Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 28, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Entity File Number | 001-35108 | |
Entity Registrant Name | SERVICESOURCE INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-0578975 | |
Entity Address, Address Line One | 707 17th Street, 25th Floor | |
Entity Address, City or Town | Denver, | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 720 | |
Local Phone Number | 889-8500 | |
Title of 12(b) Security | Common Stock, $0.0001 Par Value | |
Trading Symbol | SREV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Small Business | true | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common stock, shares outstanding | 99,067,482 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001310114 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 30,170 | $ 34,006 |
Accounts receivable, net | 35,464 | 38,890 |
Prepaid expenses and other | 8,599 | 9,275 |
Total current assets | 74,233 | 82,171 |
Property and equipment, net | 21,540 | 29,948 |
ROU assets | 22,706 | 29,798 |
Contract acquisition costs | 604 | 872 |
Goodwill | 6,334 | 6,334 |
Other assets | 4,109 | 3,490 |
Total assets | 129,526 | 152,613 |
Current liabilities: | ||
Accounts payable | 3,003 | 1,204 |
Accrued expenses | 3,203 | 3,217 |
Accrued compensation and benefits | 19,147 | 18,342 |
Revolver | 10,000 | 15,000 |
Operating lease liabilities | 9,503 | 10,797 |
Other current liabilities | 973 | 1,209 |
Total current liabilities | 45,829 | 49,769 |
Operating lease liabilities, net of current portion | 18,931 | 25,975 |
Other long-term liabilities | 1,893 | 1,593 |
Total liabilities | 66,653 | 77,337 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 20,000 shares authorized and none issued and outstanding | ||
Common stock, $0.0001 par value; 1,000,000 shares authorized; 99,162 shares issued and 99,041 shares outstanding as of September 30, 2021; 97,248 shares issued and 97,127 shares outstanding as of December 31, 2020 | 10 | 10 |
Treasury stock | (441) | (441) |
Additional paid-in capital | 384,337 | 379,696 |
Accumulated deficit | (321,924) | (304,607) |
Accumulated other comprehensive income | 891 | 618 |
Total stockholders' equity | 62,873 | 75,276 |
Total liabilities and stockholders' equity | $ 129,526 | $ 152,613 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 99,162,000 | 97,248,000 |
Common stock, shares outstanding (in shares) | 99,041,000 | 97,127,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Consolidated Statements of Operations | ||||
Net revenue | $ 48,578 | $ 45,790 | $ 139,908 | $ 143,542 |
Cost of revenue | 35,030 | 33,210 | 104,492 | 103,415 |
Gross profit | 13,548 | 12,580 | 35,416 | 40,127 |
Operating expenses: | ||||
Sales and marketing | 4,174 | 5,638 | 12,263 | 19,048 |
Research and development | 1,338 | 1,489 | 3,679 | 4,186 |
General and administrative | 10,801 | 10,537 | 33,615 | 31,844 |
Restructuring and other related costs | 974 | 703 | ||
Total operating expenses | 16,313 | 17,664 | 50,531 | 55,781 |
Loss from operations | (2,765) | (5,084) | (15,115) | (15,654) |
Interest and other expense, net | (267) | (500) | (1,791) | (1,050) |
Loss before provision for income taxes | (3,032) | (5,584) | (16,906) | (16,704) |
Provision for income tax (expense) benefit | (359) | 6 | (411) | (173) |
Net loss | $ (3,391) | $ (5,578) | $ (17,317) | $ (16,877) |
Net loss per common share: | ||||
Basic (in dollars per share) | $ (0.03) | $ (0.06) | $ (0.18) | $ (0.18) |
Diluted (in dollars per share) | $ (0.03) | $ (0.06) | $ (0.17) | $ (0.18) |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 98,253 | 95,963 | 97,703 | 95,437 |
Diluted (in shares) | 98,253 | 95,963 | 97,703 | 95,437 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (3,391) | $ (5,578) | $ (17,317) | $ (16,877) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (83) | 102 | 273 | 53 |
Other comprehensive (loss) income: | (83) | 102 | 273 | 53 |
Comprehensive loss | $ (3,474) | $ (5,476) | $ (17,044) | $ (16,824) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Treasury Shares/Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total |
Beginning balance (in shares) at Dec. 31, 2019 | 94,972 | (121) | ||||
Beginning balance at Dec. 31, 2019 | $ 9 | $ (441) | $ 374,525 | $ (286,066) | $ 410 | $ 88,437 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (5,942) | (5,942) | ||||
Other comprehensive income (loss) | 498 | 498 | ||||
Stock-based compensation | 1,066 | 1,066 | ||||
Issuance of common stock, RSUs (in shares) | 178 | |||||
Issuance of common stock, RSUs | $ 1 | (1) | ||||
Proceeds from the exercise of stock options and ESPP (in shares) | 112 | |||||
Proceeds from the exercise of stock options and ESPP | 76 | 76 | ||||
Ending balance (in shares) at Mar. 31, 2020 | 95,262 | (121) | ||||
Ending balance at Mar. 31, 2020 | $ 10 | $ (441) | 375,666 | (292,008) | 908 | 84,135 |
Beginning balance (in shares) at Dec. 31, 2019 | 94,972 | (121) | ||||
Beginning balance at Dec. 31, 2019 | $ 9 | $ (441) | 374,525 | (286,066) | 410 | 88,437 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (16,877) | |||||
Other comprehensive income (loss) | 53 | |||||
Ending balance (in shares) at Sep. 30, 2020 | 96,684 | (121) | ||||
Ending balance at Sep. 30, 2020 | $ 10 | $ (441) | 378,309 | (302,943) | 463 | 75,398 |
Beginning balance (in shares) at Mar. 31, 2020 | 95,262 | (121) | ||||
Beginning balance at Mar. 31, 2020 | $ 10 | $ (441) | 375,666 | (292,008) | 908 | 84,135 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (5,357) | (5,357) | ||||
Other comprehensive income (loss) | (547) | (547) | ||||
Stock-based compensation | 1,278 | 1,278 | ||||
Issuance of common stock, RSUs (in shares) | 438 | |||||
Ending balance (in shares) at Jun. 30, 2020 | 95,700 | (121) | ||||
Ending balance at Jun. 30, 2020 | $ 10 | $ (441) | 376,944 | (297,365) | 361 | 79,509 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (5,578) | (5,578) | ||||
Other comprehensive income (loss) | 102 | 102 | ||||
Stock-based compensation | 1,282 | 1,282 | ||||
Issuance of common stock, RSUs (in shares) | 877 | |||||
Proceeds from the exercise of stock options and ESPP (in shares) | 107 | |||||
Proceeds from the exercise of stock options and ESPP | 83 | 83 | ||||
Ending balance (in shares) at Sep. 30, 2020 | 96,684 | (121) | ||||
Ending balance at Sep. 30, 2020 | $ 10 | $ (441) | 378,309 | (302,943) | 463 | 75,398 |
Beginning balance (in shares) at Dec. 31, 2020 | 97,248 | (121) | ||||
Beginning balance at Dec. 31, 2020 | $ 10 | $ (441) | 379,696 | (304,607) | 618 | 75,276 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (8,835) | (8,835) | ||||
Other comprehensive income (loss) | 325 | 325 | ||||
Stock-based compensation | 2,486 | 2,486 | ||||
Issuance of common stock, RSUs (in shares) | 73 | |||||
Proceeds from the exercise of stock options and ESPP (in shares) | 149 | |||||
Proceeds from the exercise of stock options and ESPP | 132 | 132 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 97,470 | (121) | ||||
Ending balance at Mar. 31, 2021 | $ 10 | $ (441) | 382,314 | (313,442) | 943 | 69,384 |
Beginning balance (in shares) at Dec. 31, 2020 | 97,248 | (121) | ||||
Beginning balance at Dec. 31, 2020 | $ 10 | $ (441) | 379,696 | (304,607) | 618 | 75,276 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (17,317) | |||||
Other comprehensive income (loss) | 273 | |||||
Ending balance (in shares) at Sep. 30, 2021 | 99,162 | (121) | ||||
Ending balance at Sep. 30, 2021 | $ 10 | $ (441) | 384,337 | (321,924) | 891 | 62,873 |
Beginning balance (in shares) at Mar. 31, 2021 | 97,470 | (121) | ||||
Beginning balance at Mar. 31, 2021 | $ 10 | $ (441) | 382,314 | (313,442) | 943 | 69,384 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (5,091) | (5,091) | ||||
Other comprehensive income (loss) | 31 | 31 | ||||
Stock-based compensation | 1,085 | 1,085 | ||||
Issuance of common stock, RSUs (in shares) | 485 | |||||
Proceeds from the exercise of stock options and ESPP (in shares) | 4 | |||||
Proceeds from the exercise of stock options and ESPP | 4 | 4 | ||||
Ending balance (in shares) at Jun. 30, 2021 | 97,959 | (121) | ||||
Ending balance at Jun. 30, 2021 | $ 10 | $ (441) | 383,403 | (318,533) | 974 | 65,413 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (3,391) | (3,391) | ||||
Other comprehensive income (loss) | (83) | (83) | ||||
Stock-based compensation | 1,109 | 1,109 | ||||
Issuance of common stock, RSUs (in shares) | 1,200 | |||||
Proceeds from the exercise of stock options and ESPP (in shares) | 3 | |||||
Proceeds from the exercise of stock options and ESPP | 3 | 3 | ||||
Net cash paid for payroll taxes on RSU releases | (178) | (178) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 99,162 | (121) | ||||
Ending balance at Sep. 30, 2021 | $ 10 | $ (441) | $ 384,337 | $ (321,924) | $ 891 | $ 62,873 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (17,317) | $ (16,877) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 10,969 | 10,331 |
Amortization of contract acquisition costs | 434 | 798 |
Amortization of ROU assets | 7,046 | 7,255 |
Stock-based compensation | 4,649 | 3,586 |
Restructuring and other related costs | 935 | 633 |
Other | 364 | 54 |
Net changes in operating assets and liabilities: | ||
Accounts receivable, net | 3,193 | 8,544 |
Prepaid expenses and other assets | (553) | 1,226 |
Contract acquisition costs | (167) | (195) |
Accounts payable | 1,810 | (3,597) |
Accrued compensation and benefits | 185 | 317 |
Operating lease liabilities | (8,154) | (7,299) |
Accrued expenses | (6) | (831) |
Other liabilities | 573 | (1,081) |
Net cash provided by operating activities | 3,961 | 2,864 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,682) | (5,124) |
Net cash used in investing activities | (2,682) | (5,124) |
Cash flows from financing activities: | ||
Repayment on finance lease obligations | (485) | (730) |
Debt issuance costs | (97) | |
Proceeds from Revolver | 13,500 | 27,000 |
Repayment of Revolver | (18,500) | (12,000) |
Proceeds from issuance of common stock | 139 | 159 |
Payments related to minimum tax withholdings on RSU releases | (178) | |
Net cash (used in) provided by financing activities | (5,621) | 14,429 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 480 | (52) |
Net change in cash and cash equivalents and restricted cash | (3,862) | 12,117 |
Cash and cash equivalents and restricted cash, beginning of period | 36,326 | 29,383 |
Cash and cash equivalents and restricted cash, end of period | 32,464 | 41,500 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 288 | 408 |
Supplemental disclosures of non-cash activities: | ||
Purchases of property and equipment accrued in accounts payable and accrued expenses | 25 | 203 |
ROU assets obtained in exchange for new lease liabilities | $ 618 | $ 2,271 |
The Company
The Company | 9 Months Ended |
Sep. 30, 2021 | |
The Company | |
The Company | Note 1 — The Company ServiceSource is a leading provider of BPaaS solutions that enable the transformation of go-to-market organizations and functions for global technology clients. We design, deploy, and operate a suite of innovative solutions and complex processes that support and augment our clients’ B2B customer acquisition, engagement, expansion, and retention activities. Our clients - ranging from Fortune 500 technology titans to high-growth disruptors and innovators - rely on our holistic customer engagement methodology and process excellence, global scale and delivery footprint, and data analytics and business insights to deliver trusted business outcomes that have a meaningful and material positive impact to their long-term revenue and profitability objectives. Through our unique integration of people, process, and technology - leveraged against our more than 20 years of experience and domain expertise in the cloud, software, hardware, medical device and diagnostic equipment, and industrial IoT sectors - we effect and transact billions of dollars of B2B commerce in more than 175 countries on our clients’ behalf annually. “ServiceSource,” “the Company,” “we,” “us,” or “our,” as used herein, refer to ServiceSource International, Inc. and its wholly owned subsidiaries, unless the context indicates otherwise. For a summary of commonly used industry terms and abbreviations used in this quarterly report on Form 10-Q, see the Glossary of Terms. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim Consolidated Financial Statements include the accounts of ServiceSource International, Inc. and its wholly owned subsidiaries and have been prepared in accordance with GAAP and with the instructions to Form 10-Q and Article 8 of Regulation S-X for interim financial information. All intercompany balances and transactions have been eliminated in consolidation. These financial statements do not include all the information required by GAAP for annual financial statements. The unaudited Consolidated Balance Sheet as of December 31, 2020 has been derived from the Company’s audited annual Consolidated Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 24, 2021. In the opinion of management, these Consolidated Financial Statements reflect all adjustments, including normal recurring adjustments, management considers necessary for a fair presentation of the Company’s financial position, operating results, and cash flows for the interim periods presented. These Consolidated Financial Statements and accompanying notes should be read in conjunction with our audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2020, included in our annual report on Form 10-K. Interim results are not necessarily indicative of results for the entire year. Use of Estimates The preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amount of net revenue and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on various assumptions that it believes are reasonable under the circumstances. The Company has considered the effects of the COVID-19 pandemic in determining its estimates. However, future events are difficult to predict and subject to change, especially with the risks and uncertainties related to the impact of the COVID-19 pandemic, which could cause estimates and judgments to require adjustment. Actual results and outcomes may differ from our estimates. Cash Equivalents and Restricted Cash The Company follows a three-tier fair value hierarchy, which is described in detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Cash equivalents consist of highly liquid investments with original maturities of three months or less at the time of purchase and are classified as a Level 1 investment. Restricted cash consists of cash in money market accounts that are used to secure letters of credit in connection with two of our leased facilities. Restricted cash is recorded within "Other assets" in the Consolidated Balance Sheets and is classified as a Level 1 investment. The Company had restricted cash of $2.3 million as of September 30, 2021 and December 31, 2020. The Company did not have any other financial instruments or debt measured at fair value as of September 30, 2021 and December 31, 2020. There were no transfers between levels during the nine months ended September 30, 2021 and 2020. Government Assistance During 2020, ServiceSource received various grants from the Singapore g overnment, including the Job Support Scheme, which assists enterprises in retaining their local employees during the COVID-19 pandemic. The Company received and recognized income related to the grants of approximately $0.2 million and $0.5 million for the three months ended September 30, 2021 and 2020, respectively, and $0.3 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively. There are no conditions to repay the grants. The Company does not expect to receive additional support related to these grants. Government grants are recognized in the Company’s Consolidated Statements of Operations during the same period that the expenses related to the grant are incurred if there is reasonable New Accounting Standards Adopted Income Taxes In December 2019, the FASB issued an ASU that simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard effective January 1, 2021 and the effects of this standard were applied prospectively to eligible costs incurred on or after January 1, 2021. The adoption of this standard did not have a material impact on the Consolidated Financial Statements. New Accounting Standards Issued but Not yet Adopted Financial Instruments - Credit Losses In June 2016, the FASB issued an ASU that amends the measurement of credit losses on financial instruments and requires measurement and recognition of expected versus incurred credit losses for financial assets held. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2022, with early adoption permitted. This standard will apply to the Company’s accounts receivable and contract assets. Based on our current analysis, the Company does not expect the adoption to have a material impact on the Consolidated Financial Statements as credit losses from trade receivables have historically been insignificant. The Company will adopt this standard effective January 1, 2023. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt | |
Debt | Note 3 — Debt Revolving Line of Credit In July 2018, ServiceSource, together with its wholly owned subsidiary, ServiceSource Delaware, Inc., entered into the 2018 Credit Agreement, providing for a $40.0 million revolving line of credit allowing each borrower to borrow against its domestic receivables as defined in the 2018 Credit Agreement. The Revolver in the 2018 Credit Agreement was scheduled to mature in July 2021 and was repaid in full in connection with the Company’s entry into the 2021 Credit Agreement. In July 2021, ServiceSource, together with its wholly owned subsidiary, ServiceSource Delaware, Inc., entered into the 2021 Credit Agreement, which provides for a $35.0 million revolving line of credit allowing each borrower to borrow against its receivables subject to the terms and conditions set forth in the 2021 Credit Agreement. At the Company’s request and subject to customary conditions, the aggregate commitments under the 2021 Credit Agreement may be increased up to an additional $10.0 million, for a total maximum commitment amount of $45.0 million. The Revolver in the 2021 Credit Agreement matures in July 2024 and bears interest at a rate equal to BSBY plus 2.00% to 2.50% per annum or, at our election, an alternate base rate plus 1.00% to 1.50% per annum. As of September 30, 2021, the Company had $10.0 million of borrowings under the Revolver in the 2021 Credit Agreement through a three-month BSBY borrowing at an effective interest rate of 2.42% maturing November 2021. An additional $12.2 million was available for borrowing under the Revolver as of September 30, 2021. The BSBY borrowings may be extended upon maturity, converted into a base rate borrowing upon maturity or require an incremental payment if the borrowing base decreases below the current amount outstanding during the term of the BSBY borrowing. The obligations under the 2021 Credit Agreement are secured by substantially all assets of ServiceSource and certain of its subsidiaries, including pledges of equity in certain of the Company’s subsidiaries. The 2021 Credit Agreement has financial covenants that the Company was in compliance with as of September 30, 2021. Interest Expense Interest expense related to the amortization of debt issuance costs and interest expense associated with the Company’s debt obligation was $0.1 million for the three months ended September 30, 2021 and 2020 and $0.3 million and $0.4 million for the nine months ended September 30, 2021 and 2020, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Leases | Note 4 — Leases The Company has operating leases for office space and finance leases for certain equipment under non-cancelable agreements with various expiration dates through May 2030. Certain office leases include the option to extend the term between one During 2021, the Company extended its agreement to sublease one floor of office space at one of its locations in Manila, Philippines to a third-party through the end of the original lease term in September 2023, entered into an agreement to sublease two floors of office space at a second location in Manila, Philippines to a third-party through the end of the original lease term in December 2021, and extended its lease for reduced office space at its location in Yokohama, Japan through May 2024. Supplemental income statement information related to leases was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Operating lease cost $ 2,780 $ 3,090 $ 8,574 $ 9,121 Finance lease cost: Amortization of leased assets 98 213 364 564 Interest on lease liabilities 4 19 22 75 Total finance lease cost 102 232 386 639 Sublease income (1,259) (905) (3,644) (2,692) Net lease cost $ 1,623 $ 2,417 $ 5,316 $ 7,068 Supplemental balance sheet information related to leases was as follows: September 30, 2021 December 31, 2020 (in thousands) Operating leases: ROU assets $ 22,706 $ 29,798 Operating lease liabilities $ 9,503 $ 10,797 Operating lease liabilities, net of current portion 18,931 25,975 Total operating lease liabilities $ 28,434 $ 36,772 Finance leases: Property and equipment $ 2,861 $ 2,880 Accumulated depreciation (2,318) (1,963) Property and equipment, net $ 543 $ 917 Other current liabilities $ 186 $ 608 Other long-term liabilities — 63 Total finance lease liabilities $ 186 $ 671 Lease term and discount rate information was as follows: For the Nine Months Ended September 30, 2021 2020 Weighted-average remaining lease term (in years): Operating lease 5.7 5.7 Finance lease 0.3 1.2 Weighted-average discount rate: Operating lease 6.2 % 6.2 % Finance lease 6.5 % 7.0 % Maturities of lease liabilities were as follows as of September 30, 2021: Operating Leases Operating Sublease Finance Leases Total (in thousands) Remainder of 2021 $ 3,119 $ (1,292) $ 125 $ 1,952 2022 9,329 (3,588) 64 5,805 2023 4,390 (1,410) — 2,980 2024 3,000 — — 3,000 2025 2,950 — — 2,950 Thereafter 11,222 — — 11,222 Total lease payments 34,010 (6,290) 189 27,909 Less: interest (5,576) — (3) (5,579) Total $ 28,434 $ (6,290) $ 186 $ 22,330 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition | |
Revenue Recognition | Note 5 — Revenue Recognition The following tables present the disaggregation of revenue from contracts with our clients: Revenue by Performance Obligation For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Selling services $ 47,746 $ 44,840 $ 137,683 $ 140,558 Professional services 832 950 2,225 2,984 Total revenue $ 48,578 $ 45,790 $ 139,908 $ 143,542 Revenue by Geography Revenue for each geography generally reflects commissions earned from sales of service contracts managed from revenue delivery centers in that geography and subscription sales and professional services to deploy the Company’s solutions. Predominantly all the service contracts sold and managed by the revenue delivery centers relate to end customers located in the same geography. All NALA revenue represents revenue generated within the U.S. For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) NALA $ 27,215 $ 27,204 $ 78,064 $ 83,235 EMEA 13,529 11,984 39,616 38,837 APJ 7,834 6,602 22,228 21,470 Total revenue $ 48,578 $ 45,790 $ 139,908 $ 143,542 Revenue by Contract Pricing For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Variable consideration $ 34,499 $ 33,188 $ 101,848 $ 103,367 Fixed consideration 14,079 12,602 38,060 40,175 Total revenue $ 48,578 $ 45,790 $ 139,908 $ 143,542 Contract Balances As of September 30, 2021, contract assets and liabilities were $0.0 million and $0.6 million, respectively. As of December 31, 2020, contract assets and liabilities were $0.5 million and $0.4 million, respectively. Transaction Price Allocated to Remaining Performance Obligations As of September 30, 2021, assuming none of the Company’s current contracts with fixed consideration are renewed, the Company estimates receiving approximately $38.8 million in future selling services fixed consideration and approximately $0.4 million in professional services fixed consideration. Contract Acquisition Costs As of September 30, 2021 and December 31, 2020, capitalized contract acquisition costs were $0.6 million and $0.9 million, respectively. The Company recorded amortization expense related to capitalized contract acquisition costs of $0.1 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $0.4 million and $0.8 million for the nine months ended September 30, 2021 and 2020, respectively. Impairment recognized on contract costs was insignificant for the three and nine months ended September 30, 2021. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 6 — Stock-Based Compensation ESPP The Company previously offered an ESPP until its expiration in February 2021. 2021 PSU Awards During March 2021, the Company granted PSUs under the 2020 Plan to certain executives in which the number of shares ultimately received depends on the Company’s achievement of two performance goals for fiscal year 2021 and a rTSR modifier based on the Company’s rTSR for fiscal years 2021, 2022, and 2023 compared to a peer group. The aggregate target number of shares subject to these awards is 0.8 million. The awards were valued on the grant date using a Monte Carlo simulation for the rTSR modifier and using the Company’s closing stock price for the performance metrics for an aggregate grant date fair value of $1.2 million. The number of shares ultimately received related to these awards will range from 0% to 173% of the participant’s target award and will vest on the third anniversary of the grant date. The Company’s expense will be recognized over the service period and adjusted based on estimated achievement of the performance goals. Additionally, certain of the Company’s senior leaders elected to receive a portion of their annual cash corporate incentive plan in PSUs. The Company granted the PSUs under the 2020 Plan during March 2021. The number of shares ultimately received depends on the Company’s achievement of specified revenue, Adjusted EBITDA, and free cash flow performance goals for fiscal year 2021. The aggregate target number of shares subject to these awards is 0.4 million. The awards were valued using the Company’s closing stock price on the grant date and had an aggregate grant date fair value of $0.6 million. The number of shares ultimately received related to these awards ranges from 0% to 200% of the participant’s target award and will vest on the first anniversary of the grant date. The Company’s expense will be recognized over the service period and adjusted based on estimated achievement of the performance targets. Stock-Based Compensation Expense The following table presents stock-based compensation expense as allocated within the Company’s Consolidated Statements of Operations: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Cost of revenue $ 245 $ 110 $ 663 $ 245 Sales and marketing 141 200 500 1,021 Research and development 2 14 34 33 General and administrative 712 942 3,452 2,287 Total stock-based compensation $ 1,100 $ 1,266 $ 4,649 $ 3,586 The above table does not include capitalized stock-based compensation related to internal-use software that was insignificant for the three and nine months ended September 30, 2021 and 2020. Stock Awards A summary of the Company’s stock option activity and related information was as follows: Weighted- Weighted- Average Average Remaining Exercise Contractual Shares Price Life (Years) Intrinsic Value (in thousands) (in thousands) Outstanding as of December 31, 2020 3,030 $ 2.09 $ 1,372 Exercised (275) $ 1.18 Expired and/or forfeited (808) $ 2.02 Outstanding as of September 30, 2021 1,947 $ 2.25 6.19 $ 283 Exercisable as of September 30, 2021 1,843 $ 2.31 6.10 $ 245 As of September 30, 2021, there was $0.1 million of unrecognized compensation expense related to previously granted stock options, which is expected to be recognized over a weighted-average period of 1.1 years. A summary of the Company’s RSU and PSU activity and related information was as follows: Weighted- Average Grant Units Date Fair Value (in thousands) Non-vested as of December 31, 2020 7,015 $ 1.55 Granted 4,791 $ 1.52 Vested (1) (1,882) $ 1.65 Forfeited (1,439) $ 1.61 Non-vested as of September 30, 2021 8,485 $ 1.50 (1) 1,758 shares of common stock were issued for RSUs and PSUs vested and the remaining 124 shares were withheld for taxes. As of September 30, 2021, there was $8.0 million of unrecognized compensation expense related to previously granted RSUs and PSUs, which is expected to be recognized over a weighted-average period of 1.9 years. Potential shares of common stock that are not included in the determination of diluted net loss per share because they are anti-dilutive for the periods presented consist of stock options and unvested RSUs and PSUs. The Company excluded from diluted earnings per share the weighted-average common share equivalents related to 1.5 million and 3.2 million shares for the three months ended September 30, 2021 and 2020, respectively, and 1.3 million and 4.1 million shares for the nine months ended September 30, 2021 and 2020, respectively, because their effect would have been anti-dilutive. |
Restructuring and Other Related
Restructuring and Other Related Costs | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Other Related Costs | |
Restructuring and Other Related Costs | Note 7 — Restructuring and Other Related Costs The Company has undergone restructuring efforts to better align its cost structure with its business and market conditions. These restructuring efforts include severance and other employee costs, lease and other contract termination costs and asset impairments. Severance and other employee costs include severance payments, related employee benefits, stock-based compensation related to the accelerated vesting of certain equity awards and employee-related legal fees. Lease and other contract termination costs include charges related to lease consolidation and abandonment of spaces no longer utilized and the cancellation of certain contracts with outside vendors. Asset impairments include charges related to leasehold improvements and furniture in spaces vacated or no longer in use. The restructuring plans and future cash outlays are recorded in "Accrued expenses," "Accrued compensation," and "Other long-term liabilities" in the Consolidated Balance Sheet as of December 31, 2020. There are no future restructuring plans and future cash outlays as of September 30, 2021. During 2020, the Company announced a restructuring effort to align with its virtual-first operating model and reduce the operating cost structure resulting in a reduction of headcount and office lease costs. The Company recognized charges related to this restructuring effort of $1.0 million for the nine months ended September 30, 2021. The Company does not expect to incur additional charges related to this restructuring effort as of September 30, 2021. The following table presents a reconciliation of the beginning and ending fair value liability balance related to the 2020 restructuring effort: Severance and Other Lease Termination Employee Costs Costs Total (in thousands) Balance as of January 1, 2020 $ — $ — $ — Restructuring and other related costs 780 59 839 Cash paid (442) — (442) Balance as of December 31, 2020 338 59 397 Restructuring and other related costs 897 77 974 Cash paid (1,235) (136) (1,371) Balance as of September 30, 2021 $ — $ — $ — |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes | |
Income Taxes | Note 8 — Income Taxes The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. Earnings from non-U.S. activities are subject to local country income tax. The Company computes its quarterly income tax provision by using a forecasted annual effective tax rate and adjusts for any discrete items arising during the quarter. The primary difference between the effective tax rate and the federal statutory tax rate relates to the valuation allowances on the Company’s net operating losses and foreign tax rate differences. The "Provision for income tax expense" in the Consolidated Statements of Operations primarily consists of income and withholding taxes for foreign and state jurisdictions where the Company has profitable operations, as well as valuation allowance adjustments for certain U.S. tax jurisdictions. No tax benefit was provided for losses incurred in the U.S., Ireland, and Singapore because those losses are offset by a full valuation allowance. The tax years 2012 through 2020 generally remain subject to examination by federal, state, and foreign tax authorities. The gross amount of the Company’s unrecognized tax benefits was $1.0 million as of September 30, 2021 and December 31, 2020, none of which, if recognized, would affect the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the three and nine months ended September 30, 2021 and 2020, interest and penalties recognized were insignificant. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 9 — Commitments and Contingencies Letters of Credit In connection with two of our leased facilities, the Company is required to maintain two letters of credit totaling $2.3 million. The letters of credit are secured by $2.3 million of cash in money market accounts, which are classified as restricted cash in "Other assets" in the Consolidated Balance Sheets. Non-cancelable Service Contract Commitments Future minimum payments under non-cancelable service contract commitments were as follows: September 30, 2021 (in thousands) Remainder of 2021 $ 3,669 2022 10,220 2023 8,183 2024 828 Thereafter — Total $ 22,900 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim Consolidated Financial Statements include the accounts of ServiceSource International, Inc. and its wholly owned subsidiaries and have been prepared in accordance with GAAP and with the instructions to Form 10-Q and Article 8 of Regulation S-X for interim financial information. All intercompany balances and transactions have been eliminated in consolidation. These financial statements do not include all the information required by GAAP for annual financial statements. The unaudited Consolidated Balance Sheet as of December 31, 2020 has been derived from the Company’s audited annual Consolidated Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 24, 2021. In the opinion of management, these Consolidated Financial Statements reflect all adjustments, including normal recurring adjustments, management considers necessary for a fair presentation of the Company’s financial position, operating results, and cash flows for the interim periods presented. These Consolidated Financial Statements and accompanying notes should be read in conjunction with our audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2020, included in our annual report on Form 10-K. Interim results are not necessarily indicative of results for the entire year. |
Use of Estimates | Use of Estimates The preparation of the Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amount of net revenue and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on various assumptions that it believes are reasonable under the circumstances. The Company has considered the effects of the COVID-19 pandemic in determining its estimates. However, future events are difficult to predict and subject to change, especially with the risks and uncertainties related to the impact of the COVID-19 pandemic, which could cause estimates and judgments to require adjustment. Actual results and outcomes may differ from our estimates. |
Cash Equivalents and Restricted Cash | Cash Equivalents and Restricted Cash The Company follows a three-tier fair value hierarchy, which is described in detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Cash equivalents consist of highly liquid investments with original maturities of three months or less at the time of purchase and are classified as a Level 1 investment. Restricted cash consists of cash in money market accounts that are used to secure letters of credit in connection with two of our leased facilities. Restricted cash is recorded within "Other assets" in the Consolidated Balance Sheets and is classified as a Level 1 investment. The Company had restricted cash of $2.3 million as of September 30, 2021 and December 31, 2020. The Company did not have any other financial instruments or debt measured at fair value as of September 30, 2021 and December 31, 2020. There were no transfers between levels during the nine months ended September 30, 2021 and 2020. |
Government Assistance | Government Assistance During 2020, ServiceSource received various grants from the Singapore g overnment, including the Job Support Scheme, which assists enterprises in retaining their local employees during the COVID-19 pandemic. The Company received and recognized income related to the grants of approximately $0.2 million and $0.5 million for the three months ended September 30, 2021 and 2020, respectively, and $0.3 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively. There are no conditions to repay the grants. The Company does not expect to receive additional support related to these grants. Government grants are recognized in the Company’s Consolidated Statements of Operations during the same period that the expenses related to the grant are incurred if there is reasonable |
New Accounting Standards Adopted And New Accounting Standards Issued But Not Yet Adopted | New Accounting Standards Adopted Income Taxes In December 2019, the FASB issued an ASU that simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard effective January 1, 2021 and the effects of this standard were applied prospectively to eligible costs incurred on or after January 1, 2021. The adoption of this standard did not have a material impact on the Consolidated Financial Statements. New Accounting Standards Issued but Not yet Adopted Financial Instruments - Credit Losses In June 2016, the FASB issued an ASU that amends the measurement of credit losses on financial instruments and requires measurement and recognition of expected versus incurred credit losses for financial assets held. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2022, with early adoption permitted. This standard will apply to the Company’s accounts receivable and contract assets. Based on our current analysis, the Company does not expect the adoption to have a material impact on the Consolidated Financial Statements as credit losses from trade receivables have historically been insignificant. The Company will adopt this standard effective January 1, 2023. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Summary of Supplemental Income Statement Information and Other Information | Supplemental income statement information related to leases was as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Operating lease cost $ 2,780 $ 3,090 $ 8,574 $ 9,121 Finance lease cost: Amortization of leased assets 98 213 364 564 Interest on lease liabilities 4 19 22 75 Total finance lease cost 102 232 386 639 Sublease income (1,259) (905) (3,644) (2,692) Net lease cost $ 1,623 $ 2,417 $ 5,316 $ 7,068 Lease term and discount rate information was as follows: For the Nine Months Ended September 30, 2021 2020 Weighted-average remaining lease term (in years): Operating lease 5.7 5.7 Finance lease 0.3 1.2 Weighted-average discount rate: Operating lease 6.2 % 6.2 % Finance lease 6.5 % 7.0 % |
Summary of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows: September 30, 2021 December 31, 2020 (in thousands) Operating leases: ROU assets $ 22,706 $ 29,798 Operating lease liabilities $ 9,503 $ 10,797 Operating lease liabilities, net of current portion 18,931 25,975 Total operating lease liabilities $ 28,434 $ 36,772 Finance leases: Property and equipment $ 2,861 $ 2,880 Accumulated depreciation (2,318) (1,963) Property and equipment, net $ 543 $ 917 Other current liabilities $ 186 $ 608 Other long-term liabilities — 63 Total finance lease liabilities $ 186 $ 671 |
Summary of Maturities of Operating Lease Liabilities | Maturities of lease liabilities were as follows as of September 30, 2021: Operating Leases Operating Sublease Finance Leases Total (in thousands) Remainder of 2021 $ 3,119 $ (1,292) $ 125 $ 1,952 2022 9,329 (3,588) 64 5,805 2023 4,390 (1,410) — 2,980 2024 3,000 — — 3,000 2025 2,950 — — 2,950 Thereafter 11,222 — — 11,222 Total lease payments 34,010 (6,290) 189 27,909 Less: interest (5,576) — (3) (5,579) Total $ 28,434 $ (6,290) $ 186 $ 22,330 |
Operating Lease, Lease Income | Maturities of lease liabilities were as follows as of September 30, 2021: Operating Leases Operating Sublease Finance Leases Total (in thousands) Remainder of 2021 $ 3,119 $ (1,292) $ 125 $ 1,952 2022 9,329 (3,588) 64 5,805 2023 4,390 (1,410) — 2,980 2024 3,000 — — 3,000 2025 2,950 — — 2,950 Thereafter 11,222 — — 11,222 Total lease payments 34,010 (6,290) 189 27,909 Less: interest (5,576) — (3) (5,579) Total $ 28,434 $ (6,290) $ 186 $ 22,330 |
Summary of Maturities of Finance Lease Liabilities | Maturities of lease liabilities were as follows as of September 30, 2021: Operating Leases Operating Sublease Finance Leases Total (in thousands) Remainder of 2021 $ 3,119 $ (1,292) $ 125 $ 1,952 2022 9,329 (3,588) 64 5,805 2023 4,390 (1,410) — 2,980 2024 3,000 — — 3,000 2025 2,950 — — 2,950 Thereafter 11,222 — — 11,222 Total lease payments 34,010 (6,290) 189 27,909 Less: interest (5,576) — (3) (5,579) Total $ 28,434 $ (6,290) $ 186 $ 22,330 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition | |
Disaggregation of Revenue from Contracts with Clients | The following tables present the disaggregation of revenue from contracts with our clients: Revenue by Performance Obligation For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Selling services $ 47,746 $ 44,840 $ 137,683 $ 140,558 Professional services 832 950 2,225 2,984 Total revenue $ 48,578 $ 45,790 $ 139,908 $ 143,542 Revenue by Geography Revenue for each geography generally reflects commissions earned from sales of service contracts managed from revenue delivery centers in that geography and subscription sales and professional services to deploy the Company’s solutions. Predominantly all the service contracts sold and managed by the revenue delivery centers relate to end customers located in the same geography. All NALA revenue represents revenue generated within the U.S. For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) NALA $ 27,215 $ 27,204 $ 78,064 $ 83,235 EMEA 13,529 11,984 39,616 38,837 APJ 7,834 6,602 22,228 21,470 Total revenue $ 48,578 $ 45,790 $ 139,908 $ 143,542 Revenue by Contract Pricing For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Variable consideration $ 34,499 $ 33,188 $ 101,848 $ 103,367 Fixed consideration 14,079 12,602 38,060 40,175 Total revenue $ 48,578 $ 45,790 $ 139,908 $ 143,542 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stock-Based Compensation | |
Summary of Stock-Based Compensation Expense | The following table presents stock-based compensation expense as allocated within the Company’s Consolidated Statements of Operations: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Cost of revenue $ 245 $ 110 $ 663 $ 245 Sales and marketing 141 200 500 1,021 Research and development 2 14 34 33 General and administrative 712 942 3,452 2,287 Total stock-based compensation $ 1,100 $ 1,266 $ 4,649 $ 3,586 |
Summary of Option and Restricted Stock Activity | A summary of the Company’s stock option activity and related information was as follows: Weighted- Weighted- Average Average Remaining Exercise Contractual Shares Price Life (Years) Intrinsic Value (in thousands) (in thousands) Outstanding as of December 31, 2020 3,030 $ 2.09 $ 1,372 Exercised (275) $ 1.18 Expired and/or forfeited (808) $ 2.02 Outstanding as of September 30, 2021 1,947 $ 2.25 6.19 $ 283 Exercisable as of September 30, 2021 1,843 $ 2.31 6.10 $ 245 |
Summary of Additional Information Concerning Vested RSUs and PSUs | A summary of the Company’s RSU and PSU activity and related information was as follows: Weighted- Average Grant Units Date Fair Value (in thousands) Non-vested as of December 31, 2020 7,015 $ 1.55 Granted 4,791 $ 1.52 Vested (1) (1,882) $ 1.65 Forfeited (1,439) $ 1.61 Non-vested as of September 30, 2021 8,485 $ 1.50 (1) 1,758 shares of common stock were issued for RSUs and PSUs vested and the remaining 124 shares were withheld for taxes. |
Restructuring and Other Relat_2
Restructuring and Other Related Costs (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Other Related Costs | |
Schedule of Restructuring and Other Reserve Activities | The following table presents a reconciliation of the beginning and ending fair value liability balance related to the 2020 restructuring effort: Severance and Other Lease Termination Employee Costs Costs Total (in thousands) Balance as of January 1, 2020 $ — $ — $ — Restructuring and other related costs 780 59 839 Cash paid (442) — (442) Balance as of December 31, 2020 338 59 397 Restructuring and other related costs 897 77 974 Cash paid (1,235) (136) (1,371) Balance as of September 30, 2021 $ — $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies | |
Future Minimum Payments Under Non-cancelable Service Contract Commitments | Future minimum payments under non-cancelable service contract commitments were as follows: September 30, 2021 (in thousands) Remainder of 2021 $ 3,669 2022 10,220 2023 8,183 2024 828 Thereafter — Total $ 22,900 |
The Company (Details)
The Company (Details) | 9 Months Ended |
Sep. 30, 2021country | |
The Company | |
Years of operating experience | 20 years |
Number of countries in which company operates | 175 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)location | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)location | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Number of leased facilities | location | 2 | 2 | |||
Proceeds received from grant | $ 0.2 | $ 0.5 | $ 0.3 | $ 0.9 | |
Financial instrument, fair value | 0 | 0 | $ 0 | ||
Asset transfer, L1 to L2 | 0 | 0 | 0 | 0 | |
Asset transfer, L2 to L1 | 0 | 0 | 0 | 0 | |
Asset transfer, into L3 | 0 | 0 | |||
Asset transfer, out of L3 | 0 | 0 | |||
Liability transfer, L1 to L2 | 0 | 0 | 0 | 0 | |
Liability transfer, L2 to L1 | 0 | $ 0 | 0 | 0 | |
Liability transfer, into L3 | 0 | 0 | |||
Liability transfer, out of L3 | 0 | $ 0 | |||
Level 1 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Restricted cash | $ 2.3 | $ 2.3 | $ 2.3 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Jul. 31, 2018 | |
Debt Instrument [Line Items] | |||||||
Revolver | $ 10,000 | $ 10,000 | $ 15,000 | ||||
Proceeds from Lines of Credit | 13,500 | $ 27,000 | |||||
Repayments of Lines of Credit | 18,500 | 12,000 | |||||
BSBY | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread of interest rate | 2.00% | ||||||
BSBY | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread of interest rate | 2.50% | ||||||
Base rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread of interest rate | 1.00% | ||||||
Base rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread of interest rate | 1.50% | ||||||
Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Additional borrowing capacity | $ 10,000 | ||||||
Revised maximum borrowing capacity | 45,000 | ||||||
Revolver | $ 10,000 | $ 10,000 | |||||
Effective interest rate | 2.42% | 2.42% | |||||
Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 35,000 | $ 40,000 | |||||
Line of credit facility, remaining borrowing capacity | $ 12,200 | $ 12,200 | |||||
Interest expense | $ 100 | $ 100 | $ 300 | $ 400 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021floor | |
Third-Party One [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessor, Operating Lease, Number Of Floors Leased | 1 |
Third-Party Two [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessor, Operating Lease, Number Of Floors Leased | 2 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Option to extend, term (in years) | 1 year |
Option to terminate, term (in years) | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Option to extend, term (in years) | 7 years |
Leases - Supplemental Income St
Leases - Supplemental Income Statement Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases | ||||
Operating lease cost | $ 2,780 | $ 3,090 | $ 8,574 | $ 9,121 |
Finance lease cost: | ||||
Amortization of leased assets | 98 | 213 | 364 | 564 |
Interest on lease liabilities | 4 | 19 | 22 | 75 |
Total finance lease cost | 102 | 232 | 386 | 639 |
Sublease income | (1,259) | (905) | (3,644) | (2,692) |
Net lease cost | $ 1,623 | $ 2,417 | $ 5,316 | $ 7,068 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Operating leases: | ||
ROU assets | $ 22,706 | $ 29,798 |
Operating lease liabilities | 9,503 | 10,797 |
Operating lease liabilities, net of current portion | 18,931 | 25,975 |
Total operating lease liabilities | 28,434 | 36,772 |
Finance leases: | ||
Property and equipment | 2,861 | 2,880 |
Accumulated depreciation | (2,318) | (1,963) |
Property and equipment, net | 543 | 917 |
Other current liabilities | 186 | 608 |
Other long-term liabilities | 0 | 63 |
Total finance lease liabilities | $ 186 | $ 671 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property and equipment, net | Property and equipment, net |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Sep. 30, 2021 | Sep. 30, 2020 |
Weighted-average remaining lease term (in years): | ||
Operating lease | 5 years 8 months 12 days | 5 years 8 months 12 days |
Finance lease | 3 months 18 days | 1 year 2 months 12 days |
Weighted-average discount rate: | ||
Operating lease | 6.20% | 6.20% |
Finance lease | 6.50% | 7.00% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Operating Leases | ||
Remainder of 2021 | $ 3,119 | |
2022 | 9,329 | |
2023 | 4,390 | |
2024 | 3,000 | |
2025 | 2,950 | |
Thereafter | 11,222 | |
Total lease payments | 34,010 | |
Less: interest | (5,576) | |
Total | 28,434 | $ 36,772 |
Operating Sublease | ||
Remainder of 2021 | (1,292) | |
2022 | (3,588) | |
2023 | (1,410) | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total | (6,290) | |
Finance Leases | ||
Remainder of 2021 | 125 | |
2022 | 64 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total lease payments | 189 | |
Less: interest | (3) | |
Total | 186 | $ 671 |
Total | ||
Remainder of 2021 | 1,952 | |
2022 | 5,805 | |
2023 | 2,980 | |
2024 | 3,000 | |
2025 | 2,950 | |
Thereafter | 11,222 | |
Total lease payments | 27,909 | |
Less: interest | (5,579) | |
Total | $ 22,330 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 48,578 | $ 45,790 | $ 139,908 | $ 143,542 |
Variable consideration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 34,499 | 33,188 | 101,848 | 103,367 |
Fixed consideration | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 14,079 | 12,602 | 38,060 | 40,175 |
NALA | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 27,215 | 27,204 | 78,064 | 83,235 |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 13,529 | 11,984 | 39,616 | 38,837 |
APJ | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 7,834 | 6,602 | 22,228 | 21,470 |
Selling services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 47,746 | 44,840 | 137,683 | 140,558 |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 832 | $ 950 | $ 2,225 | $ 2,984 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Contract asset | $ 0 | $ 0 | $ 0.5 | ||
Contract liability | 0.6 | 0.6 | 0.4 | ||
Contract acquisition asset | 0.6 | 0.6 | $ 0.9 | ||
Amortization of contract acquisition costs | 0.1 | $ 0.3 | 0.4 | $ 0.8 | |
Selling services | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Remaining performance obligation | 38.8 | 38.8 | |||
Professional services | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Remaining performance obligation | $ 0.4 | $ 0.4 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021USD ($)itemshares | Sep. 30, 2021USD ($)shares | Sep. 30, 2020shares | Sep. 30, 2021USD ($)shares | Sep. 30, 2020shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number Of Performance Goals | item | 2 | ||||
Antidilutive shares excluded from diluted earnings per share calculation (in shares) | shares | 1,500 | 3,200 | 1,300 | 4,100 | |
PSUs | Certain Executives | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 800 | ||||
Fair value of shares granted | $ | $ 1.2 | ||||
PSUs | Certain Senior Leaders | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 400 | ||||
Fair value of shares granted | $ | $ 0.6 | ||||
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense, stock options | $ | $ 0.1 | $ 0.1 | |||
Unrecognized compensation expense, weighted-average period recognized | 1 year 1 month 6 days | ||||
RSUs and PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | shares | 4,791 | ||||
Unrecognized compensation expense, weighted-average period recognized | 1 year 10 months 24 days | ||||
Unrecognized compensation expense, RSUs and PSUs | $ | $ 8 | $ 8 | |||
Minimum | PSUs | Certain Executives | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares received from rewards, percent | 0.00% | ||||
Minimum | PSUs | Certain Senior Leaders | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares received from rewards, percent | 0.00% | ||||
Maximum | PSUs | Certain Executives | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares received from rewards, percent | 173.00% | ||||
Maximum | PSUs | Certain Senior Leaders | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares received from rewards, percent | 200.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 1,100 | $ 1,266 | $ 4,649 | $ 3,586 |
Cost of revenue. | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 245 | 110 | 663 | 245 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 141 | 200 | 500 | 1,021 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 2 | 14 | 34 | 33 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 712 | $ 942 | $ 3,452 | $ 2,287 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option Activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Shares | ||
Outstanding, beginning balance (in shares) | 3,030 | |
Number of shares, options exercised (in shares) | (275) | |
Expired and/or forfeited (in shares) | (808) | |
Outstanding, ending balance (in shares) | 1,947 | |
Options exercisable (in shares) | 1,843 | |
Weighted-Average Exercise Price | ||
Outstanding, weighted average exercise, beginning balance (in dollars per share) | $ 2.09 | |
Weighted-average exercise price, options exercised (in dollars per share) | 1.18 | |
Expired and/or forfeited, weighted average exercise price (in dollars per share) | 2.02 | |
Outstanding, weighted average exercise, ending balance (in dollars per share) | 2.25 | |
Options exercisable, weighted average option price per share (in dollars per share) | $ 2.31 | |
Outstanding, weighted average remaining contractual life (years) | 6 years 2 months 8 days | |
Options exercisable, weighted average remaining contractual life (years) | 6 years 1 month 6 days | |
Outstanding, intrinsic value | $ 283 | $ 1,372 |
Options exercisable, intrinsic value | $ 245 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - RSUs and PSUs shares in Thousands | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Units | |
Non-vested, beginning balance (in shares) | 7,015 |
Granted (in shares) | 4,791 |
Vested (in shares) | (1,882) |
Forfeited (in shares) | (1,439) |
Unvested, ending balance (in shares) | 8,485 |
Weighted-Average Grant Date Fair Value | |
Non-vested, weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 1.55 |
Granted, weighted average grant date fair value (in dollars per share) | $ / shares | 1.52 |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | 1.65 |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 1.61 |
Non-vested, weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 1.50 |
Shares withheld for tax purposes (in shares) | 124 |
Restructuring and Other Relat_3
Restructuring and Other Related Costs - Narrative (Details) - Restructuring Effort 2020 - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 974 | $ 839 |
Other additional restructuring costs | $ 0 |
Restructuring and Other Relat_4
Restructuring and Other Related Costs - Restructuring and Other Reserve Activities (Details) - Restructuring Effort 2020 - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 397 | $ 0 |
Restructuring and other related costs | 974 | 839 |
Cash paid | (1,371) | (442) |
Ending Balance | 0 | 397 |
Severance and Other Employee Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 338 | 0 |
Restructuring and other related costs | 897 | 780 |
Cash paid | (1,235) | (442) |
Ending Balance | 0 | 338 |
Lease Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 59 | 0 |
Restructuring and other related costs | 77 | 59 |
Cash paid | (136) | 0 |
Ending Balance | $ 0 | $ 59 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Income Taxes | ||
Unrecognized tax benefits | $ 1 | $ 1 |
Unrecognized tax benefits that would impact effective tax rate | $ 0 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | Sep. 30, 2021USD ($)facilityitem |
Other Commitments [Line Items] | |
Number of leased facilities | facility | 2 |
Number of letters of credit | item | 2 |
Money Market Mutual Funds | Letter of Credit | |
Other Commitments [Line Items] | |
Letters of credit | $ 2.3 |
Restricted cash | $ 2.3 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Payments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Non-cancelable Service Contract Commitments | |
Remainder of 2021 | $ 3,669 |
2022 | 10,220 |
2023 | 8,183 |
2024 | 828 |
Thereafter | 0 |
Total | $ 22,900 |