Note 3 - Business Combination

3 Months Ended

Mar. 31, 2026

Notes to Financial Statements

Business Combination [Text Block]

3. Business Combination

Mandatorily Redeemable Noncontrolling Interest

On January 29, 2025, the Company consummated its acquisition of 80% of the outstanding shares of Ydentic Holding B.V., which owns 100% of the outstanding equity interests of Ydentic B.V. (together, “Ydentic”). The acquisition was made pursuant to the Share Purchase Agreement, by and among the Company and the former Ydentic shareholders. The Company completed the acquisition of Ydentic to further expand its SaaS solutions for providing robust, simple, centralized multi-tenant management for managed service providers (“MSPs”) that utilize Microsoft solutions. As part of the acquisition, the Company agreed to purchase the remaining 20% of the outstanding shares of Ydentic. The unconditional purchase obligation is a liability-classified mandatorily redeemable noncontrolling interest with subsequent measurement at its estimated redemption value. The estimated fair value of the transaction consideration is approximately $20.4 million, consisting of $14.9 million in cash paid at closing and a $5.5 million unconditional purchase obligation with variability in the timing and amount of settlement.

As of  March 31, 2026, the liability was $6.3 million and is included in accrued expenses and other current liabilities within the condensed consolidated balance sheets. As of December 31, 2025, the liability was $6.2 million, of which $1.9 million was included in accrued expenses and other current liabilities and $4.3 million was included in other liabilities within the condensed consolidated balance sheets. During the three months ended  March 31, 2026 and 2025, the Company recorded interest expense of $0.2 million and $0.8 million, respectively, to adjust the redemption value of the mandatorily redeemable noncontrolling interest. The interest expense is included in other income, net, within the condensed consolidated statements of income.

In April 2026, the Company purchased one third of the remaining 20% of the outstanding shares of Ydentic for an aggregate cash purchase price of $1.8 million.