0001558370-21-003017 | 10-K | XBRL Viewer

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Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
Document and Entity Information - USD ($) $ in Thousands	Dec. 31, 2020	Mar. 11, 2021	Jun. 30, 2020
Document Information:
Document Type	10-K
Document Period End Date	Dec. 31, 2020
Entity Registrant Name	Vertex, Inc.
Title of 12(b) Security	Class A Common Stock, Par Value $0.001 Per Share
Trading Symbol	VERX
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Public Float			$ 0
Entity Central Index Key	0001806837
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
Class A
Document Information:
Entity Common Stock, Shares Outstanding		26,327,441
Class B
Document Information:
Entity Common Stock, Shares Outstanding		120,117,000

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 303,051	$ 75,903
Funds held for customers	9,222	7,592
Accounts receivable, net of allowance of $8,592, and $7,515	77,159	70,367
Prepaid expenses and other current assets	13,259	11,695
Total current assets	402,691	165,557
Property and equipment, net of accumulated depreciation	56,557	54,727
Capitalized software, net of accumulated amortization	31,989	32,075
Goodwill and other intangible assets	18,711
Deferred commissions	11,743	11,196
Deferred income tax asset	29,974	219
Other assets	3,263	849
Total assets	554,928	264,623
Current liabilities:
Current portion of long-term debt	882	50,804
Accounts payable	8,876	10,729
Accrued expenses	19,176	13,308
Distributions payable	2,700	13,183
Customer funds obligations	9,235	7,553
Accrued salaries and benefits	17,326	15,195
Accrued variable compensation	22,372	22,237
Deferred compensation, current	2,057	8,935
Deferred revenue	207,560	191,745
Deferred rent and other	939	840
Purchase Commitment Liability, current	845
Total current liabilities	291,968	334,529
Deferred compensation, net of current portion	5,010	18,530
Deferred revenue, net of current portion	14,702	14,046
Long-term debt, net of current portion	225	682
Future acquisition commitment, net of current portion	8,905
Deferred other liabilities	8,632	9,268
Total liabilities	329,442	377,055
Commitments and contingencies (Note 12)
Options for redeemable shares		17,344
Stockholders' equity (deficit):
Additional paid in capital	206,541
Retained earnings (accumulated deficit)	21,926	(90,701)
Accumulated other comprehensive loss	(3,127)	(491)
Treasury stock		(38,638)
Total stockholders' equity (deficit)	225,486	(129,776)
Total liabilities and equity	554,928	264,623
Class A
Stockholders' equity (deficit):
Common stock, value issued
Common Stock, Value, Issued	26
Class B
Stockholders' equity (deficit):
Common stock, value issued		$ 54
Common Stock, Value, Issued	$ 120

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Allowance for accounts receivable	$ 8,592	$ 7,515
Preferred stock par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	30,000	0
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Class A
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	0	600
Common stock, shares authorized (in shares)	300,000	0
Common stock, shares issued (in shares)	0	300
Common stock, shares issued (in shares)	26,327	0
Common stock, shares outstanding (in shares)	0	147
Common stock, shares outstanding (in shares)	26,327	0
Class B
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	0	299,400
Common stock, shares authorized (in shares)	150,000	0
Common stock, shares issued (in shares)	0	162,297
Common stock, shares issued (in shares)	120,117	0
Common stock, shares outstanding (in shares)	0	120,270
Common stock, shares outstanding (in shares)	120,117	0

Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Revenues	$ 374,665	$ 321,500	$ 272,403
Cost of revenues:
Cost of revenues	165,387	110,378	95,698
Gross profit	209,278	211,122	176,705
Operating expenses:
Research and development	54,340	30,557	23,755
Selling and marketing	99,418	68,127	56,898
General and administrative	149,057	71,014	58,947
Depreciation and amortization	11,018	8,996	7,937
Impairment of asset			32,692
Other operating expense (income), net	203	573	(691)
Total operating expenses	314,036	179,267	179,538
(Loss) income from operations	(104,758)	31,855	(2,833)
Interest expense, net	3,111	953	1,594
Net income (loss) before income taxes	(107,869)	30,902	(4,427)
Income tax (benefit) expense	(28,932)	(155)	1,679
Net (loss) income	(78,937)	31,057	(6,106)
Other comprehensive loss (income) from foreign currency translation adjustments and revaluations, net of tax	2,636	(5)	355
Total comprehensive (loss) income	(81,573)	31,062	(6,461)
Loss before income taxes	(107,869)	30,902	(4,427)
Pro forma provision for income tax benefit	(27,507)
Proforma net loss	(80,362)
Software subscriptions
Revenues:
Revenues	316,763	275,629	235,663
Cost of revenues:
Cost of revenues	105,676	77,259	68,945
Services
Revenues:
Revenues	57,902	45,871	36,740
Cost of revenues:
Cost of revenues	59,711	33,119	26,753
Class A
Operating expenses:
Net (loss) income attributable to stockholders, basic	$ (6,660)	$ 23	$ (16)
Net (loss) income per share, basic	$ (0.60)	$ 0.20	$ (0.08)
Weighted average common stock, basic	11,096	118	210
Net (loss) income attributable to stockholders, diluted	$ (6,660)	$ 965	$ (16)
Net (loss) income per share, diluted	$ (0.60)	$ 0.25	$ (0.08)
Weighted average common stock, diluted	11,096	3,861	210
Proforma net loss	$ (6,780)
Weighted average common stock, basic and diluted	11,096
Pro forma net loss per share, basic and diluted	$ (0.61)
Class B
Operating expenses:
Net (loss) income attributable to stockholders, basic	$ (72,277)	$ 31,034	$ (6,090)
Net (loss) income per share, basic	$ (0.60)	$ 0.26	$ (0.05)
Weighted average common stock, basic	120,415	120,417	120,417
Net (loss) income attributable to stockholders, diluted	$ (72,277)	$ 30,092	$ (6,090)
Net (loss) income per share, diluted	$ (0.60)	$ 0.25	$ (0.05)
Weighted average common stock, diluted	120,415	120,417	120,417
Proforma net loss	$ (73,582)
Weighted average common stock, basic and diluted	120,415
Pro forma net loss per share, basic and diluted	$ (0.61)

Consolidated Statements of Changes in Equity - USD ($) shares in Thousands, $ in Thousands	Former Class A Common Stock	Former Class A	Former Class B Common Stock	Former Class B	Class A Common Stock	Class A	Class B Common Stock	Class B	Additional paid in capital.	Retained Earnings (Accumulated Deficit).	Accumulated Other Comprehensive Loss	Treasury stock	Total
Balance at Dec. 31, 2017			$ 54							$ (41,977)	$ (141)	$ (36,520)	$ (78,584)
Balance (in shares) at Dec. 31, 2017	147		120,270									41,283
Distributions declared										(38,916)			(38,916)
Remeasurement of options for redeemable shares										(1,027)			(1,027)
Exercise of stock options, net										(12)			(12)
Exercise of stock options, net (in shares)			402
Purchase of treasury stock												$ (1,277)	(1,277)
Purchase of treasury stock (in shares)			(402)									402
Foreign currency translation adjustments and revaluations, net of tax											(355)		(355)
Net (loss) income										(6,106)			(6,106)
Balance at Dec. 31, 2018			$ 54							(88,038)	(496)	$ (37,797)	(126,277)
Balance (in shares) at Dec. 31, 2018	147		120,270									41,685
Distributions declared										(30,857)			(30,857)
Remeasurement of options for redeemable shares										(2,763)			(2,763)
Exercise of stock options, net										(100)			(100)
Exercise of stock options, net (in shares)			225
Purchase of treasury stock												$ (841)	(841)
Purchase of treasury stock (in shares)			(225)									225
Foreign currency translation adjustments and revaluations, net of tax											5		5
Net (loss) income										31,057			31,057
Balance at Dec. 31, 2019			$ 54							(90,701)	(491)	$ (38,638)	(129,776)
Balance (in shares) at Dec. 31, 2019	147	147	120,270			0		0				41,910
Balance (in shares) at Jun. 30, 2020				120,443
Balance at Dec. 31, 2019			$ 54							(90,701)	(491)	$ (38,638)	(129,776)
Balance (in shares) at Dec. 31, 2019	147	147	120,270			0		0				41,910
Distributions declared										(132,901)			(132,901)
Exercise of stock options prior to Offering										53			53
Exercise of stock options prior to Offering (in shares)			173
Remeasurement of options for redeemable shares									$ (21,954)	(29,879)			(51,833)
Reclassification of options for redeemable shares									69,177				69,177
Recapitalization prior to Offering			$ (54)				$ 120		(38,704)			$ 38,638
Recapitalization prior to Offering (in shares)	(147)		(120,443)		173		120,417					(41,910)
Reclassification of SAR liability to equity in connection with the Offering									143,519				143,519
Auto-exercised stock options in connection with Offering					$ 1				(13,809)				(13,808)
Auto-exercised stock options in connection with Offering (in shares)					564
Shares issued in connection with Offering, net of Offering costs					$ 24				416,778				416,802
Shares issued in connection with Offering (in shares)					23,812
Exercise of stock options in connection with the Offering									(7,023)				(7,023)
Exercise of stock options in connection with the Offering (in shares)					510
Vested restricted stock issued in connection with Offering									361				361
Vested restricted stock issued in connection with Offering (in shares)					19
Exercise of stock options, net					$ 1				1,687				1,688
Exercise of stock options, net (in shares)					890
Stock-based compensation expense from equity-classified awards under the 2020 Plan									12,576				12,576
Shares issued under ESPP					$ 59				957				957
Distributions paid or payable in connection with Tax Sharing Agreement									(2,733)				(2,733)
Class B shares exchanged for Class A shares (in shares)					300		(300)
Reclassification of accumulated S Corporation earnings									(354,291)	354,291
Foreign currency translation adjustments and revaluations, net of tax											(2,636)		(2,636)
Net (loss) income										(78,937)			(78,937)
Balance at Dec. 31, 2020					$ 26		$ 120		$ 206,541	$ 21,926	$ (3,127)		$ 225,486
Balance (in shares) at Dec. 31, 2020					26,327	26,327	120,117	120,117

Consolidated Statements of Changes in Equity (Parenthetical) - Options for redeemable shares - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Options for redeemable shares
Balance Bgn	$ 17,344	$ 14,581	$ 13,554
Remeasurement of options for redeemable shares	51,833	2,763	1,027
Reclassification of options for redeemable shares	$ (69,177)
Balance End		$ 17,344	$ 14,581

- Definition

Carrying amount, attributable to parent and noncontrolling interests, of an entity's issued and outstanding stock which is not included within permanent equity. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. Includes stock with a put option held by an ESOP and stock redeemable by a holder only in the event of a change in control of the issuer.

+ References + Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net (loss) income	$ (78,937)	$ 31,057	$ (6,106)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	32,215	25,190	24,901
Impairment of asset			32,692
Provision for subscription cancellations and non-renewals, net of Deferred Allowance	259	1,232	237
Amortization of deferred financing costs	373	266	266
Write-off of deferred financing costs	1,387
Stock-based compensation expense	147,904	9,460	5,108
Deferred income tax (benefit) provision	(29,643)	(848)	847
Redemption of Converted SARs	(22,889)
Other	107	43	52
Changes in operating assets and liabilities:
Accounts receivable	(6,762)	(10,116)	(16,958)
Prepaid expenses and other current assets	(1,541)	(809)	524
Deferred commissions	(547)	(2,366)	(3,154)
Accounts payable	(1,842)	3,868	3,397
Accrued expenses	4,568	2,539	1,566
Accrued and deferred compensation	(632)	5,318	2,060
Deferred revenue	17,557	27,168	35,196
Other	(2,034)	496	(179)
Net cash provided by operating activities	59,543	92,498	80,449
Cash flows from investing activities:
Acquisition of business, net of cash acquired (Note 2)	(11,570)
Property and equipment additions	(20,955)	(20,339)	(21,053)
Capitalized software additions	(11,850)	(17,221)	(12,261)
Net cash used in investing activities	(44,375)	(37,560)	(33,314)
Cash flows from financing activities:
Net increase in customer funds obligations	1,681	4,276	1,711
Proceeds from line of credit	12,500
Principal payments on line of credit	(12,500)
Proceeds from long-term debt	175,000
Principal payments on long-term debt	(226,251)	(5,566)	(3,284)
Payments for deferred financing costs, net	(2,436)
Proceeds from issuance of shares in connection with Offering	423,024
Payments for offering costs	(6,222)
Payments for taxes on exercised stock options	(14,813)
Purchase of treasury stock		(841)	(1,277)
Proceeds from purchases of stock under ESPP	957
Proceeds from exercise of stock options	8,808	68	177
Distributions to stockholders	(146,116)	(28,566)	(28,024)
Net cash provided by (used in) financing activities	213,632	(30,629)	(30,697)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(22)	12	(402)
Net increase in cash, cash equivalents and restricted cash	228,778	24,321	16,036
Cash, cash equivalents and restricted cash, beginning of period	83,495	59,174	43,138
Cash, cash equivalents and restricted cash, end of period	$ 312,273	$ 83,495	$ 59,174

Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of cash, cash equivalents and restricted cash to the Consolidated Balance Sheets, end of period:
Cash and cash equivalents	$ 303,051	$ 75,903	$ 55,838
Restricted cash—funds held for customers	9,222	7,592	3,336
Total cash, cash equivalents and restricted cash, end of period	$ 312,273	$ 83,495	$ 59,174	$ 43,138

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Vertex, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Amounts in thousands, except per share data)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Vertex, Inc. (“Vertex”) and its direct and indirect wholly owned subsidiaries (collectively, the “Company”) operate as solutions providers of state, local and value added tax calculation, compliance and analytics, offering software products which are sold through software license and software as a service (“cloud”) subscriptions. The Company also provides implementation and training services in connection with its software license and cloud subscriptions, transaction tax returns outsourcing, and other tax-related services. The Company sells to customers located throughout the United States of America (“U.S.”) and internationally.

Basis of Consolidation

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the accounts of the Company. All intercompany transactions have been eliminated in consolidation.

On January 7, 2020, the Company acquired a 60% controlling interest in Systax Sistemas Fiscais LTDA (“Systax”), a provider of Brazilian transaction tax content and software. Systax is considered a Variable Interest Entity (“VIE”) and its accounts have been included in the consolidated financial statements from the acquisition date. Systax was determined to be a VIE as Vertex is the primary beneficiary of the equity interests in Systax and participates significantly in the variability in the fair value of Systax’s net assets. Although Vertex does not have full decision-making authority as it is shared with the minority interest owners, as the minority interest owners are considered a related party, Vertex is considered the most closely associated party to Systax and is required to consolidate. Systax’s assets may only be used to settle its own obligations and this will continue until such time as Vertex owns 100% of the VIE. As of December 31, 2020, the consolidated net assets of Systax, inclusive of goodwill and intangible assets recognized under purchase accounting, were $18,721. Vertex is at risk to the extent of its current 60% ownership of Systax, which risk will increase over time in proportion to increases in percentage ownership as Vertex exercises its future share purchase commitment through 2024. See Note 2.

Registration of Company Stock and Initial Public Offering

On July 28, 2020, the Company filed its amended and restated certificate of incorporation with the Delaware Secretary of State to: (i) effect a three-for-one forward stock split (the “Stock Split”); (ii) establish a new capital structure for the Company (the “New Capital Structure”); and (iii) effect a share exchange (the “Share Exchange”) (collectively, the “Recapitalization”). The Stock Split resulted in each one share owned by a stockholder being exchanged for three shares of common stock, and the number of shares of the Company’s common stock issued and outstanding was increased proportionately based on the Stock Split. After the Stock Split, the Share Exchange occurred, resulting in stockholders of record exchanging their existing Class A and Class B common stock (“former Class A” and “former Class B”, respectively) for newly created shares of Class A and Class B common stock (“Class A” and “Class B”, respectively) issued in connection with the New Capital Structure. The effect of the Stock Split and the Share Exchange are recognized retrospectively in the consolidated financial statements.

The Company’s Registration Statement on Form S-1 with the Securities and Exchange Commission (“SEC”) was declared effective on July 28, 2020, resulting in the Class A shares being registered and available for trading on the NASDAQ exchange (the “Offering”).

On July 31, 2020, the Company received $423,024 in proceeds from the sale of 23,812 shares of Class A at a public offering price of $19.00 per share, net of underwriting fees, and used a portion of the proceeds to pay off $175,000 in outstanding debt. The net proceeds remaining after payment of Offering costs are being used for working capital and other corporate purposes.

Segments

The Company operates its business as one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company’s CODM allocates resources and assesses performance based upon discrete financial information at the consolidated level.

For the years ended December 31, 2020, 2019 and 2018 approximately 5%, 4% and 4%, respectively, of the Company’s revenues were generated outside of the U.S. As of December 31, 2020, $287 of the Company’s property and equipment assets were held outside of the U.S. As of December 31, 2019, none of the Company’s property and equipment assets were held outside the U.S.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, funds held for customers, accounts receivable and investment securities.

The Company maintains the majority of its cash and cash equivalent balances and funds held for customers in four banks. These amounts exceed federally insured ("FDIC") limits. The Company periodically evaluates the creditworthiness of the banks. The Company has not experienced any losses in these accounts and believes they are not exposed to significant credit risk on such accounts.

The Company does not require collateral from its customers. Allowances are maintained for subscription cancellations. Credit risk related to accounts receivable is limited due to the industry and geographic diversity within the Company's customer base. No single customer accounted for more than 10% of revenues for the years ended December 31, 2020, 2019 and 2018.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a measurement date. A three-level fair value hierarchy (the “Fair Value Hierarchy”) prioritizes the inputs used to measure fair value. The Fair Value Hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. Classification in the Fair Value Hierarchy is based on the lowest of the following levels that is significant to the measurement:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3: Inputs are unobservable inputs based on the Company’s assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The Company’s assessment of the significance of an input to a fair value measurement requires judgment, which may affect the determination of fair value and the measurement’s classification within the Fair Value Hierarchy. The Company may exercise considerable judgment when estimating fair value, particularly when evaluating what assumptions market participants would likely make. The use of different assumptions or estimation methodologies could have a material effect on the estimated fair values.

Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses during the reporting period. Significant estimates used in preparing these consolidated financial statements include: (i) the estimated allowance for subscription cancellations, (ii) the reserve for self-insurance, (iii) assumptions related to achievement of technological feasibility for software developed for sale, (iv) product life cycles, (v) estimated useful lives and potential impairment of long-lived assets, intangible assets and goodwill, (vi) determination of the fair value of tangible and intangible assets acquired, liabilities assumed and consideration transferred in an acquisition, (vii) amortization period of material rights and deferred commissions (viii) valuation of the Company’s stock used to measure stock-based compensation awards, (ix) Black-Scholes-Merton option pricing model (“Black-Scholes model”) input assumptions used to determine the fair value of stock-based compensation awards, and (x) the potential outcome of future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. Actual results may differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an initial maturity date of three months or less to be cash equivalents. Funds held as investments in money market funds are included within cash and cash equivalents.

In accordance with ASU No. 2016-18, Restricted Cash, the Company presents changes in restricted cash in the cash flow statement.

Funds Held for Customers

Funds held for customers in the consolidated balance sheets represents customer funds advanced for transaction tax returns outsourcing. Funds held for customers are restricted for the sole purpose of remitting such funds to satisfy obligations on behalf of such customers and are deposited at FDIC-insured institutions. Customer obligations are included in current liabilities in the consolidated balance sheets, as the obligations are expected to be settled within one year.

Property and Equipment

Property and equipment are stated at cost or fair value when acquired and presented net of accumulated depreciation. Normal maintenance and repairs are charged to expense, while major renewals and betterments are capitalized. Assets under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets and are depreciated over the shorter of the asset’s useful life or lease term.

Depreciation and amortization are computed straight-line over the estimated useful lives of the assets, as follows:


Leasehold improvements		1 - 12 years
Internal-use software developed		3 - 5 years
Computer software purchased		3 - 7 years
Equipment		3 - 10 years
Furniture and fixtures		7 - 10 years

Software Development Costs

Internal-Use Software

The Company follows Accounting Standard Codification (“ASC”) 350‑40, Goodwill and Other, Internal-Use Software, to account for development costs incurred for the costs of computer software developed or obtained for internal use. ASC 350‑40 requires such costs to be capitalized once certain criteria are met. Capitalized internal-use software costs are primarily comprised of direct labor, related expenses and initial software licenses. ASC 350‑40 includes specific guidance on costs not to be capitalized, such as overhead, general and administrative and training costs. Internal-use software includes software utilized for cloud-based solutions as well as software for internal systems and tools. Costs are capitalized once the project is defined, funding is committed and it is confirmed the software will be used for its intended purpose. Capitalization of these costs concludes once the project is substantially complete and the software is ready for its intended purpose. Post-configuration training and maintenance costs are expensed as incurred. Internal-use software is included in internal-use software developed in property and equipment in the consolidated balance sheets once available for its intended use. Depreciation expense for internal-use software utilized for cloud-based customer solutions and for software for internal systems and tools is included in cost of revenues, software subscriptions and depreciation and amortization, respectively, in the consolidated statements of comprehensive income (loss).

Software Developed for Sale

The costs incurred for the development of computer software to be sold, leased, or otherwise marketed are capitalized in accordance with ASC 985‑20, Costs of Software to be Sold, Leased or Marketed, when technological feasibility has been established. Technological feasibility generally occurs when all planning, design, coding and testing activities are completed that are necessary to establish that the product can be produced to meet its design specifications, including functions, features and technical performance requirements. The establishment of technological feasibility is an ongoing assessment of judgment by management with respect to certain external factors, including, but not limited to, anticipated future revenues, estimated economic life and changes in technology. Capitalized software includes direct labor and related expenses for software development for new products and enhancements to existing products and acquired software.

Amortization of capitalized software development costs begins when the product is available for general release. Amortization is provided on a product-by-product basis using the straight-line method over periods between 3 to 5 years. Unamortized capitalized software development costs determined to be in excess of the net realizable value of the product are expensed immediately.

Capitalized software costs are subject to an ongoing assessment of recoverability based on anticipated future revenues and changes in software technologies at least annually at December 31, and whenever events or circumstances make it more likely than not that impairment may have occurred. In the event of impairment, unamortized capitalized software costs are compared to the net realizable value of the related product and the carrying value of the related assets are written down to the net realizable value to the extent the unamortized capitalized costs exceed such value. The net realizable value is the estimated future gross revenues from the related product reduced by the estimated future costs of completing and disposing of such product, including the costs of providing related maintenance and customer support.

Assessment of Long-Lived Assets

The Company reviews the carrying value of long-lived assets, including internal-use software, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Whenever such events or circumstances are present, an impairment loss equal to the excess of the asset carrying value over its fair value, if any, is recorded.

Business Combinations

Upon acquisition of a company, the Company determines if the transaction is a business combination, which is accounted for using the acquisition method of accounting. Under the acquisition method, once control is obtained of a business, the assets acquired, liabilities assumed, consideration transferred and amounts attributed to noncontrolling interests, are recorded at fair value. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired, liabilities assumed, consideration transferred and amounts attributed to noncontrolling interests at the acquisition date. One of the most significant estimates relates to the determination of the fair value of these assets and liabilities. The determination of the fair values is based on estimates and judgments made by management. The Company’s estimates of fair value are based upon assumptions it believes to be reasonable, but which are inherently uncertain and unpredictable. Measurement period adjustments to these values as of the acquisition date are reflected at the time identified, up through the conclusion of the measurement period, which is the time at which all information for determination of the values of assets acquired, liabilities assumed, consideration transferred and noncontrolling interests is received, and is not to exceed one year from the acquisition date (the “Measurement Period "). The Company may record adjustments to the fair value of these tangible and intangible assets acquired, liabilities assumed, consideration transferred and noncontrolling interests, with the corresponding offset to goodwill. Additionally, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluate these estimates and assumptions periodically and record any adjustments to preliminary estimates to goodwill, provided the Company is within the Measurement Period, with any adjustments to amortization of new or previously recorded identifiable intangibles being recorded to the consolidated statements of comprehensive income (loss) in the period in which they arise. In addition, if outside of the Measurement Period, any subsequent adjustments to the acquisition date fair values are recorded to the consolidated statements of comprehensive income (loss) in the period in which they arise.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. The Company evaluates goodwill for impairment annually at October 1 and whenever events or circumstances make it more likely than not that impairment may have occurred.

During the fourth quarter of 2020, the Company initiated a change in its method of applying an accounting principle and changed the date of its annual impairment test from December 31 to October 1. The change from our fiscal year end to such earlier date was preferrable to management in order to afford additional time to more effectively administer the assessment, including to facilitate interactions with third-party specialists, and in order to complete the year end closing process in a timelier fashion. Management has assessed that the change had no impact on the consolidated financial statements as of and for the year ended December 31, 2020. Had this change in accounting principle been applied in periods prior to 2020, it would have had no impact as the Company had no recognized goodwill.

The Company has determined that its business comprises one reporting unit. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, in which case a quantitative impairment test is not required.

As provided for by Accounting Standards Update (“ASU”) 2017-04, Simplifying the Test for Goodwill Impairment, the quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the fair value up to the amount of goodwill allocated to the reporting unit. Income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit are considered when measuring the goodwill impairment loss, if applicable.

Deferred Financing Costs

The Company capitalizes costs related to obtaining, renewing or extending loan agreements and amortizes these costs on a straight-line basis, which approximates the effective interest method, over the life of the loan. Deferred financing costs related to outstanding borrowings under bank debt are reflected as a reduction of current portion of long-term debt and long-term debt, net of current portion. Deferred financing costs related to undrawn debt are reflected in other assets in the consolidated balance sheets in accordance with ASC 835‑30, Interest—Imputation of Interest.

Stock-Based Compensation

On the effective date of the Offering, the Company adopted the 2020 Incentive Award Plan (the “2020 Plan”) and the 2020 Employee Stock Purchase Plan (the “ESPP”), which provides for the award of stock appreciation rights (“SARs”) stock options (“options”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and participation in the ESPP (collectively, the "awards"), which are subject to guidance set forth in ASC 718, Compensation—Stock Compensation, ("ASC 718") for the award of equity-based instruments.

The provisions of ASC 718 require a company to measure the fair value of stock-based compensation as of the grant date of the award. Stock-based compensation expense reflects the cost of employee services received in exchange for the awards.

SARs are accounted for as liabilities under ASC 718 and, as such, the Company recognizes stock-based compensation expense by remeasuring the value of the SARs at the end of each reporting period and accruing the portion of the requisite service rendered at that date. Prior to July 2, 2020, the date management determined the Company was considered to have become a public entity, the Company measured SARs based on their intrinsic value which reflected the difference between the fair value of the Company’s former Class B common stock at the reporting date less the grant date fair value of the underlying shares as this was the value the SAR participant could derive from exercise of the SAR award. Prior to the Offering, the fair value of the Company’s common stock was determined periodically by the board of directors (the “Board”) with the assistance of management and a third-party valuation firm. Upon becoming a public entity, and up to the effective date of the Offering, management remeasured outstanding SARs using the fair value-based method under ASC 718. See Note 10 for discussion of the impact of the resulting change in accounting policy. Outstanding SARs are included in deferred compensation, current and deferred compensation, net of current portion in the consolidated balance sheets.

Stock-based compensation expense for new options issued under the 2020 Plan after the Offering is measured based on the grant date fair value of the award and is estimated using the Black-Scholes model. Compensation cost is recognized on a straight-line basis over the requisite service or performance period associated with the award.

Stock-based compensation expense for RSAs and RSUs is based on the fair value of the Company’s underlying common stock on the date of grant. Compensation cost is recognized on a straight-line basis over the requisite service or performance period associated with the award.

The ESPP permits participants to purchase Class A common stock through payroll deductions, up to a specified percentage of their eligible compensation or a lump sum contribution amount for the initial offering period (July 28 to November 30, 2020), subject to the plan’s maximum purchase provisions during the specified offering periods. The plan is a compensatory plan as it allows participants to purchase stock at a 15% discount from the lower of the fair value of the Class A common on the first or last day of the ESPP offering period (the “ESPP discount”). The ESPP is accounted for as an equity-classified award. Stock-based compensation expense for the ESPP is measured based on the fair value of the ESPP award at the start of the offering period. The fair value is comprised of the value of the ESPP discount and the value associated with the variability in the Class A common stock price during the offering period (the “Call/Put”), which is estimated using the Black-Scholes model. Compensation cost is recognized on a straight-line basis over the respective offering period.

The Company has elected to recognize award forfeitures as they occur.

Operating Leases and Deferred Rent

Rent expense for operating leases is recognized on a straight-line basis over the period of the related lease. For lease agreements that include future specific rent increases, rent concessions and/or tenant improvement allowances, the difference between the rent payments and the straight-line rent expense is included in deferred rent liability in the consolidated balance sheets.

Self-insurance

The Company is self-insured for the majority of its health insurance costs, including medical claims subject to certain stop-loss provisions. Management periodically reviews the adequacy of the Company’s stop-loss insurance coverage. The Company records an estimate of claims incurred but not reported, based on management’s judgment and historical experience. Self-insurance accruals are $1,766 and $1,473 at December 31, 2020 and 2019, respectively, and are reflected in accrued salaries and benefits in the consolidated balance sheets. Material differences may result in the amount and timing of insurance expense if actual experience differs significantly from management’s estimates.

Revenue Recognition

Revenue from contracts with customers

On January 1, 2018, the Company adopted ASU 2014‑09, Revenue from Contracts with Customers, (“ASC 606”). Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected to be received in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct, and accounted for as separate performance obligations. Revenue is recognized net of allowance for subscription and non-renewal cancellations and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Nature of goods and services

Licenses for on-premise software subscriptions provide the customer with a right to use the software as it exists when made available to the customer. Customers purchase a subscription to these licenses, which includes the related software and tax content updates (collectively “updates”) and product support. The updates and support, which are part of the subscription agreement, are essential to the continued utility of the software; therefore, the Company has determined the software and the related updates and support to be a single performance obligation. Accordingly, when on-premise software is licensed, the revenue associated with this combined performance obligation is recognized ratably over the license term as these subscriptions are provided for the duration of the license term. Revenue recognition begins on the later of the beginning of the subscription period or the date the software is made available to the customer to download. The Company’s on-premise software subscription prices in the initial subscription year are higher than standard renewal prices. The excess initial year price over the renewal price (“new sale premium”) is a material right that provides customers with the right to this reduced renewal price. The Company recognizes revenue associated with this material right over the estimated period of benefit to the customer, which is generally three years.

Cloud-based subscriptions allow customers to use Company-hosted software over the contract period without taking possession of the software. The cloud-based offerings also include related updates and support. Cloud-based contracts consistently provide a benefit to the customer during the subscription period; thus, the associated revenue is recognized ratably over the related subscription period. Revenue recognition begins on the later of the beginning of the subscription period or the date the customer is provided access to the cloud-based solutions.

Revenue from deliverable-based services is recognized as services are delivered. Revenue from fixed fee services is recognized as services are performed using the percentage of completion input method.

The Company has elected the "right to invoice" practical expedient for revenue related to services that are billed on an hourly basis, which enables revenue to be recognized as the services are performed.

The Company has determined that the methods applied to measuring its progress toward complete satisfaction of performance obligations recognized over time are a faithful depiction of the transfer of control of software subscriptions and services to customers.

Significant Judgments

Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Identification of the amortization periods of material rights and contract costs requires significant judgement by management.

Disaggregation of revenue

The table reflects revenue by major source for the following periods:


	For the Year Ended December 31,
		2020	2019		2018
Sources of revenues:
Software subscriptions	$	316,763	$	275,629	$	235,663
Services		57,902		45,871		36,740
Total revenues	$	374,665	$	321,500	$	272,403

Contract balances

Timing of revenue recognition may differ from the timing of invoicing customers. A receivable is recorded in the consolidated balance sheets when customers are billed related to revenue to be collected and recognized for subscription agreements as there is an unconditional right to invoice and receive payment in the future related to these subscriptions. A receivable and related revenue may also be recorded in advance of billings to the extent services have been performed and the Company has a right under the contract to bill and collect for such performance. Subscription-based customers are generally invoiced annually at the beginning of each annual subscription period. Accounts receivable is presented net of an allowance for potentially uncollectible accounts and estimated cancellations of software license and cloud-based subscriptions (the “allowance”) of $8,592 and $7,515 at December 31, 2020 and 2019, respectively. The allowance is based on management’s assessment of uncollectible accounts on a specific identification basis, with the estimate of potential cancellations being determined based on management’s review of historical cancellation rates.

The beginning and ending balances of accounts receivable, net of allowance, are as follows:


	For the Year Ended December 31,
	2020		2019
Balance, beginning of period	$	70,367	$	62,235
Balance, end of period		77,159		70,367
Increase, net	$	6,792	$	8,132

A contract liability is recorded as deferred revenue on the consolidated balance sheets when customers are billed in advance of performance obligations being satisfied, and revenue is recognized after invoicing ratably over the subscription period or over the amortization period of material rights. Deferred revenue is reflected net of a related deferred allowance for subscription cancellations (the “deferred allowance”) of $6,432 and $5,614 at December 31, 2020 and 2019, respectively. The deferred allowance represents the portion of the allowance for subscription cancellations associated with deferred revenue.

The beginning and ending balances of and changes to the allowance and the deferred allowance are as follows:


	For the Year Ended December 31,
	2020				2019				2018
	Balance			Net Change	Balance			Net Change	Balance			Net Change
Allowance balance, January 1	$	(7,515)			$	(5,527)			$	(4,320)
Allowance balance, December 31		(8,592)				(7,515)				(5,527)
Change in allowance			$	1,077			$	1,988			$	1,207
Deferred allowance balance, January 1		5,614				4,858				3,888
Deferred allowance balance, December 31		6,432				5,614				4,858
Change in deferred allowance				(818)				(756)				(970)
Net amount charged to revenues			$	259			$	1,232			$	237

The amount of revenue recognized during the years ended December 31, 2020, 2019 and 2018 that was included in the opening deferred revenue balance of the same fiscal year was approximately $191,745, $163,939, and $135,190, respectively. The portion of deferred revenue expected to be recognized in revenue beyond one year is included in deferred revenue, net of current portion in the consolidated balance sheets.

The table provides information about the balances of and changes to deferred revenue for the following periods:


	As of December 31,
	2020		2019
Balances:
Deferred revenue, current	$	207,560	$	191,745
Deferred revenue, non-current		14,702		14,046
Total deferred revenue	$	222,262	$	205,791


	For the Year Ended December 31,
	2020		2019		2018
Changes to deferred revenue:
Beginning balance	$	205,791	$	178,703	$	139,059
Additional amounts deferred		391,136		348,588		312,047
Revenues recognized		(374,665)		(321,500)		(272,403)
Ending balance	$	222,262	$	205,791	$	178,703

Deferred revenue at December 31, 2020 will be recognized as follows for all future years:


Year Ending December 31,
2021	$	207,560
2022		11,441
2023		3,261
Total	$	222,262

Contract costs

Deferred sales commissions earned by the Company’s sales force and certain sales incentive programs and vendor referral agreements are considered incremental and recoverable costs of obtaining a contract with a customer. An asset is recognized for these incremental contract costs and reflected as deferred commissions in the consolidated balance sheets. These contract costs are amortized on a straight-line basis over a period consistent with the transfer of the associated product and services to the customer, which is generally three years. Amortization of these costs are included in selling and marketing expense in the consolidated statements of comprehensive income (loss). The Company periodically reviews these contract assets to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these assets. There were no impairment losses recorded for the periods presented.

The table provides information about the changes to contract cost balances as of and for the following periods:


	For the Year Ended December 31,
	2020		2019		2018
Changes to deferred commissions:
Beginning balance	$	11,196	$	8,830	$	5,676
Additions		8,291		10,140		8,691
Amortization		(7,744)		(7,774)		(5,537)
Ending balance	$	11,743	$	11,196	$	8,830

Payment terms

Payment terms and conditions vary by contract, although the Company’s terms generally include a requirement of payment within 30 days. In instances where the timing of revenue recognition differs from the timing of payment, the Company has determined that its contracts do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services, not to receive financing from customers or to provide customers with financing.

Cost of Revenues

Cost of revenues, software subscriptions include the direct cost to develop, host and distribute software products, the direct cost to provide customer support, and amortization of costs capitalized for software developed for sale, for internal-use software utilized for cloud-based subscriptions and for acquired intangible assets. Cost of revenues, services include the direct costs of implementation, training, transaction tax returns outsourcing and other tax-related services.

Reimbursable Costs

Reimbursable costs passed through and invoiced to customers of the Company are recorded as services revenues with the associated expenses recorded as cost of revenues, services in the consolidated statements of comprehensive income (loss). These amounts were $199, $1,107 and $902 for the years ended December 31, 2020, 2019 and 2018, respectively.

Research and Development

Research and development costs consist primarily of personnel and related expenses for research and development activities including salaries, benefits and other compensation. Research and development costs are expensed as incurred in accordance with ASC 730, Research and Development, and are included in the consolidated statements of comprehensive income (loss).

Advertising

Advertising expense is recorded as incurred and is reflected in selling and marketing expense in the consolidated statements of comprehensive income (loss). Total advertising expense was $11,069, $11,921 and $8,956 for the years ended December 31, 2020, 2019 and 2018, respectively.

Foreign Currency

The Company transacts business in various foreign currencies. Management has concluded that the local country’s currency is the functional currency of its foreign operations. Consequently, operating activities outside the U.S. are translated into U.S. Dollars using average exchange rates, while assets and liabilities of operations outside the U.S. are translated into U.S. Dollars using exchange rates at the balance sheet date. The effects of foreign currency translation adjustments are included in stockholders' equity (deficit) as a component of accumulated other comprehensive loss in the consolidated balance sheets. Related periodic movements in exchange rates are included in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss). Other operating expense (income), net in the consolidated statements of comprehensive income (loss) includes net foreign exchange transaction losses of $155, $84 and $121 for the years ended December 31, 2020, 2019 and 2018, respectively.

Income Taxes

On July 27, 2020, the Company’s S-Corporation election (the “S Election”) was terminated by the Company’s stockholders in connection with the Offering. As a result, Vertex will now be taxed at the corporate level as a C-Corporation for U.S federal and state income tax purposes. In connection with the S Election termination, the Company entered into an agreement with the S-Corporation stockholders pursuant to which the Company has indemnified them for unpaid income tax liabilities and may be required to make future payments in material amounts to them attributable to incremental income taxes resulting from an adjustment to S-Corporation related taxable income that arises after the effective date of the S Election termination (the “Tax Sharing Agreement”). In addition, the Tax Sharing Agreement indemnifies the S-Corporation stockholders for any interest, penalties, losses, costs or expenses arising out of any claim under the agreement. Correspondingly, the S-Corporation stockholders have indemnified the Company with respect to unpaid tax liabilities (including interest and penalties) to the extent that such unpaid tax liabilities are attributable to a decrease in S-Corporation stockholders’ taxable income for any period and a corresponding increase in our taxable income for any period.

Prior to July 27, 2020, as Vertex was taxed as an S-Corporation for U.S. federal income tax purposes and for most states, net income or loss was allocated to the stockholders and was included on their individual income tax returns. Historically the Company distributed amounts to the stockholders to satisfy their tax liabilities resulting from allocated net income or loss. In certain states, Vertex was taxed at the corporate level. Accordingly, the income tax provision or benefit was based on taxable income allocated to these states. In certain foreign jurisdictions, Vertex subsidiaries were taxed at the corporate level. Similar to states, the income tax provision or benefit is based on taxable income sourced to these foreign jurisdictions.

Certain foreign subsidiaries in which we own greater than 50% of the equity by measure of vote or value are treated as controlled foreign companies (“CFCs”) for U.S. federal income tax purposes and most states under the IRS foreign tax regulations. The income and loss from these entities is reported on the Company’s U.S. federal and some state income tax returns when the foreign earnings are repatriated or deemed to be repatriated to the U.S. In conjunction with the termination of the S Election, certain direct and indirect wholly owned foreign subsidiaries that were previously treated as disregarded entities for U.S. federal income tax purposes and most states under the Internal Revenue Service (“IRS”) “check-the-box” regulations, “unchecked-the-box” to become regarded entities and as a result, became CFCs. Prior to these elections, the income and loss from these entities was reported on the Company’s U.S. federal and most state income tax returns in addition to being reported on a foreign jurisdiction tax return regardless of whether or not the earnings were repatriated.

The Company records deferred income taxes using the liability method. The Company recognizes deferred tax assets and liabilities for future tax consequences of events that have been previously recognized in the Company’s consolidated financial statements and tax returns. The measurement of deferred tax assets and liabilities is based on provisions of the enacted tax law. The effects of future changes in tax laws or rates are not anticipated. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process whereby: (i) management determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and (ii) for those tax positions that meet the more likely than not recognition threshold, management recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The impact as a result of the application of ASC 740 is reflected in the consolidated financial statements. The Company assesses its income tax positions and records tax benefits or expense based upon management’s evaluation of the facts, circumstances, and information available at the reporting date.

The Company recorded a $24,944 deferred tax asset during the year ended December 31, 2020 as a result of the conversion from an S-Corporation to a C-Corporation. The deferred tax asset is primarily due to future stock-based compensation deductions for tax purposes resulting from SARs that were previously issued by the Company, converted to options and immediately exercised upon the effective date of the Offering. The exercise of these options has resulted in a net operating loss for the C-Corporation short tax year beginning July 27, 2020 and ending December 31, 2020. Based on Management’s evaluation of the positive and negative evidence, it is more likely than not that the Company will realize these benefits on future U.S. tax returns.

Total Comprehensive Income (Loss)

Total comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are recorded as elements of stockholders' equity (deficit) but are excluded from net income. Other comprehensive income (loss) is comprised of foreign currency translation adjustments and revaluations.

Earnings Per Share (“EPS”)

The Company has two classes of common stock outstanding and thus calculates EPS following the two-class method. This method allocates earnings for the respective periods between the two classes of common stock in proportion to the weighted average shares outstanding for each class of common stock as a percentage of total weighted average shares of both classes of common stock outstanding. Neither the Class A nor Class B common stock has any liquidity or dividend preferences and are both considered to be participating securities. Basic and diluted net income (loss) per share attributable to common stockholders is calculated using the treasury stock method. The basic net income (loss) per share attributable to Class A common stockholders includes RSAs, RSUs and ESPP shares once vesting or purchase contingencies are resolved and the related shares are deemed to be outstanding. The diluted net income (loss) per share attributable to Class A common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, all options to purchase shares of Class A common stock, RSAs, and RSUs are considered common stock equivalents. Additionally, the portion of ESPP shares for which the Company has received payments but for which the related shares are not yet issued and outstanding are also considered common stock equivalents. In periods of net loss available to common stockholders, diluted calculations are equal to basic calculations because the inclusion of common stock equivalents would be anti-dilutive.

In accordance with ASC 260, Earnings Per Share, the historical EPS was retrospectively restated similar to the treatment of a stock split to reflect the Share Exchange for all periods presented prior to the Offering as management concluded that there was no economic value attributable to the exchange of shares in connection with the Recapitalization. Class A common stock issued in connection with the Offering are reflected in the weighted average share calculation from their issuance date.

Unaudited Pro Forma Income Taxes

A pro forma income tax provision has been disclosed in the accompanying consolidated financial statements as if the Company was a taxable corporation for the entirety of the year ended December 31, 2020. The Company has computed pro forma entity level income tax expense using an estimated effective tax rate of 25.5%, inclusive of all applicable U.S. federal, state, local and foreign income taxes.

Unaudited Pro Forma Earnings Per Share

The Company has presented pro forma earnings per share for the year ended December 31, 2020 to reflect the pro forma adjustment to income taxes resulting from the conversion to a C-Corporation effective July 27, 2020.


	For the Year Ended
	December 31, 2020
Class A common stock:	(unaudited)
Numerator:
Pro forma net loss attributable to all stockholders	$	(80,362)
Class A common stock as a percentage of total shares outstanding		8.44	%
Pro forma net loss attributable to Class A stockholders	$	(6,780)

Denominator:
Weighted average Class A common stock, basic and diluted		11,096

Pro forma net loss per Class A share, basic and diluted	$	(0.61)


	For the Year Ended
	December 31, 2020
Class B common stock:	(unaudited)
Numerator:
Pro forma net loss attributable to all stockholders	$	(80,362)
Class B common stock as a percentage of total shares outstanding		91.56	%
Pro forma net loss attributable to Class B stockholders	$	(73,582)

Denominator:
Weighted average Class B common stock, basic and diluted		120,415

Pro forma net loss per Class B share, basic and diluted	$	(0.61)

Supplemental Cash Flow Disclosures

Supplemental cash flow disclosures are as follows for the respective periods:


	For the Year Ended December 31,
	2020		2019		2018
Cash paid for:
Interest	$	2,461	$	1,766	$	1,853
Income taxes	$	588	$	945	$	668
Non-cash investing and financing activities:
Distributions payable	$	—	$	13,183	$	10,892
Estimated distributions payable under Tax Sharing Agreement	$	2,700	$	—	$	—
Purchase Commitment Liability at acquisition date (Note 2)	$	12,592	$	—	$	—
Remeasurement of options for redeemable shares	$	51,833	$	2,763	$	1,027
Conversion of SARs in connection with the Offering	$	129,710	$	—	$	—
Exchange of Amended Options in connection with the Offering	$	69,177	$	—	$	—
Exercised options exchanged in lieu of income taxes	$	—	$	184	$	209
Equipment acquired through capital leases	$	646	$	1,904	$	—

Recently Issued Accounting Pronouncements

As an "emerging growth company," the Jumpstart Our Business Startups Act (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to delay adoption of certain new or revised accounting standards. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.

In February 2016, the FASB issued ASU No. 2016‑02, Leases. This standard amends several aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of-use asset, and a corresponding lease liability, measured at the present value of the future minimum lease payments. The standard is effective for public entities for fiscal years beginning after December 15, 2018, and after December 15, 2020 for all other companies, with early adoption permitted. The Company intends to adopt this standard effective January 1, 2021 using the modified retrospective transition method and therefore will not restate comparative periods. The Company plans to elect the "package of three" practical expedients permitted under the transition guidance, which among other things, allows a carry forward of the historical lease classification conclusions. The Company expects to recognize, among other adjustments, operating lease assets totaling approximately $24,000 and operating lease liabilities of approximately $33,000 on the consolidated balance sheet at January 1, 2021 as a result of the implementation of this standard. We do not expect this standard to materially impact our earnings upon adoption. As implementation of this standard results in adjustments to and reclassifications of assets and liabilities which are non-cash in nature, there will be no impact on the Company’s cash flows in connection with the adoption of this standard.

In June 2016, the FASB issued ASU 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, (“ASU 2016‑13”) which replaces the existing incurred loss impairment model with an expected credit loss model and requires financial assets, including trade receivables, measured at amortized cost to be presented at the net amount expected to be collected. ASU 2016‑13 is effective for annual periods, and interim periods within those years, beginning after December 15, 2019, for business entities that are public and meet the definition of an SEC filer (excluding smaller reporting companies), and after December 15, 2022 for all other entities. Adoption of this guidance requires using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. The Company has assessed the impact of ASU 2016-13 and has determined that the adoption of this standard, effective January 1, 2021, will not have any impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU Update No. 2019‑12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, (“ASU 2019‑12”) which simplifies the accounting for income taxes. ASU 2019-12 removes certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effects of enacted changes in tax laws or rates in interim periods. The guidance in ASU 2019‑12 is required for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2020, for business entities that are public, and after December 15, 2021, including interim periods within those annual periods for all other entities, with early adoption permitted. The Company has elected to adopt this guidance effective January 1, 2021. While the Company is continuing to assess the potential impacts of ASU 2019-12, it does not expect ASU 2019-12 to have a material effect on its financial statements.

Risks and Uncertainties

In December 2019, a novel strain of coronavirus (“COVID-19”) appeared. In March 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic. The COVID-19 pandemic is having widespread, rapidly evolving and unpredictable impacts on global society, economies, financial markets and business practices. To protect the health and well-being of Company employees and customers, substantial modifications were made to employee travel policies, our offices were closed and employees advised to work from home, and conferences and other marketing events were cancelled or shifted to virtual-only. The COVID-19 pandemic has impacted and may continue to adversely impact Company operations, including employees, customers and partners, and there is substantial uncertainty in the nature and degree of its continued effects over time.

The Company did not experience any significant reductions in sales, revenues or collections in the year ended December 31, 2020 as a result of COVID-19. The uncertainty caused by the COVID-19 pandemic could, however, impact Company billings to new customers beyond 2020 as the pandemic continues to generate economic uncertainty, and it may also negatively impact Company efforts to maintain or expand revenues from existing customers as they continue to evaluate certain long-term projects and budget constraints. In addition to the potential impact on sales, the Company may see delays in collections in 2021 as the pandemic continues to generate economic uncertainty. However, these delays are not expected to materially impact the business, and thus the Company has not recorded an additional allowance for doubtful accounts in connection with any delays. The Company believes it has ample liquidity and capital resources to continue to meet its operating needs and its ability to continue to service its debt or other financial obligations is not currently impaired.

The extent to which the COVID-19 pandemic impacts the business going forward will depend on numerous evolving factors that cannot reliably be predicted, including the duration and scope of the pandemic; governmental, business, and individuals’ actions in response to the pandemic; and the impact on economic activity, including the possibility of recession or financial market instability. These factors may adversely impact consumer, business and government spending on technology as well as customers’ ability to pay for Company products and services on an ongoing basis. This uncertainty also affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions, including estimated allowance for subscription cancellations, product life cycles and estimated useful lives and potential impairment of long-lived assets, intangible assets and goodwill.

Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on previously reported comprehensive income or loss.

BUSINESS COMBINATIONS

12 Months Ended

Dec. 31, 2020

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

2. BUSINESS COMBINATIONS

On January 7, 2020, the Company acquired a 60% controlling interest in Systax, a provider of Brazilian transaction tax content and software. Cash consideration for the purchase was $12,374 and was funded through borrowings under a revolving line of credit. This acquisition provides the Company with full access to a sizeable database of Brazilian tax content that is critical to supporting its global multi-national customers’ business expansion into Brazil.

The Company has a contractual purchase commitment to acquire the remaining 40% equity interest from the original Systax Quotaholders incrementally between 2021 through 2024. Future purchase commitment payments for these incremental acquisition amounts are based on a multiple of Systax revenue and earnings before interest, depreciation, amortization and income taxes (“EBITDA”) performance at the end of 2020, 2022 and 2023, whereby the Company will have full ownership after the final transaction in 2024. Management has determined these future purchase commitments to be a forward contract, resulting in the Company being required to estimate and record an estimated future purchase commitment amount (the “Purchase Commitment Liability”) in connection with recording the initial purchase. The fair value of the Purchase Commitment Liability was initially estimated to be $14,344 at the acquisition date based on information available at that time. Subsequently, during the fourth quarter of 2020 and based on the receipt of additional information and analysis, the fair value of the Purchase Commitment Liability at the acquisition date was finalized to be $12,592, thereby necessitating an adjustment to goodwill. This amount will fluctuate as a result of changes in foreign currency exchange rates and is reflected in Purchase Commitment Liability in the consolidated balance sheet at December 31, 2020. Adjustments to the settlement date value that arise as a result of remeasurement at future balance sheet dates will be recorded as interest expense related to financing costs in the consolidated statements of comprehensive income (loss) in the period the change is identified.

The acquisition was accounted for as a business combination and the total purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the excess being recorded as goodwill. The preliminary values recorded were adjusted within the Measurement Period upon the receipt of further information that become available regarding the fair values of these amounts as of the acquisition date, and such adjusted values are reflected in the tables below. Any subsequent adjustments to these values not associated with determination of their fair values on the acquisition date will be recorded in the consolidated statements of comprehensive income (loss) in the period the change is identified.

The following table reflects the purchase price for Systax:


	January 7, 2020
Cash paid to Systax Quotaholders at closing	$	11,626
Cash held in escrow for benefit of Systax Quotaholders		748
Initial cash consideration		12,374
Purchase Commitment Liability		12,592
Less cash acquired		(56)
Total	$	24,910

The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed as recorded in the Company’s consolidated balance sheet as of the acquisition date:


	January 7, 2020
Accounts receivable	$	495
Property and equipment		112
Other current assets		14
Goodwill		21,089
Other intangible assets		3,650
Accounts payable		(358)
Accrued expenses		(92)
Total	$	24,910

The excess of the purchase consideration over the net assets acquired is recorded as goodwill and primarily reflects the value of expected future synergies, the existence of intangible assets not recognized under U.S. GAAP such as the value of the assembled workforce and other market factors. Goodwill is deductible for tax purposes.

The Company has included the financial results of Systax in the consolidated statement of comprehensive income (loss) from the date of acquisition in accordance with ASC 810 due to the Company having a controlling financial interest in Systax. Systax revenue and net loss for the year ended December 31, 2020 reflected in the consolidated statement of comprehensive income (loss) were $4,430 and $(1,089), respectively.

The transaction costs associated with the acquisition were $504 and were recorded in general and administrative expense in the year ended December 31, 2019.

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS	12 Months Ended
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS	Dec. 31, 2020
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS	3.Financial instruments and fair value measurements Our financial instruments subject to fair value measurements include cash and cash equivalents, funds held for customers, accounts receivable, accounts payable, accrued expenses, debt, and derivatives. Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company has investments in money market accounts, which are included in cash and cash equivalents on the consolidated balance sheets. Fair value inputs for these investments are considered Level 1 measurements within the Fair Value Hierarchy since money market account fair values are known and observable through daily published floating net asset values. The fair value of the Company’s investments in money market accounts, being the same as their carrying value, were $168,330 and $61,644 at December 31, 2020 and 2019, respectively. Assets and Liabilities for Which Fair Value is Only Disclosed The residual carrying amount of cash and cash equivalents and the carrying amount of funds held for customers were the same as their respective fair values and are considered Level 1 measurements. The carrying amounts for accounts receivable, accounts payable, accrued expenses and debt approximate their relative fair values due to their short-term nature and are considered Level 2 measurements. Non-recurring Fair Value Measurements The Systax acquisition was accounted for as a business combination and the total purchase price was allocated to the net assets acquired and liabilities assumed based on their estimated fair values. The fair values of identifiable intangible assets were determined by an income approach, with application of an appropriate underlying method, such as a multi-period excess earnings, cost savings and or relief from royalty method, which we consider to be Level 3 measurements. The fair value of property and equipment was determined at the individual asset level using a combination of cost, sales and income approaches, which we consider to be Level 3 measurements. The fair values of all other identifiable assets acquired and liabilities assumed were primarily based on their carrying values, which we consider to be Level 2 measurements. The Company’s obligation with respect to future purchase commitments to the Systax Quotaholders was determined to be a forward contract necessitating initial recognition based on fair value. We estimated the initial fair value of our Purchase Commitment Liability using a Monte Carlo simulation, which we consider to be a Level 3 measurement. The significant assumptions used in the Monte Carlo simulation include, among other variables, forecasted cash flow projections consistent with those used to support the overall purchase price, selection of comparable companies, asset volatility and discount rate determinations and the total number of simulations to compute. Subsequent remeasurements of the Purchase Commitment Liability, as and if required, are not expected to be based on fair value. Derivatives and Hedging Activities We may periodically engage in hedging activities to reduce our exposure to foreign currency exchange rates. Our hedging activities are typically designed to manage specific risks according to our strategies, which may change from time to time. In May 2020, we entered into a series of foreign currency forward contracts to hedge a portion of our exposure to adverse fluctuations in the Brazilian Real associated with our Purchase Commitment Liability. Such forward contracts, which do not qualify for hedge accounting and are not material to our consolidated financial statements, are remeasured at fair value on a recurring basis and classified within other assets in our consolidated balance sheets and with changes in estimated fair value recognized as interest expense in our consolidated statements of comprehensive income or loss. Our fair value determinations are based on foreign currency exchange rates in active markets, which we consider to be Level 2 measurements within the Fair Value Hierarchy.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2020

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

4.PROPERTY AND EQUIPMENT

The major components of property and equipment are as follows:


	As of December 31,
	2020		2019
Leasehold improvements	$	20,907	$	20,887
Equipment		41,410		40,639
Computer software purchased		11,620		11,232
Internal-use software developed:
Cloud-based customer solutions		65,423		51,442
Internal systems and tools		25,349		23,957
Furniture and fixtures		7,674		7,455
In-process internal-use software		3,304		791
		175,687		156,403
Less accumulated depreciation		(119,130)		(101,676)
Property and equipment, net	$	56,557	$	54,727

Depreciation expense for property and equipment, excluding all internal-use software developed and capital leases, was $7,833, $7,386 and $7,279 for the years ended December 31, 2020, 2019 and 2018, respectively. Depreciation for property and equipment, excluding internal-use software developed for cloud-based customer solutions, is reflected in depreciation and amortization in the consolidated statements of comprehensive income (loss).

Assets under capital leases of $1,360 and $1,455, net of accumulated depreciation of $1,370 and $627, at December 31, 2020 and 2019, respectively, are included in property and equipment in the consolidated balance sheets. Depreciation expense for assets held under capital leases was $743, $565 and $40 for the years ended December 31, 2020, 2019 and 2018, respectively, and is included in depreciation and amortization in the consolidated statements of comprehensive income (loss).

The major components of internal-use software developed are as follows:


	As of December 31,
	2020		2019
Internal-use software developed	$	90,772	$	75,399
Less accumulated depreciation		(65,090)		(53,852)
		25,682		21,547
In-process internal-use software		3,304		791
Internal-use software developed, net	$	28,986	$	22,338

Amounts capitalized for internal-use software developed and included in property and equipment additions on the consolidated statements of cash flows are as follows:


	For the Year Ended December 31,
	2020		2019		2018
Cloud-based customer solutions	$	14,710	$	10,179	$	14,345
Internal systems and tools		3,176		4,860		2,484
Total	$	17,886	$	15,039	$	16,829

In-process internal-use software developed is not depreciated until it is available for its intended use. Depreciation expense for internal-use software developed for cloud-based customer solutions for the years ended December 31, 2020, 2019 and 2018 was $8,818, $7,982 and $11,707, respectively, and is included in cost of revenues, software subscriptions in the consolidated statements of comprehensive income (loss). Depreciation expense for internal-use software developed for internal systems and tools for the years ended December 31, 2020, 2019 and 2018 was $2,442, $1,045 and $618, respectively, and is included in depreciation and amortization in the consolidated statements of comprehensive income (loss). Research and development costs associated with internal-use software developed for cloud-based customer solutions were $10,518, $10,765 and $11,038 for the years ended December 31, 2020, 2019 and 2018, respectively, and is included in research and development in the consolidated statements of comprehensive income (loss).

Amortization expense of internal-use software developed, excluding in-process internal-use software not yet available for its intended use, at December 31, 2020 is as follows for all future years:


Year Ending December 31,	Internal Systems and Tools		Cloud-Based Customer Solutions
2021	$	2,362	$	10,534
2022		2,049		6,795
2023		957		2,443
2024		473		—
2025		69		—
Total	$	5,910	$	19,772

During the year ended December 31, 2018, the Company recorded an impairment of capitalized internal-use software previously utilized to provide cloud-based solutions to customers of $32,692, net of accumulated amortization of $11,907, due to a product strategy shift that resulted in this service no longer being offered to customers after 2018. The software was deemed to be fully impaired due to the net book value of the software exceeding expected future cash flows. This amount is included in impairment of assets in the 2018 consolidated statement of comprehensive income (loss).

CAPITALIZED SOFTWARE

12 Months Ended

Dec. 31, 2020

CAPITALIZED SOFTWARE

CAPITALIZED SOFTWARE

5.CAPITALIZED SOFTWARE

Capitalized software includes acquired software and direct labor and related expenses for software developed for sale for new products and enhancements to existing products. Software development costs capitalized for the years ended December 31, 2020, 2019 and 2018 were $11,850, $17,221 and $12,261, respectively.

The major components of capitalized software are as follows:


	As of December 31,
	2020		2019
Capitalized software	$	63,071	$	47,862
Less accumulated amortization		(32,217)		(20,281)
		30,854		27,581
In-process capitalized software		1,135		4,494
Capitalized software, net	$	31,989	$	32,075

Capitalized software amortization expense for the years ended December 31, 2020, 2019 and 2018 was $11,936, $8,212 and $5,257, respectively, and is included in cost of revenues, software subscriptions in the consolidated statements of comprehensive income (loss).

In-process capitalized software at December 31, 2020 was not available for general release to customers as of the balance sheet date and therefore not included in the table below. Amortization expense of capitalized software available for general release to customers as of December 31, 2020 is as follows for all future years:


Year Ending December 31,
2021	$	11,811
2022		8,596
2023		5,974
2024		3,783
2025		690
Total	$	30,854

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2020

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

6.GOODWILL AND OTHER INTANGIBLE ASSETS

At December 31, 2020, goodwill and other intangible assets were as follows:


Goodwill	$	16,329
Other intangible assets, net		2,382
	$	18,711

The changes in the carrying amount of goodwill for the year ended December 31, 2020 are as follows:


Balance, January 1, 2020	$	—
Acquisition of Systax (Note 2)		21,089
Foreign currency translation adjustments		(4,760)
Balance, December 31, 2020, net		16,329
Accumulated impairment losses		—
Balance, December 31, 2020, gross	$	16,329

During the year ended December 31, 2020, the Company recognized various amortizable intangible assets in connection with the acquisition of Systax (Note 2), including relating to customer relationships, technology and tradenames. The following tables provide additional information for our other intangible assets, which are individually not material to our consolidated financial statements:


			As of December 31, 2020
	Weighted Average Amortization Period (Years)		Gross Value		Accumulated Amortization		Carrying Value
Other intangible assets		5.5	$	2,825	$	443	$	2,382


	For the Year Ended December 31, 2020
	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense		Total Expense
Amortization of acquired intangible assets	$	267	$	176	$	443

The following table presents estimated future amortization of intangible assets:


Year Ending December 31,
2021	$	616
2022		500
2023		500
2024		499
2025		267
Total	$	2,382

DEBT

12 Months Ended

Dec. 31, 2020

DEBT

DEBT

7.DEBT

Credit Agreement

On March 31, 2020, the Company entered into a credit agreement with a bank, which was subsequently amended on April 3, 2020 to permit another bank to be a party to the agreement, consisting of a $175,000 term loan (the “Term Loan”) and a $100,000 committed line of credit (the “Line of Credit”) (collectively, the “Credit Agreement”).

Net proceeds from the Term Loan after payment of financing fees of $2,904 and repayment of aggregate amounts outstanding under a previous credit agreement of $61,656, were used to fund a portion of the $123,185 distribution made to the stockholders on May 29, 2020 (see Note 8).

A portion of the Offering proceeds was used to repay the $175,000 Term Loan in full on July 31, 2020. The Company received a refund of $468 of financing fees as a result of repayment of the Term Loan within 90 days of execution of the Credit Agreement, which was recorded as a reduction of deferred financing costs associated with the Term Loan. The Company wrote off the remaining balance of deferred financing costs associated with the Term Loan of $1,174, which was recorded as interest expense in the consolidated statement of comprehensive income (loss) for the year ended December 31, 2020.

The Line of Credit matures in March 2025 and had no outstanding borrowings at closing or at December 31, 2020. The Company has the option to select an applicable interest rate at either the bank base rate plus an applicable margin (the “Base Rate Option”) or the LIBOR plus an applicable margin (the “LIBOR Option”). The applicable margins are determined by certain financial covenant performance as defined in the Credit Agreement. At December 31, 2020, the Base Rate Option and LIBOR Option applicable to Line of Credit borrowings were 3.25% and 2.00%, respectively.

The Credit Agreement is collateralized by certain assets of the Company and contains financial and operating covenants. The Company was in compliance with these covenants at December 31, 2020.

Prior Credit Agreement

At December 31, 2019, the Company had a credit agreement consisting of a term loan (the “Prior Term Loan”) with an outstanding principal balance of $50,375 and a $40,000 committed line of credit (the “Prior Line of Credit”) with no outstanding borrowings (collectively, the “Prior Credit Agreement”).

The Prior Term Loan required quarterly principal payments over five years, with a balloon payment in November 2020. The Prior Line of Credit was due to expire on November 1, 2020. As a result of the Prior Term Loan becoming due in November 2020, the balance outstanding of $50,375 was included in current portion of long-term debt on the consolidated balance sheet at December 31, 2019.

Unamortized deferred financing costs of $221 at December 31, 2019 were included as a reduction in current portion of long-term debt in the consolidated balance sheet. Amortization expense of deferred financing costs on the Prior Term Loan was $44 and $266 for the year ended December 31, 2020 and 2019, respectively, which was recorded as interest expense in the consolidated statements of comprehensive income (loss). The Company wrote off the remaining unamortized deferred financing costs associated with the Prior Term Loan of $177, which was recorded as interest expense in the consolidated statement of comprehensive income (loss) for the year ended December 31, 2020.

Capital Leases

Capital lease obligations were $1,107 and $1,332 at December 31, 2020 and 2019, respectively, and are included in current portion of long-term debt and long-term debt, net of current portion in the consolidated balance sheets.

Future minimum capital lease payments as of December 31, 2020 are as follows:


Year Ending December 31,
2021	$	915
2022		230
Total		1,145
Less amount representing interest		38
Present value of minimum lease payments		1,107
Less current portion		882
Capital lease obligations, net of current portion	$	225

STOCKHOLDERS' EQUITY (DEFICIT)	12 Months Ended
STOCKHOLDERS' EQUITY (DEFICIT)	Dec. 31, 2020
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT)	8.STOCKHOLDERS’ EQUITY (DEFICIT) Termination of S-Corporation status In connection with termination of the Company’s S-Corporation status effective July 27, 2020, the Company had an accumulated deficit of $354,291 pertaining to the S-Corporation shareholders which was reclassified to additional paid in capital upon such termination. Common Stock In connection with the Recapitalization, the Company: (i) effected the three-for-one Stock Split, which is reflected retrospectively in the consolidated financial statements; (ii) established the New Capital Structure; and (iii) effected the Share Exchange. Prior to the Share Exchange, the Company had 147 shares of former Class A common stock and 120,443 shares of former Class B common stock outstanding. Members of a family (the “Family”) owned 99.9% of all outstanding shares of both former classes of common stock, which was comprised of 100% of the former Class A common stock and 120,270 shares of the former Class B common stock. The remaining 173 shares of former Class B common stock were owned by non-Family members. There were no dividend or liquidation preference differences between the former Class A and former Class B shares. In connection with establishing the New Capital Structure, the shareholders authorized 450,000 shares of common stock, par value $0.001 per share, and 30,000 shares of preferred stock, par value $0.001 per share. Common stock is divided into two classes, Class A with one vote per share, and Class B with ten votes per share. The rights of the holders of Class A and Class B are identical, except with respect to voting and conversion rights. Upon transfer of Class B shares to a non-Family member, such shares will automatically convert to an equivalent number of Class A shares with the respective voting rights attributable to such new shares. Authorized Class A and Class B shares are 300,000 and 150,000 shares, respectively. There are no dividend or liquidation preference differences between Class A and Class B. In connection with the Share Exchange, the Family members exchanged each share of former Class A and former Class B for the equivalent number of Class B shares established as part of the New Capital Structure. In addition, the non-Family members exchanged their former Class B shares for an equivalent number of Class A shares established as part of the New Capital Structure. No funds were exchanged in connection with the Share Exchange and the aggregate number of shares outstanding both immediately prior to and after the Share Exchange remained the same at 120,590. In addition, common stock equivalents, all of which were held by non-Family members and which were previously exercisable into former Class B shares, became exercisable into Class A shares established as part of the New Capital Structure. In April 2020, Vertex issued 173 shares of former Class B common stock in connection with the exercise of options by option holders for cash of $53. These shares were exchanged for Class A common stock in connection with the Recapitalization on July 28, 2020. Also, on July 28, 2020, the Company sold 23,812 shares of Class A in connection with the Offering for $423,024, net of underwriting fees. Offering costs paid from these proceeds aggregated $6,222 and are reflected as a reduction of additional paid in capital in stockholders’ equity. In addition, the Company issued 510 shares of Class A in connection with the exercise of options by option holders, net of 381 shares returned to the Company in lieu of payment of the exercise price and taxes due on these exercises. In connection with the Offering, the Company also issued an aggregate 564 shares of Class A related to the conversion of SARs into options and the immediate exercise of these options into shares, net of 860 shares returned to the Company in lieu of payment of the exercise price and taxes due on these exercises. The Company also issued 890 Class A shares in connection with the exercise of outstanding options and 19 Class A shares in connection with RSAs granted at the Offering, which vested immediately. A stockholder exchanged 300 shares of Class B common stock for an equivalent number of shares of Class A common stock during the year ended December 31, 2020. In April 2019, Vertex issued 225 shares of former Class B common stock in connection with the exercise of options by option holders for cash of $68, net of 51 shares that were immediately returned to Vertex upon exercise in lieu of payment of income taxes payable by the option holders. At December 31, 2019 the Company held repurchased shares (“Treasury Stock”) aggregating 41,910 which are carried at cost and included in Treasury Stock in the consolidated balance sheet. Such amount is comprised of 41,757 shares of former Class B common stock and 153 shares of former Class A common stock. In connection with the Recapitalization, the Treasury Stock was retired and amounts associated with the Treasury Stock were reclassified to additional paid in capital. At December 31, 2020, there was no Treasury Stock. The Board declared distributions of $4,010 ($0.03 per share) and $123,185 ($1.02 per share) during the three months ended March 31 and June 30, 2020, respectively, and $5,706 ($0.05 per share) through July 25, 2020, pro rata to stockholders of former Class A and former Class B common stock. The Board declared aggregate pro rata distributions to stockholders of former Class A and former Class B common stock of $30,857 ($0.11 per share) and $38,916 ($0.09 per share) during the year ended December 31, 2019 and 2018, respectively During the three months ended December 31, 2020, the Company distributed $33 in December 2020 to the former S-Corporation shareholders and additionally recognized an estimated liability of $2,700 to be distributed to the former S-Corporation shareholders for income taxes related to the allocation of taxable income to the S-Corporation short tax period ended July 26, 2020, each in connection with obligations under the Tax Sharing Agreement. The Company is required to settle this liability for the 2020 S-Corporation short tax period on or before July 30, 2021. All obligations of the Company under the Tax Sharing Agreement are satisfied by adjustments of additional paid in capital.

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2020

EARNINGS PER SHARE

EARNINGS PER SHARE

9.EARNINGS PER SHARE

The table below illustrates the calculation of basic and diluted net (loss) income per common share for the Class A common and Class B common for the periods reflected below. The weighted average shares outstanding have been retrospectively restated to reflect the Share Exchange for all periods prior to the Offering, resulting in the Class A shares representing non-Family-owned shares and Class B representing Family-owned shares for all periods presented. See Note 8 for further information on the Share Exchange.


	For the Year Ended December 31,
Class A common stock:	2020			2019			2018
Numerator, basic:
Net (loss) income attributable to all stockholders	$	(78,937)		$	31,057		$	(6,106)
Class A common stock as a percentage of total shares outstanding, basic		8.44	%		0.08	%		0.26	%
Net (loss) income attributable to Class A stockholders, basic	$	(6,660)		$	23		$	(16)

Numerator, diluted:
Net (loss) income attributable to all stockholders	$	(78,937)		$	31,057		$	(6,106)
Class A common stock as a percentage of total shares outstanding, diluted		8.44	%		3.11	%		0.26	%
Net (loss) income attributable to Class A stockholders, diluted	$	(6,660)		$	965		$	(16)

Denominator, basic and diluted:
Weighted average Class A common stock, basic		11,096			118			210
Dilutive effect of common stock equivalents*		—			3,743			—
Weighted average Class A common stock, diluted		11,096			3,861			210

Net (loss) income per Class A share, basic	$	(0.60)		$	0.20		$	(0.08)
Net (loss) income per Class A share, diluted	$	(0.60)		$	0.25		$	(0.08)

* The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share attributable to Class A stockholders because the impact of including them would have been anti-dilutive: 7,158 and 4,013 for the year ended December 31, 2020 and 2018, respectively.


	For the Year Ended December 31,
Class B common stock:	2020			2019			2018
Numerator, basic:
Net (loss) income attributable to all stockholders	$	(78,937)		$	31,057		$	(6,106)
Class B common stock as a percentage of total shares outstanding, basic		91.56	%		99.92	%		99.74	%
Net (loss) income attributable to Class B stockholders, basic	$	(72,277)		$	31,034		$	(6,090)

Numerator, diluted:
Net (loss) income attributable to all stockholders	$	(78,937)		$	31,057		$	(6,106)
Class B common stock as a percentage of total shares outstanding, diluted		91.56	%		96.89	%		99.74	%
Net (loss) income attributable to Class B stockholders, diluted	$	(72,277)		$	30,092		$	(6,090)

Denominator, basic and diluted:
Weighted average Class B common stock, basic		120,415			120,417			120,417
Dilutive effect of common stock equivalents		—			—			—
Weighted average Class B common stock, diluted		120,415			120,417			120,417

Net (loss) income per Class B share, basic	$	(0.60)		$	0.26		$	(0.05)
Net (loss) income per Class B share, diluted	$	(0.60)		$	0.25		$	(0.05)

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2020

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS

10.EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS

401(k) Plan

The Company maintains a 401(k) plan that covers eligible employees subject to certain age and length of service requirements. The Company matches up to 3% of eligible compensation during the period in which an eligible participant contributes to the plan. Matching contributions were $4,011, $3,419 and $2,893 for the years ended December 31, 2020, 2019 and 2018, respectively. In addition, a discretionary profit-sharing contribution of 3% of eligible compensation for eligible employees was approved and aggregated $4,035, $3,363 and $2,886 for the years ended December 31, 2020, 2019 and 2018, respectively, and is reflected in accrued salaries and benefits in the consolidated balance sheets.

Long-Term Rewards Plan

The Company has a long-term rewards (“LTR”) plan for certain key employees which provides for compensation related to growth in certain financial measures over a three-year period (the “Reward Performance Period’), subject to achieving an annual minimum net income target (the “Net Income Target”) during each year of the Reward Performance Period. Each year, eligible LTR plan participants receive an individual target award opportunity (“Award Opportunity”) for a new three-year Reward Performance Period (i.e., target award grant made in 2018 is for years 2018 through 2020). Compensation earned for growth in the financial measures over each Reward Performance Period is paid in cash in the year following the end of the respective Reward Performance Period, assuming the Net Income Target was achieved in the final year of the Reward Performance Period. Estimated compensation is recorded during each year of a Reward Performance Period (“accrued LTR Award Opportunities”).

Compensation expense included $3,027, $2,462 and $2,012 for the years ended December 31, 2020, 2019 and 2018, respectively, for open Reward Performance Periods. Amounts paid to participants in 2020 for the Reward Performance Period starting in 2017 of $2,717 is reflected in deferred compensation, current in the consolidated balance sheet as of December 31, 2019. Amounts estimated to be paid in 2021 for performance through December 31, 2020 for the Reward Performance Period starting in 2018 of $1,987 is reflected in deferred compensation, current in the consolidated balance sheet as of December 31, 2020. The remaining balances of accrued LTR Award Opportunities for open Reward Performance Periods of $2,772 and $1,812 as of December 31, 2020 and 2019, respectively, are reflected in deferred compensation, net of current portion, in the consolidated balance sheets.

After December 31, 2020, no new LTR Award Opportunities will be granted under the LTR plan as future long-term awards will only be made under the 2020 Plan.

Stock-Based Award Plans

On the effective date of the Offering, the Company adopted the 2020 Plan and the ESPP.

The 2020 Plan provides the ability to grant cash and equity-based incentive awards to eligible employees, directors and service providers in order to attract, retain and motivate those that make important contributions to the Company. The 2020 Plan provides for the award of stock options, RSAs, RSUs, SARs and other cash compensation. The Company granted 694 RSAs and 10 RSUs on the effective date of the Offering.

The ESPP provides eligible employees with rights during each six-month ESPP offering period to purchase shares of the Company’s Class A common at the ESPP discount through payroll deductions, or through lump sum payments during the initial offering period (July 28 to November 30, 2020). Amounts withheld or received from participants are reflected in accrued salaries and benefits in the consolidated balance sheets until such shares are purchased. Amounts withheld from participants for the offering period ending May 31, 2021 aggregated $246 as of December 31, 2020.

Stock-based award plan events and related activity are described further below.

Prior to the adoption of the 2020 Plan, the Company had a SAR plan for the purpose of providing incentives to key members of management and consultants to contribute to the growth and financial success of the Company. As a result of the Offering, SAR participants were offered the option to either redeem their SARs upon the occurrence of the Offering or amend their SARs pursuant to which, upon effectiveness of the 2020 Plan, such SARs would become options to purchase shares of Class A common stock under the 2020 Plan (the “SAR Exchange Offer”). All SAR participants eligible to receive the SAR Exchange Offer accepted and had their outstanding SARs, which aggregated 12,038, converted to options with equivalent terms under the 2020 Plan at the Offering effective date (the “Converted SARs”). This was considered a modification of these SAR awards as described further below. The SAR plan was retired (“Retired SAR Plan”) and any future SARs will be granted under the 2020 Plan. This activity is described further below.

Prior to the adoption of the 2020 Plan, the Company had options outstanding to purchase 3,676 shares of former Class B common stock. Upon the effectiveness of the Offering, these options were amended and exchanged for options to purchase an equivalent number of Class A shares at the same exercise price and vesting, subject to many of the terms of the 2020 Plan. These options remain subject to expiration in connection with a Triggering Event under the terms of the original option agreements (the “Amended Options”). This activity is described further below.

The following table reflects the exchanges and new issuances of stock-based awards in connection with the Offering:


	Units Outstanding July 27, 2020	Units (Exchanged) Issued in Connection with Offering	Units Outstanding July 28, 2020 (Prior to Exercises)
SARs	12,086	(12,038)	48
Amended Options	3,676	(3,676)	—
2020 Plan options	—	15,714	15,714
RSAs	—	694	694
RSUs	—	10	10

Compensation expense and additional information pertaining to stock-based awards is described further below.

2020 Plan

An aggregate of 16,500 shares of our Class A common stock was initially available for issuance under the 2020 Plan. The number of shares initially available for issuance will be increased annually on January 1 of each calendar year beginning in 2021 and ending in and including 2030, equal to the lesser of (i) 4% of the shares of Class A and Class B common stock outstanding on the final day of the immediately preceding calendar year and (ii) a smaller number of shares as determined by the Board. No more than 3,000 shares of Class A common may be issued under the 2020 Plan upon the exercise of incentive stock options. Shares available under the 2020 Plan may consist of authorized but unissued shares, shares purchased on the open market, or treasury shares. If an award under the 2020 Plan expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, or canceled without having been fully exercised or forfeited, any unused shares subject to the award will again be available for new grants under the 2020 Plan. Awards granted under the 2020 Plan in substitution for any options or other stock or stock‑based awards granted by an entity before the entity’s merger or consolidation with or acquisition by the Company of the entity’s property or stock will not reduce the shares available for grant under the 2020 Plan but will count against the maximum number of shares that may be issued upon the exercise of incentive stock options. As of December 31, 2020, 1,869 shares of our Class A common were available for issuance under the 2020 Plan. No incentive stock options that would be subject to the 3,000 Class A share limit were issued or outstanding under the 2020 Plan at December 31, 2020.

Awards issued under the 2020 Plan vest based on service criteria established by the Board. The Company has elected to account for forfeitures as they occur rather than estimate forfeitures at date of grant.

Retired SAR Plan

The Retired SAR Plan enabled the Company to grant awards (“SAR Awards”) as a fixed number of shares of former Class B common stock (“SAR Units”). SAR Units outstanding aggregated 12,276 at December 31, 2019. SAR Units were issued at the equivalent of the fair value of the equivalent number of shares of the Company’s former Class B common stock on the grant date (“Base Value”), as determined by the Board with assistance from management and an independent third-party valuation provider, and compensation recorded based upon the appreciation of the SAR Units in excess of the Base Value over the requisite service period. SAR Awards were exercisable upon 50% vesting or upon the occurrence of a triggering event.

Prior to the SAR Exchange Offer being made, vested SAR Units were redeemable upon the occurrence of a triggering event which included: (i) expiration of the term of the SAR Award; (ii) a change of control of the Company whereby stockholders holding at least 50% of the voting stock of the Company sell their shares; (iii) a merger of the Company with an unrelated third-party; (iv) an initial public offering; and (v) death, disability or retirement of a SAR participant.

SAR participants were limited to exercising no more than 25% of their vested SAR Units in any given year. SAR Awards generally vested 50% and 100% after two years and five years, respectively, from the grant date, or as determined by the Board. Maximum contractual terms ranged from ten years to the term of employment of the participant. SAR Awards were settled in cash only, not through the issuance of shares. SAR Award exercises were limited each year to the proportion of the vested SAR Units to the total SAR Units outstanding multiplied by adjusted net cash from operating activities (the “Liquidity Pool”), which was defined as cash from operating activities less cash paid for property and equipment and capitalized software for a given period.

The SAR Exchange Offer resulted in eligible SAR participants amending their SAR Units pursuant to which, upon effectiveness of the Company’s 2020 Plan, such SAR Units were exchanged for options under the 2020 Plan. Effective July 13, 2020, the SAR Exchange Offer period ended and all SAR participants eligible to receive the offer accepted and had their outstanding SAR Units converted to options with equivalent terms under the 2020 Plan on the effective date of the plan upon the Offering. This was considered an accounting modification of these SAR Awards.

Converted SARs with either no expiration date or that expired during calendar year 2020 were converted to options and automatically exercised into shares (the “Auto Exercise New Options”) on the effective date of the Offering. Shares issued in connection with the Auto Exercise New Options were net of the number of shares of common stock necessary to satisfy the aggregate exercise price and the tax withholding obligation of such options of $13,835. The Auto Exercise New Option participants also had the ability to require the Company to repurchase all or a portion of these on the Offering effective date for cash based on the Offering price of $19.00 per share, which aggregated $9,054. The aggregate of these amounts of $22,889 is reflected as a reduction of cash provided by operating activities as these payment requirements arose when the original SARs were liability-classified prior to their conversion and exercise.

Management continued to record changes in the intrinsic value of the SAR Units in 2020 up to July 2, 2020, the date on which management determined the Company was considered to have become a public entity. Management measured the change in accounting policy of $2,422 in accordance with ASC 718 during the year ended December 31, 2020, which included $1,299 of vested Converted SARs that were recognized as compensation expense during this period, with the remaining $1,122 of unvested Converted SARs being recognized as compensation expense over the remaining service period of one to five years through 2025. The additional incremental increase in fair value of the Converted SARs after July 2, 2020 and up to the time of the exchange on the Offering effective date resulting from the modification was recorded as compensation expense. The fair value of the Converted SARs, estimated using the Black-Scholes model, was $197,708, of which $153,366 was vested as of the Offering date. Management recorded additional compensation expense of $57,079 for vested Converted SARs from July 1 to the Offering effective date, which included the $1,299 impact of the change in accounting of vested Converted SARs. The remaining $44,342 of unvested Converted SAR liability, which includes the $1,122 of unvested Converted SARs in connection with the change in accounting policy on July 2, 2020, will be recognized as compensation expense over the remaining service period of one to five years through 2025. Upon modification, the Converted SARs are no longer being recorded as a liability under ASC 718 and the accumulated liability balance, net of amounts for payment of tax withholding and redemption, was reclassified to stockholders’ equity. No incremental compensation expense arose in connection with the SAR modification.

The assumptions used in the Black-Scholes model to determine the fair value of the Converted SARs on the modification date are as follows:


Fair market value of common stock (per share)	$	19.00
Volatility		36.70	%
Expected term (years)		6.5
Expected dividend yield		—	%
Risk-free interest rate		0.40	%

As of the modification date, the Company lacked sufficient historical data on the volatility of its stock price. Selected volatility is representative of expected future volatility and was based on the historical and implied volatility of comparable publicly traded companies over a similar expected term. The expected term represents the term of the Converted SARs, which ranges from within one year to ten years. The Company does not expect to pay dividends after the Offering. The risk-free interest rate was based on the rate for a U.S. Treasury zero-coupon issue with a term that closely approximates the expected term of the SAR grants.

Prior to the Offering, the fair value of the common stock underlying the SAR Awards was determined by the Board with assistance from management and an independent third-party valuation firm. The determination of value used the market and income approaches, with an adjustment for marketability discount pertinent to private company entities in arriving at the per share fair value (the “valuation methodology”). Under the market approach, the guideline public company method is used, which estimates the fair value of the Company based on market prices of stock of guideline public companies. The income approach involves projecting the future benefits of owning an asset and estimating the present value of those future benefits by discounting them based upon the time value of money and the investment risks associated with ownership. At the end of 2019, due to the consideration by the Board of pursuing the Offering, the valuation methodology began to consider the impact of such an event on the value of the Company’s common stock underlying the awards. As the Company approached the Offering effective date, this resulted in increases in the value of the SAR Awards which resulted in corresponding increases to compensation expense for the year ended December 31, 2020 which exceeded historical results.

The below table represents SAR activity for the following periods:


	Units			Range of
	Vested	Nonvested	Total	Grant Values
Outstanding at January 1, 2019	5,889	4,782	10,671	$	0.92–$3.17
Granted	297	2,112	2,409	$	3.73
Exercised	(609)	—	(609)	$	1.31–$2.50
Forfeited	—	(195)	(195)	$	2.13–$2.50
Vested	630	(630)	—
Outstanding at December 31, 2019	6,207	6,069	12,276	$	0.92–$3.73
Granted	21	681	702	$	4.70
Exercised	(877)	—	(877)	$	1.31–$2.50
Forfeited	—	(63)	(63)	$	2.50
Vested	1,410	(1,410)	—
Converted	(6,761)	(5,277)	(12,038)	$	0.92–$4.70
Outstanding at December 31, 2020	—	—	—		—

Prior to July 2, 2020, the weighted average grant date intrinsic value of the SARs on grant date was zero as the Company’s Board granted all awards at a price per share not less than the per share fair value of the Company’s former Class B common stock underlying such awards on the date of grant.

Accrued SAR Awards of $5,790 as of December 31, 2019, representing SAR Units scheduled for redemption and 25% of the vested SAR Units eligible for exercise within 12‑months of the balance sheet date are reflected in deferred compensation, current in the consolidated balance sheets. The remaining balance of accrued SAR Awards of $16,506 at December 31, 2019 is reflected as deferred compensation, net of current portion, in the consolidated balance sheet. We had approximately $3,900 of total unrecognized compensation expense for unvested SAR awards at December 31, 2019.

At the Offering effective date, the liability for total recognized compensation for vested SAR Awards of $143,519 was reclassified to additional paid in capital as these awards were reclassified to equity-based awards on this date subject to the terms of the 2020 Plan. Unrecognized compensation for unvested SAR awards of $44,342 will be recognized as compensation expense under the 2020 Plan over the respective service periods of one to five years.

Amended Options

On July 20, 2020, the Amended Options resulted from the Board amending the outstanding options to provide for their exchange for options to purchase an equivalent number of Class A shares available under the 2020 Plan at the same exercise price, vesting and term. The amendment of the options was deemed an accounting modification. No incremental compensation was recorded in connection with this modification as it was determined that the value of the Amended Options was the same both before and after the modification. The Amended Options remain exercisable upon: (i) the option holder no longer serving as an employee of the Company or a member of the Board; (ii) the Grantee’s death or disability; (iii) the occurrence of a Partial Triggering Event (as defined below); or (iv) the occurrence of a Triggering Event (as defined below). Prior to being amended, the option agreements provided employee option holders with the ability to exercise a portion of their options between April 15 and April 30 of each year based upon the fair value of the Class B common stock as of December 31 of the prior calendar year, provided that certain Company performance is achieved. Upon amendment, the options are instead now subject to restrictions on trading during certain periods (“blackout dates”). Option holders are permitted to satisfy tax withholding obligations incurred in connection with the exercise by exchanging exercised options in lieu of payment of income taxes paid by the Company on their behalf.

In the event of the sale of at least 50% of the Company’s stock or all the assets of the Company (“Triggering Event”) in a single or multiple transactions, the option holders have the right to exercise their options and sell their related shares in connection with the transactions. Unexercised options expire after a Triggering Event. In the event of a sale of at least 25% of the Company’s assets to an unrelated third-party in a single or multiple transactions (“Partial Triggering Event”), the option holders have the right to exercise a portion of their options pro rata based on the sales price and sell their related shares in connection with the transaction. Unexercised options remaining after a Partial Triggering Event remain outstanding. In addition, in the event stockholders owning at least 51% of the outstanding stock of the Company (the “selling stockholders”) sell a portion of their stock to an unrelated third-party, the option holders have the right to exercise and sell an amount of options in the same proportion as the selling stockholders (a “tag-along right”). The option holders may also be required to exercise all their outstanding options and sell all related shares in the event the selling stockholders sell at least 51% of their ownership to an unrelated third-party (a “drag-along right”).

Prior to the amendment, the options permitted holders to put their exercised shares back to the Company, thus the options were classified as temporary equity and included in “Options for Redeemable Shares” on the consolidated balance sheets. The Company recorded increases in the value of Options for Redeemable Shares of $51,833, $2,763 and $1,027 during the years ended December 31, 2020, 2019 and 2018, respectively. The option holders’ ability to put the exercised Amended Option shares to the Company in order to attain liquidity was exchanged for the right by the holders to exercise these options and sell the related shares on the NASDAQ exchange. As a result of this put right no longer being applicable, the options were no longer considered temporary equity and were reclassified to stockholders’ equity in the amount of $69,177 during the year ended December 31, 2020.

The following table summarizes activity for the Amended Options from January 1, 2019:


				Weighted
			Weighted	Average
			Average	Remaining	Aggregate
			Exercise	Contractual	Intrinsic
Amended Option Activity	Units		Price	Life (Years)	Value
Outstanding at January 1, 2019	4,125	$	0.20	*	$	14,581
Exercised	(276)	$	0.25		$	957
Outstanding at December 31, 2019	3,849	$	0.19	*	$	17,344
Exercised through June 30	(173)	$	0.30		$	759
Amendment and exchange of options	(3,676)	$	0.19	*	$	69,177
Outstanding at December 31, 2020	—
*Options have indefinite contractual lives

Options under 2020 Plan

The Company issued no options under the 2020 Plan through December 31, 2020 other than those associated with the Converted SARs and the Amended Options previously discussed. The following table summarizes activity for options outstanding under the 2020 Plan:


				Weighted
			Weighted	Average
			Average	Remaining	Aggregate
			Exercise	Contractual	Intrinsic
2020 Plan Option Activity	Units		Price	Life (Years)	Value
Outstanding at January 1, 2020	—		—
Issued in connection with Converted SARs	12,038	$	2.76
Issued in connection with Amended Options	3,676	$	0.19	*
Total options granted	15,714	$	2.16
Forfeited	(156)	$	3.29
Exercised	(3,682)	$	1.21		$	70,137
2020 Plan options outstanding at December 31, 2020	11,876	$	2.44	5.29	$	384,883
2020 Plan options exercisable at December 31, 2020	6,943	$	1.74	3.59	$	229,911
*Amended Options have indefinite contractual lives

The detail of options outstanding, vested and exercisable under the 2020 Plan as of December 31, 2020 is as follows:


	Options Outstanding		Options Vested and Exercisable
		Weighted		Weighted
		Average		Average
Exercise Prices	Units	Life (Years)	Units	Life (Years)
$0.15 to $0.71	2,552	—	2,552	—
$2.15	1,115	4.1	1,115	4.1
$2.50	2,816	5.4	1,808	5.4
$2.67	817	6.2	377	6.2
$3.17	1,563	7.3	813	7.3
$3.73	2,330	8.7	278	8.6
$4.70	683	9.1	—	—
	11,876		6,943

The Board intends all options granted to be exercisable at a price per share not less than the per share fair market value of the Company’s Class A common stock underlying the options on the date of grant. Compensation expense for new option awards issued subsequent to the Offering to participants under the 2020 Plan are measured based on the grant date fair value of the awards and recognized in the consolidated statements of comprehensive income (loss) over the period during which the participant is required to perform the requisite services. The vesting period is generally one to four years. The grant date fair value of options is estimated using the Black-Scholes model. No new options were granted subsequent to the Offering through December 31, 2020. Unrecognized compensation expense associated with the Converted SARs was $33,671 at December 31, 2020 and is expected to be recognized over a weighted average period of approximately 3.4 years.

Restricted Stock Units

The Company issued RSUs to eligible participants during the year ended December 31, 2020. The following table summarizes RSU activity for the year ended December 31, 2020:


		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2020	—	$	—
Granted	101		23.80
Outstanding at December 31, 2020	101	$	23.80

Stock-based compensation cost for RSUs is measured based on the fair value of the Company’s underlying common stock on the date of grant and aggregated $2,400 in the year ended December 31, 2020. This cost will be recognized on a straight-line basis in the consolidated statements of comprehensive income (loss) over the period during which the participant is required to perform services in exchange for the award, which is generally one to four years. During the year ended December 31, 2020 the Company recognized stock-based compensation expense of $171 related to these awards. At December 31, 2020, $2,229 of unrecognized compensation cost for RSUs is expected to be recognized over a weighted average period of approximately 3.4 years.

Restricted Stock Awards

The Company issued RSAs to eligible participants during the year ended December 31, 2020. The following table summarizes RSA activity for the year ended December 31, 2020:


		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2020	—	$	—
Granted	694		19.00
Vested	(21)		19.00
Forfeited	(3)		19.00
Outstanding at December 31, 2020	670	$	19.00

Stock-based compensation cost for RSAs is measured based on the fair value of the Company’s underlying common stock on the date of grant and aggregated $13,141 during the year ended December 31, 2020. This cost will be recognized on a straight-line basis in the consolidated statements of comprehensive income (loss) over the period during which the participants are required to perform services in exchange for the award, which is generally one to four years. During the year ended December 31, 2020, the Company recognized stock-based compensation expense of $4,284, net of forfeitures, related to these awards. At December 31, 2020, $8,857 of unrecognized compensation cost for RSAs is expected to be recognized over a weighted average period of approximately 2.2 years.

Employee Stock Purchase Plan

The ESPP permits participants to purchase Class A common stock through payroll deductions of up to a specified percentage of their eligible compensation, provided that participants will be permitted to make lump sum contributions to the ESPP during the initial offering period (July 28 to November 30, 2020). The maximum number of shares that may be purchased by a participant during any offering period is determined by the plan administrator in advance of each offering period.

On the first trading day of each offering period, each participant will automatically be granted an option to purchase shares of Class A common. The option will expire at the end of the applicable offering period and will be exercised at that time to the extent of the payroll deductions accumulated or contributions made during such offering period. The purchase price of the shares, in the absence of a contrary designation, is 85% of the lower of the fair value of the Class A common on the first or last day of the ESPP offering period. Participants may voluntarily end their participation in the plan at any time during a specified period prior to the end of the applicable offering period and will be paid their accrued payroll deductions and related contributions, if applicable, that have not yet been used to purchase shares of Class A common. If a participant withdraws from the plan during an offering period, the participant cannot rejoin until the next offering period. Participation ends automatically upon a participant's termination of employment.

A total of 1,000 shares of Class A common were initially reserved for issuance under the ESPP. The number of shares available for issuance under the ESPP will be increased annually on January 1 of each calendar year beginning in 2021 and ending in and including 2030, by an amount equal to the lesser of (i) 1% of the shares of Class A and Class B common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Board, provided that no more than 16,000 shares of Class A common stock may be issued. The ESPP is administered by a committee of the Board.

During the year ended December 31, 2020, the Company recorded stock-based compensation expense of $326 related to the ESPP. Shares of Class A common stock purchased under the ESPP aggregated 59 for the year ended December 31, 2020. As of December 31, 2020, there was approximately $218 of unrecognized ESPP stock-based compensation cost that is expected to be recognized on a straight-line basis over the remaining term of the offering period that ends on May 31, 2021.

The fair value of ESPP purchase rights is comprised of the value of the 15% ESPP discount and the value associated with the Call/Put over the ESPP offering period. The value of the Call/Put for the initial offering period (July 28 – November 30, 2020) and the second offering period (December 1, 2020 – May 31, 2021) was estimated using the Black-Scholes model with the following assumptions:


	Initial			Second
	Offering Period			Offering Period
Fair market value of common stock (per share)	$	19.00		$	25.83
Volatility		35.00	%		35.00	%
Expected term (years)		0.33			0.50
Expected dividend yield		-	%		-	%
Risk-free interest rate		0.11	%		0.11	%

The Company lacks sufficient historical data on the volatility of its stock price. Selected volatility is representative of expected future volatility and was based on the historical and implied volatility of comparable publicly traded companies over a similar expected term. The expected term represents the term of the ESPP offering period, which is generally six months except for the initial offering period which was from July 28 to November 30, 2020. The Company does not expect to pay dividends after the Offering. The risk-free interest rate was based on the rate for a U.S. Treasury zero-coupon issue with a term that closely approximates the expected term of the award at the date nearest the offering term.

Stock-Based Compensation

The Company recognized total stock-based compensation cost related to incentive awards as follows:


	For the Year Ended December 31,
	2020		2019		2018
Stock-based compensation expense:
SARs and Converted SARs	$	143,123	$	9,460	$	5,108
Stock options		—		—		—
RSUs		171		—		—
RSAs		4,284		—		—
ESPP		326		—		—
Total stock-based compensation expense	$	147,904	$	9,460	$	5,108

The Company recognized stock-based compensation cost in the consolidated statements of comprehensive income (loss) as follows:


	For the Year Ended December 31,
	2020		2019		2018
Stock-based compensation expense:
Cost of revenues, software subscriptions	$	14,663	$	946	$	512
Cost of revenues, services		21,472		1,419		765
Research and development		14,694		946		511
Selling and marketing		29,551		1,892		1022
General and administrative		67,524		4,257		2298
Total stock-based compensation expense	$	147,904	$	9,460	$	5,108

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 55
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=118257860&loc=d3e4179-114921

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section S99
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (o)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (p)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 70
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-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
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-Section 50
-Paragraph 3
-Subparagraph (c)
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-Name Accounting Standards Codification
-Topic 715
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-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
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-Section 50
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-Subparagraph (q)
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-Name Accounting Standards Codification
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-Topic 715
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-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

+ Details

RELATED PARTIES	12 Months Ended
RELATED PARTIES	Dec. 31, 2020
RELATED PARTIES
RELATED PARTIES	11.RELATED PARTIES The Company advanced amounts to certain stockholders of the Company of $283 at December 31, 2019. These amounts are non-interest bearing as they are short-term in nature and repaid within three months. These amounts are included in prepaid expenses and other current assets in the consolidated balance sheet. No amounts were outstanding at December 31, 2020.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

12.COMMITMENTS AND CONTINGENCIES

The Company leases office space under operating leases that expire at various dates through September 2028. Rent expense under all property operating leases was $7,006, $6,408 and $6,291 for the years ended December 31, 2020, 2019 and 2018, respectively. These amounts are reflected in general and administrative expense in the consolidated statements of comprehensive income (loss).

Future minimum lease obligations as of December 31, 2020 for all operating property leases for all future years, excluding operating costs, are as follows:


Year Ending December 31,
2021	$	5,442
2022		4,518
2023		4,459
2024		4,464
2025		4,382
Thereafter		12,531
Total	$	35,796

The Company may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company is not aware of any such legal proceedings or claims that management believes will have a material adverse effect on our business, financial condition, or operating results.

INCOME TAXES

12 Months Ended

Dec. 31, 2020

INCOME TAXES

INCOME TAXES

13.INCOME TAXES

The Company has historically been taxed as an S-Corporation for U.S. federal income tax purposes and for income tax purposes in most states. As a result, income was not subject to U.S. federal income taxes or state income taxes in those states where the S-Corporation status is recognized. Therefore, previously, no provision or liability for federal or state income tax had been provided in the consolidated financial statements except for those states where the S-Corporation status was not recognized, or where states imposed a tax on S-Corporations. The provision for income tax in the historical periods prior to the Offering consists of these state taxes and taxes from certain foreign jurisdictions where the Company is subject to tax.

Effective July 27, 2020 the Company converted to a C-Corporation, which has resulted in net income or losses for all future periods to be taxed at the corporate level. The termination of the S-Corporation status was treated as a change in tax status resulting in the deferred tax effects of such change being recorded to income from continuing operations on the date the S-Corporation status terminated. The termination of the S-Corporation election has had a material impact on the Company’s results of operations and financial condition. As such, the Company’s income tax provision for periods subsequent to the C-Corporation conversion will not be comparable to periods prior to such conversion.

For U.S. corporate income tax purposes, the Company will apportion its 2020 taxable income ratably between the S-Corporation and C-Corporation periods. This allocation of income will effectively result in a blended income tax rate for the 2020 year, as only the C-Corporation earnings will be subject to both U.S. federal and state corporate income tax, while the S-Corporation earnings will only be subject to tax in those states that tax S-Corporations or do not recognize S-Corporation status.

The components of net income (loss) before income taxes, by geography, are as follows:


	For the Year Ended December 31,
	2020		2019		2018
U.S.	$	(107,959)	$	32,131	$	(1,999)
Foreign		90		(1,229)		(2,428)
Net income (loss) before income taxes	$	(107,869)	$	30,902	$	(4,427)

Income tax benefit (expense) consists of the following:


	For the Year Ended December 31,
	2020		2019		2018
Current income taxes:
Federal	$	—	$	—	$	—
State and local		(617)		(578)		(537)
Foreign		(94)		(115)		(295)
Total current		(711)		(693)		(832)
Deferred income taxes:
Federal		23,931		—		—
State and local		5,780		677		(818)
Foreign		(68)		171		(29)
Total deferred		29,643		848		(847)
Income tax benefit (expense)	$	28,932	$	155	$	(1,679)

During the year ended December 31, 2020, the Company recognized a $55 income tax benefit in accumulated other comprehensive loss relating to recognized losses from foreign currency translation adjustments and revaluations.

The reconciliation of the effective tax rate to tax at the statutory rates for the years ended December 31 is as follows:


	2020				2019				2018
	Total		Tax Rate		Total		Tax Rate		Total		Tax Rate
Pretax net (loss) income	$	(107,869)			$	30,902			$	(4,427)
Taxes:
U.S. federal income tax at statutory rate	$	(22,652)	21.0	%	$	6,489	21.0	%	$	(930)	21.0	%
State income taxes		(1,811)	1.7	%		(98)	(0.3)	%		1,355	(30.6)	%
Tax effect of S-Corporation status		21,325	(19.8)	%		(6,489)	(21.0)	%		930	(21.0)	%
Impact of change in tax status		(24,944)	23.1	%		—	—	%		—	—	%
Stock-based compensation expense		(1,554)	1.4	%		—	—	%		—	—	%
Impact of foreign operations		(56)	—	%		(57)	(0.2)	%		324	(7.3)	%
Other permanent items, net		760	(0.6)	%		—	—	%		—	—	%
Taxes and effective tax rate	$	(28,932)	26.8	%	$	(155)	(0.5)	%	$	1,679	(37.9)	%

The effective tax rate in 2020 increased to 26.8% from 0.5% in 2019. For the year ended December 31, 2020, the Company recorded a $24,944 deferred tax benefit related to the remeasurement of its U.S. deferred tax assets and liabilities due to the change in tax status from an S-Corporation to a C-Corporation.

The effective tax rate in 2019 decreased to 0.5% from 37.9% in 2018 primarily due to a $1.0 million charge in 2018 to establish deferred taxes for assets that were transferred to the U.S. from a taxing jurisdiction that had a 0% tax rate.

Significant components of the Company's net deferred tax assets (liabilities) are as follows:


	As of December 31,
Deferred tax assets:	2020		2019
Deferred revenue	$	4,013	$	289
State operating loss carry forwards		2,595		56
Federal and foreign loss carry forwards		13,526		217
Accrued expenses		3,952		98
Accrued variable compensation		3,272		(47)
Deferred compensation		24,933		548
Other		727		46
Deferred tax assets		53,018		1,207
Valuation allowance		(1,507)		(46)
Total deferred tax assets		51,511		1,161
Deferred tax liabilities:
Depreciation and amortization		(19,998)		(860)
Prepaid expenses		(1,556)		(40)
Total deferred tax liabilities		(21,554)		(900)
Net deferred tax asset	$	29,957	$	261

Classification in the consolidated balance sheets:
Deferred income tax asset	$	29,974	$	288
Deferred other liabilities		(17)		(27)
Net deferred tax asset	$	29,957	$	261

At December 31, 2020, the Company has available U.S. federal operating loss carry forwards of $56,759, and U.S. state operating loss carry forwards of $44,613. The federal operating loss will carryforward indefinitely and the state operating loss will expire at varying dates beginning in 2026. Management expects to fully utilize these U.S. federal and U.S. state operating loss carry forwards.

At December 31, 2020, the Company has available foreign operating losses of approximately $4,865, some of which expire as early as 2025, and others which carry forward indefinitely. In addition, the Company has $56 of foreign non-operating losses, which carry forward indefinitely. A valuation allowance for a portion of the foreign operating and all of the foreign non-operating losses are recorded at December 31, 2020 and 2019. During the year ended December 31, 2020, we recognized $1,269 of incremental valuation allowances through purchase accounting related to net operating losses associated with Systax.

The Company does not assert any earnings to be permanently reinvested with respect to the undistributed earnings of its foreign subsidiaries.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which the Company operates. Under applicable U.S. federal statutes, tax years ended December 31, 2017 through December 31, 2020 remain subject to examination. Under applicable statutes, state and foreign corporate tax returns filed for the Company and its respective foreign subsidiaries for years ended December 31, 2015 through December 31, 2020 remain subject to examination by the respective authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2020
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	14. SUBSEQUENT EVENTS On January 25, 2021, the Company acquired Tellutax, a Portland, Oregon-based edge computing technology startup for $6,100. The acquisition was funded through cash on hand and serves to strengthen our technology roadmap and hybrid cloud strategy, enabling us to better serve customers in an increasingly hyper-connected environment. Our accounting for the Tellutax acquisition, including whether it constitutes an asset or business purchase, is preliminary.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Basis of Consolidation

Registration of Company Stock and Initial Public Offering

Segments

Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, funds held for customers, accounts receivable and investment securities.

Fair Value Measurement

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Use of Estimates

Cash and Cash Equivalents

In accordance with ASU No. 2016-18, Restricted Cash, the Company presents changes in restricted cash in the cash flow statement.

Funds Held for Customers

Property and Equipment

Depreciation and amortization are computed straight-line over the estimated useful lives of the assets, as follows:


Leasehold improvements		1 - 12 years
Internal-use software developed		3 - 5 years
Computer software purchased		3 - 7 years
Equipment		3 - 10 years
Furniture and fixtures		7 - 10 years

Internal-use software

Internal-Use Software

Software developed for sale

Software Developed for Sale

Assessment of Long-Lived Assets

Business Combinations

Goodwill

Deferred Financing Costs

Stock-Based Compensation

The Company has elected to recognize award forfeitures as they occur.

Operating Leases and Deferred Rent

Self-insurance

Revenue Recognition

Revenue from contracts with customers

Nature of goods and services

Significant Judgments

Disaggregation of revenue

The table reflects revenue by major source for the following periods:


	For the Year Ended December 31,
		2020	2019		2018
Sources of revenues:
Software subscriptions	$	316,763	$	275,629	$	235,663
Services		57,902		45,871		36,740
Total revenues	$	374,665	$	321,500	$	272,403

Contract balances

The beginning and ending balances of accounts receivable, net of allowance, are as follows:


	For the Year Ended December 31,
	2020		2019
Balance, beginning of period	$	70,367	$	62,235
Balance, end of period		77,159		70,367
Increase, net	$	6,792	$	8,132

The beginning and ending balances of and changes to the allowance and the deferred allowance are as follows:


	For the Year Ended December 31,
	2020				2019				2018
	Balance			Net Change	Balance			Net Change	Balance			Net Change
Allowance balance, January 1	$	(7,515)			$	(5,527)			$	(4,320)
Allowance balance, December 31		(8,592)				(7,515)				(5,527)
Change in allowance			$	1,077			$	1,988			$	1,207
Deferred allowance balance, January 1		5,614				4,858				3,888
Deferred allowance balance, December 31		6,432				5,614				4,858
Change in deferred allowance				(818)				(756)				(970)
Net amount charged to revenues			$	259			$	1,232			$	237

The table provides information about the balances of and changes to deferred revenue for the following periods:


	As of December 31,
	2020		2019
Balances:
Deferred revenue, current	$	207,560	$	191,745
Deferred revenue, non-current		14,702		14,046
Total deferred revenue	$	222,262	$	205,791


	For the Year Ended December 31,
	2020		2019		2018
Changes to deferred revenue:
Beginning balance	$	205,791	$	178,703	$	139,059
Additional amounts deferred		391,136		348,588		312,047
Revenues recognized		(374,665)		(321,500)		(272,403)
Ending balance	$	222,262	$	205,791	$	178,703

Deferred revenue at December 31, 2020 will be recognized as follows for all future years:


Year Ending December 31,
2021	$	207,560
2022		11,441
2023		3,261
Total	$	222,262

Contract costs

The table provides information about the changes to contract cost balances as of and for the following periods:


	For the Year Ended December 31,
	2020		2019		2018
Changes to deferred commissions:
Beginning balance	$	11,196	$	8,830	$	5,676
Additions		8,291		10,140		8,691
Amortization		(7,744)		(7,774)		(5,537)
Ending balance	$	11,743	$	11,196	$	8,830

Payment terms

Cost of Revenues

Reimbursable Costs

Research and Development

Advertising

Foreign Currency

Income Taxes

Total Comprehensive Income (Loss)

Earnings Per Share (“EPS”)

Unaudited Pro Forma Income Taxes

Unaudited Pro Forma Earnings Per Share


	For the Year Ended
	December 31, 2020
Class A common stock:	(unaudited)
Numerator:
Pro forma net loss attributable to all stockholders	$	(80,362)
Class A common stock as a percentage of total shares outstanding		8.44	%
Pro forma net loss attributable to Class A stockholders	$	(6,780)

Denominator:
Weighted average Class A common stock, basic and diluted		11,096

Pro forma net loss per Class A share, basic and diluted	$	(0.61)


	For the Year Ended
	December 31, 2020
Class B common stock:	(unaudited)
Numerator:
Pro forma net loss attributable to all stockholders	$	(80,362)
Class B common stock as a percentage of total shares outstanding		91.56	%
Pro forma net loss attributable to Class B stockholders	$	(73,582)

Denominator:
Weighted average Class B common stock, basic and diluted		120,415

Pro forma net loss per Class B share, basic and diluted	$	(0.61)

Supplemental Cash Flow Disclosures

Supplemental cash flow disclosures are as follows for the respective periods:


	For the Year Ended December 31,
	2020		2019		2018
Cash paid for:
Interest	$	2,461	$	1,766	$	1,853
Income taxes	$	588	$	945	$	668
Non-cash investing and financing activities:
Distributions payable	$	—	$	13,183	$	10,892
Estimated distributions payable under Tax Sharing Agreement	$	2,700	$	—	$	—
Purchase Commitment Liability at acquisition date (Note 2)	$	12,592	$	—	$	—
Remeasurement of options for redeemable shares	$	51,833	$	2,763	$	1,027
Conversion of SARs in connection with the Offering	$	129,710	$	—	$	—
Exchange of Amended Options in connection with the Offering	$	69,177	$	—	$	—
Exercised options exchanged in lieu of income taxes	$	—	$	184	$	209
Equipment acquired through capital leases	$	646	$	1,904	$	—

Recently Issued Accounting Pronouncements

Risks and Uncertainties

Reclassifications

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of estimated useful lives property and equipment


Leasehold improvements		1 - 12 years
Internal-use software developed		3 - 5 years
Computer software purchased		3 - 7 years
Equipment		3 - 10 years
Furniture and fixtures		7 - 10 years

Schedule of disaggregation of revenue


	For the Year Ended December 31,
		2020	2019		2018
Sources of revenues:
Software subscriptions	$	316,763	$	275,629	$	235,663
Services		57,902		45,871		36,740
Total revenues	$	374,665	$	321,500	$	272,403

Schedule of beginning and ending balances of accounts receivable, net of allowance


	For the Year Ended December 31,
	2020		2019
Balance, beginning of period	$	70,367	$	62,235
Balance, end of period		77,159		70,367
Increase, net	$	6,792	$	8,132

Schedule of beginning and ending balances of and changes to the allowance and the deferred allowance


	For the Year Ended December 31,
	2020				2019				2018
	Balance			Net Change	Balance			Net Change	Balance			Net Change
Allowance balance, January 1	$	(7,515)			$	(5,527)			$	(4,320)
Allowance balance, December 31		(8,592)				(7,515)				(5,527)
Change in allowance			$	1,077			$	1,988			$	1,207
Deferred allowance balance, January 1		5,614				4,858				3,888
Deferred allowance balance, December 31		6,432				5,614				4,858
Change in deferred allowance				(818)				(756)				(970)
Net amount charged to revenues			$	259			$	1,232			$	237

Schedule of information about the balances of and changes to deferred revenue


	As of December 31,
	2020		2019
Balances:
Deferred revenue, current	$	207,560	$	191,745
Deferred revenue, non-current		14,702		14,046
Total deferred revenue	$	222,262	$	205,791


	For the Year Ended December 31,
	2020		2019		2018
Changes to deferred revenue:
Beginning balance	$	205,791	$	178,703	$	139,059
Additional amounts deferred		391,136		348,588		312,047
Revenues recognized		(374,665)		(321,500)		(272,403)
Ending balance	$	222,262	$	205,791	$	178,703


Year Ending December 31,
2021	$	207,560
2022		11,441
2023		3,261
Total	$	222,262

Schedule of information about the changes to contract cost balances


	For the Year Ended December 31,
	2020		2019		2018
Changes to deferred commissions:
Beginning balance	$	11,196	$	8,830	$	5,676
Additions		8,291		10,140		8,691
Amortization		(7,744)		(7,774)		(5,537)
Ending balance	$	11,743	$	11,196	$	8,830

Schedule of unaudited proforma earnings per share


	For the Year Ended
	December 31, 2020
Class A common stock:	(unaudited)
Numerator:
Pro forma net loss attributable to all stockholders	$	(80,362)
Class A common stock as a percentage of total shares outstanding		8.44	%
Pro forma net loss attributable to Class A stockholders	$	(6,780)

Denominator:
Weighted average Class A common stock, basic and diluted		11,096

Pro forma net loss per Class A share, basic and diluted	$	(0.61)


	For the Year Ended
	December 31, 2020
Class B common stock:	(unaudited)
Numerator:
Pro forma net loss attributable to all stockholders	$	(80,362)
Class B common stock as a percentage of total shares outstanding		91.56	%
Pro forma net loss attributable to Class B stockholders	$	(73,582)

Denominator:
Weighted average Class B common stock, basic and diluted		120,415

Pro forma net loss per Class B share, basic and diluted	$	(0.61)

Schedule of supplemental cash flow disclosures


	For the Year Ended December 31,
	2020		2019		2018
Cash paid for:
Interest	$	2,461	$	1,766	$	1,853
Income taxes	$	588	$	945	$	668
Non-cash investing and financing activities:
Distributions payable	$	—	$	13,183	$	10,892
Estimated distributions payable under Tax Sharing Agreement	$	2,700	$	—	$	—
Purchase Commitment Liability at acquisition date (Note 2)	$	12,592	$	—	$	—
Remeasurement of options for redeemable shares	$	51,833	$	2,763	$	1,027
Conversion of SARs in connection with the Offering	$	129,710	$	—	$	—
Exchange of Amended Options in connection with the Offering	$	69,177	$	—	$	—
Exercised options exchanged in lieu of income taxes	$	—	$	184	$	209
Equipment acquired through capital leases	$	646	$	1,904	$	—

BUSINESS COMBINATIONS (Tables)

12 Months Ended

Dec. 31, 2020

BUSINESS COMBINATIONS

Schedule of purchase price:


	January 7, 2020
Cash paid to Systax Quotaholders at closing	$	11,626
Cash held in escrow for benefit of Systax Quotaholders		748
Initial cash consideration		12,374
Purchase Commitment Liability		12,592
Less cash acquired		(56)
Total	$	24,910

Schedule of preliminary purchase price allocation recorded in the Company's consolidated balance sheet as of the acquisition date


	January 7, 2020
Accounts receivable	$	495
Property and equipment		112
Other current assets		14
Goodwill		21,089
Other intangible assets		3,650
Accounts payable		(358)
Accrued expenses		(92)
Total	$	24,910

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2020

PROPERTY AND EQUIPMENT

Schedule of major components of property and equipment


	As of December 31,
	2020		2019
Leasehold improvements	$	20,907	$	20,887
Equipment		41,410		40,639
Computer software purchased		11,620		11,232
Internal-use software developed:
Cloud-based customer solutions		65,423		51,442
Internal systems and tools		25,349		23,957
Furniture and fixtures		7,674		7,455
In-process internal-use software		3,304		791
		175,687		156,403
Less accumulated depreciation		(119,130)		(101,676)
Property and equipment, net	$	56,557	$	54,727

Schedule of major components of internal-use software


	As of December 31,
	2020		2019
Internal-use software developed	$	90,772	$	75,399
Less accumulated depreciation		(65,090)		(53,852)
		25,682		21,547
In-process internal-use software		3,304		791
Internal-use software developed, net	$	28,986	$	22,338

Schedule of amounts capitalized for internal-use software and included in property and equipment additions on the consolidated statements of cash flows


	For the Year Ended December 31,
	2020		2019		2018
Cloud-based customer solutions	$	14,710	$	10,179	$	14,345
Internal systems and tools		3,176		4,860		2,484
Total	$	17,886	$	15,039	$	16,829

Schedule of amortization expense excluding internal-use software


Year Ending December 31,	Internal Systems and Tools		Cloud-Based Customer Solutions
2021	$	2,362	$	10,534
2022		2,049		6,795
2023		957		2,443
2024		473		—
2025		69		—
Total	$	5,910	$	19,772

CAPITALIZED SOFTWARE (Tables)

12 Months Ended

Dec. 31, 2020

CAPITALIZED SOFTWARE

Schedule of major components of capitalized software


	As of December 31,
	2020		2019
Capitalized software	$	63,071	$	47,862
Less accumulated amortization		(32,217)		(20,281)
		30,854		27,581
In-process capitalized software		1,135		4,494
Capitalized software, net	$	31,989	$	32,075

Schedule of in-process capitalized software not available for general release


Year Ending December 31,
2021	$	11,811
2022		8,596
2023		5,974
2024		3,783
2025		690
Total	$	30,854

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2020

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill


Balance, January 1, 2020	$	—
Acquisition of Systax (Note 2)		21,089
Foreign currency translation adjustments		(4,760)
Balance, December 31, 2020, net		16,329
Accumulated impairment losses		—
Balance, December 31, 2020, gross	$	16,329

Schedule of acquired intangible assets


			As of December 31, 2020
	Weighted Average Amortization Period (Years)		Gross Value		Accumulated Amortization		Carrying Value
Other intangible assets		5.5	$	2,825	$	443	$	2,382


	For the Year Ended December 31, 2020
	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense		Total Expense
Amortization of acquired intangible assets	$	267	$	176	$	443

Schedule of future amortization expense


Year Ending December 31,
2021	$	616
2022		500
2023		500
2024		499
2025		267
Total	$	2,382

DEBT (Tables)

12 Months Ended

Dec. 31, 2020

DEBT

Schedule of future minimum capital lease payments


Year Ending December 31,
2021	$	915
2022		230
Total		1,145
Less amount representing interest		38
Present value of minimum lease payments		1,107
Less current portion		882
Capital lease obligations, net of current portion	$	225

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2020

EARNINGS PER SHARE

Schedule of earnings per share basic and diluted


	For the Year Ended December 31,
Class A common stock:	2020			2019			2018
Numerator, basic:
Net (loss) income attributable to all stockholders	$	(78,937)		$	31,057		$	(6,106)
Class A common stock as a percentage of total shares outstanding, basic		8.44	%		0.08	%		0.26	%
Net (loss) income attributable to Class A stockholders, basic	$	(6,660)		$	23		$	(16)

Numerator, diluted:
Net (loss) income attributable to all stockholders	$	(78,937)		$	31,057		$	(6,106)
Class A common stock as a percentage of total shares outstanding, diluted		8.44	%		3.11	%		0.26	%
Net (loss) income attributable to Class A stockholders, diluted	$	(6,660)		$	965		$	(16)

Denominator, basic and diluted:
Weighted average Class A common stock, basic		11,096			118			210
Dilutive effect of common stock equivalents*		—			3,743			—
Weighted average Class A common stock, diluted		11,096			3,861			210

Net (loss) income per Class A share, basic	$	(0.60)		$	0.20		$	(0.08)
Net (loss) income per Class A share, diluted	$	(0.60)		$	0.25		$	(0.08)


	For the Year Ended December 31,
Class B common stock:	2020			2019			2018
Numerator, basic:
Net (loss) income attributable to all stockholders	$	(78,937)		$	31,057		$	(6,106)
Class B common stock as a percentage of total shares outstanding, basic		91.56	%		99.92	%		99.74	%
Net (loss) income attributable to Class B stockholders, basic	$	(72,277)		$	31,034		$	(6,090)

Numerator, diluted:
Net (loss) income attributable to all stockholders	$	(78,937)		$	31,057		$	(6,106)
Class B common stock as a percentage of total shares outstanding, diluted		91.56	%		96.89	%		99.74	%
Net (loss) income attributable to Class B stockholders, diluted	$	(72,277)		$	30,092		$	(6,090)

Denominator, basic and diluted:
Weighted average Class B common stock, basic		120,415			120,417			120,417
Dilutive effect of common stock equivalents		—			—			—
Weighted average Class B common stock, diluted		120,415			120,417			120,417

Net (loss) income per Class B share, basic	$	(0.60)		$	0.26		$	(0.05)
Net (loss) income per Class B share, diluted	$	(0.60)		$	0.25		$	(0.05)

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS (Tables)

12 Months Ended

Dec. 31, 2020

Compensation plans:

Schedule of exchanges and new issuance of stock-based awards in connection with the offering


	Units Outstanding July 27, 2020	Units (Exchanged) Issued in Connection with Offering	Units Outstanding July 28, 2020 (Prior to Exercises)
SARs	12,086	(12,038)	48
Amended Options	3,676	(3,676)	—
2020 Plan options	—	15,714	15,714
RSAs	—	694	694
RSUs	—	10	10

Schedule of stock appreciation rights activity


	Units			Range of
	Vested	Nonvested	Total	Grant Values
Outstanding at January 1, 2019	5,889	4,782	10,671	$	0.92–$3.17
Granted	297	2,112	2,409	$	3.73
Exercised	(609)	—	(609)	$	1.31–$2.50
Forfeited	—	(195)	(195)	$	2.13–$2.50
Vested	630	(630)	—
Outstanding at December 31, 2019	6,207	6,069	12,276	$	0.92–$3.73
Granted	21	681	702	$	4.70
Exercised	(877)	—	(877)	$	1.31–$2.50
Forfeited	—	(63)	(63)	$	2.50
Vested	1,410	(1,410)	—
Converted	(6,761)	(5,277)	(12,038)	$	0.92–$4.70
Outstanding at December 31, 2020	—	—	—		—

Schedule of outstanding, vested and exercisable


	Options Outstanding		Options Vested and Exercisable
		Weighted		Weighted
		Average		Average
Exercise Prices	Units	Life (Years)	Units	Life (Years)
$0.15 to $0.71	2,552	—	2,552	—
$2.15	1,115	4.1	1,115	4.1
$2.50	2,816	5.4	1,808	5.4
$2.67	817	6.2	377	6.2
$3.17	1,563	7.3	813	7.3
$3.73	2,330	8.7	278	8.6
$4.70	683	9.1	—	—
	11,876		6,943

Schedule of ESPP valuation assumptions


	Initial			Second
	Offering Period			Offering Period
Fair market value of common stock (per share)	$	19.00		$	25.83
Volatility		35.00	%		35.00	%
Expected term (years)		0.33			0.50
Expected dividend yield		-	%		-	%
Risk-free interest rate		0.11	%		0.11	%

Schedule of stock-based compensation cost related to incentive awards


	For the Year Ended December 31,
	2020		2019		2018
Stock-based compensation expense:
SARs and Converted SARs	$	143,123	$	9,460	$	5,108
Stock options		—		—		—
RSUs		171		—		—
RSAs		4,284		—		—
ESPP		326		—		—
Total stock-based compensation expense	$	147,904	$	9,460	$	5,108

Schedule of stock based compensation cost in consolidated statement of operations


	For the Year Ended December 31,
	2020		2019		2018
Stock-based compensation expense:
Cost of revenues, software subscriptions	$	14,663	$	946	$	512
Cost of revenues, services		21,472		1,419		765
Research and development		14,694		946		511
Selling and marketing		29,551		1,892		1022
General and administrative		67,524		4,257		2298
Total stock-based compensation expense	$	147,904	$	9,460	$	5,108

SAR

Compensation plans:

Schedule of valuation assumptions


Fair market value of common stock (per share)	$	19.00
Volatility		36.70	%
Expected term (years)		6.5
Expected dividend yield		—	%
Risk-free interest rate		0.40	%

Amended Options

Compensation plans:

Schedule of Option activity


				Weighted
			Weighted	Average
			Average	Remaining	Aggregate
			Exercise	Contractual	Intrinsic
Amended Option Activity	Units		Price	Life (Years)	Value
Outstanding at January 1, 2019	4,125	$	0.20	*	$	14,581
Exercised	(276)	$	0.25		$	957
Outstanding at December 31, 2019	3,849	$	0.19	*	$	17,344
Exercised through June 30	(173)	$	0.30		$	759
Amendment and exchange of options	(3,676)	$	0.19	*	$	69,177
Outstanding at December 31, 2020	—
*Options have indefinite contractual lives

2020 Plan

Compensation plans:

Schedule of Option activity


				Weighted
			Weighted	Average
			Average	Remaining	Aggregate
			Exercise	Contractual	Intrinsic
2020 Plan Option Activity	Units		Price	Life (Years)	Value
Outstanding at January 1, 2020	—		—
Issued in connection with Converted SARs	12,038	$	2.76
Issued in connection with Amended Options	3,676	$	0.19	*
Total options granted	15,714	$	2.16
Forfeited	(156)	$	3.29
Exercised	(3,682)	$	1.21		$	70,137
2020 Plan options outstanding at December 31, 2020	11,876	$	2.44	5.29	$	384,883
2020 Plan options exercisable at December 31, 2020	6,943	$	1.74	3.59	$	229,911
*Amended Options have indefinite contractual lives

Restricted Stock Units

Compensation plans:

Schedule of restricted activity


		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2020	—	$	—
Granted	101		23.80
Outstanding at December 31, 2020	101	$	23.80

Restricted Stock Awards

Compensation plans:

Schedule of restricted activity


		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2020	—	$	—
Granted	694		19.00
Vested	(21)		19.00
Forfeited	(3)		19.00
Outstanding at December 31, 2020	670	$	19.00

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENCIES

Schedule of future payments under operating property lease


Year Ending December 31,
2021	$	5,442
2022		4,518
2023		4,459
2024		4,464
2025		4,382
Thereafter		12,531
Total	$	35,796

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

INCOME TAXES

Schedule of components of net income (loss) before income taxes


	For the Year Ended December 31,
	2020		2019		2018
U.S.	$	(107,959)	$	32,131	$	(1,999)
Foreign		90		(1,229)		(2,428)
Net income (loss) before income taxes	$	(107,869)	$	30,902	$	(4,427)

Schedule of Income tax benefit (expense)


	For the Year Ended December 31,
	2020		2019		2018
Current income taxes:
Federal	$	—	$	—	$	—
State and local		(617)		(578)		(537)
Foreign		(94)		(115)		(295)
Total current		(711)		(693)		(832)
Deferred income taxes:
Federal		23,931		—		—
State and local		5,780		677		(818)
Foreign		(68)		171		(29)
Total deferred		29,643		848		(847)
Income tax benefit (expense)	$	28,932	$	155	$	(1,679)

Schedule of reconciliation of the effective tax rate to tax


	2020				2019				2018
	Total		Tax Rate		Total		Tax Rate		Total		Tax Rate
Pretax net (loss) income	$	(107,869)			$	30,902			$	(4,427)
Taxes:
U.S. federal income tax at statutory rate	$	(22,652)	21.0	%	$	6,489	21.0	%	$	(930)	21.0	%
State income taxes		(1,811)	1.7	%		(98)	(0.3)	%		1,355	(30.6)	%
Tax effect of S-Corporation status		21,325	(19.8)	%		(6,489)	(21.0)	%		930	(21.0)	%
Impact of change in tax status		(24,944)	23.1	%		—	—	%		—	—	%
Stock-based compensation expense		(1,554)	1.4	%		—	—	%		—	—	%
Impact of foreign operations		(56)	—	%		(57)	(0.2)	%		324	(7.3)	%
Other permanent items, net		760	(0.6)	%		—	—	%		—	—	%
Taxes and effective tax rate	$	(28,932)	26.8	%	$	(155)	(0.5)	%	$	1,679	(37.9)	%

Schedule of significant components of the Company's net deferred tax assets (liabilities)


	As of December 31,
Deferred tax assets:	2020		2019
Deferred revenue	$	4,013	$	289
State operating loss carry forwards		2,595		56
Federal and foreign loss carry forwards		13,526		217
Accrued expenses		3,952		98
Accrued variable compensation		3,272		(47)
Deferred compensation		24,933		548
Other		727		46
Deferred tax assets		53,018		1,207
Valuation allowance		(1,507)		(46)
Total deferred tax assets		51,511		1,161
Deferred tax liabilities:
Depreciation and amortization		(19,998)		(860)
Prepaid expenses		(1,556)		(40)
Total deferred tax liabilities		(21,554)		(900)
Net deferred tax asset	$	29,957	$	261

Classification in the consolidated balance sheets:
Deferred income tax asset	$	29,974	$	288
Deferred other liabilities		(17)		(27)
Net deferred tax asset	$	29,957	$	261

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Business (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 07, 2020
Systax - VIE
Summary of significant accounting policies
Ownership (as a percent)	60.00%
Ownership percentage of VIE to settle obligations	100.00%
Net assets	$ 18,721
Systax
Summary of significant accounting policies
Interest acquired (as a percent)		60.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Registration of Company Stock and Initial Public Offering (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands				12 Months Ended
	Jul. 31, 2020	Jul. 28, 2020	Apr. 03, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Initial Public Offering
Forward Stock Split		three-for-one
Proceeds from issuance of shares in connection with Offering				$ 423,024
Principal payments on long-term debt				$ 226,251	$ 5,566	$ 3,284
Term Loan
Initial Public Offering
Principal payments on long-term debt	$ 175,000		$ 61,656
Class A \| Initial Public Offering
Initial Public Offering
Proceeds from issuance of shares in connection with Offering		$ 423,024
Stock issued during the period		23,812
Price (per share)		$ 19.00

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segments (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018
Segment information:
Operating segments \| segment	1
Property and equipment	$ 56,557	$ 54,727
Geographic Concentration Risk \| Outside United States
Segment information:
Property and equipment	$ 287	$ 0
Revenue \| Geographic Concentration Risk \| Outside United States
Segment information:
Risk percentage	5.00%	4.00%	4.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Credit Risk (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenue \| No customer concentration >10%
Segments:
Risk percentage	10.00%	10.00%	10.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2020
Leasehold improvements \| Minimum
Property and equipment
Estimated useful lives (in years)	1 year
Leasehold improvements \| Maximum
Property and equipment
Estimated useful lives (in years)	12 years
Internal-use software developed \| Minimum
Property and equipment
Estimated useful lives (in years)	3 years
Internal-use software developed \| Maximum
Property and equipment
Estimated useful lives (in years)	5 years
Computer software purchased \| Minimum
Property and equipment
Estimated useful lives (in years)	3 years
Computer software purchased \| Maximum
Property and equipment
Estimated useful lives (in years)	7 years
Equipment \| Minimum
Property and equipment
Estimated useful lives (in years)	3 years
Equipment \| Maximum
Property and equipment
Estimated useful lives (in years)	10 years
Furniture and fixtures \| Minimum
Property and equipment
Estimated useful lives (in years)	7 years
Furniture and fixtures \| Maximum
Property and equipment
Estimated useful lives (in years)	10 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details)	12 Months Ended
	Dec. 31, 2020 item
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Units	1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounting for Stock-Based Compensation (Details)	12 Months Ended
	Dec. 31, 2020
ESPP
Compensation plans:
Discount	15.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Self-insurance (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Self-insurance accruals	$ 1,766	$ 1,473

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of goods and services (Details)	Dec. 31, 2020
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-12-31
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue recognition period	3 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of revenue:
Total revenues	$ 374,665	$ 321,500	$ 272,403
Software subscriptions
Disaggregation of revenue:
Total revenues	316,763	275,629	235,663
Services
Disaggregation of revenue:
Total revenues	$ 57,902	$ 45,871	$ 36,740

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract balances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Allowance for accounts receivable	$ 8,592	$ 7,515	$ 5,527	$ 4,320
Accounts receivable rollforward:
Balance, beginning of period	70,367	62,235
Balance, end of period	77,159	70,367
Increase, net	$ 6,792	$ 8,132

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Allowance and deferred allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Allowance for credit loss
Allowance balance, January 1	$ (7,515)	$ (5,527)	$ (4,320)
Allowance balance, December 31	(8,592)	(7,515)	(5,527)
Change in allowance	1,077	1,988	1,207
Deferred allowance balance, January 1	5,614	4,858	3,888
Deferred allowance balance, December 31	6,432	5,614	4,858
Change in deferred allowance	(818)	(756)	(970)
Net amount charged to revenue	259	1,232	237
Revenue recognized for satisfaction in previous period	$ 191,745	$ 163,939	$ 135,190

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred revenue (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Deferred revenue, current	$ 207,560	$ 191,745
Deferred revenue, non-current	14,702	14,046
Total deferred revenue, end of period	$ 222,262	$ 205,791	$ 178,703	$ 139,059

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred revenue, changes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Changes to deferred revenue:
Beginning balance	$ 205,791	$ 178,703	$ 139,059
Additional amounts deferred	391,136	348,588	312,047
Revenues recognized	(374,665)	(321,500)	(272,403)
Ending balance	$ 222,262	$ 205,791	$ 178,703

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred revenue, recognized (Details) $ in Thousands	Dec. 31, 2020 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2021	$ 207,560
2022	11,441
2023	3,261
Deferred revenue	$ 222,262

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment loss	$ 0	$ 0	$ 0
Contract costs, amortization period	3 years
Payment terms (in days)	30
Changes to deferred commissions:
Beginning balance	$ 11,196	8,830	5,676
Additions	8,291	10,140	8,691
Amortization	(7,744)	(7,774)	(5,537)
Ending balance	$ 11,743	$ 11,196	$ 8,830

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reimbursable costs (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reimbursable costs	$ 199	$ 1,107	$ 902

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Advertising expense	$ 11,069	$ 11,921	$ 8,956

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Other expense (income)
Foreign currency
Net foreign transaction (losses)	$ (155)	$ (84)	$ (121)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income taxes
Deferred income tax asset	$ 29,974	$ 219
Conversion from S to C Corp
Income taxes
Deferred income tax asset	$ 24,944
U.S. Federal
Income taxes
Proforma tax rate	25.50%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Unaudited Pro Forma Earnings Per Share (Details) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) $ / shares shares
Numerator:
Pro forma net loss attributable to all stockholders	$ (80,362)
Class A
Numerator:
Stock as a percentage of total shares outstanding	8.44%
Pro forma net loss attributable to all stockholders	$ (6,780)
Denominator:
Weighted average common stock, basic and diluted \| shares	11,096
Pro forma net loss per share, basic and diluted \| $ / shares	$ (0.61)
Class B
Numerator:
Stock as a percentage of total shares outstanding	91.56%
Pro forma net loss attributable to all stockholders	$ (73,582)
Denominator:
Weighted average common stock, basic and diluted \| shares	120,415
Pro forma net loss per share, basic and diluted \| $ / shares	$ (0.61)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash paid for:
Interest	$ 2,461	$ 1,766	$ 1,853
Income taxes	588	945	668
Non-cash investing and financing activities:
Distributions payable		13,183	10,892
Estimated distributions payable under tax sharing agreement	2,700
Purchase Commitment Liability at acquisition date (Note 2)	12,592
Remeasurement of options for redeemable shares	51,833	2,763	1,027
Conversions of SAR's in connection with the Offering	129,710
Exchange of Amended Options in connection with the Offering	69,177
Exercised options exchanged in lieu of income taxes		184	$ 209
Equipment acquired through capital leases	$ 646	$ 1,904

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Issued Accounting Pronouncements (Details)	Jan. 01, 2021 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lease, Practical Expedients, Package [true false]	true
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets	$ 24,000
Operating lease liabilities	$ 33,000

BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands		12 Months Ended
BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands	Jan. 07, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Acquisition
Revenues		$ 374,665	$ 321,500	$ 272,403
Net (loss) income		$ (78,937)	31,057	$ (6,106)
Systax - VIE
Acquisition
Ownership (as a percent)		60.00%
Revenues		$ 4,430
Net (loss) income		(1,089)
General and administrative
Acquisition
Transaction costs			$ 504
Systax
Acquisition
Interest acquired (as a percent)	60.00%
Payments to acquire business	$ 12,374
Purchase Commitment Liability		$ 12,592
Systax \| Quotaholders
Acquisition
Ownership (as a percent)	40.00%
Systax \| Scenario, Adjustment
Acquisition
Purchase Commitment Liability	$ 14,344

BUSINESS COMBINATIONS - Purchase price (Details) - Systax - USD ($) $ in Thousands	Jan. 07, 2020	Dec. 31, 2020
Acquisition
Cash held in escrow for benefit of Systax Quataholders	$ 748
Cash consideration	12,374
Purchase Commitment Liability		$ 12,592
Less: cash acquired	(56)
Total	24,910
Quotaholders
Acquisition
Cash consideration	$ 11,626

BUSINESS COMBINATIONS - Net assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 07, 2020	Dec. 31, 2019
Acquisition
Goodwill	$ 16,329		$ 0
Systax
Acquisition
Accounts receivable		$ 495
Property and equipment		112
Other current assets		14
Goodwill		21,089
Other intangible assets		3,650
Accounts payable		(358)
Accrued expenses		(92)
Total		$ 24,910

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Money market accounts
Cash and cash equivalents
Fair value, investments	$ 168,330	$ 61,644

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property and equipment
Property and equipment, gross	$ 175,687	$ 156,403
Less accumulated depreciation	(119,130)	(101,676)
Property and equipment, net	56,557	54,727
Leasehold improvements
Property and equipment
Property and equipment, gross	20,907	20,887
Equipment
Property and equipment
Property and equipment, gross	41,410	40,639
Computer software purchased
Property and equipment
Property and equipment, gross	11,620	11,232
Internal-use software developed
Property and equipment
Property and equipment, gross	90,772	75,399
Less accumulated depreciation	(65,090)	(53,852)
Property and equipment, net	28,986	22,338
Cloud-based customer solutions
Property and equipment
Property and equipment, gross	65,423	51,442
Internal systems and tools
Property and equipment
Property and equipment, gross	25,349	23,957
Furniture and fixtures
Property and equipment
Property and equipment, gross	7,674	7,455
In-process internal-use software
Property and equipment
Property and equipment, gross	$ 3,304	$ 791

PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and equipment
Depreciation and amortization	$ 11,018	$ 8,996	$ 7,937
Property and equipment	56,557	54,727
Accumulated depreciation	119,130	101,676
Excluding internal-use software and capital leases
Property and equipment
Depreciation expense	7,833	7,386	7,279
Assets under capital leases
Property and equipment
Property and equipment	1,360	1,455
Accumulated depreciation	1,370	627
Depreciation expense	743	565	40
Internal systems and tools
Property and equipment
Depreciation expense	$ 2,442	$ 1,045	$ 618

PROPERTY AND EQUIPMENT - Major components of internal-use software (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property and equipment
Property and equipment, gross	$ 175,687	$ 156,403
Less accumulated depreciation	(119,130)	(101,676)
Property and equipment	56,557	54,727
Internal-use software developed
Property and equipment
Property and equipment, gross	90,772	75,399
Less accumulated depreciation	(65,090)	(53,852)
Property and equipment, net excluding in-process internal-use software	25,682	21,547
Property and equipment	28,986	22,338
In-process internal-use software
Property and equipment
Property and equipment, gross	$ 3,304	$ 791

PROPERTY AND EQUIPMENT - Amounts capitalized for internal-use software and included in property and equipment additions on the consolidated statements of cash flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and equipment
Capitalized internal-use software	$ 20,955	$ 20,339	$ 21,053
Research and development	54,340	30,557	23,755
Internal-use software developed
Property and equipment
Capitalized internal-use software	17,886	15,039	16,829
Depreciation expense	8,818	7,982	11,707
Research and development	10,518	10,765	11,038
Cloud-based customer solutions
Property and equipment
Capitalized internal-use software	14,710	10,179	14,345
Internal systems and tools
Property and equipment
Capitalized internal-use software	3,176	4,860	2,484
Depreciation expense	$ 2,442	$ 1,045	$ 618

PROPERTY AND EQUIPMENT - Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2020
Software
Total		$ 2,382
Internal systems and tools
Software
2021		2,362
2022		2,049
2023		957
2024		473
2025		69
Total		5,910
Cloud-based customer solutions
Software
2021		10,534
2022		6,795
2023		2,443
Total		$ 19,772
Internal-use software developed
Software
Impairment	$ 32,692
Accumulated amortization	$ 11,907

CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands	12 Months Ended
CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Software
Capitalized software, net	$ 31,989	$ 32,075
Capitalized software amortization expense	11,936	8,212	$ 5,257
Software
Software
Capitalized development, developed for sale	11,850	17,221	$ 12,261
Capitalized software, gross	63,071	47,862
Accumulated amortization	(32,217)	(20,281)
Capitalized software, net	30,854	27,581
In-process internal-use software
Software
Capitalized software, gross	$ 1,135	$ 4,494

CAPITALIZED SOFTWARE - Amortization expense (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Future amortization expense:
Total	$ 2,382
Software
Future amortization expense:
2021	11,811
2022	8,596
2023	5,974
2024	3,783
2025	690
Total	$ 30,854

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill.	$ 16,329	$ 0
Other intangible assets, net	2,382
Goodwill and other intangible assets	$ 18,711

GOODWILL AND OTHER INTANGBLE ASSETS (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
Balance, January 1, 2020	$ 0
Acquisition of Systax (Note 2)	21,089
Foreign currency translation adjustments	(4,760)
Balance, December 21, 2020, net	16,329
Accumulated impairment losses	0
Balance, December 31, 2020, gross	$ 16,329

GOODWILL AND OTHER INTANGIBLE ASSETS - Intangibles (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Other intangible assets
Carrying Value	$ 2,382
Amortization of acquired intangible assets
Amortization	443
Cost of Revenues \| Software subscriptions
Amortization of acquired intangible assets
Amortization	267
Selling and marketing
Amortization of acquired intangible assets
Amortization	$ 176
Other intangible assets
Other intangible assets
Weighted Average Amortization Period (Years)	5 years 6 months
Gross Value	$ 2,825
Accumulated Amortization	443
Carrying Value	$ 2,382

GOODWILL AND OTHER INTANGIBLE ASSETS - Future amortization (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Future amortization expense:
Total	$ 2,382
Other intangible assets
Future amortization expense:
2021	616
2022	500
2023	500
2024	499
2025	267
Total	$ 2,382

DEBT - Credit Agreement (Details) - USD ($) $ in Thousands				12 Months Ended
DEBT - Credit Agreement (Details) - USD ($) $ in Thousands	Jul. 31, 2020	May 29, 2020	Apr. 03, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Debt
Distribution paid		$ 123,185		$ 146,116	$ 28,566	$ 28,024
Payments for deferred financing costs				2,436
Refund on payments for deferred financing costs				468
Principal payments on long-term debt				226,251	5,566	3,284
Current portion of long-term debt				882	50,804
Unamortized deferred financing costs					221
Amortization of deferred financing costs				373	266	$ 266
Capital lease obligations				$ 1,107
Base rate
Debt
Interest rate				3.25%
LIBOR
Debt
Interest rate				2.00%
Term Loan
Debt
Face amount			$ 175,000
Payments for deferred financing costs			2,904
Write off deferred financing costs				$ 1,174
Principal payments on long-term debt	$ 175,000		$ 61,656
Current portion of long-term debt					50,375
Term of debt			5 years
Amortization of deferred financing costs				44	266
Interest Expense				177
Line of Credit
Debt
Line of credit, capacity			$ 100,000		40,000
Line of credit, outstanding borrowings				$ 0	$ 0
Maturity date				Mar. 01, 2025
In covenant compliance				True

DEBT - Capital leases (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Year Ending December 31,
2021	$ 915
2022	230
Total	1,145
Less amount representing interest	38
Present value of minimum lease payments	1,107	$ 1,332
Less: current portion	882
Capital lease obligations, net of current portion	$ 225

STOCKHOLDERS EQUITY (DEFICIT) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		1 Months Ended			3 Months Ended			12 Months Ended
	Jul. 28, 2020	Jul. 25, 2020	Apr. 30, 2020	Apr. 30, 2019	Dec. 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jul. 27, 2020
Common Stock
Stockholders' Equity (Deficit)					$ 225,486			$ 225,486	$ (129,776)
Forward Stock Split	three-for-one
Proceeds from common stock share exchange	$ 0
Liquidation preferences	$ 0					$ 0
Common Stock, Shares Authorized	450,000
Common stock par value (in dollars per share)	$ 0.001
Preferred Stock, Shares Authorized	30,000				30,000			30,000	0
Preferred Stock, Par or Stated Value Per Share	$ 0.001				$ 0.001			$ 0.001	$ 0.001
Proceeds from exercise of stock option								$ 8,808	$ 68	$ 177
Proceeds from issuance of shares in connection with Offering								423,024
Exercised options exchanged in lieu of income taxes									184	209
Distributions		$ 5,706				$ 123,185	$ 4,010	$ 132,901	$ 30,857	$ 38,916
Distributions per share		$ 0.05				$ 1.02	$ 0.03		$ 0.11	$ 0.09
Exchange of shares								300
Repurchased Treasury Stock
Common Stock
Treasury stock acquired									41,910
Treasury stock					0			0
Family
Common Stock
Ownership (as a percent)						99.90%
Former Class A
Common Stock
Common Stock, Shares, Outstanding									147
Former Class A \| Repurchased Treasury Stock
Common Stock
Purchase of treasury stock (in shares)									153
Former Class A \| Family
Common Stock
Ownership (as a percent)						100.00%
Former Class B
Common Stock
Common Stock, Shares, Outstanding						120,443
Stock issued during the period			173
Proceeds from exercise of stock option			$ 53
Former Class B \| Repurchased Treasury Stock
Common Stock
Purchase of treasury stock (in shares)									41,757
Former Class B \| Family
Common Stock
Common Stock, Shares, Outstanding						120,270
Former Class B \| Selling stockholders
Common Stock
Common Stock, Shares, Outstanding						173
Class A
Common Stock
Common Stock, Shares, Outstanding					26,327			26,327	0
Common Stock, Shares Authorized	300,000				300,000			300,000	0
Common stock par value (in dollars per share)					$ 0.001			$ 0.001	$ 0.001
Common Stock, Voting Rights	one
Shares exchanged in lieu								860
Class A \| Exercise of outstanding options
Common Stock
Exercise of stock options, net (in shares)								890
New Issues Vested Restricted Stock, Shares								19
Class A \| In connection with the offering
Common Stock
Auto exercised options in connection with offering shares issued								564
Class A \| Initial Public Offering
Common Stock
Offering costs	$ 6,222
Stock issued during the period	23,812
Proceeds from issuance of shares in connection with Offering	$ 423,024
Class A \| Selling stockholders
Common Stock
Stock issued during the period								510
Shares exchanged in lieu								381
Class B
Common Stock
Common Stock, Shares, Outstanding					120,117			120,117	0
Common Stock, Shares Authorized	150,000				150,000			150,000	0
Common stock par value (in dollars per share)					$ 0.001			$ 0.001	$ 0.001
Common Stock, Voting Rights	ten
Stock issued during the period				225
Proceeds from exercise of stock option				$ 68
Shares exchanged in lieu				51
Common Stock
Common Stock
Common Stock, Shares, Outstanding	120,590										120,590
S Corporation
Common Stock
Stockholders' Equity (Deficit)											$ 354,291
Distributions					$ 33
Amount of estimated dividends liability					$ 2,700			$ 2,700

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Numerator:
Net (loss) income attributable to all stockholders	$ (78,937)	$ 31,057	$ (6,106)
Denominator:
Anti-dilutive shares	7,158		4,013
Class A
Numerator:
Common stock as a percentage of total shares outstanding, basic	8.44%	0.08%	0.26%
Net (loss) income attributable to stockholders, basic	$ (6,660)	$ 23	$ (16)
Common stock as a percentage of total shares outstanding, diluted	8.44%	3.11%	0.26%
Net (loss) income attributable to stockholders, diluted	$ (6,660)	$ 965	$ (16)
Denominator:
Weighted average common stock, basic	11,096	118	210
Dilutive effect of common stock equivalents		3,743
Weighted average common stock, diluted	11,096	3,861	210
Net (loss) income per share, basic	$ (0.60)	$ 0.20	$ (0.08)
Net (loss) income per share, diluted	$ (0.60)	$ 0.25	$ (0.08)
Class B
Numerator:
Common stock as a percentage of total shares outstanding, basic	91.56%	99.92%	99.74%
Net (loss) income attributable to stockholders, basic	$ (72,277)	$ 31,034	$ (6,090)
Common stock as a percentage of total shares outstanding, diluted	91.56%	96.89%	99.74%
Net (loss) income attributable to stockholders, diluted	$ (72,277)	$ 30,092	$ (6,090)
Denominator:
Weighted average common stock, basic	120,415	120,417	120,417
Weighted average common stock, diluted	120,415	120,417	120,417
Net (loss) income per share, basic	$ (0.60)	$ 0.26	$ (0.05)
Net (loss) income per share, diluted	$ (0.60)	$ 0.25	$ (0.05)

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - 401K Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Compensation plans:
Contribution (as a percent)	3.00%	3.00%	3.00%
401(k) matching contributions	$ 4,011	$ 3,419	$ 2,893
Discretionary profit-sharing
Compensation plans:
Contribution (as a percent)	3.00%	3.00%	3.00%
401(k) discretionary contributions	$ 4,035	$ 3,363	$ 2,886

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Long-Term Rewards Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Compensation plans:
Deferred compensation, current	$ 2,057	$ 8,935
Deferred compensation, net of current portion	$ 5,010	18,530
Long-Term Rewards Plan
Compensation plans:
Performance period (in years)	P3Y
Compensation expense	$ 3,027	2,462	$ 2,012
Deferred compensation, current	1,987	2,717
Deferred compensation, net of current portion	$ 2,772	$ 1,812

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Stock-Based Award Plans (Details) - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
	Jul. 28, 2020	Dec. 31, 2020	Dec. 31, 2019	Jul. 27, 2020	Dec. 31, 2018
Compensation plans:
Accrued salaries and benefits		$ 17,326	$ 15,195
Restricted Stock Awards
Compensation plans:
Granted	694
Outstanding (in shares)	694	670
Restricted Stock Units
Compensation plans:
Granted	10	101
Shares converted	10
Outstanding (in shares)	10	101
ESPP
Compensation plans:
Offering Period		6 months
Accrued salaries and benefits		$ 246
SAR
Compensation plans:
Granted		702	2,409
Shares converted	12,038
Outstanding (in shares)			6,207		5,889
Outstanding vested and expected to vest (in shares)	48		12,276	12,086	10,671
Amended Options
Compensation plans:
Shares converted	3,676
Outstanding (in shares)			3,849	3,676	4,125
2020 Plan
Compensation plans:
Granted		15,714
Shares converted	15,714
Outstanding (in shares)	15,714	11,876

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - 2020 Plan (Details) - 2020 Plan shares in Thousands	12 Months Ended
	Dec. 31, 2020 shares
Compensation plans:
Shares authorized	16,500
Available for issuance	1,869
Maximum issuance (as a percentage of outstanding)	4.00%
Maximum issuance (in shares)	3,000

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Retired SAR Plan (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
	Jul. 28, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jul. 27, 2020
Compensation plans:
Redemption of Converted SARs		$ (22,889)
Exercised options exchanged in lieu of income taxes			$ 184	$ 209
Unrecognized compensation expense	$ 44,342
Deferred compensation, current		2,057	8,935
Deferred compensation, net of current portion		5,010	18,530
Stock-based compensation expense from equity-classified awards under the 2020 Plan		12,576
Stock-based compensation expense		$ 147,904	$ 9,460	$ 5,108
SAR
Compensation plans:
Outstanding (in shares)			6,207	5,889
Percentage of vesting to exercise		50.00%
Triggering event ownership percentage		50.00%
Outstanding vested and expected to vest (in shares)	48		12,276	10,671	12,086
Service requirement (in years)		10 years
Exercised options exchanged in lieu of income taxes	$ 13,835
Aggregate intrinsic value	9,054
Unrecognized compensation expense		$ 44,342	$ 3,900
Deferred compensation, current	1,299	1,299	5,790
Deferred compensation, net of current portion		1,122	$ 16,506
Stock-based compensation expense from equity-classified awards under the 2020 Plan		143,519
Fair value, vested and expected to vest	197,708
Fair value of options		153,366
Stock-based compensation expense	$ 57,079
Incremental compensation expense		$ 0
Fair Value Assumptions and Methodology
Share Price	$ 19.00
Volatility	36.70%
Expected term (in years)	6 years 6 months
Risk-free interest rate	0.40%
SAR \| Minimum
Compensation plans:
Service requirement (in years)		1 year
Unrecognized compensation expense period	1 year
SAR \| Maximum
Compensation plans:
Service requirement (in years)		10 years
Unrecognized compensation expense period	5 years
SAR \| Accounting Standards Update 2016-09
Compensation plans:
Unrecognized compensation expense		$ 2,422
SAR \| Year one
Compensation plans:
Vesting percentage		25.00%
SAR \| Year two
Compensation plans:
Vesting percentage		50.00%
SAR \| Year five
Compensation plans:
Vesting percentage		100.00%

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - SAR Plan, activity (Details) - $ / shares shares in Thousands			12 Months Ended
	Jul. 28, 2020	Jul. 01, 2020	Dec. 31, 2020	Dec. 31, 2019
Grant values, Nonvested
Weighted average grant date intrinsic value		$ 0
SAR
Vested and Expected to Vest
Balance, Bgn	12,086		12,276	10,671
Granted			702	2,409
Exercised			(877)	(609)
Forfeited			(63)	(195)
Converted			(12,038)
Balance, End	48			12,276
Vested
Balance, Bgn			6,207	5,889
Exercised			(877)	(609)
Vested			(1,410)	(630)
Balance, End				6,207
Nonvested Units
Balance, Bgn			6,069	4,782
Forfeited			(63)	(195)
Vested			(1,410)	(630)
Balance, End				6,069
Grant values
Granted			$ 4.70	$ 3.73
Forfeited			2.50
Grant values, Nonvested
Forfeited			2.50
SAR \| Minimum
Grant values
Balance, Bgn				0.92
Vested				0.92
Exercised			1.31	1.31
Forfeited				2.13
Converted			0.92
Balance, End
Grant values, Vested
Exercised			1.31	1.31
Grant values, Nonvested
Balance Bgn			0.92
Forfeited				2.13
Balance, End				0.92
SAR \| Maximum
Grant values
Balance, Bgn			3.73	3.17
Granted				2.50
Vested			3.73	3.73
Exercised			2.50
Forfeited				2.50
Converted			4.70
Balance, End				3.73
Grant values, Vested
Exercised			$ 2.50
Grant values, Nonvested
Forfeited				$ 2.50
Vested units
Vested and Expected to Vest
Granted			21	297
Converted			(6,761)
Non vested units
Vested and Expected to Vest
Granted			681	2,112
Converted			(5,277)

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Amended Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Compensation plans:
Remeasurement of options for redeemable shares		$ 51,833	$ 2,763	$ 1,027
Amended Options
Compensation plans:
Triggering event (as percentage of stock)		50.00%
Partial triggering event		25.00%
Tag along right		51.00%
Drag along right		51.00%
Remeasurement of options for redeemable shares		$ 51,833	$ 2,763	$ 1,027
Temporary equity and were reclassified to stockholders’ equity		$ 69,177
Units
Balance, Bgn	3,849	3,849	4,125
Exercised	(173)		(276)
Exchange		(3,676)
Balance, End			3,849	4,125
Weighted Average Per Share
Balance, Bgn	$ 0.19	$ 0.19	$ 0.20
Exercised	$ 0.30		0.25
Exchange		$ 0.19
Balance, End			$ 0.19	$ 0.20
Aggregate intrinsic value
Beginning of period	$ 17,344	$ 17,344	$ 14,581
Exercised		759	957
Amendment and exchange of options		$ 69,177
End of period			$ 17,344	$ 14,581

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Options under 2020 Plan (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jul. 28, 2020	Dec. 31, 2020
2020 Plan
Compensation plans:
Intrinsic value, exercised		$ 70,137
Intrinsic value, outstanding		$ 384,883
Remaining contractual life, outstanding		5 years 3 months 15 days
Vested and exercisable		6,943,000
Intrinsic value, exercisable		$ 229,911
Remaining contractual life, exercisable		3 years 7 months 2 days
Units
Granted		15,714,000
Forfeited		(156,000)
Exercised		(3,682,000)
Balance, End	15,714,000	11,876,000
Vested and exercisable		6,943,000
Weighted Average Per Share
Granted		$ 2.16
Exercised		1.21
Forfeited		3.29
Balance, End		2.44
Exercisable		$ 1.74
Unrecognized compensation expense		$ 33,671
Unrecognized compensation expense period		3 years 4 months 24 days
2020 Plan \| Maximum
Weighted Average Per Share
Vesting period		4 years
2020 Plan \| Minimum
Weighted Average Per Share
Vesting period		1 year
Converted Options
Units
Granted		12,038,000
Weighted Average Per Share
Granted		$ 2.76
Amended Options
Units
Granted		3,676,000
Weighted Average Per Share
Granted		$ 0.19
Subsequent to Offering
Units
Granted		0

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Options under 2020 Plan Price Range (Details) shares in Thousands	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Options outstanding, vested and exercisable:
Options outstanding	11,876
Options vested and exercisable	6,943
$0.15 to $0.71
Options outstanding, vested and exercisable:
Exercise prices, lower range \| $ / shares	$ 0.15
Exercise prices, upper range \| $ / shares	$ 0.71
Options outstanding	2,552
$2.15
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.15
Options outstanding	1,115
Options outstanding, life	4 years 1 month 6 days
Options vested and exercisable	1,115
Options vested and exercisable, life	4 years 1 month 6 days
$2.50
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.50
Options outstanding	2,816
Options outstanding, life	5 years 4 months 24 days
Options vested and exercisable	1,808
Options vested and exercisable, life	5 years 4 months 24 days
$2.67
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.67
Options outstanding	817
Options outstanding, life	6 years 2 months 12 days
Options vested and exercisable	377
Options vested and exercisable, life	6 years 2 months 12 days
$3.17
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 3.17
Options outstanding	1,563
Options outstanding, life	7 years 3 months 18 days
Options vested and exercisable	813
Options vested and exercisable, life	7 years 3 months 18 days
$3.73
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 3.73
Options outstanding	2,330
Options outstanding, life	8 years 8 months 12 days
Options vested and exercisable	278
Options vested and exercisable, life	8 years 7 months 6 days
$4.70
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 4.70
Options outstanding	683
Options outstanding, life	9 years 1 month 6 days

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
	Jul. 28, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Compensation plans:
Compensation expense		$ 147,904	$ 9,460	$ 5,108
Restricted Stock Units
Compensation plans:
Fair value of options		2,400
Compensation expense		171
Unrecognized compensation cost		$ 2,229
Unrecognized compensation expense period		3 years 4 months 24 days
Units
Granted	10	101
Balance, End	10	101
Weighted Average Per Share
Granted		$ 23.80
Balance, End		$ 23.80
Restricted Stock Units \| Minimum
Compensation plans:
Service requirement (in years)		1 year
Restricted Stock Units \| Maximum
Compensation plans:
Service requirement (in years)		4 years

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
	Jul. 28, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Compensation plans:
Stock-based compensation expense		$ 147,904	$ 9,460	$ 5,108
Restricted Stock Awards
Compensation plans:
Fair value of options		13,141
Stock-based compensation expense		4,284
Unrecognized compensation cost		$ 8,857
Unrecognized compensation expense period		2 years 2 months 12 days
Units
Granted	694
Vested		(21)
Forfeited		(3)
Balance, End	694	670
Weighted Average Per Share
Granted	$ 19.00
Vested		$ 19.00
Forfeited		19.00
Balance, End		$ 19.00

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Compensation plans:
Compensation expense	$ 147,904	$ 9,460	$ 5,108
ESPP
Compensation plans:
Purchase price as a percent of fair value	85.00%
Reserved for issuance	1,000,000
Maximum issuance (as a percentage of outstanding)	1.00%
Maximum issuance (in shares)	16,000,000
Compensation expense	$ 326
Unrecognized compensation cost	$ 218
ESPP \| Class A
Compensation plans:
Shares purchased	59

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - ESPP - Option-pricing model key input assumptions (Details) - ESPP	12 Months Ended
	Dec. 31, 2020 $ / shares
Compensation plans:
Discount	15.00%
Offering Period	6 months
Initial Public Offering
Fair Value Assumptions and Methodology
Fair market value of common stock	$ 19.00
Volatility	35.00%
Expected term (in years)	3 months 29 days
Risk-free interest rate	0.11%
Second Offering Period
Fair Value Assumptions and Methodology
Fair market value of common stock	$ 25.83
Volatility	35.00%
Expected term (in years)	6 months
Risk-free interest rate	0.11%

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Stock based compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Allocation of costs
Compensation expense	$ 147,904	$ 9,460	$ 5,108
SAR
Allocation of costs
Compensation expense	143,123	$ 9,460	$ 5,108
Restricted Stock Units
Allocation of costs
Compensation expense	171
Restricted Stock Awards
Allocation of costs
Compensation expense	4,284
ESPP
Allocation of costs
Compensation expense	$ 326

EMPLOYEE BENEFIT AND DEFERRED COMPENSATION PLANS - Stock based compensation, comprehensive income (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Allocation of costs
Compensation expense	$ 147,904	$ 9,460	$ 5,108
Research and development
Allocation of costs
Compensation expense	14,694	946	511
Selling and marketing
Allocation of costs
Compensation expense	29,551	1,892	1,022
General and administrative
Allocation of costs
Compensation expense	67,524	4,257	2,298
Software subscriptions
Allocation of costs
Compensation expense	14,663	946	512
Services
Allocation of costs
Compensation expense	$ 21,472	$ 1,419	$ 765

RELATED PARTIES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
RELATED PARTIES
Advances to stockholders	$ 0	$ 283

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
COMMITMENTS AND CONTINGENCIES
Operating lease expense	$ 7,006	$ 6,408	$ 6,291
Future minimum lease obligations:
2021	5,442
2022	4,518
2023	4,459
2024	4,464
2025	4,382
Thereafter	12,531
Total	$ 35,796

INCOME TAXES - Geography (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES - Geography (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
INCOME TAXES
U.S.	$ (107,959)	$ 32,131	$ (1,999)
Foreign	90	(1,229)	(2,428)
Net income (loss) before income taxes	$ (107,869)	$ 30,902	$ (4,427)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
-SubTopic 20
-Section 25
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=68072869&loc=d3e41242-110953

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(8))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI http://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ Details

INCOME TAXES - Benefit (Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current income taxes:
State and local	$ (617)	$ (578)	$ (537)
Foreign	(94)	(115)	(295)
Total current	(711)	(693)	(832)
Deferred income taxes:
Federal	23,931
State and local	5,780	677	(818)
Foreign	(68)	171	(29)
Total deferred	29,643	848	(847)
Income tax benefit (expense)	$ 28,932	$ 155	$ (1,679)

INCOME TAXES - Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income taxes:
Loss before income taxes	$ (107,869)	$ 30,902	$ (4,427)
Income tax benefit from translation adjustments and revaluations	55
Taxes:
U.S. federal income tax at statutory rate	(22,652)	6,489	(930)
State income taxes	(1,811)	(98)	1,355
Tax effect of S-Corporation status	21,325	(6,489)	930
Impact of change in tax status	(24,944)
Stock based compensation	(1,554)
Impact of foreign operations	(56)	(57)	324
Other permanent items, net	760
Income tax benefit (expense)	$ (28,932)	$ (155)	$ 1,679
Tax Rate (Percentage)
U.S. federal income tax at statutory rate	21.00%	21.00%	21.00%
State income taxes	1.70%	(0.30%)	(30.60%)
Tax effect of S-Corporation status	(19.80%)	(21.00%)	(21.00%)
Impact of change in tax status	23.10%
Stock based compensation	1.40%
Impact of foreign operations		(0.20%)	(7.30%)
Other permanent items, net	(0.60%)
Taxes and effective tax rate	26.80%	(0.50%)	(37.90%)
Deferred tax benefit related to the remeasurement	$ 24,944
Foreign taxing jurisdiction
Tax Rate (Percentage)
Taxes and effective tax rate			0.00%
Tax charge, asset transfers			$ 1,000

INCOME TAXES - Net deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Deferred revenue	$ 4,013	$ 289
State operating loss carry forwards	2,595	56
Federal and foreign loss carry forwards	13,526	217
Accrued expenses	3,952	98
Accrued variable compensation	3,272
Accrued variable compensation		(47)
Deferred compensation	24,933	548
Other	727	46
Deferred tax assets	53,018	1,207
Valuation allowance	(1,507)	(46)
Total deferred tax assets	51,511	1,161
Deferred tax liabilities:
Depreciation and amortization	(19,998)	(860)
Prepaid expenses	(1,556)	(40)
Deferred tax liabilities	(21,554)	(900)
Classification in the consolidated balance sheets
Deferred income tax asset	29,974	219
Net deferred tax asset	29,957	261
Deferred income tax asset
Classification in the consolidated balance sheets
Deferred income tax asset	29,974	288
Deferred other liabilities
Classification in the consolidated balance sheets
Deferred other liabilities	$ (17)	$ (27)

INCOME TAXES - Carryforwards (Details) $ in Thousands	12 Months Ended
INCOME TAXES - Carryforwards (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Foreign
Operating loss carryforwards
Operating Loss Carryforwards	$ 4,865
Non operating loss carryforwards	56
U.S. Federal
Operating loss carryforwards
Operating Loss Carryforwards	56,759
State and local
Operating loss carryforwards
Operating Loss Carryforwards	44,613
Incremental valuation allowances
Operating loss carryforwards
Incremental valuation allowances	$ 1,269

SUBSEQUENT EVENTS (Details) $ in Thousands	Jan. 25, 2021 USD ($)
Subsequent event \| Tellutax
Subsequent events:
Payments to acquire business	$ 6,100