0001558370-21-015677 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2021	Nov. 08, 2021
Document Information:
Document Type	10-Q
Document Period End Date	Sep. 30, 2021
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-39413
Entity Registrant Name	Vertex, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	23-2081753
Entity Address, Address Line One	2301 Renaissance Blvd
Entity Address, City or Town	King of Prussia
Entity Address State Or Province	PA
Entity Address, Postal Zip Code	19406
City Area Code	800
Local Phone Number	355-3500
Title of 12(b) Security	Class A Common Stock, Par Value $0.001 Per Share
Trading Symbol	VERX
Security Exchange Name	NASDAQ
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 Central Index Key	0001806837
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A
Document Information:
Entity Common Stock, Shares Outstanding		40,772,739
Class B
Document Information:
Entity Common Stock, Shares Outstanding		108,017,000

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 47,481	$ 303,051
Funds held for customers	27,860	9,222
Accounts receivable, net of allowance of $8,845, and $8,592, respectively	73,234	77,159
Prepaid expenses and other current assets	18,167	13,259
Total current assets	166,742	402,691
Property and equipment, net of accumulated depreciation	97,869	56,557
Capitalized software, net of accumulated amortization	34,018	31,989
Goodwill and other intangible assets	277,924	18,711
Deferred commissions	12,583	11,743
Deferred income tax asset	32,816	29,974
Operating lease right-of-use assets	21,137
Other assets	2,755	3,263
Total assets	645,844	554,928
Current liabilities:
Accounts payable	10,701	8,876
Accrued expenses	23,467	19,176
Distributions payable		2,700
Customer funds obligations	27,979	9,235
Accrued salaries and benefits	26,472	17,326
Accrued and deferred compensation, current	23,101	24,429
Deferred revenue	211,036	207,560
Current portion of long-term debt		882
Current portion of operating lease liabilities	2,480
Current portion of finance lease liabilities	276
Deferred rent and other		939
Deferred purchase consideration, current	19,705
Purchase commitment and contingent consideration liabilities, current	478	845
Total current liabilities	345,695	291,968
Deferred compensation, net of current portion	2,786	5,010
Deferred revenue, net of current portion	11,544	14,702
Debt, net of current portion		225
Operating lease liabilities, net of current portion	26,707
Finance lease liabilities, net of current portion	334
Deferred purchase consideration, net of current portion	19,319
Purchase commitment and contingent consideration liabilities, net of current portion	11,049	8,905
Deferred other liabilities	4,199	8,632
Total liabilities	421,633	329,442
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred shares, $0.001 par value, 30,000 shares authorized; no shares issued and outstanding
Additional paid in capital	215,647	206,541
Retained earnings	21,582	21,926
Accumulated other comprehensive loss	(13,167)	(3,127)
Total stockholders' equity	224,211	225,486
Total liabilities and stockholders' equity	645,844	554,928
Class A
Stockholders' equity:
Common stock, value issued	41	26
Class B
Stockholders' equity:
Common stock, value issued	$ 108	$ 120

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Allowance for accounts receivable	$ 8,845	$ 8,592
Preferred stock par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	30,000	30,000
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, shares authorized (in shares)	300,000	300,000
Common stock, shares issued (in shares)	40,574	26,327
Common stock, shares outstanding (in shares)	40,574	26,327
Class B
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000	150,000
Common stock, shares issued (in shares)	108,017	120,117
Common stock, shares outstanding (in shares)	108,017	120,117

Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenues:
Revenues	$ 110,718	$ 94,605	$ 313,892	$ 275,121
Cost of revenues:
Cost of revenues	43,938	47,968	118,250	129,175
Gross profit	66,780	46,637	195,642	145,946
Operating expenses:
Research and development	9,879	16,501	33,264	43,197
Selling and marketing	25,658	29,423	70,673	78,300
General and administrative	31,237	48,043	80,954	123,437
Depreciation and amortization	3,082	2,735	8,787	8,109
Other operating expense (income), net	538	(60)	4,892	154
Total operating expenses	70,394	96,642	198,570	253,197
Loss from operations	(3,614)	(50,005)	(2,928)	(107,251)
Interest expense, net	521	1,796	671	3,424
Loss before income taxes	(4,135)	(51,801)	(3,599)	(110,675)
Income tax benefit	(187)	(30,773)	(2,747)	(31,508)
Net loss	(3,948)	(21,028)	(852)	(79,167)
Other comprehensive loss from foreign currency translation adjustments and revaluations, net of tax	5,704	238	10,040	3,512
Total comprehensive loss	(9,652)	(21,266)	(10,892)	(82,679)
Software subscriptions
Revenues:
Revenues	92,276	79,778	265,160	232,844
Cost of revenues:
Cost of revenues	32,000	29,161	84,419	79,846
Services
Revenues:
Revenues	18,442	14,827	48,732	42,277
Cost of revenues:
Cost of revenues	11,938	18,807	33,831	49,329
Class A
Operating expenses:
Net loss attributable to stockholders, basic	$ (1,070)	$ (2,751)	$ (195)	$ (2,427)
Net loss per share, basic (in dollars per share)	$ (0.03)	$ (0.15)	$ (0.01)	$ (0.40)
Weighted average common stock, basic (in shares)	40,141	18,124	33,775	6,129
Net income (loss) attributable to stockholders, diluted	$ (1,070)	$ (2,751)	$ (195)	$ (2,427)
Net income (loss) per share, diluted (in dollars per share)	$ (0.03)	$ (0.15)	$ (0.01)	$ (0.40)
Weighted average common stock, diluted (in shares)	40,141	18,124	33,775	6,129
Class B
Operating expenses:
Net loss attributable to stockholders, basic	$ (2,878)	$ (18,277)	$ (657)	$ (76,740)
Net loss per share, basic (in dollars per share)	$ (0.03)	$ (0.15)	$ (0.01)	$ (0.64)
Weighted average common stock, basic (in shares)	108,017	120,417	113,646	120,417
Net income (loss) attributable to stockholders, diluted	$ (2,878)	$ (18,277)	$ (657)	$ (76,740)
Net income (loss) per share, diluted (in dollars per share)	$ (0.03)	$ (0.15)	$ (0.01)	$ (0.64)
Weighted average common stock, diluted (in shares)	108,017	120,417	113,646	120,417

Condensed Consolidated Statements of Changes in Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands	Common Stock Former Class A ASC 842	Common Stock Former Class A	Common Stock Former Class B ASC 842	Common Stock Former Class B	Common Stock Class A	Common Stock Class B	Additional paid in capital.	Retained Earnings (Accumulated Deficit). ASC 842	Retained Earnings (Accumulated Deficit).	Accumulated Other Comprehensive Loss ASC 842	Accumulated Other Comprehensive Loss	Treasury stock ASC 842	Treasury stock	Former Class A	Former Class B	Class A	Class B	Options for redeemable shares ASC 842	Options for redeemable shares	Total
Balance at Dec. 31, 2019			$ 54					$ (90,701)		$ (491)		$ (38,638)
Balance (in shares) at Dec. 31, 2019	147		120,270									41,910
Options for redeemable shares, bgn at Dec. 31, 2019																		$ 17,344
Remeasurement of options for redeemable shares									$ (15,242)										$ 15,242
Distributions declared									(4,010)											$ (4,010)
Foreign currency translation adjustments and revaluations, net of tax											$ (2,998)
Net loss									(29,064)
Balance at Mar. 31, 2020				$ 54					(139,017)		(3,489)		$ (38,638)
Balance (in shares) at Mar. 31, 2020		147		120,270									41,910
Options for redeemable shares, ending at Mar. 31, 2020																			32,586
Balance at Dec. 31, 2019			$ 54					$ (90,701)		$ (491)		$ (38,638)
Balance (in shares) at Dec. 31, 2019	147		120,270									41,910
Options for redeemable shares, bgn at Dec. 31, 2019																		$ 17,344
Foreign currency translation adjustments and revaluations, net of tax																				(3,512)
Net loss																				(79,167)
Balance at Sep. 30, 2020					$ 26	$ 120	$ 200,722		21,696		(4,003)
Balance (in shares) at Sep. 30, 2020					25,688	120,417								147	120,443
Balance at Mar. 31, 2020				$ 54					(139,017)		(3,489)		$ (38,638)
Balance (in shares) at Mar. 31, 2020		147		120,270									41,910
Options for redeemable shares, bgn at Mar. 31, 2020																			32,586
Remeasurement of options for redeemable shares									(14,637)										14,637
Distributions declared									(123,185)											(123,185)
Exercise of stock options, net									53
Exercise of stock options, net (in shares)				173
Foreign currency translation adjustments and revaluations, net of tax											(276)
Net loss									(29,075)
Balance at Jun. 30, 2020				$ 54					(305,861)		(3,765)		$ (38,638)
Balance (in shares) at Jun. 30, 2020		147		120,443									41,910
Options for redeemable shares, ending at Jun. 30, 2020																			47,223
Remeasurement of options for redeemable shares							(21,954)												21,954
Distributions declared									(5,706)
Shares issued upon vesting of Restricted Stock Units, net							(69,177)												$ 69,177
Stock-based compensation expense							5,661
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
Auto-exercised options in connection with Offering					$ 1		(13,809)
Auto-exercised options in connection with Offering (in shares)					564
Exercise of stock options in connection with the Offering							(7,023)
Exercise of stock options in connection with the Offering (in shares)					510
Vested restricted stock issued in connection with Offering							361
Vested restricted stock issued in connection with Offering (in shares)					19
Shares issued in connection with Offering, net of Offering costs					$ 24		416,778
Shares issued in connection with Offering, net of Offering costs (shares)					23,812
Exercise of stock options, net					$ 1		1,007
Exercise of stock options, net (in shares)					610
Reclassification of accumulated S Corporation earnings							(354,291)		354,291
Foreign currency translation adjustments and revaluations, net of tax											(238)									(238)
Net loss									(21,028)											(21,028)
Balance at Sep. 30, 2020					$ 26	$ 120	$ 200,722		$ 21,696		$ (4,003)
Balance (in shares) at Sep. 30, 2020					25,688	120,417								147	120,443
Balance (in shares) at Dec. 31, 2020																26,327	120,117
Foreign currency translation adjustments and revaluations, net of tax																				(10,040)
Net loss																				$ (852)
Balance (in shares) at Sep. 30, 2021																40,574	108,017

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net loss	$ (852)	$ (79,167)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	31,902	23,586
Provision for subscription cancellations and non-renewals, net of deferred allowance	423	52
Amortization of deferred financing costs	159	356
Write-off of deferred financing costs		1,351
Stock-based compensation expense	20,250	140,890
Deferred income tax benefit	(3,075)	(32,004)
Redemption of Converted SARs		(22,889)
Non-cash operating lease costs	2,867
Other	280	86
Changes in operating assets and liabilities:
Accounts receivable	12,120	4,143
Prepaid expenses and other current assets	(3,669)	(4,613)
Deferred commissions	(840)	824
Accounts payable	1,529	1,193
Accrued expenses	(2,445)	1,382
Accrued and deferred compensation	(679)	(5,399)
Deferred revenue	(1,971)	(8,251)
Operating lease liabilities	(3,685)
Other	354	(1,496)
Net cash provided by operating activities	52,668	20,044
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired	(251,412)	(12,318)
Property and equipment additions	(23,899)	(14,982)
Capitalized software additions	(7,902)	(9,246)
Net cash used in investing activities	(283,213)	(36,546)
Cash flows from financing activities:
Net increase in customer funds obligations	18,744	1,158
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		(226,029)
Payments for deferred financing costs, net		(2,436)
Proceeds from purchases of stock under ESPP	1,010
Payments for taxes related to net share settlement of stock-based awards	(12,712)
Proceeds from exercise of stock options	1,212	6,023
Distributions to stockholders		(146,084)
Distributions under Tax Sharing Agreement	(2,700)
Proceeds from issuance of shares in connection with Offering		423,024
Payments for offering costs		(6,222)
Payments for taxes on exercised options		(11,999)
Payments for purchase commitment liabilities	(10,822)
Payments on finance lease liabilities	(685)
Net cash (used in) provided by financing activities	(5,953)	212,435
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(434)	(412)
Net (decrease) increase in cash, cash equivalents and restricted cash	(236,932)	195,521
Cash, cash equivalents and restricted cash, beginning of period	312,273	83,495
Cash, cash equivalents and restricted cash, end of period	$ 75,341	$ 279,016

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets, end of period:
Cash and cash equivalents	$ 47,481	$ 270,271
Restricted cash-funds held for customers	27,860	8,745
Total cash, cash equivalents and restricted cash, end of period	$ 75,341	$ 279,016

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 condensed 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.

The Company has a 65% 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 condensed 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.

Unaudited Interim Financial Information

The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and include the accounts of the Company. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Annual Report”) filed with the SEC on March 15, 2021. The interim condensed consolidated balance sheet as of December 31, 2020 has been derived from audited financial statements included in the 2020 Annual Report. The accompanying interim condensed consolidated balance sheet as of September 30, 2021, the interim condensed consolidated statements of comprehensive loss and changes in equity (deficit) for the three and nine months ended September 30, 2021 and 2020, and interim condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare the annual audited consolidated financial statements and include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements. The operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results expected for the full year ending December 31, 2021.

Segments

The Company operates its business as one operating segment. For the three months ended September 30, 2021 and 2020, approximately 6% and 3%, respectively, of the Company’s revenues were generated from customers outside the U.S. For the nine months ended September 30, 2021 and 2020, approximately 6% and 3%, respectively, of the Company’s revenues were generated from customers outside the U.S..

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.

Use of Estimates

The preparation of condensed 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 condensed consolidated financial statements include: (i) the estimated allowance for subscription cancellations, (ii) expected credit losses associated with the allowance for doubtful accounts; (iii) the reserve for self-insurance, (iv) assumptions related to achievement of technological feasibility for software developed for sale, (v) product life cycles, (vi) estimated useful lives and potential impairment of long-lived assets and intangible assets, (vii) potential impairment of goodwill, (viii) determination of the fair value of tangible and intangible assets acquired, liabilities assumed and consideration transferred in acquisitions, (ix) amortization period of material rights and deferred commissions (x) valuation of the Company’s stock used to measure stock-based compensation awards, (xi) Black-Scholes-Merton option pricing model (“Black-Scholes model”) input assumptions used to determine the fair value of stock-based compensation awards, (xii) measurement of future purchase commitment, contingent consideration liabilities and deferred purchase consideration liabilities associated with acquisitions, and (xiii) the potential outcome of future tax consequences of events that have been recognized in the condensed consolidated financial statements or tax returns. Actual results may differ from these estimates.

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. Internal-use software is included in internal-use software developed in property and equipment in the condensed consolidated balance sheets once available for its intended use and is depreciated over periods between 3 to 5 years. 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 expense, respectively, in the condensed consolidated statements of comprehensive 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. 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 and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive loss. 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.

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 amounts. 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”). Thus 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 during this Measurement Period. 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 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 reflected in the consolidated statements of comprehensive 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.

Stock-Based Compensation

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

The awards are subject to, and the Company applies, the guidance set forth in ASC 718, Compensation—Stock Compensation, 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 at their intrinsic value. After such date, management remeasured outstanding SARs using the fair value-based method under ASC 718.

Stock-based compensation expense for stock 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. Stock-based compensation expense for awards subject to performance-based measurement criteria is recognized when achievement of performance targets is deemed probable.

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. 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.

Revenue Recognition

Revenue from contracts with customers

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. 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. Certain 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.

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 includes 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 and for internal-use software utilized for cloud-based subscriptions. Cost of revenues, services includes 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 condensed consolidated statements of comprehensive loss.

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 became taxable 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 (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) attributable to a decrease in S-Corporation stockholders’ taxable income and a corresponding increase in our taxable income as a C-Corporation for any period.

Prior to July 27, 2020, as Vertex was taxed as an S-Corporation for U.S. federal and certain states income tax purposes, net income or loss was allocated to and included on the income tax returns of the S-Corporation stockholders. Historically, the Company distributed amounts to the S-Corporation stockholders to satisfy their tax liabilities resulting from allocated net income or loss. Vertex was taxed at the corporate level in those states where the S-Corporation status was not recognized or where the state imposed a tax on an S-Corporation. 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, and the income tax provision or benefit was based on taxable income sourced to these foreign jurisdictions.

Supplemental Cash Flow Disclosures

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


	For the nine months ended
	September 30,
	2021		2020

	(unaudited)
Cash paid for interest	$	180	$	1,912
Cash paid for income taxes, net of refunds	$	1,032	$	522
Operating cash flows from operating leases	$	4,090	$	—

Non-cash investing and financing activities:
Purchase commitment and contingent consideration liabilities	$	50,653	$	14,344
Leased assets obtained in exchange for new finance lease liabilities	$	173	$	—
Equipment acquired through capital leases	$	—	$	826
Remeasurement of options for redeemable shares	$	—	$	51,833
Conversion of SARs in connection with the Offering	$	—	$	128,870
Exchange of Amended Options in connection with the Offering	$	—	$	69,177

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.

Deferred Revenue

In October 2021, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations. This standard provides specific guidance on how to recognize and measure contract assets and contract liabilities related to revenue contracts with customers acquired in a business combination. This will align the accounting for these acquired contracts to the accounting for revenue contracts originated by the acquirer and will provide more comparable information to investors and other financial statement users seeking to better understand the financial impact of these acquisitions. The standard is effective for all other entities for fiscal years beginning after December 15, 2022, and interim periods within fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the Company’s condensed consolidated financial statements.

Recently Adopted Accounting Pronouncements

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASC 842”). This standard amended several aspects of lease accounting, including requiring lessees to recognize operating leases with a initial 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 and interim periods beginning after December 15, 2018. The standard is effective for all other entities for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted.

The Company adopted ASC 842 on January 1, 2021 using the modified retrospective transition method, which did not require the Company to adjust comparative periods. The Company’s lease assets and lease liabilities are recognized on the lease commencement date in an amount that represents the present value of future lease payments. The Company’s incremental borrowing rate, which is based on information available at the adoption date for existing leases and the commencement date for leases commencing after the adoption date, is used to determine the present value of lease payments.

The Company elected the “package of three” practical expedients permitted under the transition guidance, which allows (i) a carry forward of the historical lease classification conclusions, (ii) management to assess whether a contract is or contains a lease, and (iii) the retention of initial direct costs for any leases that exist prior to adoption of the new standard.

As a result of the adoption of ASC 842 on January 1, 2021, the Company recorded both operating lease right-of-use assets of $24,004 and operating lease liabilities of $32,562. An adjustment to retained earnings of $508, net of the deferred tax impact, was also recorded. The adoption of ASC 842 had an immaterial impact on the condensed consolidated statement of comprehensive loss and the condensed consolidated cash flow. The adoption of this standard also resulted in a change in the naming convention for leases classified historically as capital leases. These leases are now referred to as finance leases within property and equipment, with corresponding short-term and long-term debt liabilities being presented as “Current portion of finance lease liabilities” and “Finance lease liabilities, net of current portion,” respectively. See Note 7 for further information.

The Company does not recognize leases with an initial term less than one year (“short-term leases”) on its condensed consolidated balance sheets, and recognizes such lease payments in the condensed consolidated statements of comprehensive loss on a straight-line basis over the lease term. Leases with an option to extend the related lease term or terminate early are reflected in the lease term when it is reasonably certain that the Company will exercise such options.

Credit Losses

In June 2016, the FASB issued ASU No. 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, to be 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. The Company adopted this standard effective January 1, 2021, and this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, (“ASU 2019-12”) which simplifies the accounting for income taxes. 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 adopted this standard effective January 1, 2021, and this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

Risks and Uncertainties

In March 2020, the World Health Organization declared the outbreak of coronavirus disease 2019 (“COVID-19”) to be a pandemic. The COVID-19 pandemic is continuing to have 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, and our offices were closed, and remained closed through September 30, 2021, with employees directed to work from home. In addition, conferences and other marketing events were cancelled or shifted to virtual-only, and the Company continued to participate virtually through September 30, 2021. The COVID-19 pandemic has impacted, and may continue to impact, Company operations, including employees, customers and partners, and there is substantial uncertainty regarding the nature and degree of its continued effects over time.

The Company did not experience any significant reductions in sales, revenues or collections through September 30, 2021 as a result of COVID-19. The uncertainty caused by the COVID-19 pandemic could, however, impact Company billings to new customers for the remainder of 2021, and may also negatively impact Company efforts to 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 during 2021 as customers adjust their operating protocols to accommodate implementation of new criteria to protect the health and well-being of their employees and customers. However, these delays are not expected to materially impact the business, and thus the Company has not recorded additional credit losses associated with the 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 to service debt and other financial obligations.

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 lives of long-lived assets.

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.

REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2021

REVENUE RECOGNITION

REVENUE RECOGNITION

2. REVENUE RECOGNITION

See Note 1 for a description of the Company’s revenue recognition accounting policy.

Disaggregation of revenue

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


	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

	(unaudited)				(unaudited)
Software subscriptions:
Software licenses	$	58,932	$	56,882	$	172,807	$	170,801
Cloud subscriptions		33,344		22,896		92,353		62,043
Software subscriptions		92,276		79,778		265,160		232,844
Services		18,442		14,827		48,732		42,277
Total revenues	$	110,718	$	94,605	$	313,892	$	275,121

Contract balances

Timing of revenue recognition may differ from the timing of invoicing customers. A receivable is recorded in the condensed 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”) $8,845 and $8,592 at September 30, 2021 and December 31, 2020, respectively. The allowance for potentially uncollectible accounts represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations.

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


	For the nine months ended		For the year ended
	September 30, 2021		December 31, 2020
	(unaudited)
Balance, beginning of period	$	77,159	$	70,367
Balance, end of period		73,234		77,159
(Decrease) increase, net	$	(3,925)	$	6,792

A contract liability is recorded as deferred revenue on the condensed 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 $6,284 and $6,432 at September 30, 2021 and December 31, 2020, 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 three months ended September 30,
	2021				2020
	Balance			Net Change	Balance			Net Change
Allowance balance, July 1	$	(9,399)			$	(7,669)
Allowance balance, September 30		(8,845)				(7,567)
Change in allowance			$	(554)			$	(102)
Deferred allowance balance, July 1		6,267				5,335
Deferred allowance balance, September 30		6,284				5,170
Change in deferred allowance				(17)				165
Net amount charged to revenues			$	(571)			$	63


	For the nine months ended September 30,
	2021				2020
	Balance			Net Change	Balance			Net Change
Allowance balance, January 1	$	(8,592)			$	(7,515)
Allowance balance, September 30		(8,845)				(7,567)
Change in allowance			$	253			$	52
Deferred allowance balance, January 1		6,432				5,614
Deferred allowance balance, September 30		6,284				5,170
Change in deferred allowance				148				444
Net amount charged to revenues			$	401			$	496

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 condensed consolidated balance sheets.

The tables provide information about the balances of and changes to deferred revenue for the following periods:


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Balances:
Deferred revenue, current	$	211,036	$	207,560
Deferred revenue, non-current		11,544		14,702
Total deferred revenue	$	222,580	$	222,262


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

	(unaudited)				(unaudited)
Changes to deferred revenue:
Beginning balance	$	222,612	$	198,437	$	222,262	$	205,791
Additional amounts deferred		110,686		93,708		314,210		266,870
Revenues recognized		(110,718)		(94,605)		(313,892)		(275,121)
Ending balance	$	222,580	$	197,540	$	222,580	$	197,540

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 condensed 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 condensed consolidated statements of comprehensive 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 three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

	(unaudited)				(unaudited)
Beginning balance	$	11,545	$	10,390	$	11,743	$	11,196
Additions		3,866		1,876		8,059		4,570
Amortization		(2,828)		(1,894)		(7,219)		(5,394)
Ending balance	$	12,583	$	10,372	$	12,583	$	10,372

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

BUSINESS COMBINATIONS

9 Months Ended

Sep. 30, 2021

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

3. BUSINESS COMBINATIONS

LCR-Dixon

On September 22, 2021, the Company executed a stock purchase agreement with LCR-Dixon Corporation (“LCR-Dixon”), an expert in SAP technologies and leading provider of tax intelligence solutions. LCR-Dixon’s solutions were specifically developed to improve functionality and performance for SAP indirect tax processes and are integrated with the Company’s tax determination software. The purchase price was $98,744 as of the acquisition date consisting of (i) $59,720 of cash paid at closing, partially offset by $1,899 of LCR-Dixon cash received in the acquisition resulting in net cash consideration at closing of $57,821 and (ii) non-interest bearing deferred payments aggregating $40,000 to be paid in four installments of $10,000 each every six-months beginning March 2022 and ending September 2023 (the “deferred purchase consideration”). Cash consideration was funded from available cash on hand. Management recorded the deferred purchase consideration at a preliminary fair value at the acquisition date of $39,024, net of a discount of $976 which will be recorded as interest expense over the payment period using the effective interest method. The deferred purchase consideration, net of discount, is included in current liabilities and long-term liabilities at $19,705 and $19,319, respectively, in the condensed consolidated balance sheet at September 30, 2021. The preliminary values recorded will be adjusted during the Measurement Period as more detailed analyses are performed and further information becomes available regarding the fair values of these amounts on the acquisition date.

The following table summarizes the preliminary purchase price for LCR-Dixon:


	September 22, 2021
	(unaudited)
Cash paid at closing	$	59,720
Fair value of deferred purchase consideration		39,024
Total	$	98,744

The Company’s accounting for the LCR-Dixon acquisition is preliminary. The purchase price is subject to purchase price adjustments related to the final determination of LCR-Dixon’s cash, net working capital, and taxes as of the acquisition date. The LCR-Dixon acquisition was accounted for as a business combination. The total preliminary purchase price was allocated to the net assets acquired based on management’s determination of their estimated fair values using available information as of the acquisition date. The preliminary excess of purchase consideration over the net assets acquired is recorded as goodwill, which primarily reflects the existence of intangible assets not recognized under U.S. GAAP such as the value of expected future synergies, the value of the assembled workforce and other market factors. The Company expects that goodwill associated with the LCR-Dixon acquisition will not be deductible for tax purposes. The preliminary values recorded, which are reflected in the table below, will be adjusted during the Measurement Period as more detailed analyses are performed and further information becomes available regarding the fair values of these amounts on the acquisition date. The Company does not have a preliminary estimate of identifiable intangible assets as of September 30, 2021. A third-party expert has been engaged to assist in the valuation of identifiable intangible assets and deferred payments as part of the acquisition. Any subsequent adjustments to the preliminary values not associated with determination of their fair values on the acquisition date will be recorded in the condensed consolidated statements of comprehensive loss in the period in which the adjustment is identified. LCR-Dixon’s business and product offerings are being integrated into the Company’s one operating segment.

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


	September 22, 2021
	(unaudited)
Cash and cash equivalents	$	1,899
Accounts receivable		1,002
Prepaid expenses and other current assets		313
Property and equipment		4
Goodwill		97,817
Accounts payable		(18)
Accrued expenses		(438)
Accrued compensation		(1,796)
Deferred revenue		(39)
Total	$	98,744

The transaction costs associated with the acquisition were not significant.

The Company has included the financial results of LCR-Dixon in the condensed consolidated statement of comprehensive loss from the date of acquisition. As the LCR-Dixon acquisition did not have a material impact on the Company’s reported revenue or net loss for the three and nine months ended September 30, 2021, pro forma financial information has not been presented.

Taxamo

On May 12, 2021, the Company acquired 95% of the outstanding equity of EVAT and its wholly owned subsidiaries (collectively “Taxamo”), a cloud-based provider of tax and payment automation for global eCommerce and marketplaces. This acquisition supports the Company’s growth strategies across eCommerce platforms and marketplaces in Europe and North America. Included in the acquisition agreement is an option to purchase from and an option for the remaining shareholder to sell the remaining 5% of the outstanding equity of EVAT (the “Option”) at a fixed amount between August and December 2021 for an estimated fair value of $10,034.

The purchase price for the Taxamo acquisition was $200,689 as of the acquisition date, consisting of (i) $190,153 of cash paid at closing, partially offset by $2,662 of Taxamo’s cash received in the acquisition resulting in net cash consideration at closing of $187,491, (ii) an acquisition holdback with an estimated fair value upon acquisition of $502, and (iii) the Option. The Company recorded the estimated fair value of the Option payment amount in purchase commitment and contingent consideration liabilities, current, on the condensed consolidated balance sheet as of the acquisition date. Cash consideration was funded from available cash on hand.

The following table summarizes the purchase price for Taxamo:


	May 12, 2021
	(unaudited)
Cash paid at closing	$	190,153
Fair value of acquisition holdback		502
Fair value of the Option		10,034
Total	$	200,689

On August 19, 2021, the Company acquired the remaining 5% equity interest of EVAT for $10,034 through exercise of the Option, giving the Company 100% of the outstanding equity interest of EVAT. The acquisition holdback estimated fair value of $478 is included in purchase commitment and contingent consideration liabilities, current in the condensed consolidated balance sheet as of September 30, 2021.

The Company’s accounting for the Taxamo acquisition is preliminary. The purchase price is subject to purchase price adjustments related to the final determination of Taxamo’s cash, net working capital, and taxes as of May 12, 2021. The

Taxamo acquisition was accounted for as a business combination. The total preliminary purchase price was allocated to the net assets acquired based on management’s determination of their estimated fair values using available information as of the acquisition date. The preliminary value of the excess of purchase consideration over the net assets acquired was recorded as goodwill, which reflects the value of intangible assets not recognized under U.S. GAAP such as the value of expected future synergies, the value of the assembled workforce and other market factors. The Company expects that goodwill associated with the Taxamo acquisition will not be deductible for tax purposes. The preliminary values recorded will be adjusted during the Measurement Period as more detailed analyses are performed and further information becomes available regarding the fair values of these amounts on the acquisition date. Adjustments identified to date during the Measurement Period based on additional information obtained include increases in property and equipment of $40,746 for acquired developed technology and other intangibles of $1,581 for customer relationships and trade name assets (collectively, the “identifiable intangibles”), and various other adjustments resulting in a net reduction to goodwill of $37,131. Subsequent adjustments to the preliminary values of the net assets acquired after the end of the Measurement Period will be recorded in the condensed consolidated statements of comprehensive loss in the period in which the adjustment is identified. Taxamo’s business and product offerings are being integrated into the Company’s one operating segment.

The following table presents the preliminary adjusted purchase price allocation of the assets acquired and liabilities assumed as recorded in the Company’s condensed consolidated balance sheet as of the acquisition date with Measurement Period adjustments through September 30, 2021:


	Preliminary Unadjusted		Measurement Period		Preliminary Adjusted
	May 12, 2021		Adjustments		May 12, 2021
	(unaudited)		(unaudited)		(unaudited)
Cash and cash equivalents	$	2,441	$	—	$	2,441
Funds held for customers		221		—		221
Accounts receivable		7,783		(5,278)		2,505
Prepaid expenses and other current assets		908		—		908
Property and equipment		46		40,746		40,792
Goodwill		201,580		(37,131)		164,449
Other intangibles		—		1,581		1,581
Accounts payable		(304)		—		(304)
Accrued expenses		(6,615)		5,220		(1,395)
Accrued compensation		(3,939)		—		(3,939)
Deferred revenue		—		(2,196)		(2,196)
Deferred other income		(1,432)		1,432		—
Deferred other liabilities		—		(4,374)		(4,374)
Total	$	200,689	$	—	$	200,689

The preliminary fair value, valuation methodologies, estimated useful lives, and significant assumptions of the identifiable intangibles acquired in the Taxamo acquisition are summarized in the table below:

May 12, 2021

Taxamo Identifiable Intangibles

Balance Sheet Location

Fair Value

Valuation Methodology

Estimated Useful Life

Discount Rate

Developed technology

Property and equipment, net (Note 5)

40,746

Multi-period excess earnings method - income approach

3 years

16.5

Trade name

Goodwill and other intangible assets (Note 8)

608

Relief from royalty method - income approach

2 years

16.5

Customer relationships

Goodwill and other intangible assets (Note 8)

973

Distributor method - income approach

2 years

16.5

The Company has included the financial results of Taxamo in the condensed consolidated statement of comprehensive loss from the date of acquisition. Taxamo total revenues and net loss for the three months ended September 30, 2021

reflected in the condensed consolidated statement of comprehensive loss was $2,166 and $(6,419), respectively. Taxamo total revenues and net loss from the date of the Taxamo acquisition through September 30, 2021, reflected in the consolidated statement of comprehensive loss was $2,727, and $(6,814), respectively. Net loss for Taxamo includes depreciation expense for developed technology and amortization expense for other intangibles of $5,217 for the three and nine months ended September 30, 2021. If the business combination had occurred as of January 1, 2021, Taxamo financial results would have increased the Company’s total revenues and net loss excluding transaction costs by $2,816 and $(3,559), respectively through the acquisition date.

The transaction costs associated with the acquisition were $4,522 and are recorded in other operating expense (income), net, for the nine months ended September 30, 2021.

The Company assumed certain liabilities in the acquisition of Taxamo, including deferred revenue with a fair value of $2,196 million, using a cost-plus profit approach. The Company is amortizing the acquired deferred revenue at its fair value over the period for which it is incurring costs to support the assumed customer obligations.

Tellutax

On January 25, 2021, the Company executed an Asset Purchase Agreement with Tellutax LLC, a Portland, Oregon-based edge computing technology startup (“Tellutax”), to acquire substantially all of Tellutax’s assets (the “Tellutax acquisition”). Cash consideration paid for the acquisition was $6,100, funded through cash on hand, and serves to strengthen the Company’s technology roadmap and hybrid cloud strategy enabling it to better serve customers in an increasingly hyper-connected environment. The Tellutax acquisition entitles the sellers to contingent consideration if sales targets are met during a period of time following the acquisition.

The Tellutax acquisition was accounted for as a business combination. The total purchase price was allocated to the net assets acquired based on management’s determination of their estimated fair values using available information as of the acquisition date. The excess of purchase consideration over the net assets acquired is recorded as goodwill, which 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. The Company expects that goodwill associated with the Tellutax acquisition will be deductible for tax purposes. The fair values of these amounts on the acquisition date, which are reflected in the table below, have been finalized. Any subsequent adjustments to these values will be recorded in the condensed consolidated statements of comprehensive loss in the period in which the adjustment is identified.

The purchase price for the Tellutax acquisition included cash paid at closing plus an estimated fair value of contingent consideration of $2,200 (the “Tellutax Contingent Consideration”) as of January 25, 2021. The following table presents the final purchase price allocation recorded in the condensed consolidated balance sheet as of the acquisition date:


	January 25, 2021
	(unaudited)
Capitalized software - developed technology	$	3,600
Goodwill		4,700
Total	$	8,300

The Company has included the financial results of Tellutax in the condensed consolidated statement of comprehensive loss from the date of acquisition. As the Tellutax acquisition did not have a material impact on the Company’s reported revenue or net loss for the three and nine months ended September 30, 2021, pro forma financial information has not been presented.

The fair value of developed technology was valued using the multi-period excess earnings method, which is a variation of the income approach. This method estimates an intangible asset’s value based on the present value of the incremental after-tax cash flows attributable to the intangible asset. The significant assumptions used in the developed technology valuation included forecasted results and discount rate.

The fair value of Tellutax Contingent Consideration is estimated using a Monte Carlo Simulation to compute the expected cash flows from earnout payments specified in the purchase agreement. The Tellutax Contingent Consideration is based on three potential earn-out payments determined by periodic revenue achievements over a thirty-month period. Earn-out payments have no maximum limit, but if certain targets are not met, there will be no earn-out payment for the applicable measurement period. The estimated fair value of the Tellutax Contingent Consideration recorded as of the acquisition date was $2,200. See Note 4 for information on recurring fair value adjustments after the acquisition date.

Systax

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. This acquisition provided 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.

On the acquisition date, the Company had 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 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 at the acquisition date was finalized to be $12,592. This amount will fluctuate as a result of changes in foreign currency exchange rates and is reflected in purchase commitment and contingent consideration liabilities in the condensed consolidated balance sheets, with such changes in exchange rates being reflected in other comprehensive income or loss in the condensed consolidated statements of comprehensive loss. The Purchase Commitment Liability was $9,750 at December 31, 2020, reflecting the impacts of such fluctuations in foreign currency exchange rates. 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 or loss in the period the change is identified. No such adjustments have been recorded through September 30, 2021.

The Company acquired an additional 5% equity interest of Systax in April 2021 for $788 which is reflected in the activity for the nine months ended September 30, 2021, increasing the Company’s equity interest in Systax to 65%. The remaining Purchase Commitment Liability of $8,549 is included in purchase commitment and contingent consideration liabilities, net of current portion in the condensed consolidated balance sheets at September 30, 2021.

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2021

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

4. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

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 condensed 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 following table summarizes the Company’s Fair Value Hierarchy for its financial assets and liabilities measured at fair value on a recurring basis:


	Fair Value Measurements Using
As of September 30, 2021	Fair Value		Prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	10,701	$	10,701	$	—	$	—
Tellutax Contingent Consideration	$	(2,500)	$	—	$	—	$	(2,500)

	Fair Value Measurements Using
As of December 31, 2020	Fair Value		Prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	265,270	$	265,270	$	—	$	—

Tellutax Contingent Consideration

The Tellutax acquisition entitles the sellers to contingent consideration if sales targets are met during a period of time following the acquisition. The estimated fair value of the Tellutax Contingent Consideration as of the acquisition date of January 25, 2021 was $2,200.

The Tellutax Contingent Consideration is based on three potential earn-out payments determined by periodic revenue achievements over a thirty-month period. Such estimate represents a recurring fair value measurement with significant unobservable inputs, which management considers to be Level 3 measurements under the Fair Value Hierarchy. The significant assumptions used in these calculations included forecasted results and the estimated likelihood for each performance scenario. The fair value of Tellutax Contingent Consideration is estimated using a Monte Carlo Simulation to compute the expected cash flows from earn-out payments specified in the purchase agreement. The Tellutax Contingent Consideration is based on three potential earn-out payments determined by periodic revenue achievements over a thirty-month period. Earn-out payments have no maximum limit, but if certain targets are not met, there will be no earn-out payment for the applicable measurement period.

The fair value analysis of the Tellutax Contingent Consideration was updated as of September 30, 2021, resulting in an adjustment to increase the carrying value to $2,500 at September 30, 2021, from $2,276 as of June 30, 2021, and $2,200 as of the acquisition date. Fair value adjustments of $224 and $300 were recorded in other operating expense, net for the three and nine months ended September 30, 2021, respectively. The Tellutax Contingent Consideration fair value of $2,500 is included in purchase commitment and contingent consideration liabilities, net of current portion in the condensed consolidated balance sheet at September 30, 2021.

Tellutax Contingent Consideration fair value as of September 30, 2021 and the acquisition date, and unobservable inputs used for the Monte Carlo Simulation valuation were as follows:


	September 30, 2021
Liability	Fair Value		Valuation Technique	Unobservable Inputs
Tellutax Contingent Consideration	$	(2,500)	Monte Carlo Simulation	Revenue volatility	95.0	%
				Revenue discount rate	19.0	%
				Term (in years)	3.6

	January 25, 2021
Liability	Fair Value		Valuation Technique	Unobservable Inputs
Tellutax Contingent Consideration	$	(2,200)	Monte Carlo Simulation	Revenue volatility	95.0	%
				Revenue discount rate	20.3	%
				Term (in years)	4.3

Changes in the fair value of Tellutax Contingent Consideration during the nine months ended September 30, 2021 were as follows:


	Tellutax Contingent Consideration
Balance, January 1, 2021	$	—
Acquisition of Tellutax		(2,200)
Fair value adjustments		(300)
Balance, September 30, 2021	$	(2,500)

Assets and Liabilities for Which Fair Value is Only Disclosed

The carrying amounts of cash and cash equivalents and 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, and accrued expenses approximate their relative fair values due to their short-term nature.

Non-recurring Fair Value Measurements

The LCR-Dixon acquisition on September 22, 2021, the Taxamo acquisition on May 12, 2021, and the Tellutax acquisition on January 25, 2021 were accounted for as business combinations and the total purchase price for each acquisiton was allocated to the net assets acquired and liabilities assumed based on their estimated fair values. See Note 3.

See Note 3 for information on the LCR-Dixon deferred purchase consideration of $39,024 and the Systax Purchase Commitment Liability of $8,549 recorded in the condensed consolidated balance sheet at September 30, 2021. The carrying amounts of both approximated their respective fair values at September 30, 2021 and are considered Level 3 non-recurring fair value measurements.

- 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

9 Months Ended

Sep. 30, 2021

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

The major components of property and equipment are as follows:


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Leasehold improvements	$	20,959	$	20,907
Equipment		42,218		41,410
Computer software purchased		11,782		11,620
Internal-use software developed:
Cloud-based customer solutions		109,828		65,423
Internal systems and tools		32,000		25,349
Furniture and fixtures		7,676		7,674
In-process internal-use software		12,714		3,304
		237,177		175,687
Less accumulated depreciation		(139,308)		(119,130)
Property and equipment, net	$	97,869	$	56,557

Depreciation expense for property and equipment, excluding all internal-use software developed and finance leases, was $1,849 and $1,970 for the three months ended September 30, 2021 and 2020, respectively, and $5,658 and $5,918 for the nine months ended September 30, 2021 and 2020, respectively, depreciation for property and equipment, excluding internal-use software developed for cloud-based customer solutions, is reflected in depreciation and amortization in the condensed consolidated statements of comprehensive loss.

Finance lease amortization was $363 and $826 for the three and nine months ended September 30, 2021, respectively, and depreciation expense for assets held under capital leases was $178 and $513 for the three and nine months ended September 30, 2020, respectively. Finance lease amortization and depreciation expense for assets held under capital leases are included in depreciation and amortization expense in the condensed consolidated statements of comprehensive loss. Assets under finance leases of $1,533, net of accumulated amortization of $826, at September 30, 2021 are included in property and equipment in the condensed consolidated balance sheets. Assets under capital leases of $1,360, net of accumulated depreciation of $1,370, at December 31, 2020, are included in property and equipment in the condensed consolidated balance sheets.

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


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Internal-use software developed	$	141,828	$	90,772
Less accumulated depreciation		(80,222)		(65,090)
		61,606		25,682
In-process internal-use software		12,714		3,304
Internal-use software developed, net	$	74,320	$	28,986

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


	For the nine months ended September 30,		For the nine months ended September 30,
	2021		2020
	(unaudited)		(unaudited)
Cloud-based customer solutions	$	13,881	$	12,574
Internal systems and tools		7,762		1,463
Total	$	21,643	$	14,037

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 three months ended September 30, 2021 and 2020, was $7,561 and $2,183 respectively, and was $12,906 and $6,647 for the nine months ended September 30, 2021 and 2020, respectively, and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive loss. During the three and nine months ended September 30, 2021, developed technology with an acquisition date fair value of $40,746 was recorded in connection with Measurement Period adjustments to the preliminary values of assets acquired in the Taxamo acquisition and is reflected in property and equipment, net, in the condensed consolidated balance sheet at September 30, 2021. Depreciation expense from the acquisition date through September 30, 2021 associated with this developed technology was $4,930 for the three and nine months ended September 30, 2021 and was reflected in cost of revenues - software subscriptions in the condensed consolidated statement of comprehensive loss at September 30, 2021. Had the preliminary value of the developed technology been determinable at the date of acquisition, the Company would have recorded $1,643 of this depreciation expense in the condensed consolidated statement of comprehensive loss at June 30, 2021.

Depreciation expense for internal-use software developed for internal systems and tools for the three months ended September 30, 2021 and 2020, was $870 and $587, respectively, and was $2,303 and $1,678 for the nine months ended September 30, 2021 and 2020, respectively, and is included in depreciation and amortization in the condensed consolidated statements of comprehensive loss.

CAPITALIZED SOFTWARE

9 Months Ended

Sep. 30, 2021

CAPITALIZED SOFTWARE

CAPITALIZED SOFTWARE

6. 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.

The major components of capitalized software are as follows:


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Capitalized software	$	71,209	$	63,071
Less accumulated amortization		(41,690)		(32,217)
		29,519		30,854
In-process capitalized software		4,499		1,135
Capitalized software, net	$	34,018	$	31,989

Software development costs capitalized for the three months ended September 30, 2021 and 2020 were $2,777 and $2,591, respectively, and were $7,902 and $9,246 for the nine months ended September 30, 2021 and 2020, respectively. In-process capitalized software at September 30, 2021 reflects the acquisition date fair value of $3,600 for developed technology acquired in the Tellutax acquisition as the Company undertakes necessary enhancements to integrate the technology with the Company’s existing software architecture.

Capitalized software amortization expense for the three months ended September 30, 2021 and 2020 was $3,123 and $3,124, respectively, and was $9,473 and $8,702 for the nine months ended September 30, 2021 and 2020, respectively, and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive loss.

LEASES

9 Months Ended

Sep. 30, 2021

LEASES

LEASES

7. LEASES

The Company leases office space, IT equipment and office equipment. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets and lease expense is recognized over the term of these leases on a straight-line basis. The Company’s leases have remaining terms of up to 7 years.

The following table sets forth the Company’s lease assets and liabilities and their balance sheet location as follows:


		As of September 30,
	Balance Sheet Location	2021
Lease assets:		(unaudited)
Operating lease right-of-use assets	Operating lease right-of-use assets	$	21,137
Finance lease assets	Property and equipment, net (Note 5)		707
Total lease assets		$	21,844

Lease liabilities:
Current:
Operating lease liabilities	Current portion of operating lease liabilities	$	2,480
Finance lease liabilities	Current portion of finance lease liabilities		276
Total current lease liabilities			2,756
Non-current:
Operating lease liabilities	Operating lease liabilities, net of current portion		26,707
Finance lease liabilities	Finance lease liabilities, net of current portion		334
Total non-current lease liabilities			27,041
Total lease liabilities		$	29,797

The major components of lease cost are as follows:


	For the three months ended September 30,		For the nine months ended September 30,
	2021		2021
	(unaudited)		(unaudited)
Operating lease cost	$	1,177	$	3,527

Finance lease cost:
Amortization of lease assets		363		826
Interest on lease liabilities		5		15
Total lease cost	$	1,545	$	4,368

The weighted-average term and discount rate for leases are as follows:


	As of September 30,
	2021
	(unaudited)
Weighted-average remaining lease term (years):
Operating leases	6.8
Finance leases	1.5

Weighted-average discount rate:
Operating leases	2.3	%
Finance leases	2.3	%

Lease liability maturities for the next five years and thereafter are as follows as of September 30, 2021:


	Operating Leases		Finance Leases

	(unaudited)
Remainder of 2021 (three months remaining)	$	1,411	$	264
2022		4,533		289
2023		4,460		60
2024		4,464		10
2025		4,382		—
Thereafter		12,531		—
Total lease payments		31,781		623
Less: Imputed interest		(2,594)		(13)
Present value of lease liabilities	$	29,187	$	610

Lease liability maturities for the next five years and thereafter under the previous lease accounting standard are as follows:


	As of December 31, 2020
	Operating Leases		Capital Leases
2021	$	5,442	$	915
2022		4,518		230
2023		4,459		—
2024		4,464		—
2025		4,382		—
Thereafter		12,531		—
Total Lease Payments	$	35,796		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

GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2021

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets are as follows:


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Goodwill	$	274,862	$	16,329
Other intangible assets, net		3,062		2,382
	$	277,924	$	18,711

The changes in the carrying amount of goodwill for the nine months ended September 30, 2021 are as follows:


Balance, January 1, 2021	$	16,329
Acquisition of LCR-Dixon		97,817
Acquisition of Taxamo		164,449
Acquisition of Tellutax		4,700
Foreign currency translation adjustments		(8,433)
Balance, September 30, 2021, gross		274,862
Accumulated impairment losses		—
Balance, September 30, 2021, net	$	274,862

The Company has recognized various amortizable other intangible assets in connection with acquisitions, including related to customer relationships, technology, and tradenames. The following tables provide additional information for other intangible assets, which are individually not material to the condensed consolidated financial statements:


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Other intangible assets
Weighted average amortization period (years)		4.3		5.5

Gross value	$	4,210	$	2,825
Accumulated amortization		(1,148)		(443)
Carrying value	$	3,062	$	2,382


	For the three months ended September 30, 2021
	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense			Total
Amortization of acquired intangible assets	$	65	$	375	$	440

	For the nine months ended September 30, 2021
	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense			Total
Amortization of acquired intangible assets	$	192	$	545	$	737

DEBT

9 Months Ended

Sep. 30, 2021

DEBT

DEBT

9.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”).

A portion of the Offering proceeds was used to repay the $175,000 Term Loan in full on July 31, 2020.

The Line of Credit matures in March 2025 and had no outstanding borrowings at September 30, 2021 or 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 September 30, 2021, 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 September 30, 2021.

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2021

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

10.STOCKHOLDERS’ EQUITY

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.

Recapitalization

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 of common stock 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 Share Exchange are recognized retrospectively in the condensed consolidated financial statements.

In connection with the New Capital Structure, Treasury Stock was retired and amounts associated with the Treasury Stock were reclassified to additional paid in capital. Thus, at September 30, 2021 and December 31, 2020, there was no Treasury Stock.

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 all 147 outstanding shares of 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 outstanding were owned by non-Family members in connection with the exercise of stock options in April 2020 for cash of $53. There were no dividend or liquidation preference differences between the former Class A and former Class B shares. There were common stock equivalents outstanding at September 30, 2020 held by non-Family members that entitled such holders to receive an equivalent number of former Class B shares upon exercise.

In connection with establishing the New Capital Structure in July 2020, the stockholders 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. In connection with the New Capital Structure, 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 in July 2020, 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. Historical earnings per share information for all periods presented prior to the Offering was retrospectively restated similar to the treatment of a stock split to reflect the Share Exchange as management concluded that there was no economic value attributable to such exchange of shares in connection with the Recapitalization. See Note 11.

Common Stock (after the Recapitalization)

During the three and nine months ended September 30, 2021, the Company issued 625 and 1,726 shares of Class A, respectively, related to the exercise of options, net of 128 and 703 shares, respectively, returned to the Company in lieu of payment of the exercise price and taxes due on these exercises.

During the three and nine months ended September 30, 2021 the Company issued 3 and 8 shares of Class A, respectively, in connection with the vesting of RSUs, net of 2 and 3 shares, respectively, returned to the Company in lieu of payment of taxes due on the vesting of these RSUs.

During the three and nine months ended September 30, 2021, 118 and 352 shares of Class A, respectively were issued in connection with the vesting of RSAs, net of 11 and 11 shares, respectively, returned to the Company in lieu of payment of taxes due on the vesting of these RSAs.

During the nine months ended September 30, 2021, a stockholder exchanged 12,100 shares of Class B for an equivalent number of shares of Class A.

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 stock 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 610 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.

Distributions

The board of directors (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 the former Class A and Class B common stock.

Tax Sharing Agreement Payments

In connection with termination of the Company’s S-Corporation status effective July 27, 2020, the Company entered into a Tax Sharing Agreement with the former S-Corporation shareholders. See Note 1. The Tax Sharing Agreement, as amended on June 30, 2021, requires the Company to finalize the S-Corporation income tax returns for the short period ended July 26, 2020 no later than August 15, 2021 (previously June 30, 2021 prior to the amendment). The Company is required to settle any remaining liability for taxes to the former S-Corporation shareholders within 15 days thereafter under the amended Tax Sharing Agreement. All obligations of the Company under the Tax Sharing Agreement are satisfied by adjustments of additional paid in capital.

Through the three months ended September 30, 2021, the Company distributed $2,700 to the former S-Corporation shareholders under the Tax Sharing Agreement in connection with preliminary estimates of obligations for income taxes related to the allocation of taxable income to the S-Corporation short tax period ended July 26, 2020.

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2021

EARNINGS PER SHARE

EARNINGS PER SHARE

11. EARNINGS PER SHARE

The table below illustrates the calculation of basic and diluted net loss 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 10 for further information on the Share Exchange.


	For the three months ended						For the nine months ended
	September 30,						September 30,
Class A common stock:	2021			2020			2021			2020

	(unaudited)						(unaudited)
Numerator, basic:
Net loss attributable to all stockholders	$	(3,948)		$	(21,028)		$	(852)		$	(79,167)
Class A common stock as a percentage of total shares outstanding, basic		27.09	%		13.08	%		22.91	%		3.07	%
Net loss attributable to Class A stockholders, basic	$	(1,070)		$	(2,751)		$	(195)		$	(2,427)

Numerator, diluted:
Net loss attributable to all stockholders	$	(3,948)		$	(21,028)		$	(852)		$	(79,167)
Class A common stock as a percentage of total shares outstanding, diluted		27.09	%		13.08	%		22.91	%		3.07	%
Net loss attributable to Class A stockholders, diluted	$	(1,070)		$	(2,751)		$	(195)		$	(2,427)

Denominator, basic and diluted:
Weighted average Class A common stock, basic		40,141			18,124			33,775			6,129
Dilutive effect of common stock equivalents¹		—			—			—			—
Weighted average Class A common stock, diluted		40,141			18,124			33,775			6,129

Net loss per Class A share, basic	$	(0.03)		$	(0.15)		$	(0.01)		$	(0.40)

Net loss per Class A share, diluted	$	(0.03)		$	(0.15)		$	(0.01)		$	(0.40)

¹ 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: 9,598 and 9,707 for the three months ended September 30, 2021 and 2020, respectively, and 10,488 and 5,654 for the nine months ended September 30, 2021 and 2020, respectively.


	For the three months ended						For the nine months ended
	September 30,						September 30,
Class B common stock:	2021			2020			2021			2020

	(unaudited)						(unaudited)
Numerator, basic:
Net loss attributable to all stockholders	$	(3,948)		$	(21,028)		$	(852)		$	(79,167)
Class B common stock as a percentage of total shares outstanding, basic		72.91	%		86.92	%		77.09	%		96.93	%
Net loss attributable to Class B stockholders, basic	$	(2,878)		$	(18,277)		$	(657)		$	(76,740)

Numerator, diluted:
Net loss attributable to all stockholders	$	(3,948)		$	(21,028)		$	(852)		$	(79,167)
Class B common stock as a percentage of total shares outstanding, diluted		72.91	%		86.92	%		77.09	%		96.93	%
Net loss attributable to Class B stockholders, diluted	$	(2,878)		$	(18,277)		$	(657)		$	(76,740)

Denominator, basic and diluted:
Weighted average Class B common stock, basic		108,017			120,417			113,646			120,417
Dilutive effect of common stock equivalents		—			—			—			—
Weighted average Class B common stock, diluted		108,017			120,417			113,646			120,417

Net loss per Class B share, basic	$	(0.03)		$	(0.15)		$	(0.01)		$	(0.64)

Net loss per Class B share, diluted	$	(0.03)		$	(0.15)		$	(0.01)		$	(0.64)

STOCK-BASED AWARD PLANS

9 Months Ended

Sep. 30, 2021

STOCK-BASED AWARD PLANS

STOCK-BASED AWARD PLANS

12. 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 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, except for the initial offering period (July 28 to November 30, 2020) whereby the participants were permitted to make lump sum contributions to the ESPP for such period. Amounts withheld or received from participants are reflected in accrued salaries and benefits in the condensed consolidated balance sheets until such shares are purchased. Amounts withheld from participants for the offering period ending November 30, 2021 aggregated $867 as of September 30, 2021.

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 converted to stock options with equivalent terms under the 2020 Plan at the Offering effective date (the “Converted SARs”) of July 28, 2020. This was considered a modification of these SAR awards which was recorded in the respective quarter this occurred. The SAR plan was subsequently retired (“Retired SAR Plan”) and any SARs issued after such date will be granted under the 2020 Plan.

Prior to the adoption of the 2020 Plan, the Company had options outstanding to purchase 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 under the 2020 Plan at the same exercise price and vesting, subject to the terms of the 2020 Plan except with regard to certain terms of the original option agreements primarily with respect to expiration in

connection with a Triggering Event (the “Amended Options”). Any new options issued subsequent to this exchange will be granted under the 2020 Plan.

2020 Plan

As of September 30, 2021, 6,526 shares of Class A common were available for issuance under the 2020 Plan.

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

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 during 2020 which exceeded historical results.

Amended Options

Prior to the amendment of the options in connection with the Offering in July 2020, 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 condensed consolidated statements of changes in equity (deficit) through the Offering date. The Company recorded an increase in the value of Options for Redeemable Shares of $21,954 and $51,833 during the three and nine months ended September 30, 2020, respectively, pertaining to the options outstanding through the Offering date. As all options outstanding were fully vested, no related compensation expense was recorded for the three or nine months ended September 30, 2020.

In connection with the amendment, 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 under the terms of the 2020 Plan and sell the related shares on the NASDAQ exchange. As a result of the put right no longer being applicable, the options were no longer considered temporary equity and were reclassified to stockholders’ equity at the time of the exchange.

Options under 2020 Plan

The following table summarizes activity for options outstanding under the 2020 Plan, including the Amended Options:


				Weighted
			Weighted	Average
			Average	Remaining	Aggregate
			Exercise	Contractual	Intrinsic
2020 Plan Option Activity	Units		Price	Life (Years)	Value
Outstanding at January 1, 2021	11,876	$	2.44
Granted	566	$	24.78
Forfeited	(293)	$	4.06
Exercised	(2,429)	$	2.13		$	49,205
2020 Plan options outstanding at September 30, 2021	9,720	$	3.77	5.14	$	150,182
2020 Plan options exercisable at September 30, 2021	5,258	$	2.12	3.24	$	89,924

The detail of options outstanding, vested and exercisable under the 2020 Plan (including the Amended Options) as of September 30, 2021 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	2,076	*	2,076	*
$2.15	472	3.35	472	3.35
$2.50	2,186	4.78	1,557	4.65
$2.67	506	5.43	128	5.44
$3.17	1,286	6.54	536	6.54
$3.73	1,957	8.05	371	7.75
$4.70	683	8.36	—	-
$18.96	235	9.88	105	9.88
$19.00	68	9.99	—	-
$32.16	251	9.42	13	9.42
	9,720		5,258

*Amended Options have indefinite contractual lives

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 condensed consolidated statements of comprehensive 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.

The Company issued 303 options and 566 options under the 2020 Plan during the three months and nine months September 30, 2021, respectively. The assumptions used in the Black-Scholes model to determine the value of the options issued during these periods are as follows:


	Option Valuation Period
	Q1 2021			Q2 2021			Q3 2021			Q3 2021
Fair market value of common stock	$	32.16		$	17.66		$	18.96		$	19.00
Volatility		36.8	%		36.8	%		37.1	%		37.1	%
Expected term (years)		6.0			6.0			5.0			5.0
Expected dividend yield		—	%		—	%		—	%		—	%
Risk-free interest rate		0.4	%		0.4	%		0.8	%		0.9	%

The fair market value of common stock reflects the market closing price on NASDAQ on the respective option grant date. As of the valuation dates, 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 the options are expected to be exercised over, which differs from the term of the option grants which is ten years. The Company does not expect to pay dividends. 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 option grants.

At September 30, 2021, $21,530 of unrecognized compensation expense associated with options and Converted SARs is expected to be recognized over a weighted average period of approximately 2.8 years.

Restricted Stock Units

The following table summarizes RSU activity for the nine months ended September 30, 2021:


		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2021	101	$	23.80
Granted	408		28.58
Vested	(11)		33.65
Forfeited	(28)		24.96
Outstanding at September 30, 2021	470	$	27.65

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 is recognized on a straight-line basis in the condensed consolidated statements of comprehensive 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. Vested RSUs are settled by issuing Class A shares or the equivalent value in cash at the Board’s discretion. At September 30, 2021, $10,990 of unrecognized compensation cost for RSUs is expected to be recognized over a weighted average period of approximately 3.4 years.

In connection with the Taxamo acquisition, certain continuing employees of Taxamo received RSUs with service and performance conditions covering up to 1,230 shares of our Class A common stock (“PSUs”) with an aggregate grant date fair value of $21,729 that will be accounted for as post-acquisition compensation expense over the vesting period. The performance-based condition will be satisfied upon meeting certain performance targets for the year ended 2023. As of September 30, 2021, it is not probable that these targets will be met, thus no compensation expense has been recorded to date related to these PSUs.

Restricted Stock Awards

The following table summarizes RSA activity for the nine months ended September 30, 2021:


		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2021	670	$	19.00
Granted	59		17.66
Vested	(363)		19.00
Forfeited	(26)		19.00
Outstanding at September 30, 2021	340	$	18.77

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 is recognized on a straight-line basis in the condensed consolidated statements of comprehensive 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. Vested RSAs are settled by issuing Class A shares upon vesting. At September 30, 2021, $4,955 of unrecognized compensation cost for RSAs is expected to be recognized over a weighted average period of approximately 2.1 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. 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 15% 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.

Class A common stock purchased under the ESPP for the six-month offering period ended May 31, 2021 aggregated 60 shares. As of September 30, 2021, there was approximately $90 of unrecognized ESPP stock-based compensation cost that is expected to be recognized on a straight-line basis over the remaining term of the six-month offering period that started June 1, 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 respective ESPP offering period. The value of the Call/Put for the previous offering period (December 1, 2020 – May 31, 2021) and the current offering period (June 1, 2021 – November 30, 2021) was estimated using the Black-Scholes model with the following assumptions:


	Previous			Current
	Offering Period			Offering Period
Fair market value of common stock	$	25.83		$	19.89
Volatility		35.10	%		35.10	%
Expected term (years)		0.50			0.50
Expected dividend yield		—	%		—	%
Risk-free interest rate		0.12	%		0.12	%

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. The Company does not expect to pay dividends. 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, net of forfeitures, as follows:


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Stock-based compensation expense:
SARs and Converted SARs	$	4,364	$	62,141	$	11,275	$	138,737
Stock options		1,215		—		1,985		—
RSUs		908		18		2,137		18
RSAs		799		2,014		4,454		2,014
ESPP		136		121		399		121
Total stock-based compensation expense	$	7,422	$	64,294	$	20,250	$	140,890

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


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Stock-based compensation expense:
Cost of revenues, software subscriptions	$	656	$	6,342	$	1,788	$	14,002
Cost of revenues, services		760		9,230		1,976		20,719
Research and development		876		6,340		2,008		14,000
Selling and marketing		2,157		12,821		4,877		28,140
General and administrative		2,973		29,561		9,601		64,029
Total stock-based compensation expense	$	7,422	$	64,294	$	20,250	$	140,890

- 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
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

LEGAL PROCEEDINGS

9 Months Ended

Sep. 30, 2021

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS

13. LEGAL PROCEEDINGS

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 the Company’s business. The Company is not aware of any such legal proceedings or claims that management believes will have a material adverse effect on its business, financial condition, or operating results.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Basis of Consolidation

Basis of Consolidation

Unaudited Interim Financial Information

Unaudited Interim Financial Information

Segments

Segments

Fair Value Measurement

Fair Value Measurement

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

Use of Estimates

Use of Estimates

Internal-Use Software

Internal-Use Software

software subscriptions and depreciation and amortization expense, respectively, in the condensed consolidated statements of comprehensive loss.

Software Developed for Sale

Software Developed for Sale

Business Combinations

Business Combinations

Goodwill

Goodwill

Stock-Based Compensation

Stock-Based Compensation

The awards are subject to, and the Company applies, the guidance set forth in ASC 718, Compensation—Stock Compensation, for the award of equity-based instruments.

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

Revenue Recognition

Revenue from contracts with customers

Nature of goods and services

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.

Significant Judgments

Payment terms

Cost of Revenues

Reimbursable Costs

Income Taxes

Income Taxes

Supplemental Cash Flow Disclosures

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


	For the nine months ended
	September 30,
	2021		2020

	(unaudited)
Cash paid for interest	$	180	$	1,912
Cash paid for income taxes, net of refunds	$	1,032	$	522
Operating cash flows from operating leases	$	4,090	$	—

Non-cash investing and financing activities:
Purchase commitment and contingent consideration liabilities	$	50,653	$	14,344
Leased assets obtained in exchange for new finance lease liabilities	$	173	$	—
Equipment acquired through capital leases	$	—	$	826
Remeasurement of options for redeemable shares	$	—	$	51,833
Conversion of SARs in connection with the Offering	$	—	$	128,870
Exchange of Amended Options in connection with the Offering	$	—	$	69,177

Recently Issued and Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

Deferred Revenue

Recently Adopted Accounting Pronouncements

Leases

Credit Losses

Income Taxes

Risks and Uncertainties

Reclassifications

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of supplemental cash flow disclosures


	For the nine months ended
	September 30,
	2021		2020

	(unaudited)
Cash paid for interest	$	180	$	1,912
Cash paid for income taxes, net of refunds	$	1,032	$	522
Operating cash flows from operating leases	$	4,090	$	—

Non-cash investing and financing activities:
Purchase commitment and contingent consideration liabilities	$	50,653	$	14,344
Leased assets obtained in exchange for new finance lease liabilities	$	173	$	—
Equipment acquired through capital leases	$	—	$	826
Remeasurement of options for redeemable shares	$	—	$	51,833
Conversion of SARs in connection with the Offering	$	—	$	128,870
Exchange of Amended Options in connection with the Offering	$	—	$	69,177

REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2021

REVENUE RECOGNITION

Schedule of disaggregation of revenue


	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

	(unaudited)				(unaudited)
Software subscriptions:
Software licenses	$	58,932	$	56,882	$	172,807	$	170,801
Cloud subscriptions		33,344		22,896		92,353		62,043
Software subscriptions		92,276		79,778		265,160		232,844
Services		18,442		14,827		48,732		42,277
Total revenues	$	110,718	$	94,605	$	313,892	$	275,121

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


	For the nine months ended		For the year ended
	September 30, 2021		December 31, 2020
	(unaudited)
Balance, beginning of period	$	77,159	$	70,367
Balance, end of period		73,234		77,159
(Decrease) increase, net	$	(3,925)	$	6,792

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


	For the three months ended September 30,
	2021				2020
	Balance			Net Change	Balance			Net Change
Allowance balance, July 1	$	(9,399)			$	(7,669)
Allowance balance, September 30		(8,845)				(7,567)
Change in allowance			$	(554)			$	(102)
Deferred allowance balance, July 1		6,267				5,335
Deferred allowance balance, September 30		6,284				5,170
Change in deferred allowance				(17)				165
Net amount charged to revenues			$	(571)			$	63


	For the nine months ended September 30,
	2021				2020
	Balance			Net Change	Balance			Net Change
Allowance balance, January 1	$	(8,592)			$	(7,515)
Allowance balance, September 30		(8,845)				(7,567)
Change in allowance			$	253			$	52
Deferred allowance balance, January 1		6,432				5,614
Deferred allowance balance, September 30		6,284				5,170
Change in deferred allowance				148				444
Net amount charged to revenues			$	401			$	496

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


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Balances:
Deferred revenue, current	$	211,036	$	207,560
Deferred revenue, non-current		11,544		14,702
Total deferred revenue	$	222,580	$	222,262


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

	(unaudited)				(unaudited)
Changes to deferred revenue:
Beginning balance	$	222,612	$	198,437	$	222,262	$	205,791
Additional amounts deferred		110,686		93,708		314,210		266,870
Revenues recognized		(110,718)		(94,605)		(313,892)		(275,121)
Ending balance	$	222,580	$	197,540	$	222,580	$	197,540

Schedule of information about the changes to contract cost balances


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020

	(unaudited)				(unaudited)
Beginning balance	$	11,545	$	10,390	$	11,743	$	11,196
Additions		3,866		1,876		8,059		4,570
Amortization		(2,828)		(1,894)		(7,219)		(5,394)
Ending balance	$	12,583	$	10,372	$	12,583	$	10,372

BUSINESS COMBINATIONS (Tables)

9 Months Ended

Sep. 30, 2021

LCR-Dixon

BUSINESS COMBINATIONS

Schedule of allocation of consideration transferred


	September 22, 2021
	(unaudited)
Cash paid at closing	$	59,720
Fair value of deferred purchase consideration		39,024
Total	$	98,744

Schedule of purchase price to assets acquired and liabilities assumed


	September 22, 2021
	(unaudited)
Cash and cash equivalents	$	1,899
Accounts receivable		1,002
Prepaid expenses and other current assets		313
Property and equipment		4
Goodwill		97,817
Accounts payable		(18)
Accrued expenses		(438)
Accrued compensation		(1,796)
Deferred revenue		(39)
Total	$	98,744

Tellutax

BUSINESS COMBINATIONS

Schedule of purchase price to assets acquired and liabilities assumed


	January 25, 2021
	(unaudited)
Capitalized software - developed technology	$	3,600
Goodwill		4,700
Total	$	8,300

Taxamo

BUSINESS COMBINATIONS

Schedule of allocation of consideration transferred


	May 12, 2021
	(unaudited)
Cash paid at closing	$	190,153
Fair value of acquisition holdback		502
Fair value of the Option		10,034
Total	$	200,689

Schedule of purchase price to assets acquired and liabilities assumed


	Preliminary Unadjusted		Measurement Period		Preliminary Adjusted
	May 12, 2021		Adjustments		May 12, 2021
	(unaudited)		(unaudited)		(unaudited)
Cash and cash equivalents	$	2,441	$	—	$	2,441
Funds held for customers		221		—		221
Accounts receivable		7,783		(5,278)		2,505
Prepaid expenses and other current assets		908		—		908
Property and equipment		46		40,746		40,792
Goodwill		201,580		(37,131)		164,449
Other intangibles		—		1,581		1,581
Accounts payable		(304)		—		(304)
Accrued expenses		(6,615)		5,220		(1,395)
Accrued compensation		(3,939)		—		(3,939)
Deferred revenue		—		(2,196)		(2,196)
Deferred other income		(1,432)		1,432		—
Deferred other liabilities		—		(4,374)		(4,374)
Total	$	200,689	$	—	$	200,689

Schedule of acquired intangible assets

May 12, 2021

Taxamo Identifiable Intangibles

Balance Sheet Location

Fair Value

Valuation Methodology

Estimated Useful Life

Discount Rate

Developed technology

Property and equipment, net (Note 5)

40,746

Multi-period excess earnings method - income approach

3 years

16.5

Trade name

Goodwill and other intangible assets (Note 8)

608

Relief from royalty method - income approach

2 years

16.5

Customer relationships

Goodwill and other intangible assets (Note 8)

973

Distributor method - income approach

2 years

16.5

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2021

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Schedule of assets and liabilities measured at fair value on a recurring basis


	Fair Value Measurements Using
As of September 30, 2021	Fair Value		Prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	10,701	$	10,701	$	—	$	—
Tellutax Contingent Consideration	$	(2,500)	$	—	$	—	$	(2,500)

	Fair Value Measurements Using
As of December 31, 2020	Fair Value		Prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Money market funds	$	265,270	$	265,270	$	—	$	—

Summary of estimated fair value of tellutax contingent consideration


	September 30, 2021
Liability	Fair Value		Valuation Technique	Unobservable Inputs
Tellutax Contingent Consideration	$	(2,500)	Monte Carlo Simulation	Revenue volatility	95.0	%
				Revenue discount rate	19.0	%
				Term (in years)	3.6

	January 25, 2021
Liability	Fair Value		Valuation Technique	Unobservable Inputs
Tellutax Contingent Consideration	$	(2,200)	Monte Carlo Simulation	Revenue volatility	95.0	%
				Revenue discount rate	20.3	%
				Term (in years)	4.3

Changes in fair value of tellutax contingent consideration


	Tellutax Contingent Consideration
Balance, January 1, 2021	$	—
Acquisition of Tellutax		(2,200)
Fair value adjustments		(300)
Balance, September 30, 2021	$	(2,500)

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2021

PROPERTY AND EQUIPMENT

Schedule of major components of property and equipment


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Leasehold improvements	$	20,959	$	20,907
Equipment		42,218		41,410
Computer software purchased		11,782		11,620
Internal-use software developed:
Cloud-based customer solutions		109,828		65,423
Internal systems and tools		32,000		25,349
Furniture and fixtures		7,676		7,674
In-process internal-use software		12,714		3,304
		237,177		175,687
Less accumulated depreciation		(139,308)		(119,130)
Property and equipment, net	$	97,869	$	56,557

Schedule of major components of internal-use software


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Internal-use software developed	$	141,828	$	90,772
Less accumulated depreciation		(80,222)		(65,090)
		61,606		25,682
In-process internal-use software		12,714		3,304
Internal-use software developed, net	$	74,320	$	28,986

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


	For the nine months ended September 30,		For the nine months ended September 30,
	2021		2020
	(unaudited)		(unaudited)
Cloud-based customer solutions	$	13,881	$	12,574
Internal systems and tools		7,762		1,463
Total	$	21,643	$	14,037

CAPITALIZED SOFTWARE (Tables)

9 Months Ended

Sep. 30, 2021

CAPITALIZED SOFTWARE

Schedule of major components of capitalized software


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Capitalized software	$	71,209	$	63,071
Less accumulated amortization		(41,690)		(32,217)
		29,519		30,854
In-process capitalized software		4,499		1,135
Capitalized software, net	$	34,018	$	31,989

LEASES (Tables)

9 Months Ended

Sep. 30, 2021

LEASES

Schedule of company's lease assets and lease liabilities and their balance sheet location


		As of September 30,
	Balance Sheet Location	2021
Lease assets:		(unaudited)
Operating lease right-of-use assets	Operating lease right-of-use assets	$	21,137
Finance lease assets	Property and equipment, net (Note 5)		707
Total lease assets		$	21,844

Lease liabilities:
Current:
Operating lease liabilities	Current portion of operating lease liabilities	$	2,480
Finance lease liabilities	Current portion of finance lease liabilities		276
Total current lease liabilities			2,756
Non-current:
Operating lease liabilities	Operating lease liabilities, net of current portion		26,707
Finance lease liabilities	Finance lease liabilities, net of current portion		334
Total non-current lease liabilities			27,041
Total lease liabilities		$	29,797

Schedule of company's lease costs, weighted-average term and rate


	For the three months ended September 30,		For the nine months ended September 30,
	2021		2021
	(unaudited)		(unaudited)
Operating lease cost	$	1,177	$	3,527

Finance lease cost:
Amortization of lease assets		363		826
Interest on lease liabilities		5		15
Total lease cost	$	1,545	$	4,368


	As of September 30,
	2021
	(unaudited)
Weighted-average remaining lease term (years):
Operating leases	6.8
Finance leases	1.5

Weighted-average discount rate:
Operating leases	2.3	%
Finance leases	2.3	%

Schedule of maturity of operating lease liabilities


	Operating Leases		Finance Leases

	(unaudited)
Remainder of 2021 (three months remaining)	$	1,411	$	264
2022		4,533		289
2023		4,460		60
2024		4,464		10
2025		4,382		—
Thereafter		12,531		—
Total lease payments		31,781		623
Less: Imputed interest		(2,594)		(13)
Present value of lease liabilities	$	29,187	$	610

Schedule of maturity of finance lease liabilities


	Operating Leases		Finance Leases

	(unaudited)
Remainder of 2021 (three months remaining)	$	1,411	$	264
2022		4,533		289
2023		4,460		60
2024		4,464		10
2025		4,382		—
Thereafter		12,531		—
Total lease payments		31,781		623
Less: Imputed interest		(2,594)		(13)
Present value of lease liabilities	$	29,187	$	610

Schedule of maturity of capital leases under ASU 840

Schedule of maturity of operating leases under ASU 840

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2021

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Goodwill	$	274,862	$	16,329
Other intangible assets, net		3,062		2,382
	$	277,924	$	18,711


Balance, January 1, 2021	$	16,329
Acquisition of LCR-Dixon		97,817
Acquisition of Taxamo		164,449
Acquisition of Tellutax		4,700
Foreign currency translation adjustments		(8,433)
Balance, September 30, 2021, gross		274,862
Accumulated impairment losses		—
Balance, September 30, 2021, net	$	274,862

Schedule of other acquired intangible assets


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Other intangible assets
Weighted average amortization period (years)		4.3		5.5

Gross value	$	4,210	$	2,825
Accumulated amortization		(1,148)		(443)
Carrying value	$	3,062	$	2,382

Schedule of future amortization expense


	For the three months ended September 30, 2021
	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense			Total
Amortization of acquired intangible assets	$	65	$	375	$	440

	For the nine months ended September 30, 2021
	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense			Total
Amortization of acquired intangible assets	$	192	$	545	$	737

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2021

Class A

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

Schedule of earnings per share basic and diluted


	For the three months ended						For the nine months ended
	September 30,						September 30,
Class A common stock:	2021			2020			2021			2020

	(unaudited)						(unaudited)
Numerator, basic:
Net loss attributable to all stockholders	$	(3,948)		$	(21,028)		$	(852)		$	(79,167)
Class A common stock as a percentage of total shares outstanding, basic		27.09	%		13.08	%		22.91	%		3.07	%
Net loss attributable to Class A stockholders, basic	$	(1,070)		$	(2,751)		$	(195)		$	(2,427)

Numerator, diluted:
Net loss attributable to all stockholders	$	(3,948)		$	(21,028)		$	(852)		$	(79,167)
Class A common stock as a percentage of total shares outstanding, diluted		27.09	%		13.08	%		22.91	%		3.07	%
Net loss attributable to Class A stockholders, diluted	$	(1,070)		$	(2,751)		$	(195)		$	(2,427)

Denominator, basic and diluted:
Weighted average Class A common stock, basic		40,141			18,124			33,775			6,129
Dilutive effect of common stock equivalents¹		—			—			—			—
Weighted average Class A common stock, diluted		40,141			18,124			33,775			6,129

Net loss per Class A share, basic	$	(0.03)		$	(0.15)		$	(0.01)		$	(0.40)

Net loss per Class A share, diluted	$	(0.03)		$	(0.15)		$	(0.01)		$	(0.40)

Class B

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

Schedule of earnings per share basic and diluted


	For the three months ended						For the nine months ended
	September 30,						September 30,
Class B common stock:	2021			2020			2021			2020

	(unaudited)						(unaudited)
Numerator, basic:
Net loss attributable to all stockholders	$	(3,948)		$	(21,028)		$	(852)		$	(79,167)
Class B common stock as a percentage of total shares outstanding, basic		72.91	%		86.92	%		77.09	%		96.93	%
Net loss attributable to Class B stockholders, basic	$	(2,878)		$	(18,277)		$	(657)		$	(76,740)

Numerator, diluted:
Net loss attributable to all stockholders	$	(3,948)		$	(21,028)		$	(852)		$	(79,167)
Class B common stock as a percentage of total shares outstanding, diluted		72.91	%		86.92	%		77.09	%		96.93	%
Net loss attributable to Class B stockholders, diluted	$	(2,878)		$	(18,277)		$	(657)		$	(76,740)

Denominator, basic and diluted:
Weighted average Class B common stock, basic		108,017			120,417			113,646			120,417
Dilutive effect of common stock equivalents		—			—			—			—
Weighted average Class B common stock, diluted		108,017			120,417			113,646			120,417

Net loss per Class B share, basic	$	(0.03)		$	(0.15)		$	(0.01)		$	(0.64)

Net loss per Class B share, diluted	$	(0.03)		$	(0.15)		$	(0.01)		$	(0.64)

STOCK-BASED AWARD PLANS (Tables)

9 Months Ended

Sep. 30, 2021

Compensation plans:

Schedule of ESPP valuation assumptions


	Previous			Current
	Offering Period			Offering Period
Fair market value of common stock	$	25.83		$	19.89
Volatility		35.10	%		35.10	%
Expected term (years)		0.50			0.50
Expected dividend yield		—	%		—	%
Risk-free interest rate		0.12	%		0.12	%

Schedule of stock-based compensation cost related to incentive awards


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Stock-based compensation expense:
SARs and Converted SARs	$	4,364	$	62,141	$	11,275	$	138,737
Stock options		1,215		—		1,985		—
RSUs		908		18		2,137		18
RSAs		799		2,014		4,454		2,014
ESPP		136		121		399		121
Total stock-based compensation expense	$	7,422	$	64,294	$	20,250	$	140,890

Schedule of stock based compensation cost in consolidated statement of operations


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Stock-based compensation expense:
Cost of revenues, software subscriptions	$	656	$	6,342	$	1,788	$	14,002
Cost of revenues, services		760		9,230		1,976		20,719
Research and development		876		6,340		2,008		14,000
Selling and marketing		2,157		12,821		4,877		28,140
General and administrative		2,973		29,561		9,601		64,029
Total stock-based compensation expense	$	7,422	$	64,294	$	20,250	$	140,890

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, 2021	11,876	$	2.44
Granted	566	$	24.78
Forfeited	(293)	$	4.06
Exercised	(2,429)	$	2.13		$	49,205
2020 Plan options outstanding at September 30, 2021	9,720	$	3.77	5.14	$	150,182
2020 Plan options exercisable at September 30, 2021	5,258	$	2.12	3.24	$	89,924

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	2,076	*	2,076	*
$2.15	472	3.35	472	3.35
$2.50	2,186	4.78	1,557	4.65
$2.67	506	5.43	128	5.44
$3.17	1,286	6.54	536	6.54
$3.73	1,957	8.05	371	7.75
$4.70	683	8.36	—	-
$18.96	235	9.88	105	9.88
$19.00	68	9.99	—	-
$32.16	251	9.42	13	9.42
	9,720		5,258

*Amended Options have indefinite contractual lives

Schedule of valuation assumptions


	Option Valuation Period
	Q1 2021			Q2 2021			Q3 2021			Q3 2021
Fair market value of common stock	$	32.16		$	17.66		$	18.96		$	19.00
Volatility		36.8	%		36.8	%		37.1	%		37.1	%
Expected term (years)		6.0			6.0			5.0			5.0
Expected dividend yield		—	%		—	%		—	%		—	%
Risk-free interest rate		0.4	%		0.4	%		0.8	%		0.9	%

Restricted Stock Units

Compensation plans:

Schedule of restricted activity


		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2021	101	$	23.80
Granted	408		28.58
Vested	(11)		33.65
Forfeited	(28)		24.96
Outstanding at September 30, 2021	470	$	27.65

Restricted Stock Awards

Compensation plans:

Schedule of restricted activity


		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2021	670	$	19.00
Granted	59		17.66
Vested	(363)		19.00
Forfeited	(26)		19.00
Outstanding at September 30, 2021	340	$	18.77

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basis of Consolidation (Details)	Sep. 30, 2021	Aug. 19, 2021	May 12, 2021	Jan. 07, 2020
Taxamo
Summary of significant accounting policies
Interest acquired (as a percent)		100.00%	95.00%
Systax
Summary of significant accounting policies
Interest acquired (as a percent)	65.00%			60.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segments (Details) - segment	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Segment information:
Operating segments			1
Revenue \| Geographic Concentration Risk \| Outside United States
Segment information:
Risk percentage	6.00%	3.00%	6.00%	3.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Useful life (Details)	9 Months Ended
	Sep. 30, 2021
Internal-Use Software \| Minimum
Property and equipment
Estimated useful lives (in years)	3 years
Internal-Use Software \| Maximum
Property and equipment
Estimated useful lives (in years)	5 years
Software developed for sale \| Minimum
Property and equipment
Estimated useful lives (in years)	3 years
Software developed for sale \| Maximum
Property and equipment
Estimated useful lives (in years)	5 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Stock-Based Compensation (Details)	9 Months Ended
	Sep. 30, 2021
ESPP
Compensation plans:
Discount	15.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details)	9 Months Ended
	Sep. 30, 2021
Deferred revenue recognition:
Payment terms (in days)	30-days
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-06-30
Deferred revenue recognition:
Revenue recognition period	3 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash paid for Interest	$ 180	$ 1,912
Cash paid for income taxes, net of refunds	1,032	522
Operating cash flows from operating leases	4,090
Non-cash investing and financing activities:
Purchase commitment and contingent consideration liabilities	50,653	14,344
Leased assets obtained in exchange for new finance lease liabilities	$ 173
Remeasurement of options for redeemable shares		51,833
Conversion of SAR's in connection with the Offering		128,870
Exchange of Amended Options in connection with the Offering		$ 69,177

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2021	Sep. 30, 2021	Dec. 31, 2020
Recently issued accounting pronouncements
Lease, Practical Expedients, Package [true false]	true
Operating lease right-of-use assets		$ 21,137
Operating lease liabilities		29,187
Retained earnings		$ 21,582	$ 21,926
ASC 842
Recently issued accounting pronouncements
Operating lease right-of-use assets	$ 24,004
Operating lease liabilities	32,562
Retained earnings	$ 508

REVENUE RECOGNITION - Disaggregation of revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Disaggregation of revenue:
Revenues	$ 110,718	$ 94,605	$ 313,892	$ 275,121
Software subscriptions
Disaggregation of revenue:
Revenues	92,276	79,778	265,160	232,844
Software licenses
Disaggregation of revenue:
Revenues	58,932	56,882	172,807	170,801
Cloud subscriptions
Disaggregation of revenue:
Revenues	33,344	22,896	92,353	62,043
Services
Disaggregation of revenue:
Revenues	$ 18,442	$ 14,827	$ 48,732	$ 42,277

- 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

REVENUE RECOGNITION - Accounts receivable, net (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020	Jun. 30, 2021	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
REVENUE RECOGNITION
Allowance for accounts receivable	$ 8,845	$ 8,592	$ 9,399	$ 7,567	$ 7,669	$ 7,515
Allowance for credit loss
Balance, beginning of period	77,159	70,367
Balance, end of period	73,234	77,159
(Decrease) increase, net	$ (3,925)	$ 6,792

REVENUE RECOGNITION - Allowance and deferred allowance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Allowance for credit loss
Beginning balance	$ (9,399)	$ (7,669)	$ (8,592)	$ (7,515)
Ending balance	(8,845)	(7,567)	(8,845)	(7,567)
Change in allowance	(554)	(102)	253	52
Deferred beginning balance	6,267	5,335	6,432	5,614
Deferred ending balance	6,284	5,170	6,284	5,170
Change in deferred allowance	(17)	165	148	444
Net amount charged to revenues	$ (571)	$ 63	$ 401	$ 496

REVENUE RECOGNITION - Deferred revenue (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
REVENUE RECOGNITION
Deferred revenue, current	$ 211,036		$ 207,560
Deferred revenue, non-current	11,544		14,702
Total deferred revenue	$ 222,580	$ 222,612	$ 222,262	$ 197,540	$ 198,437	$ 205,791

REVENUE RECOGNITION - Changes to deferred revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
REVENUE RECOGNITION
Beginning balance	$ 222,612	$ 198,437	$ 222,262	$ 205,791
Additional amounts deferred	110,686	93,708	314,210	266,870
Revenues recognized	(110,718)	(94,605)	(313,892)	(275,121)
Ending balance	$ 222,580	$ 197,540	$ 222,580	$ 197,540

REVENUE RECOGNITION - Contract cost balances (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Changes to deferred commissions:
Beginning balance	$ 11,545	$ 10,390	$ 11,743	$ 11,196
Additions	3,866	1,876	8,059	4,570
Amortization	(2,828)	(1,894)	(7,219)	(5,394)
Ending balance	$ 12,583	$ 10,372	12,583	$ 10,372
Impairment loss			$ 0
Contract costs, amortization period	3 years		3 years

BUSINESS COMBINATIONS (Details) $ in Thousands					3 Months Ended	5 Months Ended	9 Months Ended
BUSINESS COMBINATIONS (Details) $ in Thousands	Sep. 22, 2021 USD ($) installment	May 12, 2021 USD ($)	Jan. 25, 2021 USD ($) payment	Jan. 07, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Aug. 19, 2021 USD ($)	Dec. 31, 2020 USD ($)
BUSINESS COMBINATIONS
Cash consideration, net							$ 251,412	$ 12,318
Deferred purchase consideration, current					$ 19,705	$ 19,705	19,705
Deferred purchase consideration, net of current portion					19,319	19,319	$ 19,319
Additional equity interests acquired							5.00%
Payments for purchase commitment liability							$ 10,822
LCR-Dixon
BUSINESS COMBINATIONS
Cash consideration	$ 59,720
Purchase price	98,744
Cash received in the acquisition	1,899
Cash consideration, net	57,821
Aggregate deferred payments	$ 40,000
No of Installment of deferred payment \| installment	4
Amount per installment of deferred payment	$ 10,000
Fair value of deferred payment, net of discount	39,024
Amount of discount of deferred payments	976
LCR-Dixon \| Current Liabilities
BUSINESS COMBINATIONS
Deferred purchase consideration, current	19,705
LCR-Dixon \| Noncurrent Liabilities
BUSINESS COMBINATIONS
Deferred purchase consideration, net of current portion	$ 19,319
Taxamo
BUSINESS COMBINATIONS
Cash consideration		$ 190,153
Fair value of acquisition holdbacks		502
Fair value of purchase commitment liability		10,034							$ 10,034
Purchase price		200,689
Cash received in the acquisition		2,662
Cash consideration, net		$ 187,491
Percentage of remaining outstanding share of the acquiree		5.00%							5.00%
Interest acquired (as a percent)		95.00%							100.00%
Revenue					2,166	2,727
Net loss					(6,419)	(6,814)
Transaction costs							5,217
Pro forma revenue							2,816
Pro forma net income (loss)							(3,559)
Tellutax
BUSINESS COMBINATIONS
Cash consideration			$ 6,100
Contingent consideration			$ 2,200
Number of potential earnout payments \| payment			3
Revenue achievement period			30 months
Earn out payment for applicable measurement period			$ 0
Maximum limit on earnout payments			$ 0
Systax
BUSINESS COMBINATIONS
Cash consideration				$ 12,374
Fair value of purchase commitment liability					$ 788	$ 788	788
Purchase commitment liability				$ 12,592						$ 9,750
Adjustment due to currency exchange rates fluctuation							$ 0
Interest acquired (as a percent)				60.00%	65.00%	65.00%	65.00%
Payments for purchase commitment liability							$ 8,549
Systax \| Quotaholders
BUSINESS COMBINATIONS
Percentage of remaining outstanding share of the acquiree				40.00%

BUSINESS COMBINATIONS - Net assets and liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 22, 2021	May 12, 2021	Jan. 25, 2021	Dec. 31, 2020
BUSINESS COMBINATIONS
Goodwill	$ 274,862				$ 16,329
LCR-Dixon
BUSINESS COMBINATIONS
Cash and cash equivalents		$ 1,899
Accounts receivable		1,002
Prepaid expenses and other current assets		313
Property and equipment		4
Goodwill		97,817
Accounts payable		(18)
Accrued expenses		(438)
Accrued compensation		(1,796)
Deferred revenue		(39)
Total		$ 98,744
Taxamo
BUSINESS COMBINATIONS
Cash and cash equivalents			$ 2,441
Funds held for customers			221
Accounts receivable			7,783
Prepaid expenses and other current assets			908
Property and equipment			46
Goodwill			201,580
Accounts payable			(304)
Accrued expenses			(6,615)
Accrued compensation			(3,939)
Deferred revenue			(2,196)
Total			$ 200,689
Tellutax
BUSINESS COMBINATIONS
Capitalized Software - Developed technology				$ 3,600
Goodwill				4,700
Total				$ 8,300

BUSINESS COMBINATIONS - Intangible assets acquired in the acquisition (Details) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
	May 12, 2021	Sep. 30, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Estimated Useful Life		4 years 3 months 18 days	5 years 6 months
Taxamo \| Developed Technology
Business Acquisition [Line Items]
Fair Value		$ 40,746
Taxamo \| Developed Technology \| Property and Equipment, net
Business Acquisition [Line Items]
Fair Value	$ 40,746
Estimated Useful Life	3 years
Discount Rate	16.50%
Taxamo \| Trade Name \| Goodwill and other intangible assets
Business Acquisition [Line Items]
Fair Value	$ 608
Estimated Useful Life	2 years
Discount Rate	16.50%
Taxamo \| Customer Relationships \| Goodwill and other intangible assets
Business Acquisition [Line Items]
Fair Value	$ 973
Estimated Useful Life	2 years
Discount Rate	16.50%

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details) $ in Thousands	Jan. 25, 2021 USD ($) payment	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Money market funds		$ 10,701		$ 265,270
Prices in active markets for identical assets (Level 1) \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Money market funds		10,701		$ 265,270
Tellutax
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Tellutax contingent consideration	$ (2,200)	(2,500)	$ (2,276)
Number of potential earnout payments \| payment	3
Revenue achievement period	30 months
Tellutax \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Tellutax contingent consideration		(2,500)
Tellutax \| Significant unobservable inputs (Level 3) \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Tellutax contingent consideration		$ (2,500)

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Estimated fair values of Tellutax contingent consideration (Details) - Tellutax $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021 USD ($) Y	Sep. 30, 2021 USD ($) Y	Jun. 30, 2021 USD ($)	Jan. 25, 2021 USD ($) Y
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Tellutax contingent consideration	$ (2,500)	$ (2,500)	$ (2,276)	$ (2,200)
Fair value adjustments to contingent consideration	$ 224	$ 300
Revenue volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	95.0	95.0		95.0
Revenue discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	19.0	19.0		20.3
Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input \| Y	3.6	3.6		4.3

FINANCIAL INSTRUMENTS AND FAIR VALUE - Changes in fair value of Tellutax contingent consideration (Details) - Contingent Consideration $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Acquisition of Tellutax	$ (2,200)
Fair value adjustments	(300)
Balance, September 30, 2021	$ (2,500)

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Property and equipment
Property and equipment, gross	$ 237,177	$ 175,687
Less accumulated depreciation	(139,308)	(119,130)
Property and equipment, net	97,869	56,557
Leasehold improvements
Property and equipment
Property and equipment, gross	20,959	20,907
Equipment
Property and equipment
Property and equipment, gross	42,218	41,410
Computer software purchased
Property and equipment
Property and equipment, gross	11,782	11,620
Internal-Use Software
Property and equipment
Property and equipment, gross	141,828	90,772
Less accumulated depreciation	(80,222)	(65,090)
Property and equipment, net	74,320	28,986
Cloud-based customer solutions
Property and equipment
Property and equipment, gross	109,828	65,423
Internal systems and tools
Property and equipment
Property and equipment, gross	32,000	25,349
Furniture and fixtures
Property and equipment
Property and equipment, gross	7,676	7,674
In-process internal-use software
Property and equipment
Property and equipment, gross	$ 12,714	$ 3,304

PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Property and equipment
Finance lease amortization	$ 363		$ 826
Property and equipment	97,869		97,869		$ 56,557
Accumulated depreciation	139,308		139,308		119,130
Taxamo \| Developed Technology
Property and equipment
Fair Value			40,746
Excluding internal-use software and capital leases
Property and equipment
Depreciation expense	1,849	$ 1,970	5,658	$ 5,918
Assets under finance leases
Property and equipment
Property and equipment	1,533		1,533
Accumulated depreciation	826		826
Assets under capital leases
Property and equipment
Finance lease amortization	363		826	513
Property and equipment					1,360
Accumulated depreciation					1,370
Depreciation expense		178
Internal systems and tools
Property and equipment
Depreciation expense	870	587	2,303	1,678
Internal-Use Software
Property and equipment
Property and equipment	74,320		74,320		28,986
Accumulated depreciation	80,222		80,222		$ 65,090
Depreciation expense	$ 7,561	$ 2,183	$ 12,906	$ 6,647

PROPERTY AND EQUIPMENT - Major components of internal-use software (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Property and equipment
Property and equipment, gross	$ 237,177	$ 175,687
Less accumulated depreciation	(139,308)	(119,130)
Property and equipment	97,869	56,557
Internal-Use Software
Property and equipment
Property and equipment, gross	141,828	90,772
Less accumulated depreciation	(80,222)	(65,090)
Property and equipment, net excluding in-process internal-use software	61,606	25,682
Property and equipment	74,320	28,986
In-process internal-use software
Property and equipment
Property and equipment, gross	$ 12,714	$ 3,304

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	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Property and equipment
Capitalized internal-use software	$ 23,899	$ 14,982
Internal-Use Software
Property and equipment
Capitalized internal-use software	21,643	14,037
Cloud-based customer solutions
Property and equipment
Capitalized internal-use software	13,881	12,574
Internal systems and tools
Property and equipment
Capitalized internal-use software	$ 7,762	$ 1,463

CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Capitalized software, bgn
Capitalized software, net	$ 34,018		$ 34,018		$ 31,989
Capitalized software additions			3,600
Capitalized software amortization expense	3,123	$ 3,124	9,473	$ 8,702
Software
Capitalized software, bgn
Capitalized software, gross	71,209		71,209		63,071
Less accumulated amortization	(41,690)		(41,690)		(32,217)
Capitalized software, net	29,519		29,519		30,854
Capitalized development costs	2,777	$ 2,591	7,902	$ 9,246
In-process internal-use software
Capitalized software, bgn
Capitalized software, gross	$ 4,499		$ 4,499		$ 1,135

LEASES (Details)	9 Months Ended
LEASES (Details)	Sep. 30, 2021
Maximum
Remaining lease term (in years)	7 years

LEASES - Lease Assets and Liabilities (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Lease assets:
Operating lease right-of-use assets	$ 21,137
Finance lease assets	$ 707
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property, Plant and Equipment, Net
Total lease assets	$ 21,844
Current:
Operating lease liabilities	2,480
Finance lease liabilities	276
Total current lease liabilities	2,756
Non-current:
Operating lease liabilities, non-current	26,707
Finance lease liabilities, non-current	334
Total non-current lease liabilities	27,041
Total lease liabilities	$ 29,797

LEASES - Lease Costs, Weighted Average Term and Rates (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)
Lease Cost, Weighted average term and discount rate:
Operating lease cost	$ 1,177	$ 3,527
Amortization of lease assets	363	826
Interest on lease liabilities	5	15
Total lease cost	$ 1,545	$ 4,368
Operating leases, weighted-average remaining lease term (in years)	6 years 9 months 18 days	6 years 9 months 18 days
Finance leases, weighted-average remaining lease term (in years)	1 year 6 months	1 year 6 months
Operating leases, weighted-average discount rate	2.30%	2.30%
Finance leases, weighted-average discount rate	2.30%	2.30%

LEASES - Future Maturity of Lease Liabilities (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Operating Leases
Remainder of 2021 (three months remaining)	$ 1,411
2022	4,533
2023	4,460
2024	4,464
2025	4,382
Thereafter	12,531
Total lease payments	31,781
Less: Imputed Interest	(2,594)
Present value of lease liabilities	29,187
Finance Leases
Remainder of 2021 (three months remaining)	264
2022	289
2023	60
2024	10
Total lease payments	623
Less: Imputed Interest	(13)
Present value of lease liabilities	$ 610

LEASES - Future Maturity of Lease Liabilities under ASU 840 (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Operating Leases
2021	$ 5,442
2022	4,518
2023	4,459
2024	4,464
2025	4,382
Thereafter	12,531
Total Lease Payments	35,796
Finance Leases
2021	915
2022	230
Total Lease Payments	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

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill.	$ 274,862	$ 16,329
Other intangible assets, net	3,062	2,382
Goodwill and other intangible assets	$ 277,924	$ 18,711

GOODWILL AND OTHER INTANGIBLE ASSETS - Changes (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($)
Balance, January 1, 2021	$ 16,329
Foreign currency translation adjustments	(8,433)
Balance, September 30, 2021, gross	274,862
Balance, September 30, 2021, net	274,862
LCR-Dixon
Acquisition	97,817
Taxamo
Acquisition	164,449
Tellutax
Acquisition	$ 4,700

GOODWILL AND OTHER INTANGIBLE ASSETS - Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2021	Dec. 31, 2020
Other intangible assets
Weighted Average Amortization Period (Years)		4 years 3 months 18 days	5 years 6 months
Gross Value	$ 4,210	$ 4,210	$ 2,825
Accumulated Amortization	(1,148)	(1,148)	(443)
Carrying Value	3,062	3,062	$ 2,382
Amortization of acquired intangible assets
Amortization	440	737
Cost of Revenues
Amortization of acquired intangible assets
Amortization	65	192
Selling and marketing
Amortization of acquired intangible assets
Amortization	$ 375	$ 545

DEBT - Credit Agreement (Details) - USD ($) $ in Thousands		9 Months Ended
DEBT - Credit Agreement (Details) - USD ($) $ in Thousands	Jul. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Apr. 03, 2020
Debt
Principal payments on long-term debt			$ 226,029
Base rate
Debt
Interest rate		3.25%
LIBOR
Debt
Interest rate		2.00%
Term Loan
Debt
Face amount					$ 175,000
Principal payments on long-term debt	$ 175,000
Line of Credit
Debt
Line of credit, capacity					$ 100,000
Line of credit, outstanding borrowings		$ 0		$ 0
In covenant compliance		true

STOCKHOLDERS EQUITY (Details) - USD ($) $ / shares in Units, shares in Thousands				3 Months Ended			9 Months Ended
	Jun. 30, 2021	Jul. 28, 2020	Jul. 25, 2020	Sep. 30, 2021	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Jul. 27, 2020
Common Stock
Additional paid in capital		$ (6,222,000)		$ 215,647,000			$ 215,647,000		$ 206,541,000
Forward Stock Split		three-for-one
Stock split							0.33
Treasury stock				0			0		0
Liquidation preferences		$ 0						$ 0
Common stock, shares authorized (in shares)		450,000
Common stock par value (in dollars per share)		$ 0.001
Preferred stock, shares authorized (in shares)		30,000		30,000			30,000		30,000
Preferred stock par value (in dollars per share)		$ 0.001		$ 0.001			$ 0.001		$ 0.001
Proceeds from issuance of shares in connection with Offering								423,024,000
Proceeds from exercise of stock option							$ 1,212,000	$ 6,023,000
Distributions			$ 5,706,000		$ 123,185,000	$ 4,010,000
Distributions per share			$ 0.05		$ 1.02	$ 0.03
Period with in the company is required settle any remaining liability for taxes to the former S-corporation shareholders	15 days
Exchange of shares							12,100
Former Class A
Common Stock
Common Stock, Shares, Outstanding								147
Former Class A \| Family
Common Stock
Common Stock, Shares, Outstanding								147
Former Class B
Common Stock
Common Stock, Shares, Outstanding								120,443
Proceeds from exercise of stock option								$ 53,000
Former Class B \| Selling stockholders
Common Stock
Common Stock, Shares, Outstanding								173
Class A
Common Stock
Common Stock, Shares, Outstanding				40,574			40,574		26,327
Common stock, shares authorized (in shares)		300,000		300,000			300,000		300,000
Common stock par value (in dollars per share)				$ 0.001			$ 0.001		$ 0.001
Common Stock, Voting Rights		one
Class A \| Exercise of outstanding options
Common Stock
Exercise of stock options, net (in shares)		610
New Issues Vested Restricted Stock, Shares		19
Class A \| In connection with the offering
Common Stock
Exercise of stock options, net (in shares)		564
Shares exchanged in lieu		860
Class A \| Initial Public Offering
Common Stock
Offering costs		$ 6,222,000
Proceeds from issuance of shares in connection with Offering		$ 423,024,000
Stock issued during the period		23,812
Class A \| Selling stockholders
Common Stock
Auto exercised options in connection with offering shares issued		510		625			1,726
Shares exchanged in lieu		381		128			703
Class A \| Restricted Stock Units
Common Stock
Shares issued upon vesting of Restricted Stock Units, net (shares)				3			8
Shares returned in lieu of payment of taxes				2			3
Class A \| Restricted Stock Awards
Common Stock
Shares issued upon vesting of Restricted Stock Units, net (shares)				118			352
Shares returned in lieu of payment of taxes				11			11
Class B
Common Stock
Common Stock, Shares, Outstanding				108,017			108,017		120,117
Common stock, shares authorized (in shares)		150,000		150,000			150,000		150,000
Common stock par value (in dollars per share)				$ 0.001			$ 0.001		$ 0.001
Common Stock, Voting Rights		ten
Class B \| Family
Common Stock
Common Stock, Shares, Outstanding								120,270
Common Stock
Common Stock
Common Stock, Shares, Outstanding		120,590
Share exchange, amount		$ 0
S Corporation
Common Stock
Additional paid in capital										$ (354,291)
Amount of estimated dividends liability				$ 2,700,000			$ 2,700,000

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Numerator:
Net loss attributable to all stockholders	$ (3,948)	$ (21,028)	$ (852)	$ (79,167)
Denominator:
Anti-dilutive shares	9,598	9,707	10,488	5,654
Class A
Numerator:
Common stock as a percentage of total shares outstanding, basic	27.09%	13.08%	22.91%	3.07%
Net loss attributable to stockholders, basic	$ (1,070)	$ (2,751)	$ (195)	$ (2,427)
Common stock as a percentage of total shares outstanding, diluted	27.09%	13.08%	22.91%	3.07%
Net loss attributable to stockholders, diluted	$ (1,070)	$ (2,751)	$ (195)	$ (2,427)
Denominator:
Weighted average common stock, basic (in shares)	40,141	18,124	33,775	6,129
Weighted average common stock, diluted (in shares)	40,141	18,124	33,775	6,129
Net loss per share, basic (in dollars per share)	$ (0.03)	$ (0.15)	$ (0.01)	$ (0.40)
Net income loss per share, diluted	$ (0.03)	$ (0.15)	$ (0.01)	$ (0.40)
Class B
Numerator:
Common stock as a percentage of total shares outstanding, basic	72.91%	86.92%	77.09%	96.93%
Net loss attributable to stockholders, basic	$ (2,878)	$ (18,277)	$ (657)	$ (76,740)
Common stock as a percentage of total shares outstanding, diluted	72.91%	86.92%	77.09%	96.93%
Net loss attributable to stockholders, diluted	$ (2,878)	$ (18,277)	$ (657)	$ (76,740)
Denominator:
Weighted average common stock, basic (in shares)	108,017	120,417	113,646	120,417
Weighted average common stock, diluted (in shares)	108,017	120,417	113,646	120,417
Net loss per share, basic (in dollars per share)	$ (0.03)	$ (0.15)	$ (0.01)	$ (0.64)
Net income loss per share, diluted	$ (0.03)	$ (0.15)	$ (0.01)	$ (0.64)

STOCK-BASED AWARD PLANS - Stock-Based Award Plans (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Compensation plans:
Accrued salaries and benefits	$ 26,472	$ 17,326
ESPP
Compensation plans:
Offering Period	6 months
Accrued salaries and benefits	$ 867

STOCK-BASED AWARD PLANS - 2020 Plan (Details) shares in Thousands	Sep. 30, 2021 shares
2020 Plan
Compensation plans:
Shares authorized	6,526

STOCK-BASED AWARD PLANS - Amended Options (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Compensation plans:
Remeasurement of options for redeemable shares				$ 51,833
Compensation expense	$ 7,422	$ 64,294	$ 20,250	140,890
Amended Options
Compensation plans:
Remeasurement of options for redeemable shares		$ 21,954		51,833
Compensation expense	$ 1,215		$ 1,985	$ 0

STOCK-BASED AWARD PLANS - Options under 2020 Plan (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Weighted Average Per Share
Compensation expense	$ 7,422	$ 64,294	$ 20,250	$ 140,890
2020 Plan
Units
Balance, Bgn			11,876
Granted	303		566
Forfeited			(293)
Exercised			(2,429)
Balance, End	9,720		9,720
Exercisable	5,258		5,258
Weighted Average Per Share
Balance, Bgn			$ 2.44
Granted			24.78
Forfeited			4.06
Exercised			2.13
Balance, End	$ 3.77		3.77
Exercisable	$ 2.12		$ 2.12
Remaining contractual life, outstanding			5 years 1 month 20 days
Remaining contractual life, exercisable			3 years 2 months 26 days
Intrinsic value, exercised			$ 49,205
Intrinsic value, outstanding	$ 150,182		150,182
Intrinsic value, exercisable	89,924		$ 89,924
Vesting period			10 years
Unrecognized compensation expense	$ 21,530		$ 21,530
Unrecognized compensation expense period			2 years 9 months 18 days
2020 Plan \| Minimum
Weighted Average Per Share
Vesting period			1 year
2020 Plan \| Maximum
Weighted Average Per Share
Vesting period			4 years

STOCK-BASED AWARD PLANS - Options under 2020 Plan Price Range (Details) - 2020 Plan shares in Thousands	9 Months Ended
	Sep. 30, 2021 $ / shares shares
Options outstanding, vested and exercisable:
Options outstanding	9,720
Options vested and exercisable	5,258
$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	2,076
Options outstanding, life	0 years
Options vested and exercisable	2,076
Options vested and exercisable, life	0 years
$2.15
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.15
Options outstanding	472
Options outstanding, life	3 years 4 months 6 days
Options vested and exercisable	472
Options vested and exercisable, life	3 years 4 months 6 days
$2.50
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.50
Options outstanding	2,186
Options outstanding, life	4 years 9 months 10 days
Options vested and exercisable	1,557
Options vested and exercisable, life	4 years 7 months 24 days
$2.67
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.67
Options outstanding	506
Options outstanding, life	5 years 5 months 4 days
Options vested and exercisable	128
Options vested and exercisable, life	5 years 5 months 8 days
$3.17
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 3.17
Options outstanding	1,286
Options outstanding, life	6 years 6 months 14 days
Options vested and exercisable	536
Options vested and exercisable, life	6 years 6 months 14 days
$3.73
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 3.73
Options outstanding	1,957
Options outstanding, life	8 years 18 days
Options vested and exercisable	371
Options vested and exercisable, life	7 years 9 months
$4.70
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 4.70
Options outstanding	683
Options outstanding, life	8 years 4 months 9 days
$18.96
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 18.96
Options outstanding	235
Options outstanding, life	9 years 10 months 17 days
Options vested and exercisable	105
Options vested and exercisable, life	9 years 10 months 17 days
$19.00
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 19.00
Options outstanding	68
Options outstanding, life	9 years 11 months 26 days
$32.16
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 32.16
Options outstanding	251
Options outstanding, life	9 years 5 months 1 day
Options vested and exercisable	13
Options vested and exercisable, life	9 years 5 months 1 day

STOCK-BASED AWARD PLANS - Options under 2020 Plan Options issued (Details) - 2020 Plan - $ / shares	3 Months Ended			9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2021
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Fair market value of common stock	$ 18.96	$ 17.66	$ 32.16	$ 19.00
Volatility	37.10%	36.80%	36.80%	37.10%
Expected term (in years)	5 years	6 years	6 years	5 years
Risk-free interest rate	0.8	0.4	0.4	0.9

STOCK-BASED AWARD PLANS - Restricted Stock Units (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
	May 12, 2021	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Compensation plans:
Compensation expense		$ 7,422	$ 64,294	$ 20,250	$ 140,890
Restricted Stock Units
Compensation plans:
Compensation expense		908	$ 18	2,137	$ 18
Unrecognized compensation cost		$ 10,990		$ 10,990
Unrecognized compensation expense period				3 years 4 months 24 days
Granted (in units)				408
Units
Balance, Bgn (in units)				101
Granted (in units)				408
Vested (in units)				(11)
Forfeited (in units)				(28)
Balance, End (in units)		470		470
Weighted Average Per Share
Balance, Bgn (in dollars per share)				$ 23.80
Granted (in dollars per share)				28.58
Vested (in dollars per share)				33.65
Forfeited (in dollars per share)				24.96
Balance, End (in dollars per share)		$ 27.65		$ 27.65
Restricted Stock Units \| Minimum
Compensation plans:
Service requirement (in years)				1 year
Restricted Stock Units \| Maximum
Compensation plans:
Service requirement (in years)				4 years
PSU
Compensation plans:
Compensation expense				$ 0
PSU \| Employee \| Taxamo
Compensation plans:
Granted (in units)	1,230
Grant date fair value	$ 21,729
Units
Granted (in units)	1,230

STOCK-BASED AWARD PLANS - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 28, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Weighted Average Per Share
Stock-based compensation expense				$ 20,250	$ 140,890
Compensation expense		$ 7,422	$ 64,294	$ 20,250	140,890
Restricted Stock Awards
Units
Balance, Bgn (in units)				670
Granted (in units)	59
Vested (in units)				(363)
Forfeited (in units)				(26)
Balance, End (in units)		340		340
Weighted Average Per Share
Balance, Bgn (in dollars per share)				$ 19.00
Granted (in dollars per share)	$ 17.66
Vested (in dollars per share)				19.00
Forfeited (in dollars per share)				19.00
Balance, End (in dollars per share)		$ 18.77		$ 18.77
Compensation expense		$ 799	$ 2,014	$ 4,454	$ 2,014
Unrecognized compensation cost		$ 4,955		$ 4,955
Unrecognized compensation expense period				2 years 1 month 6 days
Restricted Stock Awards \| Minimum
Compensation plans:
Service requirement (in years)				1 year
Restricted Stock Awards \| Maximum
Compensation plans:
Service requirement (in years)				4 years

STOCK-BASED AWARD PLANS - Employee Stock Purchase Plan (Details) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended	9 Months Ended
	Jun. 30, 2021	Sep. 30, 2021	Sep. 30, 2020	May 31, 2021	Sep. 30, 2021	Sep. 30, 2020
Compensation plans:
Compensation expense		$ 7,422	$ 64,294		$ 20,250	$ 140,890
Class A
Compensation plans:
Offering period	6 months			6 months
ESPP
Compensation plans:
Purchase price as a percent of fair value					15.00%
Reserved for issuance					1,000
Maximum issuance (as a percentage of outstanding)					1.00%
Maximum issuance (in shares)					16,000
Compensation expense		136	$ 121		$ 399	$ 121
Unrecognized compensation cost		$ 90			$ 90
ESPP \| Class A
Compensation plans:
Shares purchased				60

STOCK-BASED AWARD PLANS - ESPP - Option-pricing model key input assumptions (Details) - ESPP - $ / shares	6 Months Ended		9 Months Ended
	Nov. 30, 2021	May 31, 2021	Sep. 30, 2021
Compensation plans:
Discount			15.00%
Offering Period			6 months
Fair Value Assumptions and Methodology
Fair market value of common stock	$ 19.89	$ 25.83
Volatility	35.10%	35.10%
Expected term (in years)	6 months	6 months
Risk-free interest rate	0.12%	0.12%

STOCK-BASED AWARD PLANS - Stock based compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Allocation of costs
Compensation expense	$ 7,422	$ 64,294	$ 20,250	$ 140,890
SAR
Allocation of costs
Compensation expense	4,364	62,141	11,275	138,737
Amended Options
Allocation of costs
Compensation expense	1,215		1,985	0
Restricted Stock Units
Allocation of costs
Compensation expense	908	18	2,137	18
Restricted Stock Awards
Allocation of costs
Compensation expense	799	2,014	4,454	2,014
ESPP
Allocation of costs
Compensation expense	$ 136	$ 121	$ 399	$ 121

STOCK-BASED AWARD PLANS - Stock based compensation, comprehensive income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Allocation of costs
Compensation expense	$ 7,422	$ 64,294	$ 20,250	$ 140,890
Research and development
Allocation of costs
Compensation expense	876	6,340	2,008	14,000
Selling and marketing
Allocation of costs
Compensation expense	2,157	12,821	4,877	28,140
General and administrative
Allocation of costs
Compensation expense	2,973	29,561	9,601	64,029
Software subscriptions
Allocation of costs
Compensation expense	656	6,342	1,788	14,002
Services
Allocation of costs
Compensation expense	$ 760	$ 9,230	$ 1,976	$ 20,719