Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Aug. 31, 2023 | Sep. 30, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39348 | |
Entity Registrant Name | ACCOLADE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 01-0969591 | |
Entity Address, Address Line One | 1201 Third Avenue | |
Entity Address, Address Line Two | Suite 1700 | |
Entity Address, City or Town | Seattle | |
Entity Address State Or Province | WA | |
Entity Address, Postal Zip Code | 98101 | |
City Area Code | 206 | |
Local Phone Number | 926-8100 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | ACCD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,232,192 | |
Entity Central Index Key | 0001481646 | |
Current Fiscal Year End Date | --02-29 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2023 | Feb. 28, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 292,187 | $ 321,083 |
Accounts receivable, net | 22,114 | 23,435 |
Unbilled revenue | 3,200 | 3,260 |
Current portion of deferred contract acquisition costs | 4,474 | 4,022 |
Prepaid and other current assets | 14,286 | 14,149 |
Total current assets | 336,261 | 365,949 |
Property and equipment, net | 17,823 | 14,763 |
Operating lease right-of-use assets | 26,617 | 29,525 |
Goodwill | 278,191 | 278,191 |
Intangible assets, net | 183,689 | 203,202 |
Deferred contract acquisition costs | 9,077 | 9,815 |
Other assets | 2,662 | 1,624 |
Total assets | 854,320 | 903,069 |
Current liabilities: | ||
Accounts payable | 7,098 | 10,155 |
Accrued expenses and other current liabilities | 12,575 | 11,744 |
Accrued compensation | 25,325 | 39,346 |
Due to customers | 10,128 | 15,694 |
Current portion of deferred revenue | 47,522 | 35,191 |
Current portion of operating lease liabilities | 6,355 | 7,284 |
Total current liabilities | 109,003 | 119,414 |
Loans payable, net of unamortized issuance costs | 283,162 | 282,323 |
Operating lease liabilities | 24,249 | 27,189 |
Other noncurrent liabilities | 165 | 203 |
Deferred revenue | 97 | 154 |
Total liabilities | 416,676 | 429,283 |
Commitments and Contingencies (note 10) | ||
Stockholders' equity | ||
Common stock par value $0.0001; 500,000,000 shares authorized; 76,053,281 and 73,089,075 shares issued and outstanding at August 31, 2023 and February 28, 2023, respectively | 8 | 7 |
Additional paid-in capital | 1,463,164 | 1,428,073 |
Accumulated deficit | (1,025,528) | (954,294) |
Total stockholders' equity | 437,644 | 473,786 |
Total liabilities and stockholders' equity | $ 854,320 | $ 903,069 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Aug. 31, 2023 | Feb. 28, 2023 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 76,081,370 | 73,089,075 |
Common stock, shares outstanding | 76,053,281 | 73,089,075 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Condensed Consolidated Statements of Operations | ||||
Revenue | $ 96,864 | $ 87,643 | $ 190,090 | $ 173,171 |
Cost of revenue, excluding depreciation and amortization | 55,317 | 49,830 | 109,520 | 97,445 |
Operating expenses: | ||||
Product and technology | 25,602 | 26,194 | 51,501 | 53,011 |
Sales and marketing | 24,076 | 24,936 | 49,109 | 50,550 |
General and administrative | 16,259 | 21,020 | 32,339 | 41,258 |
Depreciation and amortization | 10,818 | 11,571 | 22,458 | 23,147 |
Goodwill impairment | 299,705 | |||
Total operating expenses | 76,755 | 83,721 | 155,407 | 467,671 |
Loss from operations | (35,208) | (45,908) | (74,837) | (391,945) |
Interest income (expense), net | 1,714 | (236) | 2,635 | (870) |
Other income (expense) | 753 | (130) | 1,143 | (180) |
Loss before income taxes | (32,741) | (46,274) | (71,059) | (392,995) |
Income tax benefit (expense) | (84) | (249) | (175) | 3,650 |
Net loss | $ (32,825) | $ (46,523) | $ (71,234) | $ (389,345) |
Net loss per share, basic | $ (0.43) | $ (0.66) | $ (0.96) | $ (5.54) |
Net loss per share, diluted | $ (0.66) | $ (5.54) | ||
Weighted-average common shares outstanding, basic | 75,487,717 | 70,475,778 | 74,334,111 | 70,251,890 |
Weighted-average common shares outstanding, diluted | 70,475,778 | 70,251,890 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders Equity (Deficit) - USD ($) $ in Thousands | Common stock | Additional paid-in capital | Accumulated deficit | Total |
Balance at Feb. 28, 2022 | $ 7 | $ 1,350,431 | $ (494,644) | $ 855,794 |
Balance (shares) at Feb. 28, 2022 | 67,098,477 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Settlement of acquisition-related contingent consideration (shares) | 1,939,853 | |||
Exercise of stock options and vesting of restricted stock units | 358 | 358 | ||
Exercise of stock options and vesting of restricted stock units (shares) | 228,701 | |||
Issuance of common stock in connection with the employee stock purchase plan | 1,788 | 1,788 | ||
Issuance of common stock in connection with the employee stock purchase plan (shares) | 343,310 | |||
Stock-based compensation expense | 19,389 | 19,389 | ||
Net loss | (342,822) | (342,822) | ||
Balance at May. 31, 2022 | $ 7 | 1,371,966 | (837,466) | 534,507 |
Balance (shares) at May. 31, 2022 | 69,610,341 | |||
Balance at Feb. 28, 2022 | $ 7 | 1,350,431 | (494,644) | 855,794 |
Balance (shares) at Feb. 28, 2022 | 67,098,477 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (389,345) | |||
Balance at Aug. 31, 2022 | $ 7 | 1,390,296 | (883,989) | 506,314 |
Balance (shares) at Aug. 31, 2022 | 71,538,377 | |||
Balance at May. 31, 2022 | $ 7 | 1,371,966 | (837,466) | 534,507 |
Balance (shares) at May. 31, 2022 | 69,610,341 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Settlement of acquisition-related contingent consideration (shares) | 1,327,408 | |||
Exercise of stock options and vesting of restricted stock units | 816 | 816 | ||
Exercise of stock options and vesting of restricted stock units (shares) | 600,628 | |||
Stock-based compensation expense | 17,514 | 17,514 | ||
Net loss | (46,523) | (46,523) | ||
Balance at Aug. 31, 2022 | $ 7 | 1,390,296 | (883,989) | 506,314 |
Balance (shares) at Aug. 31, 2022 | 71,538,377 | |||
Balance at Feb. 28, 2023 | $ 7 | 1,428,073 | (954,294) | 473,786 |
Balance (shares) at Feb. 28, 2023 | 73,089,075 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of stock options and vesting of restricted stock units | $ 1 | 2,530 | 2,531 | |
Exercise of stock options and vesting of restricted stock units (shares) | 1,895,163 | |||
Issuance of common stock in connection with the employee stock purchase plan | 1,992 | 1,992 | ||
Issuance of common stock in connection with the employee stock purchase plan (shares) | 280,162 | |||
Stock-based compensation expense | 14,278 | 14,278 | ||
Net loss | (38,409) | (38,409) | ||
Balance at May. 31, 2023 | $ 8 | 1,446,873 | (992,703) | 454,178 |
Balance (shares) at May. 31, 2023 | 75,264,400 | |||
Balance at Feb. 28, 2023 | $ 7 | 1,428,073 | (954,294) | 473,786 |
Balance (shares) at Feb. 28, 2023 | 73,089,075 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | (71,234) | |||
Balance at Aug. 31, 2023 | $ 8 | 1,463,164 | (1,025,528) | 437,644 |
Balance (shares) at Aug. 31, 2023 | 76,081,370 | |||
Balance at May. 31, 2023 | $ 8 | 1,446,873 | (992,703) | 454,178 |
Balance (shares) at May. 31, 2023 | 75,264,400 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Release of indemnity shares in connection with acquisition (shares) | 28,089 | |||
Exercise of stock options and vesting of restricted stock units | 565 | 565 | ||
Exercise of stock options and vesting of restricted stock units (shares) | 788,881 | |||
Stock-based compensation expense | 15,726 | 15,726 | ||
Net loss | (32,825) | (32,825) | ||
Balance at Aug. 31, 2023 | $ 8 | $ 1,463,164 | $ (1,025,528) | $ 437,644 |
Balance (shares) at Aug. 31, 2023 | 76,081,370 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 31, 2023 | Aug. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (71,234) | $ (389,345) |
Adjustments to reconcile net loss to net cash used in Operating activities: | ||
Goodwill impairment | 299,705 | |
Depreciation and amortization expense | 22,458 | 23,147 |
Amortization of deferred contract acquisition costs | 2,368 | 1,713 |
Deferred income taxes | (3,859) | |
Noncash interest expense | 839 | 838 |
Stock-based compensation expense | 30,004 | 36,903 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable and unbilled revenue | 1,381 | 193 |
Accounts payable and accrued expenses | (1,565) | 3,623 |
Deferred contract acquisition costs | (2,082) | (3,730) |
Deferred revenue and due to customers | 6,707 | 6,403 |
Accrued compensation | (14,020) | (8,249) |
Other liabilities | (1,000) | (474) |
Other assets | (1,181) | (322) |
Net cash used in operating activities | (27,325) | (33,454) |
Cash flows from investing activities: | ||
Capitalized software development costs | (4,698) | (1,499) |
Purchases of property and equipment | (1,965) | (1,405) |
Net cash used in investing activities | (6,663) | (2,904) |
Cash flows from financing activities: | ||
Proceeds from stock option exercises | 3,100 | 1,178 |
Proceeds from employee stock purchase plan | 1,992 | 1,788 |
Payment of contingent consideration for acquisition | (1,828) | |
Net cash provided by financing activities | 5,092 | 1,138 |
Net decrease in cash and cash equivalents | (28,896) | (35,220) |
Cash and cash equivalents, beginning of period | 321,083 | 365,853 |
Cash and cash equivalents, end of period | 292,187 | 330,633 |
Supplemental cash flow information: | ||
Interest paid | 820 | 820 |
Fixed assets and capitalized software included in accounts payable | 99 | 429 |
Other receivable related to stock option exercises | 4 | 4 |
Income taxes paid | $ 303 | $ 22 |
Background
Background | 6 Months Ended |
Aug. 31, 2023 | |
Background | |
Background | (1) Background Accolade, Inc. (Accolade or together with its subsidiaries, the Company) provides an advocacy-led, nationwide care delivery service comprised of personalized, technology-enabled solutions that help people better understand, navigate, and utilize the healthcare system and their workplace benefits. The Company’s customers are primarily employers that deploy Accolade solutions in order to provide employees and their families (the members) a single place to turn for their health, healthcare, and benefits needs. The Company also offers expert medical opinion services to commercial customers (which includes employers, health plans, and governmental entities) and virtual primary care both directly to consumers and to commercial customers. These services are designed to improve the member experience, encourage better healthcare outcomes, and lower costs for both members and customers. Accolade is co-headquartered in Seattle, Washington and Plymouth Meeting, Pennsylvania. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Aug. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | (2) Basis of Presentation and Summary of Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended February 28, 2023 appearing in the Company’s Annual Report on Form 10-K and filed with the Securities and Exchange Commission (the SEC) on April 28, 2023. (a) Basis of Presentation and Principles of Consolidation Accolade’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the Company’s accounts and those of the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has various administrative service agreements (ASA) with professional medical corporations established in California, Illinois, Wyoming, and New Jersey (PC). The PCs employ or contract with medical providers who provide services via the Company’s technology platform. The ASAs are evergreen and are terminable by the parties for breach or bankruptcy. Through the ASAs, the Company provides non-clinical administrative services to the PCs and manages the economic activities that most significantly affect PCs. The PCs retain control over the provision of medical services and the PC’s clinical personnel. The PCs are variable interest entities (VIE) to the Company. (b) Unaudited Interim Financial Statements The accompanying condensed consolidated financial statements and the related footnote disclosures are unaudited. The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s interim condensed consolidated financial position as of August 31, 2023, the results of its operations for the three and six months ended August 31, 2023 and 2022, and its cash flows for the six months ended August 31, 2023 and 2022. The results for the three and six months ended August 31, 2023 are not necessarily indicative of results to be expected for the year ending February 29, 2024, any other interim periods, or any future year or period. The Company’s management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended February 28, 2023. (c) Capitalized Internal-Use Software Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, including tools that enable the Company’s employees to interact with members and their providers, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs related to minor upgrades, minor enhancements, and maintenance activities are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. Internal-use software is included in property and equipment and is amortized on a straight-line basis over 3 years. For the three months ended August 31, 2023 and 2022, the Company capitalized $1,765 and $733, respectively, for internal-use software. For the six months ended August 31, 2023 and 2022, the Company capitalized $4,175 and $1,499, respectively, for internal-use software. Amortization expense related to capitalized internal-use software during the three months ended August 31, 2023 and 2022 was $785 and $289, respectively. Amortization expense related to capitalized internal-use software during the six months ended August 31, 2023 and 2022 was $1,131 and $579, respectively. (d) Impairment of Long-Lived Assets The Company reviews long-lived assets, such as property and equipment and finite-lived intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, then an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the fair value of the asset. (e) Intangible Assets The Company has acquired intangible assets through various acquisitions. Intangible assets are recorded at fair value on the date of acquisition and are subject to amortization over the estimated useful lives of each asset. Estimates of fair value and useful lives are based on historical factors, current circumstances, and the experience and judgment of management. Estimates and assumptions used to value intangible assets are evaluated by management on an ongoing basis. (f) Goodwill Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized, but is subject to evaluations of its recoverability annually and upon the identification of a triggering event. The Company has a single reporting unit and all goodwill relates to that reporting unit. The Company performs an impairment analysis of goodwill on an annual basis in the fourth quarter of each fiscal year or more frequently if changes in circumstances or the occurrence of events suggest that an impairment exists. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded. ( g ) Revenue and Deferred Revenue Revenue Recognition The Company generates revenue by providing customers access to its advocacy, expert medical opinion, and virtual primary care services, as well as through utilization of its expert medical opinion and virtual primary care services. Contracts with customers that include expert medical opinion or virtual primary care services may contain either an access fee, a utilization-based fee, or both. In accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers reflects the consideration to which it expects to be entitled in exchange for those services. Accordingly, the Company determines 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 contracts; and ● recognition of revenue when, or as, the Company satisfies a performance obligation. At contract inception, the Company assesses the type of services being provided and assesses the performance obligations in the contract. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on overall pricing objectives, taking into consideration market conditions and other factors, using an expected cost plus margin approach. The Company considered the variable consideration allocation exception in ASC 606 for its advocacy contracts and concluded that such exception for allocating variable consideration to distinct performance obligations or distinct time periods within a series was not met primarily due to variability in its per-member-per-month (PMPM) pricing. The majority of fees earned by the Company are considered to be variable consideration due to both the uncertainty regarding the total number of members, consultations or visits for which the Company will invoice the customer, as well as the variable PMPM fees that are dependent upon the achievement of performance metrics and/or healthcare cost savings. Performance metrics are measured monthly, quarterly, or annually, and with respect to the achievement of healthcare cost savings targets, annually (typically measured on a calendar year basis). Accordingly, at contract inception and on an ongoing basis, as part of the Company’s estimate of the transaction price, the Company determines whether any such fees should be constrained, and the Company includes the estimated consideration for those fees to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur (and is therefore considered to be unconstrained). Consideration related to the Company’s achievement of healthcare cost savings is typically constrained until the end of the applicable calendar year due to uncertainty related to factors outside of the Company’s control. Consideration related to other performance metrics is typically not constrained based on the Company’s prior success of achieving such metrics. On an ongoing basis, the Company reassesses its estimates for variable consideration, which can change based upon its assessment of the achievement of performance metrics and healthcare cost savings, as well as the number of members, consultations, or visits. Access Fees The Company generates revenue primarily from contracts with customers to access the Company’s advocacy, expert medical opinion, and virtual primary care services. The Company prices access fees primarily using a recurring PMPM fee, typically with a portion of the fee calculated as the product of a fixed rate times the number of members (fixed PMPM fee), plus a variable PMPM fee calculated as the product of a variable rate times the number of members (variable PMPM fee). The fees associated with the variable PMPM fee can be earned through the achievement of performance metrics and/or the realization of healthcare cost savings resulting from use of the Company’s services. Collectively, the fixed PMPM fee and variable PMPM fee are referred to as the total PMPM fee. The Company’s PMPM pricing varies by contract. In certain contracts, the maximum total PMPM fee varies during the contract term (total PMPM rate increases or decreases annually), while in other contracts, the total PMPM maximum fee is consistent over the term, yet the fixed and variable portions vary. For example, in certain contracts the fixed PMPM fee increases on an annual basis while the variable PMPM fee decreases on an annual basis, resulting in the same total PMPM fee throughout the term of the contract. The PMPM fees for expert medical opinion and virtual primary care services may be tiered based upon the customer’s utilization. Access to the Company’s services represent a single stand-ready performance obligation. The Company’s contracts include stand-ready services to provide eligible participants with access to the Company’s services and to perform an unspecified quantity of interactions with members during the contract period. Accordingly, the Company’s services are generally viewed as stand-ready performance obligations comprised of a series of distinct daily services that are substantially the same and have the same pattern of transfer. For advocacy services, the Company satisfies these performance obligations over time and recognizes revenue related to its services as the services are provided using a measure of progress based upon the actual number of members eligible for the service during the respective period as a percentage of the estimated members expected to be eligible for the service over the term of the contract. The Company believes a measure of progress based on the number of members is the most appropriate measurement of control of the services being transferred to the customer as the amount of internal resources necessary to stand-ready is directly correlated to the number of members who can use the services. For the majority of expert medical opinion services, the Company satisfies these performance obligations over time and recognizes revenue in the amount of consideration for which it has the right to invoice using the as-invoiced practical expedient. Access fees also include access to the Company’s virtual primary care services sold directly to consumers on a monthly or yearly fixed fee subscription basis. For these services, the Company satisfies these stand-ready performance obligations over time and recognizes revenue ratably over the subscription period. Utilization-based fees The Company also generates revenue when members utilize the expert medical opinion and virtual primary care services that are billed based on utilization. Many, but not all, contracts with customers contain utilization-based fees. For any utilization-based fees, the Company satisfies these performance obligations over time and recognizes revenue in the amount of consideration for which it has the right to invoice using the as-invoiced practical expedient for any consultations or visits sold to commercial customers as well as any non-insured consultations or visits related to virtual primary care services sold directly to consumers. For any consultations or visits that are paid through insurance claims, the Company recognizes revenue as the consultations and visits occur in an amount that reflects the consideration that is expected based upon then-current prices and historical experience from insurance payors. Deferred Revenue The Company typically invoices its customers in advance of the services performed on a monthly or quarterly basis, and the amount invoiced typically represents the maximum total PMPM fee for the estimated number of eligible members over the applicable invoice period. The total PMPM fee covers the stand-ready services in the Company’s typical contracts (i.e., the performance obligations are not separately priced or invoiced). The maximum total PMPM fee that is invoiced includes both the fixed PMPM fee and the variable PMPM fee related to the performance metrics and/or the realization of healthcare cost savings that can be achieved during the period. These fees are classified as deferred revenue on the Company’s consolidated balance sheet until such time that revenue can be recognized. In the event the Company fails to satisfy any of the performance metrics and/or realization of healthcare cost savings that are billed in advance, the Company will refund the applicable portion of the fee or offset the amount against a future invoice. These amounts are included in due to customers on the Company’s consolidated balance sheet. The Company’s accounts receivable represent rights to consideration that are unconditional. ( h ) Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents. The Company maintains its cash primarily with domestic financial institutions of high credit quality, which may exceed federal deposit insurance corporation limits. The Company invests its cash equivalents in highly rated money market funds and U.S. treasury bills with original maturities of three months or less. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents and performs periodic evaluations of the credit standing of such institutions. (i) Leases Whenever the Company enters into a new arrangement, it determines, at the inception date, whether the arrangement is or contains a lease. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the right to direct the use of, and obtain substantially all the economic benefits from, the use of the underlying asset. For each lease, the Company then determines the lease term, the present value of lease payments, and the classification of the lease as either an operating or finance lease. The Company has elected, for all of its leases, to not separate lease and non-lease components. The lease term is the period of the lease not cancellable by the Company, together with periods covered by: (i) renewal options the Company is reasonably certain to exercise, (ii) termination options the Company is reasonably certain not to exercise, and (iii) renewal or termination options that are controlled by the lessor. The present value of lease payments is calculated based on: (1) Lease payments – Lease payments included in the measurement of the lease asset or liability comprise the following: fixed payments (including in-substance fixed payments), and the exercise price of a lessee option to purchase the underlying asset if the lessee is reasonably certain to exercise. (2) Discount rate – the discount rate is determined based on information available to the Company upon the commencement of the lease. Lessees are required to use the rate implicit in the lease whenever such rate is readily available; however, as the implicit rate in the Company’s leases is generally not readily determinable, the Company generally uses the incremental borrowing rate it would have to pay to borrow an amount equal to the lease payments, on a collateralized basis, over a timeframe similar to the lease term. In making the determination of whether a lease is an operating lease or a finance lease, the Company considers the lease term in relation to the economic life of the leased asset, the present value of lease payments in relation to the fair value of the leased asset and certain other factors, including the lessee’s and lessor’s rights, obligations, and economic incentives over the term of the lease. The Company does not recognize leases with an initial term of 12 months or less on its consolidated balance sheets and recognizes these payments in the consolidated statements of operations on a straight-line basis over the lease term. Certain leases contain variable payments which are based on usage or operating costs, such as utilities and maintenance. These payments are not included in the measurement of the lease liability or corresponding right-of-use asset due to the uncertainty of the payment amount and are recorded as lease expense in the period incurred. |
Revenue
Revenue | 6 Months Ended |
Aug. 31, 2023 | |
Revenue | |
Revenue | (3) Revenue The following table presents the Company’s revenues disaggregated by revenue source: Three Months Ended August 31, Six Months Ended August 31, 2023 2022 2023 2022 Access fees $ 70,897 $ 67,878 $ 137,494 $ 136,003 Utilization-based fees 25,967 19,765 52,596 37,168 Total $ 96,864 $ 87,643 $ 190,090 $ 173,171 As of August 31, 2023, revenue is expected to be recognized from remaining performance obligations as follows: Fiscal year ending February 28(29), Remainder of 2024 $ 105,469 2025 83,146 2026 22,972 2027 6,058 2028 94 Total $ 217,739 The expected revenue includes variable fee estimates for the non-cancellable term of the Company’s contracts. The expected revenue does not include amounts of variable consideration that are constrained. Significant changes to the contract liability balances during the six months ended August 31, 2023 and 2022 were the result of revenue recognized and net cash received. Significant changes in the deferred revenue balances during the six months ended August 31, 2023 and 2022 were the result of recognized revenue of $34,232 and $29,550, respectively, that were previously included in deferred revenue. In addition, significant changes to the contract asset balances during the six months ended August 31, 2023 and 2022 were the result of revenue recognized as well as transfers to accounts receivable. Contract assets relating to unbilled revenue are transferred to accounts receivable when the right to consideration becomes unconditional. Revenue related to performance obligations satisfied in prior periods that was recognized during the three months ended August 31, 2023 and 2022 was $1,533 and $794, respectively. Revenue related to performance obligations satisfied in prior periods that was recognized during the six months ended August 31, 2023 and 2022 was $2,966 and $2,623, respectively. These amounts relate to the ratable recognition through the minimum contract term of performance obligations satisfied in prior periods related to the Company’s achievement of healthcare cost savings. Cost to obtain and fulfill a contract The Company capitalizes sales commissions paid to internal sales personnel that are both incremental to the acquisition of customer contracts and recoverable. These costs are recorded as deferred contract acquisition costs in the accompanying condensed consolidated balance sheets. The Company capitalized commission costs of $1,144 and $2,662 for the three months ended August 31, 2023 and 2022, respectively. The Company capitalized commission costs of $1,786 and $3,500 for the six months ended August 31, 2023 and 2022, respectively. The Company defers costs based on its sales compensation plans only if the commissions are incremental and would not have occurred absent the customer contract. Payments to direct sales personnel are typically made upon signature of the contract. The Company does not pay commissions on contract renewals. Deferred commissions paid on the initial acquisition of a contract are amortized ratably over an estimated period of benefit of five years, which is the estimated customer life. The Company determined the period of amortization for deferred commissions by taking into consideration current customer contract terms, historical customer retention, and other factors. Amortization is included in sales and marketing expenses in the accompanying condensed consolidated statements of operations and totaled $821 and $672 for the three months ended August 31, 2023 and 2022, respectively, and $1,659 and $1,264 for the six months ended August 31, 2023 and 2022, respectively. The Company periodically reviews deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated period of benefit. There were no impairment losses recorded during the periods presented. For certain customer contracts, the Company may incur direct and incremental costs related to customer set-up and implementation. The Company recorded deferred implementation costs of $167 and $144 for the three months ended August 31, 2023 and 2022, respectively, and $274 and $230 for the six months ended August 31, 2023 and 2022, respectively. These implementation costs are deferred and amortized over the expected useful life of the Company’s customers, which is five years. Amortization is included in cost of revenue in the Company’s condensed consolidated statements of operations and totaled $252 and $223 for the three months ended August 31, 2023 and 2022, respectively, and $530 and $448 for the six months ended August 31, 2023 and 2022, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Aug. 31, 2023 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (4) Goodwill and Intangible Assets The Company’s goodwill balance at August 31, 2023 and February 28, 2023 was $278,191 . The Company recorded a goodwill impairment loss of $299,705 during the prior fiscal year. Annually, and upon the identification of a triggering event, management is required to perform an evaluation of the recoverability of goodwill. Triggering events potentially warranting an interim goodwill impairment test include, among other factors, declines in historical or projected revenue, operating income or cash flows, and sustained declines in the Company’s stock price or market capitalization, considered both in absolute terms and relative to peers. While management cannot predict if or when additional future goodwill impairments may occur, additional goodwill impairments could have material adverse effects on the Company’s operating income, net assets, and/or the Company’s cost of, or access to, capital. As of August 31, 2023 Useful Life Gross Value Accumulated Amortization Net Carrying Value Weighted Average Remaining Useful Life (Years) Customer relationships 2 to 20 years $ 124,050 $ (18,875) $ 105,175 17.5 Technology 2 to 5 years 111,526 (56,561) 54,965 2.5 Supplier-based network 5 years 25,000 (12,500) 12,500 2.5 Trade name 10 years 13,700 (3,167) 10,533 7.7 Non-compete agreement 2 to 3 years 9,300 (8,784) 516 0.5 $ 283,576 $ (99,887) $ 183,689 Amortization expense for intangible assets was $9,141 and $10,372 during the three months ended August 31, 2023 and 2022, respectively, and $19,513 and $20,744 during the six months ended August 31, 2023 and 2022, respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Aug. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | (5) Fair Value Measurements The following table sets forth the fair value of the Company’s financial assets and liabilities within the fair value hierarchy: August 31, 2023 Level 1 Level 2 Level 3 Fair Value Assets Cash equivalents: Money market funds $ 112,365 $ — $ — $ 112,365 February 28, 2023 Level 1 Level 2 Level 3 Fair Value Assets Cash equivalents: Money market funds $ 99,861 $ — $ — $ 99,861 United States treasury bills $ 39,995 $ — $ — $ 39,995 The estimated fair value of the convertible senior notes (Note 6) was $239,344 as of August 31, 2023, based on quoted market prices of the Company’s instrument in markets that are not active and are classified as Level 2 within the fair value hierarchy. Considerable judgment is necessary to interpret the market data and develop an estimate of the fair value. Accordingly, the estimate is not necessarily indicative of the amount at which this instrument could be purchased, sold, or settled. |
Debt
Debt | 6 Months Ended |
Aug. 31, 2023 | |
Debt | |
Debt | (6) Debt (a) Convertible Senior Notes and Capped Call Options Convertible Senior Notes The Notes consisted of the following: August 31, 2023 February 28, 2023 Principal $ 287,500 $ 287,500 Unamortized issuance costs (4,338) (5,177) Net carrying amount $ 283,162 $ 282,323 In March 2021, the Company completed a private convertible note offering, pursuant to an Indenture dated as of March 29, 2021 between the Company and U.S. Bank National Association, as trustee (the Indenture), and issued $287,500 of 0.50% Convertible Senior Notes due 2026 (the Notes) that mature in April 2026, unless earlier converted, redeemed or repurchased. The Notes bear interest at a rate of 0.50% per annum, payable semiannually in arrears on April 1 and October 1 of each year, beginning on October 1, 2021 and are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election. The Company incurred costs of $8,428 in connection with the Notes and the capped calls, of which $8,368 was allocated to the Notes and recorded as a debt discount and $60 was allocated to the capped call and recorded directly to additional paid-in capital. Net proceeds from the issuance of Notes were $279,132, and the Company used $34,443 of the net proceeds to pay the costs of the capped call transactions described below. For the three months ended August 31, 2023 and 2022, the Company recorded interest expense of $781 and $779, respectively, of which $420 and $417, respectively, was associated with the amortization of the debt discount. For the six months ended August 31, 2023 and 2022, the Company recorded interest expense of $1,562 and $1,558, respectively, of which $839 and $834, respectively, was associated with the amortization of debt discount. Pursuant to the terms of the Notes, a holder may convert all or any portion of its Notes at its option at any time prior to October 1, 2025 and only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending on August 31, 2021, if the last reported sale price of the Company’s common stock for at least 20 trading days during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) if the Company calls such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events. On or after October 1, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances. The initial conversion rate is 19.8088 shares of the Company’s common stock per $1 principal amount of Notes (equivalent to an initial conversion price of approximately $50.48 per share of the Company’s common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or convert its Notes called (or deemed called) for redemption in connection with such notice of redemption, as the case may be. The Company may not redeem the Notes prior to April 6, 2024. On or after April 6, 2024, the Company may redeem for cash all or any portion of the Notes (subject to the partial redemption limitation set forth in the Indenture), at its option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days, including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes. Upon a fundamental change (as defined in the Indenture), holders may, subject to certain exceptions, require the Company to purchase their Notes in whole or in part for cash at a price equal to the principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date (as defined in the Indenture). In addition, upon a Make-Whole Fundamental Change (as defined in the Indenture), the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its Notes in connection with such Make-Whole Fundamental Change. Under the Indenture, the Notes may be accelerated upon the occurrence of certain customary events of default. If certain bankruptcy and insolvency-related events of default with respect to the Company occur, the principal of, and accrued and unpaid interest on, all of the then outstanding Notes shall automatically become due and payable. The Indenture provides that the sole remedy for an event of default relating to certain failures by the Company to comply with reporting covenants, including timely filings, consists exclusively of the right to receive additional interest on the Notes. As of August 31, 2023, none of the conditions of the Notes to early convert have been met. The Notes are the Company’s senior, unsecured obligations that rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated to the Notes, rank equally in right of payment with the Company’s future senior unsecured indebtedness that is not so subordinated, effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables and preferred equity (to the extent the Company is not a holder thereof)) of the Company’s subsidiaries. The Notes contain both affirmative and negative covenants. As of August 31, 2023, the Company was in compliance with all covenants in the Notes. The Company concluded the Notes are accounted for as debt, with no bifurcation of the embedded conversion feature. Transaction costs were recorded as a direct deduction from the related debt liability in the consolidated balance sheet and are amortized to interest expense using the effective interest method over the term of the Notes. The effective interest rate for the Notes is 1.1%. Capped Call Concurrent with the pricing of the Notes, the Company entered into privately negotiated capped call transactions with two of the initial purchasers and/or their respective affiliates and another financial institution (the Option Counterparties). The capped call transactions are expected to offset the potential dilution to Accolade’s common stock as a result of any conversion of Notes, with such offset subject to a cap initially equal to $76.20 (which represented a premium of 100% over the last reported sale price of the Company’s common stock on March 24, 2021). The capped call transactions are separate transactions, entered into by the Company with the Option Counterparties, and are not part of the terms of the Notes. As the capped call options are both legally detachable and separately exercisable from the Notes, the Company accounts for the capped call options separately from the Notes. The capped call options are indexed to the Company’s own common stock and classified in stockholders’ equity. As such, the premiums paid for the capped call options were included as a net reduction to additional paid-in capital in the consolidated balance sheet. (b) Revolving Credit Facility During July 2019, the Company entered into a revolving credit facility (the 2019 Revolver) with a syndicate of two banks. Under the 2019 Revolver, the Company has the capacity to borrow up to $80,000 on a revolving facility. Availability of borrowings on the 2019 Revolver is calculated as a multiple of the Company’s eligible monthly recurring revenues (as defined in the 2019 Revolver). As of August 31, 2023, the Company had outstanding letters of credit to serve as office landlord security deposits in the amount of $1,311, which are secured through the revolving credit facility and reduce our borrowing capacity. The capacity of the revolving credit facility was $68,165 as of August 31, 2023. No amounts are outstanding as of August 31, 2023. The 2019 Revolver term ends on July 19, 2024. The interest rate on the outstanding borrowings are at the Bloomberg Short-Term Bank Yield Index (BSBY) rate plus 350 basis points or Base Rate (as defined) plus 250 basis points, with the BSBY rate and Base Rate subject to minimum levels. Interest payments are to be made in installments of one, two, or three months as chosen by the Company. The Company incurred lender and third-party fees when entering into the 2019 Revolver, all of which were deferred at the onset of the facility and have been fully amortized. During the three months ended August 31, 2023 and 2022, the Company recorded interest expense of $51 and $158, respectively, related to the revolving credit facility. During the six months ended August 31, 2023 and 2022, the Company recorded interest expense of $102 and $210, respectively, related to the revolving credit facility. On July 19, 2022, the Company entered into an amendment to the 2019 Revolver which extended the term until July 19, 2024, documented the transition from the LIBOR interest rate index to the BSBY rate, and established new minimum covenant revenue targets. The term will automatically be extended to July 19, 2025 if the Company has at least $200,000 in consolidated net cash as of May 31, 2024. The 2019 Revolver is collateralized by substantially all of the assets of the Company. (c) Letter of Credit In addition to the letters of credit outstanding under the 2019 Revolver, the Company had a letter of credit outstanding as of August 31, 2023 to serve as an office landlord security deposit in the amount of $1,170. This letter of credit expires on June 30, 2024. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Aug. 31, 2023 | |
Stock-based Compensation | |
Stock-based Compensation | (7) Stock-based Compensation The following table summarizes the amount of stock-based compensation included in the consolidated statements of operations: Three months ended August 31, Six months ended August 31, 2023 2022 2023 2022 Cost of revenue, excluding depreciation and amortization $ 1,202 $ 1,270 $ 2,113 $ 2,398 Product and technology 7,643 5,625 14,609 13,115 Sales and marketing 3,876 4,270 7,702 8,259 General and administrative 3,005 6,349 5,580 13,131 Total stock-based compensation $ 15,726 $ 17,514 $ 30,004 $ 36,903 In July 2020, the Company adopted the 2020 Equity Incentive Plan (the Incentive Plan), which authorized the Company to grant up to 4,300,000 shares of common stock to eligible employees, directors, and consultants to the Company in the form of stock options, restricted stock units, and other various equity awards, including any shares subject to stock options or other awards granted under the Company’s prior stock option plan that expire or terminate for any reason (other than being exercised in full) or are cancelled in accordance with the terms of the prior stock option plan. The Incentive Plan also includes an annual evergreen increase, and the amount, terms of grants, and exercisability provisions are determined by the board of directors. The term of an award may be up to 10 years and options generally vest over four years, with one remainder (a) Stock Options The following is a summary of stock option activity under the Incentive Plan: Weighted Weighted average remaining Aggregate exercise contractual life intrinsic Stock Options price in years value Balance, February 28, 2023 8,050,519 $ 10.52 Granted 10,792 14.25 Exercised (566,940) 5.26 Forfeited (233,850) 18.07 Balance, August 31, 2023 7,260,521 $ 10.69 4.4 $ 39,596 For the three months ended August 31, 2023 and 2022, the Company recognized $1,765 and $2,531 in compensation expense related to stock options, respectively. For the six months ended August 31, 2023 and 2022, the Company recognized $3,980 and $5,223 in compensation expense related to stock options, respectively. As of August 31, 2023, approximately $8,394 of unrecognized compensation expense related to our stock options is expected to be recognized over a weighted average period of 1.4 years. The aggregate intrinsic value of stock options exercised was $366 and $796 for the three months ended August 31, 2023 and 2022, respectively, and $3,498 and $1,145 for the six months ended August 31, 2023 and 2022, respectively. (b) PlushCare Stock Options In connection with the acquisition of PlushCare, Inc. (PlushCare) on June 9, 2021, the Company assumed all stock options that were awarded under the PlushCare Plan and that were outstanding as of the closing of the acquisition. These options were converted into options to purchase the Company’s common stock at a ratio determined in the purchase agreement. The Company has no intent to grant any further options under the PlushCare Plan beyond the options granted and outstanding as of the Company's acquisition of PlushCare. The following is a summary of stock option activity under the PlushCare Plan: Weighted Weighted average remaining Aggregate exercise contractual life intrinsic Stock Options price in years value Balance, February 28, 2023 153,608 $ 1.63 Exercised (49,944) $ 2.12 Forfeited (1,505) $ 2.88 Balance, August 31, 2023 102,159 $ 1.37 6.0 $ 1,238 For the three months ended August 31, 2023 and 2022, the Company recognized $720 and $1,212, respectively, in compensation expense related to PlushCare stock options. For the six months ended August 31, 2023 and 2022, the Company recognized $2,060 and $2,456, respectively, in compensation expense related to PlushCare stock options. As of August 31, 2023, approximately $499 of unrecognized compensation expense related to PlushCare stock options is expected to be recognized over a weighted average period of 1.0 years. The aggregate intrinsic value of stock options exercised was $14 and $222 for the three months ended August 31, 2023 and 2022, respectively, and $549 and $483 for the six months ended August 31, 2023 and 2022, respectively. (c) Restricted Stock Units Time-based restricted stock units have generally been subject to a vesting period of two to four years . one one one The following is a summary of activity for the six months ended August 31, 2023: Restricted Stock Units Balance, February 28, 2023 4,266,990 Granted 3,761,129 Vested (1,319,146) Forfeited (678,973) Balance, August 31, 2023 6,030,000 For the three months ended August 31, 2023 and 2022, the Company recognized $9,295 and $8,491, respectively, in restricted stock unit compensation expense. For the six months ended August 31, 2023 and 2022, the Company recognized $15,993 and $15,306, respectively, in restricted stock unit compensation expense with $79,266 remaining total unrecognized compensation costs related to these awards as of August 31, 2023. The total unrecognized costs are expected to be recognized over a weighted-average term of 2.4 years. The weighted average grant date fair value of restricted stock units granted during the six months ended August 31, 2023 was $12.34. In connection with the PlushCare acquisition, the agreement provided for the issuance of time-based restricted stock units for 64,694 shares of common stock to existing PlushCare shareholders upon the achievement of the contingent consideration revenue milestones. During the second quarter of fiscal 2023, 57,124 of these restricted stock units were issued. These restricted stock units are included in the table above. During fiscal 2023, performance-based restricted stock units were approved to be issued as part of the Company’s fiscal 2023 corporate bonus program. In association with the Company’s fiscal 2023 corporate bonus payout, 747,687 fully-vested RSUs were issued in May 2023. (d) Performance Stock Units During the three months ended August 31, 2023, the Company granted performance stock units (PSUs) to the Company’s named executive officers. These PSUs will vest after the fiscal year ending February 28, 2026 based on achievement of performance metrics for revenue, Adjusted EBITDA, and Gross Dollar Retention for each of the fiscal years 2024, 2025, and 2026. Stock-based compensation costs associated with these PSUs are reassessed each reporting period based on estimated performance achievement. The number of PSUs that will be issued to executive officers at the end of the performance period will be between 0% and 200% of the grant based on the actual achievement of performance metrics. The following is a summary of activity for the six months ended August 31, 2023: Performance Stock Units Balance, February 28, 2023 — Granted 276,480 Vested — Forfeited — Balance, August 31, 2023 276,480 Expense for these awards is recognized using graded amortization. For the three and six months ended August 31, 2023, the Company recognized $73 in PSU expense related to these awards with $3,308 remaining total unrecognized compensation costs related to these awards as of August 31, 2023. The total unrecognized costs are expected to be recognized over a weighted-average term of 2.6 years. The weighted average grant date fair value of PSUs granted during the six months ended August 31, 2023 was $12.23. (e) Employee Stock Purchase Plan In July 2020, the Board of Directors adopted the Company’s 2020 Employee Stock Purchase Plan (the ESPP), which became effective immediately prior to the effectiveness of the registration statement for the Company’s initial public offering (IPO). The total shares of common stock initially reserved under the ESPP was limited to 1,100,000 shares. On March 1, 2023, there was an automatic annual increase, which increased the total available common shares to . eligible compensation. Under the ESPP, a participant may not accrue rights to purchase more than $25,000 worth of the Company’s common stock for each calendar year in which such right is outstanding. Compensation – Stock Compensation , During the six months ended August 31, 2023 and 2022, employees who elected to participate in the ESPP purchased a total of 280,162 and 343,310 shares of common stock, respectively, resulting in cash proceeds to the Company of $1,992 and $1,788, respectively. ESPP employee payroll contributions accrued as of August 31, 2023 and February 28, 2022 totaled $1,203 and $1,384, respectively, and are included within accrued compensation in the consolidated balance sheet. Cash withheld via employee payroll deductions is presented in financing activities as proceeds from stock purchases under employee stock purchase plan on the consolidated statement of cash flows. (f) Other In connection with the acquisition of Innovation Specialists, LLC d/b/a 2nd.MD (2nd.MD) on March 3, 2021, several 2nd.MD individuals entered into agreements with the Company whereby these individuals are eligible to receive an aggregate of 608,332 shares that required continued employment with the Company. These shares are excluded from the above restricted stock units table. Included in the 608,332 shares are 281,531 shares that were also contingent upon the achievement of the contingent consideration milestones. These shares are considered compensatory in the post business combination periods due to the additional service requirement for these individuals. These shares vested 50% on the first anniversary of the acquisition date and 50% on the second anniversary of acquisition date. In connection with the acquisition of PlushCare, certain PlushCare individuals entered into agreements with the Company whereby these individuals are eligible to receive an aggregate of 806,161 shares that require continued employment with the Company. These shares are excluded from the above restricted stock units table. These shares are considered compensatory in the post business combination periods due to the additional service requirement for these individuals. One third of these shares vested on the first anniversary of the acquisition date, one third vested on the second anniversary of acquisition date, and one third will vest on the third anniversary of the acquisition date. As of August 31, 2023, there were 268,720 unvested shares outstanding with a grant date fair value of $52.52 per share. The Company recognized stock-based compensation expense of $3,557 during the three months ended August 31, 2023 and 2022, respectively, and $7,114 during the six months ended August 31, 2023 and 2022, respectively. The unamortized compensation expense of $10,904 will be recognized over a weighted average remaining period of 0.8 years. |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 31, 2023 | |
Income Taxes | |
Income Taxes | (8) Income Taxes The provision (benefit) for income taxes consists of provisions for federal, state and foreign income taxes for separate U.S. tax filers and for entities in separate tax jurisdictions. As a result of the Company’s history of net operating losses (NOL), the Company has historically provided for a full valuation allowance against its U.S. deferred tax assets that are not more-likely-than-not to be realized. For the three months ended August 31, 2023 and 2022, the Company recorded income tax provision (benefit) of $84 and $249, respectively, which resulted in effective tax rates of (0.2)% and (0.5)%, respectively. For the six months ended August 31, 2023 and 2022, the Company recorded income tax provision (benefit) of $175 and $(3,650), respectively, which resulted in effective tax rates of (0.2)% and 0.9%, respectively. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 6 Months Ended |
Aug. 31, 2023 | |
Net Loss Per Share Attributable to Common Stockholders | |
Net Loss Per Share Attributable to Common Stockholders | (9) Net Loss Per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share attributable to Accolade’s common stockholders: Three months ended Six months ended August 31, August 31, 2023 2022 2023 2022 Net loss $ (32,825) $ (46,523) $ (71,234) $ (389,345) Weighted-average common shares outstanding, basic 75,487,717 70,475,778 74,334,111 70,251,890 Net income (loss) per share attributable to common stockholders, basic $ (0.43) $ (0.66) $ (0.96) $ (5.54) As the Company has reported net losses for each of the periods presented, all potentially dilutive securities are antidilutive. The following potential outstanding shares of common stock were excluded from the computation of diluted net loss per common share for the periods presented because including them would have been antidilutive: Three months ended Six months ended August 31, August 31, 2023 2022 2023 2022 Stock options 7,362,680 8,590,272 7,362,680 8,590,272 Unvested restricted stock units 6,030,000 5,295,247 6,030,000 5,295,247 Unvested performance stock units 276,480 — 276,480 — Shares issued to 2nd.MD employees and subject to vesting — 274,224 — 274,224 Shares issued to PlushCare employees and subject to vesting 268,720 537,401 268,720 537,401 Contingent shares in connection with PlushCare acquisition 102,111 102,111 102,111 102,111 Indemnity shares held in escrow in connection with PlushCare acquisition 27,342 27,342 27,342 27,342 Shares to be issued to HealthReveal shareholders upon expiration of indemnification — 28,089 — 28,089 Convertible Senior Notes 5,700,297 5,700,297 5,700,297 5,700,297 Total 19,767,630 20,554,983 19,767,630 20,554,983 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 31, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | (10) Commitments and Contingencies (a) Legal Proceedings The Company is involved in various claims, inquiries and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s financial position or liquidity. As of August 31, 2023, the Company had accruals of $3,500 related to legal matters. On May 8, 2021, a purported class action complaint ( Robbins v. PlushCare, Inc. et al. in July 2023. The Company paid the settlement in full in September 2023 pursuant to the terms of the court-approved settlement. The majority of the Company’s liability is eligible to be paid through third-party insurance and the remaining indemnification from the selling shareholders of PlushCare. As of August, 31, 2023, the Company had recorded both receivables and a contingent liability for the remaining amount of the settlement on its consolidated balance sheet. (b) Employment Agreements Certain officers of the Company have employment agreements providing for severance, continuation of benefits, and other specified rights in the event of termination without cause, including in the event of a change of control of the Company, as defined in the agreements. (c) Purchase Obligations The Company has minimum required purchase commitments of $40,323 pursuant to an agreement primarily related to cloud computing services. Portions of the total purchase commitment are required to be met prior to the end of each contract year, September 30, in each of fiscal years 2023 through 2027. If total purchases in a contract year do not meet the portion of the commitment required for that year, the shortfall must be prepaid and can be used for future purchases through September 30, 2027. As of August 31, 2023, the Company has remaining future purchase commitments under this agreement of $28,307. |
Restructuring
Restructuring | 6 Months Ended |
Aug. 31, 2023 | |
Restructuring | |
Restructuring | (11) Restructuring During the year ended February 28, 2023, the Company initiated certain measures to accelerate the integration of recent acquisitions through strategic reductions in the Company’s workforce, including increasing hiring in lower cost regions to support its growth, scale, and profitability objectives. As a result, severance expense was recorded for the impacted employees. The Company continued to incur costs associated with these measures during the six months ended August 31, 2023. The following table summarizes the amount of severance costs included in the consolidated statements of operations: Three Months Ended August 31, Six Months Ended August 31, 2023 2022 2023 2022 Cost of revenue, excluding depreciation and amortization $ 92 $ 114 $ 726 $ 114 Product and technology (114) 1,194 107 1,194 Sales and marketing (25) 979 (25) 979 General and administrative (5) 788 242 788 Total severance costs $ (52) $ 3,075 $ 1,050 $ 3,075 The following is a summary of the changes in the severance liabilities related to the workforce reductions. These liabilities are included within accrued compensation on the consolidated balance sheets: Balance as of February 28, 2023 $ 3,996 Severance costs 1,050 Cash payments (4,444) Balance as of August 31, 2023 $ 602 The Company expects remaining severance-related liabilities to be paid out in cash during fiscal 2024. Additional expenses associated with these restructuring activities are not expected to be material. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Aug. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | (a) Basis of Presentation and Principles of Consolidation Accolade’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include the Company’s accounts and those of the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has various administrative service agreements (ASA) with professional medical corporations established in California, Illinois, Wyoming, and New Jersey (PC). The PCs employ or contract with medical providers who provide services via the Company’s technology platform. The ASAs are evergreen and are terminable by the parties for breach or bankruptcy. Through the ASAs, the Company provides non-clinical administrative services to the PCs and manages the economic activities that most significantly affect PCs. The PCs retain control over the provision of medical services and the PC’s clinical personnel. The PCs are variable interest entities (VIE) to the Company. |
Unaudited Interim Financial Statements | (b) Unaudited Interim Financial Statements The accompanying condensed consolidated financial statements and the related footnote disclosures are unaudited. The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s interim condensed consolidated financial position as of August 31, 2023, the results of its operations for the three and six months ended August 31, 2023 and 2022, and its cash flows for the six months ended August 31, 2023 and 2022. The results for the three and six months ended August 31, 2023 are not necessarily indicative of results to be expected for the year ending February 29, 2024, any other interim periods, or any future year or period. The Company’s management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended February 28, 2023. |
Capitalized Internal-Use Software Costs | (c) Capitalized Internal-Use Software Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, including tools that enable the Company’s employees to interact with members and their providers, with no substantive plans to market such software at the time of development, are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post-implementation operational stage are expensed as incurred. Costs related to minor upgrades, minor enhancements, and maintenance activities are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. Internal-use software is included in property and equipment and is amortized on a straight-line basis over 3 years. For the three months ended August 31, 2023 and 2022, the Company capitalized $1,765 and $733, respectively, for internal-use software. For the six months ended August 31, 2023 and 2022, the Company capitalized $4,175 and $1,499, respectively, for internal-use software. Amortization expense related to capitalized internal-use software during the three months ended August 31, 2023 and 2022 was $785 and $289, respectively. Amortization expense related to capitalized internal-use software during the six months ended August 31, 2023 and 2022 was $1,131 and $579, respectively. |
Impairment of Long-Lived Assets | (d) Impairment of Long-Lived Assets The Company reviews long-lived assets, such as property and equipment and finite-lived intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, then an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the fair value of the asset. |
Intangible Assets | (e) Intangible Assets The Company has acquired intangible assets through various acquisitions. Intangible assets are recorded at fair value on the date of acquisition and are subject to amortization over the estimated useful lives of each asset. Estimates of fair value and useful lives are based on historical factors, current circumstances, and the experience and judgment of management. Estimates and assumptions used to value intangible assets are evaluated by management on an ongoing basis. |
Goodwill | (f) Goodwill Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized, but is subject to evaluations of its recoverability annually and upon the identification of a triggering event. The Company has a single reporting unit and all goodwill relates to that reporting unit. The Company performs an impairment analysis of goodwill on an annual basis in the fourth quarter of each fiscal year or more frequently if changes in circumstances or the occurrence of events suggest that an impairment exists. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded. |
Revenue and Deferred Revenue | ( g ) Revenue and Deferred Revenue Revenue Recognition The Company generates revenue by providing customers access to its advocacy, expert medical opinion, and virtual primary care services, as well as through utilization of its expert medical opinion and virtual primary care services. Contracts with customers that include expert medical opinion or virtual primary care services may contain either an access fee, a utilization-based fee, or both. In accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers reflects the consideration to which it expects to be entitled in exchange for those services. Accordingly, the Company determines 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 contracts; and ● recognition of revenue when, or as, the Company satisfies a performance obligation. At contract inception, the Company assesses the type of services being provided and assesses the performance obligations in the contract. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on overall pricing objectives, taking into consideration market conditions and other factors, using an expected cost plus margin approach. The Company considered the variable consideration allocation exception in ASC 606 for its advocacy contracts and concluded that such exception for allocating variable consideration to distinct performance obligations or distinct time periods within a series was not met primarily due to variability in its per-member-per-month (PMPM) pricing. The majority of fees earned by the Company are considered to be variable consideration due to both the uncertainty regarding the total number of members, consultations or visits for which the Company will invoice the customer, as well as the variable PMPM fees that are dependent upon the achievement of performance metrics and/or healthcare cost savings. Performance metrics are measured monthly, quarterly, or annually, and with respect to the achievement of healthcare cost savings targets, annually (typically measured on a calendar year basis). Accordingly, at contract inception and on an ongoing basis, as part of the Company’s estimate of the transaction price, the Company determines whether any such fees should be constrained, and the Company includes the estimated consideration for those fees to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur (and is therefore considered to be unconstrained). Consideration related to the Company’s achievement of healthcare cost savings is typically constrained until the end of the applicable calendar year due to uncertainty related to factors outside of the Company’s control. Consideration related to other performance metrics is typically not constrained based on the Company’s prior success of achieving such metrics. On an ongoing basis, the Company reassesses its estimates for variable consideration, which can change based upon its assessment of the achievement of performance metrics and healthcare cost savings, as well as the number of members, consultations, or visits. Access Fees The Company generates revenue primarily from contracts with customers to access the Company’s advocacy, expert medical opinion, and virtual primary care services. The Company prices access fees primarily using a recurring PMPM fee, typically with a portion of the fee calculated as the product of a fixed rate times the number of members (fixed PMPM fee), plus a variable PMPM fee calculated as the product of a variable rate times the number of members (variable PMPM fee). The fees associated with the variable PMPM fee can be earned through the achievement of performance metrics and/or the realization of healthcare cost savings resulting from use of the Company’s services. Collectively, the fixed PMPM fee and variable PMPM fee are referred to as the total PMPM fee. The Company’s PMPM pricing varies by contract. In certain contracts, the maximum total PMPM fee varies during the contract term (total PMPM rate increases or decreases annually), while in other contracts, the total PMPM maximum fee is consistent over the term, yet the fixed and variable portions vary. For example, in certain contracts the fixed PMPM fee increases on an annual basis while the variable PMPM fee decreases on an annual basis, resulting in the same total PMPM fee throughout the term of the contract. The PMPM fees for expert medical opinion and virtual primary care services may be tiered based upon the customer’s utilization. Access to the Company’s services represent a single stand-ready performance obligation. The Company’s contracts include stand-ready services to provide eligible participants with access to the Company’s services and to perform an unspecified quantity of interactions with members during the contract period. Accordingly, the Company’s services are generally viewed as stand-ready performance obligations comprised of a series of distinct daily services that are substantially the same and have the same pattern of transfer. For advocacy services, the Company satisfies these performance obligations over time and recognizes revenue related to its services as the services are provided using a measure of progress based upon the actual number of members eligible for the service during the respective period as a percentage of the estimated members expected to be eligible for the service over the term of the contract. The Company believes a measure of progress based on the number of members is the most appropriate measurement of control of the services being transferred to the customer as the amount of internal resources necessary to stand-ready is directly correlated to the number of members who can use the services. For the majority of expert medical opinion services, the Company satisfies these performance obligations over time and recognizes revenue in the amount of consideration for which it has the right to invoice using the as-invoiced practical expedient. Access fees also include access to the Company’s virtual primary care services sold directly to consumers on a monthly or yearly fixed fee subscription basis. For these services, the Company satisfies these stand-ready performance obligations over time and recognizes revenue ratably over the subscription period. Utilization-based fees The Company also generates revenue when members utilize the expert medical opinion and virtual primary care services that are billed based on utilization. Many, but not all, contracts with customers contain utilization-based fees. For any utilization-based fees, the Company satisfies these performance obligations over time and recognizes revenue in the amount of consideration for which it has the right to invoice using the as-invoiced practical expedient for any consultations or visits sold to commercial customers as well as any non-insured consultations or visits related to virtual primary care services sold directly to consumers. For any consultations or visits that are paid through insurance claims, the Company recognizes revenue as the consultations and visits occur in an amount that reflects the consideration that is expected based upon then-current prices and historical experience from insurance payors. Deferred Revenue The Company typically invoices its customers in advance of the services performed on a monthly or quarterly basis, and the amount invoiced typically represents the maximum total PMPM fee for the estimated number of eligible members over the applicable invoice period. The total PMPM fee covers the stand-ready services in the Company’s typical contracts (i.e., the performance obligations are not separately priced or invoiced). The maximum total PMPM fee that is invoiced includes both the fixed PMPM fee and the variable PMPM fee related to the performance metrics and/or the realization of healthcare cost savings that can be achieved during the period. These fees are classified as deferred revenue on the Company’s consolidated balance sheet until such time that revenue can be recognized. In the event the Company fails to satisfy any of the performance metrics and/or realization of healthcare cost savings that are billed in advance, the Company will refund the applicable portion of the fee or offset the amount against a future invoice. These amounts are included in due to customers on the Company’s consolidated balance sheet. The Company’s accounts receivable represent rights to consideration that are unconditional. |
Concentration of Credit Risk | ( h ) Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents. The Company maintains its cash primarily with domestic financial institutions of high credit quality, which may exceed federal deposit insurance corporation limits. The Company invests its cash equivalents in highly rated money market funds and U.S. treasury bills with original maturities of three months or less. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents and performs periodic evaluations of the credit standing of such institutions. |
Leases | (i) Leases Whenever the Company enters into a new arrangement, it determines, at the inception date, whether the arrangement is or contains a lease. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the right to direct the use of, and obtain substantially all the economic benefits from, the use of the underlying asset. For each lease, the Company then determines the lease term, the present value of lease payments, and the classification of the lease as either an operating or finance lease. The Company has elected, for all of its leases, to not separate lease and non-lease components. The lease term is the period of the lease not cancellable by the Company, together with periods covered by: (i) renewal options the Company is reasonably certain to exercise, (ii) termination options the Company is reasonably certain not to exercise, and (iii) renewal or termination options that are controlled by the lessor. The present value of lease payments is calculated based on: (1) Lease payments – Lease payments included in the measurement of the lease asset or liability comprise the following: fixed payments (including in-substance fixed payments), and the exercise price of a lessee option to purchase the underlying asset if the lessee is reasonably certain to exercise. (2) Discount rate – the discount rate is determined based on information available to the Company upon the commencement of the lease. Lessees are required to use the rate implicit in the lease whenever such rate is readily available; however, as the implicit rate in the Company’s leases is generally not readily determinable, the Company generally uses the incremental borrowing rate it would have to pay to borrow an amount equal to the lease payments, on a collateralized basis, over a timeframe similar to the lease term. In making the determination of whether a lease is an operating lease or a finance lease, the Company considers the lease term in relation to the economic life of the leased asset, the present value of lease payments in relation to the fair value of the leased asset and certain other factors, including the lessee’s and lessor’s rights, obligations, and economic incentives over the term of the lease. The Company does not recognize leases with an initial term of 12 months or less on its consolidated balance sheets and recognizes these payments in the consolidated statements of operations on a straight-line basis over the lease term. Certain leases contain variable payments which are based on usage or operating costs, such as utilities and maintenance. These payments are not included in the measurement of the lease liability or corresponding right-of-use asset due to the uncertainty of the payment amount and are recorded as lease expense in the period incurred. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Aug. 31, 2023 | |
Revenue | |
Disaggregation of revenue | Three Months Ended August 31, Six Months Ended August 31, 2023 2022 2023 2022 Access fees $ 70,897 $ 67,878 $ 137,494 $ 136,003 Utilization-based fees 25,967 19,765 52,596 37,168 Total $ 96,864 $ 87,643 $ 190,090 $ 173,171 |
Revenue expected to be recognized from remaining performance obligations | Fiscal year ending February 28(29), Remainder of 2024 $ 105,469 2025 83,146 2026 22,972 2027 6,058 2028 94 Total $ 217,739 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Aug. 31, 2023 | |
Goodwill and Intangible Assets | |
Schedule of Intangible assets | As of August 31, 2023 Useful Life Gross Value Accumulated Amortization Net Carrying Value Weighted Average Remaining Useful Life (Years) Customer relationships 2 to 20 years $ 124,050 $ (18,875) $ 105,175 17.5 Technology 2 to 5 years 111,526 (56,561) 54,965 2.5 Supplier-based network 5 years 25,000 (12,500) 12,500 2.5 Trade name 10 years 13,700 (3,167) 10,533 7.7 Non-compete agreement 2 to 3 years 9,300 (8,784) 516 0.5 $ 283,576 $ (99,887) $ 183,689 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Aug. 31, 2023 | |
Fair Value Measurements | |
Schedule of fair value of financial assets and liabilities | August 31, 2023 Level 1 Level 2 Level 3 Fair Value Assets Cash equivalents: Money market funds $ 112,365 $ — $ — $ 112,365 February 28, 2023 Level 1 Level 2 Level 3 Fair Value Assets Cash equivalents: Money market funds $ 99,861 $ — $ — $ 99,861 United States treasury bills $ 39,995 $ — $ — $ 39,995 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Aug. 31, 2023 | |
Debt | |
Schedule Of Debt | August 31, 2023 February 28, 2023 Principal $ 287,500 $ 287,500 Unamortized issuance costs (4,338) (5,177) Net carrying amount $ 283,162 $ 282,323 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Aug. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock-based compensation | Three months ended August 31, Six months ended August 31, 2023 2022 2023 2022 Cost of revenue, excluding depreciation and amortization $ 1,202 $ 1,270 $ 2,113 $ 2,398 Product and technology 7,643 5,625 14,609 13,115 Sales and marketing 3,876 4,270 7,702 8,259 General and administrative 3,005 6,349 5,580 13,131 Total stock-based compensation $ 15,726 $ 17,514 $ 30,004 $ 36,903 |
Schedule of restricted stock units activity | Restricted Stock Units Balance, February 28, 2023 4,266,990 Granted 3,761,129 Vested (1,319,146) Forfeited (678,973) Balance, August 31, 2023 6,030,000 |
2020 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock option activity | Weighted Weighted average remaining Aggregate exercise contractual life intrinsic Stock Options price in years value Balance, February 28, 2023 8,050,519 $ 10.52 Granted 10,792 14.25 Exercised (566,940) 5.26 Forfeited (233,850) 18.07 Balance, August 31, 2023 7,260,521 $ 10.69 4.4 $ 39,596 |
PlushCare, Inc. Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock option activity | Weighted Weighted average remaining Aggregate exercise contractual life intrinsic Stock Options price in years value Balance, February 28, 2023 153,608 $ 1.63 Exercised (49,944) $ 2.12 Forfeited (1,505) $ 2.88 Balance, August 31, 2023 102,159 $ 1.37 6.0 $ 1,238 |
Unvested performance stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of performance stock units activity | Performance Stock Units Balance, February 28, 2023 — Granted 276,480 Vested — Forfeited — Balance, August 31, 2023 276,480 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 6 Months Ended |
Aug. 31, 2023 | |
Net Loss Per Share Attributable to Common Stockholders | |
Schedule of computation of basic and diluted net loss per share | Three months ended Six months ended August 31, August 31, 2023 2022 2023 2022 Net loss $ (32,825) $ (46,523) $ (71,234) $ (389,345) Weighted-average common shares outstanding, basic 75,487,717 70,475,778 74,334,111 70,251,890 Net income (loss) per share attributable to common stockholders, basic $ (0.43) $ (0.66) $ (0.96) $ (5.54) |
Schedule of common stock were excluded from the computation of diluted net loss per share attributable to common stockholders | Three months ended Six months ended August 31, August 31, 2023 2022 2023 2022 Stock options 7,362,680 8,590,272 7,362,680 8,590,272 Unvested restricted stock units 6,030,000 5,295,247 6,030,000 5,295,247 Unvested performance stock units 276,480 — 276,480 — Shares issued to 2nd.MD employees and subject to vesting — 274,224 — 274,224 Shares issued to PlushCare employees and subject to vesting 268,720 537,401 268,720 537,401 Contingent shares in connection with PlushCare acquisition 102,111 102,111 102,111 102,111 Indemnity shares held in escrow in connection with PlushCare acquisition 27,342 27,342 27,342 27,342 Shares to be issued to HealthReveal shareholders upon expiration of indemnification — 28,089 — 28,089 Convertible Senior Notes 5,700,297 5,700,297 5,700,297 5,700,297 Total 19,767,630 20,554,983 19,767,630 20,554,983 |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Aug. 31, 2023 | |
Restructuring | |
Summary of the amount of severance costs included in the consolidated statements of operations | Three Months Ended August 31, Six Months Ended August 31, 2023 2022 2023 2022 Cost of revenue, excluding depreciation and amortization $ 92 $ 114 $ 726 $ 114 Product and technology (114) 1,194 107 1,194 Sales and marketing (25) 979 (25) 979 General and administrative (5) 788 242 788 Total severance costs $ (52) $ 3,075 $ 1,050 $ 3,075 |
Summary of the changes in severance liabilities | Balance as of February 28, 2023 $ 3,996 Severance costs 1,050 Cash payments (4,444) Balance as of August 31, 2023 $ 602 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment and Capitalized Internal Use Software Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||||
Amortization expenses | $ 22,458 | $ 23,147 | ||
Computer software | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 3 years | 3 years | ||
Capitalized cost | $ 1,765 | $ 733 | $ 4,175 | 1,499 |
Amortization expenses | $ 785 | $ 289 | $ 1,131 | $ 579 |
Revenue - Revenues Disaggregate
Revenue - Revenues Disaggregated (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 96,864 | $ 87,643 | $ 190,090 | $ 173,171 |
Access fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 70,897 | 67,878 | 137,494 | 136,003 |
Utilization-based fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 25,967 | $ 19,765 | $ 52,596 | $ 37,168 |
Revenue - Revenue and Deferred
Revenue - Revenue and Deferred Revenue (Details) $ in Thousands | Aug. 31, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 217,739 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-09-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 105,469 |
Revenue remaining performance obligation satisfaction period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 83,146 |
Revenue remaining performance obligation satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 22,972 |
Revenue remaining performance obligation satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 6,058 |
Revenue remaining performance obligation satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-03-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue | $ 94 |
Revenue remaining performance obligation satisfaction period | 1 year |
Revenue - Revenue and Deferre_2
Revenue - Revenue and Deferred Revenue Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Revenue | ||||
Contract with customer liability revenue recognized | $ 34,232 | $ 29,550 | ||
Revenue related to performance obligations satisfied in prior periods | $ 1,533 | $ 794 | $ 2,966 | $ 2,623 |
Revenue - Cost to Obtain and Fu
Revenue - Cost to Obtain and Fulfill a Contract (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Capitalized Contract Cost [Line Items] | ||||
Deferred amortization term | 5 years | 5 years | ||
Impairment loss on deferred commission | $ 0 | $ 0 | $ 0 | $ 0 |
Sales and marketing expense | ||||
Capitalized Contract Cost [Line Items] | ||||
Amortization of contract cost | 821 | 672 | 1,659 | 1,264 |
Sales commission | ||||
Capitalized Contract Cost [Line Items] | ||||
Amortization of contract cost | $ 1,144 | 2,662 | $ 1,786 | 3,500 |
Customer set up cost | ||||
Capitalized Contract Cost [Line Items] | ||||
Deferred amortization term | 5 years | 5 years | ||
Amortization of contract cost | $ 252 | 223 | $ 530 | 448 |
Deferred implementation costs | ||||
Capitalized Contract Cost [Line Items] | ||||
Amortization of contract cost | $ 167 | $ 144 | $ 274 | $ 230 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2023 | Feb. 28, 2023 | |
Goodwill and Intangible Assets | |||
Goodwill | $ 278,191 | $ 278,191 | |
Goodwill impairment | $ 299,705 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Goodwill and Intangible Assets | ||||
Gross Value | $ 283,576 | $ 283,576 | ||
Accumulated Amortization | (99,887) | (99,887) | ||
Net Carrying Value | 183,689 | 183,689 | ||
Amortization expense for intangible assets | 9,141 | $ 10,372 | 19,513 | $ 20,744 |
Customer relationships | ||||
Goodwill and Intangible Assets | ||||
Gross Value | 124,050 | 124,050 | ||
Accumulated Amortization | (18,875) | (18,875) | ||
Net Carrying Value | $ 105,175 | $ 105,175 | ||
Weighted Average Remaining Useful Life | 17 years 6 months | 17 years 6 months | ||
Customer relationships | Minimum | ||||
Goodwill and Intangible Assets | ||||
Useful Life | 2 years | 2 years | ||
Customer relationships | Maximum | ||||
Goodwill and Intangible Assets | ||||
Useful Life | 20 years | 20 years | ||
Technology | ||||
Goodwill and Intangible Assets | ||||
Gross Value | $ 111,526 | $ 111,526 | ||
Accumulated Amortization | (56,561) | (56,561) | ||
Net Carrying Value | $ 54,965 | $ 54,965 | ||
Weighted Average Remaining Useful Life | 2 years 6 months | 2 years 6 months | ||
Technology | Minimum | ||||
Goodwill and Intangible Assets | ||||
Useful Life | 2 years | 2 years | ||
Technology | Maximum | ||||
Goodwill and Intangible Assets | ||||
Useful Life | 5 years | 5 years | ||
Supplier-based network | ||||
Goodwill and Intangible Assets | ||||
Useful Life | 5 years | 5 years | ||
Gross Value | $ 25,000 | $ 25,000 | ||
Accumulated Amortization | (12,500) | (12,500) | ||
Net Carrying Value | $ 12,500 | $ 12,500 | ||
Weighted Average Remaining Useful Life | 2 years 6 months | 2 years 6 months | ||
Trade name | ||||
Goodwill and Intangible Assets | ||||
Useful Life | 10 years | 10 years | ||
Gross Value | $ 13,700 | $ 13,700 | ||
Accumulated Amortization | (3,167) | (3,167) | ||
Net Carrying Value | $ 10,533 | $ 10,533 | ||
Weighted Average Remaining Useful Life | 7 years 8 months 12 days | 7 years 8 months 12 days | ||
Non-compete agreement | ||||
Goodwill and Intangible Assets | ||||
Gross Value | $ 9,300 | $ 9,300 | ||
Accumulated Amortization | (8,784) | (8,784) | ||
Net Carrying Value | $ 516 | $ 516 | ||
Weighted Average Remaining Useful Life | 6 months | 6 months | ||
Non-compete agreement | Minimum | ||||
Goodwill and Intangible Assets | ||||
Useful Life | 2 years | 2 years | ||
Non-compete agreement | Maximum | ||||
Goodwill and Intangible Assets | ||||
Useful Life | 3 years | 3 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Aug. 31, 2023 | Feb. 28, 2023 |
Cash equivalents: | ||
Convertible senior notes | $ 239,344 | |
Money Market Funds | ||
Cash equivalents: | ||
Fair value | 112,365 | $ 99,861 |
Money Market Funds | Level 1 | ||
Cash equivalents: | ||
Fair value | $ 112,365 | 99,861 |
United States treasury bills | ||
Cash equivalents: | ||
Fair value | 39,995 | |
United States treasury bills | Level 1 | ||
Cash equivalents: | ||
Fair value | $ 39,995 |
Debt - Notes (Details)
Debt - Notes (Details) - Convertible Senior Notes - USD ($) $ in Thousands | Aug. 31, 2023 | Feb. 28, 2023 |
Debt Instrument [Line Items] | ||
Principal | $ 287,500 | $ 287,500 |
Unamortized issuance costs | (4,338) | (5,177) |
Net carrying amount | $ 283,162 | $ 282,323 |
Debt (Details)
Debt (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2021 USD ($) D $ / shares $ / derivative | Jul. 31, 2019 USD ($) | Aug. 31, 2023 USD ($) | Aug. 31, 2022 USD ($) | Aug. 31, 2023 USD ($) | Aug. 31, 2022 USD ($) | Feb. 28, 2023 USD ($) | Jul. 19, 2022 USD ($) | |
Convertible Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 287,500 | |||||||
Interest rate | 0.50% | |||||||
Conversion ratio | 19.8088 | |||||||
Principal amount denomination | $ 1 | |||||||
Conversion rate | $ / shares | $ 50.48 | |||||||
Threshold percentage of stock price trigger | 130% | |||||||
Threshold trading days | D | 20 | |||||||
Threshold consecutive trading days | D | 30 | |||||||
Percentage of principal amount redeemed | 100% | |||||||
Cap price | $ / derivative | 76.20 | |||||||
Proceeds from notes payable | $ 279,132 | |||||||
Payment of costs of the capped call transactions | 34,443 | |||||||
Cost which includes allocated pro-rata on capped call costs | 8,428 | |||||||
Long-term debt | $ 287,500 | $ 287,500 | $ 287,500 | |||||
Outstanding debt | 283,162 | 283,162 | 282,323 | |||||
Debt issuance cost | 4,338 | 4,338 | $ 5,177 | |||||
Interest expenses | 781 | $ 779 | 1,562 | $ 1,558 | ||||
Amortization of debt discount | 420 | 417 | $ 839 | 834 | ||||
Amount allocated to capped call | $ 60 | |||||||
Number of business day | D | 5 | |||||||
Number of consecutive trading day | D | 10 | |||||||
Percentage of average conversion value of note | 98% | |||||||
Effective interest rate over period | 1.10% | |||||||
Percentage of premium over last reported sale price | 100% | |||||||
Amount allocated to the Notes | $ 8,368 | |||||||
Revolving Credit Facility, 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 80,000 | |||||||
Line of credit | 1,311 | $ 1,311 | ||||||
Long-term debt | 68,165 | 68,165 | ||||||
Outstanding debt | 0 | 0 | ||||||
Interest expenses | 51 | $ 158 | 102 | $ 210 | ||||
Threshold net cash for extension of debt term | $ 200,000 | |||||||
Security Deposit | $ 1,170 | $ 1,170 | ||||||
Revolving Credit Facility, 2019 | Bloomberg Short-Term Bank Yield Index | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable rate | 3.50% | |||||||
Revolving Credit Facility, 2019 | BSBY Rate and Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument variable rate | 2.50% |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation expense | $ 15,726 | $ 17,514 | $ 30,004 | $ 36,903 |
Cost of revenue, excluding depreciation and amortization | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation expense | 1,202 | 1,270 | 2,113 | 2,398 |
Product and technology | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation expense | 7,643 | 5,625 | 14,609 | 13,115 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation expense | 3,876 | 4,270 | 7,702 | 8,259 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation expense | $ 3,005 | $ 6,349 | $ 5,580 | $ 13,131 |
Stock-based Compensation - St_2
Stock-based Compensation - Stock Options (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2020 | Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 15,726 | $ 17,514 | $ 30,004 | $ 36,903 | |
2020 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock authorized to be issued | 12,135,039 | 12,135,039 | |||
Common stock available for future grants | 1,006,028 | 1,006,028 | |||
2020 Equity Incentive Plan | Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock authorized to be issued | 4,300,000 | ||||
Term of option | 10 years | ||||
Vesting period | 4 years | ||||
Compensation expense | $ 1,765 | 2,531 | $ 3,980 | 5,223 | |
Aggregate intrinsic value of stock options | 366 | 796 | 3,498 | 1,145 | |
Unrecognized compensation expense | 8,394 | $ 8,394 | |||
Weighted average period | 1 year 4 months 24 days | ||||
2020 Equity Incentive Plan | Employee Stock Option | Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
Vesting percentage | 25% | ||||
2020 Equity Incentive Plan | Employee Stock Option | Tranche Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Vesting percentage | 75% | ||||
PlushCare, Inc. Stock Incentive Plan | Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 720 | 1,212 | $ 2,060 | 2,456 | |
Aggregate intrinsic value of stock options | 14 | $ 222 | 549 | $ 483 | |
Unrecognized compensation expense | $ 499 | $ 499 | |||
Weighted average period | 1 year |
Stock-based Compensation - St_3
Stock-based Compensation - Stock Option Activity Under Option Plan and Incentive Plan (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Aug. 31, 2023 USD ($) $ / shares shares | |
2020 Equity Incentive Plan | |
Stock Options | |
Beginning Balance | shares | 8,050,519 |
Granted | shares | 10,792 |
Exercised | shares | (566,940) |
Forfeited | shares | (233,850) |
Ending Balance | shares | 7,260,521 |
Weighted average exercise price | |
Beginning Balance (in USD per share) | $ / shares | $ 10.52 |
Granted | $ / shares | 14.25 |
Exercised | $ / shares | 5.26 |
Forfeited | $ / shares | 18.07 |
Ending Balance (in USD per share) | $ / shares | $ 10.69 |
Weighted remaining contractual life in years | 4 years 4 months 24 days |
Ending Balance | $ | $ 39,596 |
PlushCare, Inc. Stock Incentive Plan | |
Stock Options | |
Beginning Balance | shares | 153,608 |
Exercised | shares | (49,944) |
Forfeited | shares | (1,505) |
Ending Balance | shares | 102,159 |
Weighted average exercise price | |
Beginning Balance (in USD per share) | $ / shares | $ 1.63 |
Exercised | $ / shares | 2.12 |
Forfeited | $ / shares | 2.88 |
Ending Balance (in USD per share) | $ / shares | $ 1.37 |
Weighted remaining contractual life in years | 6 years |
Ending Balance | $ | $ 1,238 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 09, 2021 | Mar. 03, 2021 | May 31, 2023 | Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Summary of activity | |||||||
Compensation expense | $ 15,726 | $ 17,514 | $ 30,004 | $ 36,903 | |||
Time-based restricted stock units | |||||||
Summary of activity | |||||||
Beginning Balance | 4,266,990 | ||||||
Granted | 3,761,129 | ||||||
Vested | (1,319,146) | ||||||
Forfeited | (678,973) | ||||||
Ending Balance | 6,030,000 | 6,030,000 | |||||
Compensation expense | $ 9,295 | $ 8,491 | $ 15,993 | 15,306 | |||
Remaining of total unrecognized compensation costs | $ 79,266 | $ 79,266 | |||||
Weighted average period | 2 years 4 months 24 days | ||||||
Weighted average grant date fair value | $ 12.34 | ||||||
Time-based restricted stock units | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
Time-based restricted stock units | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Time-based restricted stock units | PlushCare | |||||||
Summary of activity | |||||||
Number of shares issued in connection with the acquisition to the existing shareholders | 64,694 | ||||||
Non option equity instruments | 57,124 | ||||||
Individuals Agreements With Company | Acquisition of 2nd.MD | |||||||
Summary of activity | |||||||
Shares Eligible To Be Received By Individuals Of Company With Continued Employment | 608,332 | ||||||
Additional Shares Eligible To Be Received By Individuals Of Company, Upon Achievement Of Contingent Consideration Milestones | 281,531 | ||||||
Individuals Agreements With Company | PlushCare | |||||||
Summary of activity | |||||||
Ending Balance | 268,720 | 268,720 | |||||
Compensation expense | $ 3,557 | $ 3,557 | $ 7,114 | $ 7,114 | |||
Unamortized compensation expense | $ 10,904 | ||||||
Unamortized Compensation Expense, Weighted Average Remaining Period | 9 months 18 days | ||||||
Weighted average grant date fair value | $ 52.52 | ||||||
Shares Eligible To Be Received By Individuals Of Company With Continued Employment | 806,161 | ||||||
Individuals Agreements With Company | Tranche One | Acquisition of 2nd.MD | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 50% | ||||||
Individuals Agreements With Company | Tranche One | PlushCare | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 33.33% | ||||||
Individuals Agreements With Company | Tranche Two | Acquisition of 2nd.MD | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 50% | ||||||
Individuals Agreements With Company | Tranche Two | PlushCare | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 33.33% | ||||||
Individuals Agreements With Company | Tranche Three | PlushCare | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 33.33% | ||||||
Restricted stock units 2023 Bonus plan payout | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Units issued | 747,687 | ||||||
Time based restricted stock units granted for two years | Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
Vesting percentage | 12.50% | ||||||
Time based restricted stock units granted for three years | Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Vesting percentage | 33.33% | ||||||
Time based restricted stock units granted for three years | Tranche Two | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Time based restricted stock units granted for three years | Tranche Two | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
Time based restricted stock units granted for four years | Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Vesting percentage | 25% | ||||||
Time based restricted stock units granted for four years | Tranche Three | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Time based restricted stock units granted for four years | Tranche Three | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years |
Stock-based Compensation - Perf
Stock-based Compensation - Performance Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 15,726 | $ 17,514 | $ 30,004 | $ 36,903 |
Performance Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ 73 | $ 73 | ||
Summary of activity | ||||
Granted | 276,480 | |||
Ending Balance | 276,480 | 276,480 | ||
Unrecognized compensation expense | $ 3,308 | $ 3,308 | ||
Weighted average period | 2 years 7 months 6 days | |||
Weighted average grant date fair value | $ 12.23 | $ 12.23 | ||
Performance Stock Units | Maximum | ||||
Summary of activity | ||||
Grant based on the actual achievement of performance metrics | 200% | 200% | ||
Performance Stock Units | Minimum | ||||
Summary of activity | ||||
Grant based on the actual achievement of performance metrics | 0% | 0% |
Stock-based Compensation - Empl
Stock-based Compensation - Employee Stock Purchase Plan - (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Mar. 01, 2023 | Jul. 31, 2020 | Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense | $ 15,726 | $ 17,514 | $ 30,004 | $ 36,903 | ||
2020 Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock initially reserved | 1,100,000 | |||||
Number of automatic annual increase in common share | 3,058,760 | |||||
Percentage of lower in fair market value | 85% | |||||
Compensation expense | 316 | 274 | $ 784 | $ 685 | ||
Issuance of common stock in connection with the employee stock purchase plan (shares) | 280,162 | 343,310 | ||||
Proceeds from Stock Plans | $ 1,992 | $ 1,788 | ||||
Employee Payroll Contributions Accrued | $ 1,203 | $ 1,384 | $ 1,203 | $ 1,384 | ||
Maximum | 2020 Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of employee contribution on compensation | 15% | |||||
Participant accrued purchase rights | $ 25,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Income Taxes | ||||
Income tax provision (benefit) | $ 84 | $ 249 | $ 175 | $ (3,650) |
Effective income tax rate | (0.20%) | (0.50%) | (0.20%) | 0.90% |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 31, 2023 | May 31, 2023 | Aug. 31, 2022 | May 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Net Loss Per Share Attributable to Common Stockholders | ||||||
Net loss | $ (32,825) | $ (38,409) | $ (46,523) | $ (342,822) | $ (71,234) | $ (389,345) |
Weighted-average common shares outstanding, basic | 75,487,717 | 70,475,778 | 74,334,111 | 70,251,890 | ||
Net income (loss) per share attributable to common stockholders, basic | $ (0.43) | $ (0.66) | $ (0.96) | $ (5.54) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Antidilutive (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 19,767,630 | 20,554,983 | 19,767,630 | 20,554,983 |
Employee Stock Option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 7,362,680 | 8,590,272 | 7,362,680 | 8,590,272 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 6,030,000 | 5,295,247 | 6,030,000 | 5,295,247 |
Unvested performance stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 276,480 | 276,480 | ||
Shares issued to 2nd.MD employees and subject to vesting | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 274,224 | 274,224 | ||
Shares issued to PlushCare employees and subject to vesting | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 268,720 | 537,401 | 268,720 | 537,401 |
Contingent shares in connection with PlushCare acquisition | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 102,111 | 102,111 | 102,111 | 102,111 |
Indemnity shares held in escrow in connection with PlushCare acquisition | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 27,342 | 27,342 | 27,342 | 27,342 |
Shares to be issued to HealthReveal shareholders upon expiration of indemnification | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 28,089 | 28,089 | ||
Convertible Senior Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 5,700,297 | 5,700,297 | 5,700,297 | 5,700,297 |
Commitments and Contingencies -
Commitments and Contingencies - Legal Proceedings (Details) - USD ($) $ in Thousands | May 08, 2021 | Aug. 31, 2023 |
Commitments and Contingencies. | ||
Accruals related to legal matters | $ 3,500 | |
Litigation settlement | $ 3,700 |
Commitments and Contingencies_2
Commitments and Contingencies - Purchase Obligations (Details) $ in Thousands | Aug. 31, 2023 USD ($) |
Commitments and Contingencies. | |
Purchase Obligation | $ 40,323 |
Purchase obligation, remaining future purchase commitments | $ 28,307 |
Restructuring - Severance Costs
Restructuring - Severance Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | $ (52) | $ 3,075 | $ 1,050 | $ 3,075 |
Cost of revenue, excluding depreciation and amortization | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | 92 | 114 | 726 | 114 |
Product and technology | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | (114) | 1,194 | 107 | 1,194 |
Sales and marketing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | (25) | 979 | (25) | 979 |
General and administrative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | $ (5) | $ 788 | $ 242 | $ 788 |
Restructuring - Severance Liabi
Restructuring - Severance Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2023 | Aug. 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Restructuring Reserve [Roll Forward] | ||||
Balance at beginning of period | $ 3,996 | |||
Severance Costs | $ (52) | $ 3,075 | 1,050 | $ 3,075 |
Cash payments | (4,444) | |||
Balance at end of period | $ 602 | $ 602 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 31, 2023 | May 31, 2023 | Aug. 31, 2022 | May 31, 2022 | Aug. 31, 2023 | Aug. 31, 2022 | |
Pay vs Performance Disclosure | ||||||
Net Income (Loss) | $ (32,825) | $ (38,409) | $ (46,523) | $ (342,822) | $ (71,234) | $ (389,345) |
Insider Trading Arrangements
Insider Trading Arrangements - shares | Jul. 21, 2023 | Jul. 20, 2023 |
Rajeev Singh [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On July 20, 2023, Rajeev Singh, our Chief Executive Officer and Chairman of the Board, adopted a trading plan intended to satisfy the affirmative defense conditions under Rule 10b5-1(c) of the Securities Exchange Act of 1934, as amended (the Exchange Act). The plan is for the sale of up to 250,000 shares and terminates on the earlier of the date all the shares under the plan are sold and April 22, 2024. | |
Name | Rajeev Singh | |
Title | Chief Executive Officer and Chairman of the Board | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | July 20, 2023 | |
Aggregate Available | 250,000 | |
Expiration date | April 22, 2024 | |
Richard Eskew [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On July 21, 2023, Richard Eskew, our EVP, General Counsel, adopted a trading plan intended to satisfy the affirmative defense conditions under Rule 10b5-1(c) of the Exchange Act. The plan is for (1) the sale of up to 2,400 shares of our common stock in amounts determined in accordance with a formula set forth in the plan and (2) the exercise of non-qualified stock options up to 16,659 shares, the proceeds of which would be used to exercise options and hold up to 30,250 shares. The plan terminates on the earlier of the date all the shares under the plan are sold or exercised, as applicable, and April 19, 2024. | |
Name | Richard Eskew | |
Title | EVP, General Counsel | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | July 21, 2023 | |
Expiration date | April 19, 2024 | |
Plan 1 [Member] | Richard Eskew [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 2,400 | |
Exercise of Non-Qualified Stock Options [Member] | Richard Eskew [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 16,659 | |
Exercise options [Member] | Richard Eskew [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 30,250 |