QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
☑ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
PART I - FINANCIAL INFORMATION | |||||||||||
Page | |||||||||||
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
PART II - OTHER INFORMATION | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 6. | |||||||||||
Certifications |
June 30, | December 31, | ||||||||||
2022 | 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, net of allowances of $ | |||||||||||
Income tax receivable | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease assets | |||||||||||
Deferred taxes | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Other assets, net | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities and other | |||||||||||
Current operating lease liabilities | |||||||||||
Accrued interest payable | |||||||||||
Income taxes payable | |||||||||||
Current portion of deferred revenue | |||||||||||
Current debt obligation | |||||||||||
Total current liabilities | |||||||||||
Long-term liabilities: | |||||||||||
Deferred revenue, net of current portion | |||||||||||
Non-current deferred taxes | |||||||||||
Non-current operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 10) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Preferred stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Subscription | $ | $ | $ | $ | |||||||||||||||||||
Maintenance | |||||||||||||||||||||||
Total recurring revenue | |||||||||||||||||||||||
License | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Cost of recurring revenue | |||||||||||||||||||||||
Amortization of acquired technologies | |||||||||||||||||||||||
Total cost of revenue | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Amortization of acquired intangibles | |||||||||||||||||||||||
Goodwill impairment | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||
Total other expense | ( | ( | ( | ( | |||||||||||||||||||
Loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Income tax expense (benefit) | ( | ( | |||||||||||||||||||||
Net loss from continuing operations | ( | ( | $ | ( | $ | ( | |||||||||||||||||
Net income from discontinued operations, net of tax | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss from continuing operations available to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net income from discontinued operations available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) available to common stockholders per share: | |||||||||||||||||||||||
Basic loss from continuing operations per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic earnings from discontinued operations per share | $ | $ | |||||||||||||||||||||
Basic loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted loss from continuing operations per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted earnings from discontinued operations per share | $ | $ | |||||||||||||||||||||
Diluted loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted-average shares used to compute net income (loss) available to common stockholders per share: | |||||||||||||||||||||||
Shares used in computation of basic earnings (loss) per share | |||||||||||||||||||||||
Shares used in computation of diluted earnings (loss) per share |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | ( | ||||||||||||||||||||
Unrealized losses on investments, net of income tax expense (benefit) of $( | ( | ( | |||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Comprehensive income (loss) | $ | ( | $ | $ | ( | $ | ( |
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Unrealized gain (loss) on investments, net of taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Comprehensive loss | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted stock units issued, net of shares withheld for taxes | ( | — | — | ( | |||||||||||||||||||||||||||||||
Issuance of stock | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at June 30, 2022 | ( | ( | $ | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Unrealized gain (loss) on investments, net of taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Comprehensive loss | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted stock units issued, net of shares withheld for taxes | ( | — | — | ( | |||||||||||||||||||||||||||||||
Issuance of stock | — | — | |||||||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted stock units issued, net of shares withheld for taxes | ( | — | — | ( | |||||||||||||||||||||||||||||||
Issuance of stock | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Six months ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Comprehensive loss | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted stock units issued, net of shares withheld for taxes | ( | — | — | ( | |||||||||||||||||||||||||||||||
Issuance of stock | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss from continuing operations | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Goodwill and indefinite-lived intangible asset impairment | |||||||||||
Provision for losses on accounts receivable | |||||||||||
Stock-based compensation expense | |||||||||||
Amortization of debt issuance costs | |||||||||||
Deferred taxes | ( | ( | |||||||||
Gain on foreign currency exchange rates | ( | ( | |||||||||
Other non-cash expenses | |||||||||||
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations: | |||||||||||
Accounts receivable | |||||||||||
Income taxes receivable | ( | ( | |||||||||
Prepaid and other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued liabilities and other | ( | ( | |||||||||
Accrued interest payable | ( | ||||||||||
Income taxes payable | ( | ( | |||||||||
Deferred revenue | ( | ( | |||||||||
Other long-term liabilities | ( | ||||||||||
Net cash provided by operating activities from continuing operations | |||||||||||
Cash flows from investing activities | |||||||||||
Purchases of investments | ( | ||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Purchases of intangible assets | ( | ( | |||||||||
Acquisitions, net of cash acquired | ( | ||||||||||
Net cash used in investing activities from continuing operations | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of common stock under employee stock purchase plan | |||||||||||
Repurchase of common stock and incentive restricted stock | ( | ( | |||||||||
Exercise of stock options | |||||||||||
Repayments of borrowings from credit agreement | ( | ( | |||||||||
Net cash used in financing activities from continuing operations | ( | ( | |||||||||
Effect of exchange rate changes on cash and cash equivalents from continuing operations | ( | ( | |||||||||
Cash flows of discontinued operations | |||||||||||
Operating activities of discontinued operations | |||||||||||
Investing activities of discontinued operations | ( | ||||||||||
Financing activities of discontinued operations | ( | ||||||||||
Effect of exchange rate changes on cash and cash equivalents from discontinued operations | ( | ||||||||||
Net cash provided by discontinued activities | |||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents | |||||||||||
Beginning of period | |||||||||||
End of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | $ | $ | |||||||||
Foreign Currency Translation Adjustments | Unrealized Gain (Loss) on Investments, Net of Tax | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
(in thousands) | |||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ||||||||||||||
Other comprehensive gain (loss) before reclassification | ( | ( | ( | ||||||||||||||
Amount reclassified from accumulated other comprehensive income (loss) | |||||||||||||||||
Net current period other comprehensive income (loss) | ( | ( | ( | ||||||||||||||
Balance at June 30, 2022 | $ | ( | $ | ( | $ | ( |
Total Deferred Revenue | |||||
(in thousands) | |||||
Balance at December 31, 2021 | $ | ||||
Deferred revenue recognized | ( | ||||
Additional amounts deferred | |||||
Deferred revenue acquired in business combinations | |||||
Balance at June 30, 2022 | $ |
Revenue Recognition Expected by Period | |||||||||||||||||||||||
Total | Less than 1 year | 1-3 years | More than 3 years | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Expected recognition of deferred revenue | $ | $ | $ | $ |
Deferred Commissions | |||||||||||
(in thousands) | |||||||||||
Balance at December 31, 2021 | $ | ||||||||||
Commissions capitalized | |||||||||||
Amortization recognized | ( | ||||||||||
Balance at June 30, 2022 | $ | ||||||||||
June 30, | December 31, | ||||||||||
2022 | 2021 | ||||||||||
(in thousands) | |||||||||||
Classified as: | |||||||||||
Current | $ | $ | |||||||||
Non-current | |||||||||||
Total deferred commissions | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Amortization of acquired license technologies | $ | $ | $ | $ | |||||||||||||||||||
Amortization of acquired subscription technologies | |||||||||||||||||||||||
Total amortization of acquired technologies | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||
June 30, 2021 | |||||||||||
(in thousands) | |||||||||||
Revenue: | |||||||||||
Subscription | $ | $ | |||||||||
Maintenance | |||||||||||
Total recurring revenue | |||||||||||
License | |||||||||||
Total revenue | |||||||||||
Cost of revenue: | |||||||||||
Cost of recurring revenue | |||||||||||
Amortization of acquired technologies | |||||||||||
Total cost of revenue | |||||||||||
Gross profit | |||||||||||
Operating expenses: | |||||||||||
Sales and marketing | |||||||||||
Research and development | |||||||||||
General and administrative | |||||||||||
Amortization of acquired intangibles | |||||||||||
Total operating expenses | |||||||||||
Operating income from discontinued operations | |||||||||||
Other expense: | |||||||||||
Interest (expense) income, net | |||||||||||
Other expense, net | ( | ( | |||||||||
Total other expense | ( | ( | |||||||||
Income from discontinued operations before income taxes | |||||||||||
Income tax expense (benefit) | ( | ||||||||||
Net income from discontinued operations, net of tax | $ | $ |
June 30, 2022 | |||||||||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Short-term investments: | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Corporate bonds | ( | ||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||
Total short-term investments | $ | $ | $ | ( | $ | ||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||
As of June 30, 2022 | |||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
Corporate bonds | ( | ( | |||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | |||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
June 30, 2022 | |||||||||||
Cost | Fair Value | ||||||||||
(in thousands) | |||||||||||
Due in one year or less | $ | $ | |||||||||
Due after one year through five years | |||||||||||
$ | $ |
(in thousands) | |||||
Balance at December 31, 2021 | $ | ||||
Acquisitions | |||||
Goodwill impairment | ( | ||||
Foreign currency translation and other adjustments | ( | ||||
Balance at June 30, 2022 | $ |
Fair Value Measurements at June 30, 2022 Using | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Total cash equivalents | |||||||||||||||||||||||
Short-term investments: | |||||||||||||||||||||||
U.S. Treasury securities | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Total short-term investments | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ |
Fair Value Measurements at December 31, 2021 Using | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
Total cash equivalents | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ |
June 30, | December 31, | ||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Amount | Effective Rate | Amount | Effective Rate | ||||||||||||||||||||
(in thousands, except interest rates) | |||||||||||||||||||||||
Revolving credit facility | $ | % | $ | % | |||||||||||||||||||
First Lien Term Loan (as amended) due Feb 2024 | % | % | |||||||||||||||||||||
Total principal amount | |||||||||||||||||||||||
Unamortized discount and debt issuance costs | ( | ( | |||||||||||||||||||||
Total debt | |||||||||||||||||||||||
Less: Current portion of long-term debt | ( | ( | |||||||||||||||||||||
Total long-term debt | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Basic earnings (loss) per share | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net income from discontinued operations | |||||||||||||||||||||||
Net loss | ( | ( | ( | ( | |||||||||||||||||||
Earnings allocated to unvested restricted stock | |||||||||||||||||||||||
Net loss from continuing operations available to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net income from discontinued operations available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average common shares outstanding used in computing basic net earnings (loss) per share | |||||||||||||||||||||||
Diluted net earnings (loss) per share | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss from continuing operations available to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net income from discontinued operations available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average shares used in computing basic net earnings (loss) per share | |||||||||||||||||||||||
Add dilutive impact of employee equity plans | |||||||||||||||||||||||
Weighted-average shares used in computing diluted net earnings (loss) per share |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Total anti-dilutive shares |
As of June 30, | Year-over-Year Growth | ||||||||||||||||
2022 | 2021 | ||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Subscription ARR(1) | $ | 148,277 | $ | 119,189 | 24.4 | % | |||||||||||
Total ARR(2) | 625,496 | 621,072 | 0.7 |
Three Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Subscription | $ | 36,980 | 21.0 | % | $ | 29,608 | 16.7 | % | $ | 7,372 | |||||||||||||||||||
Maintenance | 113,972 | 64.8 | 120,502 | 68.2 | (6,530) | ||||||||||||||||||||||||
Total recurring revenue | 150,952 | 85.8 | 150,110 | 84.9 | 842 | ||||||||||||||||||||||||
License | 25,082 | 14.2 | 26,678 | 15.1 | (1,596) | ||||||||||||||||||||||||
Total revenue | $ | 176,034 | 100.0 | % | $ | 176,788 | 100.0 | % | $ | (754) |
Trailing Twelve-Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Net retention rate(1) | 97 | % | 96 | % |
Trailing Twelve-Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Maintenance renewal rate(1) | 91 | % | 90 | % |
Three Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Cost of recurring revenue | $ | 15,460 | 8.8 | % | $ | 15,728 | 8.9 | % | $ | (268) | |||||||||||||||||||
Amortization of acquired technologies | 3,648 | 2.1 | 40,098 | 22.7 | (36,450) | ||||||||||||||||||||||||
Total cost of revenue | $ | 19,108 | 10.9 | % | $ | 55,826 | 31.6 | % | $ | (36,718) |
Three Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Sales and marketing | $ | 64,615 | 36.7 | % | $ | 58,076 | 32.9 | % | $ | 6,539 | |||||||||||||||||||
Research and development | 22,108 | 12.6 | 25,831 | 14.6 | (3,723) | ||||||||||||||||||||||||
General and administrative | 41,283 | 23.5 | 30,719 | 17.4 | 10,564 | ||||||||||||||||||||||||
Amortization of acquired intangibles | 13,103 | 7.4 | 13,882 | 7.8 | (779) | ||||||||||||||||||||||||
Goodwill impairment | 612,395 | 347.9 | — | — | 612,395 | ||||||||||||||||||||||||
Total operating expenses | $ | 753,504 | 428.0 | % | $ | 128,508 | 72.7 | % | $ | 624,996 |
Three Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Interest expense, net | $ | (18,401) | (10.5) | % | $ | (16,191) | (9.2) | % | $ | (2,210) |
Three Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Other income (expense), net | $ | 726 | 0.4 | % | $ | (269) | (0.2) | % | $ | 995 | |||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Loss before income taxes | $ | (614,253) | (348.9) | % | $ | (24,006) | (13.6) | % | $ | (590,247) | |||||||||||||||||||
Income tax expense (benefit) | 7,871 | 4.5 | (2,121) | (1.2) | 9,992 | ||||||||||||||||||||||||
Effective tax rate | (1.3) | % | 8.8 | % | (10.1) | % |
Three Months Ended | |||||||||||
June 30, 2021 | |||||||||||
Amount | Percentage of Revenue | ||||||||||
(in thousands, except percentages) | |||||||||||
Total revenue | $ | 85,186 | 100.0 | % | |||||||
Total cost of revenue | 12,825 | 15.1 | |||||||||
Operating expenses | 61,524 | 72.2 | |||||||||
Income before income taxes | 10,785 | 12.7 | |||||||||
Income tax expense | 524 | 0.6 | |||||||||
Income from discontinued operations, net of taxes | 10,261 | 12.0 |
Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Subscription | $ | 75,727 | 21.5 | % | $ | 57,925 | 16.5 | % | $ | 17,802 | |||||||||||||||||||
Maintenance | 229,467 | 65.0 | 241,167 | 68.8 | (11,700) | ||||||||||||||||||||||||
Total recurring revenue | 305,194 | 86.5 | 299,092 | 85.3 | 6,102 | ||||||||||||||||||||||||
License | 47,708 | 13.5 | 51,552 | 14.7 | (3,844) | ||||||||||||||||||||||||
Total revenue | $ | 352,902 | 100.0 | % | $ | 350,644 | 100.0 | % | $ | 2,258 |
Trailing Twelve-Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Net retention rate(1) | 97 | % | 96 | % |
Trailing Twelve-Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Maintenance renewal rate(1) | 91 | % | 90 | % |
Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Cost of recurring revenue | $ | 33,291 | 9.4 | % | $ | 31,382 | 8.9 | % | $ | 1,909 | |||||||||||||||||||
Amortization of acquired technologies | 20,875 | 5.9 | 80,515 | 23.0 | (59,640) | ||||||||||||||||||||||||
Total cost of revenue | $ | 54,166 | 15.3 | % | $ | 111,897 | 31.9 | % | $ | (57,731) |
Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Sales and marketing | $ | 125,659 | 35.6 | % | $ | 115,742 | 33.0 | % | $ | 9,917 | |||||||||||||||||||
Research and development | 45,530 | 12.9 | 52,189 | 14.9 | (6,659) | ||||||||||||||||||||||||
General and administrative | 73,947 | 21.0 | 61,584 | 17.6 | 12,363 | ||||||||||||||||||||||||
Amortization of acquired intangibles | 26,342 | 7.5 | 27,920 | 7.9 | (1,578) | ||||||||||||||||||||||||
Goodwill impairment | 612,395 | 173.5 | — | — | 612,395 | ||||||||||||||||||||||||
Total operating expenses | $ | 883,873 | 250.5 | % | $ | 257,435 | 73.4 | % | $ | 626,438 |
Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Interest expense, net | $ | (34,488) | (9.8) | % | $ | (32,365) | (9.2) | % | $ | (2,123) |
Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Other income (expense), net | $ | 557 | 0.2 | % | $ | 387 | 0.1 | % | $ | 170 | |||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||
Amount | Percentage of Revenue | Amount | Percentage of Revenue | Change | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||
Loss before income taxes | $ | (619,068) | (175.4) | % | $ | (50,666) | (14.4) | % | $ | (568,402) | |||||||||||||||||||
Income tax expense (benefit) | 7,715 | 2.2 | (7,001) | (2.0) | 14,716 | ||||||||||||||||||||||||
Effective tax rate | (1.2) | % | 13.8 | % | (15.0) | % |
Six Months Ended | |||||||||||
June 30, 2021 | |||||||||||
Amount | Percentage of Revenue | ||||||||||
(in thousands, except percentages) | |||||||||||
Total revenue | $ | 168,232 | 100.0 | % | |||||||
Total cost of revenue | 26,833 | 15.9 | % | ||||||||
Operating expenses | 121,422 | 72.2 | % | ||||||||
Income before income taxes | 19,396 | 11.5 | % | ||||||||
Income tax benefit | (5,485) | (3.3) | % | ||||||||
Income from discontinued operations, net of taxes | 24,881 | 14.8 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Total GAAP revenue | $ | 176,034 | $ | 176,788 | $ | 352,902 | $ | 350,644 | |||||||||||||||
Impact of purchase accounting(1) | — | 55 | — | 134 | |||||||||||||||||||
Total non-GAAP revenue | $ | 176,034 | $ | 176,843 | $ | 352,902 | $ | 350,778 | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||
GAAP operating loss from continuing operations | $ | (596,578) | $ | (7,546) | $ | (585,137) | $ | (18,688) | |||||||||||||||
Impact of purchase accounting | — | 55 | — | 134 | |||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | 17,541 | 13,865 | 33,478 | 28,393 | |||||||||||||||||||
Amortization of acquired technologies | 3,648 | 40,098 | 20,875 | 80,515 | |||||||||||||||||||
Amortization of acquired intangibles | 13,103 | 13,882 | 26,342 | 27,920 | |||||||||||||||||||
Acquisition and other costs | 118 | 245 | 286 | 1,171 | |||||||||||||||||||
Restructuring costs | 7 | 1,565 | 1,430 | 2,300 | |||||||||||||||||||
Cyber Incident costs, net | 3,748 | 10,732 | 9,464 | 20,895 | |||||||||||||||||||
Goodwill and indefinite-lived intangible asset impairment | 621,760 | — | 621,760 | — | |||||||||||||||||||
Non-GAAP operating income | $ | 63,347 | $ | 72,896 | $ | 128,498 | $ | 142,640 | |||||||||||||||
GAAP operating margin | (338.9) | % | (4.3) | % | (165.8) | % | (5.3) | % | |||||||||||||||
Non-GAAP operating margin | 36.0 | % | 41.2 | % | 36.4 | % | 40.7 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(in thousands, except margin data) | |||||||||||||||||||||||
Net loss from continuing operations | $ | (622,124) | $ | (21,885) | $ | (626,783) | $ | (43,665) | |||||||||||||||
Amortization and depreciation | 20,131 | 57,653 | 54,059 | 116,008 | |||||||||||||||||||
Income tax expense (benefit) | 7,871 | (2,121) | 7,715 | (7,001) | |||||||||||||||||||
Interest expense, net | 18,401 | 16,191 | 34,488 | 32,365 | |||||||||||||||||||
Impact of purchase accounting on total revenue | — | 55 | — | 134 | |||||||||||||||||||
Unrealized foreign currency (gains) losses | (720) | 333 | (440) | (1,116) | |||||||||||||||||||
Acquisition and other costs | 118 | 245 | 286 | 1,171 | |||||||||||||||||||
Debt related costs | 95 | 93 | 197 | 192 | |||||||||||||||||||
Stock-based compensation expense and related employer-paid payroll taxes | 17,541 | 13,865 | 33,478 | 28,393 | |||||||||||||||||||
Restructuring costs | 3 | 1,565 | 1,390 | 2,300 | |||||||||||||||||||
Cyber Incident costs, net | 3,748 | 10,732 | 9,464 | 20,895 | |||||||||||||||||||
Goodwill and indefinite-lived intangible asset impairment | 621,760 | — | 621,760 | — | |||||||||||||||||||
Adjusted EBITDA | $ | 66,824 | $ | 76,726 | $ | 135,614 | $ | 149,676 | |||||||||||||||
Adjusted EBITDA margin | 38.0 | % | 43.4 | % | 38.4 | % | 42.7 | % |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
(in thousands) | |||||||||||
Net cash provided by operating activities from continuing operations | $ | 81,440 | $ | 48,213 | |||||||
Net cash used in investing activities from continuing operations | (73,426) | (6,491) | |||||||||
Net cash used in financing activities from continuing operations | (16,081) | (16,479) | |||||||||
Effect of exchange rate changes on cash and cash equivalents from continuing operations | (1,609) | (3,453) | |||||||||
Net cash provided by discontinued operations | — | 18,347 | |||||||||
Net increase (decrease) in cash and cash equivalents | $ | (9,676) | $ | 40,137 |
Period | Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan or Program (in thousands) | |||||||||||||||||||
April 1-30, 2022 | — | $ | — | — | $ | — | |||||||||||||||||
May 1-31, 2022 | — | — | — | — | |||||||||||||||||||
June 1-30, 2022 | 6,750 | 4.00 | — | — | |||||||||||||||||||
Total | 6,750 | — |
Exhibit Number | Exhibit Title | |||||||
Third Amended and Restated Certificate of Incorporation as currently in effect (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 10-Q (File No. 001-38711), filed with the Securities and Exchange Commission on November 27, 2018) | ||||||||
Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of SolarWinds Corporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K (File No. 001-38711), filed with the Securities and Exchange Commission on July 26, 2021) | ||||||||
Amended and Restated Bylaws as currently in effect (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 10-Q (File No. 001-38711), filed with the Securities and Exchange Commission on November 27, 2018) | ||||||||
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
101* | Interactive Data Files (formatted as Inline XBRL) | |||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith | |||||||
** | The certifications attached as Exhibit 32.1 accompanying this Quarterly Report on Form 10-Q, are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing |
SOLARWINDS CORPORATION | |||||||||||
Dated: | August 5, 2022 | By: | /s/ J. Barton Kalsu | ||||||||
J. Barton Kalsu | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial and Accounting Officer) |
Date: | August 5, 2022 | By: | /s/ Sudhakar Ramakrishna | ||||||||
Sudhakar Ramakrishna | |||||||||||
President and Chief Executive Officer (Principal Executive Officer) |
Date: | August 5, 2022 | By: | /s/ J. Barton Kalsu | ||||||||
J. Barton Kalsu | |||||||||||
Chief Financial Officer (Principal Financial Officer) |
Date: | August 5, 2022 | By: | /s/ Sudhakar Ramakrishna | ||||||||
Sudhakar Ramakrishna | |||||||||||
President and Chief Executive Officer (Principal Executive Officer) |
Date: | August 5, 2022 | By: | /s/ J. Barton Kalsu | ||||||||
J. Barton Kalsu | |||||||||||
Chief Financial Officer (Principal Financial Officer) |
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Assets | ||
Allowance for credit loss, accounts receivable | $ 726 | $ 476 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, issued (in shares) | 160,870,907 | 159,176,042 |
Common stock, outstanding (in shares) | 160,870,907 | 159,176,042 |
Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Revenue: | ||||
Total revenue | $ 176,034,000 | $ 176,788,000 | $ 352,902,000 | $ 350,644,000 |
Cost of revenue: | ||||
Cost of recurring revenue | 15,460,000 | 15,728,000 | 33,291,000 | 31,382,000 |
Amortization of acquired technologies | 3,648,000 | 40,098,000 | 20,875,000 | 80,515,000 |
Total cost of revenue | 19,108,000 | 55,826,000 | 54,166,000 | 111,897,000 |
Gross profit | 156,926,000 | 120,962,000 | 298,736,000 | 238,747,000 |
Operating expenses: | ||||
Sales and marketing | 64,615,000 | 58,076,000 | 125,659,000 | 115,742,000 |
Research and development | 22,108,000 | 25,831,000 | 45,530,000 | 52,189,000 |
General and administrative | 41,283,000 | 30,719,000 | 73,947,000 | 61,584,000 |
Amortization of acquired intangibles | 13,103,000 | 13,882,000 | 26,342,000 | 27,920,000 |
Goodwill impairment | 612,395,000 | 0 | 612,395,000 | 0 |
Total operating expenses | 753,504,000 | 128,508,000 | 883,873,000 | 257,435,000 |
Operating loss | (596,578,000) | (7,546,000) | (585,137,000) | (18,688,000) |
Other income (expense): | ||||
Interest expense, net | (18,401,000) | (16,191,000) | (34,488,000) | (32,365,000) |
Other income (expense), net | 726,000 | (269,000) | 557,000 | 387,000 |
Total other expense | (17,675,000) | (16,460,000) | (33,931,000) | (31,978,000) |
Loss before income taxes | (614,253,000) | (24,006,000) | (619,068,000) | (50,666,000) |
Income tax expense (benefit) | 7,871,000 | (2,121,000) | 7,715,000 | (7,001,000) |
Net loss from continuing operations | (622,124,000) | (21,885,000) | (626,783,000) | (43,665,000) |
Net income from discontinued operations, net of tax | 0 | 10,261,000 | 0 | 24,881,000 |
Net loss | (622,124,000) | (11,624,000) | (626,783,000) | (18,784,000) |
Net loss from continuing operations available to common stockholders | (622,124,000) | (21,885,000) | (626,783,000) | (43,665,000) |
Net income from discontinued operations available to common stockholders | $ 0 | $ 10,261,000 | $ 0 | $ 24,881,000 |
Net income (loss) available to common stockholders per share: | ||||
Basic loss from continuing operations per share (in dollars per share) | $ (3.87) | $ (0.14) | $ (3.91) | $ (0.28) |
Basic earnings from discontinued operations per share (in dollars per share) | 0 | 0.07 | 0 | 0.16 |
Basic loss per share (in dollars per share) | (3.87) | (0.07) | (3.91) | (0.12) |
Diluted loss from continuing operations per share (in dollars per share) | (3.87) | (0.14) | (3.91) | (0.28) |
Diluted earnings loss from discontinued operations per share (in dollars per share) | 0 | 0.07 | 0 | 0.16 |
Diluted loss per share (in dollars per share) | $ (3.87) | $ (0.07) | $ (3.91) | $ (0.12) |
Weighted-average shares used to compute net income (loss) available to common stockholders per share: | ||||
Weighted-average common shares outstanding used in computing basic earnings (loss) per share (in shares) | 160,663 | 157,854 | 160,257 | 157,491 |
Weighted-average shares used in computation of diluted earnings (loss) per share (in shares) | 160,663 | 157,854 | 160,257 | 157,491 |
Recurring Revenue | ||||
Revenue: | ||||
Total revenue | $ 150,952,000 | $ 150,110,000 | $ 305,194,000 | $ 299,092,000 |
Subscription | ||||
Revenue: | ||||
Total revenue | 36,980,000 | 29,608,000 | 75,727,000 | 57,925,000 |
Cost of revenue: | ||||
Amortization of acquired technologies | 2,727,000 | 2,770,000 | 5,471,000 | 5,851,000 |
Maintenance | ||||
Revenue: | ||||
Total revenue | 113,972,000 | 120,502,000 | 229,467,000 | 241,167,000 |
License | ||||
Revenue: | ||||
Total revenue | 25,082,000 | 26,678,000 | 47,708,000 | 51,552,000 |
Cost of revenue: | ||||
Amortization of acquired technologies | $ 921,000 | $ 37,328,000 | $ 15,404,000 | $ 74,664,000 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (622,124) | $ (11,624) | $ (626,783) | $ (18,784) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (53,670) | 17,645 | (70,565) | (48,105) |
Unrealized losses on investments, net of income tax expense (benefit) of $(34) and $(34) for the three and six months ended June 30, 2022, respectively | (152) | 0 | (152) | 0 |
Other comprehensive income (loss) | (53,822) | 17,645 | (70,717) | (48,105) |
Comprehensive income (loss) | $ (675,946) | $ 6,021 | $ (697,500) | $ (66,889) |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain (loss) on investments, net of taxes | $ (34) | $ (34) |
Organization and Nature of Operations |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations SolarWinds Corporation, a Delaware corporation, and its subsidiaries (“Company”, “we,” “us” and “our”) is a leading provider of simple, powerful and secure information technology, or IT, management software. Our solutions give organizations worldwide, regardless of type, size or complexity, the power to accelerate business transformation in today's hybrid IT environments. Our approach, which we refer to as the SolarWinds Model, combines customer-driven products with an "inside-first" selling motion. We’ve built our business to enable the technology professionals who use our products to manage “all things IT.” Our range of customers has expanded over time to include network and systems engineers, database administrators, storage administrators, DevOps, SecOps and service desk professionals. Our SolarWinds Model enables us to sell our products for use in organizations ranging in size from very small businesses to large enterprises. Spin-Off of N-able Business On July 19, 2021, we completed the separation and distribution of our managed service provider (“N-able”) business into a newly created and separately traded public company, N-able, Inc. We refer to this transaction as the “Separation.” After the Separation, we do not beneficially own any shares of common stock in N-able and no longer consolidate N‑able into our financial results for periods ending after July 19, 2021. As a result, N‑able's historical financial results through the Separation are reflected in our consolidated financial statements as discontinued operations. See Note 3. Discontinued Operations for additional information.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies We prepared our interim condensed consolidated financial statements in conformity with United States of America generally accepted accounting principles ("GAAP"), and the reporting regulations of the Securities and Exchange Commission (the "SEC"). They do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements include the accounts of SolarWinds Corporation and the accounts of its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions. The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021. Reverse Stock Split Effective July 30, 2021, we effected a 2:1 reverse stock split of our common stock. As a result of the reverse stock split, all share and per share figures contained in the condensed consolidated financial statements have been retroactively restated as if the reverse stock split occurred at the beginning of the periods presented. Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include: •the valuation of goodwill, intangibles, long-lived assets and contingent consideration; •revenue recognition; •stock-based compensation; •income taxes; and •loss contingencies. Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2021-08 "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers", which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers", instead of at fair value on the acquisition date as previously required by ASC 805. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for acquired revenue contracts and revenue contracts not acquired in a business combination. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2022 and early adoption is permitted. We elected to early adopt the updated guidance prospectively as of January 1, 2022. The adoption of the standard did not have a material impact on our condensed consolidated financial statements for the three or six months ended June 30, 2022. Impairment of Goodwill, Intangible Assets and Long-lived Assets Goodwill Our goodwill was derived from the take private transaction in early 2016 ("Take Private") and acquisitions where the purchase price exceeded the fair value of the net identifiable assets acquired. Goodwill is tested for impairment at least annually on October 1st or more frequently if events or circumstances indicate it is more likely than not that the fair value of our reporting unit is less than its carrying value. Subsequent to our annual 2021 goodwill impairment analysis on October 1, 2021, we experienced a decline in our stock price resulting in the total market value of our shares of stock outstanding (our "market capitalization"), being less than the carrying value of our reporting unit. Therefore, as of December 31, 2021, we assessed several events and circumstances that could affect the significant inputs used to determine the fair value of our one reporting unit, including the significance of the amount of excess fair value over carrying value, consistency of operating margins and cash flows, budgeted-to-actual performance from prior year, overall change in economic climate, changes in the industry and competitive environment, and earnings quality and sustainability. We considered the decline in the market capitalization being less than the carrying value of our reporting unit in our evaluation of goodwill impairment indicators and determined it appropriate to perform a quantitative assessment of our reporting unit as of December 31, 2021. As a result of the impairment analysis, our reporting unit was determined to have a fair value that exceeded its carrying value by approximately 7.2%, and therefore no impairment was recognized. As of March 31, 2022, while we experienced a further decline in our market capitalization, there were no unanticipated changes or negative indicators in the goodwill impairment qualitative factors or significant changes to assumptions used in the discounted cash flow models that would impact the fair value of our reporting unit. After considering all available evidence, we determined there were no indicators of impairment or changes to circumstances that more likely than not reduced the fair value of our reporting unit to less than its carrying value as of March 31, 2022. As of June 30, 2022, we experienced a further decline in our market capitalization and considered the impact of current macroeconomic conditions on our projected operating results and assumptions used in the income approach - discounted cash flow method and market approach models that impact the fair value of our reporting unit. The macroeconomic conditions considered include deterioration in the equity markets evidenced by sustained declines in our stock price, those of our peers, and major market indices since December 31, 2021, which reduced the market multiples, along with an increase in the weighted-average cost of capital primarily driven by an increase in interest rates. In addition, as of June 30, 2022, we lowered our projected operating results primarily due to the recent impact of foreign currency exchange rate fluctuations on our projected sales and market concerns related to inflation, supply chain disruption issues and other macroeconomic factors. After considering all available evidence in our evaluation of goodwill impairment indicators, we determined it appropriate to perform an interim quantitative assessment of our reporting unit as of June 30, 2022. We engaged a third-party valuation specialist to assist in the performance of the impairment analysis of our reporting unit. For the interim quantitative goodwill impairment analysis performed as of June 30, 2022, we utilized a combination of both an income and market approach to determine the fair value of our reporting unit. The income approach utilizes a discounted cash flow method which is based on the present value of projected cash flows. The discounted cash flow models reflect our assumptions regarding revenue growth rates, risk-adjusted discount rate, terminal period growth rate, economic and market trends and other expectations about the anticipated operating results of our reporting unit. Under the market approach, we estimate the fair value based on market multiples of revenues derived from comparable publicly traded companies with operating characteristics similar to the reporting unit. As a result of the interim goodwill impairment analysis, our reporting unit was determined to have a carrying value that exceeded its fair value and therefore, a $612.4 million non-cash goodwill impairment charge was recognized in our condensed consolidated statements of operations for the three months ended June 30, 2022. Fair value determination of our reporting unit requires considerable judgment and is sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the quantitative goodwill impairment tests will prove to be an accurate prediction of future results. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of our reporting unit may include such items as: (i) volatility in the equity and debt markets or other macroeconomic factors, (ii) an increase in the weighted-average cost of capital due to further increases in interest rates, (iii) timing and success of new products introduced in our evolution from monitoring to observability, (iv) the ongoing impact of the Cyber Incident including a decrease in future cash flows due to lower than expected license sales or maintenance renewals, higher than expected customer attrition, higher than estimated costs to respond and adverse loss exposure from claims, fines or penalties resulting from government investigations and litigation; and (v) fluctuations in foreign currency exchange rates that may negatively impact our reported results of operations. Accordingly, if our current cash flow assumptions are not realized, we experience further sustained declines in our stock price or market capitalization, or there are further declines in the market multiplies used in our analysis, it is possible that an additional impairment charge may be recorded in the future, which could be material. Indefinite-lived Intangible Assets We review our indefinite-lived intangible assets for impairment annually, in the fourth quarter, or more frequently if a triggering event occurs. We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative test. If necessary, the quantitative test is performed by comparing the fair value of indefinite lived intangible assets to the carrying value. In the event the carrying value exceeds the fair value of the assets, the assets are written down to their fair value. As of June 30, 2022, due to the factors discussed in the goodwill analysis above, we performed a quantitative assessment of our indefinite-lived intangible assets utilizing a relief from royalty method and determined the estimated fair value of the SolarWinds trade name, recorded in connection with the Take Private, was less than its carrying value. As a result, we recorded a $9.4 million non-cash impairment charge which is included in general and administrative expense in our condensed consolidated statements of operations for the three months ended June 30, 2022. Long-lived Assets We evaluate the recoverability of our long-lived assets, including finite-lived intangible assets and other assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. As of June 30, 2022, prior to performing the goodwill impairment analysis, we performed a recoverability test of our long-lived assets, including finite-lived intangible assets, by comparing the net book value of our long-lived assets or asset groups, to the future undiscounted net cash flows attributable to such assets. We determined no impairment was required. Investments Our investments, classified as available-for-sale securities, consist of marketable securities such as U.S. Treasury securities, corporate bonds, commercial paper and asset-backed securities. We determine the appropriate classification of our investments at the time of purchase and reevaluate such determination at each balance sheet date. We may classify our available-for-sale securities as either short-term or long-term investments. We classify an investment as short-term if we have both the intent and ability to convert the security into cash to fund current operations. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss), which is a component of shareholders' equity except for any unrealized losses determined to be related to credit losses, which we record within other income (expense), net in our condensed consolidated statements of operations. Any premiums or discounts are amortized or accreted, respectively, to maturity as a component of interest expense, net in our condensed consolidated statements of operations. Cash flows from the amount of purchases, sales and maturities of available-for-sale securities are classified as cash flows from investing activities. Amortization and accretion of purchased premiums and discounts on securities are included as a non-cash adjustment to net income (loss) within cash flows from operating activities in our condensed consolidated statements of cash flows. The cost of securities sold is based on the specific-identification method. In determining if and when a decline in fair value is judged to be other-than-temporary, we evaluate, among other factors: the duration and extent to which the fair value has been less than the carrying value and the intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair market value. Declines in fair value deemed other-than-temporary are included as a component of other income (expense), net in our condensed consolidated statements of operations. We have not recorded any other-than-temporary impairments related to marketable securities. See Note 4. Investments for a summary of our investments. Fair Value Measurements We apply the authoritative guidance on fair value measurements for financial assets and liabilities that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows: Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us. Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1. Level 3: Inputs that are unobservable in the marketplace and significant to the valuation. We determine the fair value of our available-for-sale securities based on inputs obtained from multiple pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, we classify all of our available-for-sale securities as being valued using Level 2 inputs. The valuation techniques used to determine the fair value of our financial instruments having Level 2 inputs are derived from unadjusted, non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models. Our procedures include controls to ensure that appropriate fair values are recorded by a review of the valuation methods and assumptions. See Note 6. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis. The carrying amounts reported in our consolidated balance sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component are summarized below:
Deferred Revenue Details of our total deferred revenue balance are as follows:
We expect to recognize revenue related to these remaining performance obligations as of June 30, 2022 as follows:
Deferred Commissions Details of our deferred commissions balance are as follows:
Cost of Revenue Amortization of Acquired Technologies. Amortization of acquired technologies included in cost of revenue relate to our licensed products and subscription products as follows:
The decreases in amortization of acquired license technologies for the three and six months ended June 30, 2022 in comparison to the same periods in 2021 were primarily due to certain intangible assets acquired in connection with the Take Private being fully amortized during the periods ended June 30, 2022.
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Discontinued Operations | Discontinued Operations As discussed in Note 1. Organization and Nature of Operations, we completed the Separation of the N‑able business into a newly created and separately traded public company, N-able, Inc., on July 19, 2021. The Separation was achieved through the transfer of all the net assets and legal entities associated with the N-able business to N-able, Inc. In accordance with applicable accounting guidance, the results of the N-able business are presented as discontinued operations for the period up to and including the date of the Separation, and, as such, have been excluded from continuing operations for all periods presented. The following table summarizes the results of operations of N-able presented as discontinued operations:
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment | InvestmentsOur short-term investments as of June 30, 2022 consist of available-for-sale securities, such as U.S. Treasury securities, corporate bonds, commercial paper and asset-backed securities. The Company did not own any investments as of December 31, 2021. The following table summarizes our short-term investments as of June 30, 2022:
The following table summarizes the fair value of our available-for-sale securities with unrealized losses aggregated by type of investment instrument and length of time those securities have been in a continuous unrealized loss position:
The following table summarizes the contractual underlying maturities of our available-for-sale securities as of June 30, 2022:
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Goodwill |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill The following table reflects the changes in goodwill for the six months ended June 30, 2022:
As of June 30, 2022, our accumulated goodwill impairment was $612.4 million. See Note 2. Summary of Significant Accounting Policies for discussion of the goodwill impairment recorded during the six months ended June 30, 2022.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following table summarizes the fair value of our financial assets that were measured on a recurring basis as of June 30, 2022 and December 31, 2021. There have been no transfers between fair value measurement levels during the six months ended June 30, 2022.
As of June 30, 2022 and December 31, 2021, the carrying value of our long-term debt approximates its estimated fair value as the interest rate on the debt agreements is adjusted for changes in the market rates. See Note 7. Debt for additional information regarding our debt. The fair value of our non-financial assets and liabilities, which include goodwill, intangible assets and property, plant and equipment, are measured on a non-recurring basis. Fair value adjustments are made in the period an impairment charge is recognized. During the three months ended June 30, 2022 we recognized impairment charges of $612.4 million and $9.4 million related to our goodwill and our trade name indefinite-lived intangible asset, respectively. The fair value of our reporting unit and indefinite-lived intangible asset are classified as Level 3 within the fair value hierarchy due to the significant unobservable inputs developed using company-specific information. For additional information, see the discussion of our impairment charges in Note 2. Summary of Significant Accounting Policies - Impairment of Goodwill, Intangible Assets and Long-lived Assets, including the valuation methods and inputs used in the fair value measurements.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following table summarizes information relating to our debt:
Senior Secured First Lien Credit Facilities Our first lien credit agreement, as amended, or First Lien Credit Agreement, provides for senior secured first lien credit facilities, consisting of the following as of June 30, 2022: •a $1.99 billion U.S. dollar term loan, or First Lien Term Loan, with a final maturity date of February 5, 2024; and •a $117.5 million revolving credit facility (with a letter of credit sub-facility in the amount of $35.0 million), or the Revolving Credit Facility, consisting of (i) a $100.0 million multicurrency tranche and (ii) a $17.5 million tranche available only in U.S. dollars, with a final maturity date of August 5, 2023. Borrowings under our Revolving Credit Facility bear interest at a floating rate which is, at our option, either (1) a Eurodollar rate for a specified interest period plus an applicable margin of 2.50% or (2) a base rate plus an applicable margin of 1.50%, respectively. The Eurodollar rate applicable to the Revolving Credit Facility is subject to a “floor” of 0.0%. Borrowings under our First Lien Term Loan bear interest at a floating rate which is, at our option, either (1) a Eurodollar rate for a specified interest period plus an applicable margin of 2.75% or (2) a base rate plus an applicable margin of 1.75%, respectively. The Eurodollar rate applicable to the First Lien Term Loan is subject to a “floor” of 0.0%. The Eurodollar rate is equal to an adjusted London Interbank Offered Rate, or LIBOR, for a one-, two-, three- or six-month interest period with a LIBOR floor of 0%. The base rate for any day is a fluctuating rate per annum equal to the highest of (a) the rate of interest in effect for such day as publicly announced by Credit Suisse as its “prime rate” and (b) the federal funds effective rate in effect on such day plus 0.50% and (c) the one-month adjusted LIBOR plus 1.0% per annum. The First Lien Term Loan requires equal quarterly repayments equal to 0.25% of the original principal amount. In addition to paying interest on loans outstanding under the Revolving Credit Facility and the First Lien Term Loan, we are required to pay a commitment fee of 0.50% per annum of unused commitments under the Revolving Credit Facility. The commitment fee is subject to a reduction to 0.375% per annum based on our first lien net leverage ratio. The First Lien Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to: incur additional indebtedness; incur liens; engage in mergers, consolidations, liquidations or dissolutions; pay dividends and distributions on, or redeem, repurchase or retire our capital stock; and make certain investments, acquisitions, loans, or advances. In addition, the terms of the First Lien Credit Agreement include a financial covenant which requires that, at the end of each fiscal quarter, if the aggregate amount of borrowings under the Revolving Credit Facility exceeds 35% of the aggregate commitments under the Revolving Credit Facility, our first lien net leverage ratio cannot exceed 7.40 to 1.00. The First Lien Credit Agreement also contains certain customary representations and warranties, affirmative covenants and events of default. As of June 30, 2022, we were in compliance with all covenants of the First Lien Credit Agreement.
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Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | 8. Earnings (Loss) Per Share A reconciliation of the number of shares in the calculation of basic and diluted earnings (loss) per share follows:
The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income (loss) per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive or for which the performance condition had not been met at the end of the period:
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Income Taxes |
6 Months Ended |
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended June 30, 2022 and 2021, we recorded income tax expense from continuing operations of $7.9 million and income tax benefit of $2.1 million, respectively, resulting in an effective tax rate of (1.3)% and 8.8%, respectively. For the six months ended June 30, 2022 and 2021, we recorded income tax expense from continuing operations of $7.7 million and income tax benefit $7.0 million, respectively, resulting in an effective tax rate of (1.2)% and 13.8%, respectively. The decrease in the effective tax rate for the three and six months ended June 30, 2022 compared to the same periods in 2021 was primarily due to the effect of the goodwill impairment charge, which is primarily non-deductible for income tax purposes. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. At June 30, 2022, we had accrued interest and penalties related to unrecognized tax benefits of approximately $3.1 million. We establish valuation allowances when necessary to reduce deferred tax assets to amounts expected to be realized. During the three months ended June 30, 2022, as a result of the goodwill impairment charge, we increased our valuation allowance primarily related to the component of tax-deductible goodwill. We file U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2013 through February 2016 and 2018 through 2021 tax years generally remain open and subject to examination by federal tax authorities. The 2012 through 2021 tax years generally remain open and subject to examination by the state tax authorities and foreign tax authorities. We are currently under examination by the IRS for the tax years 2013 through the period ending February 2016. We are under audit by the Indian Tax Authority for the 2017 and 2019 tax years. We are currently under audit by the California Franchise Tax Board for the 2012 through 2014 tax years and the Texas Comptroller for the 2015 through 2018 tax years. We are not currently under audit in any other taxing jurisdictions.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Cyber Incident As previously disclosed, we were the victim of a cyberattack on our Orion Software Platform and internal systems, or the Cyber Incident. We, together with our partners, have undertaken extensive measures to investigate, contain, eradicate, and remediate the Cyber Incident. Expenses Incurred For the three months ended June 30, 2022, we recorded pretax gross expenses related to the Cyber Incident of $3.7 million, primarily included in general and administrative expense in the condensed consolidated statements of operations. For the three months ended June 30, 2021, we recorded pretax gross expenses related to the Cyber Incident of $13.6 million, partially offset by proceeds under our insurance coverage of $2.9 million, for pretax net expenses of $10.7 million. For the three months ended June 30, 2021, we have included $0.7 million of these gross expenses in cost of recurring revenue, $0.8 million in sales and marketing expense and $12.2 million in general and administrative expense in the condensed consolidated statements of operations. For the six months ended June 30, 2022, we recorded pretax gross expenses related to the Cyber Incident of $9.5 million and have included $0.2 million of these gross expenses in cost of recurring revenue, $0.1 million in sales and marketing expense and $9.2 million in general and administrative expense in the condensed consolidated statements of operations. For the six months ended June 30, 2021, we recorded pretax gross expenses related to the Cyber Incident of $34.0 million, partially offset by proceeds under our insurance coverage of $13.1 million, for pretax net expenses of $20.9 million. For the six months ended June 30, 2021, we have included $1.5 million of these gross expenses in cost of recurring revenue, $1.5 million in sales and marketing expense and $31.0 million in general and administrative expense in the condensed consolidated statements of operations. General and administrative expense is presented net of insurance proceeds in the condensed consolidated statements of operations. Expenses include one-time costs to investigate and remediate the Cyber Incident, and legal and other professional services related thereto, and consulting services being provided to customers at no charge, all of which were expensed as incurred. Litigation, Claims and Government Investigations As a result of the Cyber Incident, we are subject to multiple lawsuits and investigations. A consolidated putative class action lawsuit alleging violations of the federal securities laws is pending against us and certain of our current and former officers. The complainants sought certification of a class of all persons who purchased or otherwise acquired our securities between October 18, 2018 and December 17, 2020 and seek unspecified monetary damages, costs and attorneys’ fees. In August 2021, the Company and all other named defendants in the securities class action filed motions to dismiss the consolidated class action complaint. On March 30, 2022, the District Court for the Western District of Texas entered an order denying the Company's motion to dismiss. Discovery has commenced in the action. In addition, two shareholder derivative actions, purportedly on behalf of the Company, are pending, one in the Western District of Texas and one in the Delaware Court of Chancery, in each case asserting breach of duty and other claims against certain of our current and former officers and directors in connection with the Cyber Incident. In January 2022, the Company and all other named defendants filed motions to dismiss the Delaware derivative complaint which is pending before the court. We dispute the allegations in these complaints and intend to defend against the claims. In addition, there are underway numerous investigations and inquiries by domestic and foreign law enforcement and other governmental authorities related to the Cyber Incident, including from the Department of Justice, the Securities and Exchange Commission, and various state Attorneys General. We are cooperating and providing information in connection with these investigations and inquiries and are incurring, and in future periods expect to incur, costs and other expenses in connection with these investigations and inquiries. While we believe it is reasonably possible that we could incur losses associated with these proceedings and investigations, it is not possible to estimate the amount of any loss or range of possible loss that might result from adverse judgments, settlements, penalties or other resolutions of such proceedings and investigations based on the early stage thereof, the fact that alleged damages have not been specified, the uncertainty as to the certification of a class or classes and the size of any certified class, as applicable, and the lack of resolution on significant factual and legal issues. The Company will continue to evaluate information as it becomes known and will record an estimate for losses at the time or times when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. Losses associated with any adverse judgments, settlements, penalties or other resolutions of such proceedings and investigations could be material to our business, results of operations, financial condition or cash flows in future periods. Additional lawsuits and claims related to the Cyber Incident may be asserted by or on behalf of customers, stockholders or others seeking damages or other related relief and additional inquiries from governmental agencies may be received or investigations by governmental agencies commenced. Insurance Coverage We maintain $15 million of cybersecurity insurance coverage to limit our exposure to losses such as those related to the Cyber Incident, which we renewed in June 2022. As of June 30, 2022, we had received insurance proceeds payments of $15 million for costs incurred related to the Cyber Incident. In addition, we maintain $50 million of directors and officers liability insurance coverage to reduce our exposure to our indemnification obligations for certain expenses incurred by our directors and officers, including as a result of the legal proceedings related to the Cyber Incident. Indemnification In connection with the Separation, we entered into a separation and distribution agreement and related agreements with N‑able to govern the Separation and related transactions and the relationship between the respective companies going forward. The separation and distribution agreement provides for certain indemnity and liability obligations, including that we will indemnify N-able for all liabilities based upon, arising out of or related to the Cyber Incident other than certain specified expenses for which N-able will be responsible. The amount of the indemnification liability, if any, cannot be determined and has not been recorded in our condensed consolidated financial statements as of June 30, 2022. Other Matters In addition to the Cyber Incident described above, from time to time we are involved in litigation arising from the normal course of business. In management's opinion, this litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
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Summary of Significant Accounting Policies (Policies) |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting | We prepared our interim condensed consolidated financial statements in conformity with United States of America generally accepted accounting principles ("GAAP"), and the reporting regulations of the Securities and Exchange Commission (the "SEC"). They do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements include the accounts of SolarWinds Corporation and the accounts of its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions.The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include: •the valuation of goodwill, intangibles, long-lived assets and contingent consideration; •revenue recognition; •stock-based compensation; •income taxes; and •loss contingencies.
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Recently Adopted Accounting Pronouncements | In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2021-08 "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers", which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers", instead of at fair value on the acquisition date as previously required by ASC 805. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for acquired revenue contracts and revenue contracts not acquired in a business combination. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2022 and early adoption is permitted. We elected to early adopt the updated guidance prospectively as of January 1, 2022. The adoption of the standard did not have a material impact on our condensed consolidated financial statements for the three or six months ended June 30, 2022. |
Impairment of Goodwill and Intangible Assets | Our goodwill was derived from the take private transaction in early 2016 ("Take Private") and acquisitions where the purchase price exceeded the fair value of the net identifiable assets acquired. Goodwill is tested for impairment at least annually on October 1st or more frequently if events or circumstances indicate it is more likely than not that the fair value of our reporting unit is less than its carrying value. Subsequent to our annual 2021 goodwill impairment analysis on October 1, 2021, we experienced a decline in our stock price resulting in the total market value of our shares of stock outstanding (our "market capitalization"), being less than the carrying value of our reporting unit. Therefore, as of December 31, 2021, we assessed several events and circumstances that could affect the significant inputs used to determine the fair value of our one reporting unit, including the significance of the amount of excess fair value over carrying value, consistency of operating margins and cash flows, budgeted-to-actual performance from prior year, overall change in economic climate, changes in the industry and competitive environment, and earnings quality and sustainability. We considered the decline in the market capitalization being less than the carrying value of our reporting unit in our evaluation of goodwill impairment indicators and determined it appropriate to perform a quantitative assessment of our reporting unit as of December 31, 2021. As a result of the impairment analysis, our reporting unit was determined to have a fair value that exceeded its carrying value by approximately 7.2%, and therefore no impairment was recognized. As of March 31, 2022, while we experienced a further decline in our market capitalization, there were no unanticipated changes or negative indicators in the goodwill impairment qualitative factors or significant changes to assumptions used in the discounted cash flow models that would impact the fair value of our reporting unit. After considering all available evidence, we determined there were no indicators of impairment or changes to circumstances that more likely than not reduced the fair value of our reporting unit to less than its carrying value as of March 31, 2022. As of June 30, 2022, we experienced a further decline in our market capitalization and considered the impact of current macroeconomic conditions on our projected operating results and assumptions used in the income approach - discounted cash flow method and market approach models that impact the fair value of our reporting unit. The macroeconomic conditions considered include deterioration in the equity markets evidenced by sustained declines in our stock price, those of our peers, and major market indices since December 31, 2021, which reduced the market multiples, along with an increase in the weighted-average cost of capital primarily driven by an increase in interest rates. In addition, as of June 30, 2022, we lowered our projected operating results primarily due to the recent impact of foreign currency exchange rate fluctuations on our projected sales and market concerns related to inflation, supply chain disruption issues and other macroeconomic factors. After considering all available evidence in our evaluation of goodwill impairment indicators, we determined it appropriate to perform an interim quantitative assessment of our reporting unit as of June 30, 2022. We engaged a third-party valuation specialist to assist in the performance of the impairment analysis of our reporting unit. For the interim quantitative goodwill impairment analysis performed as of June 30, 2022, we utilized a combination of both an income and market approach to determine the fair value of our reporting unit. The income approach utilizes a discounted cash flow method which is based on the present value of projected cash flows. The discounted cash flow models reflect our assumptions regarding revenue growth rates, risk-adjusted discount rate, terminal period growth rate, economic and market trends and other expectations about the anticipated operating results of our reporting unit. Under the market approach, we estimate the fair value based on market multiples of revenues derived from comparable publicly traded companies with operating characteristics similar to the reporting unit. As a result of the interim goodwill impairment analysis, our reporting unit was determined to have a carrying value that exceeded its fair value and therefore, a $612.4 million non-cash goodwill impairment charge was recognized in our condensed consolidated statements of operations for the three months ended June 30, 2022. Fair value determination of our reporting unit requires considerable judgment and is sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the quantitative goodwill impairment tests will prove to be an accurate prediction of future results. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of our reporting unit may include such items as: (i) volatility in the equity and debt markets or other macroeconomic factors, (ii) an increase in the weighted-average cost of capital due to further increases in interest rates, (iii) timing and success of new products introduced in our evolution from monitoring to observability, (iv) the ongoing impact of the Cyber Incident including a decrease in future cash flows due to lower than expected license sales or maintenance renewals, higher than expected customer attrition, higher than estimated costs to respond and adverse loss exposure from claims, fines or penalties resulting from government investigations and litigation; and (v) fluctuations in foreign currency exchange rates that may negatively impact our reported results of operations. Accordingly, if our current cash flow assumptions are not realized, we experience further sustained declines in our stock price or market capitalization, or there are further declines in the market multiplies used in our analysis, it is possible that an additional impairment charge may be recorded in the future, which could be material. Indefinite-lived Intangible Assets We review our indefinite-lived intangible assets for impairment annually, in the fourth quarter, or more frequently if a triggering event occurs. We first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative test. If necessary, the quantitative test is performed by comparing the fair value of indefinite lived intangible assets to the carrying value. In the event the carrying value exceeds the fair value of the assets, the assets are written down to their fair value. As of June 30, 2022, due to the factors discussed in the goodwill analysis above, we performed a quantitative assessment of our indefinite-lived intangible assets utilizing a relief from royalty method and determined the estimated fair value of the SolarWinds trade name, recorded in connection with the Take Private, was less than its carrying value. As a result, we recorded a $9.4 million non-cash impairment charge which is included in general and administrative expense in our condensed consolidated statements of operations for the three months ended June 30, 2022.
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Impairment Long-lived Assets | We evaluate the recoverability of our long-lived assets, including finite-lived intangible assets and other assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. As of June 30, 2022, prior to performing the goodwill impairment analysis, we performed a recoverability test of our long-lived assets, including finite-lived intangible assets, by comparing the net book value of our long-lived assets or asset groups, to the future undiscounted net cash flows attributable to such assets. We determined no impairment was required. |
Investments | Our investments, classified as available-for-sale securities, consist of marketable securities such as U.S. Treasury securities, corporate bonds, commercial paper and asset-backed securities. We determine the appropriate classification of our investments at the time of purchase and reevaluate such determination at each balance sheet date. We may classify our available-for-sale securities as either short-term or long-term investments. We classify an investment as short-term if we have both the intent and ability to convert the security into cash to fund current operations. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss), which is a component of shareholders' equity except for any unrealized losses determined to be related to credit losses, which we record within other income (expense), net in our condensed consolidated statements of operations. Any premiums or discounts are amortized or accreted, respectively, to maturity as a component of interest expense, net in our condensed consolidated statements of operations. Cash flows from the amount of purchases, sales and maturities of available-for-sale securities are classified as cash flows from investing activities. Amortization and accretion of purchased premiums and discounts on securities are included as a non-cash adjustment to net income (loss) within cash flows from operating activities in our condensed consolidated statements of cash flows. The cost of securities sold is based on the specific-identification method. In determining if and when a decline in fair value is judged to be other-than-temporary, we evaluate, among other factors: the duration and extent to which the fair value has been less than the carrying value and the intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair market value. Declines in fair value deemed other-than-temporary are included as a component of other income (expense), net in our condensed consolidated statements of operations. We have not recorded any other-than-temporary impairments related to marketable securities. See Note 4. Investments for a summary of our investments.
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Fair Value Measurements | We apply the authoritative guidance on fair value measurements for financial assets and liabilities that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis. The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows: Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us. Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1. Level 3: Inputs that are unobservable in the marketplace and significant to the valuation. We determine the fair value of our available-for-sale securities based on inputs obtained from multiple pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, we classify all of our available-for-sale securities as being valued using Level 2 inputs. The valuation techniques used to determine the fair value of our financial instruments having Level 2 inputs are derived from unadjusted, non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models. Our procedures include controls to ensure that appropriate fair values are recorded by a review of the valuation methods and assumptions. See Note 6. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis. The carrying amounts reported in our consolidated balance sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) by Component | Changes in accumulated other comprehensive income (loss) by component are summarized below:
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Details of Total Deferred Revenue Balance | Details of our total deferred revenue balance are as follows:
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Remaining Performance Obligations For Revenue Recognition | We expect to recognize revenue related to these remaining performance obligations as of June 30, 2022 as follows:
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Details of Contract Acquisition Cost | Details of our deferred commissions balance are as follows:
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Amortization of Acquired Technologies | Amortization of Acquired Technologies. Amortization of acquired technologies included in cost of revenue relate to our licensed products and subscription products as follows:
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Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Discontinued Operations | The following table summarizes the results of operations of N-able presented as discontinued operations:
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-Sale Securities Reconciliation | The following table summarizes our short-term investments as of June 30, 2022:
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Schedule of Available-for-Sale Securities in Continuous Unrealized Loss Position and Fair Value | The following table summarizes the fair value of our available-for-sale securities with unrealized losses aggregated by type of investment instrument and length of time those securities have been in a continuous unrealized loss position:
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Schedule of Investments Classified by Contractual Maturity Date | The following table summarizes the contractual underlying maturities of our available-for-sale securities as of June 30, 2022:
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Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table reflects the changes in goodwill for the six months ended June 30, 2022:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets Measured on a Recurring Basis | The following table summarizes the fair value of our financial assets that were measured on a recurring basis as of June 30, 2022 and December 31, 2021. There have been no transfers between fair value measurement levels during the six months ended June 30, 2022.
|
Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt | The following table summarizes information relating to our debt:
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Earnings (Loss) Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Shares in Basic and Diluted Earnings Per Share Calculation | A reconciliation of the number of shares in the calculation of basic and diluted earnings (loss) per share follows:
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Weighted Average Shares Excluded From Earnings Per Share Computation | The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of the diluted net income (loss) per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive or for which the performance condition had not been met at the end of the period:
|
Summary of Significant Accounting Policies - Narrative (Details) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2021
USD ($)
|
Jul. 30, 2021 |
Jun. 30, 2022
USD ($)
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2021
USD ($)
|
|
Change in Accounting Estimate [Line Items] | ||||||
Reverse stock split, conversion ratio | 0.5 | |||||
Goodwill impairment | $ 0 | $ 612,395,000 | $ 0 | $ 612,395,000 | $ 0 | |
Valuation Technique, Discounted Cash Flow | ||||||
Change in Accounting Estimate [Line Items] | ||||||
Percentage of fair value in excess of carrying amount (as a percent) | 7.20% |
Summary of Significant Accounting Policies - Changes in Deferred Revenue (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Movement in Deferred Revenue [Roll Forward] | |
Balance at December 31, 2021 | $ 362,669 |
Deferred revenue recognized | (250,679) |
Additional amounts deferred | 237,742 |
Deferred revenue acquired in business combinations | 263 |
Balance at June 30, 2022 | $ 349,995 |
Summary of Significant Accounting Policies - Change in Contract Acquisition Costs (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Deferred Commissions, Roll Forward [Roll Forward] | ||
Balance at December 31, 2021 | $ 18,897 | |
Commissions capitalized | 3,911 | |
Amortization recognized | (3,113) | |
Balance at June 30, 2022 | 19,695 | |
Current | 5,822 | $ 5,378 |
Non-current | 13,873 | 13,519 |
Total deferred commissions | $ 19,695 | $ 18,897 |
Summary of Significant Accounting Policies - Cost of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Product Information [Line Items] | ||||
Total amortization of acquired technologies | $ 3,648 | $ 40,098 | $ 20,875 | $ 80,515 |
License | ||||
Product Information [Line Items] | ||||
Total amortization of acquired technologies | 921 | 37,328 | 15,404 | 74,664 |
Subscription | ||||
Product Information [Line Items] | ||||
Total amortization of acquired technologies | $ 2,727 | $ 2,770 | $ 5,471 | $ 5,851 |
Discontinued Operations - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
N-able | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |||
Subsidiary, Sale of Stock [Line Items] | |||
Spin-off costs | $ 13.2 | $ 0.2 | $ 23.1 |
Investments - Available-For-Sale Securities (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Dec. 31, 2021 |
|
Short-term investments: | ||
Cost | $ 55,954 | |
Gross Unrealized Gains | 10 | |
Gross Unrealized Losses | (196) | |
Fair Value | 55,768 | $ 0 |
U.S. Treasury securities | ||
Short-term investments: | ||
Cost | 23,958 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (72) | |
Fair Value | 23,886 | |
Corporate bonds | ||
Short-term investments: | ||
Cost | 22,034 | |
Gross Unrealized Gains | 10 | |
Gross Unrealized Losses | (121) | |
Fair Value | 21,923 | |
Commercial paper | ||
Short-term investments: | ||
Cost | 8,959 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 8,959 | |
Asset-backed securities | ||
Short-term investments: | ||
Cost | 1,003 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (3) | |
Fair Value | $ 1,000 |
Investments - Maturity Dates Of Available-For-Sale Securities (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Cost | |
Due in one year or less | $ 54,951 |
Due after one year through five years | 1,003 |
Net Carrying Amount | 55,954 |
Fair Value | |
Due in one year or less | 54,768 |
Due after one year through five years | 1,000 |
Fair Value | $ 55,768 |
Goodwill - Schedule of Goodwill (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Goodwill [Roll Forward] | |||||
Balance at beginning of period | $ 3,308,405,000 | ||||
Acquisitions | 5,415,000 | ||||
Goodwill impairment | $ 0 | $ (612,395,000) | $ 0 | (612,395,000) | $ 0 |
Foreign currency translation and other adjustments | (59,037,000) | ||||
Balance at end of period | $ 3,308,405,000 | $ 2,642,388,000 | $ 2,642,388,000 |
Goodwill - Narrative (Details) $ in Millions |
Jun. 30, 2022
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Accumulated goodwill impairment | $ 612.4 |
Fair Value Measurements - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Fair Value Disclosures [Abstract] | |||||
Goodwill impairment | $ 0 | $ 612,395,000 | $ 0 | $ 612,395,000 | $ 0 |
Indefinite-lived intangible assets impairment, excluding goodwill | $ 9,400,000 |
Debt - Summary of Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Amount | ||
Total principal amount | $ 1,899,400 | $ 1,909,350 |
Unamortized discount and debt issuance costs | (14,230) | (18,681) |
Total debt | 1,885,170 | 1,890,669 |
Less: Current portion of long-term debt | (19,900) | (19,900) |
Total long-term debt | 1,865,270 | 1,870,769 |
Line of Credit | Revolving credit facility | ||
Amount | ||
Total principal amount | $ 0 | $ 0 |
Effective Rate | 0.00% | 0.00% |
Secured Debt | First Lien Term Loan (as amended) due Feb 2024 | ||
Amount | ||
Total principal amount | $ 1,899,400 | $ 1,909,350 |
Effective Rate | 4.42% | 2.85% |
Earnings (Loss) Per Share - Weighted Average Outstanding Shares of Common Stock Equivalents Excluded (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Earnings Per Share [Abstract] | ||||
Total anti-dilutive shares (in shares) | 12,594 | 7,071 | 11,074 | 6,613 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 7,871 | $ (2,121) | $ 7,715 | $ (7,001) |
Effective income tax rate | (1.30%) | 8.80% | (1.20%) | 13.80% |
Unrecognized tax benefits, income tax penalties and interest accrued | $ 3,100 | $ 3,100 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Loss Contingencies [Line Items] | ||||
Loss contingency, receivable, additions | $ 2.9 | $ 13.1 | ||
Cybersecurity insurance coverage amount | $ 15.0 | $ 15.0 | ||
Loss contingency, receivable, proceeds | 15.0 | |||
Director and Officer liability insurance | 50.0 | 50.0 | ||
Cyber Incident | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, pretax expenses | $ 3.7 | 13.6 | 9.5 | 34.0 |
Loss contingency expense net of insurance proceeds | 10.7 | 20.9 | ||
Cyber Incident | Cost of Sales | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, pretax expenses | 0.7 | 0.2 | 1.5 | |
Cyber Incident | Selling and Marketing Expense | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, pretax expenses | 0.8 | 0.1 | 1.5 | |
Cyber Incident | General and Administrative Expense | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, pretax expenses | $ 12.2 | $ 9.2 | $ 31.0 |
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