UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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at an exercise price of $11.50 |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
There were
Table of Contents
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Item 1. |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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PART II. |
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Item 1. |
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Item 1A. |
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Item 2 |
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Item 6. |
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2
GLOSSARY OF TERMS
Abbreviation |
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Term |
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ASC |
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Accounting Standards Codification |
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BluJay |
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BluJay TopCo Limited, a private limited liability company registered in England and Wales which owns BluJay Solutions, a cloud-based logistics execution platform company |
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BluJay Sellers |
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BluJay and its subsidiaries |
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CC Capital |
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CC NB Sponsor 1 Holdings LLC |
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Class A Common Stock |
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Class A common stock, par value $0.0001 per share |
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Class V Common Stock |
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Class V common stock, par value $0.0001 per share |
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Common Units |
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common units representing limited liability company interests of E2open Holdings, LLC |
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Forward Purchase Agreement |
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agreement dated as of April 28, 2020, by and between CCNB1 and Neuberger Berman Opportunistic Capital Solutions Master Fund LP |
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Forward Purchase Warrants |
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5,000,000 redeemable warrants purchased pursuant to the Forward Purchase Agreement |
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Insight Partners |
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entities affiliated with Insight Venture Management, LLC, including funds under management; controlling unitholder of E2open Holdings, LLC |
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Investor Rights Agreement |
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agreement amended and restated on September 1, 2021 providing Insight Partners, CC Capital, Francisco Partners and Temasek the right to nominate members to the board of directors, requires parties to vote in favor of director nominees recommended by the board of directors, requires the registration of securities within 30 days of September 1, 2021 and limits the transfer of beneficially owned shares of common stock prior to the termination of the Lock-up Period. |
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LIBOR |
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London Interbank Offered Rate |
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Lock-up Period |
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period commencing on September 1, 2021 and ending on February 28, 2022 |
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nm |
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not meaningful |
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PIPE |
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private investment in public equity; financing from institutional investors |
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Purchase Agreement |
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Share Purchase Deed entered into on May 27, 2021 with BluJay |
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RCU |
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restricted common units representing Series 1 and Series 2 of E2open Holdings, LLC |
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SCM |
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supply chain management |
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SEC |
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U.S. Securities and Exchange Commission |
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Temasek |
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Temasek Holdings |
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U.S. GAAP |
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generally accepted accounting principles in the United States |
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NYSE |
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New York Stock Exchange |
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VWAP |
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daily per share volume-weighted average price of the Class A Common Stock on the NYSE as displayed on the Bloomberg page under the heading Bloomberg VWAP |
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3
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (Quarterly Report) contains “forward-looking statements” within the meaning of the federal securities law. These forward-looking statements give E2open Parent Holdings, Inc.’s (we, our, us, Company or E2open) current expectations and include projections of results of operations or financial condition or forecasts of future events. Words such as “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” and similar expressions are used to identify forward-looking statements. Without limiting the generality of the forgoing, forward-looking statements contained in this document include our expectations regarding our future growth, operational and financial performance and business prospects and opportunities.
These forward-looking statements are based on information available as of the date of this Quarterly Report and management’s current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside our control and our directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. We do not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.
As a result of a number of known and unknown risks and uncertainties, our results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
For a further discussion of these and other factors that could impact our future results and performance, see Part I, Item 1A., Risk Factors in our Annual Report on Form 10-K for the fiscal year ended February 28, 2021, filed with the SEC on May 20, 2021 (2021 Form 10-K).
4
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
E2open Parent Holdings, Inc.
Condensed Consolidated Balance Sheets
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Successor |
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(In thousands, except share amounts) |
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August 31, 2021 |
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February 28, 2021 |
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(unaudited) |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable - net of allowance of $ |
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Prepaid expenses and other current assets |
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Total current assets |
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Long-term investments |
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Goodwill |
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Intangible assets, net |
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Property and equipment, net |
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Operating lease right-of-use assets |
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— |
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Other noncurrent assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Accounts payable and accrued liabilities |
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$ |
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$ |
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Incentive program payable |
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Deferred revenue |
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Payable to sellers |
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— |
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Acquisition-related obligations |
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— |
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Current portion of notes payable |
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Current portion of operating lease obligations |
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— |
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Current portion of financing lease obligations |
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Total current liabilities |
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Long-term deferred revenue |
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Operating lease obligations |
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— |
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Financing lease obligations |
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Notes payable |
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Tax receivable agreement liability |
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Warrant liability |
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Contingent consideration |
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Deferred taxes |
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Other noncurrent liabilities |
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Total liabilities |
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Stockholders' Equity |
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Class A common stock; $ |
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Class V common stock; $ |
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Series B-1 common stock; $ |
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Series B-2 common stock; $ |
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Additional paid-in capital |
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Accumulated other comprehensive (loss) income |
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(Accumulated deficit) retained earnings |
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Treasury stock, at cost: |
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Total E2open Parent Holdings, Inc. equity |
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Noncontrolling interest |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
5
E2open Parent Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
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Predecessor |
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Predecessor |
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Three Months Ended |
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Three Months Ended |
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Six Months Ended |
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Six Months Ended |
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(In thousands, except per share amounts) |
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August 31, 2021 |
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August 31, 2020 |
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August 31, 2021 |
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August 31, 2020 |
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Revenue |
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Subscriptions |
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$ |
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$ |
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$ |
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$ |
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Professional services |
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Total revenue |
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Cost of Revenue |
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Subscriptions |
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Professional services |
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Amortization of acquired intangible assets |
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Total cost of revenue |
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Gross Profit |
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Operating Expenses |
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Research and development |
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Sales and marketing |
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General and administrative |
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Acquisition-related expenses |
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Amortization of acquired intangible assets |
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Total operating expenses |
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(Loss) income from operations |
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( |
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( |
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Other (expense) income |
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Interest and other expense, net |
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( |
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( |
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( |
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( |
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Change in tax receivable agreement liability |
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( |
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— |
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( |
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— |
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Gain (loss) from change in fair value of warrant |
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— |
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( |
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— |
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Loss from change in fair value of contingent |
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( |
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— |
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( |
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— |
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Total other expenses |
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( |
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( |
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( |
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( |
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Loss before income tax expense |
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( |
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( |
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( |
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( |
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Income tax expense |
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( |
) |
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( |
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( |
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( |
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Net loss |
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( |
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$ |
( |
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( |
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$ |
( |
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Less: Net loss attributable to noncontrolling |
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( |
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( |
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Net loss attributable to E2open Parent Holdings, |
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$ |
( |
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$ |
( |
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Net loss attributable to E2open Parent Holdings, |
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Basic |
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$ |
( |
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$ |
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Diluted |
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$ |
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$ |
( |
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See notes to condensed consolidated financial statements.
6
E2open Parent Holdings, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
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Successor |
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Predecessor |
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Successor |
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Predecessor |
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Three Months Ended |
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Three Months Ended |
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Six Months Ended |
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Six Months Ended |
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(In thousands) |
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August 31, 2021 |
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August 31, 2020 |
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August 31, 2021 |
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August 31, 2020 |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Other comprehensive loss, net: |
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Net foreign currency translation loss |
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( |
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( |
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( |
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( |
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Total other comprehensive loss, net |
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( |
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( |
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( |
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( |
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Comprehensive loss |
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( |
) |
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$ |
( |
) |
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( |
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$ |
( |
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Less: Comprehensive loss attributable to |
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( |
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( |
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Comprehensive loss attributable to E2open |
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$ |
( |
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$ |
( |
) |
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See notes to condensed consolidated financial statements.
7
E2open Parent Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
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Predecessor |
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(In thousands) |
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Members' Capital |
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Accumulated |
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Accumulated |
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Total |
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Balance, February 29, 2020 |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Investment by member |
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— |
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— |
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Unit-based compensation |
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— |
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— |
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Comprehensive loss |
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— |
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( |
) |
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— |
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( |
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Net loss |
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— |
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— |
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( |
) |
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( |
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Balance, May 31, 2020 |
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( |
) |
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( |
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Investment by member |
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( |
) |
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— |
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— |
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( |
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Unit-based compensation |
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— |
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— |
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Comprehensive loss |
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— |
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( |
) |
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— |
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( |
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Net loss |
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— |
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— |
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( |
) |
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( |
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Balance, August 31, 2020 |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Successor |
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(In thousands) |
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Common |
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Additional |
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Accumulated |
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Retained |
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Treasury Stock |
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Total |
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Noncontrolling |
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Total |
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Balance, February 28, 2021 |
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$ |
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$ |
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$ |
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$ |
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$ |
— |
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$ |
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$ |
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$ |
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Share-based compensation |
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— |
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— |
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— |
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— |
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— |
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Comprehensive income |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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( |
) |
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( |
) |
Balance, May 31, 2021 |
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( |
) |
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— |
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Share-based compensation |
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— |
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— |
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— |
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— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Business Combination purchase |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Conversion of Common Units to |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Conversion of Series B-1 shares |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
||||
Impact of Common Unit |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Comprehensive loss |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Balance, August 31, 2021 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
See notes to condensed consolidated financial statements.
8
E2open Parent Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||
(In thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash from operating activities: |
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
||
Amortization of deferred commissions |
|
|
|
|
|
|
|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
|
||
Amortization of operating lease right-of-use assets |
|
|
|
|
|
|
|
||
Share-based and unit-based compensation |
|
|
|
|
|
|
|
||
Change in tax receivable agreement liability |
|
|
|
|
|
|
|
||
Loss from change in fair value of warrant liability |
|
|
|
|
|
|
|
||
Loss from change in fair value of contingent consideration |
|
|
|
|
|
|
|
||
(Gain) loss on disposal of property and equipment |
|
|
( |
) |
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
( |
) |
Other noncurrent assets |
|
|
( |
) |
|
|
|
( |
) |
Accounts payable and accrued liabilities |
|
|
( |
) |
|
|
|
( |
) |
Incentive program payable |
|
|
( |
) |
|
|
|
|
|
Deferred revenue |
|
|
|
|
|
|
( |
) |
|
Changes in other liabilities |
|
|
( |
) |
|
|
|
|
|
Net cash provided by operating activities |
|
|
|
|
|
|
|
||
Cash flows from investing activities |
|
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
|
( |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
||
Proceeds from PIPE investment |
|
|
|
|
|
|
|
||
Proceeds from sale of membership units |
|
|
|
|
|
|
|
||
Repayments of indebtedness |
|
|
( |
) |
|
|
|
( |
) |
Repayments of financing lease obligations |
|
|
( |
) |
|
|
|
( |
) |
Repurchase of common stock |
|
|
( |
) |
|
|
|
|
|
Repurchase of Common Units |
|
|
( |
) |
|
|
|
|
|
Net cash used in financing activities |
|
|
|
|
|
|
( |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
( |
) |
|
|
|
( |
) |
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at beginning of period |
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period |
|
$ |
|
|
|
$ |
|
||
Reconciliation of cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
|
||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
|
$ |
|
||
Supplemental Information - Cash Paid for: |
|
|
|
|
|
|
|
||
Interest |
|
$ |
|
|
|
$ |
|
||
Income taxes |
|
|
|
|
|
|
|
||
Non-Cash Investing and Financing Activities: |
|
|
|
|
|
|
|
||
Capital expenditures financed under financing lease obligations |
|
$ |
|
|
|
$ |
|
||
Capital expenditures included in accounts payable and accrued liabilities |
|
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for operating lease obligations |
|
|
|
|
|
|
|
||
Prepaid software, maintenance and insurance under notes payable |
|
|
|
|
|
|
|
||
Conversion of Common Units to Class A Common Stock |
|
|
|
|
|
|
|
||
Conversion of Series B1 common stock to Class A Common Stock |
|
|
|
|
|
|
|
||
Business Combination purchase price adjustment |
|
|
|
|
|
|
|
See notes to condensed consolidated financial statements.
9
E2open Parent Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Organization and Basis of Presentation
Organization and Description of Business
CC Neuberger Principal Holdings I (CCNB1) was a blank check company incorporated in the Cayman Islands on January 14, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. CCNB1’s sponsor was CC Neuberger Principal Holdings I Sponsor LLC, a Delaware limited liability company (Sponsor). CCNB1 became a public company on April 28, 2020 through an initial public offering (IPO).
On February 4, 2021 (Closing Date), CCNB1 and E2open Holdings, LLC and its operating subsidiaries (E2open Holdings) completed a business combination (Business Combination) contemplated by the definitive Business Combination Agreement entered into on October 14, 2020 (Business Combination Agreement). In connection with the finalization of the Business Combination, CCNB1 changed its name to “E2open Parent Holdings, Inc.” and changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware (Domestication).
Immediately following the Domestication, various entities merged with and into E2open, with E2open as the surviving company. Additionally, E2open Holdings became a subsidiary of E2open with the equity interests of E2open Holdings held by E2open and existing owners of E2open Holdings. The existing owners of E2open Holdings are considered noncontrolling interests in the condensed consolidated financial statements.
We are headquartered in Austin, Texas. We are a leading provider of cloud-based, end-to-end supply chain management software. Our software combines networks, data and applications to provide a deeply embedded, mission-critical platform that allows customers to optimize their supply chain by accelerating growth, reducing costs, increasing visibility and driving improved resiliency. Given the business-critical nature of our solutions, we maintain deep, long-term relationships with our customers across a wide range of end-markets, including technology, consumer, industrial and transportation, among others.
Basis of Presentation
As a result of the Business Combination, for accounting purposes, the Company is the acquirer and E2open Holdings is the acquiree and accounting predecessor. The financial statement presentation includes the financial statements of E2open Holdings as “Predecessor” for periods prior to the Closing Date and of the Company as “Successor” for the periods after the Closing Date, including the consolidation of E2open Holdings.
These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended August 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending February 28, 2022. For further information, refer to the consolidated financial statements and notes thereto included in our 2021 Form 10-K.
Use of Estimates
The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Reclassifications
Financing lease obligation were previously included in current portion of notes payable and capital lease obligations as well as notes payable and capital lease obligations on the Consolidated Balance Sheets. Beginning March 1, 2021, capital lease obligations became financing lease obligations and were presented separately on the Consolidated Balance Sheets. Additionally, financing leases are no longer presented with notes payable in the notes to the financial statements as all leases are presented together in one note. These reclassifications and changes did not affect our net income, total assets, liabilities, equity or cash flows.
10
Seasonality
Our quarterly operating results have fluctuated in the past and are expected to fluctuate in the future due to a variety of factors, many of which are outside of our control, including seasonality in our business as a result of customer budget cycles and customary European vacation schedules, with higher sales in the third and fourth fiscal quarters. As a result, our past results may not be indicative of our future performance and comparing our operating results on a period-to-period basis may not be meaningful.
2. Accounting Standards
Recently Adopted Accounting Guidance
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). The core principle of ASC 842, Leases is that a lessee should recognize the assets and liabilities that arise from leases. For operating leases, a lessee is required to recognize a right-of-use (ROU) asset and a lease liability, initially measured at the present value of the lease payments, in the balance sheet. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. This standard is effective for calendar fiscal years beginning after December 15, 2021. Earlier application is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We this standard as of
In October 2018, the FASB issued ASU 2018-17, Consolidated (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. This standard is intended to improve the accounting when considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. ASU 2018-17 is effective for fiscal years beginning after December 15, 2020, and interim periods within those years. All entities are required to apply this standard retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. We this standard as of
Recent Accounting Guidance Not Yet Adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (ASC 326), which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. This standard replaces the existing incurred loss impairment methodology with an approach that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. This standard is effective for the fiscal year beginning after December 15, 2022, and all interim periods within. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard provides guidance on accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments in this standard should be applied either retrospectively or prospectively to all implementation costs incurred after the adoption date. The standard is effective for fiscal years beginning after December 15, 2021, and interim periods within those years. Earlier application is permitted. We do not expect the adoption of this standard will have a material impact on our consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Simplifying Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards. The guidance amends certain disclosure requirements that had become redundant, outdated or superseded. Additionally, this guidance amends accounting for the interim period effects of changes in tax laws or rates and simplifies aspects of the accounting for franchise taxes. ASU 2019-12 is effective for annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. Management is currently evaluating the effect of these provisions on our financial position and results of operations.
11
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting to simplify the accounting for contract modifications made to replace LIBOR or other reference rates that are expected to be discontinued because of the reference rate reform. The guidance provides optional expediates and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criterion are met. The optional expedients and exceptions can be applied to contract modifications made until December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The amendments in ASU 2021-01 are elective and apply to our debt instruments that may be modified as a result of the reference rate reform. We are continuing to evaluate these standards, as well as the timing of the transition of various rates in our debt instruments affected by reference rate reform.
3. BluJay Acquisition
On May 27, 2021, we entered into a Purchase Agreement with the BluJay Sellers. On September 1, 2021, we completed the acquisition of BluJay (BluJay Acquisition). Under the Purchase Agreement, we issued to the BluJay Sellers
In connection with the completion of the BluJay Acquisition, we secured $
The BluJay Acquisition will be presented in our financial statements and results of operations during our fiscal third quarter of 2022.
4. Liquidity and Capital Resources
We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital, capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Current working capital needs relate mainly to employee compensation and benefits, as well as interest, debt repayments, capital expenditures and operating expenses. Our ability to expand and grow our business will depend on many factors, including working capital needs and the evolution of operating cash flows.
We had $
In the future, we may enter into arrangements to acquire or invest in complementary businesses. To facilitate these acquisitions or investments, we may seek additional equity or debt financing.
12
5. Intangible Assets, Net
Intangible assets, net consisted of the following:
|
|
Successor |
|
|||||||||||
|
|
August 31, 2021 |
|
|||||||||||
($ in thousands) |
|
Weighted |
|
Cost |
|
|
Accumulated |
|
|
Net |
|
|||
Indefinite-lived: |
|
|
|
|
|
|
|
|
|
|
|
|||
Trademark / Trade name |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Definite-lived: |
|
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Technology |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Content library |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total definite-lived |
|
|
|
|
|
|
|
( |
) |
|
|
|
||
Total intangible assets |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
Successor |
|
|||||||||||
|
|
February 28, 2021 |
|
|||||||||||
($ in thousands) |
|
Weighted |
|
Cost |
|
|
Accumulated |
|
|
Net |
|
|||
Indefinite-lived: |
|
|
|
|
|
|
|
|
|
|
|
|||
Trademark / Trade name |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Definite-lived: |
|
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Technology |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Content library |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total definite-lived |
|
|
|
|
|
|
|
( |
) |
|
|
|
||
Total intangible assets |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
6. Property and Equipment, Net
Property and equipment, net consisted of the following:
|
|
Successor |
|
|||||
($ in thousands) |
|
August 31, 2021 |
|
|
February 28, 2021 |
|
||
Computer equipment |
|
$ |
|
|
$ |
|
||
Software |
|
|
|
|
|
|
||
Furniture and fixtures |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Gross property and equipment |
|
|
|
|
|
|
||
Less accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
Computer equipment and software include assets held under financing leases. Amortization of assets held under financing leases is included in depreciation expense. See Note 20, Leases for additional information regarding our financing leases.
Depreciation expense was $
13
7. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following:
|
|
Successor |
|
|||||
($ in thousands) |
|
August 31, 2021 |
|
|
February 28, 2021 |
|
||
Accrued compensation |
|
$ |
|
|
$ |
|
||
Accrued severance and retention |
|
|
|
|
|
|
||
Trade accounts payable |
|
|
|
|
|
|
||
Accrued professional services |
|
|
|
|
|
|
||
Restructuring liability |
|
|
|
|
|
|
||
Taxes payable |
|
|
|
|
|
|
||
Interest payable |
|
|
|
|
|
|
||
Customer deposits |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
8. Tax Receivable Agreement
E2open Holdings entered into a Tax Receivable Agreement with selling equity holders of E2open Holdings that requires us to pay
Significant inputs and assumptions were used to initially estimate the future expected payments including the timing of the realization of the tax benefits, a tax rate of
Pursuant to ASC 805, Business Combination and relevant tax law, we have calculated the fair value of the tax receivable agreement payments related to the transaction at the acquisition date and identified the timing of the utilization of the tax attributes. Under ASC 805, the Tax Receivable Agreement liability, as of the acquisition date, will be revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in the change in tax receivable agreement liability in the Condensed Consolidated Statements of Operations in the period in which the event occurred. Interest will accrue on the tax receivable agreement liability at a rate of LIBOR plus
14
9. Notes Payable
Notes payable outstanding were as follows:
|
|
Successor |
|
|||||
($ in thousands) |
|
August 31, 2021 |
|
|
February 28, 2021 |
|
||
2021 Term Loan |
|
$ |
|
|
$ |
|
||
Other notes payable |
|
|
|
|
|
|
||
Total notes payable |
|
|
|
|
|
|
||
Less unamortized debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Total notes payable, net |
|
|
|
|
|
|
||
Less current portion |
|
|
( |
) |
|
|
( |
) |
Notes payable, less current portion, net |
|
$ |
|
|
$ |
|
2021 Term Loan and Revolving Credit Facility
On February 4, 2021, E2open, LLC, our subsidiary, entered into a credit agreement (Credit Agreement) that provides for $
The Credit Agreement is guaranteed by E2open Intermediate, LLC, our subsidiary, and certain wholly owned subsidiaries of E2open, LLC, as guarantors, and is supported by a security interest in substantially all of the guarantors’ personal property and assets.
The Credit Agreement contains certain customary events of default, representations and warranties as well as affirmative and negative covenants.
As of August 31, 2021 and February 28, 2021, the 2021 Term Loan had a variable interest rate of
See Note 3, BluJay Acquisition for information related to additional debt incurred for the BluJay Acquisition. See Note 23, Subsequent Events for information related to borrowings under our 2021 Revolving Credit Facility.
10. Contingent Consideration
Business Combination
The contingent consideration liability is due to the issuance of Series B-1 and B-2 common stock and Series 1 restricted common units (RCUs) and Series 2 RCUs of E2open Holdings as part of the Business Combination. These shares and units were issued on a proportional basis to each holder of Class A shares in CCNB1 and Common Units of E2open Holdings. These restricted shares and Common Units are treated as a contingent consideration liability under ASC 805 and valued at fair market value. The contingent consideration liability was recorded at fair value on the acquisition date and will be remeasured at each reporting date and adjusted if necessary. Any gain or loss recognized from the remeasurement will be recorded in gain (loss) from the change in fair value of contingent consideration on the Condensed Consolidated Statements of Operations as a nonoperating income (expense) as the change in fair value is not part of our core operating activities.
The contingent consideration liability was $
The
15
As of June 8, 2021, the
There were
The
As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $
There were
Upon the conversion of an RCU, the holder of such RCU will be entitled to receive a payment equal to the amount of ordinary distributions paid on an E2open Holdings unit from the Closing Date through (but not including) the date such RCU converts into an E2open Holdings unit. If any of the RCUs do not vest on or before the
We have not paid any dividends to date and do not expect to in the future.
Sponsor Side Letter
In connection with the execution of the Business Combination Agreement, the Sponsor, certain investors and CCNB1’s Independent Directors entered into the Sponsor Side Letter Agreement with CCNB1. Under the Sponsor Side Letter Agreement,
These restricted shares were treated as a contingent consideration liability under ASC 805 and valued at fair market value. The contingent consideration liability was recorded at fair value on the acquisition date and remeasured at each reporting date and adjusted if necessary. Any gain or loss recognized from the remeasurements was recorded in gain (loss) from the change in fair value of contingent consideration on the Condensed Consolidated Statements of Operations as a nonoperating income (expense) as the change in fair value was not part of our core operating activities.
As of June 8, 2021, the
The contingent consideration liability was $
16
Averetek
E2open Holdings purchased Averetek, LLC (Averetek) in May 2019. The purchase agreement for Averetek included contingent payments of up to $
11. Fair Value Measurement
Our financial instruments include cash and cash equivalents; investments; accounts receivable, net; accounts payable; acquisition-related obligations; notes payable; and financing lease obligations. Accounts receivable, net; accounts payable; and acquisition-related obligations are stated at their carrying value, which approximates fair value, due to their short maturity. We measure our cash equivalents and investments at fair value, based on an exchange or exit price which represents the amount that would be received for an asset sale or an exit price, or paid to transfer a liability in an orderly transaction between knowledgeable and willing market participants. We estimate the fair value for notes payable and financing lease obligations by discounting the future cash flows of the related note and lease payments. As of August 31, 2021 and February 28, 2021, the fair value of the cash and cash equivalents, restricted cash, notes payable and financing lease obligations approximates their recorded values.
The following tables set forth details about our investments:
($ in thousands) |
|
Cost |
|
|
Gross |
|
|
Gross |
|
|
Fair Value |
|
||||
August 31, 2021 (Successor) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset-backed securities |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
February 28, 2021 (Successor) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset-backed securities |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect our assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.
Our assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy are summarized as follows:
|
|
Successor |
|
|||||||||||||
|
|
August 31, 2021 |
|
|||||||||||||
($ in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Total cash equivalents |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset-backed securities |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total investments |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition-related obligations |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Warrant liability |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Total liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
17
|
|
Successor |
|
|||||||||||||
|
|
February 28, 2021 |
|
|||||||||||||
($ in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Total cash equivalents |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset-backed securities |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total investments |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition-related obligations |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
Warrant liability |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Total liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
Contingent Consideration
The following table provides a reconciliation of the beginning and ending balances of acquisition related accrued earn-outs and contingent consideration using significant unobservable inputs (Level 3):
|
|
Successor |
|
|||||
($ in thousands) |
|
August 31, 2021 |
|
|
February 28, 2021 |
|
||
Beginning of period |
|
$ |
|
|
$ |
|
||
Acquisition date fair value of contingent consideration |
|
|
— |
|
|
|
|
|
Conversion to Class A Common Stock |
|
|
( |
) |
|
|
— |
|
Cash payments |
|
|
( |
) |
|
|
— |
|
Loss (gain) from fair value of contingent consideration |
|
|
|
|
|
( |
) |
|
End of period |
|
$ |
|
|
$ |
|
The change in the fair value of the earn-out is recorded in acquisition-related expenses while the change in the fair value of the contingent consideration is recorded in gain (loss) from change in fair value of contingent consideration in the Condensed Consolidated Statements of Operations.
Our warrant liability is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The following table provides a reconciliation of the warrant liability from February 4, 2021 through February 28, 2021 and February 28, 2021 through August 31, 2021:
|
|
Successor |
|
|||||
($ in thousands) |
|
August 31, 2021 |
|
|
February 28, 2021 |
|
||
Beginning of period |
|
$ |
|
|
$ |
|
||
Loss (gain) from fair value of warrant liability |
|
|
|
|
|
( |
) |
|
End of period |
|
$ |
|
|
$ |
|
The change in the fair value of the warrant liability is recorded in gain (loss) from change in fair value of warrant liability in the Condensed Consolidated Statements of Operations.
The fair values of our Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair values of our Level 2 financial instruments are based on quoted market prices for comparable instruments or model-driven valuations using observable market data or inputs corroborated by observable market data.
Our earn-out liabilities and contingent consideration are valued using a Monte Carlo simulation model. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield and risk-free interest rates. These valuation models use unobservable market input, and therefore the liabilities are classified as Level 3.
18
Our public warrant liability is valued using the binomial lattice pricing model. The private placement warrants are valued using a binomial pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes pricing model. The forward purchase warrants are valued utilizing observable market prices for public shares and warrants, relative to the present value of contractual cash proceeds. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free interest rates. These valuation models use unobservable market input, and therefore the liability is classified as Level 3.
12. Revenue
We generate revenue from the sale of subscriptions and professional services. We recognize revenue when the customer contract and associated performance obligations have been identified, transaction price has been determined and allocated to the performance obligations in the contract, and performance obligations have been satisfied. We recognize revenue net of any taxes collected from customers, which are subsequently remitted to governmental authorities.
Total Revenue by Geographic Locations
Revenue by geographic regions consisted of the following:
|
|
Successor |
|
|
|
Predecessor |
|
|
Successor |
|
|
|
Predecessor |
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||||
Americas |
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
||||
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asia Pacific |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
Revenues by geography are determined based on the region of our contracting entity, which may be different than the region of the customer. Americas revenue attributed to the United States was
During the three and six months ended August 31, 2021, we recorded a $
Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied. It includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods and does not include contracts where the customer is not committed. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty under the contract. Additionally, as a practical expedient of ASC 606, Revenue from Contracts with Customers we have not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. As of August 31, 2021 and February 28, 2021, approximately $
Contract Assets and Liabilities
Contract assets primarily represent contractual receivables recognized for performance obligations that have been satisfied but for which amounts have not been billed. Contract assets were $
19
Sales Commissions
With the adoption of ASC 606 and ASC 340-40, Contracts with Customers as of March 1, 2019, we began deferring and amortizing sales commissions that are incremental and directly related to obtaining customer contracts. Amortization expense of $
13. Severance and Exit Costs
In connection with acquisitions, we conducted post-acquisition related operational reviews to reallocate resources to strategic areas of the business. The operational reviews resulted in workforce reductions, lease obligations related to properties that were vacated and other expenses.
|
|
Successor |
|
|
|
Predecessor |
|
|
Successor |
|
|
|
Predecessor |
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||||
Severance |
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
||||
Lease exits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total severance and exit costs |
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
Included in accounts payable and accrued liabilities as of August 31, 2021 and February 28, 2021 is a restructuring liability, primarily consisting of lease related obligations, of $
The following table provides a reconciliation of the severance and exit cost accruals from February 4, 2021 through February 28, 2021 and February 28, 2021 through August 31, 2021 :
|
|
Successor |
|
|||||
($ in thousands) |
|
August 31, 2021 |
|
|
February 28, 2021 |
|
||
Beginning of period |
|
$ |
|
|
$ |
|
||
Payments |
|
|
( |
) |
|
|
( |
) |
Impairment of right-of-use assets |
|
|
( |
) |
|
|
— |
|
Expenses |
|
|
|
|
|
|
||
End of period |
|
$ |
|
|
$ |
|
14. Warrants
As of August 31, 2021 and February 28, 2021, there were an aggregate of
20
15. Stockholders’ Equity
Class V Common Stock
We were authorized to issue
The following table reflects the changes in our outstanding stock:
|
|
Class A |
|
|
Class V |
|
|
Series B-1 |
|
|
Series B-2 |
|
||||
Balance, February 28, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Conversion of Series B-1 common stock (1) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
Conversion of Series 1 RCUs (2) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Business Combination post-close adjustment |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Conversion of Common Units (4) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
Repurchase shares (5) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Balance, August 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
See Note 3, BluJay Acquisition for information regarding additional Class A Common Stock issuances and the lock-up period.
Membership Units
Prior to the Business Combination, E2open Holdings had three classes of units: Class A, Class A-1 and Class B. Class A units were the only units with voting rights. Holders of Class A and Class A-1 units were entitled to priority distributions until each unit received $
During the six months ended August 31, 2020, we received $
16. Noncontrolling Interests
Noncontrolling interest represents the portion of E2open Holdings that we control and consolidate but do not own. As of August 31, 2021 and February 28, 2021, the noncontrolling interests represent a
21
Generally, common units of E2open Holdings participate in net income or loss allocations and distributions and entitle their holder to the right, subject to the terms set forth in the limited liability agreement, to require E2open Holdings to redeem all or a portion of the common units held by such participant. At our option, we may satisfy this redemption with cash or by exchanging Class V Common Stock for our Class A Common Stock on a
On June 8, 2021, the
On July 6, 2021, pursuant to Section 3.5 of the Business Combination Agreement, we issued
As part of the Business Combination, certain individuals were party to the Lock-Up Period which expired on August 4, 2021. As a result,
See Note 23, Subsequent Events for information on additional Common Unit conversions.
As part of the BluJay Acquisition, certain individuals who are parties to the Investor Rights Agreements entered into a new lock-up period that will expire on February 28, 2022.
As of August 31, 2021 and February 28, 2021, there were a total of
We follow the guidance issued by the FASB regarding the classification and measurement of redeemable securities. Accordingly, we have determined that the common units meet the requirements to be classified as permanent equity.
17. Other Comprehensive (Loss) Income
We did not reclass any items to the Condensed Consolidated Statements of Operations from accumulated other comprehensive (loss) income during the three and six months ended August 31, 2021 and 2020.
Accumulated other comprehensive (loss) income in the equity section of our Condensed Consolidated Balance Sheets includes:
|
|
Successor |
|
|||||
($ in thousands) |
|
August 31, 2021 |
|
|
February 28, 2021 |
|
||
Foreign currency translation adjustment |
|
$ |
( |
) |
|
$ |
|
|
Accumulated other comprehensive (loss) income |
|
$ |
( |
) |
|
$ |
|
22
18. Earnings Per Share
Basic earnings per share is calculated as net income divided by the average number of shares of common stock outstanding. Diluted earnings per share assumes, when dilutive, the issuance of the net incremental shares from options and restricted shares.
|
|
Successor |
|
|||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
(in thousands, except per share data) |
|
August 31, 2021 |
|
|
August 31, 2021 |
|
||
Net loss per share: |
|
|
|
|
|
|
||
Numerator - basic: |
|
|
|
|
|
|
||
Net loss per share: |
|
$ |
( |
) |
|
$ |
( |
) |
Less: Net loss attributable to noncontrolling interests |
|
|
(3,471 |
) |
|
|
( |
) |
Net loss attributable to E2open Parent Holdings, Inc. - basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Numerator - diluted: |
|
|
|
|
|
|
||
Net loss attributable to E2open Parent Holdings, Inc. - basic |
|
$ |
( |
) |
|
$ |
( |
) |
Add: Net loss and tax effect attributable to noncontrolling interests |
|
|
— |
|
|
|
— |
|
Net loss attributable to E2open Parent Holdings, Inc. - diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Numerator - basic: |
|
|
|
|
|
|
||
Weighted average shares outstanding - basic |
|
|
|
|
|
|
||
Net income per share - basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
||
Numerator - diluted: |
|
|
|
|
|
|
||
Weighted average shares outstanding - basic |
|
|
|
|
|
|
||
Weighted average effect of dilutive securities: |
|
|
|
|
|
|
||
Shares related to Common Units |
|
|
— |
|
|
|
— |
|
Weighted average shares outstanding - diluted |
|
|
|
|
|
|
||
Diluted net income per common share |
|
$ |
( |
) |
|
$ |
( |
) |
Potential common shares issuable to employee or directors upon exercise or conversion of shares under our share-based compensation plans and upon exercise of warrants are excluded from the computation of diluted earnings per common share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss available to common stockholders.
The following table summarizes the weighted-average potential common shares excluded from diluted loss per common share as their effect would be anti-dilutive:
|
|
Successor |
|
|||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
|
August 31, 2021 |
|
|
August 31, 2021 |
|
||
Shares related to Series B-1 common stock |
|
|
|
|
|
|
||
Shares related to Series B-2 common stock |
|
|
|
|
|
|
||
Shares related to restricted common units Series 2 |
|
|
|
|
|
|
||
Shares related to warrants (1) |
|
|
|
|
|
|
||
Shares related to Common Units |
|
|
|
|
|
|
||
Shares related to options |
|
|
|
|
|
|
||
Shares related to restricted stock |
|
|
|
|
|
|
||
Units/Shares excluded from the dilution computation |
|
|
|
|
|
|
23
19. Share-Based and Unit-Based Compensation
2021 Incentive Plan
The E2open Parent Holdings, Inc. 2021 Omnibus Incentive Plan (2021 Incentive Plan) became effective on the Closing Date with the approval of CCNB1’s shareholders and the board of directors. The 2021 Incentive Plan allows us to make equity and equity-based incentive awards to officers, employees, directors and consultants. There are
Our board of directors have approved the grant of options and RSUs under the 2021 Incentive Plan.
Currently, all options are performance based and are measured based on obtaining an organic growth target over a
The RSUs are either performance based or time based. The performance based RSUs are measured based on obtaining an organic growth target over a
As of August 31, 2021, there were
Activity under the 2021 Incentive Plan related to options was as follows:
|
|
Successor |
|
|||||||||
|
|
Number of Shares |
|
|
Weighted Average Exercise Price Per Share |
|
|
Weighted Average Remaining Contractual Life (in years) |
|
|||
Balance, February 28, 2021 |
|
|
|
|
$ |
|
|
|
— |
|
||
Granted |
|
|
|
|
|
|
|
|
|
|||
Balance, August 31, 2021 |
|
|
|
|
$ |
|
|
|
|
As of August 31, 2021, there was $
Activity under the 2021 Incentive Plan related to RSUs was as follows:
|
|
Successor |
|
|||||||||
|
|
Number of Units |
|
|
Weighted Average Grant Date Fair Value Per Unit |
|
|
Weighted Average Remaining Recognition Period (in years) |
|
|||
Balance, February 28, 2021 |
|
|
|
|
$ |
|
|
|
— |
|
||
Granted |
|
|
|
|
|
|
|
|
|
|||
Forfeited |
|
|
( |
) |
|
|
|
|
|
|
||
Balance, August 31, 2021 |
|
|
|
|
$ |
|
|
|
|
As of August 31, 2021, there was $
24
The estimated grant-date fair values of the options granted during the six months ended August 31, 2021 were calculated using the Black-Scholes option-pricing valuation model, based on the following assumptions:
Expected term (in years) |
|
|
Expected equity price volatility |
|
|
Risk-free interest rate |
|
|
Expected dividend yield |
|
See Note 23, Subsequent Events for information related to additional RSU grants.
Prior to the Business Combination, we had unit-based compensation plans that authorized (a) the discretionary granting of unit options and (b) the discretionary issuance of non-vested restricted units.
Unit Options
In 2015, E2open Holdings adopted the 2015 Unit Option Plan (2015 Plan). Under the 2015 Plan, E2open Holdings issued Series A unit options to certain employees eligible to participate in E2open Holdings unit option plan. The options issued under the 2015 Plan were subject to certain transfer restrictions and were initially deemed unvested. With respect to options issued to certain employees, options either vested
Fair value of the unit options was determined on the date of grant using a pricing model affected by E2open Holdings’ unit price, as well as by certain assumptions including E2open Holdings’ expected equity price volatility over the term of the awards, actual and projected employee option exercise behavior, risk-free interest rates and expected dividends. E2open Holdings did
E2open Holdings was authorized to issue
Activity under E2open Holdings’ unit option plan was as follows:
|
|
Predecessor |
|
|||||||||
|
|
Number of Units |
|
|
Weighted Average Exercise Price Per Unit |
|
|
Weighted Average Term (in years) |
|
|||
Balance, February 29, 2020 |
|
|
|
|
$ |
|
|
|
|
|||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
|
||
Balance, August 31, 2020 |
|
|
|
|
$ |
|
|
|
|
As of February 3, 2021, there was $
We did
On January 24, 2021, the board of managers accelerated the vesting of all unvested unit options outstanding under the 2015 Plan as of the completion of the Business Combination on February 4, 2021.
25
Restricted Equity Plan
In 2015, E2open Holdings established the 2015 Restricted Equity Plan (2015 Restricted Plan) that was adopted for certain officers eligible to participate in the 2015 Restricted Plan. The units issued under the 2015 Restricted Plan were subject to certain transfer restrictions and were initially deemed unvested. With respect to units issued to certain officers, Class B units either vested
Activity under E2open Holdings’ 2015 Restricted Plan was as follows:
|
|
Predecessor |
|
|||||||||
|
|
Number of Units |
|
|
Weighted Average Grant Date Fair Value Per Unit |
|
|
Weighted Average Remaining Term (in years) |
|
|||
Balance, February 29, 2020 |
|
|
|
|
$ |
|
|
|
|
|||
Released |
|
|
( |
) |
|
|
|
|
|
|
||
Balance, August 31, 2020 |
|
|
|
|
$ |
|
|
|
|
The aggregate fair value of units vested during the three and six months ended August 31, 2020 was $
On January 24, 2021, the board of managers accelerated the vesting of all unvested unit options outstanding under the 2015 Restricted Plan as of the completion of the Business Combination on February 4, 2021.
The table below sets forth the functional classification in the Condensed Consolidated Statements of Operations of our equity-based compensation expense:
|
|
Successor |
|
|
|
Predecessor |
|
|
Successor |
|
|
|
Predecessor |
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||||
Cost of revenue |
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total share-based and unit-based |
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
20. Leases
Effective March 1, 2021, we began accounting for leases in accordance with ASC 842, Leases, which requires lessees to recognize lease liabilities and ROU assets on the balance sheet for most operating leases. Prior to March 1, 2021, we accounted for leases in accordance with ASC 840, Leases, under which operating leases were not recorded on the balance sheet.
We made the accounting policy election not to apply the recognition provisions of ASC 842 to short-term leases which are leases with a lease term of 12 months or less. Instead, we will recognize the lease payments for short-term leases on a straight-line basis over the lease term. We currently do not have any short-term leases.
Upon adoption of ASC 842, we recognized an operating lease liability of $
26
Operating lease liabilities reflect our obligation to make future lease payments for real estate locations. Lease terms are comprised of contractual terms. Payments are discounted using the rate we would pay to borrow amounts equal to the lease payments over the lease term (our incremental borrowing rate). We do not separate lease and non-lease components for contracts in which we are the lessee. ROU assets are measured based on lease liabilities adjusted for incentives and timing differences between operating lease expense and payments, recognized on a straight-line basis over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Common area maintenance and other executory costs are the main components of variable lease payments. Operating and variable lease expenses are recorded in general and administrative expense in the Condensed Consolidated Statements of Operations.
Real Estate Leases
We lease our primary office space under non-cancelable operating leases with various expiration dates through
Several of the operating lease agreements require us to provide security deposits. As of August 31, 2021, and February 28, 2021, lease deposits were $
Equipment Leases
We purchase equipment under non-cancelable financing lease arrangements related to software and computer equipment and have various expiration dates through
Balance Sheet Presentation
The following tables presents the amounts and classifications of our estimated ROU assets, net and lease liabilities:
|
|
|
|
Successor |
|
|
($ in thousands) |
|
Balance Sheet Location |
|
August 31, 2021 |
|
|
Operating lease right-of-use assets |
|
Operating lease right-of-use assets |
|
$ |
|
|
Finance lease right-of-use asset |
|
|
|
|
||
Total right-of-use assets |
|
|
|
$ |
|
|
|
|
|
Successor |
|
|
($ in thousands) |
|
Balance Sheet Location |
|
August 31, 2021 |
|
|
Operating lease liability - current |
|
Current portion of operating lease obligations |
|
$ |
|
|
Operating lease liability |
|
Operating lease obligations |
|
|
|
|
Finance lease liability - current |
|
Current portion of finance lease obligations |
|
|
|
|
Finance lease liability |
|
Finance lease obligations |
|
|
|
|
Total lease liabilities |
|
|
|
$ |
|
27
Lease Cost and Cash Flows
The following table summarizes our total lease cost:
|
|
Successor |
|
|||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
($ in thousands) |
|
August 31, 2021 |
|
|
August 31, 2021 |
|
||
Finance lease cost: |
|
|
|
|
|
|
||
Amortization of right-of-use asset |
|
$ |
|
|
$ |
|
||
Interest on lease liability |
|
|
|
|
|
|
||
Finance lease cost |
|
|
|
|
|
|
||
Operating lease cost: |
|
|
|
|
|
|
||
Operating lease cost |
|
|
|
|
|
|
||
Variable lease cost |
|
|
|
|
|
|
||
Sublease income |
|
|
( |
) |
|
|
( |
) |
Operating net lease cost |
|
|
|
|
|
|
||
Total net lease cost |
|
$ |
|
|
$ |
|
We currently do not have any short-term leases.
Rent expense for the three and six months ended August 31, 2020 was $
Supplemental cash flow information related to leases was as follows:
|
|
Successor |
|
|
|
|
Six Months Ended |
|
|
($ in thousands) |
|
August 31, 2021 |
|
|
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
Operating cash outflows from operating leases |
|
$ |
|
The following table presents the weighted-average remaining lease terms and discount rates of our leases:
|
|
Successor |
|
|
|
|
Six Months Ended |
|
|
|
|
August 31, 2021 |
|
|
Weighted -average remaining lease term (in years): |
|
|
|
|
Finance lease |
|
|
|
|
Operating lease |
|
|
|
|
Weighted-average discount rate: |
|
|
|
|
Finance lease |
|
|
% |
|
Operating lease |
|
|
% |
Lease Liability Maturity Analysis
The following table reflects the undiscounted future cash flows utilized in the calculation of the lease liabilities as of August 31, 2021:
($ in thousands) |
|
Operating Leases |
|
|
Finance Leases |
|
||
September 1, 2021 to February 28, 2022 |
|
$ |
|
|
$ |
|
||
2023 |
|
|
|
|
|
|
||
2024 |
|
|
|
|
|
|
||
2025 |
|
|
|
|
|
|
||
2026 |
|
|
|
|
|
|
||
Thereafter |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
Less: Present value discount |
|
|
( |
) |
|
|
( |
) |
Lease liabilities |
|
$ |
|
|
$ |
|
28
Future minimum lease payments under non-cancelable operating leases as of February 28, 2021, prior to the adoption of the new lease standard discussed in Note 1, Organization and Description of Business were as follows for the fiscal years ended:
($ in thousands) |
|
Amount |
|
|
2022 |
|
$ |
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Thereafter |
|
|
|
|
Total minimum lease payments |
|
$ |
|
21. Income Taxes
We calculate the provision for income taxes during interim periods by applying an estimate of the forecasted annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Our provision for income taxes was $
The decrease in the provision for income taxes and effective tax rate was primarily due to significant nondeductible mark-to-market losses associated with contingent liabilities and certain equity consideration liabilities related to the Business Combination as well as the impact to fiscal 2022 of losses attributable to our noncontrolling interest in our affiliate.
As of August 31, 2021 and February 28, 2021, total gross unrecognized tax benefits were $
22. Commitments and Contingencies
From time to time, we are subject to contingencies that arise in the ordinary course of business. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We do not currently believe the resolution of any such contingencies will have a material adverse effect upon our Condensed Consolidated Balance Sheets, Statements of Operations or Statements of Cash Flows.
23. Subsequent Events
On September 1, 2021, we completed the BluJay Acquisition. The BluJay Acquisition will be presented in our financial statements and results of operations during our fiscal third quarter of 2022. See Note 3, BluJay Acquisition for details.
On September 1, 2021, certain executives and senior management were granted an aggregate of
On September 10, 2021,
On September 29, 2021, we borrowed $
On October 1, 2021, senior management and employees were granted an aggregate of
On October 11, 2021,
29
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This item contains a discussion of our business, including a general overview of our business, results of operations, liquidity and capital resources and quantitative and qualitative disclosures about market risk.
The following discussion should be read in conjunction with Part II, Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2021 Form 10-K and the unaudited condensed financial statements and related notes beginning on page 5. This Item 2 contains “forward looking” statements that involve risks and uncertainties. See Forward-Looking Statements at the beginning of this Quarterly Report.
Overview
We are a leading provider of cloud-based, end-to-end SCM software. Our software combines networks, data and applications to provide a deeply embedded, mission-critical platform that allows customers to optimize their supply chain by accelerating growth, reducing costs, increasing visibility and driving improved resiliency. Given the mission-critical nature of our solutions, we maintain deep, long-term relationships with our customers, which is reflected by our gross retention and customer tenure.
Recent Events
On September 1, 2021, we completed the BluJay Acquisition with the issuance of 72,383,299 shares of Class A Common Stock to the BluJay Sellers and the payment of approximately $770 million of cash which includes the repayment of BluJay's debt facility. The total purchase consideration for the BluJay Acquisition was $1.6 billion.
In connection with the completion of the BluJay Acquisition, we secured $300 million in PIPE financing from institutional investors for the purchase of an aggregate of 28,909,022 shares of our Class A Common Stock. PIPE financing proceeds of $280 million were received in advance of the BluJay Acquisition and were recorded as a payable to sellers on our Condensed Consolidated Balance Sheet as of August 31, 2021. We also obtained a $380.0 million incremental term loan to our 2021 Term Loan and increased our 2021 Revolving Credit Facility by $80.0 million to $155.0 million. In addition, the letter of credit sublimit was increased from $15.0 million to $30.0 million upon completion of the BluJay Acquisition.
Additionally, the Investor Rights Agreement was amended and restated to add certain of BluJay's existing stockholders as parties, including certain affiliates of Francisco Partners and Temasek as well as include a six month lock-up period from September 1, 2021 through February 28, 2022 for certain equityholders of E2open and BluJay. The Investor Rights Agreement also provides Francisco Partners and Temasek the right to nominate one member each to our board of directors. Mr. Deep Shah and Mr. Martin Fichtner became new directors on September 1, 2021.
30
Results of Operations
The following table is our Condensed Consolidated Statements of Operations for the periods indicated:
|
|
Successor |
|
|
|
Predecessor |
|
|
Successor |
|
|
|
Predecessor |
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||||
Revenue |
|
$ |
78,079 |
|
|
|
$ |
81,817 |
|
|
$ |
144,406 |
|
|
|
$ |
164,941 |
|
Cost of revenue |
|
|
(39,551 |
) |
|
|
|
(30,157 |
) |
|
|
(77,710 |
) |
|
|
|
(60,951 |
) |
Total gross profit |
|
|
38,528 |
|
|
|
|
51,660 |
|
|
|
66,696 |
|
|
|
|
103,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
16,208 |
|
|
|
|
14,356 |
|
|
|
31,909 |
|
|
|
|
28,987 |
|
Sales and marketing |
|
|
11,174 |
|
|
|
|
11,992 |
|
|
|
23,688 |
|
|
|
|
24,302 |
|
General and administrative |
|
|
13,401 |
|
|
|
|
9,861 |
|
|
|
27,118 |
|
|
|
|
19,625 |
|
Acquisition-related expenses |
|
|
7,174 |
|
|
|
|
2,018 |
|
|
|
16,952 |
|
|
|
|
5,386 |
|
Amortization of acquired intangible assets |
|
|
3,543 |
|
|
|
|
8,447 |
|
|
|
7,373 |
|
|
|
|
16,914 |
|
Total operating expenses |
|
|
51,500 |
|
|
|
|
46,674 |
|
|
|
107,040 |
|
|
|
|
95,214 |
|
(Loss) income from operations |
|
|
(12,972 |
) |
|
|
|
4,986 |
|
|
|
(40,344 |
) |
|
|
|
8,776 |
|
Interest and other expense, net |
|
|
(6,332 |
) |
|
|
|
(16,308 |
) |
|
|
(11,235 |
) |
|
|
|
(35,680 |
) |
Change in tax receivable agreement liability |
|
|
(637 |
) |
|
|
|
— |
|
|
|
(3,136 |
) |
|
|
|
— |
|
Gain (loss) from change in fair value of warrant |
|
|
18,727 |
|
|
|
|
— |
|
|
|
(41,216 |
) |
|
|
|
— |
|
Loss from change in fair value of contingent |
|
|
(16,780 |
) |
|
|
|
— |
|
|
|
(90,040 |
) |
|
|
|
— |
|
Total other expenses |
|
|
(5,022 |
) |
|
|
|
(16,308 |
) |
|
|
(145,627 |
) |
|
|
|
(35,680 |
) |
Loss before income taxes |
|
|
(17,994 |
) |
|
|
|
(11,322 |
) |
|
|
(185,971 |
) |
|
|
|
(26,904 |
) |
Income tax expense |
|
|
(5,994 |
) |
|
|
|
(6,218 |
) |
|
|
(7,372 |
) |
|
|
|
(14,388 |
) |
Net loss |
|
|
(23,988 |
) |
|
|
$ |
(17,540 |
) |
|
|
(193,343 |
) |
|
|
$ |
(41,292 |
) |
Less: Net loss attributable to noncontrolling |
|
|
(3,471 |
) |
|
|
|
|
|
|
(30,568 |
) |
|
|
|
|
||
Net loss attributable to E2open Parent |
|
$ |
(20,517 |
) |
|
|
|
|
|
$ |
(162,775 |
) |
|
|
|
|
||
Net loss attributable to E2open Parent |
|
$ |
(0.11 |
) |
|
|
|
|
|
$ |
(0.85 |
) |
|
|
|
|
||
Weighted-average common shares |
|
|
195,148 |
|
|
|
|
|
|
|
191,099 |
|
|
|
|
|
Three Months Ended August 31, 2021 compared to Three Months Balance at August 31, 2020
Revenue
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
$ |
61,725 |
|
|
|
$ |
69,035 |
|
|
$ |
(7,310 |
) |
|
|
-11 |
% |
Professional services |
|
|
16,354 |
|
|
|
|
12,782 |
|
|
|
3,572 |
|
|
|
28 |
% |
Total revenue |
|
$ |
78,079 |
|
|
|
$ |
81,817 |
|
|
$ |
(3,738 |
) |
|
|
-5 |
% |
Percentage of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
|
79 |
% |
|
|
|
84 |
% |
|
|
|
|
|
|
||
Professional services |
|
|
21 |
% |
|
|
|
16 |
% |
|
|
|
|
|
|
||
Total |
|
|
100 |
% |
|
|
|
100 |
% |
|
|
|
|
|
|
31
Subscriptions revenue was $61.7 million for the three months ended August 31, 2021, a $7.3 million, or 11%, decrease compared to subscriptions revenue of $69.0 million for the three months ended August 31, 2020. The decrease in subscriptions revenue was primarily due to $14.2 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination, partially offset by new organic subscription sales predominantly driven by increases in products utilized across our current customer portfolio.
Professional services revenue was $16.4 million for the three months ended August 31, 2021, a $3.6 million, or 28%, increase compared to $12.8 million for the three months ended August 31, 2020. The increase was primarily related to new subscription sales in addition to customers delaying projects in fiscal year 2021 due to the COVID-19 pandemic resulting in favorable growth year over year.
Our subscriptions revenue as a percentage of total revenue decreased to 79% for the second quarter of fiscal year 2022 compared to 84% for the second quarter of fiscal 2021 driven primarily by amortizing the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination, in addition to the increase in professional services revenue.
Cost of Revenue, Gross Profit and Gross Margin
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
$ |
16,246 |
|
|
|
$ |
14,860 |
|
|
$ |
1,386 |
|
|
|
9 |
% |
Professional services |
|
|
10,967 |
|
|
|
|
10,350 |
|
|
|
617 |
|
|
|
6 |
% |
Amortization of acquired intangible assets |
|
|
12,338 |
|
|
|
|
4,947 |
|
|
|
7,391 |
|
|
nm |
|
|
Total cost of revenue |
|
$ |
39,551 |
|
|
|
$ |
30,157 |
|
|
$ |
9,394 |
|
|
|
31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
$ |
33,141 |
|
|
|
$ |
49,227 |
|
|
$ |
(16,086 |
) |
|
|
-33 |
% |
Professional services |
|
|
5,387 |
|
|
|
|
2,433 |
|
|
|
2,954 |
|
|
nm |
|
|
Total gross profit |
|
$ |
38,528 |
|
|
|
$ |
51,660 |
|
|
$ |
(13,132 |
) |
|
|
-25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
|
54 |
% |
|
|
|
71 |
% |
|
|
|
|
|
|
||
Professional services |
|
|
33 |
% |
|
|
|
19 |
% |
|
|
|
|
|
|
||
Total gross margin |
|
|
49 |
% |
|
|
|
63 |
% |
|
|
|
|
|
|
Cost of subscriptions was $16.2 million for the three months ended August 31, 2021, a $1.4 million, or 9%, increase compared to $14.9 million for the three months ended August 31, 2020. The increase was attributable to our subscriptions revenue growth excluding amortization of the fair value adjustment to deferred revenue and was related to an increase in personnel costs of 0.6 million and depreciation expense of $0.9 million related to capital expenditures for the expansion of our data centers.
Cost of professional services revenue was $11.0 million for the three months ended August 31, 2021, a $0.6 million, or 6%, increase compared to $10.4 million for the three months ended August 31, 2020. This increase was mainly related to a $0.9 million increase in personnel costs such as incentive compensation and salaries offset by $0.4 million savings from the reallocation of resources into major strategic product development efforts.
Amortization of acquired intangible assets was $12.3 million for the three months ended August 31, 2021, a $7.4 million increase compared to $4.9 million for the three months ended August 31, 2020, driven primarily by the revaluation and change in the composition of the intangible assets as part of the Business Combination in February 2021.
Our subscriptions gross margin was 54% in the second quarter of fiscal 2022 as compared to 71% for the second quarter of fiscal 2021 mainly due to lower subscriptions revenue in the current period as a direct result of amortizing the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. Our professional services gross margin increased to 33% for second quarter of fiscal 2022 from 19% in the second quarter of fiscal 2021 primarily due to new subscription sales in addition to customers delaying projects in fiscal year 2021 due to the COVID-19 pandemic resulting in favorable growth year over year.
32
Research and Development
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Research and development |
|
$ |
16,208 |
|
|
|
$ |
14,356 |
|
|
$ |
1,852 |
|
|
|
13 |
% |
Percentage of revenue |
|
|
21 |
% |
|
|
|
18 |
% |
|
|
|
|
|
|
Research and development expenses were $16.2 million for the three months ended August 31, 2021, a $1.9 million, or 13%, increase compared to $14.4 million in the prior year. The increase was due to major strategic partnership initiatives around product development efforts offset by the capitalization of software development costs during fiscal year 2022 which resulted in net increased personnel costs of $0.3 million and consulting expenses of $0.7 million. Additionally, there was an increase to share-based compensation expense of $0.2 million and depreciation expense of $0.5 million related to capital expenditures for software.
Sales and Marketing
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Sales and marketing |
|
$ |
11,174 |
|
|
|
$ |
11,992 |
|
|
$ |
(818 |
) |
|
|
-7 |
% |
Percentage of revenue |
|
|
14 |
% |
|
|
|
15 |
% |
|
|
|
|
|
|
Sales and marketing expenses were $11.2 million for the three months ended August 31, 2021, a $0.8 million, or 7%, decrease compared to $12.0 million in the prior year. The variance is primarily driven by a $1.2 million decrease in deferred commissions amortization related to the revaluation of deferred commission as part of the Business Combination in February 2021 offset by an increase in share-based compensation of $0.3 million and travel and entertainment expenses of $0.1 million.
General and Administrative
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
General and administrative |
|
$ |
13,401 |
|
|
|
$ |
9,861 |
|
|
$ |
3,540 |
|
|
|
36 |
% |
Percentage of revenue |
|
|
17 |
% |
|
|
|
12 |
% |
|
|
|
|
|
|
General and administrative expenses were $13.4 million for the three months ended August 31, 2021, a $3.5 million, or 36%, increase compared to $9.9 million in the prior year. The increase was primarily attributable to us becoming a public company and incurring incremental headcount, insurance, consulting and software expenses of $2.6 million in recurring expenses and non-recurring expenses of $1.0 million. Additionally, normal operational expenses in personnel, bad debt, bank fees and other increased by $0.6 million. These expenses were partially offset by reductions in costs related to operating leases, depreciation, share-based compensation and recruiting expenses totaling $0.7 million.
Other Operating Expenses
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Acquisition and other related expenses |
|
$ |
7,174 |
|
|
|
$ |
2,018 |
|
|
$ |
5,156 |
|
|
nm |
|
|
Amortization of acquired intangible assets |
|
|
3,543 |
|
|
|
|
8,447 |
|
|
|
(4,904 |
) |
|
|
-58 |
% |
Total other operating expenses |
|
$ |
10,717 |
|
|
|
$ |
10,465 |
|
|
$ |
252 |
|
|
|
2 |
% |
Acquisition and other related expenses were $7.2 million for the three months ended August 31, 2021, a $5.2 million increase compared to $2.0 million for the three months ended August 31, 2020. The increase was mainly related to legal and consulting expenses associated with the BluJay Acquisition in fiscal 2022.
33
Amortization of acquired intangible assets were $3.5 million for the three months ended August 31, 2021, a $4.9 million, or 58%, decrease, compared to $8.4 million for the three months ended August 31, 2020. The decrease was a result of the revaluation and change in the composition of the intangible assets associated with the Business Combination in February 2021.
Interest and Other Expense, Net
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Interest and other expense, net |
|
$ |
(6,332 |
) |
|
|
$ |
(16,308 |
) |
|
$ |
9,976 |
|
|
|
-61 |
% |
Interest expense was $6.3 million for the three months ended August 31, 2021, a $10.0 million, or 61%, decrease compared to $16.3 million in the prior year. The decrease was primarily driven by the reduction in outstanding debt, as well as the associated interest rate on the debt refinanced in the Business Combination in February 2021.
Change in Tax Receivable Agreement
During the three months ended August 31, 2021, we recorded a $0.6 million expense related to the change in the fair value of the tax receivable agreement liability, including interest. Pursuant to ASC 805, Business Combination and relevant tax law, we calculated the fair value of the tax receivable agreement payments and identified the timing of the utilization of the tax attributes. The tax receivable agreement liability, related to exchanges as of the Business Combination date, is revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in change in tax receivable agreement liability in the Condensed Consolidated Statements of Operations in the period in which the event occurred. We did not have a tax receivable agreement prior to the Business Combination.
Gain from Change in Fair Value of Warrant Liability
We recorded a gain of $18.7 million during the three months ended August 31, 2021 for the change in fair value on the revaluation of our warrant liability associated with our public, private placement and forward purchase warrants. We are required to revalue the warrants at the end of each reporting period and reflect in the Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the warrant liability in the period in which the change occurred. We did not have outstanding warrants prior to the Business Combination.
Loss from Change in Fair Value of Contingent Consideration
We recorded a loss of $16.8 million during the three months ended August 31, 2021 for the change in fair value on the revaluation of our contingent consideration associated with our restricted Series B-1 and B-2 common stock and Sponsor Side Letter. We are required to revalue the contingent consideration at the end of each reporting period or upon conversion and reflect in the Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the contingent consideration in the period in which the change occurred. The Series B-1 common stock converted into Class A Common Stock on June 8, 2021. We did not have restricted Series B-1 and B-2 common stock prior to the Business Combination.
Provision for Income Taxes
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Loss before income taxes |
|
$ |
(17,994 |
) |
|
|
$ |
(11,322 |
) |
|
$ |
(6,672 |
) |
|
|
59 |
% |
Income tax expense |
|
|
(5,994 |
) |
|
|
|
(6,218 |
) |
|
|
224 |
|
|
|
-4 |
% |
Loss before income taxes was $18.0 million for the three months ended August 31, 2021, a $6.7 million increase compared to $11.3 million for the three months ended August 31, 2020. This increase is primarily related to a loss of $16.8 million associated with the fair value adjustments for the contingent consideration liability related to the Sponsor Side Letter and restricted Series B-1 and B-2 common stock along with the $14.2 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. These expenses were partially offset by a gain of $18.7 million for the fair value adjustments for the warrant liability and $10.0 million of lower interest expense in the first quarter of fiscal 2022 compared to the same period of the prior year.
34
Income tax expense was $6.0 million for the three months ended August 31, 2021 compared to $6.2 million for the three months ended August 31, 2020. The effective tax rate was 33.3% for the three months ended August 31, 2021, compared to 54.9%, for the three months ended August 31, 2020. The overall change in the effective tax rate was primarily due to significant nondeductible mark-to-market losses associated with contingent liabilities and certain equity consideration liabilities related to the Business Combination as well as the impact of losses attributable to our noncontrolling interest in our affiliate.
Six Months Ended August 31, 2021 compared to Six Months Ended August 31, 2020
Revenue
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
$ |
112,759 |
|
|
|
$ |
138,639 |
|
|
$ |
(25,880 |
) |
|
|
-19 |
% |
Professional services |
|
|
31,647 |
|
|
|
|
26,302 |
|
|
|
5,345 |
|
|
|
20 |
% |
Total revenue |
|
$ |
144,406 |
|
|
|
$ |
164,941 |
|
|
$ |
(20,535 |
) |
|
|
-12 |
% |
Percentage of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
|
78 |
% |
|
|
|
84 |
% |
|
|
|
|
|
|
||
Professional services |
|
|
22 |
% |
|
|
|
16 |
% |
|
|
|
|
|
|
||
Total |
|
|
100 |
% |
|
|
|
100 |
% |
|
|
|
|
|
|
Subscriptions revenue was $112.8 million for the six months ended August 31, 2021, a $25.9 million, or 19%, decrease compared to subscriptions revenue of $138.6 million for the six months ended August 31, 2020. The decrease in subscriptions revenue was primarily due to $36.7 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination, partially offset by new organic subscription sales predominantly driven by increases in products utilized across our current customer portfolio.
Professional services revenue was $31.6 million for the six months ended August 31, 2021, a $5.3 million, or 20%, increase compared to $26.3 million for the six months ended August 31, 2020. The increase was primarily related to new subscription sales in addition to customers delaying projects in fiscal year 2021 due to the COVID-19 pandemic resulting in favorable growth year over year.
Our subscriptions revenue as a percentage of total revenue decreased to 78% for the second quarter of fiscal year 2022 compared to 84% for the second quarter of fiscal 2021 driven primarily by amortizing the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination, in addition to the increase in professional services revenue.
Cost of Revenue, Gross Profit and Gross Margin
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
$ |
32,754 |
|
|
|
$ |
28,998 |
|
|
$ |
3,756 |
|
|
|
13 |
% |
Professional services |
|
|
21,107 |
|
|
|
|
21,445 |
|
|
|
(338 |
) |
|
|
-2 |
% |
Amortization of acquired intangible assets |
|
|
23,849 |
|
|
|
|
10,508 |
|
|
|
13,341 |
|
|
nm |
|
|
Total cost of revenue |
|
$ |
77,710 |
|
|
|
$ |
60,951 |
|
|
$ |
16,759 |
|
|
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
$ |
56,156 |
|
|
|
$ |
99,132 |
|
|
$ |
(42,976 |
) |
|
|
-43 |
% |
Professional services |
|
|
10,540 |
|
|
|
|
4,858 |
|
|
|
5,682 |
|
|
nm |
|
|
Total gross profit |
|
$ |
66,696 |
|
|
|
$ |
103,990 |
|
|
$ |
(37,294 |
) |
|
|
-36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscriptions |
|
|
50 |
% |
|
|
|
72 |
% |
|
|
|
|
|
|
||
Professional services |
|
|
33 |
% |
|
|
|
18 |
% |
|
|
|
|
|
|
||
Total gross margin |
|
|
46 |
% |
|
|
|
63 |
% |
|
|
|
|
|
|
35
Cost of subscriptions was $32.8 million for the six months ended August 31, 2021, a $3.8 million, or 13%, increase compared to $29.0 million for the six months ended August 31, 2020. The increase was attributable to our subscriptions revenue growth, excluding amortization of the fair value adjustment to deferred revenue, and was related to an increase in personnel costs of $1.4 million, hosting and software costs of $0.3 million and depreciation expense of $2.2 million related to capital expenditures for the expansion of our data centers.
Cost of professional services revenue was $21.1 million for the six months ended August 31, 2021, a $0.3 million, or 2%, decrease compared to $21.4 million for the six months ended August 31, 2020. This decrease mainly relates to a $0.2 million decline in travel and entertainment expenses and $0.8 million savings from the reallocation of resources into major strategic product development efforts. These decreases were offset by a $0.6 million increase in personnel costs such as incentive compensation and salaries.
Amortization of acquired intangible assets was $23.8 million for the six months ended August 31, 2021, a $13.3 million increase compared to $10.5 million for the six months ended August 31, 2020, driven primarily by the revaluation and change in the composition of the intangible assets as part of the Business Combination in February 2021.
Our subscriptions gross margin was 50% in the second quarter of fiscal 2022 as compared to 72% for the second quarter of fiscal 2021 mainly due to lower subscriptions revenue in the current period as a direct result of amortizing the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. Our professional services gross margin increased to 33% for the first six months of fiscal 2022 from 18% in the first six months of fiscal 2021, primarily due to new subscription sales in addition to customer delaying projects in fiscal year 2021 due to the COVID-19 pandemic resulting in favorable growth year over year.
Research and Development
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Research and development |
|
$ |
31,909 |
|
|
|
$ |
28,987 |
|
|
$ |
2,922 |
|
|
|
10 |
% |
Percentage of revenue |
|
|
22 |
% |
|
|
|
18 |
% |
|
|
|
|
|
|
Research and development expenses were $31.9 million for the six months ended August 31, 2021, a $2.9 million, or 10%, increase compared to $29.0 million in the prior year. The increase was due to major strategic partnership initiatives around product development efforts offset by the capitalization of software development costs during fiscal year 2022 which resulted in net increase personnel costs of $0.8 million, consulting expenses of $1.1 million, depreciation expense of $1.1 million related to capital expenditures for software and share-based compensation of $0.4 million. These expense were partially offset by lower accelerated deferred compensation expense related to Amber Road.
Sales and Marketing
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Sales and marketing |
|
$ |
23,688 |
|
|
|
$ |
24,302 |
|
|
$ |
(614 |
) |
|
|
-3 |
% |
Percentage of revenue |
|
|
16 |
% |
|
|
|
15 |
% |
|
|
|
|
|
|
Sales and marketing expenses were $23.7 million for the six months ended August 31, 2021, a $0.6 million, or 3%, decrease compared to $24.3 million in the prior year. The variance is primarily driven by a $1.6 million decrease in deferred commission amortization related to the revaluation of deferred commissions as part of the Business Combination in February 2021. This decrease was partially offset by an increase in marketing expense of $0.5 million and share-based compensation of $0.4 million.
General and Administrative
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
General and administrative |
|
$ |
27,118 |
|
|
|
$ |
19,625 |
|
|
$ |
7,493 |
|
|
|
38 |
% |
Percentage of revenue |
|
|
19 |
% |
|
|
|
12 |
% |
|
|
|
|
|
|
36
General and administrative expenses were $27.1 million for the six months ended August 31, 2021, a $7.5 million, or 38%, increase compared to $19.6 million in the prior year. The increase was primarily attributable to us becoming a public company and incurring incremental headcount, insurance, consulting and software expenses of $5.4 million in recurring expenses and non-recurring expenses of $2.4 million. Additionally, normal operational expenses in personnel, consulting, bad debt and bank fees increased by $0.8 million. These increases were partially offset by reductions in costs related to operating leases, depreciation and recruiting expense totaling $1.4 million.
Other Operating Expenses
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Acquisition and other related expenses |
|
$ |
16,952 |
|
|
|
$ |
5,386 |
|
|
$ |
11,566 |
|
|
nm |
|
|
Amortization of acquired intangible assets |
|
|
7,373 |
|
|
|
|
16,914 |
|
|
|
(9,541 |
) |
|
|
-56 |
% |
Total other operating expenses |
|
$ |
24,325 |
|
|
|
$ |
22,300 |
|
|
$ |
2,025 |
|
|
|
9 |
% |
Acquisition and other related expenses were $17.0 million for the six months ended August 31, 2021, a $11.6 million increase compared to $5.4 million for the six months ended August 31, 2020. The increase was mainly related to legal and consulting expenses associated with the acquisition of BluJay in fiscal 2022.
Amortization of acquired intangible assets were $7.4 million for the six months ended August 31, 2021, a $9.5 million, or 56%, decrease, compared to $16.9 million for the six months ended August 31, 2020. The decrease was a result of the revaluation and change in the composition of the intangible assets associated with the Business Combination in February 2021.
Interest and Other Expense, Net
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Interest and other expense, net |
|
$ |
(11,235 |
) |
|
|
$ |
(35,680 |
) |
|
$ |
24,445 |
|
|
|
-69 |
% |
Interest expense was $11.2 million for the three months ended August 31, 2021, a $24.4 million, or 69%, decrease compared to $35.7 million in the prior year. The decrease was primarily driven by the reduction in outstanding debt, as well as the associated interest rate on the debt refinanced in the Business Combination in February 2021.
Change in Tax Receivable Agreement
During the six months ended August 31, 2021, we recorded a $3.1 million expense related to the change in the fair value of the tax receivable agreement liability under ASC 805, including interest. We have calculated the fair value of the tax receivable agreement payments and identified the timing of the utilization of the tax attributes. The tax receivable agreement liability, related to exchanges as of the Business Combination date, is revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in change in tax receivable agreement liability in the Condensed Consolidated Statements of Operations in the period in which the event occurred. We did not have a tax receivable agreement prior to the Business Combination.
In addition, under ASC 450, transactions with partnership unit holders after the acquisition date will result in additional Tax Receivable Agreement liabilities that are recorded on a gross undiscounted basis. The increase in the Tax Receivable Agreement liability under ASC 450 for the six months ended August 31, 2021 was $10.1 million.
Loss from Change in Fair Value of Warrant Liability
We recorded a loss of $41.2 million during the six months ended August 31, 2021 for the change in fair value on the revaluation of our warrant liability associated with our public, private placement and forward purchase warrants. We are required to revalue the warrants at the end of each reporting period and reflect in the Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the warrant liability in the period in which the change occurred. We did not have outstanding warrants prior to the Business Combination.
37
Loss from Change in Fair Value of Contingent Consideration
We recorded a loss of $90.0 million during the six months ended August 31, 2021 for the change in fair value on the revaluation of our contingent consideration associated with our restricted Series B-1 and B-2 common stock and Sponsor Side Letter. We are required to revalue the contingent consideration at the end of each reporting period or upon conversion and reflect in the Condensed Consolidated Statements of Operations a gain or loss from the change in fair value of the contingent consideration in the period in which the change occurred. The Series B-1 common stock converted into Class A Common Stock on June 8, 2021. We did not have restricted Series B-1 and B-2 common stock prior to the Business Combination.
Provision for Income Taxes
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Loss before income taxes |
|
$ |
(185,971 |
) |
|
|
$ |
(26,904 |
) |
|
$ |
(159,067 |
) |
|
nm |
|
|
Income tax expense |
|
|
(7,372 |
) |
|
|
|
(14,388 |
) |
|
|
7,016 |
|
|
|
-49 |
% |
Loss before income taxes was $186.0 million for the six months ended August 31, 2021, a $159.0 million increase compared to $26.9 million for the six months ended August 31, 2020. This increase is primarily related to a loss of $41.2 million for the fair value adjustments for the warrant liability and $90.0 million associated with the fair value adjustments for the contingent consideration liability related to the Sponsor Side Letter and restricted Series B-1 and B-2 common stock along with the $36.7 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. These expenses were partially offset by $24.4 million of lower interest expense in the first half of fiscal 2022 compared to the same period of the prior year.
Income tax expense was $7.4 million for the six months ended August 31, 2021 compared to $14.4 million for the six months ended August 31, 2020. The effective tax rate was 4.0% for the six months ended August 31, 2021, compared to 53.5%, for the six months ended August 31, 2020. The overall change in the effective tax rate was primarily due to significant nondeductible mark-to-market losses associated with contingent liabilities and certain equity consideration liabilities related to the Business Combination as well as the impact of losses attributable to our noncontrolling interest in our affiliate.
Non-GAAP Financial Measures
We have included below Non-GAAP revenue, Non-GAAP subscriptions revenue, Non-GAAP gross profit, Non-GAAP gross margin and Adjusted EBITDA, which are non-GAAP performance measures that we use to supplement our results presented in accordance with U.S. GAAP. We believe these non-GAAP measures are useful in evaluating our operating performance, as they are similar to measures reported by our public competitors and are regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. These non-GAAP measures are not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
We calculate and define Non-GAAP revenue and subscriptions revenue excluding amortization of the deferred revenue fair value adjustment related to the purchase price allocation in the Business Combination. We calculate and define Non-GAAP gross profit as gross profit excluding amortization of the deferred revenue fair value adjustment, depreciation and amortization, share-based compensation and certain other non-cash and non-recurring items. We define and calculate Adjusted EBITDA as net income or losses excluding interest income or expense, income tax expense, depreciation and amortization and further adjusted for the following items: amortization of the deferred revenue fair value adjustment, transaction-related costs, changes in the tax receivable agreement liability, (gain) loss from changes in the fair value of the warrant liability and contingent consideration, share-based compensation and certain other non-cash and non-recurring items as described in the reconciliation below. We also report Non-GAAP gross profit and Adjusted EBITDA as a percentage of Non-GAAP revenue as additional measures to evaluate financial performance.
38
We include these non-GAAP financial measures because they are used by management to evaluate our core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. These non-GAAP measures exclude certain expenses that are required in accordance with U.S. GAAP because they are non-recurring (for example, in the case of transaction-related costs and amortization of the deferred revenue fair value adjustment), non-cash (for example, in the case of depreciation, amortization, changes in the tax receivable agreement liability, (gain) loss from changes in the fair value of the warrant liability and contingent consideration, share-based compensation and amortization of the deferred revenue fair value adjustment) or are not related to our underlying business performance (for example, in the case of interest income and expense). There are limitations to non-GAAP financial measures because they exclude charges and credits that are required to be included in the U.S. GAAP financial presentation. The items excluded from U.S. GAAP financial measures such as net income or loss to arrive at non-GAAP financial measures are significant components for understanding and assessing our financial performance. As a result, non-GAAP financial measures should be considered together with, and not alternatives to, financial measures prepared in accordance with U.S. GAAP.
The table below presents our Non-GAAP revenue reconciled to our reported revenue, the closest U.S. GAAP measure, for the periods indicated:
|
|
Successor |
|
|
|
Predecessor |
|
|
Successor |
|
|
|
Predecessor |
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||||
Total revenue |
|
$ |
78,079 |
|
|
|
$ |
81,817 |
|
|
$ |
144,406 |
|
|
|
$ |
164,941 |
|
Business Combination adjustment (1) |
|
|
14,203 |
|
|
|
|
— |
|
|
|
36,705 |
|
|
|
|
— |
|
Non-GAAP revenue |
|
$ |
92,282 |
|
|
|
$ |
81,817 |
|
|
$ |
181,111 |
|
|
|
$ |
164,941 |
|
The table below presents our Non-GAAP subscriptions revenue reconciled to our reported subscriptions revenue, the closest U.S. GAAP measure, for the periods indicated:
|
|
Successor |
|
|
|
Predecessor |
|
|
Successor |
|
|
|
Predecessor |
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||||
Subscriptions revenue |
|
$ |
61,725 |
|
|
|
$ |
69,035 |
|
|
$ |
112,759 |
|
|
|
$ |
138,639 |
|
Business Combination adjustment (1) |
|
|
14,203 |
|
|
|
|
— |
|
|
|
36,705 |
|
|
|
|
— |
|
Non-GAAP subscriptions revenue |
|
$ |
75,928 |
|
|
|
$ |
69,035 |
|
|
$ |
149,464 |
|
|
|
$ |
138,639 |
|
The table below presents our Non-GAAP gross profit reconciled to our reported gross profit, the closest U.S. GAAP measure, for the periods indicated:
|
|
Successor |
|
|
|
Predecessor |
|
|
Successor |
|
|
|
Predecessor |
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||||
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reported gross profit |
|
$ |
38,528 |
|
|
|
$ |
51,660 |
|
|
$ |
66,696 |
|
|
|
$ |
103,990 |
|
Business Combination adjustment (1) |
|
|
14,203 |
|
|
|
|
— |
|
|
|
36,705 |
|
|
|
|
— |
|
Depreciation and amortization |
|
|
14,943 |
|
|
|
|
6,628 |
|
|
|
29,052 |
|
|
|
|
13,379 |
|
Non-recurring/non-operating costs (2) |
|
|
242 |
|
|
|
|
74 |
|
|
|
584 |
|
|
|
|
204 |
|
Share-based and unit-based compensation (3) |
|
|
210 |
|
|
|
|
116 |
|
|
|
530 |
|
|
|
|
286 |
|
Non-GAAP gross profit |
|
$ |
68,126 |
|
|
|
$ |
58,478 |
|
|
$ |
133,567 |
|
|
|
$ |
117,859 |
|
Gross margin |
|
|
49.3 |
% |
|
|
|
63.1 |
% |
|
|
46.2 |
% |
|
|
|
63.0 |
% |
Non-GAAP gross margin |
|
|
73.8 |
% |
|
|
|
71.5 |
% |
|
|
73.7 |
% |
|
|
|
71.5 |
% |
39
The table below presents our Adjusted EBITDA reconciled to our net loss, the closest U.S. GAAP measure, for the periods indicated:
|
|
Successor |
|
|
|
Predecessor |
|
|
Successor |
|
|
|
Predecessor |
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||||
Net loss |
|
$ |
(23,988 |
) |
|
|
$ |
(17,540 |
) |
|
$ |
(193,343 |
) |
|
|
$ |
(41,292 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
6,043 |
|
|
|
|
17,222 |
|
|
|
12,180 |
|
|
|
|
36,025 |
|
Income tax expense |
|
|
5,994 |
|
|
|
|
6,218 |
|
|
|
7,372 |
|
|
|
|
14,388 |
|
Depreciation and amortization |
|
|
20,795 |
|
|
|
|
16,888 |
|
|
|
41,000 |
|
|
|
|
33,866 |
|
EBITDA |
|
|
8,844 |
|
|
|
|
22,788 |
|
|
|
(132,791 |
) |
|
|
|
42,987 |
|
EBITDA Margin |
|
|
11.3 |
% |
|
|
|
27.9 |
% |
|
|
-92.0 |
% |
|
|
|
26.1 |
% |
Business Combination adjustment (1) |
|
|
14,203 |
|
|
|
|
— |
|
|
|
36,705 |
|
|
|
|
— |
|
Acquisition-related adjustments (2) |
|
|
7,174 |
|
|
|
|
2,018 |
|
|
|
16,952 |
|
|
|
|
5,386 |
|
Change in tax receivable agreement liability (3) |
|
|
637 |
|
|
|
|
— |
|
|
|
3,136 |
|
|
|
|
— |
|
Loss from change in fair value of warrant |
|
|
(18,727 |
) |
|
|
|
— |
|
|
|
41,216 |
|
|
|
|
— |
|
Loss from change in fair value of contingent |
|
|
16,780 |
|
|
|
|
— |
|
|
|
90,040 |
|
|
|
|
— |
|
Non-recurring/non-operating costs (6) |
|
|
2,052 |
|
|
|
|
(691 |
) |
|
|
2,499 |
|
|
|
|
419 |
|
Share-based and unit-based compensation (7) |
|
|
2,537 |
|
|
|
|
2,036 |
|
|
|
4,934 |
|
|
|
|
4,321 |
|
Adjusted EBITDA |
|
$ |
33,500 |
|
|
|
$ |
26,151 |
|
|
$ |
62,691 |
|
|
|
$ |
53,113 |
|
Adjusted EBITDA Margin |
|
|
36.3 |
% |
|
|
|
32.0 |
% |
|
|
34.6 |
% |
|
|
|
32.2 |
% |
Three Months Ended August 31, 2021 compared to Three Months Ended August 31, 2020
Non-GAAP Revenue
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Non-GAAP revenue |
|
$ |
92,282 |
|
|
|
$ |
81,817 |
|
|
$ |
10,465 |
|
|
|
13 |
% |
Non-GAAP revenue was $92.3 million for the three months ended August 31, 2021, a $10.5 million, or 13%, increase compared to $81.8 million for the three months ended August 31, 2020. The increase in Non-GAAP revenue was mainly due to the $6.9 million increase in our subscriptions revenue related to new organic sales driven by increases in products utilized across our current customer portfolio. Additionally, $3.6 million of the increase was due to an increase in our professional services revenue primarily related to new subscription sales in addition to customers delaying projects in fiscal year 2021 due to the COVID-19 pandemic resulting in favorable growth year over year.
40
Non-GAAP Subscriptions Revenue
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Non-GAAP subscriptions revenue |
|
$ |
75,928 |
|
|
|
$ |
69,035 |
|
|
$ |
6,893 |
|
|
|
10 |
% |
Non-GAAP subscriptions revenue was $75.9 million for the three months ended August 31, 2021, a $6.9 million, or 10%, increase compared to $69.0 million for the three months ended August 31, 2020. The increase in Non-GAAP subscriptions revenue relates to new organic subscription sales predominately driven by increases in products utilized across our customer portfolio alongside strategic partnership initiatives.
Gross Profit
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Gross profit |
|
$ |
38,528 |
|
|
|
$ |
51,660 |
|
|
$ |
(13,132 |
) |
|
|
-25 |
% |
Gross margin |
|
|
49.3 |
% |
|
|
|
63.1 |
% |
|
|
|
|
|
|
Gross profit was $38.5 million for the three months ended August 31, 2021, a $13.1 million, or 25%, decrease compared to $51.7 million for three months ended August 31, 2020. The decrease in gross profit was primarily due to the $14.2 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. Gross margin was 49% for the second quarter of fiscal 2022 compared to 63% for the second quarter of fiscal 2021.
Non-GAAP Gross Profit
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Non-GAAP gross profit |
|
$ |
68,126 |
|
|
|
$ |
58,478 |
|
|
$ |
9,648 |
|
|
|
16 |
% |
Non-GAAP gross margin |
|
|
73.8 |
% |
|
|
|
71.5 |
% |
|
|
|
|
|
|
Non-GAAP gross profit was $68.1 million for the three months ended August 31, 2021, a $9.6 million, or 16%, increase compared to $58.5 million for the three months ended August 31, 2020. The increase in adjusted gross profit was due to increase in Non-GAAP subscriptions revenue and professional services revenue as discussed above in alignment with scaling costs. The Non-GAAP gross margin increased to 74% for the second quarter of fiscal 2022 from 72% for the second quarter of fiscal 2021.
EBITDA
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
EBITDA |
|
$ |
8,844 |
|
|
|
$ |
22,788 |
|
|
$ |
(13,944 |
) |
|
|
-61 |
% |
EBITDA margin |
|
|
11.3 |
% |
|
|
|
27.9 |
% |
|
|
|
|
|
|
EBITDA was $8.8 million for the three months ended August 31, 2021, a $13.9 million decrease compared to $22.8 million for three months ended August 31, 2020. EBITDA margins decreased to 11% for the second quarter of fiscal 2022 compared to 28% in the prior year. The decrease in EBITDA and EBITDA margin was primarily related to the $14.2 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination and loss of $16.8 million associated with the fair value adjustment for the contingent consideration liability related to the Sponsor Side Letter and restricted Series B-1 and B-2 common stock, partially offset by the gain of $18.7 million for the fair value adjustment for the warrant liability.
41
Adjusted EBITDA
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Adjusted EBITDA |
|
$ |
33,500 |
|
|
|
$ |
26,151 |
|
|
$ |
7,349 |
|
|
|
28 |
% |
Adjusted EBITDA margin |
|
|
36.3 |
% |
|
|
|
32.0 |
% |
|
|
|
|
|
|
Adjusted EBITDA was $33.5 million for the three months ended August 31, 2021, a $7.3 million, or 28%, increase compared to $26.2 million for the three months ended August 31, 2020. Adjusted EBITDA margin increased to 36% for the second quarter of fiscal 2022 compared to 32% for the second quarter of fiscal 2021. The increase in Adjusted EBITDA and Adjusted EBITDA margins were primarily due to organic revenue growth and additional cost scaling.
Six Months Ended August 31, 2021 compared to Six Months Ended August 31, 2020
Non-GAAP Revenue
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Non-GAAP revenue |
|
$ |
181,111 |
|
|
|
$ |
164,941 |
|
|
$ |
16,170 |
|
|
|
10 |
% |
Non-GAAP revenue was $181.1 million for the six months ended August 31, 2021, a $16.2 million, or 10%, increase compared to $164.9 million for the six months ended August 31, 2020. The increase in Non-GAAP revenue was mainly due to the $10.8 million increase in our subscriptions revenue related to new organic sales driven by increases in products utilized across our current customer portfolio. Additionally, $5.3 million of the increase was due to an increase in our professional services revenue primarily related to new subscription sales in addition to customers delaying projects in fiscal year 2021 due to the COVID-19 pandemic resulting in favorable growth year over year.
Non-GAAP Subscriptions Revenue
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Non-GAAP subscriptions revenue |
|
$ |
149,464 |
|
|
|
$ |
138,639 |
|
|
$ |
10,825 |
|
|
|
8 |
% |
Non-GAAP subscriptions revenue was $149.5 million for the six months ended August 31, 2021, a $10.8 million, or 8%, increase compared to $138.6 million for the six months ended August 31, 2020. The increase in Non-GAAP subscriptions revenue relates to new organic subscription sales predominately driven by increases in products utilized across our customer portfolio alongside strategic partnership initiatives.
Gross Profit
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Gross profit |
|
$ |
66,696 |
|
|
|
$ |
103,990 |
|
|
$ |
(37,294 |
) |
|
|
-36 |
% |
Gross margin |
|
|
46.2 |
% |
|
|
|
63.0 |
% |
|
|
|
|
|
|
Gross profit was $66.7 million for the six months ended August 31, 2021, a $37.3 million, or 36%, decrease compared to $104.0 million for six months ended August 31, 2020. The decrease in gross profit was primarily due to the $36.7 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination. Gross margin was 46% for the first six months of fiscal 2022 compared to 63% for the first six months of fiscal 2021.
42
Non-GAAP Gross Profit
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Non-GAAP gross profit |
|
$ |
133,567 |
|
|
|
$ |
117,859 |
|
|
$ |
15,708 |
|
|
|
13 |
% |
Non-GAAP gross margin |
|
|
73.7 |
% |
|
|
|
71.5 |
% |
|
|
|
|
|
|
Non-GAAP gross profit was $133.6 million for the six months ended August 31, 2021, a $15.7 million, or 13%, increase compared to $117.9 million for the six months ended August 31, 2020. The increase in adjusted gross profit was due to increase in Non-GAAP subscriptions revenue and professional services revenue as discussed above in alignment with scaling costs. The Non-GAAP gross margin increased to 74% for the first six months of fiscal 2022 from 72% for the first six months of fiscal 2021.
EBITDA
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|||
EBITDA |
|
$ |
(132,791 |
) |
|
|
$ |
42,987 |
|
|
$ |
(175,778 |
) |
|
nm |
EBITDA margin |
|
|
-92.0 |
% |
|
|
|
26.1 |
% |
|
|
|
|
|
EBITDA was a loss of $132.8 million for the six months ended August 31, 2021, a $175.8 million decrease compared to $43.0 million for the six months ended August 31, 2020. EBITDA margins decreased to a negative 92% for the first six months of fiscal 2022 compared to 26% in the prior year. The decrease in EBITDA and EBITDA margin was primarily related to the $36.7 million amortization of the fair value adjustment to deferred revenue related to the purchase price allocation in the Business Combination, a loss of $41.2 million for the fair value adjustment for the warrant liability and a loss of $90.0 million associated with the fair value adjustment for the contingent consideration liability related to the Sponsor Side Letter and restricted Series B-1 and B-2 common stock.
Adjusted EBITDA
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
|
|
|
||||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
||||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
|
$ Change |
|
|
% Change |
|
||||
Adjusted EBITDA |
|
$ |
62,691 |
|
|
|
$ |
53,113 |
|
|
$ |
9,578 |
|
|
|
18 |
% |
Adjusted EBITDA margin |
|
|
34.6 |
% |
|
|
|
32.2 |
% |
|
|
|
|
|
|
Adjusted EBITDA was $62.7 million for the six months ended August 31, 2021, a $9.6 million, or 18%, increase compared to $53.1 million for the six months ended August 31, 2020. Adjusted EBITDA margin increased to 35% for the first six months of fiscal 2022 compared to 32% for the first six months of fiscal 2021. The increase in Adjusted EBITDA and Adjusted EBITDA margins were primarily due to organic revenue growth and additional cost scaling.
Liquidity and Capital Resources
We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital, capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Current working capital needs relate mainly to employee compensation and benefits as well as interest and debt. Our ability to expand and grow our business will depend on many factors, including working capital needs and the evolution of our operating cash flows.
43
We had $473.1 million in cash and cash equivalents, including $280.0 million of PIPE financing proceeds for the BluJay Acquisition, and $75.0 million of unused borrowing capacity under our 2021 Revolving Credit Facility as of August 31, 2021. See Note 9, Notes Payable to the Notes to the Unaudited Condensed Consolidated Financial Statements. We believe our existing cash and cash equivalents, cash provided by operating activities and, if necessary, the borrowing capacity under our 2021 Revolving Credit Facility will be sufficient to meet our working capital, debt repayment and capital expenditure requirements for at least the next twelve months. See Note 3, BluJay Acquisition to the Notes to the Unaudited Condensed Consolidated Financial Statements for the additional equity and debt financing related to the purchase of BluJay, which included increasing the 2021 Revolving Credit Facility by $80.0 million to a total of $155.0 million on September 1, 2021.
In the future, we may enter into arrangements to acquire or invest in complementary businesses. To facilitate these acquisitions or investments, we may seek additional equity or debt financing.
Debt
2021 Term Loan and Revolving Credit Facility
On February 4, 2021, as part of the Business Combination, E2open, LLC entered into the 2021 Term Loan for $525.0 million and the 2021 Revolving Credit Facility for $75.0 million. The 2021 Term Loan will mature on February 4, 2028, while the revolver will mature on February 4, 2026. The 2021 Term Loan has a variable interest rate which was 3.75% and 3.69% as of August 31, 2021 and February 28, 2021, respectively. Principal payments of $1.3 million are due on the last day of each February, May, August and November commencing August 2021. As of August 31, 2021 and February 28, 2021, the 2021 Term Loan had a principal balance outstanding of $523.7 million and $525.0 million, respectively, and there were no amounts drawn on the revolver.
On September 1, 2021 as part of the BluJay Acquisition, the 2021 Term Loan was increased by $380.0 million and the 2021 Revolving Credit Facility was increased by $80.0 million to $155.0 million. On September 29, 2021, we borrowed $15.0 million under the 2021 Revolving Credit Facility for daily operating activities. There were no amounts drawn on the revolver prior to September 29, 2021.
Cash Flows
The following table presents net cash from operating, investing and financing activities:
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||
($ in thousands) |
|
August 31, 2021 |
|
|
|
August 31, 2020 |
|
||
Net cash provided by operating activities |
|
$ |
41,484 |
|
|
|
$ |
41,986 |
|
Net cash used in investing activities |
|
|
(17,372 |
) |
|
|
|
(7,762 |
) |
Net cash used in financing activities |
|
|
253,276 |
|
|
|
|
(20,332 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(1,244 |
) |
|
|
|
(448 |
) |
Net increase in cash, cash equivalents and restricted cash |
|
|
276,144 |
|
|
|
|
13,444 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
207,542 |
|
|
|
|
48,428 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
483,686 |
|
|
|
$ |
61,872 |
|
Six Months Ended August 31, 2021 compared to Six Months Ended August 31, 2020
As of August 31, 2021, our consolidated cash, cash equivalents and restricted cash was $473.1 million, a $278.4 million increase from our balance of $194.7 million as of February 28, 2021.
Net cash provided by operating activities for the six months ended August 31, 2021 was $41.5 million compared to $42.0 million for the six months ended August 31, 2020. The $0.5 million decrease in cash was primarily driven by expenses related to the BluJay Acquisition offset by $8.4 million additional cash provided by working capital during the first six months of fiscal 2022 compared to the first six months of fiscal 2021.
Net cash used in investing activities was $17.4 million and $7.8 million for the six months ended August 31, 2021 and 2020, respectively. The use of cash for both periods was primarily driven by the acquisition of property and software related to our data centers.
44
Net cash provided by financing activities for the six months ended August 31, 2021 was $253.3 million compared to net cash used of $20.3 million for six months ended August 31, 2020. The increase in cash provided by financing activities was mainly due to the PIPE investment proceeds received in advance of the BluJay Acquisition of $280.0 million. During the first six months of fiscal 2021 we received $1.8 million of proceeds from the sale of membership units . There were no sales of units or stock during the first six months of fiscal 2022. The net repayment of debt was $19.7 million in fiscal 2021 compared to $1.6 million in fiscal 2022. The repayment of financing lease obligations was $3.5 million higher in fiscal 2022 than in fiscal 2021. Additionally, we paid $2.5 million for the repurchase of common stock to pay withholding taxes and $16.8 million for the repurchase of Common Units upon conversion in fiscal year 2022.
Tax Receivable Agreement
Concurrently with the completion of the Business Combination, we entered into the Tax Receivable Agreement with certain selling equity holders of E2open Holdings. Pursuant to the Tax Receivable Agreement, we will pay certain sellers, as applicable, 85% of the tax savings that we realize from increases in the tax basis in E2open Holdings’ assets as a result of the sale of E2open Holdings’ equity interests, the future exchange of the Common Units for shares of Class A Common Stock (or cash), certain pre-existing tax attributes of certain sellers and certain other tax benefits related to entering into the Tax Receivable Agreement including tax benefits attributable to payments under the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until all such tax benefits have been utilized or expired unless we exercise our right to terminate the Tax Receivable Agreement for an amount representing the present value of anticipated future tax benefits under the Tax Receivable Agreement or certain other acceleration events occur. We will retain the benefit of the remaining 15% of these cash savings.
Amounts payable under the Tax Receivable Agreement will be contingent upon, among other things, our generation of taxable income over the term of the Tax Receivable Agreement. If we do not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits subject to the Tax Receivable Agreement, we would not be required to make the related payments under the Tax Receivable Agreement. Although the amount of any payments required to be made under the Tax Receivable Agreement may be significant, the timing of these payments will vary and will generally be limited to one payment per member per year. The amount of such payments is also generally limited to the extent we are unable to utilize the full amount of any tax benefits subject to the Tax Receivable Agreement in a given period.
The liability related to the Tax Receivable Agreement was $63.3 million as of August 31, 2021, consisting of Tax Receivable liabilities recorded under ASC 805 of $53.2 million and $10.1 million under ASC 450, assuming (1) a constant corporate tax rate of 24.1%, (2) no dispositions of corporate subsidiaries, (3) no material changes in tax law and (4) we do not elect an early termination of the Tax Receivable Agreement. However, due to the uncertainty of various factors, including: (a) the timing and value of future exchanges, (b) the amount and timing of our future taxable income, (c) changes in our tax rate, (d) no future dispositions of any corporate stock and (e) changes in the tax law, the likely tax savings we will realize and the resulting amounts we are likely to pay to the E2open Sellers pursuant to the Tax Receivable Agreement are uncertain. Additionally, interest will accrue on the portion of the Tax Receivable Agreement liability recorded under ASC 805 at a rate of LIBOR plus 100 basis points. The portion of the Tax Receivable Agreement liability under ASC 450 is recorded on a gross undiscounted basis.
The liability recorded on the balance sheet does not include an estimate of the amount of payments to be made if certain sellers exchanged their remaining interests in E2open Holdings for our common stock, as this amount is not readily determinable and is dependent on several future variables, including timing of future exchanges, stock price at date of exchange, tax attributes of the individual parties to the exchange and changes in future applicable federal and state tax rates.
In addition, if we exercise our right to terminate the Tax Receivable Agreement or certain other acceleration events occur, we are required to make immediate cash payments. Such cash payments will be equal to the present value of the assumed future realized tax benefits based on a set of assumptions and using an agreed upon discount rate, as defined in the Tax Receivable Agreement. The early termination payment may be made significantly in advance of the actual realization, if any, of those future tax benefits. Such payments will be calculated based on certain assumptions, including that we have sufficient taxable income to utilize the full amount of any tax benefits subject to the Tax Receivable Agreement over the period specified therein. The payments that we would be required to make will generally reduce the amount of the overall cash flow that might have otherwise been available to us, but we expect the cash tax savings we will realize from the utilization of the related tax benefits will exceed the amount of any required payments.
45
We are entitled to receive quarterly tax distributions from E2open Holdings, subject to limitations imposed by applicable law and contractual restrictions. The cash received from such tax distributions will first be used to satisfy any tax liability and then make any payments required under the Tax Receivable Agreement. We expect that such tax distributions will be sufficient to fund both our tax liability and the required payments under the Tax Receivable Agreement.
Conversion of Contingent Consideration
The contingent consideration liability was $65.8 million and $150.8 million as of August 31, 2021 and February 28, 2021, respectively. The fair value remeasurements resulted in a gain of $18.7 million and a loss of $41.2 million for the three and six months ended August 31, 2021, respectively. There was no gain or loss for the three and six months ended August 31, 2020 as the contingent consideration liability was not recorded until February 4, 2021. The contingent liability represents the Series B-1 common stock, Series B-2 common stock, Series 1 RCUs and Series 2 RCUs.
As of June 8, 2021, the Series B-1 common stock and Series 1 RCUs were no longer reflected as a contingent consideration liability as the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share. This triggering event resulted in the 8,120,273 Series B-1 common stock converting into Class A Common Stock and 4,379,557 Series 1 RCUs becoming 4,379,557 Common Units of E2open Holdings along with entitling the holders of the newly vested common units to 4,379,557 shares of Class V Common Stock.
Leases
Effective March 1, 2021, we began accounting for leases in accordance with ASC 842, Leases, which requires lessees to recognize lease liabilities and ROU assets on the balance sheet for contracts that provide lessees with the right to control the use of identified assets for periods of greater than 12 months. Upon adoption of ASC 842, we recognized an operating lease liability of $23.0 million, a ROU operating asset of $22.4 million and no change to retained earnings.
Our non-cancelable operating leases for our office spaces have various expiration dates through August 2029. Under these leases, our undiscounted future cash flows utilized in the calculation of the lease liabilities as of August 31, 2021 were: $2.8 million for September 1, 2021 through February 28, 2022, $5.0 million for fiscal 2023, $4.2 million for fiscal 2024, $3.1 million for fiscal 2025, $2.4 million for fiscal 2026 and $4.6 million thereafter. These numbers include interest of $2.4 million.
Our non-cancelable financing lease arrangements relate to software and computer equipment and have various expiration dates through August 2024. We have the right to purchase the software and computer equipment anytime during the lease or upon lease completion. Under these leases, our undiscounted future cash flows utilized in the calculation of the lease liabilities as of August 31, 2021 were: $0.6 million for September 1, 2021 through February 28, 2022, $2.3 million for fiscal 2023 and $2.1 million for fiscal 2024. These numbers include interest of $0.4 million.
Off-Balance Sheet Arrangements
We are responsible for reimbursement of outstanding obligations related to any letters of credit issued under our $15.0 million available letters of credit accessible under our $75.0 million 2021 Revolving Credit Facility. We do not have any other material off-balance sheet arrangements or contingent commitments. There were no outstanding letters of credit or borrowings under the 2021 Revolving Credit Facility as of August 31, 2021 and February 28, 2021.
On September 1, 2021, the 2021 Revolving Credit Facility was increased by $80.0 million to $155.0 million and the letter of credit sublimit was increased from $15.0 million to $30.0 million upon completion of the BluJay Acquisition. On September 29, 2021, we borrowed $15.0 million under the 2021 Revolving Credit Facility for daily operating activities.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. Preparation of the financial statements requires management to make judgments, estimates and assumptions that impact the reported amount of revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our consolidated financial statements. Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies to the Notes to the Consolidated Financial Statements in our 2021 Form 10-K.
There have been no changes to our critical accounting policies and estimates during the three and six months ended August 31, 2021 from those previously disclosed in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Annual Report.
46
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
There have been no material changes in the market risks during the three and six months ended August 31, 2021 from those previously disclosed in Part II, Item 7A., Quantitative and Qualitative Disclosures About Market Risk of our 2021 Form 10-K.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We have disclosure controls and procedures in place to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These controls and procedures are accumulated and communicated to management, including our President and Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by the Quarterly Report. In designing and evaluating these disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal controls over financial reporting during the quarter ended August 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We review our disclosure controls and procedures, which may include internal controls over financial reporting, on an ongoing basis. From time to time, management makes changes to enhance the effectiveness of these controls and ensure that they continue to meet the needs of our business activities over time.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are subject to contingencies that arise in the ordinary course of business. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We do not currently believe the resolution of any such contingencies will have a material adverse effect upon our Consolidated Balance Sheets, Statements of Operations or Statements of Cash Flows.
Item 1A. Risk Factors.
There have been no material changes in our risk factors during the three and six months ended August 31, 2021 from those previously disclosed in Part I, Item 1A., Risk Factors of our 2021 Form 10-K and Part II, Item 1A., Risk Factors of our May 31, 2021 Form 10-Q filed with the SEC on July 16, 2021 (Q1 2022 Form 10-Q), other than set forth below. You should carefully consider the risk factors discussed in our 2021 Form 10-K and Q1 2022 Form 10-Q, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or future results.
Risks Related to Our Business Model
Cyber-attacks and security vulnerabilities could result in serious harm to our reputation, business and financial condition.
Threats to network and data security are constantly evolving and becoming increasingly diverse and sophisticated. Our products and services, servers and computer systems and those of third parties that we rely on in our operations could be vulnerable to cybersecurity risks. As such, we may be subject to risks inherent to companies that process client data for client mission critical systems like SCM solutions.
47
As we continue to grow and as threat actors have become more sophisticated, we have observed increased threat activity to our products and systems. We are the target of attempts on a regular basis to identify and exploit system vulnerabilities and/or penetrate or bypass our security measures in order to gain unauthorized access to our systems. To mitigate these risks, we employ multiple methods at different layers of our systems to defend against intrusion and attack. We do not have visibility into all unauthorized incursions, however, and our systems could experience incursions of which we are not aware. When we become aware of unauthorized access to our systems, we take steps intended to identify and remediate the source and impact of the incursions. Despite our efforts to keep our systems secure and remedy identified vulnerabilities, future attacks could be successful and result in contractual liability to clients or loss of client trust and ultimately client business.
We may experience breaches of our security measures due to human error, system errors or vulnerabilities. In particular, our platform and the other systems or networks used in our business may experience an increase in attempted cyber-attacks, targeted intrusion, ransomware and phishing campaigns. We maintain errors, omission and cyber liability insurance policies covering security and privacy damages. However, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all.
In addition, while we are continually taking steps to enhance our cybersecurity defenses, increased investments, coordination, and resources are required to achieve our objective of ensuring over time that our cybersecurity infrastructure meets or exceeds evolving industry standards. Achieving this objective will require continued effort and vigilance, including sustained investment of money and management resources in order to support the ongoing development and maintenance of systems that meet these standards.
At present, we believe the regulatory and private action risks related to personal data we process as part of our business-to-business supply chain solutions are low. We process a limited amount of personal data, typically business contact information, supplied by our clients. Regulations surrounding personal data are rapidly changing and that makes global compliance challenging and unpredictable. Failure to comply with regulations may subject us to regulatory investigations, reputational harm, contractual liability to clients and potential liability to data subjects.
Risks Related to our Indebtedness
Our substantial level of indebtedness and significant leverage may materially adversely affect our ability to raise additional capital to fund our operations and limit our ability to react to changes in the economy or our industry.
We have a substantial amount of indebtedness and are significantly leveraged. As of August 31, 2021, we had outstanding indebtedness in the principal amount of $523.8 million. As part of the BluJay Acquisition, we incurred an additional $380.0 million and the 2021 Revolving Credit Facility was increased by $80.0 million to $155.0 million. Our substantial level of indebtedness increases the possibility that we may be unable to generate sufficient cash to pay the principal, interest or other amounts due in respect of our indebtedness. Our substantial indebtedness, combined with our other financial obligations and contractual commitments, may have a material adverse impact on us and our business.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table provides information regarding purchases of Class A Common Stock during the quarter ended August 31, 2021:
Period |
|
Total Number of Shares Purchased |
|
|
|
Average Price Paid Per Share |
|
||
June 1 - June 30 |
|
$ |
— |
|
|
|
$ |
— |
|
July 1 - July 31 |
|
|
176,654 |
|
(1) |
|
|
14.00 |
|
August 1 - August 31 |
|
|
— |
|
|
|
|
— |
|
Total |
|
$ |
176,654 |
|
|
|
$ |
14.00 |
|
48
Item 6. Exhibits.
Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).
Exhibit Number |
|
Description |
2.1 |
|
|
2.2 |
|
|
2.3 |
|
|
3.1 |
|
|
3.2 |
|
|
3.3 |
|
|
3.4 |
|
|
10.1 |
|
|
10.2 |
|
|
31.3* |
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* |
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* |
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS |
|
Inline XBRL Instance Document |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
|
Cover Page Interactive Data File |
* Filed herewith.
Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The Registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon request
49
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
E2open Parent Holdings, Inc. |
|
|
|
|
|
Date: October 13, 2021 |
|
By: |
/s/ Michael A. Farlekas |
|
|
|
Michael A. Farlekas |
|
|
|
Chief Executive Officer |
|
|
|
|
Date: October 13, 2021 |
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By: |
/s/ Jarett J. Janik |
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Jarett J. Janik |
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Chief Financial Officer |
50
Exhibit 31.1
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Michael A. Farlekas, certify that:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) [Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: October 13, 2021 |
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By: |
/s/ Michael A. Farlekas |
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Name: |
Michael A. Farlekas |
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Title: |
Chief Executive Officer |
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(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Jarett J. Janik, certify that:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) [Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: October 13, 2021 |
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By: |
/s/ Jarett J. Janik |
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Name: |
Jarett J. Janik |
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Title: |
Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report of E2open Parent Holdings, Inc. (the “Company”) on Form 10-Q for the period ending August 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: October 13, 2021 |
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By: |
/s/ Michael A. Farlekas |
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Name: |
Michael A. Farlekas |
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Title: |
Chief Executive Officer |
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(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report of E2open Parent Holdings, Inc. (the “Company”) on Form 10-Q for the period ending August 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
Date: October 13, 2021 |
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By: |
/s/ Jarett J. Janik |
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Name: |
Jarett J. Janik |
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Title: |
Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 08, 2021 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Revenue | |||||
Total revenue | $ 78,079 | $ 81,817 | $ 144,406 | $ 164,941 | |
Cost of Revenue | |||||
Amortization of acquired intangible assets | 12,338 | 4,947 | 23,849 | 10,508 | |
Total cost of revenue | 39,551 | 30,157 | 77,710 | 60,951 | |
Gross Profit | 38,528 | 51,660 | 66,696 | 103,990 | |
Operating Expenses | |||||
Research and development | 16,208 | 14,356 | 31,909 | 28,987 | |
Sales and marketing | 11,174 | 11,992 | 23,688 | 24,302 | |
General and administrative | 13,401 | 9,861 | 27,118 | 19,625 | |
Acquisition-related expenses | 7,174 | 2,018 | 16,952 | 5,386 | |
Amortization of acquired intangible assets | 3,543 | 8,447 | 7,373 | 16,914 | |
Total operating expenses | 51,500 | 46,674 | 107,040 | 95,214 | |
(Loss) income from operations | (12,972) | 4,986 | (40,344) | 8,776 | |
Other (expense) income | |||||
Interest and other expense, net | (6,332) | (16,308) | (11,235) | (35,680) | |
Change in tax receivable agreement liability | (637) | (3,136) | 0 | ||
Loss from change in fair value of contingent consideration | (16,780) | 0 | (90,040) | 0 | |
Total other expenses | (5,022) | (16,308) | (145,627) | (35,680) | |
Loss before income tax expense | (17,994) | (11,322) | (185,971) | (26,904) | |
Income tax expense | (5,994) | (6,218) | (7,372) | (14,388) | |
Net loss | (23,988) | (17,540) | (193,343) | (41,292) | |
Less: Net loss attributable to noncontrolling interest | (3,471) | (30,568) | |||
Net loss attributable to E2open Parent Holdings, Inc. | $ (20,517) | $ (162,775) | |||
Net loss attributable to E2open Parent Holdings, Inc. common shareholders per share: | |||||
Basic | $ (0.11) | $ (0.85) | |||
Diluted | $ (0.11) | $ (0.85) | |||
Warrants | |||||
Other (expense) income | |||||
Gain (loss) from change in fair value of warrant liability | $ 18,727 | $ (41,216) | 0 | ||
Subscriptions | |||||
Revenue | |||||
Total revenue | $ 61,725 | 69,035 | 112,759 | 138,639 | |
Cost of Revenue | |||||
Cost of Revenue | 16,246 | 14,860 | 32,754 | 28,998 | |
Professional Services | |||||
Revenue | |||||
Total revenue | 16,354 | 12,782 | 31,647 | 26,302 | |
Cost of Revenue | |||||
Cost of Revenue | $ 10,967 | $ 10,350 | $ 21,107 | $ 21,445 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
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Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (23,988) | $ (17,540) | $ (193,343) | $ (41,292) |
Other comprehensive income (loss), net: | ||||
Net foreign currency translation gain (loss) | (6,523) | (55) | (5,048) | (346) |
Total other comprehensive income (loss), net | (6,523) | (55) | (5,048) | (346) |
Comprehensive loss | (30,511) | $ (17,595) | (198,391) | $ (41,638) |
Less: Comprehensive loss attributable to noncontrolling interest | (4,505) | (31,366) | ||
Comprehensive loss attributable to E2open Parent Holdings, Inc. | $ (26,006) | $ (167,025) |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands |
Total |
Member's Capital |
Common Stock |
Accumulated Other Comprehensive Income (Loss) |
Additional Paid-In Capital |
Retained Earnings (Accumulated Deficit) |
Treasury Stock |
Parent |
Noncontrolling Interest |
---|---|---|---|---|---|---|---|---|---|
Balance at Feb. 29, 2020 | $ 214,592 | $ 433,992 | $ (898) | $ (218,502) | |||||
Investment by member | 1,788 | 1,788 | |||||||
Unit-based compensation | 2,046 | 2,046 | |||||||
Comprehensive income (loss) | (291) | (291) | |||||||
Net loss | (23,752) | (23,752) | |||||||
Balance at May. 31, 2020 | 194,383 | 437,826 | (1,189) | (242,254) | |||||
Balance at Feb. 29, 2020 | 214,592 | 433,992 | (898) | (218,502) | |||||
Comprehensive income (loss) | (346) | ||||||||
Net loss | (41,292) | ||||||||
Balance at Aug. 31, 2020 | 178,749 | 439,787 | (1,244) | (259,794) | |||||
Balance at May. 31, 2020 | 194,383 | 437,826 | (1,189) | (242,254) | |||||
Investment by member | (10) | (10) | |||||||
Unit-based compensation | 1,971 | 1,971 | |||||||
Comprehensive income (loss) | (55) | (55) | |||||||
Net loss | (17,540) | (17,540) | |||||||
Balance at Aug. 31, 2020 | 178,749 | $ 439,787 | (1,244) | (259,794) | |||||
Balance at Feb. 28, 2021 | 2,477,358 | $ 19 | 2,388 | $ 2,071,206 | 10,800 | $ 2,084,413 | $ 392,945 | ||
Share-based compensation | 2,043 | 2,043 | 2,043 | ||||||
Comprehensive income (loss) | 1,475 | 1,475 | 1,475 | ||||||
Net loss | (169,355) | (142,258) | (142,258) | (27,097) | |||||
Balance at May. 31, 2021 | 2,311,521 | 19 | 3,863 | 2,073,249 | (131,458) | 1,945,673 | 365,848 | ||
Balance at Feb. 28, 2021 | 2,477,358 | 19 | 2,388 | 2,071,206 | 10,800 | 2,084,413 | 392,945 | ||
Comprehensive income (loss) | (5,048) | ||||||||
Net loss | (193,343) | ||||||||
Balance at Aug. 31, 2021 | 20 | ||||||||
Balance at Aug. 31, 2021 | 2,434,732 | (2,660) | 2,272,139 | (151,975) | $ (2,473) | 2,115,051 | 319,681 | ||
Balance at May. 31, 2021 | 2,311,521 | 19 | 3,863 | 2,073,249 | (131,458) | 1,945,673 | 365,848 | ||
Share-based compensation | 2,509 | 2,509 | 2,509 | ||||||
Business Combination purchase price adjustment | 2,965 | 1,666 | 1,666 | 1,299 | |||||
Conversion of Common Units to Common Stock | (16,767) | 27,228 | 27,228 | (43,995) | |||||
Conversion of Series B-1 Shares to Common Stock | 172,527 | 1 | 174,999 | (2,473) | 172,527 | ||||
Impact of common unit conversion on tax receivable agreement | (7,512) | (7,512) | (7,512) | ||||||
Comprehensive income (loss) | (6,523) | (6,523) | (6,523) | ||||||
Net loss | (23,988) | (20,517) | (20,517) | (3,471) | |||||
Balance at Aug. 31, 2021 | $ 20 | ||||||||
Balance at Aug. 31, 2021 | $ 2,434,732 | $ (2,660) | $ 2,272,139 | $ (151,975) | $ (2,473) | $ 2,115,051 | $ 319,681 |
Organization and Basis of Presentation |
6 Months Ended |
---|---|
Aug. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Organization and Description of Business CC Neuberger Principal Holdings I (CCNB1) was a blank check company incorporated in the Cayman Islands on January 14, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. CCNB1’s sponsor was CC Neuberger Principal Holdings I Sponsor LLC, a Delaware limited liability company (Sponsor). CCNB1 became a public company on April 28, 2020 through an initial public offering (IPO). On February 4, 2021 (Closing Date), CCNB1 and E2open Holdings, LLC and its operating subsidiaries (E2open Holdings) completed a business combination (Business Combination) contemplated by the definitive Business Combination Agreement entered into on October 14, 2020 (Business Combination Agreement). In connection with the finalization of the Business Combination, CCNB1 changed its name to “E2open Parent Holdings, Inc.” and changed its jurisdiction of incorporation from the Cayman Islands to the State of Delaware (Domestication). Immediately following the Domestication, various entities merged with and into E2open, with E2open as the surviving company. Additionally, E2open Holdings became a subsidiary of E2open with the equity interests of E2open Holdings held by E2open and existing owners of E2open Holdings. The existing owners of E2open Holdings are considered noncontrolling interests in the condensed consolidated financial statements. We are headquartered in Austin, Texas. We are a leading provider of cloud-based, end-to-end supply chain management software. Our software combines networks, data and applications to provide a deeply embedded, mission-critical platform that allows customers to optimize their supply chain by accelerating growth, reducing costs, increasing visibility and driving improved resiliency. Given the business-critical nature of our solutions, we maintain deep, long-term relationships with our customers across a wide range of end-markets, including technology, consumer, industrial and transportation, among others. Basis of Presentation As a result of the Business Combination, for accounting purposes, the Company is the acquirer and E2open Holdings is the acquiree and accounting predecessor. The financial statement presentation includes the financial statements of E2open Holdings as “Predecessor” for periods prior to the Closing Date and of the Company as “Successor” for the periods after the Closing Date, including the consolidation of E2open Holdings. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended August 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending February 28, 2022. For further information, refer to the consolidated financial statements and notes thereto included in our 2021 Form 10-K. Use of Estimates The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Reclassifications Financing lease obligation were previously included in current portion of notes payable and capital lease obligations as well as notes payable and capital lease obligations on the Consolidated Balance Sheets. Beginning March 1, 2021, capital lease obligations became financing lease obligations and were presented separately on the Consolidated Balance Sheets. Additionally, financing leases are no longer presented with notes payable in the notes to the financial statements as all leases are presented together in one note. These reclassifications and changes did not affect our net income, total assets, liabilities, equity or cash flows. Seasonality Our quarterly operating results have fluctuated in the past and are expected to fluctuate in the future due to a variety of factors, many of which are outside of our control, including seasonality in our business as a result of customer budget cycles and customary European vacation schedules, with higher sales in the third and fourth fiscal quarters. As a result, our past results may not be indicative of our future performance and comparing our operating results on a period-to-period basis may not be meaningful. |
Accounting Standards |
6 Months Ended |
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Aug. 31, 2021 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Accounting Standards | 2. Accounting Standards Recently Adopted Accounting Guidance In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). The core principle of ASC 842, Leases is that a lessee should recognize the assets and liabilities that arise from leases. For operating leases, a lessee is required to recognize a right-of-use (ROU) asset and a lease liability, initially measured at the present value of the lease payments, in the balance sheet. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. This standard is effective for calendar fiscal years beginning after December 15, 2021. Earlier application is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We this standard as of March 1, 2021 utilizing the modified retrospective approach and elected a set of practical expedients that allowed us not to reassess whether contracts are or contain leases, lease classification or initial direct costs for existing leases. See Note 20, Leases for more information related to our leases. In October 2018, the FASB issued ASU 2018-17, Consolidated (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. This standard is intended to improve the accounting when considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. ASU 2018-17 is effective for fiscal years beginning after December 15, 2020, and interim periods within those years. All entities are required to apply this standard retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. We this standard as of March 1, 2021 and it did t have a material impact on our consolidated financial statements. Recent Accounting Guidance Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (ASC 326), which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. This standard replaces the existing incurred loss impairment methodology with an approach that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. This standard is effective for the fiscal year beginning after December 15, 2022, and all interim periods within. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard provides guidance on accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments in this standard should be applied either retrospectively or prospectively to all implementation costs incurred after the adoption date. The standard is effective for fiscal years beginning after December 15, 2021, and interim periods within those years. Earlier application is permitted. We do not expect the adoption of this standard will have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards. The guidance amends certain disclosure requirements that had become redundant, outdated or superseded. Additionally, this guidance amends accounting for the interim period effects of changes in tax laws or rates and simplifies aspects of the accounting for franchise taxes. ASU 2019-12 is effective for annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. Management is currently evaluating the effect of these provisions on our financial position and results of operations. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting to simplify the accounting for contract modifications made to replace LIBOR or other reference rates that are expected to be discontinued because of the reference rate reform. The guidance provides optional expediates and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criterion are met. The optional expedients and exceptions can be applied to contract modifications made until December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The amendments in ASU 2021-01 are elective and apply to our debt instruments that may be modified as a result of the reference rate reform. We are continuing to evaluate these standards, as well as the timing of the transition of various rates in our debt instruments affected by reference rate reform. |
BluJay Acquisition |
6 Months Ended |
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Aug. 31, 2021 | |
Business Combinations [Abstract] | |
BluJay Acquisition | 3. BluJay Acquisition On May 27, 2021, we entered into a Purchase Agreement with the BluJay Sellers. On September 1, 2021, we completed the acquisition of BluJay (BluJay Acquisition). Under the Purchase Agreement, we issued to the BluJay Sellers 72,383,299 shares of Class A Common Stock and paid approximately $770 million of cash which includes the repayment of BluJay's debt facility. The total purchase consideration for the BluJay Acquisition was $1.6 billion. In connection with the completion of the BluJay Acquisition, we secured $300 million in PIPE financing from institutional investors for the purchase of an aggregate of 28,909,022 shares of our Class A Common Stock. PIPE financing proceeds of $280 million were received in advance of BluJay Acquisition and were recorded as a payable to sellers on our Condensed Consolidated Balance Sheet as of August 31, 2021. We also obtained a $380.0 million incremental term loan to our 2021 Term Loan, as defined below, and an $80.0 million increase to our 2021 Revolving Credit Facility, defined below. In addition, the letter of credit sublimit was increased from $15.0 million to $30.0 million upon completion of the BluJay Acquisition. Additionally, the Investor Rights Agreement was amended and restated to add certain of BluJay's existing stockholders as parties, including certain affiliates of Francisco Partners and Temasek as well as include a six month lock-up period from September 1, 2021 through February 28, 2022 for certain equityholders of E2open and BluJay. The Investor Rights Agreement also provides Francisco Partners and Temasek the right to nominate one member each to our board of directors. Mr. Deep Shah and Mr. Martin Fichtner became new directors on September 1, 2021. The BluJay Acquisition will be presented in our financial statements and results of operations during our fiscal third quarter of 2022. |
Liquidity and Capital Resources |
6 Months Ended |
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Aug. 31, 2021 | |
Liquidity And Capital Resources [Abstract] | |
Liquidity and Capital Resources | 4. Liquidity and Capital Resources We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital, capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Current working capital needs relate mainly to employee compensation and benefits, as well as interest, debt repayments, capital expenditures and operating expenses. Our ability to expand and grow our business will depend on many factors, including working capital needs and the evolution of operating cash flows. We had $473.1 million in cash and cash equivalents as of August 31, 2021, including $280.0 million of PIPE financing proceeds for the BluJay Acquisition. We believe our existing cash and cash equivalents, cash provided by operating activities, and, if necessary, the borrowing capacity of up to $75.0 million available under our 2021 Revolving Credit Facility (see Note 9, Notes Payable) will be sufficient to meet our working capital, debt repayment and capital expenditure requirements for at least the next twelve months. See Note 3, BluJay Acquisition for the additional equity and debt financing we incurred to purchase BluJay, which included increasing the 2021 Revolving Credit Facility by $80.0 million to a total of $155.0 million on September 1, 2021. In the future, we may enter into arrangements to acquire or invest in complementary businesses. To facilitate these acquisitions or investments, we may seek additional equity or debt financing. |
Intangible Assets, Net |
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Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net | 5. Intangible Assets, Net Intangible assets, net consisted of the following:
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Property and Equipment, Net |
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Property Plant And Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | 6. Property and Equipment, Net Property and equipment, net consisted of the following:
Computer equipment and software include assets held under financing leases. Amortization of assets held under financing leases is included in depreciation expense. See Note 20, Leases for additional information regarding our financing leases. Depreciation expense was $4.9 million and $3.5 million for the three months ended August 31, 2021 and 2020, respectively. Depreciation expense was $9.8 million and $6.4 million for the six months ended August 31, 2021 and 2020, respectively. |
Accounts Payable and Accrued Liabilities |
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Accounts Payable and Accrued Liabilities | 7. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following:
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Tax Receivable Agreement |
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Aug. 31, 2021 | |
Tax Receivable Agreement [Abstract] | |
Tax Receivable Agreement | 8. Tax Receivable Agreement E2open Holdings entered into a Tax Receivable Agreement with selling equity holders of E2open Holdings that requires us to pay 85% of the tax savings that are realized as a result of increases in the tax basis in E2open Holdings’ assets as a result of the sale of E2open Holdings units and exchange of the E2open Holdings units for shares of Class A Common Stock and cash, as well as certain other tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement. We will retain the benefit of the remaining 15% of these cash savings. Significant inputs and assumptions were used to initially estimate the future expected payments including the timing of the realization of the tax benefits, a tax rate of 24.1% and an imputed interest rate of 7%. Changes in any of these or other factors are expected to impact the timing and amount of gross payments. The fair value of these obligations will be accreted to the amount of the gross expected obligation. In addition, if we were to exercise our right to terminate the Tax Receivable Agreement or certain other acceleration events occur, we will be required to make immediate cash payments. Such cash payments will be equal to the present value of the assumed future realized tax benefits based on a set of assumptions and using an agreed upon discount rate, as defined in the Tax Receivable Agreement. The early termination payment may be made significantly in advance of the actual realization, if any, of those future tax benefits. Such payments will be calculated based on certain assumptions, including that we have sufficient taxable income to utilize the full amount of any tax benefits subject to the Tax Receivable Agreement over the period specified therein. The payments that we will be required to make will generally reduce the amount of the overall cash flow that might have otherwise been available, but we expect the cash tax savings we will realize from the utilization of the related tax benefits will exceed the amount of any required payments. Pursuant to ASC 805, Business Combination and relevant tax law, we have calculated the fair value of the tax receivable agreement payments related to the transaction at the acquisition date and identified the timing of the utilization of the tax attributes. Under ASC 805, the Tax Receivable Agreement liability, as of the acquisition date, will be revalued at the end of each reporting period with the gain or loss as well as the associated interest reflected in the change in tax receivable agreement liability in the Condensed Consolidated Statements of Operations in the period in which the event occurred. Interest will accrue on the tax receivable agreement liability at a rate of LIBOR plus 100 basis points. In addition, under ASC 450, Contingencies transactions with partnership unit holders after the acquisition date will result in additional Tax Receivable Agreement liabilities that are recorded on a gross undiscounted basis. The Tax Receivable Agreement liability was $63.3 million and $50.1 million as of August 31, 2021 and February 28, 2021, respectively. The increase in the Tax Receivable Agreement liability was due to an increase in the ASC 805 discounted liability of $3.1 million and increase in the ASC 450 liability of $10.1 million. |
Notes Payable |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | 9. Notes Payable Notes payable outstanding were as follows:
2021 Term Loan and Revolving Credit Facility On February 4, 2021, E2open, LLC, our subsidiary, entered into a credit agreement (Credit Agreement) that provides for $75.0 million in commitments for revolving credit loans (2021 Revolving Credit Facility) with a $15.0 million letter of credit sublimit. The 2021 Revolving Credit Facility will mature on February 4, 2026. E2open, LLC can request increases in the revolving commitments and additional term loan facilities, in minimum amounts of $2.0 million for each facility. The Credit Agreement also provides for $525.0 million in term loans (2021 Term Loan) payable in quarterly installments of $1.3 million beginning in August 2021 and payable in full on February 4, 2028. The Credit Agreement is guaranteed by E2open Intermediate, LLC, our subsidiary, and certain wholly owned subsidiaries of E2open, LLC, as guarantors, and is supported by a security interest in substantially all of the guarantors’ personal property and assets. The Credit Agreement contains certain customary events of default, representations and warranties as well as affirmative and negative covenants. As of August 31, 2021 and February 28, 2021, the 2021 Term Loan had a variable interest rate of 3.75% and 3.69%, respectively, and no outstanding borrowings under the 2021 Revolving Credit Facility. We were in compliance with the First Lien Leverage Ratio for the Credit Agreement as of August 31, 2021 and February 28, 2021. See Note 3, BluJay Acquisition for information related to additional debt incurred for the BluJay Acquisition. See Note 23, Subsequent Events for information related to borrowings under our 2021 Revolving Credit Facility. |
Contingent Consideration |
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Aug. 31, 2021 | |
Contingent Consideration [Abstract] | |
Contingent Consideration | 10. Contingent Consideration Business Combination The contingent consideration liability is due to the issuance of Series B-1 and B-2 common stock and Series 1 restricted common units (RCUs) and Series 2 RCUs of E2open Holdings as part of the Business Combination. These shares and units were issued on a proportional basis to each holder of Class A shares in CCNB1 and Common Units of E2open Holdings. These restricted shares and Common Units are treated as a contingent consideration liability under ASC 805 and valued at fair market value. The contingent consideration liability was recorded at fair value on the acquisition date and will be remeasured at each reporting date and adjusted if necessary. Any gain or loss recognized from the remeasurement will be recorded in gain (loss) from the change in fair value of contingent consideration on the Condensed Consolidated Statements of Operations as a nonoperating income (expense) as the change in fair value is not part of our core operating activities. The contingent consideration liability was $65.8 million and $129.4 million as of August 31, 2021 and February 28, 2021, respectively. The fair value remeasurements resulted in a loss of $13.0 million and $76.4 million for the three and six months ended August 31, 2021, respectively. There was no gain or loss for the three and six months ended August 31, 2020 as the contingent consideration liability was not recorded until February 4, 2021. The 8,120,367 shares of Series B-1 common stock, including the Sponsor Side Letter shares noted below, automatically convert into our Class A Common Stock on a one-to-one basis upon the occurrence of the first day on which the 5-day VWAP of our Class A Common Stock is equal to at least $13.50 per share; provided, however, that the reference to $13.50 per share shall be decreased by the aggregate per share amount of dividends actually paid in respect of a share of Class A Common Stock following the closing of the Business Combination. As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series B-1 common stock to automatically convert into our Class A Common Stock on a one-to-one basis. As such, 8,120,273 shares of Series B-1 common stock converted into 8,120,273 shares of Class A Common Stock. There were 94 shares of Series B-1 common stock pending conversion as of August 31, 2021. There were 3,372,184 shares of Series B-2 common stock outstanding as of August 31, 2021. The Series B-2 common stock automatically convert into our Class A Common Stock on a one-to-one basis upon the occurrence of the first day on which the 20-day VWAP is equal to at least $15.00 per share; provided, however, that the reference to $15.00 per share shall be decreased by the aggregate per share amount of dividends actually paid in respect of a share of Class A Common Stock following the closing of the Business Combination. The 4,379,557 shares of Series 1 RCUs vest and become Common Units of E2open Holdings at such time as the 5-day VWAP of the Class A Common Stock is at least $13.50 per share; however, the $13.50 per share threshold will be decreased by the aggregate amount of dividends per share paid following the closing of the Business Combination. As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series 1 RCUs to vest and become Common Units of E2open Holdings. As such, 4,379,557 Series 1 RCUs became 4,379,557 Common Units of E2open Holdings along with entitling the holders of the newly vested common units to 4,379,557 shares of Class V Common Stock. Catch-Up Payments were not required as a result of the Series 1 RCU vesting. There were 2,627,724 shares of Series 2 RCUs outstanding as of August 31, 2021. The Series 2 RCUs will vest (a) at such time as the 20-day VWAP of the Class A Common Stock is at least $15.00 per share; however, the $15.00 per share threshold will be decreased by the aggregate amount of dividends per share paid following the closing of the Business Combination; (b) upon the consummation of a qualifying change of control of us or the Sponsor and (c) upon the qualifying liquidation defined in the limited liability company agreement. Upon the conversion of an RCU, the holder of such RCU will be entitled to receive a payment equal to the amount of ordinary distributions paid on an E2open Holdings unit from the Closing Date through (but not including) the date such RCU converts into an E2open Holdings unit. If any of the RCUs do not vest on or before the 10-year anniversary of the Closing Date, such units will be canceled for no consideration, and will not be entitled to receive any Catch-Up Payments. We have not paid any dividends to date and do not expect to in the future. Sponsor Side Letter In connection with the execution of the Business Combination Agreement, the Sponsor, certain investors and CCNB1’s Independent Directors entered into the Sponsor Side Letter Agreement with CCNB1. Under the Sponsor Side Letter Agreement, 2,500,000 Class B ordinary shares of CCNB1 held by the Sponsor and CCNB1’s Independent Directors automatically converted into 2,500,000 shares of Series B-1 Common Stock, which, collectively, are referred to as the Restricted Sponsor Shares. The vesting conditions of the shares of Series B-1 Common Stock mirrored the Series 1 RCUs. These restricted shares were treated as a contingent consideration liability under ASC 805 and valued at fair market value. The contingent consideration liability was recorded at fair value on the acquisition date and remeasured at each reporting date and adjusted if necessary. Any gain or loss recognized from the remeasurements was recorded in gain (loss) from the change in fair value of contingent consideration on the Condensed Consolidated Statements of Operations as a nonoperating income (expense) as the change in fair value was not part of our core operating activities. As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Sponsor Side Letters shares to automatically convert into our Class A Common Stock on a one-to-one basis. As such, all of the Sponsor Side Letter shares converted into our Class A Common Stock and are included in the 8,120,273 Class A Common Stock discussed above. The contingent consideration liability was $21.4 million as of February 28, 2021. The fair value remeasurements through June 8, 2021 resulted in a loss of $3.8 million and $13.7 million for the three and six months ended August 31, 2021. There was no gain or loss for the three and six months ended August 31, 2020 as the Sponsor Side Letter was not entered into until February 4, 2021. Averetek E2open Holdings purchased Averetek, LLC (Averetek) in May 2019. The purchase agreement for Averetek included contingent payments of up to $2.0 million in consideration contingent upon successful attainment of revenue related criteria that extended up to two years subsequent to closing. The earn-out liability was recorded on the acquisition date in acquisition-related obligations on the Condensed Consolidated Balance Sheets and remeasured at each reporting date and adjusted if necessary. At the acquisition date, the fair value of the contingent consideration was $2.0 million. We determined there was no change in fair value of the contingent consideration as of February 28, 2021 or prior to payment. The earn-out liability was earned in May 2021 and paid in July 2021. |
Fair Value Measurement |
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Investments Debt And Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | 11. Fair Value Measurement Our financial instruments include cash and cash equivalents; investments; accounts receivable, net; accounts payable; acquisition-related obligations; notes payable; and financing lease obligations. Accounts receivable, net; accounts payable; and acquisition-related obligations are stated at their carrying value, which approximates fair value, due to their short maturity. We measure our cash equivalents and investments at fair value, based on an exchange or exit price which represents the amount that would be received for an asset sale or an exit price, or paid to transfer a liability in an orderly transaction between knowledgeable and willing market participants. We estimate the fair value for notes payable and financing lease obligations by discounting the future cash flows of the related note and lease payments. As of August 31, 2021 and February 28, 2021, the fair value of the cash and cash equivalents, restricted cash, notes payable and financing lease obligations approximates their recorded values. The following tables set forth details about our investments:
Observable inputs are based on market data obtained from independent sources. Unobservable inputs reflect our assessment of the assumptions market participants would use to value certain financial instruments. This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Our assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy are summarized as follows:
Contingent Consideration The following table provides a reconciliation of the beginning and ending balances of acquisition related accrued earn-outs and contingent consideration using significant unobservable inputs (Level 3):
The change in the fair value of the earn-out is recorded in acquisition-related expenses while the change in the fair value of the contingent consideration is recorded in gain (loss) from change in fair value of contingent consideration in the Condensed Consolidated Statements of Operations. Our warrant liability is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The following table provides a reconciliation of the warrant liability from February 4, 2021 through February 28, 2021 and February 28, 2021 through August 31, 2021:
The change in the fair value of the warrant liability is recorded in gain (loss) from change in fair value of warrant liability in the Condensed Consolidated Statements of Operations. The fair values of our Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair values of our Level 2 financial instruments are based on quoted market prices for comparable instruments or model-driven valuations using observable market data or inputs corroborated by observable market data. Our earn-out liabilities and contingent consideration are valued using a Monte Carlo simulation model. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield and risk-free interest rates. These valuation models use unobservable market input, and therefore the liabilities are classified as Level 3. Our public warrant liability is valued using the binomial lattice pricing model. The private placement warrants are valued using a binomial pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes pricing model. The forward purchase warrants are valued utilizing observable market prices for public shares and warrants, relative to the present value of contractual cash proceeds. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free interest rates. These valuation models use unobservable market input, and therefore the liability is classified as Level 3. |
Revenue |
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Revenue | 12. Revenue We generate revenue from the sale of subscriptions and professional services. We recognize revenue when the customer contract and associated performance obligations have been identified, transaction price has been determined and allocated to the performance obligations in the contract, and performance obligations have been satisfied. We recognize revenue net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Total Revenue by Geographic Locations Revenue by geographic regions consisted of the following:
Revenues by geography are determined based on the region of our contracting entity, which may be different than the region of the customer. Americas revenue attributed to the United States was 96% and 95% during the three months ended August 31, 2021 and 2020, respectively. Americas revenue attributed to the United States was 96% during the six months ended August 31, 2021 and 2020. No other country represented more than 10% of total revenue during these periods. During the three and six months ended August 31, 2021, we recorded a $14.2 million and $36.7 million reduction to revenue to amortize the deferred revenue fair value adjustment that resulted from the purchase price allocation in the Business Combination, respectively. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied. It includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods and does not include contracts where the customer is not committed. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty under the contract. Additionally, as a practical expedient of ASC 606, Revenue from Contracts with Customers we have not disclosed the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. As of August 31, 2021 and February 28, 2021, approximately $586.5 million and $555.7 million of revenue was expected to be recognized from remaining performance obligations, respectively. These amounts are expected to be recognized over the next five years. Contract Assets and Liabilities Contract assets primarily represent contractual receivables recognized for performance obligations that have been satisfied but for which amounts have not been billed. Contract assets were $12.4 million and $13.4 million as of August 31, 2021 and February 28, 2021, respectively. Contract liabilities consist of deferred revenue which includes billings in excess of revenue recognized related to subscription contracts and professional services. Deferred revenue is recognized as revenue when we perform under the contract. Deferred revenue was $110.3 million and $90.2 million as of August 31, 2021 and February 28, 2021, respectively. As of February 4, 2021, a fair value adjustment of $60.7 million was recorded to reduce our deferred revenue to its fair value as part of the Business Combination. As deferred revenue is recognized, any fair value adjustment related to the deferred revenue is also recognized as a reduction to revenue. As of August 31, 2021 and February 28, 2021, the fair value adjustment to reduce deferred revenue as part of the Business Combination was $17.3 million and $54.0 million, respectively. Revenue recognized during the three and six months ended August 31, 2021, included in deferred revenue on the Condensed Consolidated Balance Sheets as of February 28, 2021, was $21.1 million and $47.4 million, respectively. Sales Commissions With the adoption of ASC 606 and ASC 340-40, Contracts with Customers as of March 1, 2019, we began deferring and amortizing sales commissions that are incremental and directly related to obtaining customer contracts. Amortization expense of $0.2 million and $1.0 million was recorded in sales and marketing expense in the Condensed Consolidated Statements of Operations for the three months ended August 31, 2021 and 2020, respectively. Amortization expense of $0.4 million and $2.0 million was recorded in sales and marketing expense for the six months ended August 31, 2021 and 2020, respectively. Certain sales commissions that would have an amortization period of less than a year are expensed as incurred in sales and marketing expense. As of August 31, 2021 and February 28, 2021, we had a total of $5.3 million and $1.6 million of capitalized sales commissions included in prepaid expenses and other current assets and other noncurrent assets in the Condensed Consolidated Balance Sheets, respectively. |
Severance and Exit Costs |
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Restructuring And Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance and Exit Costs | 13. Severance and Exit Costs In connection with acquisitions, we conducted post-acquisition related operational reviews to reallocate resources to strategic areas of the business. The operational reviews resulted in workforce reductions, lease obligations related to properties that were vacated and other expenses. Severance and exit costs included in acquisition-related expenses in the Condensed Consolidated Statements of Operations were as follows:
Included in accounts payable and accrued liabilities as of August 31, 2021 and February 28, 2021 is a restructuring liability, primarily consisting of lease related obligations, of $0.5 million and $1.6 million, respectively, and a restructuring severance liability of $0.1 million and $0.3 million, respectively. We expect these amounts to be substantially paid within the next 12 months. The following table provides a reconciliation of the severance and exit cost accruals from February 4, 2021 through February 28, 2021 and February 28, 2021 through August 31, 2021 :
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Warrants |
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Aug. 31, 2021 | |
Warrants And Rights Note Disclosure [Abstract] | |
Warrants | 14. Warrants As of August 31, 2021 and February 28, 2021, there were an aggregate of 29,079,972 warrants outstanding, which include the public warrants, private placement warrants and Forward Purchase Warrants. Each warrant entitles its holders to purchase one share of Class A Common Stock at an exercise price of $11.50 per share. The private placement warrants became exercisable with the Domestication. The Forward Purchase Warrants became exercisable upon effectiveness of our Form S-1 which was initially filed on March 5, 2021 and deemed effective on March 29, 2021. The public warrants became exercisable on April 28, 2021. The public warrants, private placement warrants and Forward Purchase Warrants will expire five years after the Closing Date, or earlier upon redemption or liquidation. Once the warrants become exercisable, we may redeem the outstanding warrants when various conditions are met, such as specific stock prices, as detailed in the specific warrant agreements. However, the 10,280,000 private placement warrants are nonredeemable so long as they are held by our Sponsor or its permitted transferees. The warrants are recorded as a liability in warrant liability on the Condensed Consolidated Balance Sheets with a balance of $110.0 million and $68.8 million as of August 31, 2021 and February 28, 2021, respectively. During the three and six months ended August 31, 2021, a gain of $18.7 million and a loss of $41.2 million was recognized in gain (loss) from change in fair value of the warrant liability in the Condensed Consolidated Statements of Operations, respectively. No warrants have been exercised or redeemed to date. |
Stockholders' Equity |
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Stockholders Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | 15. Stockholders’ Equity Class V Common Stock We were authorized to issue 40,000,000 Class V common stock with a par value of $0.0001 per share. As of August 19, 2021, the number of shares authorized for issuance was increased to 42,747,890 Class V common stock with a par value of $0.0001. These shares have no economic value but entitle the holder to one vote per share. The holders of Common Units are entitled to Class V common stock on a one for one basis. The following table reflects the changes in our outstanding stock:
(1) As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series B-1 common stock to automatically convert into our Class A Common Stock on a one-to-one basis. See Note 10, Contingent Consideration for additional information. (2) As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series 1 restricted common units to automatically convert into Common Units and the holders receive one share of Class V Common Stock. See Note 10, Contingent Consideration for additional information. (3) On July 6, 2021, pursuant to Section 3.5 of the Business Combination Agreement, we issued additional Class A Common Stock and Common Units valued at $3.0 million to each E2open Holdings member as part of the post-closing adjustment of consideration required as part of the merger transaction. (4) Class A Common Stock issued for the conversion of Common Units settled in stock. During the six months ended August 31, 2021, we paid $16.8 million in cash for the repurchase of 1,615,326 Common Units that were converted into cash instead of stock at our option. Class V Common Stock is retired when Common Units are converted into Class A Common Stock or settled in cash. As a result of Common Unit conversions prior to August 19, 2021, 6,701 Class V Common Stock related to Common Unit conversions to Class A Common Stock were not issued and subsequently retired due to the limitation of authorized shares. (5) On July 13, 2021, our board of directors waived the Lock-up Period solely in respect of withholding shares to cover taxes upon the issuance of Class A Common Stock to the executive officers upon the conversion of the Series B-1 and Series B-2 common stock. The shares were repurchased at an average price of $14.00 per share, or $2.5 million, to cover withholding taxes associated with the Series B-1 conversion to Class A Common Stock. See Note 10, Contingent Consideration for additional details on the conversions. See Note 3, BluJay Acquisition for information regarding additional Class A Common Stock issuances and the lock-up period. Membership Units Prior to the Business Combination, E2open Holdings had three classes of units: Class A, Class A-1 and Class B. Class A units were the only units with voting rights. Holders of Class A and Class A-1 units were entitled to priority distributions until each unit received $1.00 per unit. Remaining distributions, if any, were made pro rata to all units. Class B units were incentive, profit-interest units issued to management, which participated as long as E2open Holdings made distributions to any Class A units equal to the participation level of the applicable Class B units. During the six months ended August 31, 2020, we received $1.8 million in proceeds from the sale of membership units. |
Noncontrolling Interests |
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Aug. 31, 2021 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | 16. Noncontrolling Interests Noncontrolling interest represents the portion of E2open Holdings that we control and consolidate but do not own. As of August 31, 2021 and February 28, 2021, the noncontrolling interests represent a 15.8% and 16.0% ownership in E2open Holdings, respectively. Generally, common units of E2open Holdings participate in net income or loss allocations and distributions and entitle their holder to the right, subject to the terms set forth in the limited liability agreement, to require E2open Holdings to redeem all or a portion of the common units held by such participant. At our option, we may satisfy this redemption with cash or by exchanging Class V Common Stock for our Class A Common Stock on a one-for-one basis. On June 8, 2021, the 4,379,557 Series 1 RCUs vested and became Common Units along with entitling the holders of the newly vested common units to 4,379,557 shares of Class V Common Stock. On July 6, 2021, pursuant to Section 3.5 of the Business Combination Agreement, we issued 103,929 additional Common Units to each E2open Holdings member in a pro rata amount reflecting the number of Common Units they received at the closing of the Business Combination as part of the post-closing adjustment as consideration required as part of the merger transaction. As part of the Business Combination, certain individuals were party to the Lock-Up Period which expired on August 4, 2021. As a result, 2,623,409 Common Units were converted into Class A Common Stock with a value of $27.2 million based off the 5-day VWAP and 1,615,326 Common Units were settled with the payment of $16.8 million of cash during the three and six months ended August 31, 2021. This activity resulted in a decrease to noncontrolling interests of $44.0 million during the three and six months ended August 31, 2021. See Note 23, Subsequent Events for information on additional Common Unit conversions. As part of the BluJay Acquisition, certain individuals who are parties to the Investor Rights Agreements entered into a new lock-up period that will expire on February 28, 2022. As of August 31, 2021 and February 28, 2021, there were a total of 35.9 million and 35.6 million Common Units held by participants of E2open Holdings, respectively. We follow the guidance issued by the FASB regarding the classification and measurement of redeemable securities. Accordingly, we have determined that the common units meet the requirements to be classified as permanent equity. |
Other Comprehensive (Loss) Income |
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Statement Of Other Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive (Loss) Income | 17. Other Comprehensive (Loss) Income We did not reclass any items to the Condensed Consolidated Statements of Operations from accumulated other comprehensive (loss) income during the three and six months ended August 31, 2021 and 2020. Accumulated other comprehensive (loss) income in the equity section of our Condensed Consolidated Balance Sheets includes:
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Earnings Per Share |
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Earnings Per Share | 18. Earnings Per Share Basic earnings per share is calculated as net income divided by the average number of shares of common stock outstanding. Diluted earnings per share assumes, when dilutive, the issuance of the net incremental shares from options and restricted shares. The following is a reconciliation of the denominators of the basic and diluted per share computations for net income:
Potential common shares issuable to employee or directors upon exercise or conversion of shares under our share-based compensation plans and upon exercise of warrants are excluded from the computation of diluted earnings per common share when the effect would be anti-dilutive. All potential common shares are anti-dilutive in periods of net loss available to common stockholders. The following table summarizes the weighted-average potential common shares excluded from diluted loss per common share as their effect would be anti-dilutive:
(1) The warrants include the public warrants, private placement warrants and Forward Purchase Warrants. |
Share-Based and Unit-Based Compensation |
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Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based and Unit-Based Compensation | 19. Share-Based and Unit-Based Compensation 2021 Incentive Plan The E2open Parent Holdings, Inc. 2021 Omnibus Incentive Plan (2021 Incentive Plan) became effective on the Closing Date with the approval of CCNB1’s shareholders and the board of directors. The 2021 Incentive Plan allows us to make equity and equity-based incentive awards to officers, employees, directors and consultants. There are 15,000,000 shares of Class A Common Stock reserved for issuance under the 2021 Incentive Plan which can be granted as stock options, restricted stock awards, restricted stock units, performance stock awards, cash awards and other equity-based awards. No award may vest earlier than the first anniversary of the date of grant, expect under limited conditions. The 2021 Incentive Plan replaced the 2015 Plan and 2015 Restricted Plan, as defined below. Our board of directors have approved the grant of options and RSUs under the 2021 Incentive Plan. Currently, all options are performance based and are measured based on obtaining an organic growth target over a one-year period with a quarter of the options vesting at the end of the performance period and the remaining options vesting equally over the following three years. Our executive officers and senior management have been granted these performance based options. Currently, we estimate that the performance target will be met at 100%. The probability of meeting the performance target is remeasured each quarter and adjusted if needed. The RSUs are either performance based or time based. The performance based RSUs are measured based on obtaining an organic growth target over a one-year period with a quarter of the options vesting at the end of the performance period and the remaining options vesting equally over the following three years. Currently, we estimate that the performance target will be met at 100%. The probability of meeting the performance target is remeasured each quarter and adjusted if needed. The time based RSUs for executive officers, senior management and employees vest ratably over a three-year period while the time based RSUs for non-employee directors of our board of directors have a one-year vesting period. As of August 31, 2021, there are 1,003,584 unvested performance based RSUs and 1,054,765 unvested time based RSUs. As of August 31, 2021, there were 10,358,331 shares of Class A Common Stock available for grant under the 2021 Incentive Plan. Activity under the 2021 Incentive Plan related to options was as follows:
As of August 31, 2021, there was $5.1 million of unrecognized compensation cost related to unvested options. Activity under the 2021 Incentive Plan related to RSUs was as follows:
As of August 31, 2021, there was $24.0 million of unrecognized compensation cost related to unvested RSUs. The estimated grant-date fair values of the options granted during the six months ended August 31, 2021 were calculated using the Black-Scholes option-pricing valuation model, based on the following assumptions:
See Note 23, Subsequent Events for information related to additional RSU grants. Prior to the Business Combination, we had unit-based compensation plans that authorized (a) the discretionary granting of unit options and (b) the discretionary issuance of non-vested restricted units. Unit Options In 2015, E2open Holdings adopted the 2015 Unit Option Plan (2015 Plan). Under the 2015 Plan, E2open Holdings issued Series A unit options to certain employees eligible to participate in E2open Holdings unit option plan. The options issued under the 2015 Plan were subject to certain transfer restrictions and were initially deemed unvested. With respect to options issued to certain employees, options either vested 25% in the first year, and quarterly thereafter over a four-year period (Time-Based Units) or based upon an exit event (Exit-Based Units). The vesting of both the Time-Based Units and Exit-Based Units were subject to the employee’s continued employment with the E2open Holdings. Fair value of the unit options was determined on the date of grant using a pricing model affected by E2open Holdings’ unit price, as well as by certain assumptions including E2open Holdings’ expected equity price volatility over the term of the awards, actual and projected employee option exercise behavior, risk-free interest rates and expected dividends. E2open Holdings did not grant any new options during the periods from March 1, 2020 through February 3, 2021. E2open Holdings was authorized to issue 46.0 million unit options under the 2015 Plan. As of February 3, 2021, outstanding unit options were 19.9 million. Unit options available for grant were 2.7 million as of February 3, 2021; however, the 2015 Plan was terminated as part of the Business Combination. Activity under E2open Holdings’ unit option plan was as follows:
As of February 3, 2021, there was $2.4 million of unrecognized compensation cost which was expected to be recognized over a weighted-average period of 1.1 year. The weighted-average contractual life of options outstanding was 6.7 years and the weighted-average contractual life of options exercisable was 6.4 years as of February 3, 2021. We did not recognize any compensation expense for Exit-Based units for the three and six months ended August 31, 2020 as these awards were not probable of vesting during these time periods. On January 24, 2021, the board of managers accelerated the vesting of all unvested unit options outstanding under the 2015 Plan as of the completion of the Business Combination on February 4, 2021. Restricted Equity Plan In 2015, E2open Holdings established the 2015 Restricted Equity Plan (2015 Restricted Plan) that was adopted for certain officers eligible to participate in the 2015 Restricted Plan. The units issued under the 2015 Restricted Plan were subject to certain transfer restrictions and were initially deemed unvested. With respect to units issued to certain officers, Class B units either vested 25% annually over a four-year period (Time-Based Units) or based upon an exit event (Exit-Based Units). The vesting of both the Time-Based Units and Exit-Based Units were subject to the employee’s continued employment with E2open Holdings. E2open Holdings authorized 32.0 million units under the 2015 Restricted Plan. As of February 3, 2021 and February 29, 2020, outstanding restricted units were 22.0 million. No restricted units were available for grant as of February 3, 2021. The 2015 Restricted Plan was terminated as part of the Business Combination. Activity under E2open Holdings’ 2015 Restricted Plan was as follows:
The aggregate fair value of units vested during the three and six months ended August 31, 2020 was $1.4 million and $2.8 million, respectively. Unrecognized compensation expense related to the Class B units was $5.4 million as of the February 3, 2021, which was expected to be recognized over a weighted-average period of approximately one year. E2open Holdings did not recognize any compensation expense for Exit-Based Units for the three and six months ended August 31, 2020. On January 24, 2021, the board of managers accelerated the vesting of all unvested unit options outstanding under the 2015 Restricted Plan as of the completion of the Business Combination on February 4, 2021. The table below sets forth the functional classification in the Condensed Consolidated Statements of Operations of our equity-based compensation expense:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 20. Leases Effective March 1, 2021, we began accounting for leases in accordance with ASC 842, Leases, which requires lessees to recognize lease liabilities and ROU assets on the balance sheet for most operating leases. Prior to March 1, 2021, we accounted for leases in accordance with ASC 840, Leases, under which operating leases were not recorded on the balance sheet. We made the accounting policy election not to apply the recognition provisions of ASC 842 to short-term leases which are leases with a lease term of 12 months or less. Instead, we will recognize the lease payments for short-term leases on a straight-line basis over the lease term. We currently do not have any short-term leases. Upon adoption of ASC 842, we recognized an operating lease liability of $23.0 million, a ROU operating asset of $22.4 million and no change to retained earnings. The lease liability is calculated based on the remaining minimum rental payments under current leasing standards for existing operating leases and the ROU asset is calculated the same as the lease liability, reduced for a $0.6 million impairment related to an office lease we had exited as of February 28, 2021. We did not include any optional extension periods or cancelations in the valuation. Operating lease liabilities reflect our obligation to make future lease payments for real estate locations. Lease terms are comprised of contractual terms. Payments are discounted using the rate we would pay to borrow amounts equal to the lease payments over the lease term (our incremental borrowing rate). We do not separate lease and non-lease components for contracts in which we are the lessee. ROU assets are measured based on lease liabilities adjusted for incentives and timing differences between operating lease expense and payments, recognized on a straight-line basis over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Common area maintenance and other executory costs are the main components of variable lease payments. Operating and variable lease expenses are recorded in general and administrative expense in the Condensed Consolidated Statements of Operations. Real Estate Leases We lease our primary office space under non-cancelable operating leases with various expiration dates through August 2029. Many of our leases have an option to be extended from to five years, and several of our leases give us the right to cancel early with proper notification. Additionally, we have a sublease on one of our office leases. Several of the operating lease agreements require us to provide security deposits. As of August 31, 2021, and February 28, 2021, lease deposits were $3.0 million and $2.9 million, respectively. The deposits are generally refundable at the expiration of the lease, assuming all obligations under the lease agreement have been met. Deposits are included in prepaid and other current assets and other noncurrent assets in the Condensed Consolidated Balance Sheets. Equipment Leases We purchase equipment under non-cancelable financing lease arrangements related to software and computer equipment and have various expiration dates through August 2024. We have the right to purchase the software and computer equipment anytime during the lease or upon lease completion. Balance Sheet Presentation The following tables presents the amounts and classifications of our estimated ROU assets, net and lease liabilities:
Lease Cost and Cash Flows The following table summarizes our total lease cost:
We currently do not have any short-term leases. Rent expense for the three and six months ended August 31, 2020 was $2.1 million and $4.3 million which was recognized under ASC 840, Leases. Supplemental cash flow information related to leases was as follows:
The following table presents the weighted-average remaining lease terms and discount rates of our leases:
Lease Liability Maturity Analysis The following table reflects the undiscounted future cash flows utilized in the calculation of the lease liabilities as of August 31, 2021:
Future minimum lease payments under non-cancelable operating leases as of February 28, 2021, prior to the adoption of the new lease standard discussed in Note 1, Organization and Description of Business were as follows for the fiscal years ended:
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Income Taxes |
6 Months Ended |
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Aug. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 21. Income Taxes We calculate the provision for income taxes during interim periods by applying an estimate of the forecasted annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Our provision for income taxes was $6.0 million for the three months ended August 31, 2021 compared to $6.2 million for the three months ended August 31, 2020. Our effective tax rate was 33.3% for the three months ended August 31, 2021, a decrease of 21.6%, compared to 54.9% for the three months ended August 31, 2020.Our provision for income taxes was $7.4 million for the six months ended August 31, 2021 compared to $14.4 million for the six months ended August 31, 2020. Our effective tax rate was 4.0% for the six months ended August 31, 2021, a decrease of 49.5%, compared to 53.5% for the six months ended August 31, 2020. The decrease in the provision for income taxes and effective tax rate was primarily due to significant nondeductible mark-to-market losses associated with contingent liabilities and certain equity consideration liabilities related to the Business Combination as well as the impact to fiscal 2022 of losses attributable to our noncontrolling interest in our affiliate. As of August 31, 2021 and February 28, 2021, total gross unrecognized tax benefits were $2.7 million. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of August 31, 2021 and February 28, 2021, the total amount of gross interest and penalties accrued was $0.3 million which is classified as other noncurrent liabilities in the Condensed Consolidated Balance Sheets. |
Commitments and Contingencies |
6 Months Ended |
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Aug. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 22. Commitments and Contingencies From time to time, we are subject to contingencies that arise in the ordinary course of business. We record an accrual for a contingency when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We do not currently believe the resolution of any such contingencies will have a material adverse effect upon our Condensed Consolidated Balance Sheets, Statements of Operations or Statements of Cash Flows. |
Subsequent Events |
6 Months Ended |
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Aug. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 23. Subsequent Events On September 1, 2021, we completed the BluJay Acquisition. The BluJay Acquisition will be presented in our financial statements and results of operations during our fiscal third quarter of 2022. See Note 3, BluJay Acquisition for details. On September 1, 2021, certain executives and senior management were granted an aggregate of 180,068 RSUs with a grant date fair value of $11.94 per share. All of these RSUs are service based which will vest ratably over a three-year period. On September 10, 2021, 958,539 Common Units were converted into an equivalent number of Class A Common Stock. On September 29, 2021, we borrowed $15.0 million under the 2021 Revolving Credit Facility. On October 1, 2021, senior management and employees were granted an aggregate of 111,506 RSUs with a grant date fair value of $11.30 per share. All of these RSUs are service based which will vest ratably over a three-year period. On October 11, 2021, 194,379 Common Units were converted into an equivalent number of Class A Common Stock. |
Organization and Basis of Presentation (Policies) |
6 Months Ended |
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Aug. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation As a result of the Business Combination, for accounting purposes, the Company is the acquirer and E2open Holdings is the acquiree and accounting predecessor. The financial statement presentation includes the financial statements of E2open Holdings as “Predecessor” for periods prior to the Closing Date and of the Company as “Successor” for the periods after the Closing Date, including the consolidation of E2open Holdings. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended August 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending February 28, 2022. For further information, refer to the consolidated financial statements and notes thereto included in our 2021 Form 10-K. |
Use of Estimates | Use of Estimates The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Financing lease obligation were previously included in current portion of notes payable and capital lease obligations as well as notes payable and capital lease obligations on the Consolidated Balance Sheets. Beginning March 1, 2021, capital lease obligations became financing lease obligations and were presented separately on the Consolidated Balance Sheets. Additionally, financing leases are no longer presented with notes payable in the notes to the financial statements as all leases are presented together in one note. These reclassifications and changes did not affect our net income, total assets, liabilities, equity or cash flows. |
Seasonality | Seasonality Our quarterly operating results have fluctuated in the past and are expected to fluctuate in the future due to a variety of factors, many of which are outside of our control, including seasonality in our business as a result of customer budget cycles and customary European vacation schedules, with higher sales in the third and fourth fiscal quarters. As a result, our past results may not be indicative of our future performance and comparing our operating results on a period-to-period basis may not be meaningful. |
Recently Adopted Accounting Guidance and Recent Accounting Guidance Not Yet Adopted | Recently Adopted Accounting Guidance In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). The core principle of ASC 842, Leases is that a lessee should recognize the assets and liabilities that arise from leases. For operating leases, a lessee is required to recognize a right-of-use (ROU) asset and a lease liability, initially measured at the present value of the lease payments, in the balance sheet. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. This standard is effective for calendar fiscal years beginning after December 15, 2021. Earlier application is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We this standard as of March 1, 2021 utilizing the modified retrospective approach and elected a set of practical expedients that allowed us not to reassess whether contracts are or contain leases, lease classification or initial direct costs for existing leases. See Note 20, Leases for more information related to our leases. In October 2018, the FASB issued ASU 2018-17, Consolidated (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. This standard is intended to improve the accounting when considering indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interests. ASU 2018-17 is effective for fiscal years beginning after December 15, 2020, and interim periods within those years. All entities are required to apply this standard retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. We this standard as of March 1, 2021 and it did t have a material impact on our consolidated financial statements. Recent Accounting Guidance Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (ASC 326), which is intended to provide financial statement users with more useful information about expected credit losses on financial assets held by a reporting entity at each reporting date. This standard replaces the existing incurred loss impairment methodology with an approach that requires consideration of a broader range of reasonable and supportable forward-looking information to estimate all expected credit losses. This standard is effective for the fiscal year beginning after December 15, 2022, and all interim periods within. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard provides guidance on accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. The amendments in this standard should be applied either retrospectively or prospectively to all implementation costs incurred after the adoption date. The standard is effective for fiscal years beginning after December 15, 2021, and interim periods within those years. Earlier application is permitted. We do not expect the adoption of this standard will have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards. The guidance amends certain disclosure requirements that had become redundant, outdated or superseded. Additionally, this guidance amends accounting for the interim period effects of changes in tax laws or rates and simplifies aspects of the accounting for franchise taxes. ASU 2019-12 is effective for annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. Management is currently evaluating the effect of these provisions on our financial position and results of operations. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting to simplify the accounting for contract modifications made to replace LIBOR or other reference rates that are expected to be discontinued because of the reference rate reform. The guidance provides optional expediates and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criterion are met. The optional expedients and exceptions can be applied to contract modifications made until December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The amendments in ASU 2021-01 are elective and apply to our debt instruments that may be modified as a result of the reference rate reform. We are continuing to evaluate these standards, as well as the timing of the transition of various rates in our debt instruments affected by reference rate reform. |
Intangible Assets, Net (Tables) |
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Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets, Net | Intangible assets, net consisted of the following:
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Property and Equipment, Net (Tables) |
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Property Plant And Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following:
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Accounts Payable and Accrued Liabilities (Tables) |
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Payables And Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consisted of the following:
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Notes Payable (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notes Payable Outstanding | Notes payable outstanding were as follows:
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Fair Value Measurement (Tables) |
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Investments Debt And Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investments | The following tables set forth details about our investments:
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Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | Our assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy are summarized as follows:
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Reconciliation of Beginning and Ending Balances of Acquisition Related Accrued Earn-Outs Using Significant Unobservable Inputs (Level 3) | The following table provides a reconciliation of the beginning and ending balances of acquisition related accrued earn-outs and contingent consideration using significant unobservable inputs (Level 3):
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Reconciliation of Warrant Liability | Our warrant liability is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The following table provides a reconciliation of the warrant liability from February 4, 2021 through February 28, 2021 and February 28, 2021 through August 31, 2021:
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Revenue (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue From Contract With Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Geographic Region | Revenue by geographic regions consisted of the following:
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Severance and Exit Costs (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring And Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Severance and Exit Costs Included in Acquisitions | Severance and exit costs included in acquisition-related expenses in the Condensed Consolidated Statements of Operations were as follows:
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Schedule of Changes in Severance and Exit Costs Accruals | The following table provides a reconciliation of the severance and exit cost accruals from February 4, 2021 through February 28, 2021 and February 28, 2021 through August 31, 2021 :
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Stockholders' Equity (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Outstanding Stock | The following table reflects the changes in our outstanding stock:
(1) As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series B-1 common stock to automatically convert into our Class A Common Stock on a one-to-one basis. See Note 10, Contingent Consideration for additional information. (2) As of June 8, 2021, the 5-day VWAP of our Class A Common Stock exceeded $13.50 per share which was the triggering event for the Series 1 restricted common units to automatically convert into Common Units and the holders receive one share of Class V Common Stock. See Note 10, Contingent Consideration for additional information. (3) On July 6, 2021, pursuant to Section 3.5 of the Business Combination Agreement, we issued additional Class A Common Stock and Common Units valued at $3.0 million to each E2open Holdings member as part of the post-closing adjustment of consideration required as part of the merger transaction. (4) Class A Common Stock issued for the conversion of Common Units settled in stock. During the six months ended August 31, 2021, we paid $16.8 million in cash for the repurchase of 1,615,326 Common Units that were converted into cash instead of stock at our option. Class V Common Stock is retired when Common Units are converted into Class A Common Stock or settled in cash. As a result of Common Unit conversions prior to August 19, 2021, 6,701 Class V Common Stock related to Common Unit conversions to Class A Common Stock were not issued and subsequently retired due to the limitation of authorized shares. (5)
On July 13, 2021, our board of directors waived the Lock-up Period solely in respect of withholding shares to cover taxes upon the issuance of Class A Common Stock to the executive officers upon the conversion of the Series B-1 and Series B-2 common stock. The shares were repurchased at an average price of $14.00 per share, or $2.5 million, to cover withholding taxes associated with the Series B-1 conversion to Class A Common Stock. See Note 10, Contingent Consideration for additional details on the conversions. |
Other Comprehensive (Loss) Income (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Statement Of Other Comprehensive Income [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income in Equity Section of Condensed Consolidated Balance Sheets | Accumulated other comprehensive (loss) income in the equity section of our Condensed Consolidated Balance Sheets includes:
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Earnings Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Basic and Diluted Per Share Computations for Net Income | The following is a reconciliation of the denominators of the basic and diluted per share computations for net income:
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Summary of Weighted Average Potential Common Shares Excluded from Diluted Loss Per Common Share | The following table summarizes the weighted-average potential common shares excluded from diluted loss per common share as their effect would be anti-dilutive:
(1)
The warrants include the public warrants, private placement warrants and Forward Purchase Warrants. |
Share-Based and Unit-Based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Option Plan Activity | Activity under E2open Holdings’ unit option plan was as follows:
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Schedule of Restricted Equity Plan | Activity under E2open Holdings’ 2015 Restricted Plan was as follows:
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Schedule of Functional Classification in the Condensed Consolidated Statements of Operations | The table below sets forth the functional classification in the Condensed Consolidated Statements of Operations of our equity-based compensation expense:
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2021 Incentive Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Option Plan Activity | Activity under the 2021 Incentive Plan related to options was as follows:
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Schedule of Restricted Equity Plan | Activity under the 2021 Incentive Plan related to RSUs was as follows:
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Summary of Estimated Grant-Date Fair Values Assumptions | The estimated grant-date fair values of the options granted during the six months ended August 31, 2021 were calculated using the Black-Scholes option-pricing valuation model, based on the following assumptions:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Classifications of Estimated ROU Assets, Net and Lease Liabilities | The following tables presents the amounts and classifications of our estimated ROU assets, net and lease liabilities:
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Summary of Lease Cost | The following table summarizes our total lease cost:
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Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows:
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Weighted-average Remaining Lease Terms and Discount Rates of Leases | The following table presents the weighted-average remaining lease terms and discount rates of our leases:
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Undiscounted Future Cash Flows Utilized in Calculation of Lease Liabilities | The following table reflects the undiscounted future cash flows utilized in the calculation of the lease liabilities as of August 31, 2021:
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Schedule of Future Minimum Payments Under Non-cancelable Operating Leases | Future minimum lease payments under non-cancelable operating leases as of February 28, 2021, prior to the adoption of the new lease standard discussed in Note 1, Organization and Description of Business were as follows for the fiscal years ended:
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Liquidity and Capital Resources - Additional Information (Details) - USD ($) |
Sep. 01, 2021 |
Aug. 31, 2021 |
Feb. 28, 2021 |
Feb. 04, 2021 |
Aug. 31, 2020 |
---|---|---|---|---|---|
Cash and Cash Equivalents [Line Items] | |||||
Cash and cash equivalents | $ 473,133,000 | $ 194,717,000 | $ 19,813,000 | ||
Cash and cash equivalents from acquisition | 280,000.0 | ||||
Maximum borrowing capacity available under its revolving credit facility | $ 75,000,000.0 | ||||
2021 Revolving Credit Facility | |||||
Cash and Cash Equivalents [Line Items] | |||||
Maximum borrowing capacity available under its revolving credit facility | $ 75,000,000.0 | ||||
Subsequent Event | BluJay TopCo Limited | 2021 Revolving Credit Facility | |||||
Cash and Cash Equivalents [Line Items] | |||||
Maximum borrowing capacity available under its revolving credit facility | $ 155,000,000.0 | ||||
Increase in line of credit facility | $ 80,000,000.0 |
Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Intangible assets amortization expense | $ 15.9 | $ 13.4 | $ 31.2 | $ 27.4 |
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | $ 58,119 | $ 45,398 |
Less accumulated depreciation and amortization | (10,424) | (1,200) |
Property and equipment, net | 47,695 | 44,198 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | 21,628 | 14,707 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | 26,318 | 21,141 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | 1,813 | 1,828 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Gross property and equipment | $ 8,360 | $ 7,722 |
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
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Property Plant And Equipment [Abstract] | ||||
Depreciation expense | $ 4.9 | $ 3.5 | $ 9.8 | $ 6.4 |
Accounts Payable and Accrued Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Payables And Accruals [Abstract] | ||
Accrued compensation | $ 26,040 | $ 34,298 |
Accrued severance and retention | 132 | 349 |
Trade accounts payable | 9,645 | 17,858 |
Accrued professional services | 11,277 | 2,938 |
Restructuring liability | 546 | 1,639 |
Taxes payable | 4,070 | 1,892 |
Interest payable | 1,473 | 1,293 |
Customer deposits | 2,076 | 1,811 |
Other | 9,172 | 8,155 |
Total accounts payable and accrued liabilities | $ 64,431 | $ 70,233 |
Tax Receivable Agreement - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Aug. 31, 2021 |
Feb. 28, 2021 |
|
Tax Receivable Agreement [Line Items] | ||
Tax savings rate | 15.00% | |
Tax rate | 24.10% | |
Imputed interest rate | 7.00% | |
Tax receivable agreement liability | $ 63,325 | $ 50,114 |
Increase in ASC 805 discounted liability | 3,100 | |
Increase in ASC 450 liability | $ 10,100 | |
LIBOR | ||
Tax Receivable Agreement [Line Items] | ||
Basis points | 100.00% | |
Class A ordinary shares | ||
Tax Receivable Agreement [Line Items] | ||
Business combination tax receivable agreement retain tax benefit remaining of cash saving | 85.00% |
Notes Payable - Schedule of Notes Payable Outstanding (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Total notes payable | $ 523,764 | $ 525,688 |
Less current portion | (3,999) | (4,405) |
Notes payable, less current portion, net | 502,616 | 502,800 |
Notes Payable | ||
Debt Instrument [Line Items] | ||
Less unamortized debt issuance costs | (17,149) | (18,483) |
Total notes payable, net | 506,615 | 507,205 |
Less current portion | (3,999) | (4,405) |
Notes payable, less current portion, net | 502,616 | 502,800 |
Notes Payable | Other Notes Payable | ||
Debt Instrument [Line Items] | ||
Total notes payable | 76 | 688 |
Notes Payable | 2021 Term Loan | ||
Debt Instrument [Line Items] | ||
Total notes payable | $ 523,688 | $ 525,000 |
Notes Payable - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Feb. 04, 2021 |
Aug. 31, 2021 |
Feb. 28, 2021 |
|
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 75,000 | ||
2021 Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 75,000 | ||
Line of credit, sublimit | 15,000 | ||
Line of credit facility, mature date | Feb. 04, 2026 | ||
2021 Term Loan | |||
Debt Instrument [Line Items] | |||
Line of credit, maximum borrowing capacity | 525,000 | $ 0 | |
Line of credit, frequency of payments | quarterly | ||
Line of credit, installments amount | 1,300 | ||
Line of credit facility, mature date | Feb. 04, 2028 | ||
Line of credit, minimum additional borrowing amount | $ 2,000 | ||
Interest rate | 3.75% | 3.69% |
Fair Value Measurement - Summary of Investments (Details) - Asset-backed Securities - USD ($) $ in Thousands |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Marketable Securities [Line Items] | ||
Cost | $ 162 | $ 162 |
Gross Unrealized Gains | 57 | 62 |
Fair Value | $ 219 | $ 224 |
Fair Value Measurement - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total cash equivalents | $ 4 | $ 4 |
Total investments | 219 | 224 |
Total assets | 223 | 228 |
Total liabilities | 175,836 | 221,580 |
Money Market | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 4 | 4 |
Asset-backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total investments | 219 | 224 |
Acquisition-related Obligations | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities | 2,000 | |
Warrant Liability | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities | 109,988 | 68,772 |
Contingent Consideration | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities | 65,848 | 150,808 |
Fair Value, Inputs, Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 4 | 4 |
Total assets | 4 | 4 |
Fair Value, Inputs, Level 1 | Money Market | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total cash equivalents | 4 | 4 |
Fair Value, Inputs, Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total investments | 219 | 224 |
Total assets | 219 | 224 |
Fair Value, Inputs, Level 2 | Asset-backed Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total investments | 219 | 224 |
Fair Value, Inputs, Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities | 175,836 | 221,580 |
Fair Value, Inputs, Level 3 | Acquisition-related Obligations | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities | 2,000 | |
Fair Value, Inputs, Level 3 | Warrant Liability | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities | 109,988 | 68,772 |
Fair Value, Inputs, Level 3 | Contingent Consideration | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Total liabilities | $ 65,848 | $ 150,808 |
Fair Value Measurement - Reconciliation of Beginning and Ending Balances of Acquisition Related Accrued Earn-Outs Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Feb. 28, 2021 |
|
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||
Cash payments | $ 16,800 | $ 16,800 | |||
Loss(gain) from change in fair value of contingent consideration | 16,780 | $ 0 | 90,040 | $ 0 | |
Fair Value, Inputs, Level 3 | |||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||
Beginning of period | 152,808 | $ 2,000 | $ 2,000 | ||
Acquisition date fair value of contingent consideration | 184,548 | ||||
Conversion to Class A Common Stock | (175,000) | ||||
Cash payments | (2,000) | ||||
Loss(gain) from change in fair value of contingent consideration | 90,040 | (33,740) | |||
End of period | $ 65,848 | $ 65,848 | $ 152,808 |
Fair Value Measurement - Reconciliation of Warrant Liability (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Aug. 31, 2021 |
Feb. 28, 2021 |
|
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning of period | $ 152,808 | $ 2,000 |
End of period | 65,848 | 152,808 |
Warrants | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning of period | 68,772 | 91,959 |
Loss (gain) from fair value of warrant liability | 41,216 | (23,187) |
End of period | $ 109,988 | $ 68,772 |
Revenue - Revenue by Geographic Region (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 78,079 | $ 81,817 | $ 144,406 | $ 164,941 |
Americas | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 74,902 | 77,741 | 138,220 | 157,799 |
Europe | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 1,298 | 1,373 | 2,622 | 2,697 |
Asia Pacific | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 1,879 | $ 2,703 | $ 3,564 | $ 4,445 |
Revenue - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Feb. 04, 2021 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Feb. 28, 2021 |
|
Disaggregation Of Revenue [Line Items] | ||||||
Fair value adjustment part of business combination reduced deferred revenue | $ 60.7 | $ 17.3 | $ 54.0 | |||
Contract with customer asset | $ 12.4 | 12.4 | 13.4 | |||
Deferred revenue | 110.3 | 110.3 | 90.2 | |||
Deferred revenue, revenue recognized | 21.1 | 47.4 | ||||
Sales and Marketing Expense | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Amortization expense | 0.2 | $ 1.0 | 0.4 | $ 2.0 | ||
Prepaid Expenses and Other Current Assets and Other Noncurrent Assets [Member] | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Capitalized sales commissions | 5.3 | 5.3 | $ 1.6 | |||
Revenue | Geographic Concentration | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Fair value adjustment part of business combination reduced deferred revenue | $ 14.2 | $ 36.7 | ||||
Revenue | Geographic Concentration | Americas | ||||||
Disaggregation Of Revenue [Line Items] | ||||||
Concentration risk percentage | 96.00% | 95.00% | 96.00% | 96.00% |
Revenue - Additional Information1 (Details) - USD ($) $ in Millions |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-03-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligation amount | $ 555.7 | |
Revenue remaining performance obligation expected period | 5 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-09-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Revenue remaining performance obligation amount | $ 586.5 | |
Revenue remaining performance obligation expected period | 5 years |
Severance and Exit Costs - Schedule of Severance and Exit Costs Included in Acquisitions (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Feb. 28, 2021 |
|
Restructuring And Related Activities [Abstract] | |||||
Severance | $ 614 | $ 897 | $ 654 | $ 1,660 | |
Lease exits | 494 | 47 | 816 | 1,004 | |
Total severance and exit costs | $ 1,108 | $ 944 | $ 1,470 | $ 2,664 | $ 4,721 |
Severance and Exit Costs - Additional Information (Details) - USD ($) $ in Millions |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Restructuring Liability | ||
Restructuring Cost And Reserve [Line Items] | ||
Accounts payable and accrued liabilities | $ 0.5 | $ 1.6 |
Restructuring Severance Liability | ||
Restructuring Cost And Reserve [Line Items] | ||
Accounts payable and accrued liabilities | $ 0.1 | $ 0.3 |
Severance and Exit Costs - Schedule of Changes in Severance and Exit Costs Accruals (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Feb. 28, 2021 |
|
Restructuring And Related Activities [Abstract] | |||||
Beginning of period | $ 1,988 | $ 3,730 | $ 3,730 | ||
Payments | (2,200) | (6,463) | |||
Impairment of right-of-use assets | (580) | ||||
Expenses | $ 1,108 | $ 944 | 1,470 | $ 2,664 | 4,721 |
End of period | $ 678 | $ 678 | $ 1,988 |
Warrants - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Feb. 28, 2021 |
|
Class Of Warrant Or Right [Line Items] | ||||
Warrants outstanding | 29,079,972 | 29,079,972 | ||
Warrant exercise price per share | $ 11.50 | $ 11.50 | ||
Warrants expiration term | 5 years | 5 years | ||
Warrant liability | $ 109,988 | $ 109,988 | $ 68,772 | |
Warrants | ||||
Class Of Warrant Or Right [Line Items] | ||||
Gain (loss) from change in fair value of warrant liability | $ 18,727 | $ (41,216) | $ 0 | |
Public Warrant | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants exercisable date | Apr. 28, 2021 | |||
Private Placement | ||||
Class Of Warrant Or Right [Line Items] | ||||
Warrants outstanding | 10,280,000 | 10,280,000 |
Stockholders' Equity - Schedule of Changes in Outstanding Stock (Details) - shares |
5 Months Ended | 6 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 06, 2021 |
Jun. 08, 2021 |
Jun. 08, 2021 |
Aug. 31, 2021 |
||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Repurchase Shares | (1,615,326) | ||||||||||||||
Class A | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Common stock, shares outstanding | 187,051,142 | ||||||||||||||
Conversion of stock, shares issued | 2,623,409 | 8,120,273 | 8,120,273 | [1] | |||||||||||
Business Combination Post Close Adjustment Issuance | [2] | 133,322 | |||||||||||||
Conversion of Common Units | [3] | (2,623,409) | |||||||||||||
Repurchase Shares | [4] | (176,654) | |||||||||||||
Common stock, shares, outstanding | 197,751,492 | ||||||||||||||
Class V | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Common stock, shares outstanding | 35,636,680 | ||||||||||||||
Conversion of stock, shares issued | [5] | 4,379,557 | |||||||||||||
Business Combination Post Close Adjustment Issuance | [2] | 92,690 | |||||||||||||
Conversion of Common Units | [3] | (4,232,034) | |||||||||||||
Common stock, shares, outstanding | 35,876,893 | ||||||||||||||
Series B-1 | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Common stock, shares outstanding | 8,120,367 | ||||||||||||||
Conversion of stock, shares converted | (8,120,273) | (8,120,273) | [1] | ||||||||||||
Common stock, shares, outstanding | 94 | ||||||||||||||
Series B-2 | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Common stock, shares outstanding | 3,372,184 | ||||||||||||||
Common stock, shares, outstanding | 3,372,184 | ||||||||||||||
|
Stockholders' Equity - Schedule of Changes in Outstanding Stock (Parenthetical) (Details) - USD ($) $ / shares in Units, $ in Thousands |
5 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Aug. 18, 2021 |
Jul. 13, 2021 |
Jul. 06, 2021 |
Jun. 08, 2021 |
Jun. 08, 2021 |
Jun. 08, 2021 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|||
Class Of Stock [Line Items] | ||||||||||
Payment in cash for repurchase of stock | $ 2,473 | $ 0 | ||||||||
Repurchase of common units | 1,615,326 | |||||||||
Share repurchased average price per share | $ 14.00 | |||||||||
Shares repurchased to cover withholding taxes associated with the Series B-1 conversion to Class A Common Stock | $ 2,500 | |||||||||
Class A | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock conversion price | $ 13.50 | $ 13.50 | ||||||||
Number of days volume-weighted average price | 5 days | |||||||||
Additional shares issued as part of the post-closing adjustment of consideration | $ 3,000 | |||||||||
Payment in cash for repurchase of stock | $ 16,800 | |||||||||
Repurchase of common units | [1] | 176,654 | ||||||||
Series B-1 | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock conversion price | $ 13.50 | $ 13.50 | ||||||||
Number of days volume-weighted average price | 5 days | |||||||||
Common stock, terms of conversion, description | Series B-1 common stock to automatically convert into our Class A Common Stock on a one-to-one basis | the Series B-1 common stock to automatically convert into our Class A Common Stock on a one-to-one basis | ||||||||
Series 1 RCUs | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock conversion price | $ 13.50 | |||||||||
Number of days volume-weighted average price | 5 days | |||||||||
Common stock, terms of conversion, description | Series 1 restricted common units to automatically convert into Common Units and the holders receive one share of Class V Common Stock | |||||||||
Class V common stock | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Common stock, terms of conversion, description | The holders of Common Units are entitled to Class V common stock on a one for one basis. | |||||||||
Stock converted and retired during period, shares | 6,701 | |||||||||
|
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | ||||
---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 19, 2021 |
May 31, 2021 |
Feb. 28, 2021 |
|
Class Of Stock [Line Items] | |||||
Shares issued price per share | $ 1.00 | ||||
Proceeds from sale of membership unit | $ 0 | $ 1,778 | |||
Class V common stock | |||||
Class Of Stock [Line Items] | |||||
Common stock, shares authorized | 42,747,890 | 42,747,890 | 40,000,000 | 40,000,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock voting rights, description | These shares have no economic value but entitle the holder to one vote per share | ||||
Common stock, terms of conversion, description | The holders of Common Units are entitled to Class V common stock on a one for one basis. |
Noncontrolling Interests - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 06, 2021 |
Jun. 08, 2021 |
Aug. 31, 2021 |
Aug. 31, 2021 |
Feb. 28, 2021 |
||||||
Minority Interest [Line Items] | ||||||||||
Number of Common Units redeemed | 1,615,326 | 1,615,326 | ||||||||
Cash payment for redemption of Common Units | $ 16.8 | $ 16.8 | ||||||||
Common units , issued | 103,929 | |||||||||
Decrease to noncontrolling interests | $ 44.0 | $ 44.0 | ||||||||
Class A ordinary shares | ||||||||||
Minority Interest [Line Items] | ||||||||||
Conversion of stock, shares issued | 2,623,409 | 8,120,273 | 8,120,273 | [1] | ||||||
Conversion of stock, amount issued | $ 27.2 | |||||||||
Common Stock Series 1 RSUs [Member] | ||||||||||
Minority Interest [Line Items] | ||||||||||
Noncontrolling Interest Number Of Common Units Vested | 4,379,557 | |||||||||
Class V common stock | ||||||||||
Minority Interest [Line Items] | ||||||||||
Conversion of stock, shares issued | [2] | 4,379,557 | ||||||||
Noncontrolling Interest Number Of Common Units Vested | 4,379,557 | |||||||||
E2open Holdings, LLC | ||||||||||
Minority Interest [Line Items] | ||||||||||
Noncontrolling interest percentage | 15.80% | 15.80% | 16.00% | |||||||
Noncontrolling interest number of common units held by participants | 35,900,000 | 35,900,000 | 35,600,000 | |||||||
E2open Holdings, LLC | Class A ordinary shares | ||||||||||
Minority Interest [Line Items] | ||||||||||
Conversion of stock, shares issued | 1 | |||||||||
E2open Holdings, LLC | Class V common stock | ||||||||||
Minority Interest [Line Items] | ||||||||||
Conversion of stock, shares issued | 1 | |||||||||
|
Other Comprehensive (Loss) Income - Accumulated Other Comprehensive Income in Equity Section of Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Feb. 28, 2021 |
Feb. 29, 2020 |
---|---|---|---|
Statement Of Other Comprehensive Income [Abstract] | |||
Foreign currency translation adjustment | $ (2,660) | $ 2,388 | |
Accumulated other comprehensive income | $ (2,660) | $ 2,388 | $ 2,388 |
Earnings Per Share - Summary of Basic and Diluted Per Share Computations for Net Income (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 31, 2021 |
May 31, 2021 |
Aug. 31, 2020 |
May 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Numerator - basic: | ||||||
Net loss | $ (23,988) | $ (169,355) | $ (17,540) | $ (23,752) | $ (193,343) | $ (41,292) |
Less: Net loss attributable to noncontrolling interest | (3,471) | (30,568) | ||||
Net loss attributable to E2open Parent Holdings, Inc. | (20,517) | (162,775) | ||||
Numerator - diluted: | ||||||
Net loss attributable to E2open Parent Holdings, Inc. - basic | (20,517) | (162,775) | ||||
Net loss attributable to E2open Parent Holdings, Inc. - diluted | $ (20,517) | $ (162,775) | ||||
Numerator - basic: | ||||||
Weighted average shares outstanding - basic | 195,148 | 191,099 | ||||
Net income per share - basic | $ (0.11) | $ (0.85) | ||||
Numerator - diluted: | ||||||
Weighted average shares outstanding - basic | 195,148 | 191,099 | ||||
Weighted average effect of dilutive securities: | ||||||
Weighted average shares outstanding - diluted | 195,148 | 191,099 | ||||
Diluted net income per common share | $ (0.11) | $ (0.85) |
Earnings Per Share - Summary of Weighted Average Potential Common Shares Excluded from Diluted Loss Per Common Shares (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2021 |
|||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Units/Shares excluded from the dilution computation | 78,392,858 | 75,958,857 | ||
Series B-1 | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Units/Shares excluded from the dilution computation | 86 | 43 | ||
Series B-2 | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Units/Shares excluded from the dilution computation | 3,372,184 | 3,372,184 | ||
Series 2 RCUs | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Units/Shares excluded from the dilution computation | 2,627,724 | 2,627,724 | ||
Warrants | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Units/Shares excluded from the dilution computation | [1] | 29,079,972 | 29,079,972 | |
Common Units | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Units/Shares excluded from the dilution computation | 38,670,936 | 37,153,808 | ||
Options | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Units/Shares excluded from the dilution computation | 2,583,320 | 2,583,320 | ||
Restricted Stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Units/Shares excluded from the dilution computation | 2,058,636 | 1,141,806 | ||
|
Share-Based and Unit-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 11 Months Ended | ||||
---|---|---|---|---|---|---|---|
Feb. 29, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Feb. 03, 2021 |
Feb. 28, 2021 |
|
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Nonvested award, cost not yet recognized, period for recognition | 1 year | ||||||
Compensation expense | $ 0 | $ 0 | |||||
Aggregate fair value of units vested | $ 1,400 | $ 2,800 | |||||
Unrecognized compensation expense | $ 5,400 | ||||||
Performance Based Restricted Stock Units | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Number of unvested shares | 1,003,584 | 1,003,584 | |||||
RSUs | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Vesting period | 10 years | ||||||
RSUs | Time-Based Units | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Number of unvested shares | 1,054,765 | 1,054,765 | |||||
Senior Management | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Organic growth target | 1 year | ||||||
Vesting period | 3 years | ||||||
Executives, Senior Management and Employees | Time-Based Units | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Vesting period | 3 years | ||||||
Executives, Senior Management and Employees | Performance Based Restricted Stock Units | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Organic growth target | 1 year | ||||||
Vesting period | 3 years | ||||||
Performance target percentage | 100.00% | ||||||
Non-Employee Directors | Time-Based Units | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Vesting period | 1 year | ||||||
2021 Incentive Plan | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Options available for grant | 2,583,000 | ||||||
Unrecognized compensation cost | $ 5,100 | $ 5,100 | |||||
Options outstanding | 2,583,000 | 2,583,000 | 0 | ||||
Weighted-average contractual life of options outstanding | 9 years 6 months | ||||||
2021 Incentive Plan | RSUs | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Unrecognized compensation cost | $ 24,000 | $ 24,000 | |||||
Number of unvested shares | 2,058,000 | 2,058,000 | 0 | ||||
2021 Incentive Plan | Class A ordinary shares | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Common stock reserved for issuance | 15,000,000 | 15,000,000 | |||||
Shares available for grant | 10,358,331 | 10,358,331 | |||||
2015 Plan | Unit Options | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Options outstanding | 22,001,000 | 20,424,000 | 20,424,000 | ||||
Weighted-average contractual life of options outstanding | 1 year 10 months 24 days | 1 year 4 months 24 days | |||||
2015 Plan | Restricted Equity Plan | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Shares available for grant | 0 | ||||||
Number of shares authorized to issue | 32,000,000.0 | ||||||
Outstanding restricted units | 22,000,000.0 | 22,000,000.0 | |||||
Number of unvested shares | 8,955,000 | 7,026,000 | 7,026,000 | ||||
2015 Plan | Restricted Equity Plan | Time-Based Units | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Vesting period | 4 years | ||||||
Vesting percentage | 25.00% | ||||||
2015 Plan | Unit Options | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Options available for grant | 0 | ||||||
Shares available for grant | 2,700,000 | ||||||
Unrecognized compensation cost | $ 2,400 | ||||||
Number of shares authorized to issue | 46,000,000.0 | 46,000,000.0 | |||||
Options outstanding | 19,900,000 | ||||||
Nonvested award, cost not yet recognized, period for recognition | 1 year 1 month 6 days | ||||||
Weighted-average contractual life of options outstanding | 6 years 8 months 12 days | ||||||
Weighted-average contractual life of options exercisable | 6 years 4 months 24 days | ||||||
Compensation expense | $ 0 | $ 0 | |||||
2015 Plan | Unit Options | Time-Based Units | |||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||||||
Vesting period | 4 years | ||||||
Vesting percentage | 25.00% |
Share-Based and Unit-Based Compensation - Summary of Activity under the 2021 Incentive Plan Related to Options (Details) - 2021 Incentive Plan |
6 Months Ended |
---|---|
Aug. 31, 2021
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of Shares, Beginning balance | shares | 0 |
Number of Shares, Granted | shares | 2,583,000 |
Number of Shares, Ending balance | shares | 2,583,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted Average Exercise Price Per Share, Beginning balance | $ / shares | $ 0 |
Share Based Compensation Arrangements By Share Based Payment Award Options Grants In Period Weighted Average Exercise Price | $ / shares | 9.86 |
Weighted Average Exercise Price Per Share, Ending balance | $ / shares | $ 9.86 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted Average Remaining Contractual Term (in years) | 9 years 6 months |
Share-Based and Unit-Based Compensation - Schedule of Activity under the 2021 Incentive Plan Related to RSUs (Details) - 2021 Incentive Plan - RSUs |
6 Months Ended |
---|---|
Aug. 31, 2021
$ / shares
shares
| |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |
Number of Shares, Beginning balance | shares | 0 |
Number of Shares, Granted | shares | 2,105,000 |
Number of Shares, Forfeited | shares | (47,000) |
Number of Shares, Ending balance | shares | 2,058,000 |
Number of Shares, Awards not vested, Beginning balance | $ / shares | $ 0 |
Weighted Average Market Value Per Share, Granted | $ / shares | 12.84 |
Weighted Average Market Value Per Share, Forfeited | $ / shares | 12.87 |
Weighted Average Market Value Per Share, Ending balance | $ / shares | $ 12.84 |
Weighted Average Remaining Contractual Term (in years) | 3 years 1 month 6 days |
Share-Based and Unit-Based Compensation - Summary of Estimated Grant-Date Fair Values Assumptions (Details) |
6 Months Ended |
---|---|
Aug. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Expected term (in years) | 6 years 3 months |
Expected equity price volatility, minimum | 46.39% |
Expected equity price volatility, maximum | 46.65% |
Risk-free interest rate, minimum | 0.96% |
Risk-free interest rate, maximum | 1.12% |
Expected dividend yield | 0.00% |
Share-Based and Unit-Based Compensation - Summary of Unit Option Plan (Details) - 2015 Plan - Unit Options - $ / shares shares in Thousands |
6 Months Ended | |
---|---|---|
Feb. 29, 2020 |
Aug. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of Shares, Beginning balance | 22,001 | |
Number of Units, Exercised | (1,290) | |
Number of Units, Forfeited | (287) | |
Number of Shares, Ending balance | 22,001 | 20,424 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Weighted Average Exercise Price Per Share, Beginning balance | $ 1.51 | |
Weighted Average Exercise Price Per Unit, Exercised | 1.45 | |
Weighted Average Exercise Price Per Unit, Forfeited | 1.64 | |
Weighted Average Exercise Price Per Share, Ending balance | $ 1.51 | $ 1.51 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted Average Remaining Contractual Term (in years) | 1 year 10 months 24 days | 1 year 4 months 24 days |
Share-Based and Unit-Based Compensation - Schedule of Restricted Equity Plan (Details) - 2015 Plan - Restricted Equity Plan - $ / shares shares in Thousands |
6 Months Ended | |
---|---|---|
Feb. 29, 2020 |
Aug. 31, 2020 |
|
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Number of Shares, Beginning balance | 8,955 | |
Number of Units, Released | (1,929) | |
Number of Shares, Ending balance | 8,955 | 7,026 |
Weighted Average Grant Date Fair Value Per Unit, Beginning balance | $ 1.40 | |
Weighted Average Grant Date Fair Value Per Unit, Released | 1.48 | |
Weighted Average Grant Date Fair Value Per Unit, Ending balance | $ 1.40 | $ 1.38 |
Weighted Average Remaining Term (in years) | 1 year 6 months | 9 months 18 days |
Share-Based and Unit-Based Compensation - Schedule of Functional Classification in the Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based and unit-based compensation | $ 2,509 | $ 1,971 | $ 4,552 | $ 4,017 |
Cost of Revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based and unit-based compensation | 257 | 115 | 457 | 225 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based and unit-based compensation | 374 | 123 | 697 | 292 |
Sales and Marketing Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based and unit-based compensation | 478 | 185 | 760 | 376 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total share-based and unit-based compensation | $ 1,400 | $ 1,548 | $ 2,638 | $ 3,124 |
Leases - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Lessee Lease Description [Line Items] | ||||
Right-of-use (ROU) operating asset | $ 22,400 | $ 19,266 | ||
Lease liability | 23,000 | $ 19,763 | ||
Change to retained earnings | 0 | |||
Office lease, impairment loss | 600 | |||
Operating lease expiration date | 2029-08 | |||
Operating lease, existence of option to extend | true | |||
Lease deposit | $ 2,900 | $ 3,000 | ||
Financing lease expiration date | 2024-08 | |||
Rent expense recognized under ASC Topic 840 | $ 2,100 | $ 4,300 | ||
Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease extended term | 2 years | |||
Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Operating lease extended term | 5 years |
Leases - Classifications of Estimated ROU Assets, Net and Lease Liabilities (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Lease Cost [Abstract] | ||
Right-of-use (ROU) operating asset | $ 19,266 | $ 22,400 |
Finance lease right-of-use asset | $ 5,117 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentMember | |
Total right-of-use assets | $ 24,383 | |
Operating lease liability - current | 4,788 | |
Operating lease liability | 14,975 | |
Finance lease liability - current | 2,406 | 4,827 |
Finance lease liability | 2,211 | $ 6,588 |
Total lease liabilities | $ 24,380 |
Leases - Summary of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Aug. 31, 2021 |
Aug. 31, 2021 |
|
Finance lease cost: | ||
Amortization of right-of-use asset | $ 398 | $ 1,591 |
Interest on lease liability | 287 | 417 |
Finance lease cost | 685 | 2,008 |
Operating lease cost: | ||
Operating lease cost | 1,143 | 2,492 |
Variable lease cost | 1,178 | 1,979 |
Sublease income | (359) | (533) |
Operating net lease cost | 1,962 | 3,938 |
Total net lease cost | $ 2,647 | $ 5,946 |
Leases - Supplemental Cash Flow Information Related to Leases (Details) $ in Thousands |
6 Months Ended |
---|---|
Aug. 31, 2021
USD ($)
| |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash outflows from operating leases | $ 3,197 |
Leases - Weighted-average Remaining Lease Terms and Discount Rates of Leases (Details) |
Aug. 31, 2021 |
---|---|
Leases [Abstract] | |
Weighted-average remaining lease term (in years): Finance lease | 1 year 11 months 23 days |
Weighted-average remaining lease term (in years): Operating lease | 5 years 2 months 12 days |
Weighted-average discount rate: Finance lease | 9.20% |
Weighted-average discount rate: Operating lease | 4.43% |
Leases - Undiscounted Future Cash Flows Utilized in Calculation of Lease Liabilities (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Feb. 28, 2021 |
---|---|---|
Operating Leases | ||
September 1, 2021 to February 28, 2022 | $ 2,787 | |
2023 | 4,970 | |
2024 | 4,200 | |
2025 | 3,125 | |
2026 | 2,450 | |
Thereafter | 4,616 | |
Total | 22,148 | |
Less: Present value discount | (2,385) | |
Lease liabilities | 19,763 | $ 23,000 |
Finance Leases | ||
September 1, 2021 to February 28, 2022 | 638 | |
2023 | 2,271 | |
2024 | 2,104 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total | 5,013 | |
Less: Present value discount | (396) | |
Lease liabilities | $ 4,617 |
Leases - Schedule of Future Minimum Payments Under Non-cancelable Operating Leases (Details) $ in Thousands |
Aug. 31, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
2022 | $ 8,507 |
2023 | 6,540 |
2024 | 5,555 |
2025 | 4,204 |
2026 | 3,218 |
Thereafter | 5,434 |
Total minimum lease payments | $ 33,458 |
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Feb. 28, 2021 |
|
Income Tax Disclosure [Abstract] | |||||
Provision for income taxes | $ 5,994 | $ 6,218 | $ 7,372 | $ 14,388 | |
Effective tax rate | 33.30% | 54.90% | 4.00% | 53.50% | |
Decrease in effective tax rate | 21.60% | 49.50% | |||
Gross unrecognized tax benefits | $ 2,700 | $ 2,700 | $ 2,700 | ||
Unrecognized tax benefits, gross interest and penalties accrued | $ 300 | $ 300 | $ 300 |
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
Oct. 11, 2021 |
Oct. 01, 2021 |
Sep. 10, 2021 |
Sep. 01, 2021 |
Sep. 29, 2021 |
Aug. 31, 2021 |
Feb. 28, 2021 |
Feb. 04, 2021 |
---|---|---|---|---|---|---|---|---|
Subsequent Event [Line Items] | ||||||||
Line of credit, maximum borrowing capacity | $ 75,000 | |||||||
2021 Term Loan | ||||||||
Subsequent Event [Line Items] | ||||||||
Line of credit, maximum borrowing capacity | $ 0 | $ 525,000 | ||||||
Subsequent Event | 2021 Term Loan | ||||||||
Subsequent Event [Line Items] | ||||||||
Line of credit, maximum borrowing capacity | $ 15,000 | |||||||
Subsequent Event | Service Based Restricted Stock Units | Executives and Senior Management | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of Shares, Granted | 180,068 | |||||||
Grant Date Fair Value Per Share | $ 11.94 | |||||||
Vesting period | 3 years | |||||||
Subsequent Event | Service Based Restricted Stock Units | Senior Management And Employees | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of Shares, Granted | 111,506 | |||||||
Grant Date Fair Value Per Share | $ 11.30 | |||||||
Vesting period | 3 years | |||||||
Subsequent Event | Class A | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion of stock, shares converted | 194,379 | 958,539 |
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