34 unchanged sentences
• our expectations as to the payment of dividends;
+Added: • potential elimination or limitation of tax incentives or tax losses and/or reduction of U.S.
+Added: federal net operating loss carryforwards (“NOLs”);
• other risk factors included under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023, 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.
13 unchanged sentences
Our revenue has grown from $149.9 million in the year ended December 31, 2018 to $317.3 million in the year ended December 31, 2022, representing a compound annual growth rate of 21%.
−Removed: During the three months ended March 31, 2023 foreign revenue as a percent of total revenue decreased to 29% compared to 32% during the three months ended March 31, 2022.
+Added: During the six months ended June 30, 2023 foreign revenue as a percent of total revenue decreased to 29% compared to 31% during the six months ended June 30, 2022.
See “ Note 12.
2 unchanged sentences
This will expand our product library, customer base, and market access resulting in increased benefits of scale.
−Removed: Consistent with our growth strategy, we have made 31 acquisitions from February 2012 through March 31, 2023.
−Removed: Recent Developments
−Removed: On May 2, 2023, the Board of Directors (the “Board of Directors”) of the Company, authorized and declared a dividend of one preferred stock purchase right (a “Right”) for each outstanding share of Common Stock.
−Removed: The dividend is payable on May 12, 2023 (the “Record Date”), to the holders of record of shares of Common Stock as of 5:00 P.M., New York City time, on the Record Date.
−Removed: The description and terms of the Rights are set forth in a Tax Benefit Preservation Plan, dated as of May 2, 2023, as the same may be amended from time to time (the “Plan”), between the Company and Broadridge Corporate Issuer Solutions, LLC, as Rights Agent.
−Removed: See “ Note 14.
−Removed: Subsequent Events ” for further details.
+Added: Consistent with our growth strategy, we have made 31 acquisitions from February 2012 through June 30, 2023.
2022 Acquisitions
−Removed: During the three months ended March 31, 2022, we completed the two acquisitions summarized below.
−Removed: As a result, the impact of these two acquisitions are fully reflected in our results of operations for the three months ended March 31, 2023 but are not fully reflected in our results of operations for the three months ended March 31, 2022.
+Added: During the six months ended June 30, 2022, we completed the two acquisitions summarized below.
• BA Insight - On February 22, 2022, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of BA Insight Inc., a Delaware corporation.
+Added: As a result of the February 22, 2022 purchase date, the impact of this acquisition is fully reflected in our results of operations for the six months ended June 30, 2023 but is not fully reflected in our results of operations for the six months ended June 30, 2022.
• Objectif Lune - On January 7, 2022, the Company entered into an agreement to purchase the shares comprising the entire issued share capital of Objectif Lune Inc., a Quebec proprietary company.
+Added: The purchase was recorded using a convenience date of January 1, 2022, therefore the impact of this acquisition is fully reflected in our results of operations for the six months ended June 30, 2023 and the six months ended June 30, 2022.
+Added: Key Metrics and Non-GAAP Financial Measures
+Added: In addition to the GAAP financial measures described below in “Results of Operations,” we regularly review the following key metrics and non-GAAP financial measures to evaluate and identify trends in our business, measure our performance, prepare financial projections and make strategic decisions.
+Added: Core Organic Growth Rate
+Added: Beginning with the three months ended June 30, 2023, we will be disclosing our Core Organic Growth Rate, a non-GAAP financial measure.
+Added: We use Core Organic Growth Rate as a key performance measure to assess our consolidated operating performance over time and for planning and forecasting purposes.
+Added: Core Organic Growth Rate is the percentage change between two reported periods in subscription and support revenue, excluding subscription and support revenue from Sunset Assets and Overage Charges, each as defined below.
+Added: We calculate our year-over-year Core Organic Growth Rate as though all acquisitions or dispositions closed as of the end of the latest period were closed as of the first day of the prior year period presented.
+Added: Core Organic Growth Rate does not represent actual organic revenue generated by our business as it stood at the beginning of the respective period.
+Added: For the three-month period ended June 30, 2023, our Core Organic Growth Rate declined 2.0%.
+Added: Core Organic Growth Rates are not necessarily indicative of either future results of operations or actual results that might have been achieved had certain Sunset Asset classifications not been made or had certain acquisitions or dispositions been consummated on the first day of the prior year period presented.
+Added: We believe that this metric is useful to management and investors in analyzing our financial and operational performance period-over-period along with evaluating the growth of our business normalized for the impact of acquisitions and dispositions, as well as adjusting for the exclusion of non-core Sunset Assets and non-committed Overage Charges.
+Added: For example, by including pre-acquisition revenue, Core Organic Growth Rate allows us to measure the underlying revenue growth of our business as of the end of the period presented, which we believe provides insight into our current performance.
+Added: Related Defined Terms
+Added: In connection with periodic reviews of our business, we have decided to sunset certain non-strategic product offerings and customer contracts (collectively referred to as “Sunset Assets”).
+Added: During the three months ended December 31, 2022, as part of the first phase of a major strategic review of our business, we decided to classify as Sunset Assets certain non-strategic product offerings representing an estimated $27.9 million of 2023 annual total revenue.
+Added: Subsequently, during the second quarter of 2023, in connection with the completion of that review of our business, we determined that certain product offerings that had been placed in Sunset Assets did have use cases that would be strategic and, as a result, we removed them from our Sunset Assets.
+Added: At the same time we identified other product offerings to include in Sunset Assets.
+Added: The net effect of these actions resulted in the estimated addition of approximately $5.0 million in 2023 annual total revenues to our Sunset Assets.
+Added: It is possible that during future periodic reviews of our business we may determine to add additional non-strategic product offerings or customer contracts to Sunset Assets or remove certain product offerings or customer contracts from the classification of Sunset Assets.
+Added: In either case, we will adjust the revenues attributable to Sunset Assets for the then current period and properly reflect the year over year change for such addition or removal.
+Added: Overage Charges are subscription and support revenues earned in addition to contractual minimum customer commitments as a result of the usage volume of services including text and e-mail messaging and third-party pass-through costs that exceed the levels stipulated in contracts with the Company.
+Added: The following table represents a reconciliation of total revenue, the most comparable GAAP measure, to core organic revenue for each of the periods indicated.
+Added: Three Months Ended June 30,
+Added: (dollars in thousands)
+Added: Reconciliation of total revenue to core organic revenue:
+Added: Total revenue $ 74,496 $ 80,227
+Added: Perpetual license revenue 1,252 1,858
+Added: Professional services revenue 2,751 3,352
+Added: Subscription and support revenue from Sunset Assets 9,597 12,737
+Added: Overage Charges 1,451 1,623
+Added: Core organic revenue $ 59,445 $ 60,657
+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 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 June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: (dollars in thousands)
+Added: Reconciliation of net loss to Adjusted EBITDA:
+Added: Net loss $ (15,147) $ (16,393) $ (155,192) $ (39,224)
+Added: Depreciation and amortization expense 18,283 13,931 36,784 28,193
+Added: Interest expense, net 5,376 7,754 10,837 15,516
+Added: Other expense (income), net 617 (1,777) (808) (1,359)
+Added: Benefit from income taxes (233) (472) (1,655) (598)
+Added: Stock-based compensation expense 6,370 14,877 12,832 26,496
+Added: Acquisition-related expense 1,072 4,925 2,166 15,338
+Added: Non-recurring litigation costs 158 — 158 —
+Added: Purchase accounting deferred revenue discount 131 1,663 351 3,592
+Added: Impairment of goodwill — — 128,755 —
+Added: Adjusted EBITDA $ 16,627 $ 24,508 $ 34,228 $ 47,954
+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
+Added: 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.
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 March 31,
−Removed: Amount Percent of Revenue Amount Percent of Revenue
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: Amount Percent of Revenue Amount Percent of Revenue Amount Percent of Revenue Amount Percent of Revenue
(dollars in thousands, except share and per share data)
38 unchanged sentences
Stockholders' Equity” .
−Removed: (2) Includes General and administrative stock-based compensation of $4.9 million and $9.0 million for the three months March 31, 2023 and March 31, 2022, respectively.
−Removed: General and administrative expense excluding stock-based compensation as a percentage of total revenues was 16% and 13% for the three months ended March 31, 2023 and March 31, 2022.
−Removed: (3) Includes depreciation and amortization of $3.4 million and $3.2 million for the three months ended March 31, 2023 and March 31, 2022, respectively.
−Removed: Comparison of the Three Months Ended March 31, 2023 and 2022
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: (2) Includes general and administrative stock-based compensation of $4.9 million and $12.1 million for the three months June 30, 2023 and June 30, 2022, respectively, and $9.8 million and $21.1 million for the six months ended June 30, 2023 and June 30, 2022, respectively.
+Added: General and administrative expense excluding stock-based compensation as a percentage of total revenues was 14% and 12% for the three months ended June 30, 2023 and June 30, 2022, respectively, and 15% and 13% for the six months ended June 30, 2023 and June 30, 2022, respectively.
+Added: (3) Includes depreciation and amortization of $3.4 million and $3.1 million for the three months ended June 30, 2023 and June 30, 2022, respectively, and $6.8 million and $6.3 million for the six months ended June 30, 2023 and June 30, 2022, respectively.
+Added: Comparison of the Three and Six Months Ended June 30, 2023 and 2022
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
10 unchanged sentences
Total revenue 100% 100% 100% 100%
−Removed: Total revenue was $77.1 million in the three months ended March 31, 2023, compared to $78.7 million in the three months ended March 31, 2022, a decrease of $1.6 million, or 2%.
−Removed: This decrease is attributable to a decline of $0.7 million in subscription and support revenue, a decline of $0.2 million in perpetual license revenue, and a decline of $0.7 million in professional services revenue.
−Removed: The table below details the $0.7 million decrease in subscription and support revenue for the three months ended March 31, 2023, compared to the three months ended March 31, 2022.
−Removed: Increase from acquisition not fully in the prior year comparative period (1)
−Removed: Decrease related to Sunset Assets (2)
−Removed: Increase related to overage charges (3)
−Removed: Remaining decrease related to core organic business (4)
−Removed: Total decrease in Subscription and support revenue $ (713)
−Removed: (1) Subscription and support revenue related to our acquisition not fully in the prior year comparative period was $2.4 million for the three months ended March 31, 2023, after the reduction of $0.1 million purchase accounting deferred revenue discount for the three months ended March 31, 2023.
−Removed: (2) During the fourth quarter of 2022, in connection with the periodic review of its business, the Company decided to sunset certain non-strategic product offerings and customer contracts (collectively referred to as “Sunset Assets”).
−Removed: Subscription and support revenue related to these Sunset Assets was $8.9 million for the three months ended March 31, 2023.
−Removed: During future periodic reviews of our business we may determine to add additional non-strategic product offerings or customer contracts to Sunset Assets.
−Removed: Similarly, we may determine that a product offering or customer contract previously determined to be non-strategic in fact does have a strategic value to the Company and therefore we may remove that product offering or customer contract from the classification of Sunset Assets.
−Removed: In either case, we will adjust the revenues attributable to Sunset Assets for the then current period and properly reflect the year over year change for such addition or removal.
−Removed: (3) Overage Charges are revenue earned in addition to contractual minimum customer commitments as a result of the usage volume of services including text and e-mail messaging and third party pass-through costs that exceed the levels stipulated in contracts with the Company.
−Removed: Subscription and support revenue related to Overage Charges was $2.4 million for the three months ended March 31, 2023.
−Removed: (4) Subscription and support revenue for the three months ended March 31, 2022 excluding revenue from acquisitions not fully in the prior year comparative period, revenue from Sunset Assets and revenue from overage charges (all as disclosed in this table and footnotes) referred to here as subscription and support revenue from the core organic business declined by $0.3 million to $59.2 million for the three months ended March 31, 2023.
−Removed: However, using constant currency foreign exchange rates from the three months ended March 31, 2022, subscription and support revenue from the core organic business grew by $0.4 million to $59.9 million for the three months ended March 31, 2023.
−Removed: The $0.2 million decrease in perpetual license revenue is normal quarterly variation as we do not expect an ongoing downtrend in perpetual license revenue.
−Removed: The $0.7 million decrease in professional services revenue is related to the typical decline of professional services revenue of acquired businesses where we de-emphasize low margin or negative margin professional service projects along with the decline of professional service revenue from Sunset Assets.
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: For the Three Months Ended June 30, 2023
+Added: Total revenue was $74.5 million in the three months ended June 30, 2023, compared to $80.2 million in the three months ended June 30, 2022, a decrease of $5.7 million, or 7%.
+Added: This decrease is attributable to a $3.5 million decrease in revenue from Sunset Assets as a result of decreased sales focus on these products, a $1.1 million decrease in other recurring revenue products and variable Overage Charges, a $0.6 million decline in perpetual license revenue, a $0.6 million decline in professional services revenue offset by a $0.1 million positive effect from foreign currency fluctuations.
+Added: For the Six Months Ended June 30, 2023
+Added: Total revenue was $151.6 million in the six months ended June 30, 2023, compared to $158.9 million in the six months ended June 30, 2022, a decrease of $7.3 million, or 5%.
+Added: This decrease is attributable to a $5.7 million decrease in revenue from Sunset Assets as a result of decreased sales focus on these products, a $0.3 million decrease in other recurring revenue products and variable Overage Charges, a $0.8 million decline in perpetual license revenue, a $1.4 million decline in professional services revenue and a $1.5 million negative effect from foreign currency fluctuations.
+Added: This was offset by an increase of $2.4 million in revenue from acquisitions not fully reflected in the comparable prior period.
+Added: Cost of Revenue
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
7 unchanged sentences
Subscription and support (1)
+Added: 30% 30% 30% 29%
Professional services and other 2% 3% 3% 3%
5 unchanged sentences
Stock Compensation $ 301 $ 575 $ 604 $ 977
−Removed: Cost of subscription and support revenue was $23.5 million in the three months ended March 31, 2023, compared to $22.1 million in the three months ended March 31, 2022, an increase of $1.4 million, or 6%.
−Removed: The acquisitions not fully in the comparable period contributed $0.2 million to cost of subscription and support revenue, primarily related to costs associated with the delivery of the newly acquired products.
−Removed: Cost of subscription and support revenue related to our Sunset Assets decreased by $1.2 million as a result of decreased sales and marketing focus on those Sunset Assets.
−Removed: The remaining increase in cost of subscription and support revenue of $2.4 million is primarily related to an increase in personnel related costs, carrier pass-through costs, hosting costs and amortization partially offset by a decrease in stock compensation.
−Removed: Cost of professional services and other revenue was $2.1 million in the three months ended March 31, 2023, compared to $2.7 million in the three months ended March 31, 2022, a decrease of $0.6 million, or 24%.
−Removed: Cost of professional services related to our Sunset Assets decreased by $0.4 million as a result of decreased sales and marketing focus on those Sunset Assets.
−Removed: The remaining decrease in cost of professional services of $0.2 million was related to a decrease in personnel related costs.
+Added: For the Three Months Ended June 30, 2023
+Added: Cost of subscription and support revenue was $22.1 million in the three months ended June 30, 2023, compared to $24.1 million in the three months ended June 30, 2022, a decrease of $2.0 million, or 9%.
+Added: The decrease in cost of subscription and support revenue of $2.0 million is primarily related to a $1.8 million decrease in our variable telecom carrier pass-through costs, combined with a decrease of $0.6 million in personnel related expenses offset by an increase of $0.4 million in amortization expense.
+Added: Cost of professional services and other revenue was $2.1 million in the three months ended June 30, 2023, compared to $2.4 million in the three months ended June 30, 2022, a decrease of $0.3 million, or 13%.
+Added: The decrease in cost of professional services was related to a decrease in personnel related expenses.
+Added: For the Six Months Ended June 30, 2023
+Added: Cost of subscription and support revenue was $45.6 million in the six months ended June 30, 2023, compared to $46.2 million in the six months ended June 30, 2022, a decrease of $0.6 million, or 1%.
+Added: Cost of subscription and support revenue decreased by $0.6 million primarily due to a $2.6 million decrease in our variable telecom carrier pass-through costs offset with increases of $0.5 million in personnel related expenses, $0.8 million in hosting expenses and $0.7 million in amortization expense.
+Added: Cost of professional services revenue was $4.2 million in the six months ended June 30, 2023, compared to $5.1 million in the six months ended June 30, 2022, a decrease of $0.9 million, or 19%, which reflects a decrease in personnel related expenses.
Operating Expenses
Sales and Marketing Expense
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
4 unchanged sentences
Stock Compensation $ 558 $ 1,498 $ 1,134 $ 2,972
−Removed: Sales and marketing expense was $14.3 million in the three months ended March 31, 2023, compared to $15.6 million in the three months ended March 31, 2022, a decrease of $1.3 million, or 8%.
−Removed: The acquisitions not fully in the comparable period contributed an increase of $0.2 million to sales and marketing expense, primarily consisting of personnel related costs.
−Removed: Sales and marketing expense related to our Sunset Assets decreased by $1.0 million as a result of decreased sales and marketing focus on those Sunset Assets.
−Removed: A decrease in sales and marketing expense of $0.9 million is attributable to a reduction in non-cash stock compensation expense.
−Removed: The remaining increase in sales and marketing expense of $0.4 million is primarily attributable to increased personnel related costs associated with our growth investments.
+Added: For the Three Months Ended June 30, 2023
+Added: Sales and marketing expense was $15.8 million in the three months ended June 30, 2023, compared to $15.3 million in the three months ended June 30, 2022, an increase of $0.5 million, or 3%.
+Added: The increase in sales and marketing expense is primarily attributable to increase in personnel related expenses associated with the announced investment in our go to market strategy partially offset by a decrease in non-cash stock compensation expense of $0.9 million.
+Added: For the Six Months Ended June 30, 2023
+Added: Sales and marketing expense was $30.0 million in the six months ended June 30, 2023, compared to $30.9 million in the six months ended June 30, 2022, a decrease of $0.9 million, or 3% attributable a decrease $1.4 million in sales and marketing costs for our Sunset Assets, a decrease of $1.8 million in non-cash stock based compensation, offset by an increase in personnel related expenses associated with the announced investment in our go to market strategy.
Research and Development Expense
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
4 unchanged sentences
Stock Compensation $ 648 $ 658 $ 1,303 $ 1,406
−Removed: Research and development expense was $12.5 million in the three months ended March 31, 2023, compared to $12.1 million in the three months ended March 31, 2022, an increase of $0.4 million, or 4%.
−Removed: The acquisitions not fully in the comparable period contributed $0.1 million to the increase in research and development expense primarily consisting of personnel related costs.
−Removed: Research and development expense related to our Sunset Assets decreased by $0.9 million as a result of decreased engineering focus on those Sunset Assets.
−Removed: The remaining increase of $1.2 million in research and development expense is primarily related to personnel related costs associated with our growth investments.
+Added: For the Three Months Ended June 30, 2023
+Added: Research and development expense was $12.4 million in the three months ended June 30, 2023, compared to $11.7 million in the three months ended June 30, 2022, an increase of $0.7 million, or 7%.
+Added: Research and development expense increased $1.5 million driven by personnel related expenses associated with the continued growth in our India operations offset by a decrease in expense for our Sunset Assets.
+Added: For the Six Months Ended June 30, 2023
+Added: Research and development expense was $25.0 million in the six months ended June 30, 2023, compared to $23.7 million in the six months ended June 30, 2022, an increase of $1.3 million, or 5%.
+Added: The increase was driven by $2.7 million increased personnel related expenses associated with the continued growth in our India operations offset by a decrease in expense related to our Sunset Assets.
General and Administrative Expense
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
4 unchanged sentences
Stock compensation $ 4,863 $ 12,146 $ 9,791 $ 21,141
−Removed: General and administrative expense was $17.2 million in the three months ended March 31, 2023, compared to $19.6 million in the three months ended March 31, 2022, a decrease of $2.4 million, or 12%.
−Removed: General and administrative expense decreased by $0.2 million due to lower personnel related expenses related to our Sunset Assets.
−Removed: In addition, general and administrative expense decreased by $4.1 million due to lower non-cash stock compensation expense, which was partially offset by a $1.9 million increase in personnel related expenses and outside professional expenses.
+Added: For the Three Months Ended June 30, 2023
+Added: General and administrative expense was $15.6 million in the three months ended June 30, 2023, compared to $21.8 million in the three months ended June 30, 2022, a decrease of $6.2 million, or 29%.
+Added: Non-cash stock compensation expense decreased $7.3 million due to additional expense recognized in the three months ended June 30, 2022 related to stock award modifications that did not reoccur.
+Added: This was partially offset by a $1.1 million increase in personnel related expenses and outside professional expenses.
+Added: For the Six Months Ended June 30, 2023
+Added: General and administrative expense was $32.8 million in the six months ended June 30, 2023, compared to $41.4 million in the six months ended June 30, 2022, a decrease of $8.6 million, or 21%.
+Added: Non-cash stock compensation expense decreased $11.4 million due to additional expense recognized in the six months ended June 30, 2022 related to stock award modifications that did not reoccur.
+Added: General administrative expense increased $2.8 million primarily due to personnel related expenses and outside professional expenses as well as administrative expenses including investments in the new go-to-market leadership team.
Depreciation and Amortization Expense
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
7 unchanged sentences
Total depreciation and amortization 20% 13% 20% 14%
−Removed: Depreciation and amortization expense was $15.1 million in the three months ended March 31, 2023, compared to $11.1 million in the three months ended March 31, 2022, an increase of $4.0 million, or 37%.
−Removed: The acquisitions not fully in the comparable period increased depreciation and amortization expense by $0.2 million, primarily related to acquired intangible assets such as customer relationships, developed technology and tradenames.
−Removed: Depreciation and amortization expense related to our Sunset Assets increased by $4.6 million.
−Removed: The remaining decrease in depreciation and amortization expense of $0.8 million resulted from assets becoming fully depreciated and amortized.
+Added: For the Three Months Ended June 30, 2023
+Added: Depreciation and amortization expense was $14.9 million in the three months ended June 30, 2023, compared to $10.8 million in the three months ended June 30, 2022, an increase of $4.1 million, or 38%.
+Added: This increase was primarily due to the adjustment of the estimated useful lives of certain intangible assets.
+Added: For the Six Months Ended June 30, 2023
+Added: Depreciation and amortization expense was $29.9 million in the six months ended June 30, 2023, compared to $21.9 million in the six months ended June 30, 2022, an increase of $8.0 million, or 37%.
+Added: This increase was primarily due to the adjustment of the estimated useful lives of certain intangible assets.
Acquisition-related Expenses
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
1 unchanged sentence
Percentage of total revenue 1% 6% 1% 10%
−Removed: Acquisition-related expenses are typically one-time expenses incurred for up to four quarters after each acquisition, with the majority of these costs being incurred within 6 to 9 months, to transform the acquired business into the Company's unified operating platform.
+Added: Acquisition-related expenses are typically one-time expenses incurred through four full quarters after each acquisition, with the majority of these costs being incurred within 6 to 9 months, to transform the acquired business into the Company's unified operating platform.
These expenses can vary based on the size, timing and location of each acquisition.
1 unchanged sentence
These acquisition-related expenses also include transformational expenses such as severance, compensation for transitional personnel, office lease terminations, vendor cancellations, and adjustments to the fair value of earnouts due to sellers.
−Removed: Generally, without new acquisition activity, acquisition related expenses decline in subsequent sequential quarters and may no longer be incurred after the first anniversary of the last closed acquisition.
−Removed: Acquisition-related expense was $1.1 million in the three months ended March 31, 2023, compared to $10.4 million in the three months ended March 31, 2022, a decrease of $9.3 million, or 89%.
−Removed: During the three months ended March 31, 2023, transaction related expense was nil compared to $4.5 million for the three months ended March 31, 2022.
−Removed: Transformational expenses were $1.1 million and $5.9 million during the three months ended March 31, 2023 and 2022, respectively.
−Removed: The transformational expenses in both the current and year ago periods were primarily related to temporary transitional personnel 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.
+Added: Generally, without new acquisition activity, acquisition related expenses decline in subsequent sequential quarters and may no longer be incurred after the first full anniversary of the last closed acquisition.
+Added: For the Three Months Ended June 30, 2023
+Added: Acquisition-related expense was $1.1 million in the three months ended June 30, 2023, compared to $4.9 million in the three months ended June 30, 2022, a decrease of $3.8 million, or 78%.
+Added: During the three months ended June 30, 2023, transaction related expense was nil compared to $0.4 million for the three months ended June 30, 2022.
+Added: Transformational expenses were $1.1 million and $4.5 million during the three months ended June 30, 2023 and 2022, respectively.
+Added: The transformational expenses in both the current and year ago periods were primarily related to temporary transitional personnel related expenses incurred as we consolidate and integrate these acquisitions.
We have had no new acquisitions since our two acquisitions during the three months ended March 31, 2022.
−Removed: Transformation expenses in the three months ended March 31, 2022 include expenses related to acquisitions closed in the three months ended March 31, 2022 as well the three acquisitions closed in 2021.
+Added: Transformation expenses in the three months ended June 30, 2022 include expenses related to acquisitions closed in the three months ended March 31, 2022 as well the residual expenses related to the three acquisitions closed in 2021.
+Added: For the Six Months Ended June 30, 2023
+Added: Acquisition related expense was $2.2 million the six months ended June 30, 2023, compared to $15.3 million in the six months ended June 30, 2022 a decrease of $13.1 million, or 86%.
+Added: During the six months ended June 30, 2023 and June 30, 2022 transaction related expenses were nil and $4.9 million, respectively.
+Added: 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.
+Added: These accelerated rent related expenses were nil and $1.2 million during the six months ended June 30, 2023 and June 30, 2022, respectively.
Impairment of goodwill
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
−Removed: Impairment of goodwill $ 128,755 $ — NA
−Removed: Goodwill impairment is recognized on a non-recurring basis when the carrying value (or GAAP basis book value) of our Company (which is our only reporting unit) exceeds the estimated fair value of our Company as determined by reference to a number of factors and assumptions, including the spot closing price of our Common Stock as of a certain reporting or measurement date.
+Added: Impairment of goodwill $ — $ — NA $ 128,755 $ — NA
+Added: Goodwill impairment is recognized on a non-recurring basis when the carrying value (or GAAP basis book value) of our Company (which is our only reporting unit) exceeds the estimated fair value of our Company as determined by reference to a
+Added: number of factors and assumptions, including the spot closing price of our Common Stock as of a certain reporting or measurement date.
We assess goodwill for impairment annually on October 1st, or more frequently when an event occurs which could cause the carrying value of our Company to exceed the estimated fair value of our Company.
−Removed: As a result of the decline of our stock price during the three months ended March 31, 2023, we performed a Goodwill impairment evaluation, which resulted in a Goodwill impairment of $128.8 million.
+Added: As a result of the decline of our stock price during the three months ended March 31, 2023, we performed a goodwill impairment evaluation, which resulted in a goodwill impairment of $128.8 million for the three months ended March 31, 2023.
+Added: See “ Note 5.
Goodwill and Other Intangible Assets ” in the notes to our condensed consolidated financial statements for more information regarding our first quarter 2023 goodwill impairment.
1 unchanged sentence
Other Income (Expense)
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
7 unchanged sentences
Total other expense (8)% (8)% (7)% (9)%
−Removed: Interest expense, net was $5.5 million in the three months ended March 31, 2023 compared to $7.8 million in the three months ended March 31, 2022 a decrease in interest expense of $2.3 million or 30%, due primarily to higher interest income on our interest-bearing cash balances as well as a decrease in interest expense due to scheduled principal payments lowering outstanding borrowings on our Credit Facility.
−Removed: Other income was $1.4 million in the three months ended March 31, 2023, compared to other expense of $0.4 million in the three months ended March 31, 2022.
−Removed: Other income recognized during the three months ended March 31, 2023 was related primarily to foreign currency exchange gains.
+Added: For the Three Months Ended June 30, 2023
+Added: Interest expense, net of interest income was $5.4 million in the three months ended June 30, 2023 compared to $7.8 million in the three months ended June 30, 2022, a decrease of $2.4 million or 31%, due primarily to higher interest income on our interest-bearing cash balances as well as a decrease in interest expense due to scheduled principal payments lowering outstanding borrowings on our Credit Facility.
+Added: Other expense, net was $0.6 million in the three months ended June 30, 2023, compared to other income, net of $1.8 million in the three months ended June 30, 2022.
+Added: Other income (expense), net recognized during the three months ended June 30, 2023 was related primarily to foreign currency exchange fluctuations.
+Added: For the Six Months Ended June 30, 2023
+Added: Interest expense, net of interest income was $10.8 million in the six months ended June 30, 2023, compared to $15.5 million in the six months ended June 30, 2022, an decrease of $4.7 million, or 30%.
+Added: The decrease is primarily attributable to higher interest income on our interest-bearing cash accounts.
+Added: As of June 30, 2023, debt outstanding under our credit facility was $519.8 million compared to $525.2 million in debt outstanding as of June 30, 2022.
+Added: Other income, net was $0.8 million in the six months ended June 30, 2023, compared to other income, net of $1.4 million in the six months ended June 30, 2022.
+Added: Other income (expense), net recognized in the six months ended June 30, 2023 and June 30, 2022 related primarily to foreign currency exchange fluctuations.
Benefit from Income Taxes
−Removed: Three Months Ended March 31,
−Removed: 2023 2022 % Change
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 % Change 2023 2022 % Change
(dollars in thousands)
1 unchanged sentence
Percentage of total revenue —% 1% 2% —%
−Removed: Benefit from income taxes was $1.4 million in the three months ended March 31, 2023, compared to a benefit for income taxes of $0.1 million in the three months ended March 31, 2022, resulting in an increase in benefit from income taxes of $1.3 million.
−Removed: The benefit from income taxes for the three months ended March 31, 2023 related primarily related to the deferred tax impact of the goodwill impairment booked during the first quarter of 2023.
+Added: For the Three Months Ended June 30, 2023
+Added: Benefit from income taxes was $0.2 million in the three months ended June 30, 2023, compared to a benefit for income taxes of $0.5 million in the three months ended June 30, 2022, resulting in a decrease in benefit from income taxes of $0.3 million.
+Added: The benefit from income taxes for the three months ended June 30, 2023 related primarily to the foreign income taxes associated with our combined non U.S.
+Added: This tax benefit is offset by changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill, and U.S.
+Added: state taxes in certain states in which the Company does not file on a consolidated basis or have NOL’s.
+Added: For the Six Months Ended June 30, 2023
+Added: The benefit from income taxes was $1.7 million in the six months ended June 30, 2023, compared to a benefit from income taxes of $0.6 million in the six months ended June 30, 2022, an increase of $1.1 million This increase was due primarily to the deferred tax impact of the goodwill impairment booked during the first quarter of 2023.
This tax benefit is offset by the foreign income taxes associated with our combined non-U.S.
operations, changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill, and U.S.
−Removed: state taxes in certain states in which the Company does not file on a consolidated basis or have net operating loss carryforwards.
−Removed: 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.
−Removed: These tax benefits were offset by changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill and state taxes in certain U.S.
−Removed: 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.
−Removed: Inflation may further effect our business, financial condition or results of operations.
−Removed: If our costs were to continue to become subject to significant inflationary pressures, we may be further challenged in our ability to offset such higher costs through price increases.
−Removed: Our inability or failure to do so could further harm our business, financial condition and results of operations.
−Removed: Non-GAAP Financial Measures
−Removed: 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.
−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 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 March 31,
−Removed: (dollars in thousands)
−Removed: Reconciliation of net loss to Adjusted EBITDA:
−Removed: Net loss $ (140,045) $ (22,831)
−Removed: Depreciation and amortization expense 18,500 14,262
−Removed: Interest expense, net 5,461 7,762
−Removed: Other expense (income), net (1,425) 418
−Removed: Benefit from income taxes (1,422) (126)
−Removed: Stock-based compensation expense 6,462 11,619
−Removed: Acquisition-related expense 1,086 10,413
−Removed: Purchase accounting deferred revenue discount 228 1,929
−Removed: Impairment of goodwill 128,755 —
−Removed: Adjusted EBITDA $ 17,600 $ 23,446
−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: state taxes in certain states in which the Company does not file on a consolidated basis or have NOL’s.
Liquidity and Capital Resources
To date, we have financed our operations primarily through the raising of capital including sales of our common stock or our convertible preferred stock, cash from operating activities, and borrowings under our credit facility.
−Removed: We believe that current cash and cash equivalents, cash flows from operating activities, availability under our existing credit facility will be sufficient to fund our operations for at least the next twelve months.
+Added: We believe that current cash and cash equivalents, cash flows from operating activities, and availability under our existing credit facility will be sufficient to fund our operations for at least the next twelve months.
In addition, we may utilize the sources of capital available to us under our credit facility to support our continued growth via acquisitions.
−Removed: As of March 31, 2023, we had cash and cash equivalents of $257.7 million, $60.0 million of available borrowings under our credit facility, as discussed below, and $521.1 million of borrowings outstanding under our credit facility.
+Added: As of June 30, 2023, we had cash and cash equivalents of $262.6 million, $60.0 million of available borrowings under our credit facility, as discussed below, and $519.8 million of borrowings outstanding under our credit facility.
As of December 31, 2022, we had cash and cash equivalents of $248.7 million, $60.0 million of available borrowings under our Credit Facility, and $522.5 million of borrowings outstanding under our credit facility.
−Removed: The $9.1 million increase in cash and cash equivalents from December 31, 2022 to March 31, 2023 was due primarily to the seasonality of our customer cash receipts in the three months ended March 31, 2023 from our customer contract renewals in the three months ended December 31, 2022.
−Removed: Our cash and cash equivalents held by our foreign subsidiaries was $53.5 million as of March 31, 2023 and $34.8 million as of December 31, 2022.
−Removed: 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.
−Removed: taxes to the extent such dividend income exceeds our ability to utilize our net operating loss carryforwards.
−Removed: However, our intent is to permanently reinvest these funds outside the U.S.
+Added: The $13.9 million increase in cash and cash equivalents from December 31, 2022 to June 30, 2023 was due primarily to customer cash receipts in the six months ended June 30, 2023 partially offset by payments on our outstanding borrowings and final payments of holdbacks related to acquisitions in prior periods.
+Added: Our cash and cash equivalents held by our foreign subsidiaries was $23.2 million as of June 30, 2023 and $34.8 million as of December 31, 2022.
+Added: Our intent is to permanently reinvest these funds outside the U.S.
and our current plans do not demonstrate a need to repatriate them to fund our domestic operations.
We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.
−Removed: As of March 31, 2023 and December 31, 2022, we had a working capital surplus of $180.2 million and surplus of $170.1 million, respectively.
−Removed: Series A Preferred Stock
−Removed: The Series A Preferred Stock as discussed in “ Note 10.
−Removed: Series A Preferred Stock ” provided us an additional $115.0 million in liquidity during the three months ended March 31, 2023, which we intend to use for (a) for general corporate purposes and (b) for transaction-related fees and expenses.
−Removed: As of March 31, 2023, the Series A Preferred Stock Issuance Costs totaled $4.6 million.
−Removed: The holders of Series A Convertible Preferred Stock are entitled to dividends (i) at the rate of 4.5% per annum until but excluding the seven year anniversary of the closing, and (ii) at the rate of 7.0% per annum on and after the seven year anniversary of the closing, and are also entitled to fully participate in any dividends or other distributions declared or paid on our common stock on an as-converted basis.
−Removed: Dividends will be payable quarterly in arrears, and may be paid, at our option, in cash or by paying dividends in kind .
−Removed: Our ability to pay cash dividends is subject to the restrictions under the Credit Facility (as defined below).
−Removed: The Series A Preferred Stock had accrued unpaid dividends of $3.2 million as of March 31, 2023.
−Removed: The Series A Preferred Stock will rank senior to our common stock with respect to distribution rights and rights upon our liquidation, dissolution or winding up (“Liquidation”), on parity with any class or series of our capital stock expressly designated as ranking on parity with the Series A Preferred Stock with respect to distribution rights and rights upon Liquidation, junior to any class or series of our capital stock expressly designated as ranking senior to the Series A Preferred
−Removed: Stock with respect to distribution rights and rights upon Liquidation and junior in right of payment to our existing and future indebtedness, including the Credit Facility.
−Removed: On October 21, 2022 we filed a resale registration statement on Form S-3 (File No.
−Removed: 333-267973), on behalf of Ulysses Aggregator, LP (the “Purchaser”) and pursuant to the Registration Rights Agreement between us and the Purchaser, which became effective on November 1, 2022 and covers (i) the issued Series A Preferred Stock and (ii) the number of shares of the Company’s common stock issuable upon conversion of such Series A Preferred Stock, which amount includes and assumes that dividends on the Series A Preferred Stock are paid by increasing the Liquidation Preference of the Series A Preferred Stock for a period of sixteen dividend payment periods from the initial issuance date.
−Removed: See “ Note—10.
−Removed: Series A Preferred Stock ” in the notes to our consolidated financial statements for more information regarding our Series A Preferred Stock.
+Added: As of June 30, 2023 and December 31, 2022, we had working capital surpluses of $187.1 million and $170.1 million, respectively.
+Added: Series A Preferred Stock Proceeds
+Added: In August of 2022, we issued Series A Preferred Stock as discussed in “ Note 10.
+Added: Series A Convertible Preferred Stock ” which provided us an additional $110.4 million in liquidity, net of issuance costs of $4.6 million, that we intend to use for general corporate purposes including acquisitions.
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 March 31, 2023.
−Removed: 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.
−Removed: The Credit Facility has no financial covenants as long as less than 35% of the Revolver is drawn as of the last day of any fiscal quarter.
−Removed: The credit facility is secured by a security interest in substantially all of our assets and requires us to maintain certain financial covenants.
−Removed: 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 March 31, 2023 we were in compliance with all covenants under the Credit Facility.
−Removed: See “ Note 7.
−Removed: Debt—Credit Facility ” for more information regarding our Credit Facility and outstanding debt as of March 31, 2023.
−Removed: 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.
−Removed: In addition, on November 26, 2019, the Company entered into interest rate swap agreements to hedge the interest rate risk associated with the Company’s floating rate obligations under the 2019 Incremental Term Loan.
−Removed: These interest rate swaps fix the Company's interest rate (including the hedge premium) at 5.4% for the term of the Credit Facility.
−Removed: The interest rate associated with our $60 million, 5 year, Revolver remains floating.
−Removed: 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 March 31, 2023, the fair value of the interest rate swap was a $33.0 million asset.
−Removed: The decrease in the fair value of the interest rate swap assets during the three months ended March 31, 2023 is the result of the change in the yield curve for our interest rate swaps compared to December 31, 2022.
+Added: As described in “ Note 7.
+Added: Debt—Credit Facility ”, the Company has a Credit Facility which provides for total Term Loans of up to $540.0 million, of which $20.3 million was available at June 30, 2023, and a $60 million Revolver which was fully available as of June 30, 2023.
The following table summarizes our cash flows for the periods indicated:
−Removed: Three Months Ended March 31,
+Added: Six Months Ended June 30,
(dollars in thousands)
9 unchanged sentences
Cash provided by operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business.
−Removed: Included in net cash provided by operations are one-time
−Removed: acquisition related expenses incurred after each acquisition to transact and transform the acquired business into the Company's unified operating platform.
−Removed: Additionally, operating cash flows includes the impact of earn-outs payments in excess of original purchase accounting estimates.
+Added: Included in net cash provided by operations are one-time acquisition related expenses incurred after each acquisition to transact and transform the acquired business into the Company's unified operating platform.
+Added: Additionally, operating cash flows include the impact of earn-outs payments in excess of original purchase accounting estimates.
Our working capital consists primarily of cash, receivables from customers, prepaid assets, unbilled professional services, deferred commissions, accounts payable, accrued compensation and other accrued expenses, acquisition related earnout and holdback liabilities, lease liabilities, and deferred revenues.
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 $15.8 million for the three months ended March 31, 2023 compared to cash provided by operating activities of $8.2 million for the three months ended March 31, 2022, an increase of $7.6 million.
−Removed: Working capital sources of cash for the three months ended March 31, 2023 included a $7.0 million decrease in accounts receivable related to the timing of collections.
−Removed: Working capital uses of cash for the three months ended March 31, 2023 included a $4.8 million increase in prepaid expenses and other current assets, partially offset by amortization of previously deferred costs of $3.4 million.
−Removed: In addition, working capital uses of cash for the three months ended March 31, 2023 included a $0.9 million decrease in accrued expenses and a $0.2 million decrease in accounts payable.
+Added: Cash provided by operating activities was $22.8 million for the six months ended June 30, 2023 compared to cash provided by operating activities of $22.3 million for the six months ended June 30, 2022, an increase of $0.6 million.
+Added: Working capital sources of cash for the six months ended June 30, 2023 included a $13.2 million decrease in accounts receivable related to the timing of collections.
+Added: Working capital uses of cash for the six months ended June 30, 2023 included a $6.5 million increase in prepaid expenses and other current assets, primarily an increase in the current income tax receivable.
+Added: This was partially offset by amortization of previously deferred costs of $6.7 million.
+Added: In addition, working capital uses of cash for the six months ended June 30, 2023 included a $4.1 million decrease in accrued expenses and a $1.2 million decrease in accounts payable.
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.
4 unchanged sentences
As our business grows, we expect our primary investing activities to continue to expand our product library, customer base, and market access.
−Removed: For the three months ended March 31, 2023, cash used in investing activities consisted of purchases of property and equipment of $0.2 million.
−Removed: Cash used in investing activities decreased $62.3 million for the three months ended March 31, 2023 compared to the same period in 2022 primarily as a result of no acquisitions closed during the period compared to the two acquisitions in the comparable prior year period.
+Added: For the six months ended June 30, 2023, cash used in investing activities consisted of purchases of property and equipment of $0.5 million.
+Added: Cash used in investing activities decreased $62.1 million for the six months ended June 30, 2023 compared to the same period in 2022 primarily as a result of no acquisitions closed during the current period compared to the two acquisitions in the comparable prior year period.
Cash Flows from Financing Activities
−Removed: 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 used in financing activities increased $2.6 million for the three months ended March 31, 2023 compared to the same period in 2022 due to a $2.6 million increase in additional consideration paid to sellers (i.e.
+Added: Our primary financing activities have consisted of capital raised to fund our acquisitions, proceeds from debt obligations incurred to finance our acquisitions, repayments and servicing of our debt obligations, and share based employee payroll tax payment activity.
+Added: Cash used in financing activities increased $2.2 million for the six months ended June 30, 2023 compared to the same period in 2022 due to a $2.5 million increase in consideration paid to sellers (i.e.
acquisition holdbacks).
13 unchanged sentences
• stock-based compensation.
−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 May 9, 2023, 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 August 3, 2023, 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 months ended March 31, 2023, as presented herein and in “ Item 1.
+Added: Our unaudited interim financial statements and other financial information for the three and six months ended June 30, 2023, as presented herein and in “ Item 1.
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, 2022 filed with the SEC on February 28, 2023 (the “Annual Report”).
6 unchanged sentences
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.