11 unchanged sentences
• our expectations with respect to revenue, cost of revenue and operating expenses in future periods;
+Added: • our expectations with regard to revenue from perpetual licenses and professional services;
• our ability to adapt to the impacts on the global economy associated with the ongoing COVID-19 pandemic;
3 unchanged sentences
• our ability to deliver high-quality customer service;
−Removed: • the growth of demand for enterprise work management applications;
• our plans regarding, and our ability to effectively manage, our growth;
4 unchanged sentences
• economic and financial conditions;
+Added: • the growth of demand for cloud-based, digital transformation applications;
• our ability to integrate our applications with other software applications;
3 unchanged sentences
• our expectations with regard to trends, such as seasonality, which affect our business;
−Removed: • our expectations with regard to revenue from perpetual licenses and professional services;
• our plans with respect to foreign currency exchange risk and inflation;
4 unchanged sentences
• other risk factors included under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022, as updated by this Quarterly Report on Form 10-Q and periodically updated as necessary in our future quarterly reports on Form 10-Q and other filings that we make with the SEC.
−Removed: The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from our forward-looking statements, including risks and uncertainties detailed in this and our other reports and filings with the SEC.
−Removed: The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q.
−Removed: We anticipate that subsequent events and developments may cause our views to change.
−Removed: However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law.
−Removed: You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.
−Removed: We provide cloud-based enterprise work management software.
−Removed: We define enterprise work management software as software applications that enable organizations to plan, manage and execute projects and work.
−Removed: Our family of applications enables users to manage their projects, professional workforce and IT investments, automate document-intensive business processes, and effectively engage with their customers, prospects, and community via the web and mobile technologies.
−Removed: The continued growth of an information-based economy has given rise to a large and growing group of knowledge workers who operate in dynamic work environments as part of geographically dispersed and virtual teams.
−Removed: We believe that manual processes and legacy on- premise enterprise systems are insufficient to address the needs of the modern work environment.
−Removed: In order for knowledge workers to be successful, they need to interact with intuitive enterprise work systems in a collaborative way, including real-time access.
−Removed: Today, legacy processes and systems are being disrupted and replaced by cloud-based enterprise work management software that improves visibility, collaboration and productivity.
−Removed: In response to these changes, we are providing organizations and their knowledge workers with software applications that better align resources with business objectives and increase visibility, governance, collaboration, quality of customer experience, and responsiveness to changes in the business environment.
−Removed: This results in increased work capacity, higher productivity, better execution, and greater levels of customer engagement.
−Removed: Our applications are easy-to-use, scalable, and offer real-time collaboration for knowledge workers distributed on a local or global scale.
−Removed: Our software applications address diverse enterprise work challenges and our customers currently use our applications in the following functional areas:
+Added: You should not rely upon forward-looking statements as predictions of future events.
+Added: We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects.
+Added: The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022.
+Added: Moreover, we operate in a very competitive and rapidly changing environment.
+Added: New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q.
+Added: We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
+Added: The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made.
+Added: We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
+Added: We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.
+Added: Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
+Added: Upland provides cloud-based software applications that enable our customers to drive digital transformation in the following business functions:
• Marketing .
Digital marketing, e-commerce, and customer service teams use our applications to interact with consumers across multiple channels to acquire new customers, drive product and service utilization, resolve issues, and build brand loyalty.
−Removed: Our applications deliver value to CX-focused organizations across a variety of use cases including mobile messaging, mobile application marketing, VoC, email marketing, knowledge management and call center productivity.
−Removed: Our teams bring deep industry experience in orchestrating campaigns and interactions that consumers want and value.
+Added: Our applications deliver value to customer experience, or CXM-focused organizations across a variety of use cases including mobile messaging, mobile application marketing, Voice of Customer engagement, or VoC, email marketing, knowledge management and call center productivity.
+Added: We also offer customer data platform, or CDP, solutions that provide organizations the ability to unify customer data stored across diverse systems to drive more personalized omnichannel campaigns.
Sales teams employ our applications to drive growth through deeper customer engagement, reduced sales cycle times, and overall improved collaboration between sales, marketing, and other customer-facing functions.
3 unchanged sentences
We offer applications that improve customer experience and reduce call volume and cycle times through customer self-service products and VoC technology that captures customer sentiment in real-time.
−Removed: Upland also offers products that improve call center agent productivity by providing more direct access to knowledge and to customer sentiment thereby improving both inbound call outcomes and proactive outbound success.
+Added: We also offer products that improve call center agent productivity by providing more direct access to knowledge and to customer sentiment thereby improving both inbound call outcomes and proactive outbound success.
+Added: We also provide products that deliver knowledge-based, guided workflows for customer service environments supporting complex products in strict regulatory requirements.
Additional solutions help call center leadership to manage agent performance and measure real-time performance relative to call resolution and customer sentiment, improve performance through gamification, and gather agent feedback to keep employee engagement high.
• Project Management.
−Removed: Business leaders and PMOs use our applications to optimize project portfolios, balance capacity against demand, improve financial-based decision making, align execution of projects to strategy across large organizations, and manage the entire project delivery lifecycle.
−Removed: Our applications deliver value to project management across a variety of use cases including continuous improvement, enterprise IT, new product development, and services departments along with industry depth in higher education, public sector, and healthcare IT.
+Added: Business leaders and Project Management Offices, or PMOs use our applications to optimize project portfolios, balance capacity against demand, improve financial-based decision making, align execution of projects to strategy across large organizations, and manage the entire project delivery lifecycle.
+Added: Our applications deliver value to project management across a variety of use cases including continuous improvement, enterprise information tech IT, new product development, and services departments along with industry depth in higher education, public sector, and healthcare IT.
• Information Technology .
IT departments use our applications to manage a variety of IT activities and resources across the enterprise.
−Removed: Our applications help information technology departments ensure they are delivering against the objectives of the business by helping them select and prioritize the right investments, gain greater control of resource
−Removed: demand and allocation, and track and report benefit realization.
+Added: Our applications help information technology departments ensure they are delivering against the objectives of the business by helping them select and prioritize the right investments, gain greater control of resource demand and allocation, and track and report benefit realization.
Our applications enable executives to gain better insight into IT spending to help prevent cost overruns and understand the nature of consumption.
1 unchanged sentence
Multiple functional departments use our applications to streamline operations and accelerate business performance across their value chains.
−Removed: Upland solutions in this area range from supply chain collaboration and factory management, back office document and vendor management, to applications that improve sales responsiveness.
+Added: Our solutions in this area range from supply chain collaboration and factory management, back office document and vendor management, to applications that improve sales responsiveness.
+Added: In addition, our products help operations teams compose, automate and exchange documents based on content from existing back-office systems to produce interactive business communications, while maintaining compliance and reducing production costs.
• Human Resources and Legal .
−Removed: HR, legal departments, and law firms use our applications to improve collaboration and operational control and streamline routine processes.
+Added: Human resources, or HR, legal departments, and law firms use our applications to improve collaboration and operational control and streamline routine processes.
We offer applications that automate document management and workflow including, contracts, records, and other documentation that require enhanced security and compliance requirements.
3 unchanged sentences
We employ a land-and-expand go-to-market strategy.
−Removed: After we demonstrate the value of an initial application to a customer, our sales and account management teams work to expand the adoption of that initial application across the customer, as well as cross-sell additional applications to address other enterprise work management needs of the customer.
+Added: After we demonstrate the value of an initial application to a customer, our sales and account management teams work to expand the adoption of that initial application across the customer, as well as cross-sell additional applications to address other digital transformation needs of the customer.
Our customer success organization supports our direct sales efforts by managing the post-sale customer lifecycle.
2 unchanged sentences
We have more than 10,000 customers with over 1,000,000 users across a broad range of industries, including financial services, retail, technology, manufacturing, legal, education, consumer goods, media, telecommunications, government, non-profit, food and beverage, healthcare and life sciences.
−Removed: Through a series of acquisitions and integrations, we have established a diverse family of software applications under the Upland brand and in the product solution categories listed above, each of which addresses a specific enterprise work management need.
+Added: Through a series of acquisitions and integrations, we have established a library of diverse, cloud-based software applications under the Upland brand that support the business functions listed above and address specific digital transformation needs.
Our revenue has grown from $98.0 million in 2017 to $302.0 million in 2021, representing a compound annual growth rate of 33%.
−Removed: During the nine months ended September 30, 2021 foreign revenue as a percent of total revenue increased to 28% compared to 26% during the year ended December 31, 2020.
+Added: During the three months ended March 31, 2022 foreign revenue as a percent of total revenue increased to 32% compared to 25% during the three months ended March 31, 2021.
Revenue Recognition in the notes to our unaudited condensed consolidated financial statements for more information regarding our revenue as it relates to domestic and foreign operations.
To support continued growth, we intend to pursue acquisitions within our core enterprise solution suites of complementary technologies and businesses.
−Removed: This will expand our product families, customer base, and market access resulting in increased benefits of scale.
−Removed: Consistent with our growth strategy, we have made twenty-nine acquisitions from February 2012 through September 30, 2021.
+Added: This will expand our product library, customer base, and market access resulting in increased benefits of scale.
+Added: Consistent with our growth strategy, we have made 31 acquisitions from February 2012 through March 31, 2022.
COVID-19 Impact
In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic, which has created significant economic uncertainty across the globe 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.
−Removed: As the administration of vaccine programs progresses and cases decline, we continue to evaluate our plans to reopen our facilities and resume business travel for our employees.
+Added: The ongoing spread of COVID-19 remains a global pandemic, compounded with the discovery of new COVID-19 variants (such as Delta and Omicron).
+Added: However, with the gradual easing of COVID-19 lockdown restrictions globally and progress made in the development and distribution of vaccines and boosters, stability in the markets have continued to improve.
+Added: As such, the Company gradually picked up acquisition activity in 2021 and continued into the first quarter of 2022.
We cannot predict the extent to which the COVID-19 outbreak will continue to impact our business or operating results, which is highly dependent on inherently uncertain future developments, including the severity of COVID-19 and the actions taken by governments and private businesses in relation to COVID-19 containment.
As our platform is offered as a subscription-based service, the effect of the outbreak may not be fully reflected in our operating results until future periods, if at all.
−Removed: While we have limited exposure to the industry verticals that have been hardest hit by the pandemic (including the travel, transportation, entertainment and retail industries) we have seen an impact to new bookings and churn which we attribute to COVID-19.
−Removed: The continued impact to bookings and churn is uncertain.
−Removed: In 2020, the impact to new bookings and churn attributable to Covid-19 was more than offset by strength in our cloud offerings that enable our customers to digitally transform their organizations at a time when they must adapt to remote work and digital engagement even more quickly and strong sales into political campaigns in the US in 2020 due to an increase in US presidential year related campaign activity.
−Removed: Generally, the campaign related increase experienced in 2020 is not repeating in 2021.
−Removed: During the second, third and fourth quarters of 2020 we paused our acquisition activity in order to gauge the overall economic impact of the pandemic and focus on evaluating our pipeline of opportunities.
−Removed: This resulted in a steady decrease in acquisition related expenses over this period.
−Removed: With acquisition activity picking up again in the first quarter of 2021, including the acquisitions of Second Street, BlueVenn, and Panviva to date in 2021, acquisition-related expenses picked up again starting in the first quarter of 2021 and these acquisition related expenses will vary quarter to quarter in proportion to the size, timing and complexity of current and future acquisitions.
−Removed: In addition to the GAAP financial measures described below in “Components of Operating Results,” we regularly review the following key metrics to evaluate and identify trends in our business, measure our performance, prepare financial projections and make strategic decisions.
−Removed: Adjusted EBITDA
−Removed: We monitor our Adjusted EBITDA to help us evaluate the effectiveness and efficiency of our operations.
−Removed: Adjusted EBITDA is a non-GAAP financial measure.
−Removed: We define Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, plus depreciation and amortization expense, interest expense, net, other expense (income), net, provision for (benefit from) income taxes, stock-based compensation expense, acquisition-related expenses, and purchase accounting adjustments for deferred revenue.
−Removed: The following table represents a reconciliation of net loss from continuing operations, the most comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated.
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 2021 2020
−Removed: (dollars in thousands)
−Removed: Reconciliation of net loss to Adjusted EBITDA:
−Removed: Net loss $ (11,015) $ (11,310) $ (50,741) $ (45,550)
−Removed: Depreciation and amortization expense 13,751 11,696 39,420 35,091
−Removed: Interest expense, net 7,971 8,078 23,700 23,594
−Removed: Other expense (income), net 650 (598) 812 819
−Removed: Benefit from income taxes (3,348) 1,149 (6,204) (3,811)
−Removed: Stock-based compensation expense 12,047 10,963 43,421 31,263
−Removed: Acquisition-related expense 3,685 3,574 18,805 24,513
−Removed: Purchase accounting deferred revenue discount 1,275 1,408 2,375 7,381
−Removed: Adjusted EBITDA $ 25,016 $ 24,960 $ 71,588 $ 73,300
−Removed: We believe that Adjusted EBITDA provides useful information to management, investors and others in understanding and evaluating our operating results for the following reasons:
−Removed: • Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired;
−Removed: • Our management uses Adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, in the preparation of our annual operating budget, as a measure of our operating performance, to assess the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance because Adjusted EBITDA eliminates the impact of items that we do not consider indicative of our core operating performance;
−Removed: • Adjusted EBITDA provides more consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our operations and also facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
−Removed: Adjusted EBITDA should not be considered as an alternative to net loss or any other measure of financial performance calculated and presented in accordance with GAAP.
−Removed: The use of Adjusted EBITDA as an analytical tool has limitations such as:
−Removed: • Depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect cash requirements for such replacements;
−Removed: however, much of the depreciation and amortization currently reflected relates to amortization of acquired intangible assets as a result of business combination purchase accounting adjustments, which will not need to be replaced in the future;
−Removed: • Adjusted EBITDA may not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;
−Removed: • Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation;
−Removed: • Adjusted EBITDA does not reflect interest or tax payments that could reduce cash available for use;
−Removed: • Other companies, including companies in our industry, might calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as comparative measures.
−Removed: Because of these limitations, you should consider Adjusted EBITDA together with other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.
+Added: The persistence of COVID-19 and the preventative measures implemented to help limit the spread of the illness, have impacted, and will continue to impact, our ability to operate our business and may materially and adversely impact our business, financial condition, and results of operations.
+Added: The health and well-being of our employees, customers, partners and communities continues to be our main priority.
+Added: As such, we support and continue the remote working arrangements for our employees.
Results of Operations
2 unchanged sentences
The period-to-period comparisons of results of operations are not necessarily indicative of results for future periods.
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 2021 2020
−Removed: Amount Percent of Revenue Amount Percent of Revenue Amount Percent of Revenue Amount Percent of Revenue
+Added: Three Months Ended March 31,
+Added: Amount Percent of Revenue Amount Percent of Revenue
(dollars in thousands, except share and per share data)
27 unchanged sentences
Loss before provision for income taxes (22,957) (29) % (25,078) (34) %
−Removed: Benefit from (provision for) income taxes 3,348 5 % (1,149) (2) % 6,204 4 % 3,811 1 %
+Added: Benefit from income taxes 126 — % 4,394 6 %
Net loss $ (22,831) (29) % $ (20,684) (28) %
1 unchanged sentence
Weighted-average common shares outstanding, basic and diluted 31,163,273 29,970,050
−Removed: (1) Includes stock-based compensation detailed under Share-based Compensation in Note 9 — Stockholders' Equity.
−Removed: (2) Includes General and administrative stock-based compensation of $9.2 million and $8.4 million for the three months September 30, 2021 and September 30, 2020, respectively, and $35.2 million and $24.7 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.
−Removed: General and administrative expense excluding stock-based compensation as a percentage of total revenues was 11% and 11% for the three months ended September 30, 2021 and September 30, 2020, respectively, and 12% and 12% for the nine months ended September 30, 2021 and September 30, 2020, respectively.
−Removed: (3) Includes depreciation and amortization of $3.0 million and $2.6 million for the three months ended September 30, 2021 and September 30, 2020, respectively, and $8.6 million and $7.7 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.
−Removed: Comparison of the Three and Nine Months Ended September 30, 2021 and 2020
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: (1) Includes stock-based compensation detailed under Share-based Compensation in “Item 1.
+Added: Financial Statements—Note 9.
+Added: Stockholders' Equity”.
+Added: (2) Includes General and administrative stock-based compensation of $9.0 million and $15.5 million for the three months March 31, 2022 and March 31, 2021, respectively.
+Added: General and administrative expense excluding stock-based compensation as a percentage of total revenues was 13% and 12% for the three months ended March 31, 2022 and March 31, 2021, respectively.
+Added: (3) Includes depreciation and amortization of $3.2 million and $2.7 million for the three months ended March 31, 2022 and March 31, 2021, respectively.
+Added: Comparison of the Three Months Ended March 31, 2022 and 2021
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
10 unchanged sentences
Total revenue 100% 100%
−Removed: For the Three Months Ended September 30, 2021
−Removed: Total revenue was $76.1 million in the three months ended September 30, 2021, compared to $74.2 million in the three months ended September 30, 2020, an increase of $1.9 million, or 3%.
−Removed: The acquisitions not fully in the comparative period contributed $8.2 million to the increase after the reduction of $1.3 million purchase accounting deferred revenue discount in the three months ended September 30, 2021.
−Removed: Total revenue related to the divestiture and sunset of certain minor non-strategic customer contracts and related website management and analytics assets (collectively referred to as “Sunset Assets”) declined by $0.3 million as a result of decreased sales and marketing focus on those Sunset Assets.
−Removed: Our organic business (the “Organic Business”) excludes acquisitions closed during or subsequent to the prior year comparable period and business operations related to Sunset Assets.
−Removed: Therefore, total revenue for our Organic Business decreased by $6.0 million.
−Removed: The three months ended September 30, 2020 included $6.0 million of CXM usage revenue from US election-year presidential campaigns which did not repeat in the current period and will not repeat for the remainder of 2021.
−Removed: Subscription and support revenue was $72.3 million in the three months ended September 30, 2021, compared to $71.0 million in the three months ended September 30, 2020, an increase of $1.3 million, or 2%.
−Removed: The acquisitions not fully in the comparative period contributed $7.8 million to the increase in subscription and support revenue after the reduction of $1.3 million purchase accounting deferred revenue discount in the three months ended September 30, 2021.
−Removed: Subscription and support revenue related to our Sunset Assets decreased $0.3 million as a result of decreased sales and marketing focus on those Sunset Assets.
−Removed: Subscription and support revenue for our Organic Business decreased to $64.2 million from a basis of $70.4 million for the three months ended September 30, 2020.
−Removed: The three months ended September 30, 2020 included $6.0 million of CXM usage revenue from US election-year presidential campaigns which did not repeat in the current period and will not repeat for the remainder of 2021.
−Removed: Perpetual license revenue was $0.7 million in the three months ended September 30, 2021, compared to $0.4 million in the three months ended September 30, 2020.
−Removed: Professional services revenue was $3.1 million in the three months ended September 30, 2021, compared to $2.8 million in the three months ended September 30, 2020, an increase of $0.3 million, or 12%.
−Removed: The acquisitions not fully in the comparative period contributed $0.4 million to the increase in professional services revenue in the three months ended September 30, 2021.
−Removed: Professional services revenue for our Organic Business decreased by $0.1 million.
−Removed: For the Nine Months Ended September 30, 2021
−Removed: Total revenue was $226.3 million in the nine months ended September 30, 2021, compared to $213.5 million in the nine months ended September 30, 2020, an increase of $12.8 million, or 6%.
−Removed: The acquisitions not fully in the comparative period contributed $20.3 million to the increase after the reduction of $2.3 million purchase accounting deferred revenue discount in the nine months ended September 30, 2021.
−Removed: Total Revenue related to Sunset Assets decreased by $1.1 million as a result of decreased sales and marketing focus on those Sunset Assets.
−Removed: Therefore, total revenue for the Organic Business decreased by $6.4 million.
−Removed: The nine months ended September 30, 2020 included $11.6 million of CXM usage revenue from US election-year presidential campaigns which did not repeat in the current period and will not repeat for the remainder of 2021.
−Removed: Subscription and support revenue was $215.3 million in the nine months ended September 30, 2021, compared to $202.6 million in the nine months ended September 30, 2020, an increase of $12.7 million, or 6%.
−Removed: The acquisitions not fully in the comparative period contributed $18.9 million to the increase in subscription and support revenue after the reduction of $2.3 million purchase accounting deferred revenue discount in the nine months ended September 30, 2021.
−Removed: Subscription and support revenue related to our Sunset Assets decreased $1.2 million as a result of decreased sales and marketing focus on those Sunset Assets.
−Removed: Subscription and support revenue for our Organic Business decreased to $183.7 million from a basis of $188.7 million for the nine months ended September 30, 2020.
−Removed: The nine months ended September 30, 2020 included $11.6 million of CXM usage revenue from US election-year presidential campaigns which did not repeat in the current period and will not repeat for the remainder of 2021.
−Removed: Perpetual license revenue was $1.5 million in the nine months ended September 30, 2021, compared to $1.3 million in the nine months ended September 30, 2020, an increase of $0.2 million.
−Removed: Professional services revenue was $9.5 million in the nine months ended September 30, 2021, compared to $9.7 million in the nine months ended September 30, 2020, a decrease of $0.2 million, or 2%.
−Removed: The acquisitions not fully in the comparative period contributed $1.4 million to the increase in professional services revenue in the nine months ended September 30, 2021.
−Removed: Therefore, professional services revenue from our Organic Business decreased by $1.6 million due primarily to COVID-19 related travel impacts.
+Added: For the Three Months Ended March 31, 2022
+Added: Total revenue was $78.7 million in the three months ended March 31, 2022, compared to $74.0 million in the three months ended March 31, 2021, an increase of $4.7 million, or 6%.
+Added: The acquisitions not fully in the comparative period contributed $10.1 million to the increase after the reduction of $1.9 million purchase accounting deferred revenue discount in the three months ended March 31, 2022.
+Added: Total revenue related to the divestiture and sunset of certain minor non-strategic customer contracts (collectively referred to as “Sunset Assets”) declined by $0.3 million in the quarter as a result of decreased sales and marketing focus on those Sunset Assets.
+Added: Total revenue related to Overage Charges (as defined) declined by $2.1 million as a result of variable demand in the quarter.
+Added: Overage Charges are amounts paid to the Company by a customer (in addition to such customer’s contractual minimum payment commitments) as a result of such customer’s number of users or level of usage of services including text and e-mail messaging and third party pass-through costs exceeding the levels stipulated in such customer’s license or related purchase agreements with the Company.
+Added: The three months ended March 31, 2021 included $0.8 million of CXM usage revenue from US election-year presidential campaigns (hereafter referred to as “Political Revenue”) which did not repeat in the current quarter and will not repeat for the remainder of 2022.
+Added: Our core organic business (the “Core Organic Business”) excludes revenues from acquisitions closed during or subsequent to the prior year comparable period, revenue from business operations related to Sunset Assets, Overage Charges and Political Revenue.
+Added: Therefore, total revenue for our Core Organic Business decreased by $2.1 million.
+Added: Subscription and support revenue was $73.6 million in the three months ended March 31, 2022, compared to $70.7 million in the three months ended March 31, 2021, an increase of $2.9 million, or 4%.
+Added: The acquisitions not fully in the comparative period contributed $8.1 million to the increase in subscription and support revenue after the reduction of $1.9 million purchase accounting deferred revenue discount in the three months ended March 31, 2022.
+Added: Subscription and support revenue related to our Sunset Assets decreased $0.3 million in the quarter as a result of decreased sales and marketing focus on those Sunset Assets.
+Added: Subscription and support revenue related to Overage Charges declined by $2.1 million as a result of variable demand in the quarter.
+Added: The three months ended March 31, 2021 included $0.8 million of Political Revenue which did not repeat in the current quarter and will not repeat for the remainder of 2022.
+Added: Therefore, subscription and support revenue for our Core Organic Business decreased to $59.5 million for the three months ended March 31, 2022, from a basis of $61.5 million for the three months ended March 31, 2021.
+Added: Perpetual license revenue was $1.8 million in the three months ended March 31, 2022, compared to $0.4 million in the three months ended March 31, 2021.
+Added: The acquisitions not fully in the comparative period contributed $1.4 million to the increase in perpetual license revenue in the three months ended March 31, 2022 primarily from the acquisition of Objectif Lune.
+Added: Therefore, perpetual license revenue for our Core Organic Business for the three months ended March 31, 2022 was flat compared to the three months ended March 31, 2021.
+Added: Professional services revenue was $3.3 million in the three months ended March 31, 2022, compared to $3.0 million in the three months ended March 31, 2021, an increase of $0.3 million, or 12%.
+Added: The acquisitions not fully in the comparative period contributed $0.6 million to the increase in professional services revenue in the three months ended March 31, 2022.
+Added: professional services revenue for our Core Organic Business decreased by $0.3 million in the three months ended March 31, 2022 compared to the three months ended March 31, 2021.
Cost of Revenue and Gross Profit Percentage
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
7 unchanged sentences
Subscription and support (1)
−Removed: 30% 32% 30% 30%
Professional services and other 3% 2%
5 unchanged sentences
Stock Compensation $ 402 $ 442
−Removed: For the Three Months Ended September 30, 2021
−Removed: Cost of subscription and support revenue was $23.0 million in the three months ended September 30, 2021, compared to $23.6 million in the three months ended September 30, 2020, a decrease of $0.6 million, or 3%.
−Removed: The acquisitions not fully in the
−Removed: comparative period contributed $2.6 million to cost of subscription and support revenue, primarily related to costs associated with the delivery of the Second Street, BlueVenn, & Panviva products.
+Added: For the Three Months Ended March 31, 2022
+Added: Cost of subscription and support revenue was $22.1 million in the three months ended March 31, 2022, compared to $22.7 million in the three months ended March 31, 2021, a decrease of $0.6 million, or 3%.
+Added: The acquisitions not fully in the comparative period contributed $2.0 million to cost of subscription and support revenue, primarily related to costs associated with the delivery of the newly acquired products.
Cost of subscription and support revenue related to our Sunset Assets decreased $0.1 million.
+Added: Our organic business excludes acquisitions closed during or subsequent to the prior year comparable period and business operations related to Sunset Assets (the “Organic Business”).
Therefore, cost of subscription and support revenue for our Organic Business decreased by $2.5 million, primarily related to a decrease in telecom messaging costs related to a year over year reduction in CXM usage as a result of cyclical highs in 2021 related to US election-year presidential campaigns.
−Removed: Cost of professional services and other revenue was $1.8 million in the three months ended September 30, 2021, compared to $2.0 million in the three months ended September 30, 2020, a decrease of $0.2 million, or 9%.
+Added: Cost of professional services and other revenue was $2.7 million in the three months ended March 31, 2022, compared to $1.7 million in the three months ended March 31, 2021, an increase of $1.0 million, or 54%.
The acquisitions not fully in the comparative period contributed $1.0 million in the cost of professional services revenue.
−Removed: Therefore, cost of professional services revenue for our Organic Business decreased by $0.5 million, primarily related to personnel and related costs, most of which were the result of our planned operating efficiencies.
−Removed: For the Nine Months Ended September 30, 2021
−Removed: Cost of subscription and support revenue was $68.8 million in the nine months ended September 30, 2021, compared to $64.7 million in the nine months ended September 30, 2020, an increase of $4.1 million, or 6%.
−Removed: The acquisitions not fully in the comparative period contributed $6.3 million to the increase to cost of subscription and support revenue, primarily related to costs associated with the delivery of the Localytics, Second Street, BlueVenn, and Panviva products.
−Removed: Cost of subscription and support revenue related to our Sunset Assets decreased $0.6 million primarily related to hosting and infrastructure costs.
−Removed: Therefore, cost of subscription and support revenue for the organic portion of our business decreased by $1.6 million, primarily related to a year over year reduction in CXM usage as a result of cyclical highs in 2020 related to US election-year presidential campaigns, which were partially offset by an increase in infrastructure and hosting costs.
−Removed: Cost of professional services revenue was $5.4 million in the nine months ended September 30, 2021, compared to $6.8 million in the nine months ended September 30, 2020, a decrease of $1.4 million, or 19%.
−Removed: The acquisitions not fully in the comparative period contributed $0.6 million to cost of professional services revenue, primarily related to an increase in personnel and related costs.
−Removed: Therefore, cost of professional services revenue for our Organic Business decreased by $2.0 million, primarily related to personnel and related costs, most of which were the result of our planned operating efficiencies.
Operating Expenses
Sales and Marketing Expense
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
4 unchanged sentences
Stock Compensation $ 1,474 $ 1,137
−Removed: For the Three Months Ended September 30, 2021
−Removed: Sales and marketing expense was $14.4 million in the three months ended September 30, 2021, compared to $11.8 million in the three months ended September 30, 2020, an increase of $2.6 million, or 22%.
+Added: For the Three Months Ended March 31, 2022
+Added: Sales and marketing expense was $15.6 million in the three months ended March 31, 2022, compared to $12.4 million in the three months ended March 31, 2021, an increase of $3.2 million, or 25%.
The acquisitions not fully in the comparative period contributed $2.1 million to the increase in sales and marketing expense, primarily consisting of personnel and related costs.
−Removed: Sales and marketing expense for our Organic Business increased $1.3 million in the comparative periods, primarily attributable to personnel and related costs associated with our continued go-to-market investments.
−Removed: For the Nine Months Ended September 30, 2021
−Removed: Sales and marketing expense was $41.1 million in the nine months ended September 30, 2021, compared to $34.5 million in the nine months ended September 30, 2020, an increase of $6.6 million, or 19%.
−Removed: The acquisitions not fully in the comparative period contributed $2.4 million to the increase in sales and marketing expense, primarily consisting of personnel and related costs in the nine months ended September 30, 2021.
−Removed: Therefore, sales and marketing expense for the organic portion of our business increased by $4.2 million, primarily attributable to personnel and related costs associated with our continued go-to-market investments.
+Added: Sales and marketing expense for our Organic Business increased $1.1 million in the comparative periods, primarily attributable to sales commissions expense associated with our continued go-to-market investments.
Research and Development Expense
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
4 unchanged sentences
Stock Compensation $ 748 $ 714
−Removed: For the Three Months Ended September 30, 2021
−Removed: Research and development expense was $10.4 million in the three months ended September 30, 2021, compared to $10.0 million in the three months ended September 30, 2020, an increase of $0.4 million, or 5%.
−Removed: The acquisitions not fully in the comparative period contributed $1.1 million to the increase in research and development expense primarily consisting of personnel and related costs.
−Removed: Therefore, research and development expense related to our Organic Business decreased by $0.7 million primarily related to personnel costs, including a reduction in non-cash stock compensation.
−Removed: For the Nine Months Ended September 30, 2021
−Removed: Research and development expense was $32.5 million in the nine months ended September 30, 2021, compared to $29.4 million in the nine months ended September 30, 2020, an increase of $3.1 million, or 11%.
−Removed: The acquisitions not fully in the comparative period contributed $2.5 million to the increase in research and development expense primarily consisting of personnel and related costs.
−Removed: Research and development costs related to our Sunset Assets decreased $0.2 million.
−Removed: Therefore, research and development costs for our Organic Business increased by $0.8 million primarily related to personnel and related costs.
+Added: For the Three Months Ended March 31, 2022
+Added: Research and development expense was $12.1 million in the three months ended March 31, 2022, compared to $10.9 million in the three months ended March 31, 2021, an increase of $1.2 million, or 10%.
+Added: The acquisitions not fully in the comparative period contributed $1.9 million to the increase in research and development expense primarily consisting of personnel and related costs from our acquisitions in 2022 and 2021.
+Added: Research and development expense related to our Sunset Assets decreased by $0.1 million.
+Added: Therefore, research and development expense related to our Organic Business decreased by $0.6 million primarily related to personnel and related costs.
General and Administrative Expense
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
4 unchanged sentences
Stock Compensation $ 8,995 $ 15,531
−Removed: For the Three Months Ended September 30, 2021
−Removed: General and administrative expense was $17.7 million in the three months ended September 30, 2021, compared to $16.9 million in the three months ended September 30, 2020, an increase of $0.8 million, or 5%.
−Removed: An increase in general administrative expense of $0.2 million was due to the acquisitions not fully in the comparative period.
−Removed: Therefore, general and administrative expense for our Organic Business increased by $0.6 million, which was driven primarily by increased non-cash stock compensation expense.
−Removed: For the Nine Months Ended September 30, 2021
−Removed: General and administrative expense was $61.3 million in the nine months ended September 30, 2021, compared to $51.2 million in the nine months ended September 30, 2020, an increase of $10.1 million, or 20%.
+Added: For the Three Months Ended March 31, 2022
+Added: General and administrative expense was $19.6 million in the three months ended March 31, 2022, compared to $24.4 million in the three months ended March 31, 2021, a decrease of $4.8 million, or 20%.
An increase in general administrative expense of $0.7 million was due to the acquisitions not fully in the comparative period.
−Removed: Therefore, general and administrative expense for our Organic Business increased by $9.9 million, which was driven primarily by increased non-cash stock compensation expense, including a one-time increase in non-cash stock compensation expense related to the departure of our former co-President and Chief Operating Officer in March 2021, and also includes investment in our new go-to-market leadership team and other personnel related costs.
+Added: Therefore, general and administrative expense for our Organic Business decreased by $5.5 million, which was driven primarily by lower non-cash stock compensation expense, primarily as a result of the $6.3 million in incremental stock-based compensation expense related to the deemed modification of the unvested portion of grants held by our former COO in the last March quarter.
+Added: Stockholders' Equity—Stock-Based Compensation”, for further details.
Depreciation and Amortization Expense
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
7 unchanged sentences
Total depreciation and amortization 14% 13%
−Removed: For the Three Months Ended September 30, 2021
−Removed: Depreciation and amortization expense was $10.8 million in the three months ended September 30, 2021, compared to $9.1 million in the three months ended September 30, 2020, an increase of $1.7 million, or 18%.
−Removed: The acquisitions not fully in the comparative period increased depreciation and amortization expense by $1.9 million, primarily related to acquired intangible assets such as customer relationships, developed technology and tradenames.
−Removed: This increase was partially offset by a decrease of $0.2 million in depreciation and amortization expense from assets becoming fully depreciated and amortized.
−Removed: For the Nine Months Ended September 30, 2021
−Removed: Depreciation and amortization expense was $30.8 million in the nine months ended September 30, 2021, compared to $27.4 million in the nine months ended September 30, 2020, an increase of $3.4 million, or 12%.
+Added: For the Three Months Ended March 31, 2022
+Added: Depreciation and amortization expense was $11.1 million in the three months ended March 31, 2022, compared to $9.7 million in the three months ended March 31, 2021, an increase of $1.4 million, or 13%.
The acquisitions not fully in the comparative period increased depreciation and amortization expense by $1.9 million, primarily related to acquired intangible assets such as customer relationships, developed technology and tradenames.
1 unchanged sentence
Acquisition-related Expenses
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
6 unchanged sentences
Generally, without new acquisition activity, acquisition related expenses decline in subsequent sequential quarters and are no longer incurred after the first anniversary of the last closed acquisition.
−Removed: For the Three Months Ended September 30, 2021
−Removed: Acquisition-related expense was $3.7 million in the three months ended September 30, 2021, compared to $3.6 million in the three months ended September 30, 2020, an increase of $0.1 million, or 3%.
−Removed: During the three months ended September 30, 2021 and September 30, 2020 transaction related expenses were $0.1 million and $0.0 million, respectively, and transformational expenses were $3.6 million and $3.6 million, respectively.
−Removed: The transformational expenses in both the current and year ago periods were primarily related to temporary transitional personnel and related costs along with accelerated rent related expenses incurred in conjunction with the closures of offices of our acquired companies as we consolidate and integrate these acquisitions.
−Removed: Transformation expenses in 2020 include expenses related to acquisitions closed in 2019 as well as the one acquisition closed in 2020 compared to transformation expenses in 2021 related to the three acquisitions closed in 2021 and one acquisition closed in 2020.
−Removed: In addition, Acquisition-related expense for the three months ended September 30, 2021 includes a gain of $0.8 million related to a decrease in the fair value of earnout liabilities due to sellers related to the BlueVenn and Second Street acquisitions.
−Removed: For the Nine Months Ended September 30, 2021
−Removed: Acquisition related expense was $18.8 million the nine months ended September 30, 2021, compared to $24.5 million in the nine months ended September 30, 2020 a decrease of $5.7 million, or 23%.
−Removed: During the nine months ended September 30, 2021 and September 30, 2020 transaction related expenses were $6.2 million and $3.5 million, respectively, and transformational expenses were $12.6 million and $21.0 million, respectively.
−Removed: The increase in transaction costs is primarily related to an increase in acquisitions completed during 2021 to three compared to one acquisition completed during the same period in 2020 as a result of a slow-down in acquisition activity during 2020 as a result of the COVID-19 pandemic.
+Added: For the Three Months Ended March 31, 2022
+Added: Acquisition-related expense was $10.4 million in the three months ended March 31, 2022, compared to $9.6 million in the three months ended March 31, 2021, an increase of $0.8 million, or 9%.
+Added: During the three months ended March 31, 2022 and March 31, 2021 transaction related expenses were $4.5 million and $4.0 million, respectively, and transformational expenses were $5.9 million and $5.6 million, respectively.
The transformational expenses in both the current and year ago periods were primarily related to temporary transitional personnel and related costs along with accelerated rent related expenses incurred in conjunction with the closures of offices of our acquired companies as we consolidate and integrate these acquisitions.
−Removed: Transformation expenses in 2020 include expenses related to the five acquisitions closed in 2019 as well as the one acquisition closed in 2020 compared to transformation expenses in 2021 related to the three acquisitions closed in 2021 and one acquisition closed in February 2020.
−Removed: In addition, Acquisition-related expense for the nine months ended September 30, 2021 includes a gain of $3.5 million related to a decrease in the fair value of earnout liabilities due to sellers related to the BlueVenn and Second Street acquisitions.
+Added: We closed two acquisitions during the three months ended March 31, 2022 and 2021.
+Added: Transformation expenses in the three months ended March 31, 2022 include expenses related to acquisitions closed in 2022 as well the three acquisitions closed in 2021 compared to transformation expenses in the three months ended March 31, 2021, which included expenses related to the two acquisitions closed as of March 31, 2021 and one acquisition from 2020.
Other Income (Expense)
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
7 unchanged sentences
Total other expense (11)% (10)%
−Removed: For the Three Months Ended September 30, 2021
−Removed: Interest expense was $8.0 million in the three months ended September 30, 2021, compared to $8.1 million in the three months ended September 30, 2020.
−Removed: Other expense was $0.7 million in the three months ended September 30, 2021, compared to other income of $0.6 million in the three months ended September 30, 2020.
−Removed: Other expense recognized during the three months ended September 30, 2021 related primarily to currency exchange gains (losses).
−Removed: For the Nine Months Ended September 30, 2021
−Removed: Interest expense was virtually flat at $23.7 million in the nine months ended September 30, 2021, compared to $23.6 million in the nine months ended September 30, 2020.
−Removed: Other expense was $0.8 million in the nine months ended September 30, 2021, compared to other expense of $0.8 million in the nine months ended September 30, 2020.
−Removed: Other expense recognized in the nine months ended September 30, 2021 and September 30, 2020 related primarily to foreign currency exchange losses in our UK entities.
+Added: For the Three Months Ended March 31, 2022
+Added: Interest expense, net was $7.8 million in the three months ended March 31, 2022, compared to $7.8 million in the three months ended March 31, 2021.
+Added: Other expense was $0.4 million in the three months ended March 31, 2022, compared to other income of $0.2 million in the three months ended March 31, 2021.
+Added: Other expense recognized during the three months ended March 31, 2022 were related primarily to currency exchange gains (losses).
Benefit from (Provision for) Income Taxes
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 % Change 2021 2020 % Change
+Added: Three Months Ended March 31,
+Added: 2022 2021 % Change
(dollars in thousands)
−Removed: Benefit from (provision for) income taxes $ 3,348 $ (1,149) (391) % $ 6,204 $ 3,811 63 %
+Added: Benefit from income taxes $ 126 $ 4,394 (97) %
Percentage of total revenue —% 6%
−Removed: For the Three Months Ended September 30, 2021
−Removed: Benefit from income taxes was $3.3 million in the three months ended September 30, 2021, compared to a provision for income taxes of $1.1 million in the three months ended September 30, 2020, an increase of $4.4 million.
−Removed: The benefit for income taxes for the three months ended September 30, 2021 related primarily to deferred tax benefits attributable to the release of valuation allowance related to acquired deferred tax liabilities associated with business combinations, the deferred tax benefit attributable to the reduction in deferred tax liabilities associated with the transfer of intangibles between foreign and domestic jurisdictions, and income tax benefits associated with our combined non-U.S.
−Removed: The provision for the three months ended September 30, 2020 related primarily to the increase in deferred tax liabilities in our UK entities associated with the change in the applicable UK tax rate.
−Removed: For the Nine Months Ended September 30, 2021
−Removed: The benefit from income taxes was $6.2 million in the nine months ended September 30, 2021, compared to a benefit from income taxes of $3.8 million in the nine months ended September 30, 2020, an increase of $2.4 million.
−Removed: The benefits for each period are due primarily to deferred tax benefits attributable to the release of valuation allowance related to the acquisitions of deferred tax liabilities associated with business combinations completed during the respective periods, and foreign income taxes associated with our combined non-U.S.
−Removed: The tax benefit for the nine months ended September 30, 2021 also includes a deferred tax benefit attributable to the reduction in deferred tax liabilities associated with the transfer of intangibles between foreign and domestic jurisdictions.
−Removed: The tax benefit for each period is primarily offset by the impact of expected future changes in UK tax rates on the balance of deferred tax assets and liabilities per tax law enacted during the three months ended June 30, 2021 and September 30, 2020, respectively.
+Added: For the Three Months Ended March 31, 2022
+Added: Benefit from income taxes was $0.1 million in the three months ended March 31, 2022, compared to a benefit from income taxes of $4.4 million in the three months ended March 31, 2021, a decrease of $4.3 million.
+Added: The benefit from income taxes for the three months ended March 31, 2022 related primarily to foreign income taxes associated with our combined non-U.S.
+Added: These tax benefits are offset by changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill and state taxes in certain states in which the Company does not file on a consolidated basis or have net operating loss carryforwards and the impact, recorded as discrete, of the deferred tax provision attributable to the tax gain associated with the transfer of goodwill between foreign and domestic jurisdictions.
+Added: The benefit for the three months ended March 31, 2021 related primarily to the release of valuation allowance related to the acquisition of deferred tax liabilities associated with business combinations completed during the period.
+Added: In addition to the GAAP financial measures described in “Results of Operations,” we regularly review the following key metrics to evaluate and identify trends in our business, measure our performance, prepare financial projections and make strategic decisions.
+Added: Adjusted EBITDA
+Added: We monitor our Adjusted EBITDA to help us evaluate the effectiveness and efficiency of our operations.
+Added: Adjusted EBITDA is a non-GAAP financial measure.
+Added: We define Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, plus depreciation and amortization expense, interest expense, net, other expense (income), net, provision for (benefit from) income taxes, stock-based compensation expense, acquisition-related expenses, and purchase accounting adjustments for deferred revenue.
+Added: The following table represents a reconciliation of net loss from continuing operations, the most comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated.
+Added: Three Months Ended March 31,
+Added: (dollars in thousands)
+Added: Reconciliation of net loss to Adjusted EBITDA:
+Added: Net loss $ (22,831) $ (20,684)
+Added: Depreciation and amortization expense 14,262 12,468
+Added: Interest expense, net 7,762 7,787
+Added: Other expense (income), net 418 (237)
+Added: Benefit from income taxes (126) (4,394)
+Added: Stock-based compensation expense 11,619 17,824
+Added: Acquisition-related expense 10,413 9,586
+Added: Purchase accounting deferred revenue discount 1,929 494
+Added: Adjusted EBITDA $ 23,446 $ 22,844
+Added: We believe that Adjusted EBITDA provides useful information to management, investors and others in understanding and evaluating our operating results for the following reasons:
+Added: • Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired;
+Added: • Our management uses Adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, in the preparation of our annual operating budget, as a measure of our operating performance, to assess the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance because Adjusted EBITDA eliminates the impact of items that we do not consider indicative of our core operating performance;
+Added: • Adjusted EBITDA provides more consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our operations and also facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
+Added: Adjusted EBITDA should not be considered as an alternative to net loss or any other measure of financial performance calculated and presented in accordance with GAAP.
+Added: The use of Adjusted EBITDA as an analytical tool has limitations such as:
+Added: • Depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect cash requirements for such replacements;
+Added: however, much of the depreciation and amortization currently reflected relates to amortization of acquired intangible assets as a result of business combination purchase accounting adjustments, which will not need to be replaced in the future;
+Added: • Adjusted EBITDA may not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;
+Added: • Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation;
+Added: • Adjusted EBITDA does not reflect interest or tax payments that could reduce cash available for use;
+Added: • Other companies, including companies in our industry, might calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as comparative measures.
+Added: Because of these limitations, you should consider Adjusted EBITDA together with other financial performance measures, including various cash flow metrics, net loss and our other GAAP results.
Liquidity and Capital Resources
−Removed: To date, we have financed our operations primarily through the raising of capital including sales of our common stock, cash from operating activities, and borrowing under our credit facility.
+Added: To date, we have financed our operations primarily through the raising of capital including sales of our common stock, cash from operating activities, and borrowings under our credit facility.
We believe that current cash and cash equivalents, cash flows from operating activities, availability under our existing credit facility, as discussed below, and the ability to offer and sell securities pursuant to our registration statement, as discussed below, will be sufficient to fund our operations for at least the next twelve months.
In addition, we intend to utilize the sources of capital available to us under our Credit Facility and registration statement to support our continued growth via acquisitions within our core enterprise solution suites of complementary technologies and businesses.
−Removed: As of September 30, 2021, we had cash and cash equivalents of $179.6 million, $60.0 million of available borrowings under our credit facility, as discussed below, and $529.2 million of borrowings outstanding under our credit facility.
+Added: As of March 31, 2022, we had cash and cash equivalents of $130.4 million, $60.0 million of available borrowings under our credit facility, as discussed below, and $526.5 million of borrowings outstanding under our credit facility.
As of December 31, 2021, we had cash and cash equivalents of $189.2 million, $60.0 million of available borrowings under our Credit Facility, and $527.9 million of borrowings outstanding under our credit facility.
−Removed: The $70.4 million decrease in cash and cash equivalents from December 31, 2020 to September 30, 2021 includes $97.7 million in cash paid for our three acquisitions completed during 2021, net of $1.2 million in cash acquired, which was partially offset by a $5.2 million settlement in total consideration for Localytics related to a representation and warranty insurance settlement.
−Removed: Non-cash acquisition date consideration to be paid in future periods related to these acquisitions includes $10.9 million in holdback payments and $4.2 million in earnout payments that are due within 12 to 18 months of the closing dates of the underlying acquisitions.
−Removed: The earnouts are subject to attainment of future performance-based conditions.
−Removed: Our cash and cash equivalents held by our foreign subsidiaries was $25.4 million as of September 30, 2021 and $15.3 million as of December 31, 2020.
+Added: The $58.7 million decrease in cash and cash equivalents from December 31, 2021 to March 31, 2022 includes $62.3 million in cash paid for our two acquisitions completed during 2022, net of $0.8 million in cash acquired.
+Added: Non-cash acquisition date consideration to be paid in future periods related to these acquisitions includes $5.9 million in holdback payments and that are due within 12 to 15 months of the closing dates of the underlying acquisitions.
+Added: Our cash and cash equivalents held by our foreign subsidiaries was $20.3 million as of March 31, 2022 and $24.8 million as of December 31, 2021.
If these funds held by our foreign subsidiaries are needed for our domestic operations, a repatriation of these funds may require us to accrue and pay dividend withholding taxes in the foreign jurisdictions where applicable and accrue and pay U.S.
3 unchanged sentences
We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.
−Removed: As of September 30, 2021 and December 31, 2020, we had a working capital surplus of $94.8 million and surplus of $196.1 million, respectively, which includes $90.4 million and $87.6 million of deferred revenue recorded as a current liability as of September 30, 2021 and December 31, 2020, respectively.
+Added: As of March 31, 2022 and December 31, 2021, we had a working capital surplus of $29.9 million and surplus of $106.5 million, respectively, which includes $114.5 million and $102.8 million of deferred revenue recorded as a current liability as of March 31, 2022 and December 31, 2021, respectively.
This deferred revenue will be recognized as revenue in future periods in accordance with our revenue recognition policy.
Credit Facility
−Removed: On August 6, 2019, we entered into a credit agreement (the “Credit Facility”) which provides for (i) a fully-drawn $350 million, 7 year, senior secured term loan B facility (the “Term Loan”) and (ii) a $60 million, 5 year, revolving credit facility (the “Revolver”) that was fully available as of September 30, 2021.
−Removed: The Credit Facility replaced our previous credit facility.
−Removed: All outstanding balances under our previous credit facility were paid off using proceeds from our current Credit Facility.
+Added: On August 6, 2019, we entered into a credit agreement (the “Credit Facility”) which provides for (i) a fully-drawn $350 million, 7 year, senior secured term loan B facility (the “Term Loan”) and (ii) a $60 million, 5 year, revolving credit facility (the “Revolver”) that was fully available as of March 31, 2022.
On November 26, 2019, the Company entered into a First Incremental Assumption Agreement (the “Incremental Assumption Agreement”) which provides for a term loan facility to be established under the Credit Facility in an aggregate principal amount of $190 million (the “2019 Incremental Term Loan”) which is in addition to the existing $350 million term loans outstanding under the Credit Facility and the $60 million Revolver under the Credit Facility.
2 unchanged sentences
The Credit Facility contains certain non-financial restrictive covenants that limit our ability to transfer or dispose of assets, merge with other companies or consummate certain changes of control, acquire other companies, pay dividends, incur additional indebtedness and liens, effect changes in management and enter into new businesses.
−Removed: As of September 30, 2021 we were in compliance with all covenants under the Credit Facility.
−Removed: Debt for more information regarding our Credit Facility and outstanding debt as of September 30, 2021.
+Added: As of March 31, 2022 we were in compliance with all covenants under the Credit Facility.
+Added: Debt” for more information regarding our Credit Facility and outstanding debt as of March 31, 2022.
On August 6, 2019, the Company entered into an interest rate hedge instrument for the full 7 year term, effectively fixing our interest rate at 5.4% for the Term Loan.
3 unchanged sentences
The interest rate swap has been designated as a cash flow hedge and is valued using a market approach, which is a Level 2 valuation technique.
−Removed: At September 30, 2021, the fair value of the interest rate swap was a $15.6 million liability as a result of a decline in short term interest rates since entering into the swap agreements.
−Removed: The decrease in the fair value of the interest rate
−Removed: swap liability during the nine months ended September 30, 2021 is the result of an increase in short term interest rates compared to December 31, 2020.
+Added: At March 31, 2022, the fair value of the interest rate swap was a $17.8 million asset.
+Added: The increase in the
+Added: fair value of the interest rate swap assets during the three months ended March 31, 2022 is the result of an increase in short term interest rates compared to December 31, 2021.
Registration Statements
3 unchanged sentences
The following table summarizes our cash flows for the periods indicated:
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(dollars in thousands)
2 unchanged sentences
Net cash used in investing activities (62,509) (72,900)
−Removed: Net cash provided by (used in) financing activities (5,096) 112,077
+Added: Net cash used in financing activities (4,211) (2,095)
Effect of exchange rate fluctuations on cash (217) (865)
8 unchanged sentences
The volume of professional services rendered, the volume and timing of customer bookings and contract renewals, and the related timing of collections on those bookings and renewals, as well as the timing of spending commitments and payments of our accounts payable, accrued expenses, accrued payroll and related benefits, all affect these account balances.
−Removed: Cash provided by operating activities was $28.6 million for the nine months ended September 30, 2021 compared to cash provided by operating activities of $14.2 million for the nine months ended September 30, 2020, an increase of $14.4 million.
−Removed: This increase in operating cash flow is generally attributable to the Company’s increased size and scale.
−Removed: Working capital sources of cash for the nine months ended September 30, 2021 included a $11.7 million decrease in accounts receivable related to the timing of collections, and an increase of $6.6 million in accounts payable related to timing of payments.
−Removed: Working capital uses of cash for the nine months ended September 30, 2021 included a $3.7 million increase in prepaids and other related primarily to an increase in deferred commissions, a decrease of $6.8 million in deferred revenue, and a $8.1 million decrease in accrued expenses.
+Added: Cash provided by operating activities was $8.2 million for the three months ended March 31, 2022 compared to cash provided by operating activities of $12.5 million for the three months ended March 31, 2021, a decrease of $4.3 million.
+Added: This decrease in operating cash flow is primarily attributable to increased acquisition related cash out flows in 2022 as a result of the Company restarting it's acquisition activity in 2021 after a pause in 2020 due to the COVID pandemic.
+Added: Working capital sources of cash for the three months ended March 31, 2022 included a $9.2 million decrease in accounts receivable related to the timing of collections, a $1.8 million decrease in prepaid expenses and other current assets and an increase of $1.1 million in deferred revenue.
+Added: Working capital uses of cash for the three months ended March 31, 2022 included a decrease of $4.1 million in accounts payable related to timing of payments and a $4.8 million decrease in accrued expenses.
A substantial source of cash is invoicing for subscriptions and support fees in advance, which is recorded as deferred revenue, and is included on our condensed consolidated balance sheets as a liability.
3 unchanged sentences
Our primary investing activities have consisted of acquisitions of complementary technologies, products and businesses.
−Removed: As our business grows, we expect our primary investing activities to continue to further expand our family of software applications and infrastructure and support additional personnel.
−Removed: For the nine months ended September 30, 2021, cash used in investing activities consisted of $97.7 million associated with the Company’s 2021 acquisitions, and the purchases of property and equipment of $1.0 million, partially offset by a
−Removed: $5.2 million settlement in total consideration for Localytics related to a representation and warranty insurance settlement.
−Removed: Cash used in investing activities increased $24.7 million for the nine months ended September 30, 2021 compared to the same period in 2020 primarily as a result of closing three acquisitions during the period compared to one acquisition in the comparable prior year period.
+Added: As our business grows, we expect our primary investing activities to continue to further expand our library of cloud-based software applications and infrastructure and support additional personnel.
+Added: For the three months ended March 31, 2022, cash used in investing activities consisted of $62.3 million associated with the Company’s 2022 acquisitions, and the purchases of property and equipment of $0.2 million.
+Added: Cash used in investing activities decreased $10.4 million for the three months ended March 31, 2022 compared to the same period in 2021 primarily as a result of lower acquisition purchase prices paid for the two acquisitions closed during the period compared to the two acquisitions in the comparable prior year period.
Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced applications and professional service offerings, and acquisitions of complementary technologies, products and businesses.
1 unchanged sentence
Our primary financing activities have consisted of capital raised to fund our acquisitions, proceeds from debt obligations incurred to finance our acquisitions, repayments of our debt obligations, and share based employee payroll tax payment activity.
−Removed: Cash provided by financing activities decreased $117.2 million for the nine months ended September 30, 2021 compared to the same period in 2020.
−Removed: The decrease relates primarily to a decrease in cash generated from issuance of our common stock as the Company received net proceeds of $130.1 million related to a secondary stock offering completed in August 2020.
−Removed: This decrease in cash provided by financing activities was partially offset by a $10.9 million decrease in additional consideration paid to sellers (i.e.
−Removed: holdbacks and earnouts) compared to the same period in 2020.
−Removed: In addition, net share employee payroll tax settlement payments decreased $1.8 million during the nine months ended September 30, 2021 compared to the same period in 2020 as a result of the employee payroll tax election in mid-2020 to sell shares to cover employee payroll taxes on stock compensation vestings.
+Added: Cash used in financing activities increased $2.1 million for the three months ended March 31, 2022 compared to the same period in 2021.
+Added: The increase in cash used in financing activities relates primarily to a $1.8 million increase in additional consideration paid to sellers (i.e.
+Added: holdbacks) and $0.5 million increase in net share employee payroll tax settlement payments compared to the same period in 2021.
+Added: This was partially offset by cash provided by financing activities related to $0.2 million in proceeds from employee stock option exercises during the period.
Critical Accounting Policies and the Use of Estimates
−Removed: We prepare our condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States.
+Added: We prepare our condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”).
The preparation of our condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures.
5 unchanged sentences
• revenue recognition and deferred revenue;
−Removed: • stock-based compensation;
−Removed: • deferred sales commissions and sales commission expense;
• income taxes;
+Added: • deferred sales commissions and sales commission expense;
• business combinations and the recoverability of goodwill and long-lived assets;
+Added: • stock-based compensation.
Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets.
−Removed: We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of November 3, 2021, the date of issuance of this Quarterly Report on Form 10-Q.
+Added: We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of May 4, 2022, the date of issuance of this Quarterly Report on Form 10-Q.
These estimates may change as new events occur and additional information is obtained.
1 unchanged sentence
Other Key Accounting Policies
−Removed: Our unaudited interim financial statements and other financial information for the three and nine months ended September 30, 2021, as presented herein and in Item 1 to this Quarterly Report on Form 10-Q, reflects no material changes in our critical accounting policies and estimates as set forth in our Annual report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021.
−Removed: Please refer to this Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.
+Added: Our unaudited interim financial statements and other financial information for the three months ended March 31, 2022, as presented herein and in “Item 1.
+Added: Financial Statements” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022.
+Added: Please refer to our Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.
We evaluate our estimates, judgments and assumptions on an ongoing basis, and while we believe that our estimates, judgments and assumptions are reasonable, they are based upon information available at the time.
2 unchanged sentences
For information with respect to recent accounting pronouncements and the impact of these pronouncements on our condensed consolidated financial statements, refer to “Note 1.
−Removed: Significant Accounting Policies to our condensed consolidated financial statements.
+Added: Basis of Presentation and Summary of Significant Accounting Policies—Recent Accounting Pronouncements” to our condensed consolidated financial statements.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.