Contingent consideration obligations | 0 | ||
Total financial liabilities | 0 | ||
Fair value measurements, recurring [Member] | Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | 31,870 | 7,160 | |
Foreign currency forward contracts | 247 | ||
Total financial assets | 32,117 | 7,160 | |
Foreign currency forward contracts | 323 | ||
Contingent consideration obligations | 0 | ||
Total financial liabilities | 323 | ||
Fair value measurements, recurring [Member] | Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate swaps | 0 | 0 | |
Foreign currency forward contracts | 0 | ||
Total financial assets | 0 | $ 0 | |
Foreign currency forward contracts | 0 | ||
Contingent consideration obligations | 2,710 | ||
Total financial liabilities | $ 2,710 | ||
[1]See discussion of our acquisition of Kilter at Note 3 to these consolidated financial statements. |
Property and Equipment and So_3
Property and Equipment and Software and Content Development Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 14.1 | $ 14.4 | $ 19.2 |
Impairment charges against certain property and equipment assets | 1.7 | ||
Capitalized software development costs, impairments | 2.3 | 4.3 | |
Software and content development costs, amortization | $ 36.8 | $ 31 | $ 31.7 |
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | General and administrative |
Property and Equipment and So_4
Property and Equipment and Software and Content Development Costs (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 170,789 | $ 170,020 |
Less: accumulated depreciation | (63,363) | (58,592) |
Property and equipment, net | 107,426 | 111,428 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,548 | 9,548 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 61,284 | 61,284 |
Property and equipment, estimated useful life (years) | 39 years | |
Building improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 10,874 | 10,874 |
Building improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 7 years | |
Building improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 20 years | |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,312 | 2,320 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 1 year | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 5 years | |
Computer hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 47,886 | 47,768 |
Computer hardware [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 1 year | |
Computer hardware [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 5 years | |
Computer software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 20,299 | 21,347 |
Computer software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 1 year | |
Computer software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 5 years | |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,500 | 2,135 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,264 | 2,658 |
Furniture and fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 2 years | |
Furniture and fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life (years) | 7 years | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 11,822 | $ 12,086 |
Property and Equipment and So_5
Property and Equipment and Software and Content Development Costs (Schedule of Software Development Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Software development costs | $ 250,551 | $ 196,337 |
Content development costs | 3,409 | 0 |
Less: accumulated amortization | (112,937) | (74,960) |
Software and content development costs, net | $ 141,023 | $ 121,377 |
Software development [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (years) | 3 years | |
Software development [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (years) | 7 years | |
Content [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life (years) | 5 years |
Consolidated Financial Statem_3
Consolidated Financial Statement Details (Components of Restricted Cash) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Restricted cash due to customers | $ 700,611 | $ 593,296 |
Real estate escrow balances and other | 1,629 | 1,134 |
Total restricted cash | 702,240 | 596,616 |
Restricted cash, letters of credit for operating leases | $ 0 | $ 2,186 |
Consolidated Financial Statem_4
Consolidated Financial Statement Details (Components of Prepaid Expenses and Other Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Costs of obtaining contracts | [1],[2] | $ 74,272 | $ 78,465 | |
Prepaid software maintenance and subscriptions | [3] | 34,766 | 28,880 | |
Derivative instruments | 32,117 | 7,160 | ||
Implementation costs for cloud computing arrangements | [4],[5] | 10,189 | 11,892 | |
Unbilled accounts receivable | 5,775 | 5,443 | ||
Prepaid insurance | 4,902 | 5,363 | ||
Taxes, prepaid and receivable | 1,855 | 3,986 | ||
Deferred tax assets | 1,153 | 1,546 | ||
Receivables for probable insurance recoveries | [6],[7] | 0 | 18,202 | |
Other assets | 10,929 | 11,835 | ||
Total prepaid expenses and other assets | 175,958 | 172,772 | ||
Less: Long-term portion | 94,304 | 77,266 | ||
Prepaid expenses and other current assets | 81,654 | 95,506 | ||
Amortization expense from costs of obtaining contracts | 33,600 | 35,500 | $ 37,400 | |
Cost of obtaining contracts, current portion | 29,100 | 30,200 | ||
Prepaid software maintenance and subscriptions, current portion | 31,700 | 24,700 | ||
Implementation costs for cloud computing arrangements, amortization | 2,200 | 1,900 | $ 800 | |
Implementation costs for cloud computing arrangements, accumulated amortization | $ 5,200 | $ 3,000 | ||
[1]Amortization expense from costs of obtaining contracts was $33.6 million, $35.5 million and $37.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, and is included in sales, marketing and customer success expense in our consolidated statements of comprehensive income.[2]The current portion of costs of obtaining contracts as of December 31, 2022 and 2021 was $29.1 million and $30.2 million, respectively.[3]The current portion of prepaid software maintenance and subscriptions as of December 31, 2022 and December 31, 2021 was $31.7 million and $24.7 million, respectively.[4]Amortization expense from capitalized cloud computing implementation costs was $2.2 million, $1.9 million and $0.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. Accumulated amortization for these costs was $5.2 million and $3.0 million as of December 31, 2022 and 2021, respectively.[5]These costs primarily relate to the multi-year implementations of our new global enterprise resource planning and customer relationship management systems.[6]All receivables for probable insurance recoveries were classified as current.[7]See discussion of the Security Incident at Note 11 to these consolidated financial statements. |
Consolidated Financial Statem_5
Consolidated Financial Statement Details (Components of Accrued Expenses and Other Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Accrued legal costs | [1] | $ 28,448 | $ 11,724 | |
Taxes payable | [2] | 16,667 | 19,777 | |
Customer credit balances | 8,257 | 8,403 | ||
Operating lease liabilities, current portion | 7,723 | 9,170 | ||
Accrued commissions and salaries | 6,944 | 7,872 | ||
Accrued transaction-based costs related to payments services | 5,059 | 5,427 | ||
Contingent consideration obligations | [3] | 2,710 | 0 | |
Accrued health care costs | 2,467 | 3,042 | ||
Accrued vacation costs | 2,156 | 2,234 | ||
Accrued bonuses | 2,026 | 5,829 | ||
Unrecognized tax benefit | 266 | 1,248 | ||
Amounts payable to former EVERFI option holders | 0 | 17,404 | [4] | |
Other liabilities | 7,573 | 9,310 | ||
Total accrued expenses and other liabilities | 90,296 | 101,440 | ||
Less: Long-term portion | 4,294 | 1,344 | ||
Accrued expenses and other current liabilities | $ 86,002 | $ 100,096 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | |||
[1]All accrued legal costs are classified as current.[2]We deferred payments of the employer's portion of Social Security taxes during 2020 under the Coronavirus, Aid, Relief and Economic Security Act ("CARES Act"), half of which was due by the end of calendar year 2021 with the remainder due by the end of calendar year 2022.[3]See discussion of our acquisition of Kilter at Note 3 to these consolidated financial statements.[4]Represents amounts that had not been paid by EVERFI to its former option holders as of December 31, 2021, solely due to the timing of the acquisition on the last day of 2021. See Note 3 to these consolidated financial statements for additional information regarding our acquisition of EVERFI. |
Consolidated Financial Statem_6
Consolidated Financial Statement Details (Components of Other Income (Expense)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Interest income | $ 1,746 | $ 392 | $ 1,660 |
Currency revaluations gains (losses) | 4,635 | (1,644) | (1,065) |
Other income, net | 2,332 | 1,432 | 1,063 |
Other income, net | $ 8,713 | $ 180 | $ 1,658 |
Debt (Details)
Debt (Details) | 1 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2021 USD ($) shares | Jun. 02, 2017 USD ($) | Oct. 30, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Aug. 26, 2022 | Jan. 31, 2022 USD ($) | Aug. 31, 2020 USD ($) | |
Line of Credit Facility [Line Items] | |||||||||
Debt instrument, term | 5 years | 5 years | |||||||
Credit facility, maximum borrowing capacity | $ 700,000,000 | $ 900,000,000 | |||||||
Line of credit facility, available increase capacity, amount | 250,000,000 | $ 250,000,000 | |||||||
Line of credit facility, current borrowing capacity | $ 319,800,000 | ||||||||
Commitment fee on unused portion of revolving credit facility | 0.375% | ||||||||
Payment of financing costs | 4,000,000 | $ 0 | $ 3,106,000 | $ 4,586,000 | |||||
Capitalized financing costs to be amortized over term of facility | 1,200,000 | ||||||||
Aggregate financing costs related to debt discount and debt issuance costs | $ (4,994,000) | $ (2,000,000) | (2,943,000) | (4,994,000) | |||||
Total deferred financing costs included in other assets | 900,000 | ||||||||
Long-term debt, gross | 961,174,000 | $ 861,986,000 | 961,174,000 | ||||||
Maximum After December 31, 2023 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Net leverage ratio | 3.75 | ||||||||
Maximum Through December 31, 2023 | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Net leverage ratio | 4 | ||||||||
EVERFI [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Total cash consideration paid for the acquisition | $ 441,800,000 | ||||||||
Shares of company's common stock, shares | shares | 3,810,888 | ||||||||
Shares of company's common stock, value assigned | $ 301,000,000 | 301,000,000 | |||||||
Aggregate purchase price | $ 742,800,000 | ||||||||
Global HQ [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, gross | $ 61,100,000 | ||||||||
Minimum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Commitment fee on unused portion of revolving credit facility | 0.25% | ||||||||
Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Net leverage ratio | 3.25 | ||||||||
Commitment fee on unused portion of revolving credit facility | 0.50% | ||||||||
Federal funds rate option [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, variable interest rate | 0.50% | 0.50% | |||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, variable interest rate | 1% | 1% | |||||||
Credit facility, basis spread on variable rate | 2.125% | ||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Daily | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit sensitive adjustment | 0.10% | ||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | One-month | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit sensitive adjustment | 0.11448% | ||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Three-month | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit sensitive adjustment | 0.26161% | ||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Six-month | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit sensitive adjustment | 0.42826% | ||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, basis spread on variable rate | 1.375% | 1.375% | |||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, basis spread on variable rate | 2.50% | 2.50% | |||||||
Base rate margin [Member] | Minimum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, basis spread on variable rate | 0.375% | 0.375% | |||||||
Base rate margin [Member] | Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, basis spread on variable rate | 1.50% | 1.50% | |||||||
Sterling Overnight Index Average Rate (SONIA) Overnight Index Swap Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit sensitive adjustment | 0.0326% | ||||||||
Credit facility, basis spread on variable rate | 2.125% | ||||||||
Sterling Overnight Index Average Rate (SONIA) Overnight Index Swap Rate | Minimum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, basis spread on variable rate | 1.375% | ||||||||
Sterling Overnight Index Average Rate (SONIA) Overnight Index Swap Rate | Maximum [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, basis spread on variable rate | 2.50% | ||||||||
Eurocurrency base rate option [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, basis spread on variable rate | 2.125% | ||||||||
Revolving credit loans [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, maximum borrowing capacity | $ 500,000,000 | ||||||||
Repayments of lines of credit | 124,400,000 | ||||||||
Long-term debt, gross | $ 260,000,000 | $ 177,800,000 | 260,000,000 | ||||||
Term loans [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, maximum borrowing capacity | 400,000,000 | ||||||||
Proceeds from lines of credit | 250,000,000 | 400,000,000 | |||||||
Payment of financing costs | 3,100,000 | ||||||||
Long-term debt, gross | $ 640,000,000 | $ 623,750,000 | $ 640,000,000 | ||||||
Standby letters of credit [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, maximum borrowing capacity | 50,000,000 | ||||||||
Swingline loans [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, maximum borrowing capacity | 50,000,000 | ||||||||
Multicurrency borrowings [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit facility, maximum borrowing capacity | $ 100,000,000 | ||||||||
Incremental Term Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | One-month | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit sensitive adjustment | 0.10% | ||||||||
Incremental Term Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Three-month | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit sensitive adjustment | 0.15% | ||||||||
Incremental Term Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Six-month | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Credit sensitive adjustment | 0.25% | ||||||||
Senior Secured Note, Series A1 [Member] | Global HQ [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, percentage bearing fixed interest, percentage rate | 5.12% | ||||||||
Long-term debt, gross | $ 49,100,000 | ||||||||
Senior Secured Note, Series A2 [Member] | Global HQ [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, percentage bearing fixed interest, percentage rate | 5.61% | ||||||||
Long-term debt, gross | $ 12,000,000 |
Debt (Summary of Debt) (Details
Debt (Summary of Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 30, 2020 |
Line of Credit Facility [Line Items] | |||
Debt, gross | $ 861,986 | $ 961,174 | |
Other debt | 2,247 | 1,694 | |
Less: Unamortized discount and debt issuance costs | 2,943 | 4,994 | $ 2,000 |
Less: Debt, current portion | 18,802 | 18,697 | |
Debt, net of current portion | $ 840,241 | $ 937,483 | |
Weighted average effective interest rate | 4.52% | 3.23% | |
Revolving credit loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt, gross | $ 177,800 | $ 260,000 | |
Weighted average effective interest rate | 5.18% | 3.27% | |
Term loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt, gross | $ 623,750 | $ 640,000 | |
Weighted average effective interest rate | 4.26% | 3.02% | |
Real estate loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt, gross | $ 58,189 | $ 59,480 | |
Weighted average effective interest rate | 5.22% | 5.22% | |
Other debt [Member] | |||
Line of Credit Facility [Line Items] | |||
Weighted average effective interest rate | 7.38% | 5% | |
Short-term debt [Member] | |||
Line of Credit Facility [Line Items] | |||
Weighted average effective interest rate | 6.45% | 3.11% | |
Long-term debt [Member] | |||
Line of Credit Facility [Line Items] | |||
Weighted average effective interest rate | 4.48% | 3.23% |
Debt (Schedule of Currently Eff
Debt (Schedule of Currently Effective Financing Agreements) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2019 |
Other debt [Member] | ||
Debt Instrument [Line Items] | ||
Debt, face amount | $ 1,710 | $ 2,150 |
Debt (Annual Maturities Related
Debt (Annual Maturities Related to Credit Facility, Real Estate Loans and Other Debt) (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 18,802 |
2024 | 18,429 |
2025 | 771,403 |
2026 | 1,969 |
2027 | 2,166 |
Thereafter | 49,217 |
Total required maturities | $ 861,986 |
Derivative Instruments (Details
Derivative Instruments (Details) £ in Millions, $ in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 CAD ($) | Dec. 31, 2022 GBP (£) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Ineffective portion of interest rate swap(s) | $ 0 | $ 0 | $ 0 | ||
Accumulated other comprehensive income expected to be reclassified into earnings within next 12 months | 19.5 | ||||
Undesignated derivative instruments | 0 | $ 0 | $ 0 | ||
Interest rate swap [Member] | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | $ 435 | ||||
Foreign currency forward contracts [Member] | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | $ 22.6 | £ 11.2 |
Derivative Instruments (Fair Va
Derivative Instruments (Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets |
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Designated as hedging instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 32,117 | $ 7,160 |
Derivative liabilities, fair value | 323 | 0 |
Designated as hedging instrument [Member] | Foreign currency forward contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, foreign currency forward contracts, current | 247 | 0 |
Derivative liability, foreign currency forward contracts, current | 323 | 0 |
Designated as hedging instrument [Member] | Interest rate swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, interest rate swaps, long-term | 31,870 | 7,160 |
Derivative liability, interest rate swaps, long-term | $ 0 | $ 0 |
Derivative Instruments (Effects
Derivative Instruments (Effects of Derivative Instruments in Cash Flow Hedging Relationships) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense, Revenue | Interest Expense | Interest Expense |
Interest rate swap [Member] | Cash flow hedging [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in accumulated other comprehensive loss | $ 31,870 | $ 7,160 | $ (4,159) |
Gain (loss) reclassified from accumulated other comprehensive loss into income | 5,520 | $ (3,714) | $ (3,827) |
Foreign currency forward contracts [Member] | Cash flow hedging [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in accumulated other comprehensive loss | 247 | ||
Gain (loss) reclassified from accumulated other comprehensive loss into income | 165 | ||
Foreign currency forward contracts [Member] | Net Investment Hedging | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in accumulated other comprehensive loss | (323) | ||
Gain (loss) reclassified from accumulated other comprehensive loss into income | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) € in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 EUR (€) | Dec. 31, 2022 USD ($) cases | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | ||
Lessee, Lease, Description [Line Items] | |||||
Operating lease, lease not yet commenced, expense | $ 3,100 | ||||
Operating lease, lease not yet commenced, term of contract | 3 years | ||||
Operating lease right-of-use assets, impairments | $ 1,000 | $ 3,600 | $ 4,000 | ||
Incremental operating lease costs | [1] | 9,501 | 9,636 | 41,210 | |
Incremental depreciation expense | 14,100 | 14,400 | 19,200 | ||
Loss Contingencies [Line Items] | |||||
Liability insurance, amount, total | 50,000 | ||||
Liability insurance, amount, deductible | 250 | ||||
Security Incident, net pre-tax expense | 32,700 | ||||
Security Incident, net cash outlays | 20,900 | ||||
Loss contingency accrual | $ 23,000 | ||||
Security Incident, number of customer reimbursement requests received | cases | 260 | ||||
Security Incident, claims settled, number | cases | 200 | ||||
Security Incident, claims settled, percent | 77% | ||||
Security Incident, number of reservations of the right to seek future expense recovery | cases | 400 | ||||
Security Incident, number of state Attorneys General | cases | 49 | ||||
Putative Consumer Class Action Cases | |||||
Loss Contingencies [Line Items] | |||||
Security Incident, number of plaintiffs | cases | 19 | ||||
Putative Consumer Class Action Cases - US Federal Courts | |||||
Loss Contingencies [Line Items] | |||||
Security Incident, number of plaintiffs | cases | 17 | ||||
Putative Consumer Class Action Cases - Canadian Courts | |||||
Loss Contingencies [Line Items] | |||||
Security Incident, number of plaintiffs | cases | 2 | ||||
EVERFI [Member] | |||||
Lessee, Lease, Description [Line Items] | |||||
Letters of credit for operating leases | $ 2,100 | ||||
Spain [Member] | |||||
Loss Contingencies [Line Items] | |||||
Security Incident, penalty paid | € | € 60 | ||||
Change in Accounting Estimate, Workforce Strategy | |||||
Lessee, Lease, Description [Line Items] | |||||
Incremental operating lease costs | 5,300 | 16,200 | |||
Incremental depreciation expense | $ 1,700 | $ 4,600 | |||
Minimum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Security Incident, expected cost | 20,000 | ||||
Security Incident, expected net cash outlays for ongoing legal fees | 25,000 | ||||
Maximum [Member] | |||||
Loss Contingencies [Line Items] | |||||
Security Incident, expected cost | 30,000 | ||||
Security Incident, expected net cash outlays for ongoing legal fees | 35,000 | ||||
Third-party technology [Member] | |||||
Long-term Purchase Commitment [Line Items] | |||||
Remaining aggregate minimum purchase commitment | $ 294,400 | ||||
[1]Includes short-term lease costs, which were immaterial. |
Commitments and Contingencies_3
Commitments and Contingencies (Components of Lease Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | [1] | $ 9,501 | $ 9,636 | $ 41,210 |
Variable lease cost | 1,670 | 2,478 | 4,266 | |
Sublease income | (2,763) | (1,516) | (3,120) | |
Net lease cost | $ 8,408 | $ 10,598 | $ 42,356 | |
[1]Includes short-term lease costs, which were immaterial. |
Commitments and Contingencies_4
Commitments and Contingencies (Schedule of Maturities of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 | $ 9,978 | |
2024 | 7,699 | |
2025 | 6,659 | |
2026 | 6,104 | |
2027 | 6,207 | |
Thereafter | 26,790 | |
Total lease payments | 63,437 | |
Less: Amount representing interest | 10,796 | |
Present value of future payments | $ 52,641 | $ 62,556 |
Commitments and Contingencies_5
Commitments and Contingencies (Schedule of Supplemental Balance Sheet Information Related To Leases) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets | $ 45,899 | $ 53,883 | |
Operating lease liabilities | $ 52,641 | $ 62,556 | |
Weighted average remaining lease term (years) | 8 years 6 months | 8 years 10 months 24 days | 4 years 7 months 6 days |
Weighted average discount rate | 4.63% | 4.68% | 5.70% |
Accrued expenses and other current liabilities [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease liabilities | $ 7,723 | $ 9,170 | |
Operating lease liabilities, net of current portion | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease liabilities | $ 44,918 | $ 53,386 |
Commitments and Contingencies_6
Commitments and Contingencies (Schedule of Supplemental Cash Flow Information Related To Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating cash flows from operating leases | $ 11,439 | $ 11,338 | [1] | $ 26,713 |
Right-of-use assets obtained in exchange for lease obligations (non-cash), operating leases | $ 0 | $ 5,358 | $ 11,002 | |
[1]The 2020 amount was revised to correct an immaterial disclosure error in the previously filed consolidated financial statements. |
Commitments and Contingencies_7
Commitments and Contingencies (Schedule of Security Incident Expense and Probable Insurance Recoveries) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Security Incident, gross expense | $ 57,614 | $ 40,561 | $ 9,830 |
Security Incident, offsetting probable insurance recoveries | (1,891) | (38,745) | (9,364) |
Security Incident, net expense | 55,723 | 1,816 | 466 |
Security Incident, cumulative gross expense | 108,005 | 50,391 | 9,830 |
Security Incident, cumulative offsetting insurance recoveries | (50,000) | (48,109) | (9,364) |
Security Incident, cumulative net expense | 58,005 | 2,282 | 466 |
Cumulative offsetting insurance recoveries paid | $ (50,000) | $ (29,968) | $ (3,075) |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Income Taxes [Line Items] | |
Unrecognized tax benefit that, if recognized, would favorably affect the effective tax rate | $ 3,100 |
Domestic Tax Authority [Member] | |
Income Taxes [Line Items] | |
Operating loss carryforwards | 31,100 |
Operating loss carryforwards subject to expiration | 13,800 |
Tax credit carryforwards | 16,900 |
Foreign Tax Authority [Member] | |
Income Taxes [Line Items] | |
Operating loss carryforwards | 5,300 |
Operating loss carryforwards subject to expiration | 62 |
State and Local Jurisdiction [Member] | |
Income Taxes [Line Items] | |
Operating loss carryforwards | 38,300 |
Tax credit carryforwards | $ 36,100 |
Income Taxes (Schedule of Compo
Income Taxes (Schedule of Components of Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current taxes: | |||
U.S. Federal | $ 3,485 | $ (2,499) | $ (407) |
U.S. State and local | 5,708 | (257) | 1,563 |
International | 7,283 | 6,570 | 3,904 |
Total current taxes | 16,476 | 3,814 | 5,060 |
Deferred taxes: | |||
U.S. Federal | (16,880) | (4,615) | (1,064) |
U.S. State and local | (9,319) | 222 | 7,725 |
International | (445) | 1,964 | 2,176 |
Total deferred taxes | (26,644) | (2,429) | 8,837 |
Total income tax (benefit) provision | $ (10,168) | $ 1,385 | $ 13,897 |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income Before Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (91,493) | $ (23,180) | $ (4,112) |
International | 35,918 | 30,263 | 25,726 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | $ (55,575) | $ 7,083 | $ 21,614 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Federal statutory rate | 21% | 21% | 21% |
Effect of: | |||
State income taxes, net of federal benefit | 1.50% | 4.40% | 5.90% |
Nondeductible security incident-related fines or penalties | (8.70%) | 0% | 0% |
Section 162(m) limitation | (6.40%) | 75% | 17.50% |
Stock-based compensation | (6.30%) | (36.20%) | (1.20%) |
Change in valuation reserve (primarily state credit reserves) | (5.40%) | 26.10% | 38.20% |
GILTI inclusion | (2.60%) | 0% | 1.30% |
Nondeductible meals, entertainment and transportation | (0.70%) | 1.10% | 3.30% |
Acquisition costs | 0% | 8.70% | 0% |
DTA Adjustment – NOLs | 0% | 0% | (3.30%) |
Unrecognized tax benefit | 0.50% | (32.70%) | 1.30% |
Foreign tax rate | 1% | (6.00%) | (1.70%) |
Return to accrual adjustment | 1.40% | (4.20%) | (4.10%) |
FDII benefit | 2.30% | 0% | 0% |
State credits, net of federal benefit | 7.20% | (32.60%) | (2.30%) |
Federal credits generated | 11.50% | (54.50%) | (17.40%) |
Other | 0.10% | 4.60% | 1.70% |
Income tax provision effective rate | 18.30% | 19.60% | 64.30% |
Foreign Tax Authority [Member] | |||
Effect of: | |||
Change in income tax rate applied to deferred tax balances | 0.10% | 42.60% | 4% |
State and Local Jurisdiction [Member] | |||
Effect of: | |||
Change in income tax rate applied to deferred tax balances | 1.80% | 2.30% | 0.10% |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets relating to: | ||||
Federal and state and foreign net operating loss carryforwards | $ 10,369 | $ 21,456 | ||
Federal, state and foreign tax credits | 50,194 | 52,283 | ||
Stock-based compensation | 21,166 | 21,432 | ||
Operating leases | 14,024 | 23,795 | ||
Allowance for credit losses | 1,803 | 2,524 | ||
Intangible assets | 561 | 1,070 | ||
Deferred revenue | 1,820 | 1,057 | ||
Accrued bonuses | 455 | 218 | ||
Capitalized R&D and software costs | 12,166 | 0 | ||
Other | 6,293 | 13,515 | ||
Total deferred tax assets | 118,851 | 137,350 | ||
Deferred tax liabilities relating to: | ||||
Intangible assets | (161,836) | (168,392) | ||
Capitalized software and content development costs | 0 | (31,326) | ||
Costs of obtaining contracts | (16,287) | (18,046) | ||
Operating leases | (11,721) | (23,582) | ||
Fixed assets | (9,827) | (8,483) | ||
Other | (9,016) | (2,515) | ||
Total deferred tax liabilities | (208,687) | (252,344) | ||
Valuation allowance | (34,769) | (31,974) | $ (29,184) | $ (6,453) |
Net deferred tax liability | $ (124,605) | $ (146,968) |
Income Taxes (Summary of Change
Income Taxes (Summary of Changes in Deferred Tax Asset Valuation Allowance) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Valuation Allowance [Line Items] | |||
Balance at beginning of year | $ 31,974 | $ 29,184 | $ 6,453 |
Balance at end of year | 34,769 | 31,974 | 29,184 |
Acquisition- related change | |||
Valuation Allowance [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | 0 | 893 | 0 |
Charges to expense | |||
Valuation Allowance [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 2,795 | $ 1,897 | $ 22,731 |
Income Taxes (Summary of Chan_2
Income Taxes (Summary of Changes in Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Balance at December 31, 2021 | $ 3,651 | $ 4,625 | $ 4,346 |
Increases from prior period positions | 89 | 6 | 414 |
Decreases in prior year positions | (908) | (57) | (614) |
Increases from current period positions | 629 | 1,751 | 491 |
Settlements (payments) | 0 | (1,192) | 0 |
Lapse of statute of limitations | (378) | (1,482) | (12) |
Balance at December 31, 2022 | $ 3,083 | $ 3,651 | $ 4,625 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of authorized stock-based awards available (in shares) | 2,875,892 | ||
Unvested awards, compensation cost not yet recognized | $ 93 | ||
Unvested awards, compensation cost not yet recognized, period of recognition (in years) | 1 year 3 months 18 days | ||
Restricted stock awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Restricted stock vested, total fair value | $ 41 | $ 38.5 | $ 39.9 |
Restricted stock granted, weighted average grant date fair value | $ 60.90 | $ 77.39 | $ 77.16 |
Restricted stock units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Restricted stock unit, time-based [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock vested, total fair value | $ 9.3 | $ 9.4 | $ 1.7 |
Restricted stock granted, weighted average grant date fair value | $ 62.38 | $ 77.74 | $ 56.66 |
Restricted stock units, performance-based [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock vested, total fair value | $ 50.5 | $ 44.9 | $ 17.2 |
Restricted stock granted, weighted average grant date fair value | $ 61.79 | $ 71.91 | $ 60.21 |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Awards Outstanding by Each Award Type) (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Restricted stock awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number | 1,345,608 | 1,192,810 |
Restricted stock unit, time-based [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number | 455,708 | 336,199 |
Restricted stock units, performance-based [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, number | 1,104,260 | 943,071 |
Stock-Based Compensation (Sum_2
Stock-Based Compensation (Summary of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | $ 110,294 | $ 120,379 | $ 87,257 |
Cost of recurring [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 11,258 | 12,405 | 5,793 |
Cost of one-time services and other [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 3,178 | 7,547 | 7,581 |
Total included in cost of revenue [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 14,436 | 19,952 | 13,374 |
Sales, marketing and customer success [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 21,409 | 20,283 | 15,514 |
Research and development [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 24,207 | 27,080 | 18,527 |
General and administrative [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | 50,242 | 53,064 | 39,842 |
Total included in operating expenses [Member] | |||
Employee Service Stock-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated stock-based compensation expense | $ 95,858 | $ 100,427 | $ 73,883 |
Stock-Based Compensation (Sum_3
Stock-Based Compensation (Summary of Unvested Restricted Stock Awards, Activity) (Details) - Restricted stock awards [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested, number, beginning of period | 1,192,810 | |||
Unvested, weighted average grant date fair value, beginning of period | $ 78.73 | |||
Granted, number | 846,295 | |||
Granted, weighted average grant date fair value | $ 60.90 | $ 77.39 | $ 77.16 | |
Forfeited, number | (179,686) | |||
Forfeited, weighted average grant date fair value | $ 69.29 | |||
Vested, number | (513,811) | |||
Vested, weighted average grant date fair value | $ 79.83 | |||
Unvested, number, end of period | 1,345,608 | 1,192,810 | ||
Unvested, weighted average grant date fair value, end of period | $ 68.09 | $ 78.73 | ||
Unvested, aggregate intrinsic value | [1] | $ 79,202 | ||
[1]The intrinsic value is calculated as the market value as of the end of the fiscal period. |
Stock-Based Compensation (Sum_4
Stock-Based Compensation (Summary of Unvested Restricted Stock Units, Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Restricted stock unit, time-based [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested, number, beginning of period | 336,199 | |||
Unvested, weighted average grant date fair value, beginning of period | $ 77.99 | |||
Granted, number | 287,198 | |||
Granted, weighted average grant date fair value | $ 62.38 | $ 77.74 | $ 56.66 | |
Forfeited, number | (48,343) | |||
Forfeited, weighted average grant date fair value | $ 65.80 | |||
Vested, number | (119,346) | |||
Vested, weighted average grant date fair value | $ 77.59 | |||
Unvested, number, end of period | 455,708 | 336,199 | ||
Unvested, weighted average grant date fair value, end of period | $ 68.81 | $ 77.99 | ||
Unvested, aggregate intrinsic value | [1] | $ 26,823 | ||
Restricted stock units, performance-based [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unvested, number, beginning of period | 943,071 | |||
Unvested, weighted average grant date fair value, beginning of period | $ 73.62 | |||
Granted, number | 977,377 | |||
Granted, weighted average grant date fair value | $ 61.79 | $ 71.91 | $ 60.21 | |
Forfeited, number | (114,071) | |||
Forfeited, weighted average grant date fair value | $ 63.47 | |||
Vested, number | (702,117) | |||
Vested, weighted average grant date fair value | $ 71.93 | |||
Unvested, number, end of period | 1,104,260 | 943,071 | ||
Unvested, weighted average grant date fair value, end of period | $ 64.94 | $ 73.62 | ||
Unvested, aggregate intrinsic value | $ 64,997 | |||
[1]The intrinsic value is calculated as the market value as of the end of the fiscal period. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | |||
Treasury stock, shares, acquired | 0 | 1,592,933 | 714,000 |
Stock repurchase program, authorized amount | $ 250 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 250 |
Stockholders' Equity (Changes i
Stockholders' Equity (Changes in Accumulated Other Comprehensive Loss by Component) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income [Roll Forward] | |||
Accumulated other comprehensive (loss) income, beginning of period | $ 6,522 | $ (2,497) | $ (5,290) |
Income tax (benefit) provision | (10,168) | 1,385 | 13,897 |
Net current-period other comprehensive income (loss) | (2,416) | (9,019) | (2,793) |
Translation adjustments | (16,160) | 661 | 4,571 |
Accumulated other comprehensive (loss) income, end of period | 8,938 | 6,522 | (2,497) |
Other comprehensive (loss) income before reclassifications, net of tax effects of $(8,068), $(1,982) and $1,625 | (8,068) | (1,982) | 1,625 |
Gains and losses on cash flow hedges [Member] | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Accumulated other comprehensive (loss) income, beginning of period | 5,257 | (3,101) | (1,323) |
Other comprehensive income (loss) before reclassifications | 22,772 | 5,617 | (4,602) |
Amounts reclassified from accumulated other comprehensive income (loss) | (5,685) | 3,714 | 3,827 |
Income tax (benefit) provision | 1,489 | (973) | (1,003) |
Total amounts reclassified from accumulated other comprehensive loss | (4,196) | 2,741 | 2,824 |
Net current-period other comprehensive income (loss) | 18,576 | 8,358 | (1,778) |
Accumulated other comprehensive (loss) income, end of period | 23,833 | 5,257 | (3,101) |
Foreign currency translation adjustment [Member] | |||
Accumulated Other Comprehensive Income [Roll Forward] | |||
Accumulated other comprehensive (loss) income, beginning of period | 1,265 | 604 | (3,967) |
Translation adjustments | (16,160) | 661 | 4,571 |
Accumulated other comprehensive (loss) income, end of period | $ (14,895) | $ 1,265 | $ 604 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer matching contribution, percent of qualified employees' contribution | 50% | 50% | 50% | |
Employer matching contributions, total | $ 9.3 | $ 6.5 | $ 1.9 | |
Employer discretionary contributions, total | $ 0 | $ 0 | ||
COVID-19 [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer discretionary contributions, total | $ 1.2 | |||
Minimum [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employee contribution, percent of salary | 1% | 1% | 1% | |
Maximum [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employee contribution, percent of salary | 75% | 75% | 75% | |
Employer matching contribution, percent of employees' salary | 6% | 6% | 6% |
Segment Information (Long-Lived
Segment Information (Long-Lived Assets By Geographic Region) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 153,325 | $ 165,311 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 151,656 | 163,241 |
Other countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 1,669 | $ 2,070 |
Revenue Recognition (Details)
Revenue Recognition (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue recognized that was included in deferred revenue at beginning of period | $ 339 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1,000 |
Revenue, remaining performance obligation, percentage to be recognized | 60% |
Revenue, remaining performance obligation, expected timing of satisfaction | 12 months |
Revenue Recognition (Contract B
Revenue Recognition (Contract Balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Total deferred revenue | $ 385,236 | $ 378,746 |
Revenue Recognition (Revenue by
Revenue Recognition (Revenue by Geography) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,058,105 | $ 927,740 | $ 913,219 |
United States [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 896,116 | 777,333 | 772,188 |
United Kingdom [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 101,026 | 89,688 | 84,121 |
Other countries [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 60,963 | $ 60,719 | $ 56,910 |
Revenue Recognition (Revenue _2
Revenue Recognition (Revenue by Market Group) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,058,105 | $ 927,740 | $ 913,219 |
Social Sector | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 907,197 | 889,755 | 873,878 |
Corporate Sector | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 150,908 | $ 37,985 | $ 39,341 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Recurring Revenue by Type) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,058,105 | $ 927,740 | $ 913,219 |
Contractual recurring [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 709,097 | 601,397 | 591,272 |
Transactional recurring [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 302,636 | 279,453 | 259,473 |
Recurring [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,011,733 | $ 880,850 | $ 850,745 |