Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 19, 2019 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36841 | |
Entity Registrant Name | Inovalon Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-1830316 | |
Entity Address, Address Line One | 4321 Collington Road, | |
Entity Address, City or Town | Bowie, | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20716 | |
City Area Code | 301 | |
Local Phone Number | 809-4000 | |
Title of 12(b) Security | Class A Common Stock, $0.000005 par value per share | |
Security Exchange Name | NASDAQ | |
Trading Symbol | INOV | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001619954 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Class A Common | ||
Entity Common Stock, Shares Outstanding (in shares) | 73,924,009 | |
Class B Common | ||
Entity Common Stock, Shares Outstanding (in shares) | 80,287,495 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 129,850 | $ 115,591 |
Short-term investments | 503 | 7,000 |
Accounts receivable (net of allowances of $4,667 and $3,350 at June 30, 2019 and December 31, 2018, respectively) | 115,440 | 104,405 |
Prepaid expenses and other current assets | 21,283 | 34,801 |
Income tax receivable | 5,228 | 10,330 |
Total current assets | 272,304 | 272,127 |
Non-current assets: | ||
Property, equipment and capitalized software, net | 136,592 | 141,758 |
Operating lease, right-of-use asset | 47,567 | 0 |
Goodwill | 955,881 | 956,029 |
Intangible assets, net | 509,110 | 535,343 |
Other assets | 19,498 | 16,158 |
Total assets | 1,940,952 | 1,921,415 |
Current liabilities: | ||
Accounts payable and accrued expenses | 32,220 | 31,295 |
Accrued compensation | 21,660 | 25,298 |
Other current liabilities | 39,050 | 51,384 |
Deferred revenue | 19,934 | 20,628 |
Credit facilities | 9,800 | 9,800 |
Operating lease liabilities | 9,095 | 0 |
Finance lease liabilities | 2,386 | 2,905 |
Total current liabilities | 134,145 | 141,310 |
Non-current liabilities: | ||
Credit facilities, less current portion | 936,583 | 939,514 |
Operating lease liabilities, less current portion | 42,900 | 0 |
Finance lease liabilities, less current portion | 13,545 | 13,927 |
Other liabilities | 48,540 | 33,406 |
Deferred income taxes | 99,105 | 110,669 |
Total liabilities | 1,274,818 | 1,238,826 |
Commitments and contingencies (Note 8) | 0 | 0 |
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Preferred stock, $0.0001 par value, 100,000,000 shares authorized, zero shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 0 | 0 |
Additional paid-in-capital | 625,908 | 618,674 |
Retained earnings | 266,686 | 270,471 |
Treasury stock, at cost, 14,620,175 shares at June 30, 2019 and December 31, 2018, respectively | (199,817) | (199,817) |
Other comprehensive loss | (26,644) | (6,740) |
Total stockholders’ equity | 666,134 | 682,589 |
Total liabilities and stockholders’ equity | 1,940,952 | 1,921,415 |
Class A Common | ||
Stockholders’ equity: | ||
Common stock | 0 | 0 |
Class B Common | ||
Stockholders’ equity: | ||
Common stock | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, allowances | ||
Accounts receivable, allowances (in dollars) | $ 4,667 | $ 3,350 |
Commitments and contingencies (Note 8) | $ 0 | $ 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000005 | $ 0.000005 |
Common stock, authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock, issued (in shares) | 0 | 0 |
Common stock, outstanding (in shares) | 0 | 0 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Class A Common | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000005 | $ 0.000005 |
Common stock, authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, issued (in shares) | 88,549,955 | 86,679,575 |
Common stock, outstanding (in shares) | 73,929,780 | 72,059,400 |
Treasury stock | ||
Treasury stock (in shares) | 14,620,175 | 14,620,175 |
Class B Common | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000005 | $ 0.000005 |
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 80,287,495 | 80,608,685 |
Common stock, outstanding (in shares) | 80,287,495 | 80,608,685 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Income Statement [Abstract] | |||||
Revenue | $ 156,977 | $ 152,798 | $ 302,468 | $ 245,553 | |
Expenses: | |||||
Cost of revenue | [1] | 41,118 | 39,015 | 78,321 | 72,506 |
Sales and marketing | [1] | 14,306 | 12,045 | 27,832 | 19,947 |
Research and development | [1] | 7,898 | 7,545 | 16,099 | 13,966 |
General and administrative | [1] | 45,694 | 60,174 | 99,317 | 109,570 |
Depreciation and amortization | 27,420 | 26,906 | 54,467 | 43,286 | |
Restructuring expense | 0 | 9,464 | 0 | 9,464 | |
Total operating expenses | 136,436 | 155,149 | 276,036 | 268,739 | |
Income (Loss) from operations | 20,541 | (2,351) | 26,432 | (23,186) | |
Other income and (expenses): | |||||
Interest income | 664 | 154 | 1,274 | 1,549 | |
Interest expense | (16,649) | (15,568) | (33,191) | (17,450) | |
Other Nonoperating Income (Expense) | 0 | (511) | (11) | (1,631) | |
Income (Loss) before taxes | 4,556 | (18,276) | (5,496) | (40,718) | |
Provision for (Benefit from) income taxes | 18 | (7,810) | (1,711) | (13,418) | |
Net income (loss) | 4,538 | (10,466) | (3,785) | (27,300) | |
Net income (loss) attributable to common stockholders, basic and diluted | $ 4,403 | $ (10,466) | $ (3,785) | $ (27,300) | |
Net income (loss) per share attributable to common stockholders, basic and diluted: | |||||
Basic net (loss) income per share (in dollars per share) | $ 0.03 | $ (0.07) | $ (0.03) | $ (0.19) | |
Diluted net (loss) income per share (in dollars per share) | $ 0.03 | $ (0.07) | $ (0.03) | $ (0.19) | |
Weighted average shares of common stock outstanding: | |||||
Basic (in shares) | 148,136 | 147,181 | 147,956 | 143,301 | |
Diluted (in shares) | 148,478 | 147,181 | 147,956 | 143,301 | |
[1] | (1) Includes stock-based compensation expense as follows: Cost of revenue $ 78 $ (87 ) $ 155 $ 53 Sales and marketing 339 (401 ) 639 68 Research and development 379 330 749 958 General and administrative 1,986 2,802 6,478 5,313 Total stock-based compensation expense $ 2,782 $ 2,644 $ 8,021 $ 6,392 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Includes stock-based compensation expense as follows: | ||||
Total stock-based compensation expense | $ 2,782 | $ 2,644 | $ 8,021 | $ 6,392 |
Cost of revenue | ||||
Includes stock-based compensation expense as follows: | ||||
Total stock-based compensation expense | 78 | (87) | 155 | 53 |
Sales and marketing | ||||
Includes stock-based compensation expense as follows: | ||||
Total stock-based compensation expense | 339 | (401) | 639 | 68 |
Research and development | ||||
Includes stock-based compensation expense as follows: | ||||
Total stock-based compensation expense | 379 | 330 | 749 | 958 |
General and administrative | ||||
Includes stock-based compensation expense as follows: | ||||
Total stock-based compensation expense | $ 1,986 | $ 2,802 | $ 6,478 | $ 5,313 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 4,538 | $ (10,466) | $ (3,785) | $ (27,300) |
Other comprehensive loss: | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | (409) | (570) | (768) | (570) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | (12,260) | (135) | (20,684) | (135) |
Realized losses on short-term investments reclassified from accumulated other comprehensive income, net of tax of $0, $0, $0 and $(319), respectively | 0 | 0 | 0 | 716 |
Net change in unrealized gains and (losses) on available-for-sale investments, net of tax of $(1), $(14), $(6) and $91, respectively | 1 | 31 | 12 | (204) |
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | 0 | 0 | 0 | (102) |
Comprehensive loss | $ (7,312) | $ (10,000) | $ (23,689) | $ (26,455) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net change in unrealized gains and (losses) on cash flow hedges, tax | $ (193) | $ (268) | $ (363) | $ (268) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax | 5,799 | 64 | 9,783 | 64 |
Realized gains on short-term investments reclassified from accumulated other comprehensive income, tax | 0 | 0 | 0 | (319) |
Net change in unrealized gains on available-for-sale investments, tax | $ (1) | $ (14) | $ (6) | $ (91) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (3,785) | $ (27,300) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock-based compensation expense | 8,021 | 6,392 |
Depreciation | 28,234 | 25,638 |
Amortization of intangibles | 26,233 | 17,648 |
Amortization of debt issuance costs and debt discount | 2,155 | 1,024 |
Deferred income taxes | (1,836) | (13,151) |
Restructuring expense, non-cash | 0 | 8,583 |
Change in fair value of contingent consideration | 517 | 8,700 |
Other | 1,703 | 1,895 |
Changes in assets and liabilities: | ||
Accounts receivable | (12,351) | (7,312) |
Prepaid expenses and other current assets | (1,634) | (3,222) |
Income taxes receivable | 5,239 | (330) |
Other assets | (3,552) | (5,727) |
Accounts payable and accrued expenses | 2,432 | (10,676) |
Accrued compensation | (4,105) | 2,336 |
Other current and non-current liabilities | (6,665) | 11,385 |
Deferred revenue | (694) | 4,241 |
Net cash provided by operating activities | 39,912 | 20,124 |
Cash flows from investing activities: | ||
Maturities of short-term investments | 6,464 | 87,901 |
Sales of short-term investments | 0 | 161,772 |
Purchases of property and equipment | (8,510) | (16,476) |
Investment in capitalized software | (16,776) | (22,532) |
Acquisition, net of cash acquired of $0 and $23,850, respectively | 0 | (1,082,740) |
Net cash used in investing activities | (18,822) | (872,075) |
Cash flows from financing activities: | ||
Proceeds from credit facility borrowings, net of discount | 0 | 965,300 |
Repayment of credit facility borrowings | (4,900) | (236,250) |
Payments for debt issuance costs | 0 | (18,269) |
Proceeds from exercise of stock options | 1,817 | 1,613 |
Finance lease liabilities paid | (1,262) | (311) |
Tax payments for equity award issuances | (2,486) | (1,069) |
Net cash (used in) provided by financing activities | (6,831) | 711,014 |
Increase (Decrease) in cash and cash equivalents | 14,259 | (140,937) |
Cash and cash equivalents, beginning of period | 115,591 | 208,944 |
Cash and cash equivalents, end of period | 129,850 | 68,007 |
Supplementary cash flow disclosure: | ||
Cash paid during the period for: Income taxes, net of refunds | (5,254) | 107 |
Cash paid during the period for: Interest | 31,465 | 11,131 |
Non-cash transactions: | ||
Operating lease obligations incurred | 20,570 | 0 |
Finance lease obligations incurred | 20 | 4,602 |
Accruals for purchases of property, equipment | 893 | 7,292 |
Accruals for investment in capitalized software | 1,427 | 1,841 |
Acquisition consideration | $ 0 | $ 83,580 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY Consolidated Statement of Stockholder's Equity - USD ($) $ in Thousands | Total | Common StockClass A Common | Common StockClass B Common | Treasury Stock | Additional Paid-in Capital | Retained Earnings | AOCI Attributable to Parent |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | Calculated under Revenue Guidance in Effect before Topic 606 | $ 628 | $ 628 | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | Accounting Standards Update 2018-02 | 102 | 102 | |||||
Beginning balance (in shares) at Dec. 31, 2017 | 77,588,018 | 80,957,495 | (14,620,175) | ||||
Beginning balance at Dec. 31, 2017 | 642,772 | $ 0 | $ 1 | $ (199,817) | $ 534,159 | 308,905 | $ (476) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense | 3,723 | 3,723 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 211,002 | ||||||
Exercise of stock options | 1,450 | 1,450 | |||||
Conversion Class B to Class A common stock (in shares) | (348,810) | (348,810) | |||||
Issuance of shares related to restricted stock units and awards (in shares) | 452,657 | ||||||
Shares withheld for employee taxes upon conversion of restricted stock (in shares) | (33,980) | ||||||
Shares withheld for employee taxes upon conversion of restricted stock | (459) | (459) | |||||
Other comprehensive loss | 379 | 379 | |||||
Net (loss) | (16,834) | (16,834) | |||||
Ending balance (in shares) at Mar. 31, 2018 | 78,566,507 | 80,608,685 | (14,620,175) | ||||
Ending balance at Mar. 31, 2018 | 631,761 | $ 0 | $ 1 | $ (199,817) | 538,873 | 292,801 | (97) |
Beginning balance (in shares) at Dec. 31, 2017 | 77,588,018 | 80,957,495 | (14,620,175) | ||||
Beginning balance at Dec. 31, 2017 | 642,772 | $ 0 | $ 1 | $ (199,817) | 534,159 | 308,905 | (476) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) | (27,300) | ||||||
Ending balance (in shares) at Jun. 30, 2018 | 86,592,250 | 80,608,685 | (14,620,175) | ||||
Ending balance at Jun. 30, 2018 | 693,923 | $ 0 | $ 1 | $ (199,817) | 611,035 | 282,335 | 369 |
Beginning balance (in shares) at Mar. 31, 2018 | 78,566,507 | 80,608,685 | (14,620,175) | ||||
Beginning balance at Mar. 31, 2018 | 631,761 | $ 0 | $ 1 | $ (199,817) | 538,873 | 292,801 | (97) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense | 2,609 | 2,609 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 21,059 | ||||||
Exercise of stock options | 163 | 163 | |||||
Conversion Class B to Class A common stock (in shares) | 0 | 0 | |||||
Issuance of shares related to restricted stock units and awards (in shares) | 466,474 | ||||||
Shares withheld for employee taxes upon conversion of restricted stock (in shares) | (60,521) | ||||||
Shares withheld for employee taxes upon conversion of restricted stock | (610) | (610) | |||||
Other comprehensive loss | 466 | 466 | |||||
Net (loss) | (10,466) | (10,466) | |||||
Ending balance (in shares) at Jun. 30, 2018 | 86,592,250 | 80,608,685 | (14,620,175) | ||||
Ending balance at Jun. 30, 2018 | 693,923 | $ 0 | $ 1 | $ (199,817) | 611,035 | 282,335 | 369 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock Issued During Period, Shares, Acquisitions | 7,598,731 | ||||||
Stock Issued During Period, Value, Acquisitions | 70,000 | 70,000 | |||||
Beginning balance (in shares) at Dec. 31, 2018 | 86,679,575 | 80,608,685 | (14,620,175) | ||||
Beginning balance at Dec. 31, 2018 | 682,589 | $ 0 | $ 1 | $ (199,817) | 618,674 | 270,471 | (6,740) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense | 5,163 | 5,163 | |||||
Conversion Class B to Class A common stock (in shares) | (460,000) | (460,000) | |||||
Issuance of shares related to restricted stock units and awards (in shares) | 759,409 | ||||||
Shares withheld for employee taxes upon conversion of restricted stock (in shares) | (82,978) | ||||||
Shares withheld for employee taxes upon conversion of restricted stock | (1,086) | (1,086) | |||||
Other comprehensive loss | (8,054) | (8,054) | |||||
Net (loss) | (8,323) | (8,323) | |||||
Ending balance (in shares) at Mar. 31, 2019 | 87,816,006 | 80,148,685 | (14,620,175) | ||||
Ending balance at Mar. 31, 2019 | 670,289 | $ 0 | $ 1 | $ (199,817) | 622,751 | 262,148 | (14,794) |
Beginning balance (in shares) at Dec. 31, 2018 | 86,679,575 | 80,608,685 | (14,620,175) | ||||
Beginning balance at Dec. 31, 2018 | 682,589 | $ 0 | $ 1 | $ (199,817) | 618,674 | 270,471 | (6,740) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) | (3,785) | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 88,549,955 | 80,287,495 | (14,620,175) | ||||
Ending balance at Jun. 30, 2019 | 666,134 | $ 0 | $ 1 | $ (199,817) | 625,908 | 266,686 | (26,644) |
Beginning balance (in shares) at Mar. 31, 2019 | 87,816,006 | 80,148,685 | (14,620,175) | ||||
Beginning balance at Mar. 31, 2019 | 670,289 | $ 0 | $ 1 | $ (199,817) | 622,751 | 262,148 | (14,794) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense | 2,740 | 2,740 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 85,038 | 139,270 | |||||
Exercise of stock options | 1,817 | 1,817 | |||||
Conversion Class B to Class A common stock (in shares) | (460) | (460) | |||||
Issuance of shares related to restricted stock units and awards (in shares) | 753,800 | ||||||
Shares withheld for employee taxes upon conversion of restricted stock (in shares) | (105,349) | ||||||
Shares withheld for employee taxes upon conversion of restricted stock | (1,400) | (1,400) | |||||
Other comprehensive loss | (11,850) | (11,850) | |||||
Net (loss) | 4,538 | 4,538 | |||||
Ending balance (in shares) at Jun. 30, 2019 | 88,549,955 | 80,287,495 | (14,620,175) | ||||
Ending balance at Jun. 30, 2019 | $ 666,134 | $ 0 | $ 1 | $ (199,817) | $ 625,908 | $ 266,686 | $ (26,644) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared by Inovalon Holdings, Inc. (“Inovalon” or the “Company”) in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2018 consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly the Company’s financial position as of June 30, 2019 , the results of operations, comprehensive loss, and stockholders’ equity, for the three and six month periods ended June 30, 2019 and 2018 , and cash flows for the six months ended June 30, 2019 and 2018 . The results of operations for the three and six month periods ended June 30, 2019 and 2018 are not necessarily indicative of the results to be expected for the full year. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, and related disclosures, as of the date of the financial statements, and the amounts of revenue and expenses reported during the period. Actual results could differ from estimates. The information contained herein should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “ 2018 Form 10-K”). Certain prior period amounts have been reclassified within the consolidated statements of operations, within the current and non-current liabilities section of the consolidated balance sheets, and within the operating section of the consolidated statements of cash flows to conform with current period presentation. Such reclassifications had no impact on net loss, current and non-current liabilities, or net cash provided by operating activities as previously reported. The accompanying unaudited consolidated financial statements include the accounts of Inovalon and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) , and in July 2018 and in March 2019 issued subsequent clarifying guidance (collectively, “ASU 2016-02”). ASU 2016-02 requires the recognition of lease assets and lease liabilities on the balance sheet and enhanced disclosure about leasing arrangements. The Company adopted the new standard on January 1, 2019 using the additional transition approach, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Accounting Standards Codification (“ASC”) 840. Refer to “Note 5 —Leases.” In June 2018, the FASB issued ASU 2018-07, Compensation–Stock Compensation (Topic 718) . ASU 2018-07 expands the scope of ASC 718, Compensation–Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting, to include share-based payment transactions for acquired goods and services from non-employees. This update includes changing the accounting for non-employee stock-based compensation as it relates to the award measurement date, the fair value measurement of the awards, and forfeitures, among other changes to align the accounting with ASC 718. The Company adopted the new standard on January 1, 2019. There was no material impact of adoption on its consolidated financial statements and notes disclosures. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes in response to the potential transition away from the London Interbank Offer Rate (“LIBOR”). This update permits the use of the Overnight Index Swap Rate based on the Secured Overnight Financing Rate as a U.S. benchmark interest rate for hedge accounting purposes under ASC Topic 815. The Company will apply the requirements of the new standard on a prospective basis beginning January 1, 2019 for any new or redesignated hedging agreements. Refer to “Note 7—Fair Value Measurements.” Recently Issued Accounting Standards There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements and note disclosures, from those disclosed in the 2018 Form 10-K, that would be expected to impact the Company. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The Company primarily derives its revenues through the sale or subscription licensing of its platform solutions and services. The following table disaggregates revenue by offering (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Platform solutions (1) $ 140,289 $ 138,209 $ 270,241 $ 217,175 Services (2) 16,688 14,589 32,227 28,378 Total revenue $ 156,977 $ 152,798 $ 302,468 $ 245,553 ______________________________________ (1) Platform solutions include arrangements for technology-based offerings representing subscription-based cloud-based platform offerings and legacy platform solutions that are not cloud-based and not billed under a subscription-based contract structure. (2) Services include advisory, implementation, and support services under time and materials, fixed price, or retainer-based contracts. Contract Balances The Company had an unbilled receivables balance of $21.0 million and $20.5 million as of June 30, 2019 and December 31, 2018 , respectively. Unbilled receivables are classified as accounts receivable on the consolidated balance sheet. The Company had deferred commissions of $9.2 million and $5.7 million as of June 30, 2019 and December 31, 2018 , respectively. The Company had a deferred revenue balance of $19.9 million and $20.6 million as of June 30, 2019 and December 31, 2018 , respectively. Revenue recognized during the three and six months ended June 30, 2019 that was included in the deferred revenue balance at the beginning of the year was $6.4 million and $13.1 million , respectively. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
NET (LOSS) INCOME PER SHARE | NET INCOME (LOSS) PER SHARE Holders of all outstanding classes of common stock participate ratably in earnings on an identical per share basis as if all shares were a single class. Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of shares of common stock (Class A common stock and Class B common stock) outstanding during the period. Diluted EPS is computed by dividing net income by the sum of the weighted average number of shares of common stock outstanding and potentially dilutive securities outstanding during the period under the treasury stock method. If the Company incurs a loss from continuing operations, diluted EPS is computed in the same manner as basic EPS. Potentially dilutive securities include stock options, restricted stock units (“RSUs”) and restricted stock awards (“RSAs”). Under the treasury stock method, dilutive securities are assumed to be exercised at the beginning of the periods and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Securities are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive to EPS. On February 18, 2015, the date of the completion of the Company’s IPO, the Company’s 2015 Omnibus Incentive Plan (the “2015 Plan”) became effective. The 2015 Plan provided for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to the Company’s employees and any parent and subsidiary employees, and for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSAs, RSUs, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to the Company’s employees, directors, and consultants and to employees, directors, and consultants of certain affiliated entities. At the Company’s annual meeting of stockholders held on June 5, 2019, the Company’s stockholders, upon the recommendation of the Board of Directors of the Company (the “Board”), approved the Amended and Restated 2015 Omnibus Incentive Plan (the “Amended Plan”), which was previously adopted by the Board on February 14, 2019, subject to the approval by the stockholders. The Amended Plan (i) increases the maximum number of shares of the Company’s Class A common stock available for issuance by 6,000,000 shares to a total of 13,335,430 ; (ii) removes the provisions regarding Section 162(m) of the Code that are no longer relevant due to recent changes to the Code pursuant to the Tax Cuts and Jobs Act of 2017, which eliminated the “performance-based compensation” exception to the deduction limitation under Section 162(m) of the Code and (iii) extends the term of the Amended Plan until the tenth anniversary of the date of Board approval of the Amended Plan. The Company has issued RSAs under the Amended Plan. The Company considers issued and unvested RSAs to be participating securities as the holders of these RSAs have a non-forfeitable right to dividends in the event of the Company’s declaration of a dividend on shares of Class A and Class B common stock. Subsequent to the issuance of the participating securities, the Company applied the two-class method required in calculating net income (loss) per share of Class A and Class B common stock. Under the two-class method, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income, less earnings attributable to participating securities. The net income per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the income for the period has been distributed. As the liquidation and dividend rights are identical for both classes of common stock, the net income attributable to common stockholders is allocated on a proportionate basis. If the Company incurs a loss from continuing operations, losses are not allocated to participating securities. The following table reconciles the weighted average shares outstanding for basic and diluted EPS for the periods indicated (in thousands, except per share amounts): Three Months Ended Six Months Ended 2019 2018 2019 2018 Basic Numerator: Net income (loss) $ 4,538 $ (10,466 ) $ (3,785 ) $ (27,300 ) Undistributed earnings allocated to participating securities (135 ) — — — Net income (loss) attributable to common stockholders—basic $ 4,403 $ (10,466 ) $ (3,785 ) $ (27,300 ) Denominator: Weighted average shares used in computing net income per share attributable to common stockholders—basic 148,136 147,181 147,956 143,301 Net income (loss) per share attributable to common stockholders—basic $ 0.03 $ (0.07 ) $ (0.03 ) $ (0.19 ) Diluted Numerator: Net income (loss) attributable to common stockholders—diluted $ 4,403 $ (10,466 ) $ (3,785 ) $ (27,300 ) Denominator: Number of shares used for basic EPS computation 148,136 147,181 147,956 143,301 Effect of dilutive securities 342 — — — Weighted average shares used in computing net loss per share attributable to common stockholders—diluted 148,478 147,181 147,956 143,301 Net income (loss) per share attributable to common stockholders—diluted $ 0.03 $ (0.07 ) $ (0.03 ) $ (0.19 ) The computation of diluted EPS does not include certain awards, on a weighted average basis, because their inclusion would have an anti-dilutive effect on EPS. The awards excluded because of their anti-dilutive effect are as follows (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Awards excluded from the computation of diluted net income (loss) per share because their inclusion would have been anti-dilutive 5 141 5 132 |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
SHORT-TERM INVESTMENTS | SHORT-TERM INVESTMENTS As of June 30, 2019 , short-term investments consisted of the following (in thousands): Amortized Cost Estimated Fair Value Available-for-sale securities: Corporate notes and bonds $ 503 $ 503 Total available-for-sale securities $ 503 $ 503 As of December 31, 2018 , short-term investments consisted of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Corporate notes and bonds $ 7,018 $ — $ (18 ) $ 7,000 Total available-for-sale securities $ 7,018 $ — $ (18 ) $ 7,000 The following table summarizes the estimated fair value of our short-term investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of the dates shown (in thousands): June 30, December 31, Due in one year or less $ 503 $ 7,000 The Company did not have available-for-sale securities in a gross unrealized loss position as of June 30, 2019 . |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company adopted ASU 2016-02 as of January 1, 2019. Leases held on or after January 1, 2019 are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840. The Company recorded a right-of-use asset of $34.8 million and a lease liability of $40.5 million . Additionally, the Company recorded a reclassification of $2.1 million from current liabilities and $3.6 million from non-current liabilities, related to deferred rent, cease-use lease liabilities, and tenant improvement liabilities related to the implementation of ASC 842. The Company elected the following practical expedients under ASC 842-10-65-1 including (1) the package of transition provisions related to expired and existing leases that allows an entity to use the historical assessment of whether contracts are or contain leases, lease classification, and initial direct costs, and (2) the practical expedient that allows for the use of hindsight in determining the lease term. The Company determines whether a contract is or contains a lease at inception. At the lease commencement date, the Company records a liability for the lease obligation and a corresponding asset representing the right to use the underlying asset over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and are recognized in expense using a straight-line basis for all asset classes. Variable lease payments are expensed as incurred, which primarily include maintenance costs, services provided by the lessor, and other charges reimbursed to the lessor. The Company leases office space, data center facilities, printers, and equipment with remaining lease terms ranging from one year to twelve years , some of which contain renewal or purchase options. The exercise of these options is at the Company’s sole discretion. The Company has entered into sublease agreements for unoccupied leased office space and records sublease income netted against rent expense. Additionally, the Company is required to maintain a standby letter of credit in the amount of $1.0 million to satisfy the requirements of a certain lease agreement. Certain of the Company’s leases contain lease and non-lease components. For leases held on or after January 1, 2019, the Company has elected the practical expedient under ASC 842-10-15-37 for all asset classes which allows companies to account for lease and non-lease components as a single lease component. The Company’s leases do not contain an implicit rate of return, therefore an incremental borrowing rate was determined. The Company assessed which rate would be most reflective of a reasonable rate the Company would be able to borrow based on asset class and lease term. Finance lease right-of-use assets of $15.4 million are included in property, equipment, and capitalized software, net on the consolidated balance sheet. The following table presents components of lease expense for the three and six months ended June 30, 2019 (in thousands): Three Months Ended Six Months Ended Finance lease cost Amortization of right-of-use assets $ 491 $ 1,041 Interest on lease liabilities 127 261 Operating lease cost 3,502 5,613 Variable lease cost 469 963 Sublease income (317 ) (634 ) Total lease cost $ 4,272 $ 7,244 Maturities of lease liabilities as of June 30, 2019 are as follows (in thousands): Operating Leases Finance Leases 2019 $ 2,411 $ 1,361 2020 3,921 2,937 2021 8,730 2,381 2022 8,288 1,185 2023 6,835 1,275 Thereafter 37,585 8,816 Total future minimum lease payments 67,770 17,955 Less: Interest (15,775 ) (2,024 ) Total $ 51,995 $ 15,931 Future non-cancellable lease payments as of December 31, 2018 are as follows (in thousands): Operating Leases Finance Leases Year ending December 31, 2019 $ 11,250 $ 3,509 2020 7,059 2,567 2021 5,898 2,017 2022 5,303 1,181 2023 3,821 1,275 Thereafter 15,599 8,831 Total future minimum lease payments 48,930 19,380 Less: Interest — (2,548 ) Total $ 48,930 $ 16,832 Supplemental cash flow information related to leases for the three and six months ended June 30, 2019 are as follows (in thousands): Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 3,416 $ 6,989 Operating cash flows for financing leases 127 260 Financing cash flows for financing leases 679 1,262 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 17,810 $ 20,800 Finance leases 20 20 Supplemental balance sheet information related to leases as of June 30, 2019 are as follows: June 30, 2019 Weighted average remaining lease term: Operating leases 5 years Financing leases 8 years Weighted average discount rate: Operating leases 4.7 % Financing leases 3.1 % |
LEASES | LEASES The Company adopted ASU 2016-02 as of January 1, 2019. Leases held on or after January 1, 2019 are presented under ASC 842, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840. The Company recorded a right-of-use asset of $34.8 million and a lease liability of $40.5 million . Additionally, the Company recorded a reclassification of $2.1 million from current liabilities and $3.6 million from non-current liabilities, related to deferred rent, cease-use lease liabilities, and tenant improvement liabilities related to the implementation of ASC 842. The Company elected the following practical expedients under ASC 842-10-65-1 including (1) the package of transition provisions related to expired and existing leases that allows an entity to use the historical assessment of whether contracts are or contain leases, lease classification, and initial direct costs, and (2) the practical expedient that allows for the use of hindsight in determining the lease term. The Company determines whether a contract is or contains a lease at inception. At the lease commencement date, the Company records a liability for the lease obligation and a corresponding asset representing the right to use the underlying asset over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and are recognized in expense using a straight-line basis for all asset classes. Variable lease payments are expensed as incurred, which primarily include maintenance costs, services provided by the lessor, and other charges reimbursed to the lessor. The Company leases office space, data center facilities, printers, and equipment with remaining lease terms ranging from one year to twelve years , some of which contain renewal or purchase options. The exercise of these options is at the Company’s sole discretion. The Company has entered into sublease agreements for unoccupied leased office space and records sublease income netted against rent expense. Additionally, the Company is required to maintain a standby letter of credit in the amount of $1.0 million to satisfy the requirements of a certain lease agreement. Certain of the Company’s leases contain lease and non-lease components. For leases held on or after January 1, 2019, the Company has elected the practical expedient under ASC 842-10-15-37 for all asset classes which allows companies to account for lease and non-lease components as a single lease component. The Company’s leases do not contain an implicit rate of return, therefore an incremental borrowing rate was determined. The Company assessed which rate would be most reflective of a reasonable rate the Company would be able to borrow based on asset class and lease term. Finance lease right-of-use assets of $15.4 million are included in property, equipment, and capitalized software, net on the consolidated balance sheet. The following table presents components of lease expense for the three and six months ended June 30, 2019 (in thousands): Three Months Ended Six Months Ended Finance lease cost Amortization of right-of-use assets $ 491 $ 1,041 Interest on lease liabilities 127 261 Operating lease cost 3,502 5,613 Variable lease cost 469 963 Sublease income (317 ) (634 ) Total lease cost $ 4,272 $ 7,244 Maturities of lease liabilities as of June 30, 2019 are as follows (in thousands): Operating Leases Finance Leases 2019 $ 2,411 $ 1,361 2020 3,921 2,937 2021 8,730 2,381 2022 8,288 1,185 2023 6,835 1,275 Thereafter 37,585 8,816 Total future minimum lease payments 67,770 17,955 Less: Interest (15,775 ) (2,024 ) Total $ 51,995 $ 15,931 Future non-cancellable lease payments as of December 31, 2018 are as follows (in thousands): Operating Leases Finance Leases Year ending December 31, 2019 $ 11,250 $ 3,509 2020 7,059 2,567 2021 5,898 2,017 2022 5,303 1,181 2023 3,821 1,275 Thereafter 15,599 8,831 Total future minimum lease payments 48,930 19,380 Less: Interest — (2,548 ) Total $ 48,930 $ 16,832 Supplemental cash flow information related to leases for the three and six months ended June 30, 2019 are as follows (in thousands): Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 3,416 $ 6,989 Operating cash flows for financing leases 127 260 Financing cash flows for financing leases 679 1,262 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 17,810 $ 20,800 Finance leases 20 20 Supplemental balance sheet information related to leases as of June 30, 2019 are as follows: June 30, 2019 Weighted average remaining lease term: Operating leases 5 years Financing leases 8 years Weighted average discount rate: Operating leases 4.7 % Financing leases 3.1 % |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT On April 2, 2018, the Company entered into a credit agreement (the “2018 Credit Agreement”) with a group of lenders and Morgan Stanley Senior Funding, Inc. (“MSSF”), as administrative agent, providing for (i) a term loan B facility with the Company as borrower in a total principal amount of $980.0 million (the “2018 Term Facility”); and (ii) a revolving credit facility with the Company as borrower in a total principal amount of up to $100.0 million (the “2018 Revolving Facility” and, together with the 2018 Term Facility, the “2018 Credit Facilities”). The 2018 Revolving Facility will terminate on April 2, 2023 and the 2018 Term Facility will mature on April 2, 2025. The entire $980.0 million 2018 Term Facility was borrowed on April 2, 2018 and was used to pay off all of the Company’s existing debt obligations as well as to provide the financing necessary to fund, in part, the cash consideration paid to acquire ABILITY (as defined in Note 9 —Business Combinations ) . As of June 30, 2019 , the Company had $100.0 million available to it consisting of $99.0 million on the 2018 Revolving Facility and a letter of credit of $1.0 million . At the option of the Company, the loans outstanding under the 2018 Term Facility will bear interest either at: (i) Adjusted LIBOR plus an applicable rate of 3.50% or (ii) the Alternate Base Rate (“ABR”) plus an applicable margin. The Company may elect interest periods of one, two, three or six months for Adjusted LIBOR borrowings. As set forth in the 2018 Credit Agreement, the ABR is the higher of: (i) the rate that MSSF as administrative agent announces from time to time as its prime or base commercial lending rate, as in effect from time to time, (ii) the Federal Funds Effective Rate plus ½ of 1.0% and (iii) one-month Adjusted LIBOR plus 1.0% . The following table discloses the outstanding debt at each balance date as follows (in thousands): June 30, December 31, 2018 Term Facility (1) $ 946,383 $ 949,314 Less: current portion 9,800 9,800 Non-current Credit Facilities $ 936,583 $ 939,514 ______________________________________ (1) The 2018 Term Facility is presented net of unamortized deferred financing fees and original issue discount (“OID”) of $26.3 million and $28.2 million as of June 30, 2019 and December 31, 2018 , respectively. The Company and its Restricted Subsidiaries (as defined in the 2018 Credit Agreement) are subject to certain affirmative and negative covenants under the 2018 Credit Agreement, and the 2018 Credit Agreement includes certain customary representations and warranties of the Company. As of June 30, 2019 , the Company is in compliance with the covenants under the 2018 Credit Agreement. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 (in thousands): Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 41,038 $ — $ — $ 41,038 Short-term investments: Corporate notes and bonds — 503 — 503 Other current liabilities: Interest rate swaps — (6,465 ) — (6,465 ) Contingent consideration — — (17,881 ) (17,881 ) Other liabilities Interest rate swaps — (32,800 ) — (32,800 ) Contingent consideration — — (14,460 ) (14,460 ) Total $ 41,038 $ (38,762 ) $ (32,341 ) $ (30,065 ) The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 34,064 $ — $ — $ 34,064 Short-term investments: Corporate notes and bonds — 7,000 — 7,000 Other current liabilities: Interest rate swaps — (1,778 ) — (1,778 ) Contingent consideration — — (15,182 ) (15,182 ) Other liabilities: Interest rate swaps — (8,151 ) — (8,151 ) Contingent consideration — — (16,642 ) (16,642 ) Total $ 34,064 $ (2,929 ) $ (31,824 ) $ (689 ) The Company determines the fair value of its security holdings based on pricing from its pricing vendors. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs). The Company performs procedures to ensure that appropriate fair values are recorded such as comparing prices obtained from other sources. The following table presents financial instruments measured at fair value using unobservable inputs (Level 3) (in thousands): Fair Value Measurements Using Unobservable Inputs (Level 3) June 30, December 31, Balance, beginning of period $ (31,824 ) $ (7,400 ) Fair value adjustment (1)(2) (165 ) (6,159 ) Accretion expense (recognized in general and administrative expenses) (352 ) (1,053 ) Contingent consideration attributable to and assumed from ABILITY Acquisition — (17,212 ) Total $ (32,341 ) $ (31,824 ) ______________________________________ (1) During 2019, the Company recognized an adjustment of $0.3 million recognized in goodwill, which was a purchase accounting adjustment attributable to the ABILITY Acquisition, partially offset by an adjustment of $0.1 million recognized in general and administrative expenses related to the change in fair value of contingent consideration. (2) During 2018, the Company recognized an adjustment of $5.6 million in general and administrative expenses related to the change in fair value of contingent consideration, and an adjustment of $0.6 million recognized in goodwill, which was a purchase accounting adjustment attributable to the ABILITY Acquisition. 2018 Credit Facilities The Company records debt on the balance sheet at carrying value. The estimated fair value of the Company’s debt is determined based on Level 2 inputs including current market rates for similar types of borrowings. The following table presents the carrying value and fair value of the Company’s debt (including the current portion thereof) as of June 30, 2019 (in thousands): June 30, Carrying value $ 946,383 Fair value $ 945,200 Interest Rate Swaps In connection with the 2018 Credit Agreement, the Company entered into four interest rate swaps during the second quarter of 2018, each of which mature in March 2025, to mitigate the risk of a rise in interest rates. These interest rate swaps mitigate the exposure on the variable component of interest on the Company’s 2018 Credit Facility. The interest rate swaps fix the LIBOR component of interest on $700.0 million of the 2018 Term Facility at a weighted average rate of approximately 2.8% . See “Note 6 —Debt” for additional information. These interest rate swaps are designated as cash flow hedges and are deemed highly effective under ASC 815, Derivatives and Hedging . The interest rate swaps are recorded on the balance sheet at fair value as either assets or liabilities and any changes to the fair value are recorded through accumulated other comprehensive income and reclassified into interest expense in the same period in which the hedged transaction is recognized in earnings. Cash flows from interest rate swaps are reported in the same category as the cash flows from the items being hedged. The following table presents the fair value of interest rate swaps on the balance sheet as of June 30, 2019 (in thousands): Liability Derivative Balance Sheet Location Fair Value Interest rate swap contract Other current liabilities $ (6,465 ) Interest rate swap contract Other liabilities $ (32,800 ) The following table presents the fair value of interest rate swaps on the balance sheet as of December 31, 2018 (in thousands): Liability Derivative Balance Sheet Location Fair Value Interest rate swap contract Other current liabilities $ (1,778 ) Interest rate swap contract Other liabilities $ (8,151 ) The following table presents the location and amount of gains and losses on interest rate swaps included in other comprehensive income (“OCI”) and the statement of operations for the three and six months ended June 30, 2019 and 2018 (in thousands): Three Months Ended June 30, 2019 Gain (Loss) recognized in OCI Statement of Operations Location (Gain) Loss reclassified from OCI Interest rate swap contract $ (18,059 ) Interest expense $ 602 Six Months Ended June 30, 2019 Gain (Loss) recognized in OCI Statement of Operations Location (Gain) Loss reclassified from OCI Interest rate swap contract $ (30,467 ) Interest expense $ 1,131 Three and Six Months Ended June 30, 2018 Gain (Loss) recognized in OCI Statement of Operations Location (Gain) Loss reclassified from OCI Interest rate swap contract $ (199 ) Interest expense $ 838 The net amount of accumulated other comprehensive income expected to be reclassified to interest expense in the next 12 months is $6.6 million . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings —From time to time the Company is involved in various litigation matters arising out of the normal course of business. The Company consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to such matters. Estimating the probable losses or a range of probable losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve discretionary amounts, present novel legal theories, are in the early stages of the proceedings, or are subject to appeal. Whether any losses, damages or remedies ultimately resulting from such matters could reasonably have a material effect on the Company’s business, financial condition, results of operations, or cash flows will depend on a number of variables, including, for example, the timing and amount of such losses or damages (if any) and the structure and type of any such remedies. The Company’s management does not presently expect any litigation matters to have a material adverse impact on the consolidated financial statements of the Company. There have been no significant or material developments to current legal proceedings, including the estimated effects on the Company’s consolidated financial statements and note disclosures, subsequent to the disclosure previously provided in Note 11 of the Notes to the Consolidated Financial Statements in the 2018 Form 10-K, other than the following update with respect to the Xiang v. Inovalon Holdings, Inc., et.al ., No. 1:16-cv-04923 case filed in the United States District Court for the Southern District of New York on June 24, 2016 against the Company, certain officers, directors and underwriters in the Company’s initial public offering. As previously disclosed, on February 20, 2019, the parties executed a settlement agreement, which was subject to Court approval, providing for the dismissal of all claims against the defendants in connection with the securities class action suit, and providing for a payment to the class of $17 million , of which the Company agreed to contribute $1.7 million , which was recorded in the Company’s 2018 financial statements, with the remaining amounts paid by the Company’s insurance carriers. On July 15, 2019, the Court entered an Order and Final Judgment, granting final approval of the settlement and dismissing the litigation. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS 2018 Acquisition ABILITY Network, Inc. On April 2, 2018, the Company completed the acquisition (the “ABILITY Acquisition”) of Butler Group Holdings, Inc., a Delaware corporation (“Butler”), and its wholly-owned subsidiaries, including, without limitation, ABILITY Network Inc., a Delaware corporation (“ABILITY”), for aggregate consideration of $1.19 billion (the “Purchase Price”) in cash and restricted shares of the Company’s Class A Common Stock. ABILITY is a leading cloud-based Software-as-a-service (“SaaS”) technology company helping to simplify the administrative and clinical complexities of healthcare. Through the my ABILITY ® software platform, an integrated set of cloud-based applications for providers, ABILITY provides core connectivity, administrative, clinical, and quality analysis, management, and performance improvement capabilities to more than 44,000 acute, post-acute and ambulatory point-of-care provider facilities. The extensive datasets, on-demand compute capability, advanced analytics, and broad healthcare ecosystem connectivity enabled by the Inovalon ONE ® Platform provide a significant expansion of application offerings within the my ABILITY ® software platform while also expanding the nature and reach of high-value solutions for Inovalon’s existing payer, pharma, and device client-base. The combination of Inovalon and ABILITY creates a vertically integrated cloud-based platform empowering the achievement of real-time, value-based care from payers, manufacturers, and diagnostics all the way to the patient’s point of care. A summary of the final composition of the stated Purchase Price and fair value of the stated Purchase Price is as follows (in thousands): Purchase Price $ 1,220,800 Working capital adjustment (630 ) Shareholder payable adjustment 880 Subtotal 1,221,050 Fair value adjustments: Restricted stock marketability discount (30,000 ) Total fair value purchase price $ 1,191,050 The final composition of the fair value of the consideration transferred is as follows (in thousands): Cash $ 1,107,220 Issuance of Class A common stock 70,000 Contingent consideration 14,460 Working capital adjustment (630 ) Total fair value purchase price $ 1,191,050 The ABILITY Acquisition was accounted for using the acquisition method of accounting under ASC No. 805, Business Combinations , which requires that assets acquired and liabilities assumed are recognized at their estimated fair values. The excess of the aggregate consideration over the estimated fair values has been allocated to goodwill. In addition, ASC No. 805 requires that the consideration transferred be measured at the closing date of the ABILITY Acquisition at the then-current market prices. The Company finalized the Purchase Price allocation as of March 31, 2019. The following table summarizes the net assets acquired and liabilities assumed (in thousands): Fair Value Cash and cash equivalents $ 23,850 Accounts receivable 16,739 Income tax receivable (2) 688 Prepaid expenses and other current assets 3,025 Property and equipment 3,095 Goodwill (1)(2) 770,949 Intangible assets (1) 490,000 Other assets 1,252 Accounts payable and accrued expenses (6,863 ) Deferred revenue (7,000 ) Other current liabilities (507 ) Other liabilities (5,291 ) Deferred tax liabilities (2) (98,887 ) Total consideration transferred $ 1,191,050 ______________________________________ (1) The Company allocated a portion of the goodwill associated with the ABILITY Acquisition to the Inovalon reporting unit based on expected revenue synergies. As a result, the fair value of the customer relationships intangible asset was adjusted by $23.0 million . (2) The Company recognized a net purchase accounting adjustment of $1.8 million resulting in a decrease to goodwill. This adjustment was driven by a $7.5 million decrease to deferred tax liabilities primarily attributable to the tax impact related to the reduction to the fair value of the customer relationships intangible assets and an adjustment to income tax receivable of $0.2 million . These reductions to goodwill were partially offset by a $5.0 million increase in deferred tax liabilities related to tax basis goodwill and provision-to-tax adjustments from ABILITY’s 2017 tax return filings and an adjustment of $0.9 million to the shareholder payable attributable to the ABILITY Acquisition. The amounts attributed to identified intangible assets are summarized in the table below (in thousands): Estimated Fair Value Measurement Period Adjustments Adjusted Fair Value Customer relationships 12-14 years $ 408,000 $ (23,000 ) $ 385,000 Technology 12-14 years 86,000 — 86,000 Trade names 16-18 years 19,000 — 19,000 Total intangible assets $ 513,000 $ (23,000 ) $ 490,000 Acquisition-related costs were expensed as incurred. During 2018, the Company incurred acquisition-related costs of $6.5 million . Acquisition-related costs were recognized within “General and administrative” expenses in the accompanying consolidated statements of operations. The following table presents revenue and income before taxes of ABILITY, included in the consolidated statements of operations (in thousands): Three Months Ended Revenue $ 37,520 Income before taxes $ 5,798 The following pro forma financial information is based on Inovalon’s and Butler’s historical consolidated financial statements as adjusted to give effect to pro forma events that are (1) directly attributable to the ABILITY Acquisition, (2) factually supportable, and (3) with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results. The pro forma adjustments include, but are not limited to: (i) amortization of acquired intangible assets, (ii) net increase to interest expense resulting from the extinguishment of the 2014 Credit Facilities and historical Butler debt, borrowings under the 2018 Term Facility and the amortization of related debt issuance costs, and (iii) elimination of non-recurring acquisition and integration-related expenses. The following consolidated pro forma financial information is unaudited and gives effect to the transactions as if they had occurred on January 1, 2018 (in thousands): Three Months Ended Six Months Ended Revenue $ 152,798 $ 282,917 Loss before taxes $ (16,543 ) $ (43,619 ) The unaudited pro forma revenue and loss before taxes was prepared for informational purposes only based on estimates and assumptions that the Company believes to be reasonable and is not necessarily indicative of the results of operations that would have occurred if the ABILITY Acquisition had been completed on the date indicated nor of the future financial position or results of operations following completion of the ABILITY Acquisition. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements have been prepared by Inovalon Holdings, Inc. (“Inovalon” or the “Company”) in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2018 consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly the Company’s financial position as of June 30, 2019 , the results of operations, comprehensive loss, and stockholders’ equity, for the three and six month periods ended June 30, 2019 and 2018 , and cash flows for the six months ended June 30, 2019 and 2018 . The results of operations for the three and six month periods ended June 30, 2019 and 2018 are not necessarily indicative of the results to be expected for the full year. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, and related disclosures, as of the date of the financial statements, and the amounts of revenue and expenses reported during the period. Actual results could differ from estimates. The information contained herein should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “ 2018 Form 10-K”). Certain prior period amounts have been reclassified within the consolidated statements of operations, within the current and non-current liabilities section of the consolidated balance sheets, and within the operating section of the consolidated statements of cash flows to conform with current period presentation. Such reclassifications had no impact on net loss, current and non-current liabilities, or net cash provided by operating activities as previously reported. The accompanying unaudited consolidated financial statements include the accounts of Inovalon and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. |
Recently Issued Accounting Standards | Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) , and in July 2018 and in March 2019 issued subsequent clarifying guidance (collectively, “ASU 2016-02”). ASU 2016-02 requires the recognition of lease assets and lease liabilities on the balance sheet and enhanced disclosure about leasing arrangements. The Company adopted the new standard on January 1, 2019 using the additional transition approach, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under Accounting Standards Codification (“ASC”) 840. Refer to “Note 5 —Leases.” In June 2018, the FASB issued ASU 2018-07, Compensation–Stock Compensation (Topic 718) . ASU 2018-07 expands the scope of ASC 718, Compensation–Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting, to include share-based payment transactions for acquired goods and services from non-employees. This update includes changing the accounting for non-employee stock-based compensation as it relates to the award measurement date, the fair value measurement of the awards, and forfeitures, among other changes to align the accounting with ASC 718. The Company adopted the new standard on January 1, 2019. There was no material impact of adoption on its consolidated financial statements and notes disclosures. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes in response to the potential transition away from the London Interbank Offer Rate (“LIBOR”). This update permits the use of the Overnight Index Swap Rate based on the Secured Overnight Financing Rate as a U.S. benchmark interest rate for hedge accounting purposes under ASC Topic 815. The Company will apply the requirements of the new standard on a prospective basis beginning January 1, 2019 for any new or redesignated hedging agreements. Refer to “Note 7—Fair Value Measurements.” Recently Issued Accounting Standards There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements and note disclosures, from those disclosed in the 2018 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates revenue by offering (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Platform solutions (1) $ 140,289 $ 138,209 $ 270,241 $ 217,175 Services (2) 16,688 14,589 32,227 28,378 Total revenue $ 156,977 $ 152,798 $ 302,468 $ 245,553 ______________________________________ (1) Platform solutions include arrangements for technology-based offerings representing subscription-based cloud-based platform offerings and legacy platform solutions that are not cloud-based and not billed under a subscription-based contract structure. (2) Services include advisory, implementation, and support services under time and materials, fixed price, or retainer-based contracts. |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of numerators and denominators of the basic and diluted EPS | The following table reconciles the weighted average shares outstanding for basic and diluted EPS for the periods indicated (in thousands, except per share amounts): Three Months Ended Six Months Ended 2019 2018 2019 2018 Basic Numerator: Net income (loss) $ 4,538 $ (10,466 ) $ (3,785 ) $ (27,300 ) Undistributed earnings allocated to participating securities (135 ) — — — Net income (loss) attributable to common stockholders—basic $ 4,403 $ (10,466 ) $ (3,785 ) $ (27,300 ) Denominator: Weighted average shares used in computing net income per share attributable to common stockholders—basic 148,136 147,181 147,956 143,301 Net income (loss) per share attributable to common stockholders—basic $ 0.03 $ (0.07 ) $ (0.03 ) $ (0.19 ) Diluted Numerator: Net income (loss) attributable to common stockholders—diluted $ 4,403 $ (10,466 ) $ (3,785 ) $ (27,300 ) Denominator: Number of shares used for basic EPS computation 148,136 147,181 147,956 143,301 Effect of dilutive securities 342 — — — Weighted average shares used in computing net loss per share attributable to common stockholders—diluted 148,478 147,181 147,956 143,301 Net income (loss) per share attributable to common stockholders—diluted $ 0.03 $ (0.07 ) $ (0.03 ) $ (0.19 ) |
Schedule of antidilutive securities excluded from computation of earnings per share | The awards excluded because of their anti-dilutive effect are as follows (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Awards excluded from the computation of diluted net income (loss) per share because their inclusion would have been anti-dilutive 5 141 5 132 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of short-term investments | As of June 30, 2019 , short-term investments consisted of the following (in thousands): Amortized Cost Estimated Fair Value Available-for-sale securities: Corporate notes and bonds $ 503 $ 503 Total available-for-sale securities $ 503 $ 503 As of December 31, 2018 , short-term investments consisted of the following (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale securities: Corporate notes and bonds $ 7,018 $ — $ (18 ) $ 7,000 Total available-for-sale securities $ 7,018 $ — $ (18 ) $ 7,000 |
Summary of estimated fair value of short-term investments, designated as available-for-sale and classified by the contractual maturity | The following table summarizes the estimated fair value of our short-term investments, designated as available-for-sale and classified by the contractual maturity date of the securities as of the dates shown (in thousands): June 30, December 31, Due in one year or less $ 503 $ 7,000 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease, Cost | Supplemental cash flow information related to leases for the three and six months ended June 30, 2019 are as follows (in thousands): Three Months Ended Six Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 3,416 $ 6,989 Operating cash flows for financing leases 127 260 Financing cash flows for financing leases 679 1,262 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 17,810 $ 20,800 Finance leases 20 20 The following table presents components of lease expense for the three and six months ended June 30, 2019 (in thousands): Three Months Ended Six Months Ended Finance lease cost Amortization of right-of-use assets $ 491 $ 1,041 Interest on lease liabilities 127 261 Operating lease cost 3,502 5,613 Variable lease cost 469 963 Sublease income (317 ) (634 ) Total lease cost $ 4,272 $ 7,244 |
Finance Lease, Liability, Maturity | Maturities of lease liabilities as of June 30, 2019 are as follows (in thousands): Operating Leases Finance Leases 2019 $ 2,411 $ 1,361 2020 3,921 2,937 2021 8,730 2,381 2022 8,288 1,185 2023 6,835 1,275 Thereafter 37,585 8,816 Total future minimum lease payments 67,770 17,955 Less: Interest (15,775 ) (2,024 ) Total $ 51,995 $ 15,931 |
Lessee, Operating Lease, Liability, Maturity | as of June 30, 2019 are as follows (in thousands): Operating Leases Finance Leases 2019 $ 2,411 $ 1,361 2020 3,921 2,937 2021 8,730 2,381 2022 8,288 1,185 2023 6,835 1,275 Thereafter 37,585 8,816 Total future minimum lease payments 67,770 17,955 Less: Interest (15,775 ) (2,024 ) Total $ 51,995 $ 15,931 |
Schedule of Future Minimum Lease Payments for Capital Leases | Future non-cancellable lease payments as of December 31, 2018 are as follows (in thousands): Operating Leases Finance Leases Year ending December 31, 2019 $ 11,250 $ 3,509 2020 7,059 2,567 2021 5,898 2,017 2022 5,303 1,181 2023 3,821 1,275 Thereafter 15,599 8,831 Total future minimum lease payments 48,930 19,380 Less: Interest — (2,548 ) Total $ 48,930 $ 16,832 |
Schedule of Future Minimum Rental Payments for Operating Leases | Future non-cancellable lease payments as of December 31, 2018 are as follows (in thousands): Operating Leases Finance Leases Year ending December 31, 2019 $ 11,250 $ 3,509 2020 7,059 2,567 2021 5,898 2,017 2022 5,303 1,181 2023 3,821 1,275 Thereafter 15,599 8,831 Total future minimum lease payments 48,930 19,380 Less: Interest — (2,548 ) Total $ 48,930 $ 16,832 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | The following table discloses the outstanding debt at each balance date as follows (in thousands): June 30, December 31, 2018 Term Facility (1) $ 946,383 $ 949,314 Less: current portion 9,800 9,800 Non-current Credit Facilities $ 936,583 $ 939,514 ______________________________________ (1) The 2018 Term Facility is presented net of unamortized deferred financing fees and original issue discount (“OID”) of $26.3 million and $28.2 million as of June 30, 2019 and December 31, 2018 , respectively. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis | The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 (in thousands): Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 41,038 $ — $ — $ 41,038 Short-term investments: Corporate notes and bonds — 503 — 503 Other current liabilities: Interest rate swaps — (6,465 ) — (6,465 ) Contingent consideration — — (17,881 ) (17,881 ) Other liabilities Interest rate swaps — (32,800 ) — (32,800 ) Contingent consideration — — (14,460 ) (14,460 ) Total $ 41,038 $ (38,762 ) $ (32,341 ) $ (30,065 ) The following table presents the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 (in thousands): Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 34,064 $ — $ — $ 34,064 Short-term investments: Corporate notes and bonds — 7,000 — 7,000 Other current liabilities: Interest rate swaps — (1,778 ) — (1,778 ) Contingent consideration — — (15,182 ) (15,182 ) Other liabilities: Interest rate swaps — (8,151 ) — (8,151 ) Contingent consideration — — (16,642 ) (16,642 ) Total $ 34,064 $ (2,929 ) $ (31,824 ) $ (689 ) |
Schedule of financial instruments measured at fair value using unobservable inputs (Level 3) | The following table presents financial instruments measured at fair value using unobservable inputs (Level 3) (in thousands): Fair Value Measurements Using Unobservable Inputs (Level 3) June 30, December 31, Balance, beginning of period $ (31,824 ) $ (7,400 ) Fair value adjustment (1)(2) (165 ) (6,159 ) Accretion expense (recognized in general and administrative expenses) (352 ) (1,053 ) Contingent consideration attributable to and assumed from ABILITY Acquisition — (17,212 ) Total $ (32,341 ) $ (31,824 ) ______________________________________ (1) During 2019, the Company recognized an adjustment of $0.3 million recognized in goodwill, which was a purchase accounting adjustment attributable to the ABILITY Acquisition, partially offset by an adjustment of $0.1 million recognized in general and administrative expenses related to the change in fair value of contingent consideration. (2) During 2018, the Company recognized an adjustment of $5.6 million in general and administrative expenses related to the change in fair value of contingent consideration, and an adjustment of $0.6 million recognized in goodwill, which was a purchase accounting adjustment attributable to the ABILITY Acquisition. |
Fair Value, by Balance Sheet Grouping | June 30, 2019 (in thousands): June 30, Carrying value $ 946,383 Fair value $ 945,200 |
Description of Location of Interest Rate Derivatives on Balance Sheet | The following table presents the fair value of interest rate swaps on the balance sheet as of June 30, 2019 (in thousands): Liability Derivative Balance Sheet Location Fair Value Interest rate swap contract Other current liabilities $ (6,465 ) Interest rate swap contract Other liabilities $ (32,800 ) The following table presents the fair value of interest rate swaps on the balance sheet as of December 31, 2018 (in thousands): Liability Derivative Balance Sheet Location Fair Value Interest rate swap contract Other current liabilities $ (1,778 ) Interest rate swap contract Other liabilities $ (8,151 ) |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the location and amount of gains and losses on interest rate swaps included in other comprehensive income (“OCI”) and the statement of operations for the three and six months ended June 30, 2019 and 2018 (in thousands): Three Months Ended June 30, 2019 Gain (Loss) recognized in OCI Statement of Operations Location (Gain) Loss reclassified from OCI Interest rate swap contract $ (18,059 ) Interest expense $ 602 Six Months Ended June 30, 2019 Gain (Loss) recognized in OCI Statement of Operations Location (Gain) Loss reclassified from OCI Interest rate swap contract $ (30,467 ) Interest expense $ 1,131 |
BUSINESS COMBINATIONS BUSINESS
BUSINESS COMBINATIONS BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The final composition of the fair value of the consideration transferred is as follows (in thousands): Cash $ 1,107,220 Issuance of Class A common stock 70,000 Contingent consideration 14,460 Working capital adjustment (630 ) Total fair value purchase price $ 1,191,050 A summary of the final composition of the stated Purchase Price and fair value of the stated Purchase Price is as follows (in thousands): Purchase Price $ 1,220,800 Working capital adjustment (630 ) Shareholder payable adjustment 880 Subtotal 1,221,050 Fair value adjustments: Restricted stock marketability discount (30,000 ) Total fair value purchase price $ 1,191,050 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the net assets acquired and liabilities assumed (in thousands): Fair Value Cash and cash equivalents $ 23,850 Accounts receivable 16,739 Income tax receivable (2) 688 Prepaid expenses and other current assets 3,025 Property and equipment 3,095 Goodwill (1)(2) 770,949 Intangible assets (1) 490,000 Other assets 1,252 Accounts payable and accrued expenses (6,863 ) Deferred revenue (7,000 ) Other current liabilities (507 ) Other liabilities (5,291 ) Deferred tax liabilities (2) (98,887 ) Total consideration transferred $ 1,191,050 ______________________________________ (1) The Company allocated a portion of the goodwill associated with the ABILITY Acquisition to the Inovalon reporting unit based on expected revenue synergies. As a result, the fair value of the customer relationships intangible asset was adjusted by $23.0 million . (2) The Company recognized a net purchase accounting adjustment of $1.8 million resulting in a decrease to goodwill. This adjustment was driven by a $7.5 million decrease to deferred tax liabilities primarily attributable to the tax impact related to the reduction to the fair value of the customer relationships intangible assets and an adjustment to income tax receivable of $0.2 million . These reductions to goodwill were partially offset by a $5.0 million increase in deferred tax liabilities related to tax basis goodwill and provision-to-tax adjustments from ABILITY’s 2017 tax return filings and an adjustment of $0.9 million to the shareholder payable attributable to the ABILITY Acquisition. |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The amounts attributed to identified intangible assets are summarized in the table below (in thousands): Estimated Fair Value Measurement Period Adjustments Adjusted Fair Value Customer relationships 12-14 years $ 408,000 $ (23,000 ) $ 385,000 Technology 12-14 years 86,000 — 86,000 Trade names 16-18 years 19,000 — 19,000 Total intangible assets $ 513,000 $ (23,000 ) $ 490,000 |
Business Acquisition, Pro Forma Information | The following consolidated pro forma financial information is unaudited and gives effect to the transactions as if they had occurred on January 1, 2018 (in thousands): Three Months Ended Six Months Ended Revenue $ 152,798 $ 282,917 Loss before taxes $ (16,543 ) $ (43,619 ) The following table presents revenue and income before taxes of ABILITY, included in the consolidated statements of operations (in thousands): Three Months Ended Revenue $ 37,520 Income before taxes $ 5,798 |
REVENUE - Additional Informatio
REVENUE - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Unbilled receivables | $ 21,000,000 | $ 21,000,000 | $ 20,500,000 |
Deferred sales commission | 9,200,000 | 9,200,000 | 5,700,000 |
Deferred revenue | 19,900,000 | 19,900,000 | $ 20,600,000 |
Deferred revenue, revenue recognized | $ 6,400,000 | $ 13,100,000 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 156,977 | $ 152,798 | $ 302,468 | $ 245,553 |
Platform Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 140,289 | 138,209 | 270,241 | 217,175 |
Services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 16,688 | $ 14,589 | $ 32,227 | $ 28,378 |
NET INCOME (LOSS) PER SHARE - A
NET INCOME (LOSS) PER SHARE - Additional Information (Details) - shares | Jun. 05, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Common stock, authorized (in shares) | 900,000,000 | 900,000,000 | |
Class A Common | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Additional shares authorized (in shares) | 6,000,000 | ||
Common stock, authorized (in shares) | 13,335,430 | 750,000,000 | 750,000,000 |
NET INCOME (LOSS) PER SHARE - T
NET INCOME (LOSS) PER SHARE - Tabular Disclosure (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Basic | ||||||
Net income (loss) | $ 4,538 | $ (8,323) | $ (10,466) | $ (16,834) | $ (3,785) | $ (27,300) |
Undistributed earnings allocated to participating securities | (135) | 0 | 0 | 0 | ||
Net income (loss) attributable to common stockholders—basic | $ 4,403 | $ (10,466) | $ (3,785) | $ (27,300) | ||
Weighted average shares used in computing net income per share attributable to common stockholders - basic (in shares) | 148,136 | 147,181 | 147,956 | 143,301 | ||
Net (loss) income per share attributable to common stockholders - basic (in dollars per share) | $ 0.03 | $ (0.07) | $ (0.03) | $ (0.19) | ||
Diluted | ||||||
Net income (loss) attributable to common stockholders—diluted | $ 4,403 | $ (10,466) | $ (3,785) | $ (27,300) | ||
Effect of dilutive securities (in shares) | 342 | 0 | 0 | 0 | ||
Weighted average shares used in computing net income per share attributable to common stockholders - diluted (in shares) | 148,478 | 147,181 | 147,956 | 143,301 | ||
Net (loss) income per share attributable to common stockholders - diluted (in dollars per share) | $ 0.03 | $ (0.07) | $ (0.03) | $ (0.19) |
NET INCOME (LOSS) PER SHARE -_2
NET INCOME (LOSS) PER SHARE - Anti-dilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Equity awards | ||||
NET INCOME PER SHARE | ||||
Awards excluded from the computation of diluted net income per share because their inclusion would have been anti-dilutive (in shares) | 5 | 141 | 5 | 132 |
SHORT-TERM INVESTMENTS - Availa
SHORT-TERM INVESTMENTS - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 503 | $ 7,018 |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (18) | |
Estimated Fair Value | 503 | 7,000 |
Corporate notes and bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 503 | 7,018 |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (18) | |
Estimated Fair Value | $ 503 | $ 7,000 |
SHORT-TERM INVESTMENTS - Estima
SHORT-TERM INVESTMENTS - Estimated Fair Value by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Due in one year or less | $ 503 | $ 7,000 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Apr. 02, 2018 |
Lessee, Lease, Description [Line Items] | ||||
Operating lease, right-of-use asset | $ 47,567,000 | $ 0 | ||
Total | 51,995,000 | |||
Liabilities, current | (134,145,000) | $ (141,310,000) | ||
Finance lease, right-of-use asset | 15,400,000 | |||
Secured Debt | Morgan Stanley Senior Funding, Inc. | ||||
Lessee, Lease, Description [Line Items] | ||||
Face amount | 100,000,000 | $ 980,000,000 | ||
Secured Debt | Line of Credit | Morgan Stanley Senior Funding, Inc. | ||||
Lessee, Lease, Description [Line Items] | ||||
Face amount | $ 1,000,000 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, term of contract | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, term of contract | 12 years | |||
Accounting Standards Update 2016-02 | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, right-of-use asset | $ 34,800,000 | |||
Total | 40,500,000 | |||
Liabilities, current | 2,100,000 | |||
Liabilities, noncurrent | $ 3,600,000 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Amortization of right-of-use assets | $ 491 | $ 1,041 |
Interest on lease liabilities | 127 | 261 |
Operating lease cost | 3,502 | 5,613 |
Variable lease cost | 469 | 963 |
Sublease income | (317) | (634) |
Total lease cost | $ 4,272 | $ 7,244 |
LEASES - Future Non-cancellable
LEASES - Future Non-cancellable Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
2019 | $ 2,411 |
2020 | 3,921 |
2021 | 8,730 |
2022 | 8,288 |
2023 | 6,835 |
Thereafter | 37,585 |
Total future minimum lease payments | 67,770 |
Less: Interest | (15,775) |
Total | 51,995 |
Finance Lease, Liability, Payment, Due [Abstract] | |
2019 | 1,361 |
2020 | 2,937 |
2021 | 2,381 |
2022 | 1,185 |
2023 | 1,275 |
Thereafter | 8,816 |
Total future minimum lease payments | 17,955 |
Less: Interest | (2,024) |
Total | $ 15,931 |
LEASES - Future non-cancellab_2
LEASES - Future non-cancellable Lease Payments Under 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases | |
2019 | $ 11,250 |
2020 | 7,059 |
2021 | 5,898 |
2022 | 5,303 |
2023 | 3,821 |
Thereafter | 15,599 |
Total future minimum lease payments | 48,930 |
Finance Lease, Liability, Payment, Due [Abstract] | |
2019 | 3,509 |
2020 | 2,567 |
2021 | 2,017 |
2022 | 1,181 |
2023 | 1,275 |
Thereafter | 8,831 |
Total future minimum lease payments | 19,380 |
Less: Interest | (2,548) |
Total | $ 16,832 |
LEASES - Other Information Rela
LEASES - Other Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Leases [Abstract] | |||
Operating cash flows for operating leases | $ 3,416 | $ 6,989 | |
Operating cash flows for financing leases | 127 | 260 | |
Financing cash flows for financing leases | 679 | 1,262 | $ 311 |
Right-of-use assets obtained in exchange for lease liabilities | 17,810 | 20,800 | |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 20 | $ 20 | |
Weighted average remaining lease term, operating lease | 5 years | 5 years | |
Weighted average remaining lease term, financing lease | 8 years | 8 years | |
Weighted average discount rate, operating leases | 4.70% | 4.70% | |
Weighted average discount rate, financing leases | 3.10% | 3.10% |
DEBT - Additional Information (
DEBT - Additional Information (Details) - USD ($) | Apr. 02, 2018 | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Proceeds from issuance of debt | $ 980,000,000 | ||
Line of Credit | Federal Funds Effective Swap Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Line of Credit | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.50% | ||
Line of Credit | Adjusted LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Morgan Stanley Senior Funding, Inc. | Secured Debt | |||
Debt Instrument [Line Items] | |||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | $ 26,300,000 | $ 28,200,000 | |
Morgan Stanley Senior Funding, Inc. | Secured Debt | |||
Debt Instrument [Line Items] | |||
Face amount | $ 980,000,000 | 100,000,000 | |
Morgan Stanley Senior Funding, Inc. | Secured Debt | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Face amount | 99,000,000 | ||
Morgan Stanley Senior Funding, Inc. | Secured Debt | Line of Credit | |||
Debt Instrument [Line Items] | |||
Face amount | $ 1,000,000 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Credit facilities | $ 9,800 | $ 9,800 |
Credit facilities, less current portion | 936,583 | 939,514 |
Morgan Stanley Senior Funding, Inc. | Secured Debt | ||
Line of Credit Facility [Line Items] | ||
2018 Term Facility | 946,383 | 949,314 |
Credit facilities | 9,800 | 9,800 |
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | $ 26,300 | $ 28,200 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Short-term investments: | ||
Debt Securities, Available-for-sale, Current | $ 503 | $ 7,000 |
Corporate notes and bonds | ||
Short-term investments: | ||
Debt Securities, Available-for-sale, Current | 503 | 7,000 |
Recurring | ||
Liabilities / Other Current Liabilities: | ||
Total | (30,065) | (689) |
Recurring | Corporate notes and bonds | ||
Short-term investments: | ||
Debt Securities, Available-for-sale, Current | 503 | 7,000 |
Recurring | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 41,038 | 34,064 |
Recurring | Level 1 | ||
Liabilities / Other Current Liabilities: | ||
Total | 41,038 | 34,064 |
Recurring | Level 1 | Corporate notes and bonds | ||
Short-term investments: | ||
Debt Securities, Available-for-sale, Current | 0 | 0 |
Recurring | Level 1 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 41,038 | 34,064 |
Recurring | Level 2 | ||
Liabilities / Other Current Liabilities: | ||
Total | (38,762) | (2,929) |
Recurring | Level 2 | Corporate notes and bonds | ||
Short-term investments: | ||
Debt Securities, Available-for-sale, Current | 503 | 7,000 |
Recurring | Level 2 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Recurring | Level 3 | ||
Liabilities / Other Current Liabilities: | ||
Total | (32,341) | (31,824) |
Recurring | Level 3 | Corporate notes and bonds | ||
Short-term investments: | ||
Debt Securities, Available-for-sale, Current | 0 | 0 |
Recurring | Level 3 | Money market funds | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Other Current Liabilities [Member] | Recurring | Contingent consideration | ||
Liabilities / Other Current Liabilities: | ||
Contingent consideration | (17,881) | (15,182) |
Other Current Liabilities [Member] | Recurring | Interest Rate Swap | ||
Liabilities / Other Current Liabilities: | ||
Interest rate swaps | (6,465) | (1,778) |
Other Current Liabilities [Member] | Recurring | Level 1 | Contingent consideration | ||
Liabilities / Other Current Liabilities: | ||
Contingent consideration | 0 | 0 |
Other Current Liabilities [Member] | Recurring | Level 1 | Interest Rate Swap | ||
Liabilities / Other Current Liabilities: | ||
Interest rate swaps | 0 | 0 |
Other Current Liabilities [Member] | Recurring | Level 2 | Contingent consideration | ||
Liabilities / Other Current Liabilities: | ||
Contingent consideration | 0 | 0 |
Other Current Liabilities [Member] | Recurring | Level 2 | Interest Rate Swap | ||
Liabilities / Other Current Liabilities: | ||
Interest rate swaps | (6,465) | (1,778) |
Other Current Liabilities [Member] | Recurring | Level 3 | Contingent consideration | ||
Liabilities / Other Current Liabilities: | ||
Contingent consideration | (17,881) | (15,182) |
Other Current Liabilities [Member] | Recurring | Level 3 | Interest Rate Swap | ||
Liabilities / Other Current Liabilities: | ||
Interest rate swaps | 0 | 0 |
Other Liabilities [Member] | Recurring | Contingent consideration | ||
Liabilities / Other Current Liabilities: | ||
Contingent consideration | (14,460) | (16,642) |
Other Liabilities [Member] | Recurring | Interest Rate Swap | ||
Liabilities / Other Current Liabilities: | ||
Interest rate swaps | (32,800) | (8,151) |
Other Liabilities [Member] | Recurring | Level 1 | Contingent consideration | ||
Liabilities / Other Current Liabilities: | ||
Contingent consideration | 0 | 0 |
Other Liabilities [Member] | Recurring | Level 1 | Interest Rate Swap | ||
Liabilities / Other Current Liabilities: | ||
Interest rate swaps | 0 | 0 |
Other Liabilities [Member] | Recurring | Level 2 | Contingent consideration | ||
Liabilities / Other Current Liabilities: | ||
Contingent consideration | 0 | 0 |
Other Liabilities [Member] | Recurring | Level 2 | Interest Rate Swap | ||
Liabilities / Other Current Liabilities: | ||
Interest rate swaps | (32,800) | (8,151) |
Other Liabilities [Member] | Recurring | Level 3 | Contingent consideration | ||
Liabilities / Other Current Liabilities: | ||
Contingent consideration | (14,460) | (16,642) |
Other Liabilities [Member] | Recurring | Level 3 | Interest Rate Swap | ||
Liabilities / Other Current Liabilities: | ||
Interest rate swaps | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Unobs
FAIR VALUE MEASUREMENTS - Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Contingent consideration liability | $ (517) | $ (8,700) | |
Level 3 | |||
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Balance, beginning of period | (31,824) | (7,400) | |
Fair value adjustment(1)(2) | (165) | (6,159) | |
Accretion Expense | (352) | (1,053) | |
Total | (32,341) | ||
Contingent Consideration Attributable to Acquisition | Level 3 | |||
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Contingent consideration liability | 0 | $ 17,212 | |
General and administrative | Level 3 | |||
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Fair value adjustment(1)(2) | $ 5,600 | 100 | |
Goodwill [Member] | Level 3 | |||
Fair Value Measurements Using Unobservable Inputs (Level 3) | |||
Fair value adjustment(1)(2) | $ 600 | $ 300 |
FAIR VALUE MEASUREMENTS - Debt
FAIR VALUE MEASUREMENTS - Debt (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Additional Fair Value Elements [Abstract] | |
Carrying value | $ 946,383 |
Fair value | $ 945,200 |
FAIR VALUE MEASUREMENTS - Inter
FAIR VALUE MEASUREMENTS - Interest Rate Swaps Narrative (Details) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Derivatives, Fair Value [Line Items] | |
Estimate of time to transfer | 12 months |
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, net | $ 6,600,000 |
Interest Rate Swap | |
Derivatives, Fair Value [Line Items] | |
Amount of hedged item | $ 700,000,000 |
Derivative, fixed interest rate | 2.80% |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair Value of Interest Rate Swaps (Details) - Interest Rate Swap - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Derivative Liability [Abstract] | ||||
Gain (Loss) recognized in OCI | $ (18,059) | $ (30,467) | $ (199) | |
(Gain) Loss reclassified from OCI | 602 | 1,131 | $ 838 | |
Other Current Liabilities [Member] | ||||
Derivative Liability [Abstract] | ||||
Fair Value | (6,465) | (6,465) | $ (1,778) | |
Other Liabilities [Member] | ||||
Derivative Liability [Abstract] | ||||
Fair Value | $ (32,800) | $ (32,800) | $ (8,151) |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Feb. 20, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Amount awarded to other party | $ 17 |
Loss related to litigation settlement | $ 1.7 |
BUSINESS COMBINATIONS - Additio
BUSINESS COMBINATIONS - Additional Information (Details) - ABILITY Network $ in Thousands | Apr. 02, 2018USD ($)facility | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||
Consideration transferred | $ 1,191,050 | |
Number of provider facilities | facility | 44,000 | |
Acquisition related costs | $ 6,500 |
BUSINESS COMBINATIONS - Stated
BUSINESS COMBINATIONS - Stated Purchase Price and Fair Value of the Purchase Price (Details) - ABILITY Network $ in Thousands | Apr. 02, 2018USD ($) |
Business Acquisition [Line Items] | |
Purchase Price | $ 1,220,800 |
Working capital adjustment | (630) |
Shareholder payable adjustment | 880 |
Subtotal | 1,221,050 |
Restricted stock marketability discount | (30,000) |
Total fair value purchase price | $ 1,191,050 |
BUSINESS COMBINATIONS - Fair Va
BUSINESS COMBINATIONS - Fair Value of Consideration Transferred (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Business Acquisition [Line Items] | |||
Contingent consideration | $ (517) | $ (8,700) | |
ABILITY Network | |||
Business Acquisition [Line Items] | |||
Cash | $ 1,107,220 | ||
Issuance of Class A common stock | 70,000 | ||
Contingent consideration | 14,460 | ||
Working capital adjustment | (630) | ||
Total fair value purchase price | $ 1,191,050 |
BUSINESS COMBINATIONS - Purchas
BUSINESS COMBINATIONS - Purchase Price Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended | ||
Sep. 30, 2018 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Apr. 02, 2018 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 955,881 | $ 956,029 | |||
Income tax receivable | $ 200 | ||||
ABILITY Network | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 23,850 | ||||
Accounts receivable | 16,739 | ||||
Income tax receivable | 688 | ||||
Prepaid expenses and other current assets | 3,025 | ||||
Property and equipment | 3,095 | ||||
Goodwill | 770,949 | ||||
Intangible assets | 490,000 | ||||
Other assets | 1,252 | ||||
Accounts payable and accrued expenses | (6,863) | ||||
Deferred revenue | (7,000) | ||||
Other current liabilities | (507) | ||||
Other liabilities | (5,291) | ||||
Deferred tax liabilities | (98,887) | ||||
Total consideration transferred | $ 1,191,050 | ||||
Intangible asset adjustment | $ 23,000 | $ (23,000) | |||
Goodwill | 1,800 | ||||
Deferred tax liability | 5,000 | ||||
Shareholder payable adjustment | 900 | ||||
Customer Relationships | ABILITY Network | |||||
Business Acquisition [Line Items] | |||||
Deferred tax liability | $ 7,500 |
BUSINESS COMBINATIONS - Identif
BUSINESS COMBINATIONS - Identified Intangible Assets (Details) - ABILITY Network - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2019 | Mar. 31, 2019 | Apr. 02, 2018 | |
Business Acquisition [Line Items] | ||||
Intangible asset adjustment | $ 23,000 | $ (23,000) | ||
Fair Value | 490,000 | $ 513,000 | ||
Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible asset adjustment | (23,000) | |||
Fair Value | 385,000 | 408,000 | ||
Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Intangible asset adjustment | 0 | |||
Fair Value | 86,000 | 86,000 | ||
Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible asset adjustment | 0 | |||
Fair Value | $ 19,000 | $ 19,000 | ||
Minimum | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 12 years | |||
Minimum | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 12 years | |||
Minimum | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 16 years | |||
Maximum | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 14 years | |||
Maximum | Technology-Based Intangible Assets | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 14 years | |||
Maximum | Trade Names | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 18 years |
BUSINESS COMBINATIONS - Results
BUSINESS COMBINATIONS - Results of Acquiree (Details) - ABILITY Network $ in Thousands | 3 Months Ended |
Jun. 30, 2018USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 37,520 |
Income before taxes | $ 5,798 |
BUSINESS COMBINATIONS - Proform
BUSINESS COMBINATIONS - Proforma Impact (Details) - ABILITY Network - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | ||
Revenue | $ 152,798 | $ 282,917 |
Loss before taxes | $ (16,543) | $ (43,619) |