Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 29, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-36720 | |
Entity Registrant Name | UPLAND SOFTWARE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-2992077 | |
Entity Address, Address Line One | 401 Congress Ave., Suite 1850 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78701 | |
City Area Code | 512 | |
Local Phone Number | 960-1010 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | UPLD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,526,597 | |
Entity Central Index Key | 0001505155 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 179,584 | $ 250,029 |
Accounts receivable (net of allowance of $1,081 and $1,465 at September 30, 2021 and December 31, 2020, respectively) | 37,076 | 44,472 |
Deferred commissions, current | 8,721 | 5,784 |
Unbilled receivables | 5,847 | 4,561 |
Prepaid and other | 8,560 | 12,694 |
Total current assets | 239,788 | 317,540 |
Tax credits receivable | 3,054 | 2,427 |
Property and equipment, net | 3,035 | 2,778 |
Operating lease right-of-use asset | 6,990 | 10,124 |
Intangible assets, net | 292,807 | 279,975 |
Goodwill | 460,178 | 383,598 |
Deferred commissions, noncurrent | 14,168 | 12,962 |
Other assets | 1,691 | 1,816 |
Total assets | 1,021,711 | 1,011,220 |
Current liabilities: | ||
Accounts payable | 16,181 | 5,395 |
Accrued compensation | 11,259 | 8,138 |
Accrued expenses and other current liabilities | 9,960 | 13,438 |
Deferred revenue | 90,368 | 87,552 |
Liabilities due to sellers of businesses | 10,531 | 416 |
Operating lease liabilities, current | 3,555 | 3,315 |
Current maturities of notes payable (includes unamortized discount of $2,243 and $2,234 at September 30, 2021 and December 31, 2020, respectively) | 3,158 | 3,166 |
Total current liabilities | 145,012 | 121,420 |
Notes payable, less current maturities (includes unamortized discount of $7,842 and $9,414 at September 30, 2021 and December 31, 2020, respectively) | 515,958 | 518,437 |
Deferred revenue, noncurrent | 2,075 | 1,587 |
Operating lease liabilities, noncurrent | 7,650 | 8,387 |
Noncurrent deferred tax liability, net | 27,484 | 24,092 |
Interest rate swap liabilities | 15,642 | 30,032 |
Other long-term liabilities | 844 | 650 |
Total liabilities | 714,665 | 704,605 |
Stockholders’ equity: | ||
Common stock, $0.0001 par value; 50,000,000 shares authorized: 30,516,350 and 29,987,114 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively) | 3 | 3 |
Additional paid-in capital | 558,495 | 515,219 |
Accumulated other comprehensive loss | (18,338) | (26,234) |
Accumulated deficit | (233,114) | (182,373) |
Total stockholders’ equity | 307,046 | 306,615 |
Total liabilities and stockholders’ equity | $ 1,021,711 | $ 1,011,220 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss, current | $ 1,081 | $ 1,465 |
Unamortized discount, current | 2,243 | 2,234 |
Unamortized discount, noncurrent | $ 7,842 | $ 9,414 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 30,516,350 | 29,987,114 |
Common stock, shares outstanding (in shares) | 30,516,350 | 29,987,114 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | $ 76,053 | $ 74,184 | $ 226,286 | $ 213,531 |
Cost of revenue | 24,816 | 25,583 | 74,255 | 71,456 |
Gross profit | 51,237 | 48,601 | 152,031 | 142,075 |
Operating expenses: | ||||
Sales and marketing | 14,364 | 11,760 | 41,094 | 34,511 |
Research and development | 10,441 | 9,967 | 32,494 | 29,379 |
General and administrative | 17,725 | 16,864 | 61,286 | 51,195 |
Depreciation and amortization | 10,764 | 9,117 | 30,785 | 27,425 |
Acquisition-related expenses | 3,685 | 3,574 | 18,805 | 24,513 |
Total operating expenses | 56,979 | 51,282 | 184,464 | 167,023 |
Loss from operations | (5,742) | (2,681) | (32,433) | (24,948) |
Other expense: | ||||
Interest expense, net | (7,971) | (8,078) | (23,700) | (23,594) |
Other income (expense), net | (650) | 598 | (812) | (819) |
Total other expense | (8,621) | (7,480) | (24,512) | (24,413) |
Loss before benefit from (provision for) income taxes | (14,363) | (10,161) | (56,945) | (49,361) |
Benefit from (provision for) income taxes | 3,348 | (1,149) | 6,204 | 3,811 |
Net loss | $ (11,015) | $ (11,310) | $ (50,741) | $ (45,550) |
Net loss per common share: | ||||
Net loss per common share, basic (in dollars per share) | $ (0.36) | $ (0.42) | $ (1.68) | $ (1.77) |
Net loss per common share, diluted (in dollars per share) | $ (0.36) | $ (0.42) | $ (1.68) | $ (1.77) |
Weighted-average common shares outstanding, basic (in shares) | 30,428,675 | 27,220,134 | 30,167,171 | 25,725,495 |
Weighted-average common shares outstanding, diluted (in shares) | 30,428,675 | 27,220,134 | 30,167,171 | 25,725,495 |
Total product revenue | ||||
Revenue | $ 72,948 | $ 71,403 | $ 216,773 | $ 203,845 |
Subscription and support | ||||
Revenue | 72,264 | 70,992 | 215,322 | 202,582 |
Cost of revenue | 22,968 | 23,562 | 68,811 | 64,701 |
Perpetual license | ||||
Revenue | 684 | 411 | 1,451 | 1,263 |
Professional services | ||||
Revenue | 3,105 | 2,781 | 9,513 | 9,686 |
Cost of revenue | $ 1,848 | $ 2,021 | $ 5,444 | $ 6,755 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (11,015) | $ (11,310) | $ (50,741) | $ (45,550) |
Foreign currency translation adjustment | (4,548) | 2,734 | (5,611) | 494 |
Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries | (2,664) | 3,927 | (884) | (3,254) |
Unrealized gain (loss) on interest rate swaps | 2,112 | (441) | 14,391 | (35,497) |
Comprehensive loss | $ (16,115) | $ (5,090) | $ (42,845) | $ (83,807) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2019 | 25,250,120 | ||||||
Beginning balance at Dec. 31, 2019 | $ 212,861 | $ (108) | $ 3 | $ 345,127 | $ (1,223) | $ (131,046) | $ (108) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of stock under Company plans, net of shares withheld for tax (in shares) | 185,468 | ||||||
Issuance of stock under Company plans, net of shares withheld for tax | (2,066) | (2,066) | |||||
Issuance of stock, net of issuance costs (in shares) | 4,025,000 | ||||||
Issuance of stock, net of issuance costs | 130,101 | 130,101 | |||||
Stock-based compensation | 31,263 | 31,263 | |||||
Foreign currency translation adjustment | 494 | 494 | |||||
Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries | (3,254) | (3,254) | |||||
Unrealized gain (loss) on interest rate swaps | (35,497) | (35,497) | |||||
Net loss | (45,550) | (45,550) | |||||
Ending balance (in shares) at Sep. 30, 2020 | 29,460,588 | ||||||
Ending balance at Sep. 30, 2020 | 288,244 | $ 3 | 504,425 | (39,480) | (176,704) | ||
Beginning balance (in shares) at Jun. 30, 2020 | 25,365,735 | ||||||
Beginning balance at Jun. 30, 2020 | 152,237 | $ 3 | 363,328 | (45,700) | (165,394) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of stock under Company plans, net of shares withheld for tax (in shares) | 69,853 | ||||||
Issuance of stock under Company plans, net of shares withheld for tax | 20 | 20 | |||||
Issuance of stock, net of issuance costs (in shares) | 4,025,000 | ||||||
Issuance of stock, net of issuance costs | 130,114 | 130,114 | |||||
Stock-based compensation | 10,963 | 10,963 | |||||
Foreign currency translation adjustment | 2,734 | 2,734 | |||||
Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries | 3,927 | 3,927 | |||||
Unrealized gain (loss) on interest rate swaps | (441) | (441) | |||||
Net loss | (11,310) | (11,310) | |||||
Ending balance (in shares) at Sep. 30, 2020 | 29,460,588 | ||||||
Ending balance at Sep. 30, 2020 | $ 288,244 | $ 3 | 504,425 | (39,480) | (176,704) | ||
Beginning balance (in shares) at Dec. 31, 2020 | 29,987,114 | 29,987,114 | |||||
Beginning balance at Dec. 31, 2020 | $ 306,615 | $ 3 | 515,219 | (26,234) | (182,373) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of stock under Company plans, net of shares withheld for tax (in shares) | 529,236 | ||||||
Issuance of stock under Company plans, net of shares withheld for tax | (145) | (145) | |||||
Stock-based compensation | 43,421 | 43,421 | |||||
Foreign currency translation adjustment | (5,611) | (5,611) | |||||
Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries | (884) | (884) | |||||
Unrealized gain (loss) on interest rate swaps | 14,391 | 14,391 | |||||
Net loss | $ (50,741) | (50,741) | |||||
Ending balance (in shares) at Sep. 30, 2021 | 30,516,350 | 30,516,350 | |||||
Ending balance at Sep. 30, 2021 | $ 307,046 | $ 3 | 558,495 | (18,338) | (233,114) | ||
Beginning balance (in shares) at Jun. 30, 2021 | 30,413,246 | ||||||
Beginning balance at Jun. 30, 2021 | 311,437 | $ 3 | 546,771 | (13,238) | (222,099) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of stock under Company plans, net of shares withheld for tax (in shares) | 103,104 | ||||||
Issuance of stock under Company plans, net of shares withheld for tax | (323) | (323) | |||||
Stock-based compensation | 12,047 | 12,047 | |||||
Foreign currency translation adjustment | (4,548) | (4,548) | |||||
Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries | (2,664) | (2,664) | |||||
Unrealized gain (loss) on interest rate swaps | 2,112 | 2,112 | |||||
Net loss | $ (11,015) | (11,015) | |||||
Ending balance (in shares) at Sep. 30, 2021 | 30,516,350 | 30,516,350 | |||||
Ending balance at Sep. 30, 2021 | $ 307,046 | $ 3 | $ 558,495 | $ (18,338) | $ (233,114) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net loss | $ (50,741) | $ (45,550) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 39,420 | 35,091 |
Change in fair value of liabilities due to sellers of businesses | (3,503) | 155 |
Deferred income taxes | (7,726) | (3,346) |
Amortization of deferred costs | 6,283 | 3,172 |
Foreign currency re-measurement loss | 18 | 311 |
Non-cash interest and other expense | 1,682 | 1,669 |
Non-cash stock compensation expense | 43,421 | 31,263 |
Non-cash loss on retirement of fixed assets | 2 | 473 |
Changes in operating assets and liabilities, net of purchase business combinations: | ||
Accounts receivable | 11,748 | 13,140 |
Prepaids and other | (3,672) | (10,093) |
Accounts payable | 6,647 | (1,782) |
Accrued expenses and other liabilities | (8,111) | (8,944) |
Deferred revenue | (6,822) | (1,407) |
Net cash provided by operating activities | 28,646 | 14,152 |
Investing activities | ||
Purchase of property and equipment | (965) | (833) |
Purchase of customer relationships | 0 | (201) |
Purchase business combinations, net of cash acquired | (92,417) | (67,651) |
Net cash used in investing activities | (93,382) | (68,685) |
Financing activities | ||
Payments on finance leases | (12) | (86) |
Proceeds from notes payable, net of issuance costs | (120) | (169) |
Payments on notes payable | (4,050) | (4,050) |
Taxes paid related to net share settlement of equity awards | (373) | (2,140) |
Issuance of common stock, net of issuance costs | 228 | 130,174 |
Additional consideration paid to sellers of businesses | (769) | (11,652) |
Net cash provided by (used in) financing activities | (5,096) | 112,077 |
Effect of exchange rate fluctuations on cash | (613) | 404 |
Change in cash and cash equivalents | (70,445) | 57,948 |
Cash and cash equivalents, beginning of period | 250,029 | 175,024 |
Cash and cash equivalents, end of period | 179,584 | 232,972 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest, net of interest rate swaps | 22,043 | 22,456 |
Cash paid for taxes | 1,772 | 2,220 |
Non-cash investing and financing activities: | ||
Business combination consideration including holdbacks and earnouts | $ 14,204 | $ 345 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of Upland Software, Inc. and its wholly owned subsidiaries (collectively referred to as “Upland”, the “Company”, “we” or “us”). All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. In the opinion of management of the Company, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, in all material respects, and include all adjustments of a normal recurring nature necessary for a fair presentation. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other period. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2020 Annual Report on Form 10-K filed with the SEC on February 25, 2021. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include those related to revenue recognition, deferred commissions, allowance for credit losses, stock-based compensation, contingent consideration, acquired intangible assets, the useful lives of intangible assets and property and equipment, the fair value of the Company’s interest rate swaps and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ from those estimates. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. Upland is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of November 3, 2021, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Concentrations of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, accounts receivable and the Company’s interest rate swap hedges. The Company’s cash and cash equivalents are placed with high-quality financial institutions, which, at times, may exceed federally insured limits. The Company has not experienced any losses in these accounts, and the Company does not believe it is exposed to any significant credit risk related to cash and cash equivalents. The Company provides credit, in the normal course of business, to a number of its customers. To manage accounts receivable credit risk, the Company performs periodic credit evaluations of its customers and maintains current expected credit losses which considers such factors as historical loss information, geographic location of customers, current market conditions, and reasonable and supportable forecasts. No individual customer represented more than 10% of total revenues for the three or nine months ended September 30, 2021, or more than 10% of accounts receivable as of September 30, 2021 or December 31, 2020. Derivatives In connection with borrowing funds under the Company’s credit facility the Company has entered into a floating-to-fixed interest rate swap agreements to limit exposure to interest rate risk related to our debt. These interest rate swaps effectively converted the entire balance of the Company's $540 million term loans from variable interest payments to fixed interest rate payments, based on an annualized fixed rate of 5.4%, for a 7 year term of debt. ASC 815 requires entities to recognize derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. The Company assessed the effectiveness of the hedging relationship under the hypothetical derivative method and noted that all of the critical terms of the hypothetical derivative and hedging instrument were the same. The hedging relationship continues to limit the Company’s exposure to the variability in interest rates under the Company’s term loans and related cash outflows. As such, the Company has deemed this hedging relationship as highly effective in offsetting cash flows attributable to hedged risk (variability in forecasted monthly interest payments) for the term of the term loans and interest rate swap agreements. All derivative financial instruments are recorded at fair value as a net asset or liability in the accompanying condensed consolidated balance sheets. As of September 30, 2021 and December 31, 2020 the fair value of the interest rate swaps included in Interest rate swap liabilities in the Company's condensed consolidated balance sheets was $15.6 million and $30.0 million, respectively. The change in the fair value of the hedging instruments is recorded in Other comprehensive income. Amounts deferred in Other comprehensive income will be reclassified to Interest expense in the accompanying condensed consolidated statements of operations in the period in which the hedged item affects earnings. Fair Value of Financial Instruments The Company recognizes financial instruments in accordance with the authoritative guidance on fair value measurements and disclosures for financial assets and liabilities. This guidance defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The guidance also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. The Company’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable and debt. The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value, primarily due to short maturities. The carrying values of the Company’s debt instruments approximated their fair value based on rates currently available to the Company. Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is evaluating the impact of this standard on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08 , Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which creates an exception to the general recognition and measurement principle for contract assets and contract liabilities from contracts with customers acquired in a business combination. The new guidance will require companies to apply the definition of a performance obligation under accounting standard codification (“ASC”) Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current GAAP, an acquirer in a business combination is generally required to recognize and measure the assets it acquires and the liabilities it assumes at fair value on the acquisition date. The new guidance will result in the acquirer recording acquired contract assets and liabilities on the same |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | 2. Acquisitions The Company performs quantitative and qualitative analyses to determine the significance of each acquisition to the financial statements the Company. Based on these analyses the below acquisitions were deemed to be insignificant on an individual and cumulative basis. 2021 Acquisitions Acquisitions completed during the nine months ended September 30, 2021 include the following: • Panviva - On June 24, 2021, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Panviva Pty Ltd, an Australian proprietary company (“Panviva”), a cloud-based enterprise knowledge management solution. Revenue recorded since the acquisition date through September 30, 2021 were approximately $1.9 million. Revenue recorded for Panviva for the quarter ended September 30, 2021 were approximately $1.8 million. • BlueVenn - On February 28, 2021 the Company entered into an agreement to purchase the shares comprising the entire issued share capital of BlueVenn Group Limited, a company limited by shares organized and existing under the laws of England and Wales (“BlueVenn”), a cloud-based customer data platform. Revenue recorded since the acquisition date through September 30, 2021 were approximately $9.0 million. Revenue recorded for BlueVenn for the quarter ended September 30, 2021 were approximately $3.6 million. • Second Street - On January 19, 2021, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Second Street Media, Inc., a Missouri corporation (“Second Street”), an audience engagement platform. Revenue recorded since the acquisition date through September 30, 2021 were approximately $7.5 million. Revenue recorded for Second Street for the quarter ended September 30, 2021 were approximately $2.8 million. 2020 Acquisition The acquisition completed during the year ended December 31, 2020 were: • Localytics - On February 6, 2020, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Char Software, Inc (dba Localytics), a Delaware corporation (“Localytics”), a provider of mobile app personalization and analytics solutions. Consideration The following table summarizes the consideration transferred for the acquisitions described above (in thousands): Panviva BlueVenn Second Street Localytics Cash $ 19,931 $ 53,535 $ 25,436 $ 67,655 Holdback (1) 3,517 2,429 5,000 345 Contingent consideration (2) — 2,535 1,650 1,000 Working capital and other adjustments (3) 379 (537) — (5,238) Total consideration $ 23,827 $ 57,962 $ 32,086 $ 63,762 (1) Represents the cash holdbacks subject to indemnification claims that are payable 12 months following closing for Panviva, Second Street and Localytics and 18 months following closing for BlueVenn. In addition, the holdback payment to Panviva may be reduced by up to $1.6 million based on the future renewal of a specific customer. The fair value of this potential reduction was $0.0 million as of the acquisition date. (2) Represents the acquisition date fair value of anticipated earn-out payments, which are based on the estimated probability of attainment of the underlying future performance-based conditions at the time of acquisition. The maximum potential payout for the BlueVenn, Second Street and Localytics earn-outs were $22.4 million, $3.0 million, and $1.0 million, respectively. The earn-out for Localytics was paid in full during the year ended December 31, 2020 based on an ending fair value of $1.0 million. Refer to Note 3 for further discussion regarding the calculation of fair value of acquisition related earn-outs. (3) In addition to working capital adjustments made to the purchase price of our acquisitions this line item includes a $5.2 million settlement in total consideration for Localytics related to a representation and warranty insurance settlement which is included in prepaids and other current assets on the Company’s consolidated balance sheets as of December 31, 2020. Fair Value of Assets Acquired and Liabilities Assumed The Company recorded the purchase of the acquisitions described above using the acquisition method of accounting and, accordingly, recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The purchase accounting for the 2021 acquisitions of Panviva, BlueVenn, and Second Street are preliminary as the Company has not finalized the tax impact of these acquisitions. Management has recorded the purchase price allocations based upon acquired company information that is currently available. Management expects to complete the purchase accounting for BlueVenn and Second Street no later than the first quarter of 2022 and no later than the second quarter of 2022 for Panviva. The following condensed table presents the preliminary and finalized acquisition-date fair value of the assets acquired and liabilities assumed for the acquisitions during the year ended December 31, 2020 and through the nine months ended September 30, 2021, as well as assets and liabilities (in thousands): Preliminary Final Panviva BlueVenn Second Street Localytics Year Acquired 2021 2021 2021 2020 Cash $ 132 $ 1,115 $ — $ — Accounts receivable 2,122 1,289 1,105 3,648 Other current assets 4,986 1,983 89 6,323 Operating lease right-of-use asset 197 1,357 489 7,605 Property and equipment 26 611 156 409 Customer relationships 9,757 18,888 14,600 30,500 Trade name 76 238 200 300 Technology 1,967 4,337 3,400 6,600 Goodwill 17,729 45,273 17,954 33,543 Other assets 33 24 13 6 Total assets acquired 37,025 75,115 38,006 88,934 Accounts payable (1,257) (2,772) (230) (2,382) Accrued expense and other (5,163) (2,198) (377) (6,761) Deferred tax liabilities (3,355) (4,066) (4,324) (3,382) Deferred revenue (3,226) (6,760) (500) (4,812) Operating lease liabilities (197) (1,357) (489) (7,835) Total liabilities assumed (13,198) (17,153) (5,920) (25,172) Total consideration $ 23,827 $ 57,962 $ 32,086 $ 63,762 The Company uses third party valuation consultants to determine the fair values of assets acquired and liabilities assumed. Tangible assets are valued at their respective carrying amounts, which approximates their estimated fair value. The valuation of identifiable intangible assets reflects management’s estimates based on, among other factors, the use of established valuation methods. Customer relationships are valued using the multi-period excess earnings method. Developed technology and trade names are valued using the relief-from-royalty method. The following table summarizes the weighted-average useful lives, by major finite-lived intangible asset class, for intangibles acquired during the nine months ended September 30, 2021 and the year ended December 31, 2020 (in years): Useful Life September 30, 2021 December 31, 2020 Customer relationships 7.0 8.0 Trade name 2.0 2.0 Developed technology 5.0 5.0 Total weighted-average useful life 6.6 7.4 During the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill based on changes to management's estimates and assumptions. The goodwill of $114.5 million for the above acquisitions is primarily attributable to the synergies expected to arise after the acquisition and the value of the acquired workforce. Goodwill that is deductible for tax purposes at the time of the acquisitions was $2.0 million. Total transaction related expenses incurred with respect to acquisition activity during the three months ended September 30, 2021 and September 30, 2020 were $0.1 million and $0.0 million, respectively, and during the nine months ended September 30, 2021 and September 30, 2020 were $6.2 million and $3.5 million, respectively. Transaction related expenses, excluding transformation costs, include expenses such as banker fees, legal and professional fees, insurance costs, and deal bonuses. Transaction costs are included in acquisition-related expenses in our condensed consolidated statement of operations. Other Acquisitions and Divestitures From time to time we may purchase or sell customer relationships that meet certain criteria. During the year ended December 31, 2020, we completed customer relationship acquisitions totaling $0.2 million. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. GAAP sets forth a three–tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three tiers are Level 1, defined as observable inputs, such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, which therefore requires an entity to develop its own assumptions. As of September 30, 2021, the Company had accrued earnout business acquisition contingent consideration liabilities for which fair values are measured as Level 3 instruments. These contingent consideration liabilities were recorded at fair value on the acquisition date and are remeasured periodically based on the then assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration payable can result from changes in anticipated revenue levels, changes in assumed discount periods and rates and changes in foreign exchange rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3. Any adjustment related to subsequent changes in the fair value of contingent consideration is recorded in acquisition-related expense or other income (expense) in the Company's condensed consolidated statement of operations based on management's assessment of the nature of the liability. Earnout consideration liabilities are included in Due to sellers in the Company's condensed consolidated balance sheets. In connection with entering into, and expanding, the Company's current credit facility, as discussed further in Note 6. Debt, the Company entered into interest rate swaps for the full 7 year term of the Company's term loans, effectively fixing our interest rate at 5.4% for the full value $540 million of the term loans. The fair value of the Company's swaps are measured at the end of each interim reporting period based on the then assessed fair value and adjusted if necessary. As the fair value measure is based on the market approach, they are categorized as Level 2. As of September 30, 2021 and December 31, 2020 the fair value of the interest rate swaps are included in Interest rate swap liabilities on the Company's condensed consolidated balance sheets. Liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements at September 30, 2021 (unaudited) Level 1 Level 2 Level 3 Total Liabilities: Earnout consideration liability $ — $ — $ 669 $ 669 Interest rate swap liabilities $ — $ 15,642 $ — $ 15,642 Fair Value Measurements at December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap liabilities $ — $ 30,032 $ — $ 30,032 The following table presents additional information about earnout consideration liabilities measured at fair value on a recurring basis and for which the Company has utilized significant unobservable (Level 3) inputs to determine fair value (in thousands) (unaudited): September 30, 2021 (unaudited) Balance at December 31, 2020 $ — Acquisitions and settlements: Acquisitions 4,185 Remeasurement adjustments: Gain included in earnings (3,503) Foreign currency translation adjustments (13) Balance at September 30, 2021 $ 669 Quantitative Information about Level 3 Fair Value Measurements The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: Fair Value at September 30, 2021 Valuation Technique Significant Unobservable Inputs Contingent acquisition consideration: $ 669 Binary option model Expected future annual revenue streams and probability of achievement Sensitivity to Changes in Significant Unobservable Inputs As presented in the table above, the significant unobservable inputs used in the fair value measurement of contingent consideration related to business acquisitions are forecasts of expected future annual revenues as developed by the Company's management and the probability of achievement of those revenue forecast. Significant increases (decreases) in these unobservable inputs in isolation would likely result in a significantly (lower) higher fair value measurement. Debt |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 4. Goodwill and Other Intangible Assets Changes in the Company’s goodwill balance for the nine months ended September 30, 2021 are summarized in the table below (in thousands): Balance at December 31, 2020 $ 383,598 Acquired in business combinations 85,102 Adjustment related to finalization of current year business combinations (4,146) Foreign currency translation adjustment (4,376) Balance at September 30, 2021 $ 460,178 Net intangible assets include the estimated acquisition-date fair values of customer relationships, marketing-related assets, developed technology, and non-compete agreements that the Company recorded as part of its business acquisitions. The following is a summary of the Company’s intangible assets, net (in thousands): Estimated Useful Gross Accumulated Net Carrying September 30, 2021: Customer relationships 1-10 $ 359,165 $ 116,707 $ 242,458 Trade name 1.5-10 9,722 5,494 4,228 Developed technology 4-9 88,387 42,266 46,121 Non-compete agreements 3 1,148 1,148 — Total intangible assets $ 458,422 $ 165,615 $ 292,807 Estimated Useful Gross Accumulated Net Carrying December 31, 2020: Customer relationships 1-10 $ 318,941 $ 89,131 $ 229,810 Trade name 1.5-10 9,283 4,763 4,520 Developed technology 4-9 79,382 33,929 45,453 Non-compete agreements 3 1,148 956 192 Total intangible assets $ 408,754 $ 128,779 $ 279,975 The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value or revised useful life. Management recorded no impairments of intangible assets or goodwill during the three and nine months ended September 30, 2021 or the year ended December 31, 2020. Total amortization expense during the three months ended September 30, 2021 and September 30, 2020 was $13.2 million and $11.2 million, respectively, and during the nine months ended September 30, 2021 and September 30, 2020 was $37.9 million and $33.6 million, respectively. As of September 30, 2021, the estimated annual amortization expense for the next five years and thereafter is as follows (in thousands): Amortization Year ending December 31: Remainder of 2021 $ 12,962 2022 49,281 2023 46,936 2024 44,588 2025 41,300 2026 and thereafter 97,740 Total $ 292,807 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes The Company’s income tax benefit for the three and nine months ended September 30, 2021 and September 30, 2020 reflects its estimate of the effective tax rates expected to be applicable for the full years, adjusted for any discrete events that are recorded in the period in which they occur. The estimates are re-evaluated each quarter based on the estimated tax expense for the full year. The tax benefit of $3.3 million and $6.2 million recorded for the three and nine months ended September 30, 2021, respectively, are primarily related to the deferred tax benefit attributable to the release of valuation allowance related to the acquisition of deferred tax liabilities associated with the Company’s business combinations occurring during the six months ended June 30, 2021, as discussed in Note 2. Acquisitions, the deferred tax benefit attributable to the reduction in deferred tax liabilities associated with the transfer of intangibles between foreign and domestic jurisdictions, and foreign income taxes associated with our combined non-U.S. operations. These tax benefits are offset by changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill and state taxes in certain states in which the Company does not file on a consolidated basis or have net operating loss carryforwards and the impact, recorded as discrete, of enacted future changes in UK tax rates on the balance of deferred tax assets and liabilities per tax law enacted in June 2021. The release of valuation allowance is attributable to ASC 805-740-30-3 and acquisitions of domestic entities with deferred tax liabilities that, upon acquisition, or shortly thereafter, allowed us to recognize certain deferred tax assets of approximately $6.5 million during the nine months ended September 30, 2021 that had previously been offset by a valuation allowance. $4.3 million of the benefit for the release of valuation allowance was primarily recorded during the three months ended March 31, 2021, and $2.2 million was primarily recorded during the three months ended September 30, 2021. The tax provision of $1.1 million and benefit of $3.8 million recorded for the three and nine months ended September 30, 2020, respectively, are primarily related to the deferred tax benefit attributable to the release of valuation allowance related to the acquisition of deferred tax liabilities associated with the Localytics business combination, as discussed in Note 2. Acquisitions, and foreign income taxes associated with our combined non-U.S. operations. These tax benefits are offset by changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill, state taxes in certain states in which the Company does not file on a consolidated basis or have net operating loss carryforwards, and an increase in net deferred tax liabilities in the UK associated with the change in the applicable UK tax rate. The release of valuation allowance is attributable to ASC 805-740-30-3 and acquisitions of domestic entities with deferred tax liabilities that, upon acquisition, allowed us to recognize certain deferred tax assets of approximately $4.2 million during the nine months ended September 30, 2020 that had previously been offset by a valuation allowance. An adjustment reducing the benefit by approximately $0.2 million was recognized during the three months ended September 30, 2020. The Company has historically incurred operating losses in the United States and, given its cumulative losses and limited history of profits, has recorded a valuation allowance against its United States net deferred tax assets, exclusive of tax deductible goodwill, at September 30, 2021 and September 30, 2020, respectively. The Company has reflected any uncertain tax positions primarily within its long-term taxes payable and a portion within deferred tax assets. The Company and its subsidiaries file tax returns in the U.S. federal jurisdiction and in several state and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years ending before December 31, 2017 and is no longer subject to state and local or foreign income tax examinations by tax authorities for years ending before December 31, 2016, other than where cross-border transactions extend the statute of limitations. The Company is not currently under audit for federal, state or any foreign jurisdictions. U.S. operating losses generated in years prior to 2017 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utilized. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt Long-term debt consisted of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Senior secured loans (includes unamortized discount of $10,085 and $11,648 based on an imputed interest rate of 5.8% and 5.8%, at September 30, 2021 and December 31, 2020, respectively) $ 519,116 $ 521,603 Less current maturities (3,158) (3,166) Total long-term debt $ 515,958 $ 518,437 Credit Facility On August 6, 2019, the Company entered into a credit agreement (the “Credit Facility”) which provides for (i) a fully-drawn $350 million, 7 year, senior secured term loan B facility (the “Term Loan”) and (ii) a new $60 million, 5 year, revolving credit facility (the “Revolver”) that was fully available as of September 30, 2021. The Credit Facility replaced the Company's previous credit agreement. All outstanding balances under our previous credit facility were paid off using proceeds from our new Credit Facility. On November 26, 2019 (the “Closing Date”), the Company entered into a First Incremental Assumption Agreement (the “Incremental Assumption Agreement”) which provides for a term loan facility to be established under the Credit Facility in an aggregate principal amount of $190.0 million (the “2019 Incremental Term Loan”) which is in addition to the existing $350.0 million term loans outstanding under the Credit Facility and the $60.0 million revolving credit facility under the Credit Facility. Payment terms The Term Loans (including the 2019 Incremental Term Loan) are repayable on a quarterly basis beginning on December 31, 2019 by an amount equal to 0.25% (1.00% per annum) of the aggregate principal amount of such loan. Any amount remaining unpaid is due and payable in full on August 6, 2026 (the “Term Loan Maturity Date”). At the option of the Company, the Term Loans (including the 2019 Incremental Term Loan) accrue interest at a per annum rate based on (i) the Base Rate plus a margin of 2.75% or (ii) the rate (not less than 0.00%) for Eurodollar deposits quoted on the LIBOR01 or LIBOR02 pages on the Reuters Screen, or as otherwise determined in accordance with the Credit Facility (based on a period equal to 1, 2, 3 or 6 months or, if available and agreed to by all relevant Lenders and the Agent, 12 months or such period of less than 1 month) plus a margin of 3.75%. The Base Rate for any day is a rate per annum equal to the greatest of (i) the prime rate in effect on such day, (ii) the federal funds effective rate (not less than 0.00%) in effect on such day plus ½ of 1.00%, and (ii) the Eurodollar rate for a one month interest period beginning on such day plus 1.00%. Accrued interest on the loans will be paid quarterly or, with respect to loans that are accruing interest based on the Eurodollar rate, at the end of the applicable interest rate period. Interest rate swaps On August 6, 2019, the Company entered into an interest rate hedge instrument for the full 7 year term, effectively fixing our interest rate at 5.4% for the Term Loan. In addition, on November 26, 2019, the Company entered into interest rate swap agreements to hedge the interest rate risk associated with the Company’s floating rate obligations under the 2019 Incremental Term Loan. These interest rate swaps fix the Company's interest rate (including the hedge premium) at 5.4% for the term of the Credit Facility. The interest rate associated with our new $60 million, 5 year, Revolver remains floating. The interest rate swap has been designated as a cash flow hedge and is valued using a market approach, which is a Level 2 valuation technique. At September 30, 2021, the fair value of the interest rate swap was a $15.6 million liability as a result of a decline in short term interest rates since entering into the swap agreements. The decrease in the fair value of the interest rate swap liability during the three and nine months ended September 30, 2021 is the result of an increase in short term interest rates during the respective periods. In the next twelve months, the Company estimates that $3.3 million will be reclassified from Accumulated other comprehensive income (loss) and recorded as an increase to Interest expense. Increases/decreases in cash paid for interest as a result of the Company’s interest rate swaps are included cash flows from operations. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (Loss) gain recognized in Other comprehensive income on derivative financial instruments $ 2,112 $ (441) $ 14,391 $ (35,497) (Loss) gain on interest rate swap (included in Interest expense on our consolidated statement of operations) $ (2,090) $ (2,013) $ (6,158) $ (3,467) Revolver Loans under the Revolver are available up to $60 million. The Revolver provides a sub-facility whereby the Company may request letters of credit (the “Letters of Credit”) in an aggregate amount not to exceed, at any one time outstanding, $10.0 million for the Company. The aggregate amount of outstanding Letters of Credit are reserved against the credit availability under the Maximum Revolver Amount. The Company incurs a 0.50% per annum unused line fee on the unborrowed balance of the Revolver which is paid quarterly. Loans under the Revolver may be borrowed, repaid and reborrowed until August 6, 2024 (the “Maturity Date”), at which time all amounts borrowed under the Revolver must be repaid. As of September 30, 2021, the Company had no borrowings outstanding under the Revolver or related sub-facility. Covenants The Credit Facility contains customary affirmative and negative covenants. The negative covenants limit the ability of the Loan Parties to, among other things (in each case subject to customary exceptions for a credit facility of this size and type): • Incur additional indebtedness or guarantee indebtedness of others; • Create liens on their assets; • Make investments, including certain acquisitions; • Enter into mergers or consolidations; • Dispose of assets; • Pay dividends and make other distributions on the Company’s capital stock, and redeem and repurchase the Company’s capital stock; • Enter into transactions with affiliates; and • Prepay indebtedness or make changes to certain agreements. The Credit Facility has no financial covenants as long as less than 35% of the Revolver is drawn as of the last day of any fiscal quarter. If 35% of the Revolver is drawn as of the last day of a given fiscal quarter the Company will be required to maintain a Total Leverage Ratio (the ratio of funded indebtedness as of such date less the amount of unrestricted cash and cash equivalents of the Company and its guarantors in an amount not to exceed $50.0 million, to adjusted EBITDA (calculated on a pro forma basis including giving effect to any acquisition)), measured on a quarter-end basis for each four consecutive fiscal quarters then ended, of not greater than 6.00 to 1.00. In addition, the Credit Facility contains customary events of default subject to customary cure periods for certain defaults that include, among others, non-payment defaults, inaccuracy of representations and warranties, covenant defaults, cross-defaults to certain other material indebtedness, change in control, bankruptcy and insolvency defaults and material judgment defaults. The occurrence of an event of default could result in the acceleration of Term Loans and Revolver and a right by the agent and lenders to exercise remedies. At the election of the lenders, a default interest rate shall apply on all obligations during an event of default, at a rate per annum equal to 2.00% above the applicable interest rate. The Term Loan and Revolver are secured by substantially all of the Company's assets. As of September 30, 2021 the Company was in compliance with all covenants under the Credit Facility. Cash interest costs averaged 5.4% and 5.4% for the nine months ended September 30, 2021 and for the year ended December 31, 2020, respectively. In addition, as of September 30, 2021 and December 31, 2020 the Company had $10.1 million and $11.6 million, respectively, of unamortized deferred financing costs associated with the Credit Facility. These financing costs will be amortized to non-cash interest expense over the remaining term of the Credit Facility. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 7. Net Loss Per Share The following table sets forth the computations of loss per share (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net Loss $ (11,015) $ (11,310) $ (50,741) $ (45,550) Denominator: Weighted–average common shares outstanding, basic and diluted 30,428,675 27,220,134 30,167,171 25,725,495 Net loss per common share, basic and diluted $ (0.36) $ (0.42) $ (1.68) $ (1.77) Due to the net losses for the three and nine months ended September 30, 2021 and September 30, 2020, respectively, basic and diluted loss per share were the same. The following table sets forth the anti–dilutive common share equivalents as of September 30, 2021 and September 30, 2020: September 30, 2021 2020 Stock options 242,984 314,310 Restricted stock awards 1,000 168,124 Restricted stock units 2,034,186 1,744,595 Performance restricted stock units 63,537 66,297 Total anti–dilutive common share equivalents 2,341,707 2,293,326 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Purchase Commitments The Company has purchase commitments related to hosting services, third-party technology used in the Company's solutions and for other services the Company purchases as part of normal operations. In certain cases these arrangements require a minimum annual purchase commitment. In addition, the Company purchased software development services pursuant to a technology services agreement with DevFactory FZ-LLC for the three months ended September 30, 2021 and September 30, 2020 totaling $2.4 million and $1.8 million, respectively, and for the nine months ended September 30, 2021 and September 30, 2020 totaling $7.2 million and $5.5 million, respectively. The remaining purchase obligation after September 30, 2021 through December 31, 2021 is $2.4 million. See Note 11. Related Party Transactions for more information regarding our purchase commitment to this related party. Litigation In the normal course of business, the Company may become involved in various lawsuits and legal proceedings. At this time, the Company is not involved in any current or pending legal proceedings, and does not anticipate any legal proceedings, that may have a material adverse effect on the Company's condensed consolidated balances sheets or condensed consolidated statement of operations. In addition, when we acquire companies, we require that the sellers provide industry standard indemnification for breaches of representations and warranties contained in the acquisition agreement and we will withhold payment of a portion of the purchase price for a period of time in order to satisfy any claims that we may make for indemnification. In certain transactions, we agree with the sellers to purchase a representation and warranty insurance policy that will pay such claims for indemnification. From time to time we may have one or more claims for indemnification pending. Similarly, we may have one or more ongoing negotiations related to the amount of an earnout. Gain contingencies related to indemnification claims are not recognized in our condensed consolidated financial statements until realized. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | 9. Stockholders' Equity Registration Statement On August 10, 2020, we filed a registration statement on Form S-3 (File No. 333-243728) (the “2020 S-3”), which became effective automatically upon its filing and covers an unlimited amount of securities. The 2020 S-3, will remain effective through August 2023. Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) consists of two elements, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) items are recorded in the stockholders’ equity section of our condensed consolidated balance sheets and excluded from net income (loss). Our other comprehensive income (loss) consists primarily of foreign currency translation adjustments for subsidiaries with functional currencies other than the U.S. dollar, unrealized translation gains (losses) on intercompany loans with foreign subsidiaries, and unrealized gains (losses) on interest rate swaps. The following table shows the components of accumulated other comprehensive loss, net of income taxes, (“AOCI”) in the stockholders’ equity section of our condensed consolidated balance sheets at the dates indicated (in thousands): September 30, 2021 December 31, 2020 Foreign currency translation adjustment $ (4,966) $ 644 Unrealized translation gain on intercompany loans with foreign subsidiaries 2,270 3,154 Unrealized loss on interest rate swaps (15,642) (30,032) Total accumulated other comprehensive loss $ (18,338) $ (26,234) The unrealized translation gain on intercompany loans with foreign subsidiaries as of September 30, 2021 is net of income tax expense of $1.8 million. The tax benefit related to unrealized translation gains on intercompany loans for the three and nine months ended September 30, 2021 was $0.5 million and $0.2 million, respectively. The income tax expense/benefit allocated to each component of other comprehensive income (loss) for all other periods and components is not material. The Company reclassifies taxes from AOCI to earnings as the items to which the tax effects relate are similarly reclassified. The functional currency of our foreign subsidiaries are primarily the local currencies. Results of operations for foreign subsidiaries are translated into United States dollars using the average exchange rates on a monthly basis during the year. The assets and liabilities of those subsidiaries are translated into United States dollars using the exchange rates in effect at the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders' equity in accumulated other comprehensive loss. The Company has intercompany loans that were used to fund the acquisitions of foreign subsidiaries. Due to the long-term nature of the loans, the unrealized translation gains (losses) resulting from re-measurement are recognized as a component of accumulated other comprehensive income (loss). Stock-Based Compensation The Company recognizes stock-based compensation expense from all awards in the following expense categories (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of revenue $ 539 $ 624 $ 1,544 $ 1,512 Research and development 671 1,005 2,327 2,639 Sales and marketing 1,636 968 4,392 2,415 General and administrative (1) 9,201 8,366 35,158 24,697 Total $ 12,047 $ 10,963 $ 43,421 $ 31,263 (1) In March 2021 our former co-President and Chief Operating Officer (“COO”) resigned from his positions and entered into an advisory agreement with the Company pursuant to which he will serve as a strategic advisor to the Company through December 31, 2022. Stock-based compensation for the nine months ended September 30, 2021 includes $6.3 million in incremental stock-based compensation expense related to the deemed modification of the unvested portion of grants held by our former COO at the time of transition, even though these shares continue to vest over their existing vesting schedule through 2022. In accordance with ASC 718, the fair value of these awards were modified and all related expense accelerated on the date of modification as a result of the reduction in required service. Restricted Stock Units Beginning in 2019, the Company began granting restricted stock units under its 2014 Stock Incentive Plan, in lieu of restricted stock awards, primarily for stock plan administrative purposes. Restricted stock unit activity during the nine months ended September 30, 2021 was as follows: Number of Weighted-Average Grant Date Fair Value Unvested balances at December 31, 2020 1,261,290 $ 39.92 Units granted 1,220,066 47.67 Units vested (383,371) 40.14 Awards forfeited (63,799) 42.81 Unvested balances at September 30, 2021 2,034,186 $ 44.43 Performance Based Restricted Stock Units In 2020 and 2021 fifty percent of the awards made to our Chief Executive Officer were performance based restricted stock units ("PRSUs"). The PRSU agreements provide that the quantity of units subject to vesting may range from 0% to 300% of the units granted per the table below based on the Company's absolute total shareholder return at the end of the eighteen month performance periods. Units granted per the table below are based on a 100% target payout. Compensation expense is recognized over the required service period of the grant and is determined based on the grant date fair value of the award and is not subject to fluctuation due to achievement of the underlying market-based target. PRSU activity during the nine months ended September 30, 2021 was as follows: Number of Weighted-Average Grant Date Fair Value Unvested balances at December 31, 2020 66,297 $ 79.72 Units granted 63,537 84.87 Incremental PRSUs vested in period 69,048 Units vested (135,345) 79.72 Unvested balances at September 30, 2021 63,537 $ 84.87 Significant assumptions used in the Monte Carlo simulation model for the PRSUs granted during the nine months ended September 30, 2021 and year ended December 31, 2020 are as follows: September 30, 2021 December 31, 2020 Expected volatility 53.6% 45.1% Risk-free interest rate 0.1% 1.3% Remaining performance period (in years) 1.35 1.35 Dividend yield — — Restricted Stock Awards Restricted share activity during the nine months ended September 30, 2021 was as follows: Number of Weighted-Average Grant Date Fair Value Unvested balances at December 31, 2020 34,508 $ 30.13 Awards vested (33,508) 30.11 Awards forfeited — — Unvested balances at September 30, 2021 1,000 $ 30.61 Stock Option Activity Stock option activity during the nine months ended September 30, 2021 was as follows: Number of Weighted– Outstanding at December 31, 2020 264,002 $ 8.93 Options exercised (20,610) 11.07 Options expired (408) 1.56 Outstanding at September 30, 2021 242,984 $ 8.76 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 10. Revenue Recognition Revenue Recognition Policy Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services over the term of the agreement, generally when made available to the customers. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenues are recognized net of sales credits and allowances. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Revenue is recognized based on the following five step model in accordance with ASC 606, Revenue from Contracts with Customers : • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Performance obligations under our contracts consist of subscription and support, perpetual licenses, and professional services revenues within a single operating segment. Subscription and Support Revenue The Company's software solutions are available for use as hosted application arrangements under subscription fee agreements without licensing perpetual rights to the software. Subscription fees from these applications are recognized over time on a ratable basis over the customer agreement term beginning on the date the Company's solution is made available to the customer. As our customers have access to use our solutions over the term of the contract agreement we believe this method of revenue recognition provides a faithful depiction of the transfer of services provided. Our subscription contracts are generally 1 to 3 years in length. Amounts that have been invoiced are recorded in accounts receivable and deferred revenue or subscription and support revenue, depending on whether the revenue recognition criteria have been met. Additional fees for monthly usage above the levels included in the standard subscription fee are recognized as subscription and support revenue at the end of each month and is invoiced concurrently. Subscription and support revenue includes revenue related to the Company’s digital engagement application which provides short code connectivity for its two-way short message service (“SMS”) programs and campaigns. As discussed further in the “Principal vs. Agent Considerations” section below, the Company recognizes revenue related to these messaging-related subscription contracts on a gross basis. Perpetual License Revenue The Company also records revenue from the sales of proprietary software products under perpetual licenses. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. The Company’s products do not require significant customization. Professional Services Revenue Professional services provided with subscription and support licenses and perpetual licenses consist of implementation fees, data extraction, configuration, and training. The Company’s implementation and configuration services do not involve significant customization of the software and are not considered essential to the functionality. Revenue from professional services are recognized over time as such services are performed. Revenue for fixed price services are generally recognized over time applying input methods to estimate progress to completion. Revenue for consumption-based services are generally recognized as the services are performed. Significant Judgments Performance Obligations and Standalone Selling Price A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company has contracts with customers that often include multiple performance obligations, usually including professional services sold with either individual or multiple subscriptions or perpetual licenses. For these contracts, the Company records individual performance obligations separately if they are distinct by allocating the contract's total transaction price to each performance obligation in an amount based on the relative standalone selling price (“SSP”), of each distinct good or service in the contract. Judgment is required to determine the SSP for each distinct performance obligation. A residual approach is only applied in limited circumstances when a particular performance obligation has highly variable and uncertain SSP and is bundled with other performance obligations that have observable SSP. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, historical standalone sales, customer demographics, geographic locations, and the number and types of users within our contracts. Principal vs. Agent Considerations The Company evaluates whether it is the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis) for vendor reseller agreements and messaging-related subscription agreements. Where the Company is the principal, it first obtains control of the inputs to the specific good or service and directs their use to create the combined output. The Company's control is evidenced by its involvement in the integration of the good or service on its platform before it is transferred to its customers, and is further supported by the Company being primarily responsible to its customers and having a level of discretion in establishing pricing. While none of the factors individually are considered presumptive or determinative, in reaching conclusions on gross versus net revenue recognition, the Company places the most weight on the analysis of whether or not it is the primary obligor in the arrangement. Generally, the Company reports revenue from vendor reseller agreements on a gross basis, meaning the amounts billed to customers are recorded as revenue, and expenses incurred are recorded as cost of revenue. As the Company is primarily obligated in its messaging-related subscription contracts, has latitude in establishing prices associated with its messaging program management services, is responsible for fulfillment of the transaction, and has credit risk, revenue is recorded on a gross basis with related telecom messaging costs incurred from third parties recorded as cost of revenue. Revenue provided from agreements in which the Company is an agent are immaterial. Contract Balances The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables, and deferred revenue. Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in unbilled receivables, which are expected to be billed during the succeeding twelve-month period and are recorded in Unbilled receivables in our condensed consolidated balance sheets. A contract liability results when we receive prepayments or deposits from customers in advance for implementation, maintenance and other services, as well as subscription fees. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. We recognize contract liabilities as revenue upon satisfaction of the underlying performance obligations. Contract liabilities that are expected to be recognized as revenue during the succeeding twelve-month period are recorded in Deferred revenue and the remaining portion is recorded in 'Deferred revenue noncurrent' on the accompanying condensed consolidated balance sheets at the end of each reporting period. Deferred revenue primarily consists of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for maintenance and other services, as well as initial subscription fees. We recognize deferred revenue as revenue when the services are performed, and the corresponding revenue recognition criteria are met. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Unbilled Receivables Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for software licenses already delivered and professional services already performed, but invoiced in arrears and for which the Company believes it has an unconditional right to payment. As of September 30, 2021 and December 31, 2020, unbilled receivables were $5.8 million and $4.6 million, respectively. Deferred Commissions Sales commissions earned by our sales force, and related payroll taxes, are considered incremental and recoverable costs of obtaining a contract with a customer. Deferred commissions and other costs for new customer contracts are capitalized upon contract signing and amortized on a systematic basis that is consistent with the transfer of goods and services over the expected life of the customer relationships, which has been determined to be approximately 6 years. The expected life of our customer relationships is based on historical data and management estimates, including estimated renewal terms and the useful life of the associated underlying technology. Commissions paid on renewal contracts are not commensurate with commissions paid on new customer contracts, as such, deferred commissions related to renewals are capitalized and amortized over the estimated average contractual renewal term of 18 months. We utilized the 'portfolio approach' practical expedient permitted under ASC 606-10-10-4, which allows entities to apply the guidance to a portfolio of contracts with similar characteristics as the effects on the financial statements of this approach would not differ materially from applying the guidance to individual contracts. The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred commissions, current, and the remainder is recorded in long-term assets as deferred commissions, net of current portion. Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of operations. Deferred commissions are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable consistent with the Company's long-lived assets policy. No indicators of impairment were identified during the nine months ended September 30, 2021. The following table presents the activity impacting deferred commissions for the nine months ended September 30, 2021 (in thousands): Balance at December 31, 2020 $ 18,746 Capitalized deferred commissions 10,240 Amortization of deferred commissions (6,097) Balance at September 30, 2021 $ 22,889 Commissions capitalized in excess of amortization of deferred commissions for the three and nine months ended September 30, 2021 were $0.6 million and $4.1 million, respectively. Deferred Revenue Deferred revenue represents either customer advance payments or billings for which the aforementioned revenue recognition criteria have not yet been met. Deferred revenue is mainly unearned revenue related to subscription services and support services. During the nine months ended September 30, 2021, we recognized $76.3 million and $1.9 million of subscription services and professional services revenue, respectively, that was included in the deferred revenue balances at the beginning of the period. In addition, during the nine months ended September 30, 2021 we recognized $5.9 million in revenue that was included in the acquired deferred revenue balance of our 2021 acquisitions as disclosed in Note 2. Acquisitions. Remaining Performance Obligations As of September 30, 2021, approximately $263.2 million of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 69% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Disaggregated Revenue The Company disaggregates revenue from contracts with customers by geography and revenue generating activity, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Revenue by geography is based on the ship-to address of the customer, which is intended to approximate where the customers' users are located. The ship-to country is generally the same as the billing country. The Company has operations primarily in the U.S., United Kingdom and Canada. Information about these operations is presented below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenues: Subscription and support: United States $ 50,866 $ 53,356 $ 154,683 $ 149,946 United Kingdom 11,886 9,518 33,938 28,864 Canada 3,355 3,318 10,317 11,260 Other International 6,157 4,800 16,384 12,512 Total subscription and support revenue 72,264 70,992 215,322 202,582 Perpetual license: United States 628 345 1,219 849 United Kingdom — — 11 16 Canada 1 14 53 71 Other International 55 52 168 327 Total perpetual license revenue 684 411 1,451 1,263 Professional services: United States 2,014 1,865 6,208 6,773 United Kingdom 753 432 2,219 1,621 Canada 117 137 309 371 Other International 221 347 777 921 Total professional service revenue 3,105 2,781 9,513 9,686 Total revenue $ 76,053 $ 74,184 $ 226,286 $ 213,531 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions We are a party to two agreements, as detailed below, with companies controlled by ESW Capital LLC (“ESW”), a non-management investor in the Company which historically held more than 5% of the Company's capital stock. As of July 9, 2021 ESWs ownership in Upland was reduced to 4.8% at which point DevFactory was no longer considered a related party. • On March 28, 2017, the Company entered into an amendment to the Amended and Restated Technology Services Agreement with DevFactory FZ LLC (“DevFactory”) to extend the initial term end date from December 31, 2017 to December 31, 2021. Additionally, the Company amended the option for either party to renew annually for one • The Company purchased services from Crossover, Inc. ("Crossover"), a company controlled by ESW Capital, LLC during the three months ended September 30, 2021 and September 30, 2020 of approximately $1.0 million and $1.2 million, respectively, and $2.9 million and $3.7 million during the nine months ended September 30, 2021 and September 30, 2020, respectively. Crossover provides a proprietary technology system to help the Company identify, screen, select, assign, and connect with necessary resources from time to time to perform technology software |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of Upland Software, Inc. and its wholly owned subsidiaries (collectively referred to as “Upland”, the “Company”, “we” or “us”). All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. In the opinion of management of the Company, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, in all material respects, and include all adjustments of a normal recurring nature necessary for a fair presentation. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other period. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2020 Annual Report on Form 10-K filed with the SEC on February 25, 2021. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses. Significant items subject to such estimates include those related to revenue recognition, deferred commissions, allowance for credit losses, stock-based compensation, contingent consideration, acquired intangible assets, the useful lives of intangible assets and property and equipment, the fair value of the Company’s interest rate swaps and income taxes. In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ from those estimates. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. Upland is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of November 3, 2021, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. |
Concentrations of Credit Risk and Significant Customers | Concentrations of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, accounts receivable and the Company’s interest rate swap hedges. The Company’s cash and cash equivalents are placed with high-quality financial institutions, which, at times, may exceed federally insured limits. The Company has not experienced any losses in these accounts, and the Company does not believe it is exposed to any significant credit risk related to cash and cash equivalents. The Company provides credit, in the normal course of business, to a number of its customers. To manage accounts receivable credit risk, the Company performs periodic credit evaluations of its customers and maintains current expected credit losses which considers such factors as historical loss information, geographic location of customers, current market conditions, and reasonable and supportable forecasts. |
Derivatives | Derivatives In connection with borrowing funds under the Company’s credit facility the Company has entered into a floating-to-fixed interest rate swap agreements to limit exposure to interest rate risk related to our debt. These interest rate swaps effectively converted the entire balance of the Company's $540 million term loans from variable interest payments to fixed interest rate payments, based on an annualized fixed rate of 5.4%, for a 7 year term of debt. ASC 815 requires entities to recognize derivative instruments as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. The Company assessed the effectiveness of the hedging relationship under the hypothetical derivative method and noted that all of the critical terms of the hypothetical derivative and hedging instrument were the same. The hedging relationship continues to limit the Company’s exposure to the variability in interest rates under the Company’s term loans and related cash outflows. As such, the Company has deemed this hedging relationship as highly effective in offsetting cash flows attributable to hedged risk (variability in forecasted monthly interest payments) for the term of the term loans and interest rate swap agreements. All derivative financial instruments are recorded at fair value as a net asset or liability in the accompanying condensed consolidated balance sheets. As of September 30, 2021 and December 31, 2020 the fair value of the interest rate swaps included in Interest rate swap liabilities in the Company's condensed consolidated balance sheets was $15.6 million and $30.0 million, respectively. The change in the fair value of the hedging instruments is recorded in Other comprehensive income. Amounts deferred in Other comprehensive income will be reclassified to Interest expense in the accompanying condensed consolidated statements of operations in the period in which the hedged item affects earnings. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company recognizes financial instruments in accordance with the authoritative guidance on fair value measurements and disclosures for financial assets and liabilities. This guidance defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The guidance also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is evaluating the impact of this standard on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08 , Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which creates an exception to the general recognition and measurement principle for contract assets and contract liabilities from contracts with customers acquired in a business combination. The new guidance will require companies to apply the definition of a performance obligation under accounting standard codification (“ASC”) Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current GAAP, an acquirer in a business combination is generally required to recognize and measure the assets it acquires and the liabilities it assumes at fair value on the acquisition date. The new guidance will result in the acquirer recording acquired contract assets and liabilities on the same |
Revenue Recognition Policy | Revenue Recognition Policy Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services over the term of the agreement, generally when made available to the customers. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenues are recognized net of sales credits and allowances. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Revenue is recognized based on the following five step model in accordance with ASC 606, Revenue from Contracts with Customers : • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Performance obligations under our contracts consist of subscription and support, perpetual licenses, and professional services revenues within a single operating segment. Subscription and Support Revenue The Company's software solutions are available for use as hosted application arrangements under subscription fee agreements without licensing perpetual rights to the software. Subscription fees from these applications are recognized over time on a ratable basis over the customer agreement term beginning on the date the Company's solution is made available to the customer. As our customers have access to use our solutions over the term of the contract agreement we believe this method of revenue recognition provides a faithful depiction of the transfer of services provided. Our subscription contracts are generally 1 to 3 years in length. Amounts that have been invoiced are recorded in accounts receivable and deferred revenue or subscription and support revenue, depending on whether the revenue recognition criteria have been met. Additional fees for monthly usage above the levels included in the standard subscription fee are recognized as subscription and support revenue at the end of each month and is invoiced concurrently. Subscription and support revenue includes revenue related to the Company’s digital engagement application which provides short code connectivity for its two-way short message service (“SMS”) programs and campaigns. As discussed further in the “Principal vs. Agent Considerations” section below, the Company recognizes revenue related to these messaging-related subscription contracts on a gross basis. Perpetual License Revenue The Company also records revenue from the sales of proprietary software products under perpetual licenses. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. The Company’s products do not require significant customization. Professional Services Revenue Professional services provided with subscription and support licenses and perpetual licenses consist of implementation fees, data extraction, configuration, and training. The Company’s implementation and configuration services do not involve significant customization of the software and are not considered essential to the functionality. Revenue from professional services are recognized over time as such services are performed. Revenue for fixed price services are generally recognized over time applying input methods to estimate progress to completion. Revenue for consumption-based services are generally recognized as the services are performed. Significant Judgments Performance Obligations and Standalone Selling Price A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company has contracts with customers that often include multiple performance obligations, usually including professional services sold with either individual or multiple subscriptions or perpetual licenses. For these contracts, the Company records individual performance obligations separately if they are distinct by allocating the contract's total transaction price to each performance obligation in an amount based on the relative standalone selling price (“SSP”), of each distinct good or service in the contract. Judgment is required to determine the SSP for each distinct performance obligation. A residual approach is only applied in limited circumstances when a particular performance obligation has highly variable and uncertain SSP and is bundled with other performance obligations that have observable SSP. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, historical standalone sales, customer demographics, geographic locations, and the number and types of users within our contracts. Principal vs. Agent Considerations The Company evaluates whether it is the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis) for vendor reseller agreements and messaging-related subscription agreements. Where the Company is the principal, it first obtains control of the inputs to the specific good or service and directs their use to create the combined output. The Company's control is evidenced by its involvement in the integration of the good or service on its platform before it is transferred to its customers, and is further supported by the Company being primarily responsible to its customers and having a level of discretion in establishing pricing. While none of the factors individually are considered presumptive or determinative, in reaching conclusions on gross versus net revenue recognition, the Company places the most weight on the analysis of whether or not it is the primary obligor in the arrangement. Generally, the Company reports revenue from vendor reseller agreements on a gross basis, meaning the amounts billed to customers are recorded as revenue, and expenses incurred are recorded as cost of revenue. As the Company is primarily obligated in its messaging-related subscription contracts, has latitude in establishing prices associated with its messaging program management services, is responsible for fulfillment of the transaction, and has credit risk, revenue is recorded on a gross basis with related telecom messaging costs incurred from third parties recorded as cost of revenue. Revenue provided from agreements in which the Company is an agent are immaterial. Contract Balances The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables, and deferred revenue. Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in unbilled receivables, which are expected to be billed during the succeeding twelve-month period and are recorded in Unbilled receivables in our condensed consolidated balance sheets. A contract liability results when we receive prepayments or deposits from customers in advance for implementation, maintenance and other services, as well as subscription fees. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. We recognize contract liabilities as revenue upon satisfaction of the underlying performance obligations. Contract liabilities that are expected to be recognized as revenue during the succeeding twelve-month period are recorded in Deferred revenue and the remaining portion is recorded in 'Deferred revenue noncurrent' on the accompanying condensed consolidated balance sheets at the end of each reporting period. Deferred revenue primarily consists of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for maintenance and other services, as well as initial subscription fees. We recognize deferred revenue as revenue when the services are performed, and the corresponding revenue recognition criteria are met. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Paid for Acquisitions | The following table summarizes the consideration transferred for the acquisitions described above (in thousands): Panviva BlueVenn Second Street Localytics Cash $ 19,931 $ 53,535 $ 25,436 $ 67,655 Holdback (1) 3,517 2,429 5,000 345 Contingent consideration (2) — 2,535 1,650 1,000 Working capital and other adjustments (3) 379 (537) — (5,238) Total consideration $ 23,827 $ 57,962 $ 32,086 $ 63,762 (1) Represents the cash holdbacks subject to indemnification claims that are payable 12 months following closing for Panviva, Second Street and Localytics and 18 months following closing for BlueVenn. In addition, the holdback payment to Panviva may be reduced by up to $1.6 million based on the future renewal of a specific customer. The fair value of this potential reduction was $0.0 million as of the acquisition date. (2) Represents the acquisition date fair value of anticipated earn-out payments, which are based on the estimated probability of attainment of the underlying future performance-based conditions at the time of acquisition. The maximum potential payout for the BlueVenn, Second Street and Localytics earn-outs were $22.4 million, $3.0 million, and $1.0 million, respectively. The earn-out for Localytics was paid in full during the year ended December 31, 2020 based on an ending fair value of $1.0 million. Refer to Note 3 for further discussion regarding the calculation of fair value of acquisition related earn-outs. |
Schedule of Assets and Liabilities Assumed through Acquisition | The following condensed table presents the preliminary and finalized acquisition-date fair value of the assets acquired and liabilities assumed for the acquisitions during the year ended December 31, 2020 and through the nine months ended September 30, 2021, as well as assets and liabilities (in thousands): Preliminary Final Panviva BlueVenn Second Street Localytics Year Acquired 2021 2021 2021 2020 Cash $ 132 $ 1,115 $ — $ — Accounts receivable 2,122 1,289 1,105 3,648 Other current assets 4,986 1,983 89 6,323 Operating lease right-of-use asset 197 1,357 489 7,605 Property and equipment 26 611 156 409 Customer relationships 9,757 18,888 14,600 30,500 Trade name 76 238 200 300 Technology 1,967 4,337 3,400 6,600 Goodwill 17,729 45,273 17,954 33,543 Other assets 33 24 13 6 Total assets acquired 37,025 75,115 38,006 88,934 Accounts payable (1,257) (2,772) (230) (2,382) Accrued expense and other (5,163) (2,198) (377) (6,761) Deferred tax liabilities (3,355) (4,066) (4,324) (3,382) Deferred revenue (3,226) (6,760) (500) (4,812) Operating lease liabilities (197) (1,357) (489) (7,835) Total liabilities assumed (13,198) (17,153) (5,920) (25,172) Total consideration $ 23,827 $ 57,962 $ 32,086 $ 63,762 |
Schedule of Weighted-Average Amortization Period | The following table summarizes the weighted-average useful lives, by major finite-lived intangible asset class, for intangibles acquired during the nine months ended September 30, 2021 and the year ended December 31, 2020 (in years): Useful Life September 30, 2021 December 31, 2020 Customer relationships 7.0 8.0 Trade name 2.0 2.0 Developed technology 5.0 5.0 Total weighted-average useful life 6.6 7.4 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Liabilities Measured at Fair Value on a Recurring Basis | Liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements at September 30, 2021 (unaudited) Level 1 Level 2 Level 3 Total Liabilities: Earnout consideration liability $ — $ — $ 669 $ 669 Interest rate swap liabilities $ — $ 15,642 $ — $ 15,642 Fair Value Measurements at December 31, 2020 Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap liabilities $ — $ 30,032 $ — $ 30,032 |
Schedule of Liabilities Measured at Fair Value on a Recurring Basis which Unobservable Inputs are Utilized | The following table presents additional information about earnout consideration liabilities measured at fair value on a recurring basis and for which the Company has utilized significant unobservable (Level 3) inputs to determine fair value (in thousands) (unaudited): September 30, 2021 (unaudited) Balance at December 31, 2020 $ — Acquisitions and settlements: Acquisitions 4,185 Remeasurement adjustments: Gain included in earnings (3,503) Foreign currency translation adjustments (13) Balance at September 30, 2021 $ 669 |
Schedule of Unobservable Inputs Used in Fair Value Measurement | The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows: Fair Value at September 30, 2021 Valuation Technique Significant Unobservable Inputs Contingent acquisition consideration: $ 669 Binary option model Expected future annual revenue streams and probability of achievement |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the Company’s goodwill balance for the nine months ended September 30, 2021 are summarized in the table below (in thousands): Balance at December 31, 2020 $ 383,598 Acquired in business combinations 85,102 Adjustment related to finalization of current year business combinations (4,146) Foreign currency translation adjustment (4,376) Balance at September 30, 2021 $ 460,178 |
Schedule of Intangible Assets, Net | The following is a summary of the Company’s intangible assets, net (in thousands): Estimated Useful Gross Accumulated Net Carrying September 30, 2021: Customer relationships 1-10 $ 359,165 $ 116,707 $ 242,458 Trade name 1.5-10 9,722 5,494 4,228 Developed technology 4-9 88,387 42,266 46,121 Non-compete agreements 3 1,148 1,148 — Total intangible assets $ 458,422 $ 165,615 $ 292,807 Estimated Useful Gross Accumulated Net Carrying December 31, 2020: Customer relationships 1-10 $ 318,941 $ 89,131 $ 229,810 Trade name 1.5-10 9,283 4,763 4,520 Developed technology 4-9 79,382 33,929 45,453 Non-compete agreements 3 1,148 956 192 Total intangible assets $ 408,754 $ 128,779 $ 279,975 |
Schedule of Estimated Annual Amortization Expense | As of September 30, 2021, the estimated annual amortization expense for the next five years and thereafter is as follows (in thousands): Amortization Year ending December 31: Remainder of 2021 $ 12,962 2022 49,281 2023 46,936 2024 44,588 2025 41,300 2026 and thereafter 97,740 Total $ 292,807 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Senior secured loans (includes unamortized discount of $10,085 and $11,648 based on an imputed interest rate of 5.8% and 5.8%, at September 30, 2021 and December 31, 2020, respectively) $ 519,116 $ 521,603 Less current maturities (3,158) (3,166) Total long-term debt $ 515,958 $ 518,437 |
Schedule of Debt, Interest Rate Swap | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (Loss) gain recognized in Other comprehensive income on derivative financial instruments $ 2,112 $ (441) $ 14,391 $ (35,497) (Loss) gain on interest rate swap (included in Interest expense on our consolidated statement of operations) $ (2,090) $ (2,013) $ (6,158) $ (3,467) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Loss Per Share | The following table sets forth the computations of loss per share (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net Loss $ (11,015) $ (11,310) $ (50,741) $ (45,550) Denominator: Weighted–average common shares outstanding, basic and diluted 30,428,675 27,220,134 30,167,171 25,725,495 Net loss per common share, basic and diluted $ (0.36) $ (0.42) $ (1.68) $ (1.77) |
Schedule of Anti–dilutive Common Share Equivalents | The following table sets forth the anti–dilutive common share equivalents as of September 30, 2021 and September 30, 2020: September 30, 2021 2020 Stock options 242,984 314,310 Restricted stock awards 1,000 168,124 Restricted stock units 2,034,186 1,744,595 Performance restricted stock units 63,537 66,297 Total anti–dilutive common share equivalents 2,341,707 2,293,326 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table shows the components of accumulated other comprehensive loss, net of income taxes, (“AOCI”) in the stockholders’ equity section of our condensed consolidated balance sheets at the dates indicated (in thousands): September 30, 2021 December 31, 2020 Foreign currency translation adjustment $ (4,966) $ 644 Unrealized translation gain on intercompany loans with foreign subsidiaries 2,270 3,154 Unrealized loss on interest rate swaps (15,642) (30,032) Total accumulated other comprehensive loss $ (18,338) $ (26,234) |
Schedule of Allocated Share-Based Compensation Expense | The Company recognizes stock-based compensation expense from all awards in the following expense categories (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of revenue $ 539 $ 624 $ 1,544 $ 1,512 Research and development 671 1,005 2,327 2,639 Sales and marketing 1,636 968 4,392 2,415 General and administrative (1) 9,201 8,366 35,158 24,697 Total $ 12,047 $ 10,963 $ 43,421 $ 31,263 (1) In March 2021 our former co-President and Chief Operating Officer (“COO”) resigned from his positions and entered into an advisory agreement with the Company pursuant to which he will serve as a strategic advisor to the Company through December 31, 2022. Stock-based compensation for the nine months ended September 30, 2021 includes $6.3 million in incremental stock-based compensation expense related to the deemed modification of the unvested portion of grants held by our former COO at the time of transition, even though these shares continue to vest over their existing vesting schedule through 2022. In accordance with ASC 718, the fair value of these awards were modified and all related expense accelerated on the date of modification as a result of the reduction in required service. |
Schedule of Restricted Stock Unit Activity | Restricted stock unit activity during the nine months ended September 30, 2021 was as follows: Number of Weighted-Average Grant Date Fair Value Unvested balances at December 31, 2020 1,261,290 $ 39.92 Units granted 1,220,066 47.67 Units vested (383,371) 40.14 Awards forfeited (63,799) 42.81 Unvested balances at September 30, 2021 2,034,186 $ 44.43 |
Schedule of Performance Based Restricted Stock Unit Activity | PRSU activity during the nine months ended September 30, 2021 was as follows: Number of Weighted-Average Grant Date Fair Value Unvested balances at December 31, 2020 66,297 $ 79.72 Units granted 63,537 84.87 Incremental PRSUs vested in period 69,048 Units vested (135,345) 79.72 Unvested balances at September 30, 2021 63,537 $ 84.87 |
Schedule of Valuation Assumptions | Significant assumptions used in the Monte Carlo simulation model for the PRSUs granted during the nine months ended September 30, 2021 and year ended December 31, 2020 are as follows: September 30, 2021 December 31, 2020 Expected volatility 53.6% 45.1% Risk-free interest rate 0.1% 1.3% Remaining performance period (in years) 1.35 1.35 Dividend yield — — |
Schedule of Restricted Stock Awards | Restricted share activity during the nine months ended September 30, 2021 was as follows: Number of Weighted-Average Grant Date Fair Value Unvested balances at December 31, 2020 34,508 $ 30.13 Awards vested (33,508) 30.11 Awards forfeited — — Unvested balances at September 30, 2021 1,000 $ 30.61 |
Schedule of Stock Option Activity | Stock option activity during the nine months ended September 30, 2021 was as follows: Number of Weighted– Outstanding at December 31, 2020 264,002 $ 8.93 Options exercised (20,610) 11.07 Options expired (408) 1.56 Outstanding at September 30, 2021 242,984 $ 8.76 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Commissions | The following table presents the activity impacting deferred commissions for the nine months ended September 30, 2021 (in thousands): Balance at December 31, 2020 $ 18,746 Capitalized deferred commissions 10,240 Amortization of deferred commissions (6,097) Balance at September 30, 2021 $ 22,889 |
Schedule of Disaggregation of Revenue | The Company has operations primarily in the U.S., United Kingdom and Canada. Information about these operations is presented below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenues: Subscription and support: United States $ 50,866 $ 53,356 $ 154,683 $ 149,946 United Kingdom 11,886 9,518 33,938 28,864 Canada 3,355 3,318 10,317 11,260 Other International 6,157 4,800 16,384 12,512 Total subscription and support revenue 72,264 70,992 215,322 202,582 Perpetual license: United States 628 345 1,219 849 United Kingdom — — 11 16 Canada 1 14 53 71 Other International 55 52 168 327 Total perpetual license revenue 684 411 1,451 1,263 Professional services: United States 2,014 1,865 6,208 6,773 United Kingdom 753 432 2,219 1,621 Canada 117 137 309 371 Other International 221 347 777 921 Total professional service revenue 3,105 2,781 9,513 9,686 Total revenue $ 76,053 $ 74,184 $ 226,286 $ 213,531 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Aug. 06, 2019 | Sep. 30, 2021 | Dec. 31, 2020 | Nov. 26, 2019 |
Interest rate swap | ||||
Offsetting Assets [Line Items] | ||||
Derivative liability, fair value, gross liability | $ (15,600,000) | $ (30,000,000) | ||
Secured Debt | Credit Facility | ||||
Offsetting Assets [Line Items] | ||||
Debt instrument, face amount | $ 350,000,000 | $ 540,000,000 | $ 190,000,000 | |
Interest rate (percent) | 5.40% | 5.40% | ||
Long-term debt, term | 7 years | 7 years |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | 8 Months Ended | 9 Months Ended | 12 Months Ended | 21 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Sep. 30, 2021 | Jun. 24, 2021 | Feb. 28, 2021 | Jan. 19, 2021 | |
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 460,178 | $ 460,178 | $ 460,178 | $ 460,178 | $ 460,178 | $ 383,598 | $ 460,178 | |||||
Goodwill acquired during period | 85,102 | 114,500 | ||||||||||
Goodwill deductible for tax purposes | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | $ 2,000 | ||||||
Transaction costs, excluding integration and transformation costs | 100 | $ 0 | $ 6,200 | $ 3,500 | ||||||||
Customer relationships | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite-lived intangible assets acquired | $ 200 | |||||||||||
Panviva | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Revenues since acquisition date | 1,800 | $ 1,900 | ||||||||||
Goodwill | $ 17,729 | |||||||||||
BlueVenn | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Revenues since acquisition date | 3,600 | $ 9,000 | ||||||||||
Goodwill | $ 45,273 | |||||||||||
Second Street | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Revenues since acquisition date | $ 2,800 | $ 7,500 | ||||||||||
Goodwill | $ 17,954 |
Acquisitions - Consideration (D
Acquisitions - Consideration (Details) - USD ($) $ in Thousands | Jun. 24, 2021 | Feb. 28, 2021 | Jan. 19, 2021 | Feb. 06, 2020 | Dec. 31, 2020 | Sep. 30, 2021 |
Business Acquisition [Line Items] | ||||||
Holdback | $ 416 | $ 10,531 | ||||
Panviva | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 19,931 | |||||
Holdback | 3,517 | |||||
Contingent consideration | 0 | |||||
Working capital and other adjustments | 379 | |||||
Total consideration | $ 23,827 | |||||
Cash holdback payable, payment period | 12 months | |||||
Business combination cash holdback payment | $ 1,600 | |||||
Business combination fair value potential reduction | $ 0 | |||||
BlueVenn | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 53,535 | |||||
Holdback | 2,429 | |||||
Contingent consideration | 2,535 | |||||
Working capital and other adjustments | (537) | |||||
Total consideration | $ 57,962 | |||||
Cash holdback payable, payment period | 18 months | |||||
Future earn out payments, maximum | $ 22,400 | |||||
Second Street | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 25,436 | |||||
Holdback | 5,000 | |||||
Contingent consideration | 1,650 | |||||
Working capital and other adjustments | 0 | |||||
Total consideration | $ 32,086 | |||||
Cash holdback payable, payment period | 12 months | |||||
Future earn out payments, maximum | $ 3,000 | |||||
Localytics | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 67,655 | |||||
Holdback | 345 | |||||
Contingent consideration | 1,000 | |||||
Working capital and other adjustments | (5,238) | (5,200) | ||||
Total consideration | $ 63,762 | |||||
Cash holdback payable, payment period | 12 months | |||||
Future earn out payments, maximum | $ 1,000 | |||||
Earn out payment | $ 1,000 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 24, 2021 | Feb. 28, 2021 | Jan. 19, 2021 | Dec. 31, 2020 | Feb. 06, 2020 |
Assets Acquired | ||||||
Operating lease right-of-use asset | $ 6,990 | $ 10,124 | ||||
Goodwill | $ 460,178 | $ 383,598 | ||||
Panviva | ||||||
Assets Acquired | ||||||
Cash | $ 132 | |||||
Accounts receivable | 2,122 | |||||
Other current assets | 4,986 | |||||
Operating lease right-of-use asset | 197 | |||||
Property and equipment | 26 | |||||
Goodwill | 17,729 | |||||
Other assets | 33 | |||||
Total assets acquired | 37,025 | |||||
Liabilities Assumed | ||||||
Accounts payable | (1,257) | |||||
Accrued expense and other | (5,163) | |||||
Deferred tax liabilities | (3,355) | |||||
Deferred revenue | (3,226) | |||||
Operating lease liabilities | (197) | |||||
Total liabilities assumed | (13,198) | |||||
Total consideration | 23,827 | |||||
Panviva | Customer relationships | ||||||
Assets Acquired | ||||||
Intangible assets | 9,757 | |||||
Panviva | Trade name | ||||||
Assets Acquired | ||||||
Intangible assets | 76 | |||||
Panviva | Technology | ||||||
Assets Acquired | ||||||
Intangible assets | $ 1,967 | |||||
BlueVenn | ||||||
Assets Acquired | ||||||
Cash | $ 1,115 | |||||
Accounts receivable | 1,289 | |||||
Other current assets | 1,983 | |||||
Operating lease right-of-use asset | 1,357 | |||||
Property and equipment | 611 | |||||
Goodwill | 45,273 | |||||
Other assets | 24 | |||||
Total assets acquired | 75,115 | |||||
Liabilities Assumed | ||||||
Accounts payable | (2,772) | |||||
Accrued expense and other | (2,198) | |||||
Deferred tax liabilities | (4,066) | |||||
Deferred revenue | (6,760) | |||||
Operating lease liabilities | (1,357) | |||||
Total liabilities assumed | (17,153) | |||||
Total consideration | 57,962 | |||||
BlueVenn | Customer relationships | ||||||
Assets Acquired | ||||||
Intangible assets | 18,888 | |||||
BlueVenn | Trade name | ||||||
Assets Acquired | ||||||
Intangible assets | 238 | |||||
BlueVenn | Technology | ||||||
Assets Acquired | ||||||
Intangible assets | $ 4,337 | |||||
Second Street | ||||||
Assets Acquired | ||||||
Cash | $ 0 | |||||
Accounts receivable | 1,105 | |||||
Other current assets | 89 | |||||
Operating lease right-of-use asset | 489 | |||||
Property and equipment | 156 | |||||
Goodwill | 17,954 | |||||
Other assets | 13 | |||||
Total assets acquired | 38,006 | |||||
Liabilities Assumed | ||||||
Accounts payable | (230) | |||||
Accrued expense and other | (377) | |||||
Deferred tax liabilities | (4,324) | |||||
Deferred revenue | (500) | |||||
Operating lease liabilities | (489) | |||||
Total liabilities assumed | (5,920) | |||||
Total consideration | 32,086 | |||||
Second Street | Customer relationships | ||||||
Assets Acquired | ||||||
Intangible assets | 14,600 | |||||
Second Street | Trade name | ||||||
Assets Acquired | ||||||
Intangible assets | 200 | |||||
Second Street | Technology | ||||||
Assets Acquired | ||||||
Intangible assets | $ 3,400 | |||||
Localytics | ||||||
Assets Acquired | ||||||
Cash | $ 0 | |||||
Accounts receivable | 3,648 | |||||
Other current assets | 6,323 | |||||
Operating lease right-of-use asset | 7,605 | |||||
Property and equipment | 409 | |||||
Goodwill | 33,543 | |||||
Other assets | 6 | |||||
Total assets acquired | 88,934 | |||||
Liabilities Assumed | ||||||
Accounts payable | (2,382) | |||||
Accrued expense and other | (6,761) | |||||
Deferred tax liabilities | (3,382) | |||||
Deferred revenue | (4,812) | |||||
Operating lease liabilities | (7,835) | |||||
Total liabilities assumed | (25,172) | |||||
Total consideration | 63,762 | |||||
Localytics | Customer relationships | ||||||
Assets Acquired | ||||||
Intangible assets | 30,500 | |||||
Localytics | Trade name | ||||||
Assets Acquired | ||||||
Intangible assets | 300 | |||||
Localytics | Technology | ||||||
Assets Acquired | ||||||
Intangible assets | $ 6,600 |
Acquisitions - Weighted Average
Acquisitions - Weighted Average Amortization Period (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 6 years 7 months 6 days | 7 years 4 months 24 days |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 7 years | 8 years |
Trade name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 2 years | 2 years |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 5 years | 5 years |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Aug. 06, 2019 | Sep. 30, 2021 | Dec. 31, 2020 | Nov. 26, 2019 |
Level 2 | Recurring Measurement Basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt instrument, fair value | $ 529,200,000 | $ 533,300,000 | ||
Credit Facility | Secured Debt | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt, term | 7 years | 7 years | ||
Interest rate (percent) | 5.40% | 5.40% | ||
Debt instrument, face amount | $ 350,000,000 | $ 540,000,000 | $ 190,000,000 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes to Fair Value of Earnout Liabilities (Details) - Recurring Measurement Basis - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Earnout consideration liability | $ 669 | |
Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap liabilities | 15,642 | $ 30,032 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Earnout consideration liability | 0 | |
Level 1 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Earnout consideration liability | 0 | |
Level 2 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap liabilities | 15,642 | 30,032 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Earnout consideration liability | 669 | |
Level 3 | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap liabilities | $ 0 | $ 0 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities which Unobservable Inputs are Utilized (Details) - Recurring Measurement Basis - Earnout Consideration $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 0 |
Acquisitions | 4,185 |
Gain included in earnings | (3,503) |
Foreign currency translation adjustments | (13) |
Ending balance | $ 669 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration | $ 669 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | 21 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 383,598 | |
Acquired in business combinations | 85,102 | $ 114,500 |
Adjustment related to finalization of current year business combinations | (4,146) | |
Foreign currency translation adjustment | (4,376) | |
Ending balance | $ 460,178 | $ 460,178 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 458,422 | $ 408,754 |
Accumulated Amortization | 165,615 | 128,779 |
Net Carrying Amount | 292,807 | 279,975 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 359,165 | 318,941 |
Accumulated Amortization | 116,707 | 89,131 |
Net Carrying Amount | $ 242,458 | $ 229,810 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 1 year | 1 year |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | 10 years |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 9,722 | $ 9,283 |
Accumulated Amortization | 5,494 | 4,763 |
Net Carrying Amount | $ 4,228 | $ 4,520 |
Trade name | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 1 year 6 months | 1 year 6 months |
Trade name | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | 10 years |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 88,387 | $ 79,382 |
Accumulated Amortization | 42,266 | 33,929 |
Net Carrying Amount | $ 46,121 | $ 45,453 |
Developed technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 4 years | 4 years |
Developed technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 9 years | 9 years |
Noncompete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 3 years | 3 years |
Gross Carrying Amount | $ 1,148 | $ 1,148 |
Accumulated Amortization | 1,148 | 956 |
Net Carrying Amount | $ 0 | $ 192 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill and intangible asset impairment | $ 0 | $ 0 | $ 0 | ||
Amortization charge of intangible assets | $ 13,200,000 | $ 11,200,000 | $ 37,900,000 | $ 33,600,000 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Estimated Annual Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remainder of 2021 | $ 12,962 | |
2022 | 49,281 | |
2023 | 46,936 | |
2024 | 44,588 | |
2025 | 41,300 | |
2026 | 97,740 | |
Net Carrying Amount | $ 292,807 | $ 279,975 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Benefit from (provision for) income taxes | $ 3,348 | $ (1,149) | $ 6,204 | $ 3,811 | |
Deferred tax assets recognized (reduced) by valuation allowance | $ 2,200 | $ 4,300 | $ 6,500 | $ 4,200 | |
Adjustment reducing the benefit from valuation allowance | $ 200 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt (Details) - Senior Secured Notes - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt instrument, unamortized discount | $ 10,085 | $ 11,648 |
Debt instrument, imputed interest rate (percent) | 5.80% | 5.80% |
Long-term debt | $ 519,116 | $ 521,603 |
Less current maturities | (3,158) | (3,166) |
Total long-term debt | $ 515,958 | $ 518,437 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Aug. 06, 2019 | Sep. 30, 2021 | Dec. 31, 2020 | Nov. 26, 2019 |
Line of Credit Facility [Line Items] | ||||
Interest rate cash flow hedge to be reclassified during next twelve months | $ 3,300,000 | |||
Cash interest costs (percent) | 5.40% | 5.40% | ||
Unamortized deferred financing costs | $ 10,100,000 | $ 11,600,000 | ||
Interest rate swap | ||||
Line of Credit Facility [Line Items] | ||||
Derivative liability, fair value, gross liability | 15,600,000 | $ 30,000,000 | ||
Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Covenant compliance (percent) | 35.00% | |||
Debt instrument, covenant, leverage ratio, amount | $ 50,000,000 | |||
Debt instrument, covenant, leverage ratio, maximum | 6 | |||
Debt instrument, debt default, increase in interest rate on obligations upon default (percent) | 2.00% | |||
Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Long-term debt, term | 5 years | |||
Maximum borrowing capacity | $ 60,000,000 | |||
Commitment fee (percent) | 0.50% | |||
Credit Facility | Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 10,000,000 | |||
Credit Facility | Secured Debt | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, face amount | $ 350,000,000 | $ 540,000,000 | $ 190,000,000 | |
Long-term debt, term | 7 years | 7 years | ||
Debt instrument, repayment rate, quarterly (percent) | 0.25% | |||
Debt instrument, repayment rate, annual (percent) | 1.00% | |||
Interest rate (percent) | 5.40% | 5.40% | ||
Credit Facility | Secured Debt | Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis points (percent) | 2.75% | |||
Credit Facility | Secured Debt | Eurodollar Deposits Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis points (percent) | 3.75% | |||
Credit Facility | Secured Debt | Eurodollar Deposits Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis points (percent) | 0.00% | |||
Credit Facility | Secured Debt | Federal Funds Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis points (percent) | 0.50% | |||
Credit Facility | Secured Debt | Federal Funds Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis points (percent) | 0.00% | |||
Credit Facility | Secured Debt | Eurodollar | ||||
Line of Credit Facility [Line Items] | ||||
Basis points (percent) | 1.00% |
Debt - Summary of Debt, Interes
Debt - Summary of Debt, Interest Rate Swap (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | ||||
Unrealized loss on interest rate swaps | $ 2,112 | $ (441) | $ 14,391 | $ (35,497) |
Interest expense, net | (7,971) | (8,078) | (23,700) | (23,594) |
Interest rate swap | ||||
Debt Instrument [Line Items] | ||||
Interest expense, net | $ (2,090) | $ (2,013) | $ (6,158) | $ (3,467) |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Net loss | $ (11,015) | $ (11,310) | $ (50,741) | $ (45,550) |
Denominator: | ||||
Weighted-average common shares outstanding, basic (in shares) | 30,428,675 | 27,220,134 | 30,167,171 | 25,725,495 |
Weighted-average common shares outstanding, diluted (in shares) | 30,428,675 | 27,220,134 | 30,167,171 | 25,725,495 |
Net loss per common share, basic (in dollars per share) | $ (0.36) | $ (0.42) | $ (1.68) | $ (1.77) |
Net loss per common share, diluted (in dollars per share) | $ (0.36) | $ (0.42) | $ (1.68) | $ (1.77) |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive Common Share Equivalents (Details) - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti–dilutive common share equivalents (in shares) | 2,341,707 | 2,293,326 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti–dilutive common share equivalents (in shares) | 242,984 | 314,310 |
Restricted stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti–dilutive common share equivalents (in shares) | 1,000 | 168,124 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti–dilutive common share equivalents (in shares) | 2,034,186 | 1,744,595 |
Performance restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti–dilutive common share equivalents (in shares) | 63,537 | 66,297 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Investor - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Long-term Purchase Commitment [Line Items] | ||||
Amount of related party transaction | $ 2.4 | $ 1.8 | $ 7.2 | $ 5.5 |
Remaining purchase obligation | $ 2.4 | $ 2.4 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stockholders' equity attributable to parent | $ 307,046 | $ 311,437 | $ 306,615 | $ 288,244 | $ 152,237 | $ 212,861 |
Accumulated Other Comprehensive Loss | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stockholders' equity attributable to parent | (18,338) | $ (13,238) | (26,234) | $ (39,480) | $ (45,700) | $ (1,223) |
Foreign currency translation adjustment | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stockholders' equity attributable to parent | (4,966) | 644 | ||||
Unrealized translation gain on intercompany loans with foreign subsidiaries | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stockholders' equity attributable to parent | 2,270 | 3,154 | ||||
Unrealized loss on interest rate swaps | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stockholders' equity attributable to parent | $ (15,642) | $ (30,032) |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||
Performance period | 18 months | ||
Target payout (percent) | 100.00% | 100.00% | 100.00% |
Performance restricted stock units | |||
Class of Stock [Line Items] | |||
Performance period | 18 months | ||
Minimum | Performance restricted stock units | |||
Class of Stock [Line Items] | |||
Award vesting rights (percent) | 0.00% | ||
Maximum | Performance restricted stock units | |||
Class of Stock [Line Items] | |||
Award vesting rights (percent) | 300.00% | ||
Chief Executive Officer | Performance restricted stock units | |||
Class of Stock [Line Items] | |||
Award vesting rights (percent) | 50.00% | 50.00% | |
Intercompany loans with foreign subsidiaries, accumulated tax | |||
Class of Stock [Line Items] | |||
Tax expense (benefit) recognized in OCI | $ (1.8) | ||
Intercompany loans, accumulated tax | |||
Class of Stock [Line Items] | |||
Tax expense (benefit) recognized in OCI | $ (0.5) | $ (0.2) |
Stockholders' Equity - Shared B
Stockholders' Equity - Shared Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 12,047 | $ 10,963 | $ 43,421 | $ 31,263 |
Incremental share-based compensation expense | 6,300 | |||
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 539 | 624 | 1,544 | 1,512 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 671 | 1,005 | 2,327 | 2,639 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | 1,636 | 968 | 4,392 | 2,415 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Share-based compensation expense | $ 9,201 | $ 8,366 | $ 35,158 | $ 24,697 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units Activity (Details) - Restricted stock units | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of Restricted Stock Units Outstanding | |
Unvested balances at beginning of period (in shares) | shares | 1,261,290 |
Units granted (in shares) | shares | 1,220,066 |
Units vested (in shares) | shares | (383,371) |
Awards forfeited (in shares) | shares | (63,799) |
Unvested balances at end of period (in shares) | shares | 2,034,186 |
Weighted-Average Grant Date Fair Value | |
Unvested balances at beginning of period (in dollars per share) | $ / shares | $ 39.92 |
Units granted (in dollars per share) | $ / shares | 47.67 |
Units vested (in dollars per share) | $ / shares | 40.14 |
Awards forfeited (in dollars per share) | $ / shares | 42.81 |
Unvested balances at end of period (in dollars per share) | $ / shares | $ 44.43 |
Stockholders' Equity - Performa
Stockholders' Equity - Performance Based Restricted Stock Unit Activity (Details) - Performance restricted stock units - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Number of PRSUs Outstanding | ||
Unvested balances at beginning of period (in shares) | 66,297 | |
Units granted (in shares) | 63,537 | |
Incremental PRSUs vested in period (in shares) | 69,048 | |
Units vested (in shares) | (135,345) | |
Unvested balances at end of period (in shares) | 63,537 | 66,297 |
Weighted-Average Grant Date Fair Value | ||
Unvested balances at beginning of period (in dollars per share) | $ 79.72 | |
Units granted (in dollars per share) | 84.87 | |
Units vested (in dollars per share) | 79.72 | |
Unvested balances at end of period (in dollars per share) | $ 84.87 | $ 79.72 |
Expected volatility (percent) | 53.60% | 45.10% |
Risk-free interest rate (percent) | 0.10% | 1.30% |
Remaining performance period (in years) | 1 year 4 months 6 days | 1 year 4 months 6 days |
Dividend yield (percent) | 0.00% | 0.00% |
Stockholders' Equity - Restri_2
Stockholders' Equity - Restricted Stock Award Activity (Details) - Restricted stock awards | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of Restricted Stock Units Outstanding | |
Unvested balances at beginning of period (in shares) | shares | 34,508 |
Awards vested (in shares) | shares | (33,508) |
Awards forfeited (in shares) | shares | 0 |
Unvested balances at end of period (in shares) | shares | 1,000 |
Weighted-Average Grant Date Fair Value | |
Unvested balances at beginning of period (in dollars per share) | $ / shares | $ 30.13 |
Awards vested (in dollars per share) | $ / shares | 30.11 |
Awards forfeited (in dollars per share) | $ / shares | 0 |
Unvested balances at end of period (in dollars per share) | $ / shares | $ 30.61 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of Options Outstanding | |
Outstanding at beginning of period (in shares) | shares | 264,002 |
Options exercised (in shares) | shares | (20,610) |
Options expired (in shares) | shares | (408) |
Outstanding at end of period (in shares) | shares | 242,984 |
Weighted– Average Exercise Price | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 8.93 |
Options exercised (in dollars per share) | $ / shares | 11.07 |
Options expired (in dollars per share) | $ / shares | 1.56 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 8.76 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Revenue from External Customer [Line Items] | ||
Performance obligation, description of timing | Our subscription contracts are generally 1 to 3 years in length | |
Unbilled receivables | $ 5,847 | $ 4,561 |
Deferred commissions, amortization period | 6 years | |
Deferred commissions renewal amortization period | 18 months | |
Revenue recognized, previously in unearned revenue | $ 5,900 | |
Subscription and support: | ||
Revenue from External Customer [Line Items] | ||
Revenue recognized, previously in unearned revenue | 76,300 | |
Professional services: | ||
Revenue from External Customer [Line Items] | ||
Revenue recognized, previously in unearned revenue | $ 1,900 |
Revenue Recognition - Activity
Revenue Recognition - Activity Impacting Deferred Commissions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Capitalized Contract Cost, Net [Roll Forward] | ||
Beginning balance | $ 18,746 | |
Capitalized deferred commissions | 10,240 | |
Amortization of deferred commissions | (6,097) | |
Ending balance | $ 22,889 | 22,889 |
Commissions capitalized in excess of amortization of deferred commissions | $ 600 | $ 4,100 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation (Details) $ in Millions | Sep. 30, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation (percent) | 69.00% |
Expected satisfaction period of performance obligations, in months | 12 months |
Subscription Contracts | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized from performance obligations | $ 263.2 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 76,053 | $ 74,184 | $ 226,286 | $ 213,531 |
Subscription and support: | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 72,264 | 70,992 | 215,322 | 202,582 |
Subscription and support: | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 50,866 | 53,356 | 154,683 | 149,946 |
Subscription and support: | United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,886 | 9,518 | 33,938 | 28,864 |
Subscription and support: | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,355 | 3,318 | 10,317 | 11,260 |
Subscription and support: | Other International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,157 | 4,800 | 16,384 | 12,512 |
Perpetual license: | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 684 | 411 | 1,451 | 1,263 |
Perpetual license: | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 628 | 345 | 1,219 | 849 |
Perpetual license: | United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 11 | 16 |
Perpetual license: | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1 | 14 | 53 | 71 |
Perpetual license: | Other International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 55 | 52 | 168 | 327 |
Professional services: | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,105 | 2,781 | 9,513 | 9,686 |
Professional services: | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,014 | 1,865 | 6,208 | 6,773 |
Professional services: | United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 753 | 432 | 2,219 | 1,621 |
Professional services: | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 117 | 137 | 309 | 371 |
Professional services: | Other International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 221 | $ 347 | $ 777 | $ 921 |
Related Party Transactions (Det
Related Party Transactions (Details) | Mar. 28, 2017 | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)agreement | Sep. 30, 2020USD ($) | Jul. 09, 2021 | Dec. 31, 2020USD ($) |
Related Party Transaction [Line Items] | |||||||
Number of agreements | agreement | 2 | ||||||
Purchase obligation increase in amount, if a 10% increase in revenue | $ 1,000,000 | ||||||
Purchase commitment, amount | 10,600,000 | ||||||
Prepaid and other | $ 8,560,000 | 8,560,000 | $ 12,694,000 | ||||
Credit loss expense recognized | $ 400,000 | ||||||
Visionael Corporation | Chief Executive Officer and Board of Directors Chairman | |||||||
Related Party Transaction [Line Items] | |||||||
Equity method investment, ownership interest (percent) | 26.18% | 26.18% | |||||
Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Amount of related party transaction | $ 2,400,000 | $ 1,800,000 | $ 7,200,000 | $ 5,500,000 | |||
Accounts payable, related parties | $ 2,400,000 | $ 2,400,000 | 0 | ||||
Investor | Upland Software, Inc. | |||||||
Related Party Transaction [Line Items] | |||||||
Equity method investment, ownership interest (percent) | 4.80% | ||||||
Investor | Upland Software, Inc. | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Equity method investment, ownership interest (percent) | 5.00% | 5.00% | |||||
Software Development Services | Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Option to renew purchase commitment, term | 1 year | ||||||
Purchase obligation outstanding | $ 9,600,000 | $ 9,600,000 | |||||
Services | Investor | |||||||
Related Party Transaction [Line Items] | |||||||
Purchase obligation outstanding | 0 | 0 | |||||
Amount of related party transaction | 1,000,000 | 1,200,000 | 2,900,000 | 3,700,000 | |||
Accounts payable, related parties | 800,000 | 800,000 | 600,000 | ||||
Management, HR/Payroll and Administrative Services | Former Subsidiary | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related party | 0 | $ 15,000 | 0 | $ 45,000 | |||
Management, HR/Payroll and Administrative Services | Former Subsidiary | Visionael Corporation | |||||||
Related Party Transaction [Line Items] | |||||||
Prepaid and other | $ 0 | $ 0 | $ 400,000 |
Uncategorized Items - upld-2021
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |