Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 28, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | EngageSmart, Inc. | ||
Entity Central Index Key | 0001863105 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 162,194,210 | ||
Entity Public Float | $ 0 | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity File Number | 001-40835 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-2785225 | ||
Entity Address, Address Line One | 30 Braintree Hill Office Park | ||
Entity Address, Address Line Two | Suite 101 | ||
Entity Address, City or Town | Braintree | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02184 | ||
City Area Code | 781 | ||
Local Phone Number | 848-3733 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Security 12b Title | Common stock, $0.001 par value per share | ||
Trading Symbol | ESMT | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
ICFR Auditor Attestation Flag | false | ||
Documents Incorporated by Reference | Portions of the registrant’s proxy statement for the 2022 annual meeting of stockholders to be filed with the SEC within 120 days after the fiscal year ended December 31, 2021, are incorporated herein by reference in Part III of this Form 10-K. | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Location | Boston, MA, United States | ||
Auditor Firm ID | 34 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 254,294 | $ 29,350 |
Accounts receivable, net of allowance for doubtful accounts of $203 and $160 as of December 31, 2021 and December 31, 2020, respectively | 10,266 | 8,100 |
Unbilled receivables | 3,441 | 2,973 |
Prepaid expenses and other current assets | 7,617 | 3,490 |
Total current assets | 275,618 | 43,913 |
Property and equipment, net | 10,968 | 6,211 |
Goodwill | 425,677 | 425,677 |
Acquired intangible assets, net | 87,920 | 103,520 |
Other assets | 3,811 | 1,837 |
Total assets | 803,994 | 581,158 |
Current liabilities: | ||
Accounts payable | 2,090 | 3,137 |
Accrued expenses and other current liabilities | 25,229 | 15,966 |
Contingent consideration liability | 2,800 | 1,867 |
Deferred revenue | 6,792 | 4,776 |
Notes payable to related parties | 5,900 | |
Total current liabilities | 36,911 | 31,646 |
Long-term debt, net of issuance costs | 110,200 | |
Deferred income taxes | 4,224 | 5,471 |
Contingent consideration liability, net of current portion | 1,498 | |
Deferred revenue, net of current portion | 232 | 201 |
Other long-term liabilities | 5,528 | 3,482 |
Total liabilities | 46,895 | 152,498 |
Commitments and contingencies (Note 14) | ||
Stockholders'/ members' equity: | ||
Preferred stock, par value $0.001 per share, 10,000,000 shares authorized and no shares issued and outstanding as of September 30, 2021, and no shares authorized, issued and outstanding as of December 31, 2020 | ||
Common stock, value | 162 | |
Additional paid-in capital | 787,043 | |
Accumulated stockholders'/members' deficit | (30,106) | (21,141) |
Total members' equity | 428,660 | |
Total stockholders’/members' equity | 757,099 | |
Total liabilities and stockholders’/members' equity | $ 803,994 | 581,158 |
Class A-1 Common Shares | ||
Stockholders'/ members' equity: | ||
Common stock, value | 293,286 | |
Class A-2 Common Shares | ||
Stockholders'/ members' equity: | ||
Common stock, value | 136,559 | |
Class A-3 Common Shares | ||
Stockholders'/ members' equity: | ||
Common stock, value | $ 19,956 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts | $ 203 | $ 160 |
Preferred stock, par value per share | $ 0.001 | |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | |
Common stock, shares authorized | 650,000,000 | 0 |
Common stock, shares, issued | 161,860,980 | 0 |
Common stock, shares, outstanding | 161,860,980 | 0 |
Common Stock | Class A-1 Common Shares | ||
Common unit, par value | $ 0 | $ 0 |
Common unit, issued | 0 | 97,209,436 |
Common unit, outstanding | 0 | 97,209,436 |
Common Stock | Class A-2 Common Shares | ||
Common unit, par value | $ 0 | $ 0 |
Common unit, issued | 0 | 45,262,340 |
Common unit, outstanding | 0 | 45,262,340 |
Common Stock | Class A-3 Common Shares | ||
Common unit, par value | $ 0 | $ 0 |
Common unit, issued | 0 | 5,010,888 |
Common unit, outstanding | 0 | 5,010,888 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 216,280 | $ 146,557 |
Cost of revenue | 55,122 | 37,593 |
Gross profit | 161,158 | 108,964 |
Operating expenses: | ||
General and administrative | 45,533 | 26,866 |
Selling and marketing | 72,968 | 48,581 |
Research and development | 33,382 | 20,788 |
Contingent consideration expense | 1,303 | 257 |
Restructuring (reversal) charges | (241) | 2,434 |
Amortization of intangible assets | 9,448 | 9,390 |
Total operating expenses | 162,393 | 108,316 |
(Loss) income from operations | (1,235) | 648 |
Other income (expense), net: | ||
Interest expense, including related party interest (Note 17) | (8,228) | (9,908) |
Other income (expense), net | (124) | (44) |
Total other income (expense), net | (8,352) | (9,952) |
Loss before income taxes | (9,587) | (9,304) |
Benefit from income taxes | (622) | (2,626) |
Net loss and comprehensive loss | $ (8,965) | $ (6,678) |
Net loss per share: | ||
Basic | $ (0.06) | $ (0.05) |
Diluted | $ (0.06) | $ (0.05) |
Weighted-average number of common shares outstanding: | ||
Basic | 151,609,440 | 145,647,226 |
Diluted | 151,609,440 | 145,647,226 |
Consolidated Statements of Memb
Consolidated Statements of Members' Equity - USD ($) $ in Thousands | Total | Common StockClass A1 Common Shares [Member] | Common StockClass A2 Common Shares [Member] | Common StockClass A3 Common Shares [Member] | Accumulated Members' Deficit |
Balances at Dec. 31, 2019 | $ 429,716 | $ 293,286 | $ 136,559 | $ 14,334 | $ (14,463) |
Balance, shares at Dec. 31, 2019 | 97,209,436 | 45,262,340 | 502,545 | ||
Exercise of equity-based options | 4,981 | $ 4,981 | |||
Exercise of equity-based options, shares | 4,508,343 | ||||
Equity-based compensation expense | 641 | $ 641 | |||
Net loss | (6,678) | (6,678) | |||
Balances at Dec. 31, 2020 | 428,660 | $ 293,286 | $ 136,559 | $ 19,956 | (21,141) |
Balance, shares at Dec. 31, 2020 | 97,209,436 | 45,262,340 | 5,010,888 | ||
Exercise of equity-based options | $ 1,063 | $ 1,063 | |||
Exercise of equity-based options, shares | 832,791 | 573,726 | |||
Net loss | $ (8,965) | $ (8,965) | |||
Balance, shares at Dec. 31, 2021 | 0 | 0 | 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Common StockClass A-1 Common Shares | Common StockClass A-2 Common Shares | Common StockClass A-3 Common Shares | Additional Paid-in Capital | Accumulated Members' Deficit |
Balances at Dec. 31, 2019 | $ 429,716 | $ 293,286 | $ 136,559 | $ 14,334 | $ (14,463) | ||
Balance, shares at Dec. 31, 2019 | 97,209,436 | 45,262,340 | 502,545 | ||||
Exercise of equity-based options | 4,981 | $ 4,981 | |||||
Exercise of equity-based options, shares | 4,508,343 | ||||||
Net loss | (6,678) | (6,678) | |||||
Balances at Dec. 31, 2020 | 428,660 | $ 293,286 | $ 136,559 | $ 19,956 | (21,141) | ||
Balance, shares at Dec. 31, 2020 | 97,209,436 | 45,262,340 | 5,010,888 | ||||
Exercise of equity-based options | $ 1,063 | $ 1,063 | |||||
Exercise of equity-based options, shares | 832,791 | 573,726 | |||||
Repurchase and retirement of common shares | $ (51) | $ 51 | |||||
Repurchase and retirement of common shares, shares | 74,529 | ||||||
Conversion of Class A-1, A-2 and A-3 common shares into common stock in connection with initial public offering (Note 10) | $ 148 | $ (293,286) | $ (136,559) | $ (20,968) | $ 450,665 | ||
Conversion of Class A-1, A-2 and A-3 common shares into common stock in connection with initial public offering (Note 10), shares | 147,981,861 | (97,209,436) | (45,262,340) | (5,510,085) | |||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions | 331,989 | $ 14 | 331,975 | ||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions, shares | 13,620,054 | ||||||
Costs incurred in connection with initial public offering | (5,579) | 5,579 | |||||
Exercise of stock options | 514 | 514 | |||||
Exercise of stock options, shares | 259,065 | ||||||
Stock/equity-based compensation expense | 9,468 | 9,468 | |||||
Net loss | (8,965) | (8,965) | |||||
Balance, shares at Dec. 31, 2021 | 0 | 0 | 0 | ||||
Balance, common, shares at Dec. 31, 2021 | 161,860,980 | ||||||
Balances at Dec. 31, 2021 | $ 757,099 | $ 162 | $ 787,043 | $ (30,106) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (8,965) | $ (6,678) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization expense | 18,190 | 16,811 |
Stock/equity-based compensation expense | 9,468 | 641 |
Contingent consideration expense | 1,303 | 257 |
Deferred income taxes | (1,247) | (2,775) |
Loss on disposal of property and equipment | 48 | |
Non-cash interest expense, including loss on extinguishment of debt | 4,125 | 4,017 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (4,127) | (617) |
Accounts receivable, net | (2,166) | (2,190) |
Unbilled receivables | (468) | (1,813) |
Other assets | (864) | (346) |
Accounts payable | (1,072) | 1,385 |
Accrued expenses and other current liabilities | 8,856 | 7,309 |
Deferred revenue | 2,047 | 526 |
Other long-term liabilities | (707) | 3,118 |
Net cash provided by operating activities | 24,421 | 19,645 |
Cash flows from investing activities: | ||
Acquisition of businesses, net of cash acquired | (25,518) | |
Purchases of property and equipment, including costs capitalized for development of internal-use software | (4,521) | (5,392) |
Net cash used in investing activities | (4,521) | (30,910) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions | 331,989 | |
Proceeds from issuance of common stock to General Atlantic (IC), L.P. in connection with the Corporate Conversion (Note 11) | 43,236 | |
Payment to settle fractional shares related to Class A-2 shareholders in connection with the Corporate Conversion (Note 11) | (43,236) | |
Proceeds from issuance of long-term debt | 31,250 | |
Repayment of long-term debt | (114,174) | |
Payment of debt issuance costs | (1,146) | |
Payment of debt extinguishment costs | (90) | |
Payments of related party notes | (5,900) | |
Payments of contingent consideration | (1,868) | (1,500) |
Proceeds from exercise of stock/equity-based options | 1,577 | 4,981 |
Repurchase and retirement of common shares | (51) | |
Payment of initial public offering costs | (5,293) | |
Net cash provided by financing activities | 205,044 | 34,731 |
Net increase in cash, cash equivalents and restricted cash | 224,944 | 23,466 |
Cash, cash equivalents and restricted cash at beginning of period | 29,650 | 6,184 |
Cash, cash equivalents and restricted cash at end of period | 254,594 | 29,650 |
Reconciliation of cash, cash equivalents, and restricted cash: | ||
Cash and cash equivalents | 254,294 | 29,350 |
Restricted cash within other assets | $ 300 | $ 300 |
Restricted Cash and Cash Equivalents, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets Noncurrent | Other Assets Noncurrent |
Total cash, cash equivalents, and restricted cash | $ 254,594 | $ 29,650 |
Supplemental cash flow information: | ||
Cash paid for interest | 5,350 | 5,662 |
Cash paid for taxes | 206 | 78 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Additions to property and equipment included in accounts payable and accrued expenses | 178 | 59 |
Deferred initial public offering costs included in accrued expenses | 286 | |
Debt issuance costs included in accrued expenses | $ 23 | |
Fair value of contingent consideration recorded in purchase accounting | $ 4,608 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation EngageSmart, Inc. and its subsidiaries (together referred to herein as the “Company” or “EngageSmart”) is a leading provider of vertically tailored customer engagement software and integrated payments solutions. EngageSmart offers single instance, multi-tenant, true Software-as-a-Service (“SaaS”) vertical solutions, including SimplePractice, InvoiceCloud, HealthPay24 and DonorDrive, that are designed to simplify our customers' engagement with their clients by driving digital adoption and self-service. The Company serves customers across several core verticals: Health & Wellness, Government, Utilities, Financial Services, Healthcare and Giving. EngageSmart's solutions are purpose-built for each of our verticals and they simplify and automate mission-critical workflows such as scheduling, client onboarding, client communication, paperless billing, and electronic payment processing. EngageSmart is headquartered in Braintree, Massachusetts with additional locations throughout the United States. Initial Public Offering On September 27, 2021, the Company completed its initial public offering ("IPO"), in which the Company issued and sold 13,620,054 shares of common stock at a public offering price of $ 26.00 per share, including 620,054 shares issued upon the exercise of the underwriters' option to purchase additional shares. The Company raised net proceeds of $ 326.4 million, after deducting the underwriting discount of $ 22.1 million and offering expenses of $ 5.6 million. Additionally, certain existing shareholders sold an aggregate of 3,112,446 shares in the IPO at the same price, resulting in net proceeds to the selling stockholders of $ 75.9 million. On September 27, 2021, the Company used a portion of the net proceeds from its IPO to repay in full the outstanding borrowings of $ 114.2 million under its Credit Facilities, as defined below. Prior to the IPO, deferred offering costs, which consist of legal, accounting, consulting and other third-party fees that were directly associated with the IPO, were capitalized within other assets on the Company's consolidated balance sheets. Upon the completion of the IPO, these costs were offset against the proceeds from the IPO and recorded as a reduction to additional paid-in capital. Following the Company's IPO, General Atlantic (IC), L.P. ("General Atlantic") controls more than 50 % of the combined voting power of the Company's outstanding common stock, and the Company is considered a "controlled company" within the meaning of the corporate governance standards of the New York Stock Exchange ("NYSE"). Corporate Conversion Immediately prior to effectiveness of the Company's IPO registration statement on Form S-1, EngageSmart LLC, a Delaware limited liability company, converted into a Delaware corporation pursuant to a statutory conversion, which changed the Company's name to EngageSmart, Inc. ("Corporate Conversion"). Refer to Note 11 - Stockholders' Equity for further discussion. Stock Split On September 10, 2021, the Company effected a 1-for- 3 forward stock split of its common shares. In connection with the forward stock split, each issued and outstanding common share, automatically and without action on the part of the holders, became three common shares. All share, per share and related information presented in the consolidated financial statements and accompanying notes have been retroactively adjusted, where applicable, to reflect the impact of the forward stock split. Basis of Presentation EngageSmart, Inc., formerly EngageSmart, LLC prior to the Corporate Conversion, was formed on December 7, 2018 as Hancock Parent, LLC. On December 11, 2018, EngageSmart, LLC entered a series of arrangements to indirectly acquire, through its wholly owned subsidiary Hancock Midco, LLC, 100 % of the equity interest in Invoice Cloud, Inc (the “InvoiceCloud Acquisition”). On February 11, 2019, Hancock Merger Sub, Inc., a transitory merger company of Hancock Midco, LLC, merged into InvoiceCloud, with InvoiceCloud continuing as the surviving corporation and a wholly owned subsidiary of Hancock Midco, LLC. For all the periods reported in these consolidated financial statements, the Company has not and does not have any material revenue-generating operations on a standalone basis, and all the material revenue-generating operations of the Company are carried out by its subsidiaries. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation. Impact of the COVID-19 Pandemic The Company is subject to risks and uncertainties relating to the ongoing outbreak of the novel strain of coronavirus (“COVID-19”), which the World Health Organization declared a pandemic in March 2020. The COVID-19 pandemic has continued to spread throughout the United States and the world and has resulted in authorities implementing numerous measures to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns. Work-from-home and other measures have introduced additional operational risks, including cybersecurity risks, and may adversely affect the way the Company and its customers and insurance providers conduct business. In response to the COVID-19 pandemic, the Company limited corporate travel and reduced certain professional services. In addition, the Company implemented remote working capabilities and measures that focused on the safety of its employees. The Company continues to monitor the rapidly evolving conditions and circumstances as well as guidance from international and domestic authorities, including public health authorities. The Company does not currently foresee the need to take additional actions, however it continues to evaluate the ongoing impact of COVID-19 as facts and circumstances change. The COVID-19 pandemic has not had a material effect on the Company’s revenues and financial results during the periods presented in the financial statements, although the magnitude and duration of the ultimate effects as a result of the COVID-19 pandemic are not possible to predict at this time. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, revenue recognition, valuation of goodwill and intangible assets, valuation of contingent consideration liabilities, stock-based compensation, and income taxes. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as changes in circumstances, facts and experience arise. Actual results may differ from those estimates or assumptions. Risk of Concentrations of Credit and Significant Customers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. At times, the Company may maintain cash balances in excess of federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Significant customers are those that accounted for 10 % or more of the Company’s total revenue or accounts receivable during any period presented herein. During the years ended December 31, 2021 and 2020, no customer accounted for 10 % or more of revenue. As of December 31, 2021 and 2020, no customer accounted for 10 % or more of accounts receivable. Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be the equivalent of cash for the purpose of balance sheet and statement of cash flows presentation. Restricted Cash As of December 31, 2021 and 2020, restricted cash consisted of $ 0.3 million deposited in a separate restricted bank account as collateral required for one of the Company’s operating bank accounts. This amount is classified within other assets on the Company’s consolidated balance sheets. Accounts Receivable, Net and Unbilled Receivables Accounts receivable are presented net of an allowance for doubtful accounts, which is an estimate of amounts that may not be collectible. The allowance for doubtful accounts is the best estimate of the amount of probable credit losses in the existing accounts receivable balance. An allowance for doubtful accounts is established when it is probable a credit loss has been incurred based on historical collection information, a review of major customer accounts receivable balances, and an assessment of current economic conditions. The Company writes off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues collection of the receivable. As of December 31, 2021 and 2020, the Company’s allowance for doubtful accounts was $ 0.2 million. During the years ended December 31, 2021 and 2020, the Company wrote off accounts receivable balances of $ 0.2 million and less than $ 0.1 million, respectively. Unbilled receivables represent amounts for which payment of consideration is subject only to the passage of time and are assessed for collectability at each reporting period. Fair Value Measurements Certain assets and liabilities are carried at fair value according to the provisions of ASC 820, Fair Value Measurements and Disclosures , (“ASC 820”). Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. Refer to Note 6 – Fair Value Measurements for additional details. Segment Information Operating segments are defined as components of a business for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s chief executive officer ("CEO"), in deciding how to allocate resources and assess performance. The CODM views the Company's operations and manages its business through two reportable segments: Enterprise Solutions and SMB Solutions. Note 18 - Segment and Geographic Information provides financial information regarding the Company's reportable segments and geographic operations and revenue. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset as follows: Asset Classification Estimated Useful Lives Computer equipment and purchased software 3 years Internal-use software 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life or remaining life of lease Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected on the consolidated statement of operations and comprehensive loss. Expenditures for repairs and maintenance are charged to expense as incurred. Cloud Computing Arrangements The Company periodically enters into cloud computing arrangements to access and use third-party software in support of its operations. The Company assesses its cloud computing arrangements with vendors to determine whether the contract meets the definition of a service contract or software license. For cloud computing arrangements that meet the definition of a service contract, the Company capitalizes implementation costs incurred during the application development stage as a prepaid expense. The current and non-current portions of implementation costs are included within prepaid expenses and other current assets and other assets, respectively, on the Company's consolidated balance sheets. The Company amortizes the costs on a straight-line basis over the term of the contract. Costs related to data conversion, training and other maintenance activities are expensed as incurred. Business Combinations In accordance with ASC 805, Business Combinations (“ASC 805”), the Company recognizes tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets. The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair value. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair value of the assets acquired and the liabilities assumed. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations and comprehensive loss. Goodwill and Acquired Intangible Assets The Company records goodwill when consideration paid in a business acquisition exceeds the value of the net assets acquired. Goodwill is not amortized, but rather is tested for impairment annually at the reporting unit level, or more frequently if facts and circumstances warrant a review. The Company assesses both the existence of potential impairment and the amount of impairment loss, if any, by comparing the fair value of the reporting unit that includes goodwill with its carrying amount, including goodwill. To date, the Company has not identified any impairment to goodwill. Intangible assets are recorded at their estimated fair values at the date of acquisition. The Company amortizes acquired intangible assets over their estimated useful lives based on the pattern of consumption of the economic benefits or, if that pattern cannot be readily determined, on a straight-line basis. Valuation of Contingent Consideration Liabilities The Company’s acquisitions may provide for potential cash payments to former owners upon achievement of certain future performance targets. The Company estimates the fair value of these payments as of each respective acquisition date. The Company remeasures the fair value of the potential payments based upon the estimated achievement levels of the remaining targets at each subsequent reporting date until the liability is fully settled. Increases or decreases in the fair value of the contingent consideration liability are recorded through contingent consideration expense on the consolidated statements of operations and comprehensive loss. Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment and intangible assets with finite lives. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. If a long-lived asset group is tested for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. If the Company determines the long-lived asset group is not recoverable, an impairment loss is calculated as the excess of the carrying amount over the fair value. For the years ended December 31, 2021 and 2020, the Company did no t record any impairment losses on long-lived assets. Revenue The Company derives its revenue primarily from providing access to its SaaS solutions via subscription agreements and from transaction and usage-based fees for services provided through its solutions. To a lesser extent, the Company also generates revenue from the sale of implementation services, sale of on-demand learning courses and the sale of hardware. In accordance with ASU 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASC 606”), the Company recognizes revenue following a five-step model, as outlined below: • Identification of the contract(s) with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when (or as) performance obligations are satisfied. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is reported net of applicable sales and use tax and is recognized when control of these services or products are transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the contract’s performance obligations. Performance Obligations and Timing of Revenue Recognition Revenue from the Company’s subscription services as well as from its transaction and usage-based services represents a single promise to provide continuous access (i.e., a stand-ready obligation) to its software solutions in the form of a service through one of the Company’s hosted data providers. Customers do not have the right or practical ability to take possession of the software and use it on their own or another entity’s hardware. For subscription services, as each day of providing access to the software is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, the Company has determined that its subscription services arrangements include a single performance obligation comprised of a series of distinct services. Revenue from the Company’s subscription services is recognized over time on a ratable basis over the contract term beginning on the date that the Company’s service is made available to the customer. Subscription periods, while primarily monthly, range from monthly to multi-year, are billed in advance and are non-cancellable. For transaction and usage-based services, since the timing and quantity of transactions to be facilitated by the Company are not determinable, the Company views transaction processing services as an obligation to stand ready to facilitate as many transactions as the customer requests. Under a stand-ready obligation, the evaluation of the nature of a performance obligation is focused on each time increment rather than the underlying activities. As each day of providing these services is substantially the same and the client simultaneously receives and consumes the benefits as services are provided, these services are viewed as a single performance obligation comprised of a series of distinct daily services. The Company satisfies its performance obligation as these services are provided. Revenue is recognized in the month the service is completed. The majority of transaction and usage-based services arrangements are priced as a percentage of transaction value or a specified fee per transaction. Given the nature of the promise is based on unknown quantities or outcomes of services to be performed over the contract term, the total consideration is determined to be variable consideration. The variable consideration relates specifically to the Company’s effort to transfer each distinct daily service, and as such, the Company allocates the variable consideration earned to the distinct day in which those activities are performed. The Company recognizes these fees as revenue in the period earned, at the point in which the variable amount is known. In determining the amount of consideration received related to these services, the Company applied the principal-agent guidance in ASC 606 and assessed whether it controls services performed by other intermediaries. As it relates to transaction and usage-based services, the Company’s software solutions provide an interface that allows customers to integrate with a variety of payment processors to route and clear transactions through applicable payment networks. As third parties are involved in the transfer of goods or services to customers, the Company considers the nature of each specific promised good or service and applies judgment to determine whether the Company controls the good or service before it is transferred to the customer or whether the Company is acting as an agent of the third party. To determine whether or not the Company controls the good or service before it is transferred to the customer, the Company assessed indicators including whether the Company or the third party is primarily responsible for fulfillment and which party has discretion in determining pricing for the good or service, as well as other considerations. Based on this assessment, the Company determined that EngageSmart does not control the services performed by card networks, sponsor banks and credit card processors as each of these parties is the primary obligor for their portion of payment and transaction processing services performed. Therefore, transaction usage-based service revenue is recognized net of any fees owed to these intermediaries. Incremental Costs of Obtaining a Contract with a Customer The Company assesses the costs of obtaining contracts with customers according to the provisions of ASC 340-40, Other Assets and Deferred Costs—Contracts with Customers . The Company capitalizes incremental costs incurred in obtaining contracts with customers if the amortization period is greater than one year . For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. The Company’s incremental costs of obtaining a contract consist of sales commissions paid to employees for new bookings and in certain situations, upon the go-live date for a new customer. Sales commissions are not paid on contract renewals. Sales commissions (related to new bookings and go-lives) are deferred and amortized on a straight-line basis over the period of benefit, which the Company has estimated to be five years for initial contracts. The period of benefit was determined based on an average customer contract term, expected customer life, and expected useful life of its related technology. Reserve for Sales Refunds and Credits The Company maintains a reserve for sales refunds and credits to customers for which the Company estimates based upon historical experience. The reserve for sales refunds and credits is recorded as a reduction in revenue. As of December 31, 2021 and 2020, the Company’s allowance for sales refunds and credits was $ 0.3 million, included within accrued expenses and other current liabilities on the consolidated balance sheets. Deferred Financing Costs The Company capitalizes certain legal and other third-party fees that are directly associated with obtaining access to capital via credit facilities. Deferred financing costs incurred in connection with obtaining access to capital are recorded in other assets and are amortized on a straight-line basis over the term of the credit facility. Deferred financing costs related to a recognized debt liability are recorded as a reduction of the carrying amount of the debt liability and amortized to interest expense over the repayment term. Deferred Rent Payment escalations, rent holidays and other lease incentives that may be included in lease agreements are accrued or deferred as appropriate such that rent expense for each lease is recognized on a straight-line basis over the respective lease term. Adjustments for such items are recorded as deferred rent and amortized over the respective lease terms. The short-term portion of the deferred rent is included within accrued expenses and other current liabilities and the long-term portion is included within other long-term liabilities on the accompanying consolidated balance sheets. Research and Development Research and development expenses consist primarily of personnel-related expenses, third-party consulting costs, and costs for software tools for product management and software development. Research and development costs are expensed as incurred, except for certain costs which are capitalized in connection with the development of the Company’s internal-use software and websites. The Company accounts for its software and website development costs in accordance with the guidance in ASC 350-40, Internal-Use Software and ASC 350-50, Website Development Costs . The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the application is substantially complete and ready for its intended use, at which point such costs are amortized over the estimated useful life of three years . Capitalized software costs are included within property and equipment, net on the Company's consolidated balance sheets. Advertising Costs The Company expenses advertising costs as incurred and such costs are included in selling and marketing expense in the statements of operations and comprehensive loss. During the years ended December 31, 2021 and 2020, advertising expense totaled $ 9.7 million and $ 6.7 million, respectively. Costs Associated with Exit Activities The Company records costs associated with exit activities in accordance with ASC 420 , Exit of Disposal Cost Obligations (“ASC 420”). Costs associated with exit activities include contract termination costs, including costs related to leased facilities to be abandoned or subleased, which are expensed in accordance with ASC 420 and are included in restructuring (reversal) charges on the consolidated statements of operations and comprehensive loss. Restructuring liabilities are recorded on the Company’s consolidated balance sheets within accrued expenses and other current liabilities and other long-term liabilities. Stock/Equity-Based Compensation The Company measures stock/equity-based compensation costs for awards with service-based vesting or performance-based vesting granted to employees, non-employees, and directors, on the grant date, based on the calculated fair value of the award, in accordance with ASC 718, Compensation - Stock Compensation ("ASC 718"). Compensation expense for the awards is recognized over the requisite service period for employees and directors and as services are delivered for non-employees, both of which are generally the vesting period of the respective award. The Company uses the straight-line method to record the expense of awards with only service-based vesting conditions. The Company uses the graded-vesting method to record the expense of awards with both service-based and performance-based vesting conditions, commencing once achievement of the performance condition becomes probable. The Company accounts for forfeitures of stock/equity-based awards as they occur. The Company classifies stock/equity-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing net loss by the sum of the weighted average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method. For periods in which the Company reports a net loss, diluted net loss per common share is the same as basic net loss per common share, since potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Income Taxes The Company is treated as a corporation for federal income tax purposes and is subject to taxation in the United States. In each reporting period, the Company’s tax provision includes the effects of consolidating the results of the operations of its subsidiaries. The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded within benefit from income taxes on the consolidated statements of operations and comprehensive loss. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 % likelihood of being realized upon ultimate settlement. Benefit from income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize most leases on their balance sheet as a right of use asset and a lease liability. In general, lease arrangements exceeding a twelve-month term must be recognized as assets and liabilities on the balance sheet. Under ASU 2016-02, a right of use asset and lease obligation is recorded for all leases, whether operating or financing, while the income statement reflects lease expense for operating leases and amortization/interest expense for financing leases. The FASB also issued ASU 2018-10, Codification Improvements to Topic 842 Leases , and ASU 2018-11, Targeted Improvements to Topic 842 Leases , which allows the new lease standard to be applied as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings rather than retroactive restatement of all periods presented. In June 2020, the FASB issued ASU No. 2020-05, which grants a one-year effective-date delay for nonpublic entities to annual reporting periods beginning after December 15, 2021 and to interim periods within fiscal years beginning after December 15, 2022. Early adoption continues to be permitted. The Company will adopt the new standard effective January 1, 2022 on a modified retrospective basis and will not restate comparative periods. The Company is currently evaluating the effect of the standard on its consolidated financial statements and expects that upon adoption a material lease liability and right of use asset will be recognized on its consolidated balance sheets. The Company's leases primarily relate to office space. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes may result in earlier recognition of credit losses. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which narrowed the scope and changed the effective date for non-public entities for ASU 2016-13. The FASB subsequently issued supplemental guidance within ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”). ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are Securities and Exchange Commission filers, excluding entities eligible to be smaller reporting companies, ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company plans to adopt the new standard effective January 1, 2022. The Company does not believe the adoption of ASU 2016-13 will have a material impact on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 simplifies the accounting for income taxes by adding guidance to reduce complexity in some areas while removing some exemptions to others, such as year-to-date loss limitations when interim-period losses exceed anticipated losses for the full year and requiring the reflection of enacted changes in tax laws in the annual effective tax rate in the interim period of the enactment date, among other changes. The Company plans to adopt the new standard effective January 1, 2022. The Company does not believe the adoption of ASU 2019-12 will have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which intends to address accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The amendments within ASU 2020-04 provide operational expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions to affected by reference rate reform if certain criteria are met. The amendments within ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The amendments in ASC 2020-04 are effective immediately and may be applied through December 31, 2022. As there are no current borrowings under the 2021 Revolving Credit Facility, as defined below, there is currently no impact related to the adoption of ASU 2020-04. If the Company draws down upon the 2021 Revolving Credit Facility, the Company will assess the impact of the adoption of this guidance on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). The amendments require contract assets and contract liabilities acquired in a business combination to be recognized in accordance with ASC 606 as if the acquirer had originated the contracts. The amendments in this updated are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of this new standard on its consolidated financial statements and related disclosures. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue | 3. Revenue Revenue Disaggregated The Company disaggregates revenue from contracts with customers by reportable segment and revenue type, as the Company believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors and is consistent with the manner in which the Company operates the business. The Company generates a significant majority of its revenue in the Enterprise Solutions segment from transaction and usage-based revenue and a significant majority of its revenue in the SMB Solutions segment from subscription revenue. The following table depicts disaggregated revenue by segment and revenue type (in thousands): Year Ended December 31, 2021 2020 Enterprise Solutions Transaction and usage-based $ 97,759 $ 74,395 Subscription 7,636 6,969 Other 2,154 2,580 Total Enterprise Solutions revenue 107,549 83,944 SMB Solutions Transaction and usage-based 33,360 17,957 Subscription 74,225 44,313 Other 1,146 343 Total SMB Solutions revenue 108,731 62,613 Total revenue $ 216,280 $ 146,557 Contract Assets and Liabilities Contract assets are rights to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditional on something other than the passage of time. Contract assets are transferred to accounts receivable once the rights become unconditional. The Company did no t have contract assets as of December 31, 2021 or December 31, 2020. Contract liabilities (deferred revenue) primarily consist of billings and payments received in advance of revenue recognition. The Company primarily bills and collects payments from customers for its services in advance on a monthly, quarterly or annual basis. Contract liabilities are recognized as revenue when services are performed and all other revenue recognition criteria have been met. Amounts expected to be recognized as revenue within 12 months of the balance sheet date are classified as current deferred revenue and amounts expected to be recognized as revenue beyond 12 months of the balance sheet date are classified as non-current deferred revenue. The Company had current deferred revenue of $ 6.8 million and $ 4.8 million as of December 31, 2021 and 2020, respectively. Non-current deferred revenue was $ 0.2 million as of December 31, 2021 and 2020. During the year ended December 31, 2021, the Company recognized revenue of $ 4.8 million from the deferred revenue balance as of December 31, 2020. During the year ended December 31, 2020, the Company recognized revenue of $ 4.0 million from the deferred revenue balance as of December 31, 2019. Remaining Performance Obligations ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. As permitted by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As described in Note 2 - Summary of Significant Accounting Policies , for contracts greater than one year in length, the Company's most significant performance obligations consist of variable consideration. Such variable consideration meets the specified criteria for the disclosure exclusion; therefore, the majority of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied is variable consideration that is not required for this disclosure. Incremental Costs of Obtaining a Contract with a Customer The Company’s incremental costs of obtaining a contract consist of sales commissions paid to employees for new bookings and in certain situations, upon the go-live date for a new customer. Deferred commissions are classified as current or non-current assets based on the timing the expense will be recognized. The current and non-current portions of deferred commissions are included within prepaid expenses and other current assets and other assets, respectively, on the Company’s consolidated balance sheets. The following table summarizes the activity related to capitalized costs to obtain a contract for the years ended December 31, 2021 and 2020 (in thousands): Capitalized costs to obtain a contract as of December 31, 2019 $ — New capitalized costs 627 Amortization of capitalized costs ( 28 ) Capitalized costs to obtain a contract as of December 31, 2020 $ 599 New capitalized costs 1,059 Amortization of capitalized costs ( 137 ) Capitalized costs to obtain a contract as of December 31, 2021 $ 1,521 As of December 31, 2021, the Company had $ 0.2 million and $ 1.3 million in current and non-current deferred costs of obtaining contracts with customers, respectively. As of December 31, 2020, the Company had $ 0.1 million and $ 0.5 million within current and non-current deferred costs of obtaining contracts with customers, respectively. Amortization expense is included within sales and marketing expense on the consolidated statements of operations and comprehensive loss. During the years December 31, 2021 and 2020, there were no impairment losses recognized related to capitalized costs to obtain a contract. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 4. Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing net loss by the sum of the weighted average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method. For the periods in which the Company incurs a net loss, the effect of the Company’s outstanding common stock equivalents is not included in the calculation of diluted net loss per share as the effect would be anti-dilutive. The following table sets forth the computation of basic and diluted net loss per share: Year Ended December 31, 2021 2020 (in thousands, except share and per share amounts) Numerator: Net loss $ ( 8,965 ) $ ( 6,678 ) Denominator: Weighted average common shares outstanding, basic 151,609,440 145,647,226 Effect of potential dilutive common shares — — Weighted average common shares outstanding, diluted 151,609,440 145,647,226 Net loss per share, basic $ ( 0.06 ) $ ( 0.05 ) Net loss per share, diluted $ ( 0.06 ) $ ( 0.05 ) The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because their inclusion would have had an anti-dilutive effect: Year Ended December 31, 2021 2020 Options to purchase common shares 9,822,179 9,333,218 Unvested restricted stock units 336,905 — Total 10,159,084 9,333,218 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination And Asset Acquisition [Abstract] | |
Acquisitions | 5. Acquisitions 2020 Acquisitions Track Your Hours, LLC On April 3, 2020, the Company consummated an equity purchase agreement with Track Your Hours, LLC (“TYH”) and its sole owner to acquire 100 % of the outstanding equity interests of TYH. TYH is a leading provider of software for tracking progress and hours for students and trainees who are in process of obtaining their licensure as marriage and family therapists, licensed clinical social workers, and licensed professional clinical counselors. The acquisition of TYH was accounted for as a purchase of a business under ASC 805. The total consideration for this acquisition was $ 5.5 million, comprised of $ 5.3 million of cash paid, net of cash acquired, and contingent consideration with a fair value of $ 0.2 million at the time of the acquisition. In allocating the total purchase consideration for this acquisition based on estimated fair values, the Company recorded goodwill of $ 3.2 million and identifiable intangible assets of $ 2.6 million. Goodwill is primarily attributable to future economic benefits expected to arise from the utilization of the intangible assets as well as the economic benefits expected from the workforce. Intangible assets acquired consisted of customer relationships valued using the income approach and developed technology and marketing/tradenames valued using a relief from royalty method. Goodwill resulting from this acquisition is not deductible for tax purposes. The operating results of TYH have been included in the consolidated financial statements beginning on the acquisition date, and pro forma information has not been presented as the operating results of TYH are not material. Acquisition-related costs related to the acquisition of TYH were not material for the periods presented. Payment Service Network, Inc. On January 2, 2020, the Company consummated a stock purchase agreement with Payment Service Network, Inc. (“PSN”) and certain other parties to acquire 100 % of the outstanding equity interests of PSN for a purchase price of $ 24.6 million. PSN is a SaaS electronic billing and payment provider that provides online billing and end-user communication across multiple industries, including utilities and municipalities. The PSN acquisition was accounted for as a purchase of a business under ASC 805 . Under the acquisition method of accounting, the assets and liabilities of PSN were recorded as of the acquisition date, at their respective fair values. The purchase consideration of $ 24.6 million reflected a net cash payment of $ 20.2 million, contingent consideration of $ 4.4 million representing the fair value of potential payments to the former shareholders of PSN, and a working capital adjustment of $ 0.1 million owed to the Company. The former shareholders of PSN are eligible to receive up to $ 6.5 million upon achievement of certain earnout targets. The Company recognized a contingent consideration liability equal to the acquisition date fair value of expected contingent payments. The Company remeasures the contingent consideration liability at each reporting period until the liability is fully settled and recognizes changes in fair value through contingent consideration expense within the Company's consolidated statements of operations and comprehensive loss. The Company uses a Monte Carlo simulation model in its estimates, and significant assumptions and estimates utilized in the model include the forecasted net recurring revenue, net recurring revenue volatility, and discount rate. During the years ended December 31, 2021 and 2020, the Company paid $ 1.9 million and $ 1.5 million, respectively, upon achievement of earnout targets . As of December 31, 2021 and 2020, the Company estimated the remaining fair value of the contingent consideration to be $ 2.8 million and $ 3.4 million, respectively. The final allocation of the purchase price was as follows (in thousands): Fair value of consideration transferred: Cash paid, net of cash acquired $ 20,213 Fair value of contingent consideration at acquisition 4,434 Working capital adjustment ( 52 ) Total purchase price consideration $ 24,595 Fair value of assets acquired and liabilities assumed: Unbilled receivables $ 1,040 Prepaid expenses and other current assets 183 Property and equipment 127 Customer relationships 6,563 Tradenames 356 Developed technology 2,732 Goodwill 17,447 Total assets acquired $ 28,448 Accounts payable ( 27 ) Accrued expenses and other current liabilities ( 1,303 ) Deferred revenue ( 104 ) Deferred income taxes ( 2,419 ) Net assets acquired $ 24,595 Customer relationships were valued using the income approach. Significant assumptions and estimates utilized in the model include the customer attrition rate and discount rate. The developed technology and tradename intangibles were valued using a relief from royalty method, which considers both the market approach and the income approach. Significant assumptions and estimates utilized in the model include the royalty and discount rates. Acquired intangible assets are amortized over their estimated useful lives based on the pattern of consumption of the economic benefits of the intangible asset or, if that pattern cannot be determined, on a straight-line basis. Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill is primarily attributable to the workforce of the acquired business (which is not eligible for separate recognition as an identifiable intangible asset) and synergies expected to arise from the acquisition. Goodwill resulting from the acquisition of PSN is not deductible for tax purposes. The operating results of PSN have been included in the consolidated financial statements beginning on the acquisition date, and pro forma information has not been presented, as the operating results of PSN are not material. Acquisition-related costs related to the acquisition of PSN were not material for the periods presented. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements The following tables present the Company’s fair value hierarchy for its assets and liabilities that were measured at fair value on a recurring basis (in thousands): December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 205,010 $ — $ — $ 205,010 Liabilities: Contingent consideration liability $ — $ — $ 2,800 $ 2,800 December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 4,405 $ — $ — $ 4,405 Liabilities: Contingent consideration liability $ — $ — $ 3,365 $ 3,365 Money market funds held as of December 31, 2021 and 2020 were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. The carrying values of the Company’s accounts receivable, unbilled receivables, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. The carrying value of the Company’s long-term debt approximated its fair value due to its variable interest rate. There were no transfers into or out of Level 3 during the periods presented. The Company’s recurring fair value measurements using Level 3 inputs relate to the Company’s contingent consideration liability, as the significant inputs to the valuation are not observable in the market (refer to Note 5 - Acquisitions ). Changes in the fair value of the Company’s contingent consideration liability were as follows (in thousands): Balance as of December 31, 2019 $ — Contingent consideration liability recorded in connection with acquisitions 4,608 Payment of contingent consideration ( 1,500 ) Change in fair value 257 Balance as of December 31, 2020 3,365 Payment of contingent consideration ( 1,868 ) Change in fair value 1,303 Balance as of December 31, 2021 $ 2,800 As of December 31, 2021, the maximum amount of future contingent consideration (undiscounted) that the Company could be required to pay associated with its prior acquisitions was $ 3.0 million. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets | 7. Goodwill and Acquired Intangible Assets The carrying amount of goodwill was $ 425.7 million as of December 31, 2021 and 2020, related to goodwill from the Company’s acquisitions. The following table summarizes the changes in the carrying amount of goodwill by reportable segment through December 31, 2021 (in thousands): Enterprise Solutions SMB Solutions Total Balance as of December 31, 2019 $ 201,211 $ 203,842 $ 405,053 Goodwill acquired 17,447 3,177 20,624 Balance as of December 31, 2020 $ 218,658 $ 207,019 $ 425,677 Goodwill acquired — — — Balance as of December 31, 2021 $ 218,658 $ 207,019 $ 425,677 Acquired intangible assets of the Company consisted of the following (in thousands): December 31, 2021 Weighted Average Gross Carrying Value Accumulated Amortization Net Carrying Value (in years) Customer relationships 10.0 $ 82,841 $ ( 23,059 ) $ 59,782 Developed technology 7.0 42,913 ( 17,311 ) 25,602 Tradenames 5.0 5,824 ( 3,288 ) 2,536 Total $ 131,578 $ ( 43,658 ) $ 87,920 December 31, 2020 Weighted Average Gross Carrying Value Accumulated Amortization Net Carrying Value (in years) Customer relationships 10.0 $ 82,841 $ ( 14,775 ) $ 68,066 Developed technology 7.0 42,913 ( 11,160 ) 31,753 Tradenames 5.0 5,824 ( 2,123 ) 3,701 Total $ 131,578 $ ( 28,058 ) $ 103,520 The Company recorded amortization expense of $ 15.6 million and $ 15.5 million for the years ended December 31, 2021 and 2020, respectively. Amortization of developed technology is recorded within cost of revenue, while amortization of customer relationships and tradenames is recorded within amortization of intangible assets on the Company’s consolidated statements of operations and comprehensive loss. Future estimated amortization expense of the Company’s intangible assets as of December 31, 2021, is expected to be as follows (in thousands): 2022 $ 15,601 2023 15,601 2024 14,640 2025 14,383 2026 9,335 Thereafter 18,360 Total $ 87,920 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 8. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2021 2020 Computer equipment and software $ 4,055 $ 3,139 Internal-use software 4,314 1,268 Furniture and fixtures 2,059 1,820 Leasehold improvements 4,780 1,961 Total property and equipment 15,208 8,188 Less: Accumulated depreciation and amortization ( 4,240 ) ( 1,977 ) Property and equipment, net $ 10,968 $ 6,211 For the years ended December 31, 2021 and 2020, depreciation and amortization expense was $ 2.6 million and $ 1.3 million, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 9. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2021 2020 Accrued employee compensation and benefits $ 12,437 $ 7,073 Accrued consulting and professional fees 2,619 619 Accrued processing fees 1,626 1,101 Accrued channel partner fees 2,081 1,615 Accrued sales tax 615 2,019 Accrued interest payable 51 794 Accrued restructuring 387 565 Other 5,413 2,180 Total $ 25,229 $ 15,966 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt The Company's long-term debt consisted of the following (in thousands): December 31, 2020 Principal amount of long-term debt $ 111,671 Less: Current portion of long-term debt — Long-term debt, net of current portion 111,671 Less: Debt issuance costs, net of accretion ( 1,471 ) Long-term debt, net of debt issuance costs and current portion $ 110,200 As of December 31, 2021, the Company had no long-term debt outstanding. 2021 Revolving Credit Facility On September 27, 2021, the Company entered into a revolving credit agreement (“2021 Revolving Credit Facility”) with JPMorgan Chase Bank, N.A. as administrative agent and certain other lenders. The 2021 Revolving Credit Facility allows the Company to borrow up to $ 75.0 million, $ 7.5 million of which may be comprised of a letter of credit facility. The 2021 Revolving Credit Facility will mature on September 27, 2026 and proceeds of the borrowings under the 2021 Revolving Credit Facility will be used for general corporate purposes. In conjunction with the 2021 Revolving Credit Facility, the Company incurred debt issuance costs in the amount of $ 1.2 million, which were recorded within other assets on the consolidated balance sheets and are being amortized into interest expense over the life of the 2021 Revolving Credit Facility. The 2021 Revolving Credit Facility requires the Company to pay a commitment fee in respect to unused revolving credit facility commitments of 0.25 % per annum. The commitment fee is recorded as a component of interest expense on the Company's consolidated statement of operations and comprehensive loss. As of December 31, 2021, the Company has not yet drawn upon the 2021 Revolving Credit Facility, although $ 2.1 million has been utilized against the 2021 Revolving Credit Facility in the form of a line of credit, reducing the Company's borrowing capacity to $ 72.9 million. The 2021 Revolving Credit Facility contains certain financial maintenance covenants, which require us to not exceed certain specified total net leverage ratios at the end of each fiscal quarter. Credit Facilities On February 11, 2019, in connection with the InvoiceCloud Acquisition, the Company entered into a credit agreement (“Credit Agreement”) with Ares Capital Corporation as administrative agent and collateral agent, and certain other lenders, which provided for a $ 75.0 million aggregate principal amount senior secured term loan facility (“Initial Term Loan Facility”), a $ 35.0 million senior secured delayed draw term loan facility (“Delayed Draw Term Loan Facility”), and a $ 7.5 million senior secured revolving credit facility (“2019 Revolving Credit Facility"). The Company collectively refers to the Initial Term Loan Facility, the Delayed Draw Term Loan Facility, and the 2019 Revolving Credit Facility as the Credit Facilities. On September 27, 2021, the Company used a portion of the net proceeds from its IPO to repay in full the outstanding borrowings of $ 114.2 million under the Credit Facilities. In connection with this repayment, the Company incurred a loss on debt extinguishment of $ 1.2 million, which is included within interest expense on the Company's consolidated statement of operations and comprehensive loss. The loss on debt extinguishment primarily consists of a write-off of unamortized debt issuance costs associated with the Credit Facilities. In September 2019, a letter of credit was issued related to one of the Company’s leases in the amount of $ 2.1 million, which reduced the amount of borrowings available under the 2019 Revolving Credit Facility. As of September 27, 2021, the Credit Agreement, which included the 2019 Revolving Credit Facility, was terminated and the outstanding letter of credit was cash collateralized. In December 2021, the cash collateral was returned along with the cancellation of the prior letter of credit, and a new letter of credit for $ 2.1 million was issued under the 2021 Revolving Credit Facility. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 11. Stockholders' Equity Initial Public Offering On September 27, 2021, the Company completed its IPO, in which the Company issued and sold 13,620,054 shares of common stock at a public offering price of $ 26.00 per share, including 620,054 shares issued upon the exercise of the underwriters' option to purchase additional shares. The Company raised net proceeds of $ 326.4 million after deducting the underwriting discounts of $ 22.1 million and offering expenses of $ 5.6 million. Corporate Conversion Immediately prior to effectiveness of the Company’s IPO registration statement on Form S-1, EngageSmart, LLC, a Delaware limited liability company, converted into a Delaware corporation pursuant to a statutory conversion, which changed the Company’s name to EngageSmart, Inc. As part of the Corporate Conversion, each Class A-1 share, Class A-2 share, and Class A-3 share, in each case, of EngageSmart, LLC was converted on a 1:1 basis into Class A-1 common stock, Class A-2 common stock and Class A-3 common stock, in each case, of the Company, respectively, with the same rights and obligations that existed under the limited liability company agreement of EngageSmart, LLC (the “LLC Agreement”). Under the LLC Agreement, Class A-2 holders, were entitled to certain cash distributions that General Atlantic would have otherwise been entitled to receive if General Atlantic had received a pre-established dollar threshold in connection with and/or following certain exit events (“CVR Obligation”). Following the Corporate Conversion, each share of (i) Class A-1 common stock was reclassified into 0.9398 shares of common stock, (ii) Class A-2 common stock was reclassified into 1.1102 shares of common stock, and (iii) Class A-3 common stock was reclassified into 1 share of common stock (collectively, the “Common Stock Reclassifications”). The conversion ratio for each Common Stock Reclassification reflected the difference in value of the shares as a result of the CVR Obligation. Pursuant to the Company’s amended and restated certificate of incorporation, no fractional shares resulting from the conversion of Class A-2 common stock to common stock were to be issued and, in lieu of the fractional shares, each holder of Class A-2 common stock who would otherwise be entitled to fractional shares were entitled to an amount in cash (the “Fractional Share Payout”). Following the Common Stock Reclassifications, General Atlantic, the sole former holder of Class A-1 common stock (which were formerly Class A-1 shares of EngageSmart, LLC) subscribed for 1,662,917 additional shares of common stock in the Company, with the value of each share based on the public offering price of the shares of common stock sold by the Company in the IPO. As consideration for the additional shares of common stock, General Atlantic contributed capital to the Company in an amount equal to $ 43.2 million in order for the Company to satisfy its obligation in full for the Fractional Share Payout. The Fractional Share Payout settled the former CVR Obligation of the Company under the LLC Agreement. Additionally, certain of the Company's executive officers and other employees, among others, currently hold CVR Unit Awards ("CVR Units"), under the CVR Bonus Award Plan (the "CVR Plan"). The CVR Plan was amended to reflect the Corporate Conversion and the CVR Units will otherwise remain subject to the same terms and conditions applicable to the CVR Units immediately prior to the Company’s IPO. Following the Common Stock Reclassifications, General Atlantic subscribed for 288,344 additional shares of common stock in the Company, with the value of each share based on the public offering price of the shares of common stock sold by the Company in the IPO. As consideration for the additional shares of common stock, General Atlantic entered into a promissory note with the Company which requires General Atlantic to make a capital contribution to the Company equal to the amount of any payments made by the Company to holders of CVR Units pursuant to the CVR Plan, which such payments would be triggered by the same exit events specified under the LLC Agreement. Stock Split On September 10, 2021, the Company effected a 1-for-3 forward stock split of its common shares. In connection with the forward stock split, each issued and outstanding common share, automatically became three common shares. Preferred Stock In connection with the Company's IPO in September 2021, the Company's amended and restated certificate of incorporation and amended and restated bylaws became effective, which authorized the issuance of 10,000,000 shares of preferred stock with a par value of $ 0.001 with rights and preferences, including voting rights, designated from time to time by the Board of Directors. As of December 31, 2021, no shares of preferred stock were issued or outstanding. Common Stock In connection with the Company's IPO in September 2021, the Company's amended and restated certificate of incorporation and amended and restated bylaws became effective, with authorized the issuance of 650,000,000 shares of common stock with a par value of $ 0.001 . As of December 31, 2021, there were 161,860,980 shares of common stock issued and outstanding. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | 12. Stock-based Compensation 2021 Incentive Award Plan In September 2021, the Company’s Board of Directors adopted, and its stockholders approved, the 2021 Incentive Award Plan (“2021 Plan”), which became effective in connection with the IPO. The 2021 Plan provides for granting stock options, including incentive stock options ("ISOs") and nonqualified stock options ("NSOs"), restricted stock, dividend equivalents, restricted stock units ("RSUs"), other stock-based awards, and cash awards to eligible employees, consultants and directors. A total of 14,798,186 shares of the Company’s common stock have been reserved for issuance under the 2021 Plan. The number of shares initially available for issuance will be increased annually on January 1 of each calendar year beginning in 2022 and ending in 2031 by an amount equal to the lesser of (i) 5 % of the shares of the Company's common stock outstanding on the final day of the immediately preceding calendar year or (ii) a smaller number of shares as determined by the Company's Board of Directors. As of December 31, 2021, there were 14,459,679 remaining shares available for the Company to grant under the 2021 Plan. The Company’s Amended and Restated 2015 Stock Option Plan ("2015 Plan”) provided for the granting of ISOs and NSOs to the Company's employees, consultants, and nonemployee directors. In conjunction with the effectiveness of the 2021 Plan, the Company’s Board of Directors voted that no further awards would be granted under the 2015 Plan but any awards under the 2015 Plan that were outstanding as of the date of the IPO shall remain outstanding and continue to be subject to the terms and conditions of the 2015 Plan. Stock-based awards granted to employees generally vest over a four-year period, and, in the case of stock options, expire ten years from the date of grant. 2021 Employee Stock Purchase Plan In September 2021, the Company’s Board of Directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (“2021 ESPP”), which became effective in connection with the IPO. The 2021 ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. A total of 2,219,728 shares of the Company’s common stock have been reserved for future issuance under the 2021 ESPP. The number of shares available for issuance under the 2021 ESPP will be annually increased on January 1 of each calendar year beginning in 2022 and ending in 2031, by an amount equal to the lesser of: (i) 1 % of the aggregate number of shares of the Company's common stock outstanding on the final day of the immediately preceding calendar year or (ii) such smaller number of shares as is determined by the Company's Board of Directors. As of December 31, 2021, the Company has not commenced any offering period under the 2021 ESPP. Stock Options The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected volatility, expected dividend yield and expected term. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The Company estimates its expected share volatility based on the historical volatility of a publicly traded set of peer companies. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The expected term of the Company’s options has been determined based on the average of the vesting term and the contractual lives of all options awarded. The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of options granted: Year Ended December 31, 2021 2020 Fair value of common stock/shares $ 7.67 $ 3.68 Risk-free interest rate 1.2 % 0.6 % Expected volatility 27.3 % 27.0 % Expected dividend yield — — Expected term (in years) 9.3 8.1 Option Activity The following table summarizes the Company’s option activity for the year ended December 31, 2021: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (in years) (in thousands) Outstanding as of December 31, 2020 9,333,218 $ 2.72 8.41 $ 16,882 Granted 3,005,910 8.58 Exercised ( 832,791 ) 1.90 Forfeited ( 1,684,158 ) 3.86 Outstanding as of December 31, 2021 9,822,179 $ 4.39 7.44 $ 193,789 Options exercisable as of December 31, 2021 4,405,641 $ 2.66 5.91 $ 94,555 As of December 31, 2021, the total compensation cost related to the unvested stock option awards not yet recognized was $ 14.4 million, which will be recognized over a weighted-average period of 2.6 years. The weighted average grant-date fair value per share of options granted during the years ended December 31, 2021 and 2020, was $ 2.39 and $ 1.26 , respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was $ 10.0 million and $ 9.6 million, respectively. For the years ended December 31, 2021 and 2020, $ 1.6 million and $ 5.0 million of cash was received as the result of the exercise of options granted under share-based payment arrangements, respectively. Restricted Stock Units The Company recognizes stock-based compensation expense over the vesting term of restricted stock units. The fair value is measured based on the closing price of the Company’s common stock underlying such units on the dates of grant. Upon vesting and settlement, each restricted stock unit entitles the holder to receive one share of common stock. The following table summarizes the Company's restricted stock unit activity for the year ended December 31, 2021: Weighted Average Number Grant Date of Shares Fair Value Outstanding as of December 31, 2020 — $ — Granted 377,363 26.42 Vested ( 1,602 ) 26.00 Forfeited ( 38,856 ) 26.09 Outstanding as of December 31, 2021 336,905 $ 26.46 As of December 31, 2021, there was $ 8.4 million of unrecognized stock-based compensation expense related to unvested restricted stock units that is expected to be recognized over a weighted-average period of 3.7 years. The aggregate fair value of restricted stock units that vested during the year ended December 31, 2021 was not material. No restricted stock units vested during the year ended December 31, 2020. Stock-based Compensation Expense Stock-based compensation expense is reflected on the consolidated statement of operations and comprehensive loss as follows (in thousands): Year Ended December 31, 2021 2020 Cost of revenue $ 247 $ 14 General and administrative 8,070 519 Selling and marketing 813 81 Research and development 338 27 Total $ 9,468 $ 641 The Company has no t capitalized any stock-based compensation expense as part of the cost of an asset in any of the periods presented. Award Modification and Acceleration of Expense In June 2021, the Company entered into an amended employment agreement with an employee. Under the terms of the amended agreement, the employee would continue to vest in his outstanding equity awards, despite changes to his day-to-day responsibilities over time. As a result of the employment change, certain awards were considered to be modified in accordance with ASC 718. This resulted in a $ 12.1 million increase in unamortized stock-based compensation expense, which will be recognized over the remaining weighted-average period of the modified awards of 2.6 years from the modification date. Upon the Company's IPO in September 2021, as specified in the 2015 Plan, all awards with performance-based vesting conditions converted into awards with service-based vesting, with vesting measured from each awards' respective grant date. Upon the Company's IPO, the Company recognized $ 5.7 million of accelerated stock-based compensation expense related to awards with performance-based vesting conditions that converted into service-based vesting, of which $ 3.6 million related to the above-mentioned modified awards. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes The Company does not have any foreign operations and therefore has not provided for any foreign taxes. The components of the benefit from income taxes were as follows (in thousands): Year Ended December 31, 2021 2020 Current income taxes: Federal $ 270 $ — State 355 150 Total current income taxes 625 150 Deferred income taxes: Federal ( 500 ) ( 2,334 ) State ( 747 ) ( 442 ) Total deferred income taxes ( 1,247 ) ( 2,776 ) Total benefit from income taxes $ ( 622 ) $ ( 2,626 ) A reconciliation of the United States federal statutory rate to the Company’s effective income tax rate is as follows for the years indicated: Year Ended December 31, 2021 2020 U.S. federal statutory rate 21.0 % 21.0 % Permanent adjustments ( 3.8 )% ( 0.4 )% State taxes, net of federal benefit 5.0 % 6.2 % Stock/equity-based compensation expense ( 11.6 )% 6.2 % Valuation allowance ( 4.2 )% — % State rate change — % ( 4.8 )% Other adjustments 0.1 % — % Effective income tax rate 6.5 % 28.2 % The Company recorded a benefit from income taxes of $ 0.6 million and $ 2.6 million for the years ended December 31, 2021 and 2020, respectively. For the years ended December 31, 2021 and 2020, the Company's tax benefit was primarily driven by the current year loss the Company generated. The components of the Company’s deferred tax assets and liabilities were as follows (in thousands): Year Ended December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 9,801 $ 12,350 Accrued expenses 3,212 1,466 Stock/equity-based compensation expense 840 115 Deferred transaction costs 237 262 Interest expense carryforward 1,645 1,891 Restructuring liability 317 583 Other ( 618 ) 116 Total deferred tax assets 15,434 16,783 Valuation allowance ( 392 ) — Total deferred tax assets, net of valuation allowance 15,042 16,783 Deferred tax liabilities: Amortization ( 19,266 ) ( 22,254 ) Total deferred tax liabilities ( 19,266 ) ( 22,254 ) Net deferred tax liabilities $ ( 4,224 ) $ ( 5,471 ) As of December 31, 2021, the Company had U.S. federal and state net operating loss carryforwards of $ 36.9 million and $ 34.0 million, respectively. The federal net operating loss carryforwards will expire at various dates beginning in 2032 . State net operating loss carryforwards will expire at various dates beginning in 2023 . The Company had federal and state net operating losses that do not expire of $ 32.3 million and $ 4.4 million, respectively that are included in the cumulative balances. Management has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. As required by the provisions of ASC 740, Income Taxes (“ASC 740”), the Company has determined that it is more-likely-than-not that it will utilize the tax benefits related to the federal and state deferred tax assets that will be realized for financial reporting purposes, except for a portion of net operating losses ("NOLs") due to historic ownership changes in the Company as described below. The U.S. net deferred tax liability primarily relates to intangible assets recognized in the financial statements which generate a deferred tax liability. The net deferred tax liability established is estimated to be a source of income to utilize previously unrecognized deferred tax assets in the U.S. Future changes in Company ownership may limit the amount of net operating loss carryforwards and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change, as defined by Section 382 of the Internal Revenue Code of 1986, as amended, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The Company has undertaken a formal study and concluded that ownership changes occurred in 2015 and 2019. The Company has calculated an annual limitation on the amount of NOLs that can be used due to these ownership changes and has determined some NOLs are subject to expiration as a result of being generated prior to the Tax Cuts and Jobs Act. These NOLs are subject to a 20-year period and are offset against the valuation allowance the Company has taken. The Company's study has concluded no ownership change occurred as of September 30, 2021 as a result of the IPO and does not believe additional ownership changes occurred as of December 31, 2021. Unrecognized Tax Benefits The Company accounts for uncertain tax positions under the recognition and measurement criteria of ASC 740. For those tax positions for which it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 % likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. If the Company does not believe that it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized. As of December 31, 2021, the Company had no unrecognized tax benefits. The Company recognizes interest and penalties related to uncertain tax positions as a component within income tax expense. As of December 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s consolidated statements of operations and comprehensive loss. The statute of limitations for assessment by the Internal Revenue Service (“IRS”) and state tax authorities is open for all tax years. The Company is subject to U.S. federal income tax as well as income tax in various state jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities within these jurisdictions. The Company is not currently under examination for income tax examination in any domestic or foreign jurisdiction . The Company is currently under sales and use tax audits in certain jurisdictions. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies Operating Leases The Company is party to various non-cancellable operating leases that expire at varying dates through November 2030 . As of December 31, 2021, the Company maintained a letter of credit for a security deposit of $ 2.1 million in conjunction with one of its leases. The Company has a seven-year operating lease for office space in Los Angeles, California, entered into in 2018. In July 2020, the Company abandoned the office space. Refer to Note 15 – Restructuring for additional information regarding the restructuring charge and liability associated with exiting this office location. The Company’s lease agreements may include lease incentives, payment escalations, and rent holidays, which are accrued or deferred as appropriate, such that rent expense for each lease is recognized on a straight-line basis over the terms of occupancy. As of December 31, 2021 and 2020, the Company had total deferred rent of $ 4.5 million and $ 1.7 million, respectively. The short-term portion of the deferred rent is included within accrued expenses and other current liabilities and the long-term portion is included within other long-term liabilities on the accompanying consolidated balance sheets. Rent expense for the years ended December 31, 2021 and 2020, was $ 4.2 million and $ 3.9 million, respectively. Rent expense was recorded within cost of revenue, general and administrative, selling and marketing and research and development expense lines on the Company’s consolidated statement of operations and comprehensive loss. Future minimum payments under operating leases as of December 31, 2021 are as follows (in thousands): 2022 $ 5,674 2023 5,716 2024 5,743 2025 4,481 2026 4,071 Thereafter 14,766 Total $ 40,451 Other Non-cancellable Commitments As of December 31, 2021, the Company had non-cancellable commitments to vendors primarily consisting of subscriptions to third party software products. Obligations under contracts that are cancellable or with a remaining term of 12 months or less are not included. As of December 31, 2021, future minimum payments under other non-cancellable agreements were $ 3.1 million, of which $ 1.9 million, $ 1.0 million and $ 0.2 million is expected to be paid by December 31, 2022, 2023, and 2024, respectively. Contingent Value Payments In connection with the InvoiceCloud Acquisition , the CVR Plan was established for the benefit of option holders as of February 11, 2019 in the event that holders of the Company’s Class A-1 common shares receive cash distributions in connection with certain exit events specified under the LLC Agreement of at least $ 889.1 million (the “Performance Threshold”). Subject to the achievement of the Performance Threshold, CVR Units entitle the holder, subject generally to the holder’s continued employment through the date of payment, to a pro-rata portion of a bonus pool (based on a participant’s share of CVR Units held). The maximum amount of this bonus pool was capped at $ 9.5 million, of which, $ 7.4 million remains outstanding as of December 31, 2021. No compensation expense has been recognized in relation to the CVR Plan as the Company has determined that certain exit events specified under the LLC Agreement are not probable as of December 31, 2021. In connection with the Company’s IPO, the CVR Plan was amended to reflect the Corporate Conversion (refer to Note 11 - Stockholders' Equity ) and the CVR Units will remain subject to the same terms and conditions applicable immediately prior to the Company’s IPO. Following the Common Stock Reclassifications, General Atlantic subscribed and received 288,344 additional shares of common stock in the Company, with the value of each share based on the public offering price of the shares of common stock sold by the Company in the IPO. As consideration for the additional shares of common stock, General Atlantic entered into a promissory note with the Company, which requires General Atlantic to make a capital contribution to the Company equal to the amount of any future payments to be made by the Company to holders of CVR Units pursuant to the CVR Plan, which such payments would be triggered by the same exit events specified under the LLC Agreement. In the event the CVR Units are forfeited or the Performance Threshold is not met, General Atlantic will not be required to make any payments under the promissory note and will keep the shares issued. Indemnification Agreements In the normal course of business, the Company may provide indemnification of varying scope and terms to third parties and may enter into commitments and guarantees (“Agreements”) under which it may be required to make payments. The duration of these Agreements varies, and in certain cases, may be indefinite with no limit to the Company’s maximum potential payment exposure. In addition, the Company has obligations with certain members of its board of directors and certain executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2021 or December 31, 2020. Legal Proceedings The Company is from time to time subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. The Company routinely assesses its current litigation and/or threatened litigation as to the probability of ultimately incurring a liability and records its best estimate of the ultimate loss if reasonably possible to estimate, in situations where the Company assesses the likelihood of loss as probable. While the outcome of these claims cannot be predicted with certainty, the Company believes that these pending or threatened legal proceeding or claims could not have a material impact on the Company’s consolidated financial statements. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 15. Restructuring In July 2020, the Company relocated certain of its operations and incurred an initial restructuring charge of $ 2.4 million related to abandoning office space in Los Angeles, California. During the year ended December 31, 2021, the Company recorded a $ 0.2 million reversal in restructuring expense related to a change in the present value of future sublease income, due to the execution of a sublease agreement in August 2021. This expense and reversal was recorded within restructuring (reversal) charges on the Company’s consolidated statement of operations and comprehensive loss. The following table summarizes the restructuring activity for the year ended December 31, 2021 and 2020 (in thousands): Facility Related Costs Accrued restructuring as of December 31, 2019 $ — Charges 2,434 Cash payments ( 349 ) Other 167 Accrued restructuring as of December 31, 2020 $ 2,252 Reversals ( 241 ) Cash payments ( 865 ) Other 93 Accrued restructuring as of December 31, 2021 $ 1,239 As of December 31, 2021 the remaining restructuring liability was $ 1.2 million, of which $ 0.4 million was included within accrued expenses and other current liabilities and $ 0.8 million was included within other long-term liabilities on the Company’s consolidated balance sheets. The restructuring liability will be reduced by net contractual lease payments through the remaining term of the lease in May 2025 . |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | 16. Defined Contribution Plan The Company has a 401(k) defined contribution plan (the “401(k) Plan”) for its employees. Eligible employees may make pretax contributions to the 401(k) Plan up to statutory limits. The Company provides a matching contribution of 25 % of the employees’ contributions up to a maximum amount per participant. The Company made contributions to the plan of $ 0.8 million and $ 0.5 million during the years ended December 31, 2021 and 2020, respectively. Expense related to 401(k) contributions was recorded within cost of revenue, general and administrative, selling and marketing and research and development expense lines on the Company’s consolidated statement of operations and comprehensive loss. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Parties | 17. Related Parties In 2019, the Company assumed unsecured notes payable in the aggregate amount of $ 3.0 million (the “GC Notes”) and $ 2.9 million (“IVR Note”), respectively, with two individuals that are former shareholders, one of which is a former employee and the other is a current employee of Global Cloud, Ltd. (“GC”) and individuals that are former shareholders and former employees of IVR Technologies Group, LLC (“IVR”), respectively. The GC Notes and IVR Note bore interest at a rate of 7 % and 8 % per annum, respectively, and required interest-only payments with the outstanding principal amount and any accrued but unpaid interest due on the maturity date of March 12, 2021 and January 16, 2021 , respectively. During the year ended December 31, 2021, the Company repaid in full the outstanding principal balance of the GC Notes and IVR Note, which totaled $ 5.9 million. These amounts are disclosed within cash flows from financing activities on the consolidated statements of cash flows. On the Company's consolidated statements of operations and comprehensive loss, the Company recognized interest expense related to the GC Notes and IVR Note of less than $ 0.1 million and $ 0.4 million during the years ended December 31, 2021 and 2020, respectively. The Company made cash interest payments related to the GC Notes and IVR Note of $ 0.2 million and $ 0.4 million during the years ended December 31, 2021 and 2020, respectively. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 18. Segment and Geographic Information Segment Information The Company has determined that its CEO is its CODM and the Company is organized into two reportable segments: Enterprise Solutions and SMB Solutions. The reportable segments were determined based on how the CODM reviews business performance and makes decisions about resources to be allocated. The Enterprise Solutions segment is primarily engaged in providing SaaS solutions that simplify customer-client engagement primarily through electronic billing and digital payments. Enterprise solutions are built to address the unique needs of specific verticals: Government, Utilities, Financial Services, Healthcare and Giving. For the Enterprise Solutions segment, the Company integrates directly with its customers’ core software systems and utilizes a partner-assisted direct sales model for purposes of its go-to-market strategy. The Company generates a significant majority of its revenue in this segment from transaction and usage-based revenue. For the year ended December 31, 2021, this segment generated 50 % of total revenue. The SMB Solutions segment is primarily engaged in providing end-to-end practice management solutions geared toward the Health & Wellness industry. For the Company's SMB Solutions segment, the Company primarily relies on a free trial to paid customer sales model. The Company generates interest for its offerings in the Company's SMB Solutions segment through a combination of search engine optimization, word-of-mouth, paid customer referrals, and search engine marketing. The Company generate a majority of its revenue in this segment from subscription revenue. For the year ended December 31, 2021, this segment generated 50 % of total revenue. The CODM evaluates segment operating performance using revenue and Adjusted EBITDA, as defined below, from reportable segments to make resource allocation decisions and to evaluate segment performance. Adjusted EBITDA assists management in comparing the Company’s performance on a consistent basis for purposes of business decision-making. The Company defines Adjusted EBITDA as net loss excluding interest expense, net; benefit for income taxes; depreciation; and amortization of intangible assets, as further adjusted for transaction-related expenses, fair value adjustment of acquired deferred revenue, stock/equity-based compensation, and restructuring (reversal) charges. Adjusted EBITDA from reportable segments excludes unallocated corporate costs which are primarily comprised of costs for accounting, finance, legal, human resources and costs for certain executives supporting overall business strategy and execution. The following table sets forth the revenue and Adjusted EBITDA results attributable to each reportable segment and includes a reconciliation of the totals reported for the reportable segments to the applicable line items on the Company’s accompanying consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2021 2020 Revenue Enterprise Solutions $ 107,549 $ 83,944 SMB Solutions 108,731 62,613 Total revenue 216,280 146,557 Adjusted EBITDA Enterprise Solutions 14,255 11,997 SMB Solutions 35,373 21,122 Total Adjusted EBITDA from reportable segments 49,628 33,119 Unallocated corporate expenses ( 18,983 ) ( 11,080 ) Total Adjusted EBITDA 30,645 22,039 Reconciling items: Interest expense, net ( 8,213 ) ( 9,903 ) Amortization of intangible assets ( 15,602 ) ( 15,523 ) Depreciation ( 2,588 ) ( 1,288 ) Transaction-related expenses ( 4,422 ) ( 1,011 ) Fair value adjustment of acquired deferred revenue ( 180 ) ( 543 ) Stock/equity-based compensation ( 9,468 ) ( 641 ) Restructuring reversal (charges) 241 ( 2,434 ) Loss before income taxes ( 9,587 ) ( 9,304 ) Benefit from income taxes ( 622 ) ( 2,626 ) Net loss $ ( 8,965 ) $ ( 6,678 ) The Company’s CODM does not separately evaluate assets by segment, and therefore assets by segment are not presented. Geographic Information For the years ended December 31, 2021 and 2020, revenues by geographic region are not disclosed as revenue outside the United States does not exceed 10 % of total revenue. The Company does not disclose geographic information for long-lived assets as long-lived assets located outside the United States do not exceed 10 % of total assets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, revenue recognition, valuation of goodwill and intangible assets, valuation of contingent consideration liabilities, stock-based compensation, and income taxes. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as changes in circumstances, facts and experience arise. Actual results may differ from those estimates or assumptions. |
Risk of Concentrations of Credit and Significant Customers | Risk of Concentrations of Credit and Significant Customers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. At times, the Company may maintain cash balances in excess of federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Significant customers are those that accounted for 10 % or more of the Company’s total revenue or accounts receivable during any period presented herein. During the years ended December 31, 2021 and 2020, no customer accounted for 10 % or more of revenue. As of December 31, 2021 and 2020, no customer accounted for 10 % or more of accounts receivable. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be the equivalent of cash for the purpose of balance sheet and statement of cash flows presentation. |
Restricted Cash | Restricted Cash As of December 31, 2021 and 2020, restricted cash consisted of $ 0.3 million deposited in a separate restricted bank account as collateral required for one of the Company’s operating bank accounts. This amount is classified within other assets on the Company’s consolidated balance sheets. |
Accounts Receivable, Net and Unbilled Receivables | Accounts Receivable, Net and Unbilled Receivables Accounts receivable are presented net of an allowance for doubtful accounts, which is an estimate of amounts that may not be collectible. The allowance for doubtful accounts is the best estimate of the amount of probable credit losses in the existing accounts receivable balance. An allowance for doubtful accounts is established when it is probable a credit loss has been incurred based on historical collection information, a review of major customer accounts receivable balances, and an assessment of current economic conditions. The Company writes off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues collection of the receivable. As of December 31, 2021 and 2020, the Company’s allowance for doubtful accounts was $ 0.2 million. During the years ended December 31, 2021 and 2020, the Company wrote off accounts receivable balances of $ 0.2 million and less than $ 0.1 million, respectively. Unbilled receivables represent amounts for which payment of consideration is subject only to the passage of time and are assessed for collectability at each reporting period. |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are carried at fair value according to the provisions of ASC 820, Fair Value Measurements and Disclosures , (“ASC 820”). Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price), in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. Refer to Note 6 – Fair Value Measurements for additional details. |
Segment Information | Segment Information Operating segments are defined as components of a business for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s chief executive officer ("CEO"), in deciding how to allocate resources and assess performance. The CODM views the Company's operations and manages its business through two reportable segments: Enterprise Solutions and SMB Solutions. Note 18 - Segment and Geographic Information provides financial information regarding the Company's reportable segments and geographic operations and revenue. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset as follows: Asset Classification Estimated Useful Lives Computer equipment and purchased software 3 years Internal-use software 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life or remaining life of lease Costs for capital assets not yet placed into service are capitalized as construction-in-progress and depreciated once placed into service. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected on the consolidated statement of operations and comprehensive loss. Expenditures for repairs and maintenance are charged to expense as incurred. |
Cloud Computing Arrangements | Cloud Computing Arrangements The Company periodically enters into cloud computing arrangements to access and use third-party software in support of its operations. The Company assesses its cloud computing arrangements with vendors to determine whether the contract meets the definition of a service contract or software license. For cloud computing arrangements that meet the definition of a service contract, the Company capitalizes implementation costs incurred during the application development stage as a prepaid expense. The current and non-current portions of implementation costs are included within prepaid expenses and other current assets and other assets, respectively, on the Company's consolidated balance sheets. The Company amortizes the costs on a straight-line basis over the term of the contract. Costs related to data conversion, training and other maintenance activities are expensed as incurred. |
Business Combinations | Business Combinations In accordance with ASC 805, Business Combinations (“ASC 805”), the Company recognizes tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets. The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair value. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair value of the assets acquired and the liabilities assumed. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations and comprehensive loss. |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets The Company records goodwill when consideration paid in a business acquisition exceeds the value of the net assets acquired. Goodwill is not amortized, but rather is tested for impairment annually at the reporting unit level, or more frequently if facts and circumstances warrant a review. The Company assesses both the existence of potential impairment and the amount of impairment loss, if any, by comparing the fair value of the reporting unit that includes goodwill with its carrying amount, including goodwill. To date, the Company has not identified any impairment to goodwill. Intangible assets are recorded at their estimated fair values at the date of acquisition. The Company amortizes acquired intangible assets over their estimated useful lives based on the pattern of consumption of the economic benefits or, if that pattern cannot be readily determined, on a straight-line basis. |
Valuation of Contingent Consideration Liabilities | Valuation of Contingent Consideration Liabilities The Company’s acquisitions may provide for potential cash payments to former owners upon achievement of certain future performance targets. The Company estimates the fair value of these payments as of each respective acquisition date. The Company remeasures the fair value of the potential payments based upon the estimated achievement levels of the remaining targets at each subsequent reporting date until the liability is fully settled. Increases or decreases in the fair value of the contingent consideration liability are recorded through contingent consideration expense on the consolidated statements of operations and comprehensive loss. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment and intangible assets with finite lives. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. If a long-lived asset group is tested for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. If the Company determines the long-lived asset group is not recoverable, an impairment loss is calculated as the excess of the carrying amount over the fair value. For the years ended December 31, 2021 and 2020, the Company did no t record any impairment losses on long-lived assets. |
Revenue | Revenue The Company derives its revenue primarily from providing access to its SaaS solutions via subscription agreements and from transaction and usage-based fees for services provided through its solutions. To a lesser extent, the Company also generates revenue from the sale of implementation services, sale of on-demand learning courses and the sale of hardware. In accordance with ASU 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASC 606”), the Company recognizes revenue following a five-step model, as outlined below: • Identification of the contract(s) with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when (or as) performance obligations are satisfied. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is reported net of applicable sales and use tax and is recognized when control of these services or products are transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the contract’s performance obligations. Performance Obligations and Timing of Revenue Recognition Revenue from the Company’s subscription services as well as from its transaction and usage-based services represents a single promise to provide continuous access (i.e., a stand-ready obligation) to its software solutions in the form of a service through one of the Company’s hosted data providers. Customers do not have the right or practical ability to take possession of the software and use it on their own or another entity’s hardware. For subscription services, as each day of providing access to the software is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, the Company has determined that its subscription services arrangements include a single performance obligation comprised of a series of distinct services. Revenue from the Company’s subscription services is recognized over time on a ratable basis over the contract term beginning on the date that the Company’s service is made available to the customer. Subscription periods, while primarily monthly, range from monthly to multi-year, are billed in advance and are non-cancellable. For transaction and usage-based services, since the timing and quantity of transactions to be facilitated by the Company are not determinable, the Company views transaction processing services as an obligation to stand ready to facilitate as many transactions as the customer requests. Under a stand-ready obligation, the evaluation of the nature of a performance obligation is focused on each time increment rather than the underlying activities. As each day of providing these services is substantially the same and the client simultaneously receives and consumes the benefits as services are provided, these services are viewed as a single performance obligation comprised of a series of distinct daily services. The Company satisfies its performance obligation as these services are provided. Revenue is recognized in the month the service is completed. The majority of transaction and usage-based services arrangements are priced as a percentage of transaction value or a specified fee per transaction. Given the nature of the promise is based on unknown quantities or outcomes of services to be performed over the contract term, the total consideration is determined to be variable consideration. The variable consideration relates specifically to the Company’s effort to transfer each distinct daily service, and as such, the Company allocates the variable consideration earned to the distinct day in which those activities are performed. The Company recognizes these fees as revenue in the period earned, at the point in which the variable amount is known. In determining the amount of consideration received related to these services, the Company applied the principal-agent guidance in ASC 606 and assessed whether it controls services performed by other intermediaries. As it relates to transaction and usage-based services, the Company’s software solutions provide an interface that allows customers to integrate with a variety of payment processors to route and clear transactions through applicable payment networks. As third parties are involved in the transfer of goods or services to customers, the Company considers the nature of each specific promised good or service and applies judgment to determine whether the Company controls the good or service before it is transferred to the customer or whether the Company is acting as an agent of the third party. To determine whether or not the Company controls the good or service before it is transferred to the customer, the Company assessed indicators including whether the Company or the third party is primarily responsible for fulfillment and which party has discretion in determining pricing for the good or service, as well as other considerations. Based on this assessment, the Company determined that EngageSmart does not control the services performed by card networks, sponsor banks and credit card processors as each of these parties is the primary obligor for their portion of payment and transaction processing services performed. Therefore, transaction usage-based service revenue is recognized net of any fees owed to these intermediaries. Incremental Costs of Obtaining a Contract with a Customer The Company assesses the costs of obtaining contracts with customers according to the provisions of ASC 340-40, Other Assets and Deferred Costs—Contracts with Customers . The Company capitalizes incremental costs incurred in obtaining contracts with customers if the amortization period is greater than one year . For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. The Company’s incremental costs of obtaining a contract consist of sales commissions paid to employees for new bookings and in certain situations, upon the go-live date for a new customer. Sales commissions are not paid on contract renewals. Sales commissions (related to new bookings and go-lives) are deferred and amortized on a straight-line basis over the period of benefit, which the Company has estimated to be five years for initial contracts. The period of benefit was determined based on an average customer contract term, expected customer life, and expected useful life of its related technology. Reserve for Sales Refunds and Credits The Company maintains a reserve for sales refunds and credits to customers for which the Company estimates based upon historical experience. The reserve for sales refunds and credits is recorded as a reduction in revenue. As of December 31, 2021 and 2020, the Company’s allowance for sales refunds and credits was $ 0.3 million, included within accrued expenses and other current liabilities on the consolidated balance sheets. |
Deferred Financing Costs | Deferred Financing Costs The Company capitalizes certain legal and other third-party fees that are directly associated with obtaining access to capital via credit facilities. Deferred financing costs incurred in connection with obtaining access to capital are recorded in other assets and are amortized on a straight-line basis over the term of the credit facility. Deferred financing costs related to a recognized debt liability are recorded as a reduction of the carrying amount of the debt liability and amortized to interest expense over the repayment term. |
Deferred Rent | Deferred Rent Payment escalations, rent holidays and other lease incentives that may be included in lease agreements are accrued or deferred as appropriate such that rent expense for each lease is recognized on a straight-line basis over the respective lease term. Adjustments for such items are recorded as deferred rent and amortized over the respective lease terms. The short-term portion of the deferred rent is included within accrued expenses and other current liabilities and the long-term portion is included within other long-term liabilities on the accompanying consolidated balance sheets. |
Research and Development | Research and Development Research and development expenses consist primarily of personnel-related expenses, third-party consulting costs, and costs for software tools for product management and software development. Research and development costs are expensed as incurred, except for certain costs which are capitalized in connection with the development of the Company’s internal-use software and websites. The Company accounts for its software and website development costs in accordance with the guidance in ASC 350-40, Internal-Use Software and ASC 350-50, Website Development Costs . The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the application is substantially complete and ready for its intended use, at which point such costs are amortized over the estimated useful life of three years . Capitalized software costs are included within property and equipment, net on the Company's consolidated balance sheets. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred and such costs are included in selling and marketing expense in the statements of operations and comprehensive loss. During the years ended December 31, 2021 and 2020, advertising expense totaled $ 9.7 million and $ 6.7 million, respectively. |
Costs Associated with Exit Activities | Costs Associated with Exit Activities The Company records costs associated with exit activities in accordance with ASC 420 , Exit of Disposal Cost Obligations (“ASC 420”). Costs associated with exit activities include contract termination costs, including costs related to leased facilities to be abandoned or subleased, which are expensed in accordance with ASC 420 and are included in restructuring (reversal) charges on the consolidated statements of operations and comprehensive loss. Restructuring liabilities are recorded on the Company’s consolidated balance sheets within accrued expenses and other current liabilities and other long-term liabilities. |
Stock/Equity-Based Compensation | Stock/Equity-Based Compensation The Company measures stock/equity-based compensation costs for awards with service-based vesting or performance-based vesting granted to employees, non-employees, and directors, on the grant date, based on the calculated fair value of the award, in accordance with ASC 718, Compensation - Stock Compensation ("ASC 718"). Compensation expense for the awards is recognized over the requisite service period for employees and directors and as services are delivered for non-employees, both of which are generally the vesting period of the respective award. The Company uses the straight-line method to record the expense of awards with only service-based vesting conditions. The Company uses the graded-vesting method to record the expense of awards with both service-based and performance-based vesting conditions, commencing once achievement of the performance condition becomes probable. The Company accounts for forfeitures of stock/equity-based awards as they occur. The Company classifies stock/equity-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing net loss by the sum of the weighted average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method. For periods in which the Company reports a net loss, diluted net loss per common share is the same as basic net loss per common share, since potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. |
Income Taxes | Income Taxes The Company is treated as a corporation for federal income tax purposes and is subject to taxation in the United States. In each reporting period, the Company’s tax provision includes the effects of consolidating the results of the operations of its subsidiaries. The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded within benefit from income taxes on the consolidated statements of operations and comprehensive loss. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 % likelihood of being realized upon ultimate settlement. Benefit from income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize most leases on their balance sheet as a right of use asset and a lease liability. In general, lease arrangements exceeding a twelve-month term must be recognized as assets and liabilities on the balance sheet. Under ASU 2016-02, a right of use asset and lease obligation is recorded for all leases, whether operating or financing, while the income statement reflects lease expense for operating leases and amortization/interest expense for financing leases. The FASB also issued ASU 2018-10, Codification Improvements to Topic 842 Leases , and ASU 2018-11, Targeted Improvements to Topic 842 Leases , which allows the new lease standard to be applied as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings rather than retroactive restatement of all periods presented. In June 2020, the FASB issued ASU No. 2020-05, which grants a one-year effective-date delay for nonpublic entities to annual reporting periods beginning after December 15, 2021 and to interim periods within fiscal years beginning after December 15, 2022. Early adoption continues to be permitted. The Company will adopt the new standard effective January 1, 2022 on a modified retrospective basis and will not restate comparative periods. The Company is currently evaluating the effect of the standard on its consolidated financial statements and expects that upon adoption a material lease liability and right of use asset will be recognized on its consolidated balance sheets. The Company's leases primarily relate to office space. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes may result in earlier recognition of credit losses. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses , which narrowed the scope and changed the effective date for non-public entities for ASU 2016-13. The FASB subsequently issued supplemental guidance within ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”). ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For public entities that are Securities and Exchange Commission filers, excluding entities eligible to be smaller reporting companies, ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, ASU 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company plans to adopt the new standard effective January 1, 2022. The Company does not believe the adoption of ASU 2016-13 will have a material impact on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 simplifies the accounting for income taxes by adding guidance to reduce complexity in some areas while removing some exemptions to others, such as year-to-date loss limitations when interim-period losses exceed anticipated losses for the full year and requiring the reflection of enacted changes in tax laws in the annual effective tax rate in the interim period of the enactment date, among other changes. The Company plans to adopt the new standard effective January 1, 2022. The Company does not believe the adoption of ASU 2019-12 will have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which intends to address accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The amendments within ASU 2020-04 provide operational expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions to affected by reference rate reform if certain criteria are met. The amendments within ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The amendments in ASC 2020-04 are effective immediately and may be applied through December 31, 2022. As there are no current borrowings under the 2021 Revolving Credit Facility, as defined below, there is currently no impact related to the adoption of ASU 2020-04. If the Company draws down upon the 2021 Revolving Credit Facility, the Company will assess the impact of the adoption of this guidance on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). The amendments require contract assets and contract liabilities acquired in a business combination to be recognized in accordance with ASC 606 as if the acquirer had originated the contracts. The amendments in this updated are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adoption and impact of this new standard on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Life of Property and Equipment | Depreciation and amortization expense is recognized using the straight-line method over the estimated useful life of each asset as follows: Asset Classification Estimated Useful Lives Computer equipment and purchased software 3 years Internal-use software 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life or remaining life of lease |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregated Revenue by Segment and Revenue Type | The following table depicts disaggregated revenue by segment and revenue type (in thousands): Year Ended December 31, 2021 2020 Enterprise Solutions Transaction and usage-based $ 97,759 $ 74,395 Subscription 7,636 6,969 Other 2,154 2,580 Total Enterprise Solutions revenue 107,549 83,944 SMB Solutions Transaction and usage-based 33,360 17,957 Subscription 74,225 44,313 Other 1,146 343 Total SMB Solutions revenue 108,731 62,613 Total revenue $ 216,280 $ 146,557 |
Summary of Activity Related to Capitalized Costs to Obtain Contract | The following table summarizes the activity related to capitalized costs to obtain a contract for the years ended December 31, 2021 and 2020 (in thousands): Capitalized costs to obtain a contract as of December 31, 2019 $ — New capitalized costs 627 Amortization of capitalized costs ( 28 ) Capitalized costs to obtain a contract as of December 31, 2020 $ 599 New capitalized costs 1,059 Amortization of capitalized costs ( 137 ) Capitalized costs to obtain a contract as of December 31, 2021 $ 1,521 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share: Year Ended December 31, 2021 2020 (in thousands, except share and per share amounts) Numerator: Net loss $ ( 8,965 ) $ ( 6,678 ) Denominator: Weighted average common shares outstanding, basic 151,609,440 145,647,226 Effect of potential dilutive common shares — — Weighted average common shares outstanding, diluted 151,609,440 145,647,226 Net loss per share, basic $ ( 0.06 ) $ ( 0.05 ) Net loss per share, diluted $ ( 0.06 ) $ ( 0.05 ) |
Schedule of Common Shares Excluded from Computation of Diluted Net Loss Per Share | The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because their inclusion would have had an anti-dilutive effect: Year Ended December 31, 2021 2020 Options to purchase common shares 9,822,179 9,333,218 Unvested restricted stock units 336,905 — Total 10,159,084 9,333,218 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination And Asset Acquisition [Abstract] | |
Schedule of Final Allocation of Purchase Price | The final allocation of the purchase price was as follows (in thousands): Fair value of consideration transferred: Cash paid, net of cash acquired $ 20,213 Fair value of contingent consideration at acquisition 4,434 Working capital adjustment ( 52 ) Total purchase price consideration $ 24,595 Fair value of assets acquired and liabilities assumed: Unbilled receivables $ 1,040 Prepaid expenses and other current assets 183 Property and equipment 127 Customer relationships 6,563 Tradenames 356 Developed technology 2,732 Goodwill 17,447 Total assets acquired $ 28,448 Accounts payable ( 27 ) Accrued expenses and other current liabilities ( 1,303 ) Deferred revenue ( 104 ) Deferred income taxes ( 2,419 ) Net assets acquired $ 24,595 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present the Company’s fair value hierarchy for its assets and liabilities that were measured at fair value on a recurring basis (in thousands): December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 205,010 $ — $ — $ 205,010 Liabilities: Contingent consideration liability $ — $ — $ 2,800 $ 2,800 December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 4,405 $ — $ — $ 4,405 Liabilities: Contingent consideration liability $ — $ — $ 3,365 $ 3,365 |
Changes in Fair Value of Contingent Consideration Liability | The Company’s recurring fair value measurements using Level 3 inputs relate to the Company’s contingent consideration liability, as the significant inputs to the valuation are not observable in the market (refer to Note 5 - Acquisitions ). Changes in the fair value of the Company’s contingent consideration liability were as follows (in thousands): Balance as of December 31, 2019 $ — Contingent consideration liability recorded in connection with acquisitions 4,608 Payment of contingent consideration ( 1,500 ) Change in fair value 257 Balance as of December 31, 2020 3,365 Payment of contingent consideration ( 1,868 ) Change in fair value 1,303 Balance as of December 31, 2021 $ 2,800 |
Goodwill and Acquired Intangi_2
Goodwill and Acquired Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill by Reportable Segment | The following table summarizes the changes in the carrying amount of goodwill by reportable segment through December 31, 2021 (in thousands): Enterprise Solutions SMB Solutions Total Balance as of December 31, 2019 $ 201,211 $ 203,842 $ 405,053 Goodwill acquired 17,447 3,177 20,624 Balance as of December 31, 2020 $ 218,658 $ 207,019 $ 425,677 Goodwill acquired — — — Balance as of December 31, 2021 $ 218,658 $ 207,019 $ 425,677 |
Schedule of Acquired Intangible Assets | Acquired intangible assets of the Company consisted of the following (in thousands): December 31, 2021 Weighted Average Gross Carrying Value Accumulated Amortization Net Carrying Value (in years) Customer relationships 10.0 $ 82,841 $ ( 23,059 ) $ 59,782 Developed technology 7.0 42,913 ( 17,311 ) 25,602 Tradenames 5.0 5,824 ( 3,288 ) 2,536 Total $ 131,578 $ ( 43,658 ) $ 87,920 December 31, 2020 Weighted Average Gross Carrying Value Accumulated Amortization Net Carrying Value (in years) Customer relationships 10.0 $ 82,841 $ ( 14,775 ) $ 68,066 Developed technology 7.0 42,913 ( 11,160 ) 31,753 Tradenames 5.0 5,824 ( 2,123 ) 3,701 Total $ 131,578 $ ( 28,058 ) $ 103,520 |
Schedule of Future Estimated Amortization Expense of Intangible Assets | Future estimated amortization expense of the Company’s intangible assets as of December 31, 2021, is expected to be as follows (in thousands): 2022 $ 15,601 2023 15,601 2024 14,640 2025 14,383 2026 9,335 Thereafter 18,360 Total $ 87,920 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, 2021 2020 Computer equipment and software $ 4,055 $ 3,139 Internal-use software 4,314 1,268 Furniture and fixtures 2,059 1,820 Leasehold improvements 4,780 1,961 Total property and equipment 15,208 8,188 Less: Accumulated depreciation and amortization ( 4,240 ) ( 1,977 ) Property and equipment, net $ 10,968 $ 6,211 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2021 2020 Accrued employee compensation and benefits $ 12,437 $ 7,073 Accrued consulting and professional fees 2,619 619 Accrued processing fees 1,626 1,101 Accrued channel partner fees 2,081 1,615 Accrued sales tax 615 2,019 Accrued interest payable 51 794 Accrued restructuring 387 565 Other 5,413 2,180 Total $ 25,229 $ 15,966 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company's long-term debt consisted of the following (in thousands): December 31, 2020 Principal amount of long-term debt $ 111,671 Less: Current portion of long-term debt — Long-term debt, net of current portion 111,671 Less: Debt issuance costs, net of accretion ( 1,471 ) Long-term debt, net of debt issuance costs and current portion $ 110,200 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Stock Option Grant Using Black-Scholes Option Pricing Model With Assumptions | The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of options granted: Year Ended December 31, 2021 2020 Fair value of common stock/shares $ 7.67 $ 3.68 Risk-free interest rate 1.2 % 0.6 % Expected volatility 27.3 % 27.0 % Expected dividend yield — — Expected term (in years) 9.3 8.1 |
Schedule of Stock Option Activity | The following table summarizes the Company’s option activity for the year ended December 31, 2021: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (in years) (in thousands) Outstanding as of December 31, 2020 9,333,218 $ 2.72 8.41 $ 16,882 Granted 3,005,910 8.58 Exercised ( 832,791 ) 1.90 Forfeited ( 1,684,158 ) 3.86 Outstanding as of December 31, 2021 9,822,179 $ 4.39 7.44 $ 193,789 Options exercisable as of December 31, 2021 4,405,641 $ 2.66 5.91 $ 94,555 |
Summary of Restricted Stock Unit Activity | The following table summarizes the Company's restricted stock unit activity for the year ended December 31, 2021: Weighted Average Number Grant Date of Shares Fair Value Outstanding as of December 31, 2020 — $ — Granted 377,363 26.42 Vested ( 1,602 ) 26.00 Forfeited ( 38,856 ) 26.09 Outstanding as of December 31, 2021 336,905 $ 26.46 |
Summary of Stock Based Compensation Expense | Stock-based compensation expense is reflected on the consolidated statement of operations and comprehensive loss as follows (in thousands): Year Ended December 31, 2021 2020 Cost of revenue $ 247 $ 14 General and administrative 8,070 519 Selling and marketing 813 81 Research and development 338 27 Total $ 9,468 $ 641 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Benefit from Income Taxes | The components of the benefit from income taxes were as follows (in thousands): Year Ended December 31, 2021 2020 Current income taxes: Federal $ 270 $ — State 355 150 Total current income taxes 625 150 Deferred income taxes: Federal ( 500 ) ( 2,334 ) State ( 747 ) ( 442 ) Total deferred income taxes ( 1,247 ) ( 2,776 ) Total benefit from income taxes $ ( 622 ) $ ( 2,626 ) |
Reconciliation of United States Federal Statutory Rate to Effective Income Tax Rate | A reconciliation of the United States federal statutory rate to the Company’s effective income tax rate is as follows for the years indicated: Year Ended December 31, 2021 2020 U.S. federal statutory rate 21.0 % 21.0 % Permanent adjustments ( 3.8 )% ( 0.4 )% State taxes, net of federal benefit 5.0 % 6.2 % Stock/equity-based compensation expense ( 11.6 )% 6.2 % Valuation allowance ( 4.2 )% — % State rate change — % ( 4.8 )% Other adjustments 0.1 % — % Effective income tax rate 6.5 % 28.2 % |
Schedule of Components of Deferred Tax Assets and Liabilities | The components of the Company’s deferred tax assets and liabilities were as follows (in thousands): Year Ended December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 9,801 $ 12,350 Accrued expenses 3,212 1,466 Stock/equity-based compensation expense 840 115 Deferred transaction costs 237 262 Interest expense carryforward 1,645 1,891 Restructuring liability 317 583 Other ( 618 ) 116 Total deferred tax assets 15,434 16,783 Valuation allowance ( 392 ) — Total deferred tax assets, net of valuation allowance 15,042 16,783 Deferred tax liabilities: Amortization ( 19,266 ) ( 22,254 ) Total deferred tax liabilities ( 19,266 ) ( 22,254 ) Net deferred tax liabilities $ ( 4,224 ) $ ( 5,471 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments under Operating Leases | Future minimum payments under operating leases as of December 31, 2021 are as follows (in thousands): 2022 $ 5,674 2023 5,716 2024 5,743 2025 4,481 2026 4,071 Thereafter 14,766 Total $ 40,451 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Summary of Restructuring Activity | The following table summarizes the restructuring activity for the year ended December 31, 2021 and 2020 (in thousands): Facility Related Costs Accrued restructuring as of December 31, 2019 $ — Charges 2,434 Cash payments ( 349 ) Other 167 Accrued restructuring as of December 31, 2020 $ 2,252 Reversals ( 241 ) Cash payments ( 865 ) Other 93 Accrued restructuring as of December 31, 2021 $ 1,239 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Revenue and Adjusted EBITDA for Reportable Segments | The following table sets forth the revenue and Adjusted EBITDA results attributable to each reportable segment and includes a reconciliation of the totals reported for the reportable segments to the applicable line items on the Company’s accompanying consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2021 2020 Revenue Enterprise Solutions $ 107,549 $ 83,944 SMB Solutions 108,731 62,613 Total revenue 216,280 146,557 Adjusted EBITDA Enterprise Solutions 14,255 11,997 SMB Solutions 35,373 21,122 Total Adjusted EBITDA from reportable segments 49,628 33,119 Unallocated corporate expenses ( 18,983 ) ( 11,080 ) Total Adjusted EBITDA 30,645 22,039 Reconciling items: Interest expense, net ( 8,213 ) ( 9,903 ) Amortization of intangible assets ( 15,602 ) ( 15,523 ) Depreciation ( 2,588 ) ( 1,288 ) Transaction-related expenses ( 4,422 ) ( 1,011 ) Fair value adjustment of acquired deferred revenue ( 180 ) ( 543 ) Stock/equity-based compensation ( 9,468 ) ( 641 ) Restructuring reversal (charges) 241 ( 2,434 ) Loss before income taxes ( 9,587 ) ( 9,304 ) Benefit from income taxes ( 622 ) ( 2,626 ) Net loss $ ( 8,965 ) $ ( 6,678 ) |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Thousands | Sep. 27, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)shares | Dec. 11, 2018 |
Subsidiary Sale Of Stock [Line Items] | |||
Offering expenses | $ 5,293 | ||
Forward stock split, description | 1-for-3 | ||
Forward stock split | 0.3333 | ||
Invoice Cloud, Inc. | Hancock Midco, LLC. | |||
Subsidiary Sale Of Stock [Line Items] | |||
Equity interest percentage | 100.00% | ||
General Atlantic, L.P. | |||
Subsidiary Sale Of Stock [Line Items] | |||
Voting power | 50.00% | ||
Credit Facilities | |||
Subsidiary Sale Of Stock [Line Items] | |||
Repayments of outstanding borrowings | $ 114,200 | ||
Common Stock | |||
Subsidiary Sale Of Stock [Line Items] | |||
Common stock shares issued and sold | shares | 13,620,054 | ||
IPO | |||
Subsidiary Sale Of Stock [Line Items] | |||
Net proceeds | 326,400 | ||
Underwriting discounts | 22,100 | ||
Offering expenses | $ 5,600 | ||
IPO | Common Stock | |||
Subsidiary Sale Of Stock [Line Items] | |||
Common stock shares issued and sold | shares | 13,620,054 | ||
Share price per share | $ / shares | $ 26 | ||
Over Allotment Option | Common Stock | |||
Subsidiary Sale Of Stock [Line Items] | |||
Common stock shares issued and sold | shares | 620,054 | ||
Existing Shareholders | Common Stock | |||
Subsidiary Sale Of Stock [Line Items] | |||
Sale of stock, shares issued | shares | 3,112,446 | ||
Net proceeds | $ 75,900 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)SegmentCustomer | Dec. 31, 2020USD ($)Customer | |
Concentration Risk [Line Items] | ||
Allowance for doubtful accounts | $ 203,000 | $ 160,000 |
Accounts receivable write off | $ 200,000 | |
Number of reportable segments | Segment | 2 | |
Impairment losses on long-lived assets | $ 0 | 0 |
Sales commissions amortization period | 5 years | |
Research and development cost amortization period | 3 years | |
Advertising expense | $ 9,700,000 | 6,700,000 |
Percentage of minimum tax benefit likelihood realized upon settlement with tax authority | 50.00% | |
Accrued Expenses and Other Current Liabilities | ||
Concentration Risk [Line Items] | ||
Allowance for sales refunds and credits | $ 300,000 | 300,000 |
Other Assets | ||
Concentration Risk [Line Items] | ||
Restricted cash deposited in separate restricted bank account as collateral | $ 300,000 | 300,000 |
Minimum | ||
Concentration Risk [Line Items] | ||
Capitalized contract cost, amortization period | 1 year | |
Maximum | ||
Concentration Risk [Line Items] | ||
Accounts receivable write off | $ 100,000 | |
Business combinations measurement period | 1 year | |
2021 Revolving Credit Facility | ||
Concentration Risk [Line Items] | ||
Current borrowings | $ 0 | |
Customer Concentration | Sales Revenue | ||
Concentration Risk [Line Items] | ||
Number of customers accounted for 10% or more | Customer | 0 | 0 |
Concentration risk percentage | 10.00% | 10.00% |
Credit Concentration | Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Number of customers accounted for 10% or more | Customer | 0 | 0 |
Concentration risk percentage | 10.00% | 10.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Useful Life of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computer Equipment and Purchased Software | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Internal-use Software | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | Shorter of useful life or remaining life of lease |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue by Segment and Revenue Type (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 216,280 | $ 146,557 |
Enterprise Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 107,549 | 83,944 |
SMB Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 108,731 | 62,613 |
Transaction and Usage-Based | Enterprise Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 97,759 | 74,395 |
Transaction and Usage-Based | SMB Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 33,360 | 17,957 |
Subscription | Enterprise Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,636 | 6,969 |
Subscription | SMB Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 74,225 | 44,313 |
Other | Enterprise Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,154 | 2,580 |
Other | SMB Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,146 | $ 343 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 0 | $ 0 |
Deferred revenue current | 6,800,000 | 4,800,000 |
Deferred revenue, non-current | 200,000 | 200,000 |
Deferred revenue, revenue recognized | 4,800,000 | 4,000,000 |
Deferred costs, current | 200,000 | 100,000 |
Deferred costs, non-current | 1,300,000 | 500,000 |
Impairment losses | $ 0 | $ 0 |
Revenue - Summary of Activity R
Revenue - Summary of Activity Related to Capitalized Costs to Obtain Contract (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | ||
Capitalized costs to obtain a contract | $ 1,521 | $ 599 |
New capitalized costs | 1,059 | 627 |
Amortization of capitalized costs | (137) | (28) |
Capitalized costs to obtain a contract | $ 1,521 | $ 599 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net loss | $ (8,965) | $ (6,678) |
Denominator: | ||
Weighted average common shares outstanding, basic | 151,609,440 | 145,647,226 |
Weighted average common shares outstanding, diluted | 151,609,440 | 145,647,226 |
Net loss per share, basic | $ (0.06) | $ (0.05) |
Net loss per share, diluted | $ (0.06) | $ (0.05) |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Common Shares Excluded from Computation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common shares excluded from computation of diluted net loss per share | 10,159,084 | 9,333,218 |
Options to Purchase Common Shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common shares excluded from computation of diluted net loss per share | 9,822,179 | 9,333,218 |
Unvested Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Common shares excluded from computation of diluted net loss per share | 336,905 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) | Apr. 03, 2020 | Jan. 02, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 425,677,000 | $ 425,677,000 | $ 405,053,000 | ||
Identifiable intangible assets | 87,920,000 | 103,520,000 | |||
Payment Service Network, Inc. | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage of outstanding equity interests acquired | 100.00% | ||||
Purchase consideration | $ 24,595,000 | ||||
Net cash payment | 20,213,000 | ||||
Fair value of contingent consideration at acquisition | 4,434,000 | ||||
Working capital adjustment | 100,000 | ||||
Payments upon achievement of earnout targets | 1,900,000 | 1,500,000 | |||
Contingent consideration, fair value | $ 2,800,000 | $ 3,400,000 | |||
Goodwill | 17,447,000 | ||||
Payment Service Network, Inc. | Maximum | |||||
Business Acquisition [Line Items] | |||||
Consideration receivable by former shareholders upon achievement of earnout targets | $ 6,500,000 | ||||
Track Your Hours, LLC | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage of outstanding equity interests acquired | 100.00% | ||||
Purchase consideration | $ 5,500,000 | ||||
Net cash payment | 5,300,000 | ||||
Fair value of contingent consideration at acquisition | 200,000 | ||||
Goodwill | 3,200,000 | ||||
Identifiable intangible assets | $ 2,600,000 |
Acquisitions - Schedule of Fina
Acquisitions - Schedule of Final Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Jan. 02, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value of assets acquired and liabilities assumed: | ||||
Goodwill | $ 425,677 | $ 425,677 | $ 405,053 | |
Payment Service Network, Inc. | ||||
Fair value of consideration transferred: | ||||
Cash paid, net of cash acquired | $ 20,213 | |||
Fair value of contingent consideration at acquisition | 4,434 | |||
Working capital adjustment | (52) | |||
Total purchase price consideration | 24,595 | |||
Fair value of assets acquired and liabilities assumed: | ||||
Unbilled receivables | 1,040 | |||
Prepaid expenses and other current assets | 183 | |||
Property and equipment | 127 | |||
Goodwill | 17,447 | |||
Total assets acquired | 28,448 | |||
Accounts payable | (27) | |||
Accrued expenses and other current liabilities | (1,303) | |||
Deferred revenue | (104) | |||
Deferred income taxes | (2,419) | |||
Net assets acquired | 24,595 | |||
Customer Relationships | Payment Service Network, Inc. | ||||
Fair value of assets acquired and liabilities assumed: | ||||
Acquired intangible assets | 6,563 | |||
Trade Names | Payment Service Network, Inc. | ||||
Fair value of assets acquired and liabilities assumed: | ||||
Acquired intangible assets | 356 | |||
Developed Technology | Payment Service Network, Inc. | ||||
Fair value of assets acquired and liabilities assumed: | ||||
Acquired intangible assets | $ 2,732 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Liabilities: | ||
Contingent consideration liability | $ 2,800 | $ 3,365 |
Level 3 | ||
Liabilities: | ||
Contingent consideration liability | 2,800 | 3,365 |
Money Market Funds | ||
Assets: | ||
Cash equivalents - money market funds | 205,010 | 4,405 |
Money Market Funds | Level 1 | ||
Assets: | ||
Cash equivalents - money market funds | $ 205,010 | $ 4,405 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value of Contingent Consideration Liability (Details) - Contingent Consideration Liability - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning Balance | $ 3,365 | |
Contingent consideration liability recorded in connection with acquisitions | $ 4,608 | |
Payment of contingent consideration | (1,868) | (1,500) |
Change in fair value | 1,303 | 257 |
Ending Balance | $ 2,800 | $ 3,365 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Asset transfers into or out of Level 3 | $ 0 | $ 0 |
Liabilities transfers into or out of Level 3 | 0 | $ 0 |
Maximum | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 3,000,000 |
Goodwill and Acquired Intangi_3
Goodwill and Acquired Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 425,677 | $ 425,677 | $ 405,053 |
Amortization expense | $ 15,600 | $ 15,500 |
Goodwill and Acquired Intangi_4
Goodwill and Acquired Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill by Reportable Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | ||
Beginning balance | $ 425,677 | $ 405,053 |
Goodwill acquired | 0 | 20,624 |
Ending balance | 425,677 | 425,677 |
Enterprise Solutions | ||
Goodwill [Line Items] | ||
Beginning balance | 218,658 | 201,211 |
Goodwill acquired | 0 | 17,447 |
Ending balance | 218,658 | 218,658 |
SMB Solutions | ||
Goodwill [Line Items] | ||
Beginning balance | 207,019 | 203,842 |
Goodwill acquired | 0 | 3,177 |
Ending balance | $ 207,019 | $ 207,019 |
Goodwill and Acquired Intangi_5
Goodwill and Acquired Intangible Assets - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Gross Carrying Value | $ 131,578 | $ 131,578 |
Accumulated Amortization | (43,658) | (28,058) |
Net Carrying Value | $ 87,920 | $ 103,520 |
Customer Relationships | ||
Weighted Average Useful Life | 10 years | 10 years |
Gross Carrying Value | $ 82,841 | $ 82,841 |
Accumulated Amortization | (23,059) | (14,775) |
Net Carrying Value | $ 59,782 | $ 68,066 |
Developed Technology | ||
Weighted Average Useful Life | 7 years | 7 years |
Gross Carrying Value | $ 42,913 | $ 42,913 |
Accumulated Amortization | (17,311) | (11,160) |
Net Carrying Value | $ 25,602 | $ 31,753 |
Trade Names | ||
Weighted Average Useful Life | 5 years | 5 years |
Gross Carrying Value | $ 5,824 | $ 5,824 |
Accumulated Amortization | (3,288) | (2,123) |
Net Carrying Value | $ 2,536 | $ 3,701 |
Goodwill and Acquired Intangi_6
Goodwill and Acquired Intangible Assets - Schedule of Future Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
2022 | $ 15,601 | |
2023 | 15,601 | |
2024 | 14,640 | |
2025 | 14,383 | |
2026 | 9,335 | |
Thereafter | 18,360 | |
Net Carrying Value | $ 87,920 | $ 103,520 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 15,208 | $ 8,188 |
Less: Accumulated depreciation and amortization | (4,240) | (1,977) |
Property and equipment, net | 10,968 | 6,211 |
Computer Equipment and Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 4,055 | 3,139 |
Internal-use Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 4,314 | 1,268 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,059 | 1,820 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 4,780 | $ 1,961 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 2.6 | $ 1.3 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables And Accruals [Abstract] | ||
Accrued employee compensation and benefits | $ 12,437 | $ 7,073 |
Accrued consulting and professional fees | 2,619 | 619 |
Accrued processing fees | 1,626 | 1,101 |
Accrued channel partner fees | 2,081 | 1,615 |
Accrued sales tax | 615 | 2,019 |
Accrued interest payable | 51 | 794 |
Accrued restructuring | 387 | 565 |
Other | 5,413 | 2,180 |
Total | $ 25,229 | $ 15,966 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Principal amount of long-term debt | $ 111,671,000 | |
Long-term debt, net of current portion | $ 0 | 111,671,000 |
Less: Debt issuance costs, net of accretion | (1,471,000) | |
Long-term debt, net of debt issuance costs and current portion | $ 110,200,000 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Sep. 27, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2019 | Feb. 11, 2019 |
Debt Instrument [Line Items] | |||||
Long-term debt outstanding | $ 0 | $ 111,671,000 | |||
Senior secured revolving credit facility | $ 7,500,000 | ||||
Repayments of outstanding borrowings | 114,174,000 | ||||
Credit Facilities | |||||
Debt Instrument [Line Items] | |||||
Loss on debt extinguishment | $ 1,200,000 | ||||
Repayments of outstanding borrowings | 114,200,000 | ||||
Letter of Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 2,100,000 | ||||
Letter of Credit Facility | JPMorgan Chase Bank, N.A. | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | 7,500,000 | ||||
Initial Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | 75,000,000 | ||||
Delayed Draw Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 35,000,000 | ||||
2021 Revolving Credit Facility | JPMorgan Chase Bank, N.A. | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 75,000,000 | ||||
Credit facility maturity date | Sep. 27, 2026 | ||||
Credit facility commitment percentage | 0.25% | ||||
Credit facility available to be drawn | 72,900,000 | ||||
Debt issuance costs | $ 1,200,000 | ||||
2021 Revolving Credit Facility | Credit Facilities | JPMorgan Chase Bank, N.A. | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 2,100,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Millions | Sep. 27, 2021USD ($)$ / sharesshares | Dec. 31, 2021$ / sharesshares | Dec. 31, 2020shares |
Class Of Stock [Line Items] | |||
Forward stock split, description | 1-for-3 | ||
Forward stock split | 0.3333 | ||
Preferred stock, shares authorized | 10,000,000 | 0 | |
Preferred stock, par value per share | $ / shares | $ 0.001 | ||
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, shares authorized | 650,000,000 | 0 | |
Common stock, par value per share | $ / shares | $ 0.001 | ||
Common stock, shares, issued | 161,860,980 | 0 | |
Common stock, shares, outstanding | 161,860,980 | 0 | |
General Atlantic, L.P. | |||
Class Of Stock [Line Items] | |||
Proceeds from capital contribution | $ | $ 43.2 | ||
Class A-1 Common Shares | |||
Class Of Stock [Line Items] | |||
Stock conversion basis | 1:1 | ||
Common stock reclassified | 0.9398 | ||
Additional shares of common stock subscribed | 1,662,917 | ||
Class A-2 Common Shares | |||
Class Of Stock [Line Items] | |||
Stock conversion basis | 1:1 | ||
Common stock reclassified | 1.1102 | ||
Class A-3 Common Shares | |||
Class Of Stock [Line Items] | |||
Stock conversion basis | 1:1 | ||
Common stock reclassified | 1 | ||
Common Stock | |||
Class Of Stock [Line Items] | |||
Common stock shares issued and sold | 13,620,054 | ||
IPO | |||
Class Of Stock [Line Items] | |||
Net proceeds | $ | $ 326.4 | ||
Underwriting discounts | $ | 22.1 | ||
Offering expenses | $ | $ 5.6 | ||
IPO | General Atlantic, L.P. | |||
Class Of Stock [Line Items] | |||
Additional shares of common stock subscribed | 288,344 | 288,344 | |
IPO | Common Stock | |||
Class Of Stock [Line Items] | |||
Common stock shares issued and sold | 13,620,054 | ||
Share price per share | $ / shares | $ 26 | ||
Over Allotment Option | Common Stock | |||
Class Of Stock [Line Items] | |||
Common stock shares issued and sold | 620,054 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | $ 14,400,000 | |||
Weighted average period over which unrecognized compensation is expected to be recognized | 2 years 7 months 6 days | |||
Cash received as result of exercise of stock options granted | $ 1,577,000 | $ 4,981,000 | ||
Stock-based compensation expense capitalized | 0 | 0 | ||
Stock based compensation expense | $ 9,468,000 | $ 641,000 | ||
2021 Incentive Award Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based awards granted to employees vesting period | 4 years | |||
Stock-based awards expired from date of grant | 10 years | |||
2021 Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares of common stock reserved for future issuance (in shares) | 2,219,728 | |||
Award Modification | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Weighted average period over which unrecognized compensation is expected to be recognized | 2 years 7 months 6 days | |||
Increase in unamortized stock-based compensation expense | $ 12,100,000 | |||
Award Modification | Performance-based Vesting | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 3,600,000 | |||
Award Acceleration | Performance-based Vesting | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 5,700,000 | |||
Common Stock | 2021 Incentive Award Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares available for issuance increase each annual by percentage of common stock shares outstanding | 5.00% | |||
Common Stock | 2021 Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares available for issuance increase each annual by percentage of common stock shares outstanding | 1.00% | |||
Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | $ 8,400,000 | |||
Weighted average period over which unrecognized compensation is expected to be recognized | 3 years 8 months 12 days | |||
Restricted stock units vested | 1,602 | 0 | ||
Restricted Stock Units | Common Stock | 2021 Incentive Award Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares of common stock reserved for future issuance (in shares) | 14,798,186 | |||
Shares available to grant | 14,459,679 | |||
Options to Purchase Common Shares | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Aggregate intrinsic value of options exercised | $ 10,000,000 | $ 9,600,000 | ||
Weighted average grant date fair value per share of options granted | $ 2.39 | $ 1.26 | ||
Cash received as result of exercise of stock options granted | $ 1,600,000 | $ 5,000,000 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock Option Grant Using Black-Scholes Option Pricing Model With Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract] | ||
Fair value of common stock/shares | $ 7.67 | $ 3.68 |
Risk-free interest rate | 1.20% | 0.60% |
Expected volatility | 27.30% | 27.00% |
Expected term (in years) | 9 years 3 months 18 days | 8 years 1 month 6 days |
Stock-based Compensation - Sc_2
Stock-based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Beginning balance | 9,333,218 | |
Granted | 3,005,910 | |
Exercised | (832,791) | |
Forfeited | (1,684,158) | |
Ending balance | 9,822,179 | 9,333,218 |
Options exercisable | 4,405,641 | |
Weighted average exercise price, Beginning balance | $ 2.72 | |
Weighted average exercise price, granted | 8.58 | |
Weighted average exercise price, exercised | 1.90 | |
Weighted average exercise price, forfieted | 3.86 | |
Weighted average exercise price, Ending balance | 4.39 | $ 2.72 |
Weighted average exercise price, options exercisable | $ 2.66 | |
Weighted average remaining contractual term (years) | 7 years 5 months 8 days | 8 years 4 months 28 days |
Weighted average remaining contractual term (years), options exercisable | 5 years 10 months 28 days | |
Aggregate intrinsic value | $ 193,789 | $ 16,882 |
Aggregate intrinsic value, options exercisable | $ 94,555 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Restricted of Stock Unit Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Beginning balance | 9,333,218 | |
Exercised | (832,791) | |
Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Granted | 377,363 | |
Vested | (1,602) | 0 |
Forfeited | (38,856) | |
Ending Balance | 336,905 | |
Weighted average grant date fair value per share of options granted | $ 26.42 | |
Weighted-Average Grant Date Fair Value, Vested | 26 | |
Weighted-Average Grant Date Fair Value, Forfeited | 26.09 | |
Weighted-Average Grant Date Fair Value, ending | $ 26.46 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | $ 9,468 | $ 641 |
Cost of Revenue | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | 247 | 14 |
General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | 8,070 | 519 |
Selling and Marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | 813 | 81 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | $ 338 | $ 27 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Benefit from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current income taxes: | ||
Federal | $ 270 | |
State | 355 | $ 150 |
Total current income taxes | 625 | 150 |
Deferred income taxes: | ||
Federal | (500) | (2,334) |
State | (747) | (442) |
Total deferred income taxes | (1,247) | (2,776) |
Total benefit from income taxes | $ (622) | $ (2,626) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of United States Federal Statutory Rate to Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | 21.00% | 21.00% |
Permanent adjustments | (3.80%) | (0.40%) |
State taxes, net of federal benefit | 5.00% | 6.20% |
Stock/equity-based compensation expense | (11.60%) | 6.20% |
Valuation allowance | (4.20%) | |
State rate change | (4.80%) | |
Other adjustments | 0.10% | |
Effective income tax rate | 6.50% | 28.20% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Benefit from income taxes | $ 622,000 | $ 2,626,000 |
Unrecognized tax benefits | 0 | |
Accrued interest or penalties related to uncertain tax positions | 0 | |
Uncertain tax position, amount recognized | $ 0 | |
Income tax examination, description | In the normal course of business, the Company is subject to examination by taxing authorities within these jurisdictions. The Company is not currently under examination for income tax examination in any domestic or foreign jurisdiction | |
Percentage of minimum tax benefit likelihood realized upon settlement with tax authority | 50.00% | |
Effective income tax rate | 6.50% | 28.20% |
Statutory rate | 21.00% | 21.00% |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 36,900,000 | |
Operating loss carryforwards expiration year | 2032 | |
Operating loss carryforwards not subject to expiration | $ 32,300,000 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 34,000,000 | |
Operating loss carryforwards expiration year | 2023 | |
Operating loss carryforwards not subject to expiration | $ 4,400,000 |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 9,801 | $ 12,350 |
Accrued expenses | 3,212 | 1,466 |
Stock/equity-based compensation expense | 840 | 115 |
Deferred transaction costs | 237 | 262 |
Interest expense carryforward | 1,645 | 1,891 |
Restructuring liability | 317 | 583 |
Other | (618) | 116 |
Total deferred tax assets | 15,434 | 16,783 |
Valuation allowance | (392) | |
Total deferred tax assets, net of valuation allowance | 15,042 | 16,783 |
Deferred tax liabilities: | ||
Amortization | (19,266) | (22,254) |
Total deferred tax liabilities | (19,266) | (22,254) |
Net deferred tax liabilities | $ (4,224) | $ (5,471) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 27, 2021 | Feb. 11, 2019 | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |||||
Operating lease expiration, month and year | 2030-11 | ||||
Deferred rent | $ 4,500,000 | $ 1,700,000 | |||
Rent expense | 4,200,000 | 3,900,000 | |||
Future minimum payments under other non-cancellable agreements | 3,100,000 | ||||
Future minimum payments under other non-cancellable agreements, expected to be paid by December 31, 2022 | 1,900,000 | ||||
Future minimum payments under other non-cancellable agreements, expected to be paid by December 31, 2023 | 1,000,000 | ||||
Future minimum payments under other non-cancellable agreements, expected to be paid by December 31, 2024 | 200,000 | ||||
Stock based compensation expense | $ 9,468,000 | $ 641,000 | |||
Office Space | |||||
Loss Contingencies [Line Items] | |||||
Operating lease expiration, month and year | 2025-05 | ||||
Operating lease term | 7 years | ||||
Class A-1 Common Shares | |||||
Loss Contingencies [Line Items] | |||||
Additional shares of common stock subscribed | 1,662,917 | ||||
CVR Plan | Invoice Cloud, Inc. | |||||
Loss Contingencies [Line Items] | |||||
Maximum bonus pool amount | $ 9,500,000 | ||||
Bonus pool amount outstanding | 7,400,000 | ||||
Stock based compensation expense | $ 0 | ||||
CVR Plan | Invoice Cloud, Inc. | Class A-1 Common Shares | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Cash distribution upon achievement of performance threshold | $ 889,100,000 | ||||
General Atlantic, L.P. | IPO | |||||
Loss Contingencies [Line Items] | |||||
Additional shares of common stock subscribed | 288,344 | 288,344 | |||
2021 Revolving Credit Facility | Credit Facilities | JPMorgan Chase Bank, N.A. | |||||
Loss Contingencies [Line Items] | |||||
Letter of credit for lease security deposit | $ 2,100,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Payments under Operating Leases (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2022 | $ 5,674 |
2023 | 5,716 |
2024 | 5,743 |
2025 | 4,481 |
2026 | 4,071 |
Thereafter | 14,766 |
Total | $ 40,451 |
Restructuring - Additional Info
Restructuring - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost And Reserve [Line Items] | |||
Restructuring reversal (charges) | $ 241 | $ (2,434) | |
Restructuring liability | $ 1,200 | ||
Operating lease expiration, month and year | 2030-11 | ||
Office Space Abandonment | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring charges | $ 2,400 | ||
Accrued Expenses and Other Current Liabilities | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring liability | $ 400 | ||
Other Long-Term Liabilities | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring liability | 800 | ||
Office Space | |||
Restructuring Cost And Reserve [Line Items] | |||
Restructuring reversal (charges) | 241 | (2,434) | |
Restructuring liability | $ 1,239 | $ 2,252 | |
Operating lease expiration, month and year | 2025-05 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Cost And Reserve [Line Items] | ||
Restructuring (reversal) charges | $ (241) | $ 2,434 |
Accrued restructuring as of December 31, 2021 | 1,200 | |
Office Space | ||
Restructuring Cost And Reserve [Line Items] | ||
Accrued restructuring as of December 31, 2020 | 2,252 | |
Restructuring (reversal) charges | (241) | 2,434 |
Cash payments | (865) | (349) |
Other | 93 | 167 |
Accrued restructuring as of December 31, 2021 | $ 1,239 | $ 2,252 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Company's contribution to plan | $ 0.8 | $ 0.5 |
Maximum | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Percentage of company's contribution with respect to each participant | 25.00% |
Related Parties - Additional In
Related Parties - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Unsecured notes payable aggregate amount | $ 5,900 | ||
Repayment of notes | $ 5,900 | ||
Interest expense | 100 | 400 | |
Cash interest payments | $ 200 | $ 400 | |
IVR Technologies Group, LLC | |||
Related Party Transaction [Line Items] | |||
Unsecured notes payable aggregate amount | $ 2,900 | ||
Interest rate | 8.00% | ||
Interest due maturity date | Jan. 16, 2021 | ||
Global Cloud, Ltd. | |||
Related Party Transaction [Line Items] | |||
Unsecured notes payable aggregate amount | $ 3,000 | ||
Interest rate | 7.00% | ||
Interest due maturity date | Mar. 12, 2021 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) - Segment | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 2 | |
Maximum | ||
Segment Reporting Information [Line Items] | ||
Percentage of revenue generated from outside the United States | 10.00% | 10.00% |
Percentage of long-lived assets located outside of United States | 10.00% | 10.00% |
Enterprise Solutions | Transaction and Usage-Based | ||
Segment Reporting Information [Line Items] | ||
Percentage of revenue generated | 50.00% | |
SMB Solutions | Subscription | ||
Segment Reporting Information [Line Items] | ||
Percentage of revenue generated | 50.00% |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Reconciliation of Revenue and Adjusted EBITDA for Reportable Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | ||
Total revenue | $ 216,280 | $ 146,557 |
Adjusted EBITDA | ||
Unallocated corporate expenses | (18,983) | (11,080) |
Total Adjusted EBITDA | 30,645 | 22,039 |
Amortization of intangible assets | (15,600) | (15,500) |
Stock/equity-based compensation | (9,468) | (641) |
Restructuring reversal (charges) | 241 | (2,434) |
Loss before income taxes | (9,587) | (9,304) |
Benefit from income taxes | (622) | (2,626) |
Net loss and comprehensive loss | (8,965) | (6,678) |
Reportable Segment | ||
Revenue | ||
Total revenue | 216,280 | 146,557 |
Adjusted EBITDA | ||
Total Adjusted EBITDA from reportable segments | 49,628 | 33,119 |
Segment Reconciling Items | ||
Adjusted EBITDA | ||
Interest expense, net | (8,213) | (9,903) |
Amortization of intangible assets | (15,602) | (15,523) |
Depreciation | (2,588) | (1,288) |
Transaction-related expenses | (4,422) | (1,011) |
Fair value adjustment of acquired deferred revenue | (180) | (543) |
Stock/equity-based compensation | (9,468) | (641) |
Restructuring reversal (charges) | 241 | (2,434) |
Enterprise Solutions | ||
Revenue | ||
Total revenue | 107,549 | 83,944 |
Enterprise Solutions | Reportable Segment | ||
Revenue | ||
Total revenue | 107,549 | 83,944 |
Adjusted EBITDA | ||
Total Adjusted EBITDA from reportable segments | 14,255 | 11,997 |
SMB Solutions | ||
Revenue | ||
Total revenue | 108,731 | 62,613 |
SMB Solutions | Reportable Segment | ||
Revenue | ||
Total revenue | 108,731 | 62,613 |
Adjusted EBITDA | ||
Total Adjusted EBITDA from reportable segments | $ 35,373 | $ 21,122 |