0001558370-22-017200 | 10-Q | XBRL Viewer

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BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands		9 Months Ended
BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands	Sep. 22, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Business combinations
Cash consideration, net		$ 474	$ 251,412
Deferred purchase consideration, current		19,724		$ 19,805
Deferred purchase consideration, net of current portion				19,419
Payments to Acquire Businesses, Net of Cash Acquired		474	$ 251,412
Systax - VIE
Business combinations
Cash consideration	$ 59,720
Cash paid for Post-closing adjustment	474
Purchase price	99,062
Cash received in the acquisition	1,899
Cash consideration, net	57,821
Aggregate deferred payments	$ 40,000
No of Installment of deferred payment	4
Amount per installment of deferred payment	$ 10,000
Amount of discount of deferred payments	976
Deferred purchase consideration, current		$ 19,724		19,805
Deferred purchase consideration, net of current portion				$ 19,419
Payments to Acquire Businesses, Net of Cash Acquired	57,821
Other adjustments	156
LCR-Dixon
Business combinations
Cash consideration	60,038
Fair value of deferred payment, net of discount	39,024
Purchase price	99,062
Royalties payable written off	252
Measurement Period Adjustments, Capitalized Software	7,700
Measurement Period Adjustments, Other Intangibles	6,500
Measurement Period Adjustments, Goodwill	$ 11,178

BUSINESS COMBINATIONS - Assumptions of intangible assets acquired in the acquisition (Details) - LCR-Dixon $ in Thousands	Sep. 22, 2021 USD ($)
Developed Technology \| Property and Equipment, net
Business combinations
Fair Value	$ 7,700
Estimated Useful Life	3 years
Discount Rate	20.00%
Trade Name \| Goodwill and other intangible assets
Business combinations
Fair Value	$ 200
Estimated Useful Life	6 months
Discount Rate	20.00%
Customer Relationships \| Goodwill and other intangible assets
Business combinations
Fair Value	$ 6,300
Estimated Useful Life	3 years
Discount Rate	20.00%

INVESTMENTS - Maturities (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Fair value of investment securities available for sale:
Due in 1 Year or Less	$ 12,391
Due > 1 Year through 5 Years	2,241
Total	14,632
Fair value of amortized cost of investment securities available for sale
Due in 1 Year or Less	12,405
Due > 1 Year through 5 Years	2,263
Total	14,668
Commercial paper
Fair value of investment securities available for sale:
Due in 1 Year or Less	9,529
Total	9,529
Fair value of amortized cost of investment securities available for sale
Total	9,529
Corporate bonds
Fair value of investment securities available for sale:
Due in 1 Year or Less	199
Total	199
Fair value of amortized cost of investment securities available for sale
Total	200
U.S. Treasury securities
Fair value of investment securities available for sale:
Due in 1 Year or Less	2,663
Due > 1 Year through 5 Years	2,241
Total	4,904
Fair value of amortized cost of investment securities available for sale
Total	$ 4,939

STOCK-BASED AWARD PLANS - Stock based compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Allocation of costs
Compensation expense	$ 5,256	$ 7,422	$ 14,383	$ 20,250
Stock options
Allocation of costs
Compensation expense	1,836	5,579	5,250	13,260
Restricted Stock Units
Allocation of costs
Compensation expense	2,544	908	6,665	2,137
Restricted Stock Awards
Allocation of costs
Compensation expense	725	799	2,034	4,454
ESPP
Allocation of costs
Compensation expense	$ 151	$ 136	$ 434	$ 399

REVENUE RECOGNITION - Contract cost balances (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Changes to deferred commissions:
Beginning balance	$ 12,168	$ 11,545	$ 12,555	$ 11,743
Additions	3,248	3,866	7,904	8,059
Amortization	(1,659)	(2,828)	(6,702)	(7,219)
Ending balance	$ 13,757	$ 12,583	$ 13,757	$ 12,583
Contract costs, amortization period	3 years		3 years
Impairment loss			$ 0

STOCK-BASED AWARD PLANS - Options under 2020 Plan Price Range (Details) - Stock options	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Options outstanding, vested and exercisable:
Options outstanding	8,731
Options outstanding, life	0 years
Options vested and exercisable	6,294
Options vested and exercisable, life	0 years
$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	1,766
Options vested and exercisable	1,766
$2.15
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.15
Options outstanding	336
Options outstanding, life	2 years 4 months 24 days
Options vested and exercisable	336
Options vested and exercisable, life	1 year 4 months 24 days
$2.50
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.50
Options outstanding	2,161
Options outstanding, life	3 years 9 months 18 days
Options vested and exercisable	2,161
Options vested and exercisable, life	3 years 9 months 18 days
$2.67
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 2.67
Options outstanding	419
Options outstanding, life	4 years 4 months 24 days
Options vested and exercisable	419
Options vested and exercisable, life	4 years 4 months 24 days
$3.17
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 3.17
Options outstanding	1,074
Options outstanding, life	5 years 6 months
Options vested and exercisable	322
Options vested and exercisable, life	5 years 7 months 6 days
$3.73
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 3.73
Options outstanding	1,533
Options outstanding, life	7 years 1 month 6 days
Options vested and exercisable	756
Options vested and exercisable, life	7 years 1 month 6 days
$4.70
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 4.70
Options outstanding	683
Options outstanding, life	7 years 4 months 24 days
Options vested and exercisable	341
Options vested and exercisable, life	7 years 4 months 24 days
$18.47
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 18.47
Options outstanding	213
Options outstanding, life	9 years 2 months 12 days
Options vested and exercisable, life	0 years
$18.96
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 18.96
Options outstanding	235
Options outstanding, life	8 years 10 months 24 days
Options vested and exercisable	105
Options vested and exercisable, life	8 years 10 months 24 days
$19.00
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 19.00
Options outstanding	66
Options outstanding, life	9 years
Options vested and exercisable	17
Options vested and exercisable, life	9 years
$32.16
Options outstanding, vested and exercisable:
Exercise prices \| $ / shares	$ 32.16
Options outstanding	245
Options outstanding, life	8 years 4 months 24 days
Options vested and exercisable	71
Options vested and exercisable, life	7 years 7 months 6 days

INVESTMENTS - Amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Investment securities available for sale:
Amortized Cost	$ 14,668
Gross Unrealized Loss	(36)
Allowance For Credit Losses	0
Fair Value	14,632
Commercial paper
Investment securities available for sale:
Amortized Cost	9,529
Fair Value	9,529
Corporate bonds
Investment securities available for sale:
Amortized Cost	200
Gross Unrealized Loss	(1)
Fair Value	199
U.S. Treasury securities
Investment securities available for sale:
Amortized Cost	4,939
Gross Unrealized Loss	(35)
Fair Value	$ 4,904

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2022

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Goodwill	$	239,346	$	270,041
Other intangible assets, net		5,938		2,661
Total	$	245,284	$	272,702


	As of September 30,
	2022		2021

	(unaudited)
Balance, January 1	$	270,041	$	16,329
Acquisitions		—		266,966
Measurement period adjustments		(10,329)		—
Foreign currency translation adjustments		(20,366)		(8,433)
Balance, September 30, gross		239,346		274,862
Accumulated impairment losses		—		—
Balance, September 30, net	$	239,346	$	274,862

Schedule of other acquired intangible assets


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Weighted average amortization period (years)		3.5		4.2

Gross value	$	10,493	$	4,110
Accumulated amortization		(4,555)		(1,449)
Carrying value	$	5,938	$	2,661

Schedule of acquired intangible assets


For the three months ended September 30,	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense		Total Expense
2022	$	58	$	755	$	813
2021		65		375		440

For the nine months ended September 30,	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense		Total Expense
2022	$	177	$	3,023	$	3,200
2021		192		545		737

REVENUE RECOGNITION - Deferred revenue (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
REVENUE RECOGNITION
Deferred revenue, current	$ 242,637		$ 237,344
Deferred revenue, non-current	11,098		11,666
Total deferred revenue	$ 253,735	$ 255,074	$ 249,010	$ 222,580	$ 222,612	$ 222,262

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Allowance for accounts receivable	$ 9,620	$ 9,151
Amortized cost	$ 6,163
Preferred stock par value (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 (per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	300,000	300,000
Common stock, shares issued (in shares)	48,673	42,286
Common stock, shares outstanding (in shares)	48,673	42,286
Class B
Common stock par value (per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000	150,000
Common stock, shares issued (in shares)	101,307	106,807
Common stock, shares outstanding (in shares)	101,307	106,807

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Vertex, Inc. (“Vertex”) and its consolidated subsidiaries and variable interest entities (“VIE”) (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

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% equity interest in Systax Sistemas Fiscais LTDA (“Systax”), a provider of Brazilian transaction tax content and software. Systax is considered a VIE given that the equity investors, as a group, lack the characteristics of a controlling financial interest. Vertex includes Systax in the condensed consolidated financial statements 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

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, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”) filed with the SEC on March 16, 2022. The condensed consolidated balance sheet as of December 31, 2021 has been derived from audited financial statements included in the 2021 Annual Report. The accompanying interim condensed consolidated balance sheet as of September 30, 2022, the interim condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2022 and 2021, and the interim condensed consolidated statements of changes in stockholders’ equity and the interim condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 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, 2022 are not necessarily indicative of the results expected for the full year ending December 31, 2022.

Segments

Segments

The Company operates its business as one operating segment. For the three and nine months ended September 30, 2022, approximately 7% and 8%, respectively, of the Company’s revenues were generated from customers located outside the U.S. For the three and nine months ended September 30, 2021, revenues generated from customers located outside the U.S. were approximately 6% and 6%, respectively. As of September 30, 2022 and December 31, 2021, $995 and $699, respectively, of the Company’s property and equipment assets were held outside the U.S.

Fair Value Measurement

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

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) allowance for credit losses on available-for-sale debt securities; (iv) the reserve for self-insurance, (v) assumptions related to achievement of technological feasibility for software developed for sale, (vi) product life cycles, (vii) estimated useful lives and potential impairment of long-lived assets and intangible assets, (viii) potential impairment of goodwill, (ix) determination of the fair value of tangible and intangible assets acquired, liabilities assumed and consideration transferred in acquisitions, (x) amortization period of material rights and deferred commissions (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.

Internal-Use Software

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

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 three to five 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

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 condensed 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 condensed consolidated statements of comprehensive loss in the period in which they arise.

Goodwill

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^st, and whenever events or circumstances make it more likely than not that impairment may have occurred.

Deferred Financing Costs

Deferred Financing Costs

The Company capitalizes costs related to obtaining, renewing or extending loan agreements and amortizes these costs on a straight-line basis, which approximates the effective interest method, over the life of the loan. Deferred financing costs related to term loans outstanding are reflected as a reduction of current portion of long-term debt and long-term debt net of current portion in the condensed consolidated balance sheets. Deferred financing costs related to undrawn debt are reflected in other assets in the condensed consolidated balance sheets.

Stock-Based Compensation

Stock-Based Compensation

The Company has stock awards issued under the 2020 Incentive Award Plan (the “2020 Plan”) and the 2020 Employee Stock Purchase Plan (the “ESPP”). 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. 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 and product support (collectively, the “updates and 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 performance obligations are satisfied over 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. Prior to January 1, 2022, certain on-premise software subscription prices in the initial subscription year were higher than standard renewal prices. The new sale premium representing the excess initial year price over the renewal price, 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. Effective January 1, 2022, the Company changed the pricing structure for on-premise software so the initial year price and renewal prices were consistent, thus removing the material right for transactions after this date. The material right for applicable transactions prior to this pricing change will continue to be recognized over the estimated period of benefit to the customer.

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 maintain, host and distribute software products, the direct cost to provide customer support, the direct cost to maintain tax content and depreciation and amortization of costs of capitalized software, acquired intangibles, and 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

Income Taxes

Vertex accounts for income taxes using the asset and liability method. The Company recognizes deferred tax assets and liabilities for future tax consequences of events that have been previously recognized in the Company’s condensed consolidated financial statements and tax returns. The measurement of deferred tax assets and liabilities is based on provisions of the enacted tax law. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The effects of future changes in tax laws or rates are not anticipated. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process whereby: (i) management determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and (ii) for those tax positions that meet the more likely than not recognition threshold, management recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records interest related to underpayment of income taxes as interest expense and penalties as other operating expenses in the condensed consolidated statements of comprehensive loss.

The impact as a result of the application of ASC 740 is reflected in the condensed consolidated financial statements. The Company assesses its income tax positions and records tax benefits or expense based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. Variations in the actual outcome of these future tax consequences could materially impact the condensed consolidated financial statements. The Company’s effective income tax rate is based on estimated income for the year, the estimated composition of the income/losses in different jurisdictions, and discrete adjustments in the applicable quarterly periods. Potential discrete adjustments generally include tax charges or benefits related to stock-based compensation and changes in tax legislation, among other items.

Supplemental Balance Sheet Disclosures

Supplemental balance sheet disclosures are as follows for the respective periods:


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Prepaid expenses and other current assets:
Prepaid expenses	$	10,666	$	8,903
Prepaid insurance		1,954		3,348
Prepaid licenses and support		9,874		8,285
Prepaid expenses and other current assets	$	22,494	$	20,536

Accrued expenses:
Accrued general expenses	$	16,059	$	10,771
Accrued contract labor and professional fees		10,654		9,688
Accrued income and other taxes		2,195		2,507
Accrued expenses	$	28,908	$	22,966

Supplemental Cash Flow Disclosures

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


	For the nine months ended September 30,
	2022		2021

	(unaudited)
Cash paid for:
Interest	$	1,558	$	180
Income taxes, net of refunds	$	2,655	$	1,032
Operating cash flows from operating leases	$	2,737	$	4,090

Non-cash investing and financing activities:
Purchase commitment and contingent consideration liabilities	$	2,000	$	50,653
Leased assets obtained in exchange for new finance lease liabilities	$	1,337	$	173

Recently Issued and Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements

As an “emerging growth company,” the Jumpstart Our Business Startups 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 (“ASU 2021-08”). ASU 2021-08 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. ASU 2021-08 will be effective for public entities with fiscal years beginning after December 15, 2022, and for all other entities with fiscal years beginning after December 15, 2023, with early adoption permitted. ASU 2021-08 will be applied prospectively to business combinations occurring on or after the applicable effective date. The Company will adopt this standard effective January 1, 2023. This standard is not expected

to have a material impact on the Company’s current condensed consolidated financial statements, but adoption could have a material impact on the accounting for future acquisitions reflected in the Company’s condensed consolidated financial statements.

Risks and Uncertainties

In March 2020, the World Health Organization declared the outbreak of the coronavirus disease 2019 (“COVID-19”) to be a pandemic. The COVID-19 pandemic continues to have widespread, 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, with employees directed to work from home. During the third quarter ended September 30, 2022, the Company reopened its offices to employees and has begun to participate in and/or hold conferences and other marketing events in person. The COVID-19 pandemic has impacted, and may continue to impact, Company operations, including employees, customers and partners, and there remains 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, 2022 as a result of COVID-19. 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 ongoing 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, inflation 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.

REVENUE RECOGNITION - Accounts receivable, net (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021	Jun. 30, 2022	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
REVENUE RECOGNITION
Allowance for accounts receivable	$ 9,620	$ 9,151	$ 8,719	$ 8,845	$ 9,399	$ 8,592
Allowance for credit loss
Balance, beginning of period	76,929	77,159
Balance, end of period	94,529	76,929
Increase (decrease), net	$ 17,600	$ (230)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Credit Risk (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Segment information:
Property and equipment	$ 109,123		$ 109,123		$ 98,390
Outside United States
Segment information:
Property and equipment	$ 995		$ 995		$ 699
Revenue \| Geographic Concentration Risk \| Outside United States
Segment information:
Risk percentage	7.00%	6.00%	8.00%	6.00%

PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Property and equipment
Finance lease amortization	$ 174	$ 363	$ 944	$ 826
Property and equipment, gross	279,747		279,747		$ 246,605
Property and equipment	109,123		109,123		98,390
Accumulated depreciation	170,624		170,624		148,215
Excluding internal-use software and capital leases
Property and equipment
Depreciation expense	1,535	1,849	4,923	5,658
Assets under finance leases
Property and equipment
Property and equipment, gross	2,225		2,225		1,533
Accumulated depreciation	1,875		1,875		931
Internal-Use Software
Property and equipment
Property and equipment, gross	172,430		172,430		147,280
Property and equipment	91,322		91,322		76,964
Accumulated depreciation	108,881		108,881		87,281
Depreciation expense	6,881	7,561	20,139	12,906
Internal systems and tools
Property and equipment
Property and equipment, gross	40,368		40,368		$ 32,408
Depreciation expense	$ 1,228	$ 870	$ 3,253	$ 2,303

DEBT

9 Months Ended

Sep. 30, 2022

DEBT

DEBT

9.DEBT

Credit Agreement

On March 8, 2022, the Company entered into the Second Amendment to Credit Agreement (the “Second Amendment”), with a banking syndicate, which amended the previous credit agreement entered into in March 2020 (the “Previous Credit Agreement”), providing for, among other modifications, (i) a new term loan in the aggregate amount of $50,000 (the “Term Loan”); (ii) an extension of the maturity date of the revolving facility from March 2025 to March 2027; (iii) an increase in the revolving credit commitment from $100,000 (the “Previous Line of Credit”) to $200,000 (the “Amended Line of Credit”); (iv) the Company’s option to select an applicable interest rate at either the bank base rate plus an applicable margin (the “New Base Rate Option”) or Secured Overnight Financing Rate (“SOFR”) plus an applicable margin (the “SOFR Option”); (v) modifications to the financial covenant performance levels which determine applicable margins; and (vi) modifications to certain covenants and events of default. Net proceeds from the Term Loan shall be used to fund ongoing working capital, capital expenditures, permitted distributions, permitted acquisitions and general corporate purposes of the Company and its subsidiaries.

The Company paid $983 in financing costs in connection with the Second Amendment, which will be amortized over the term of the loan. The Company wrote off $370 in deferred financing fees pertaining to the Previous Credit Agreement associated with a bank exiting the Second Amendment. The remaining balance of deferred financing costs pertaining to the remaining bank associated with the Previous Credit Agreement of $277 will be amortized over the term of the Second Amendment. The portion of the deferred financing costs associated with the Amended Line of Credit and the Term Loan are reflected in other assets and as a reduction of the Term Loan, respectively, in the condensed consolidated balance sheet at September 30, 2022.

The Second Amendment 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, 2022.

Term Loan

The Term Loan requires quarterly principal payments over five years, with a balloon payment due on March 8, 2027. The interest rate on the Term Loan was 4.13% at September 30, 2022 as the Company selected the SOFR Option. Term Loan outstanding amounts are reported in the current portion of long-term debt and long-term debt, net of current portion, in the condensed consolidated balance sheets.

Amended Line of Credit

The Amended Line of Credit expires in March 2027. The Company is required to pay a quarterly fee on the difference between the $200,000 allowed maximum borrowings and the unpaid principal balance outstanding under the line at the applicable rate. At September 30, 2022, the New Base Rate Option and SOFR Option applicable to Amended Line of Credit borrowings were 6.25% and 4.13%, respectively. There were no outstanding borrowings under the Amended Line of Credit at September 30, 2022 or the Previous Line of Credit at December 31, 2021, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Reconciliation of cash, cash equivalents and restricted cash to the Condensed Consolidated Balance Sheets, end of period:
Cash and cash equivalents	$ 72,370	$ 47,481
Restricted cash-funds held for customers	23,840	27,860
Total cash, cash equivalents and restricted cash, end of period	$ 96,210	$ 75,341

GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2022

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

8. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets are as follows for the periods presented:


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Goodwill	$	239,346	$	270,041
Other intangible assets, net		5,938		2,661
Total	$	245,284	$	272,702

The changes in the carrying amount of goodwill are as follows for the periods presented:


	As of September 30,
	2022		2021

	(unaudited)
Balance, January 1	$	270,041	$	16,329
Acquisitions		—		266,966
Measurement period adjustments		(10,329)		—
Foreign currency translation adjustments		(20,366)		(8,433)
Balance, September 30, gross		239,346		274,862
Accumulated impairment losses		—		—
Balance, September 30, net	$	239,346	$	274,862

The Company has recognized various amortizable other intangible assets in connection with acquisitions 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, for the periods presented:


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Weighted average amortization period (years)		3.5		4.2

Gross value	$	10,493	$	4,110
Accumulated amortization		(4,555)		(1,449)
Carrying value	$	5,938	$	2,661

The following table presents amortization of other intangible assets:


For the three months ended September 30,	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense		Total Expense
2022	$	58	$	755	$	813
2021		65		375		440

For the nine months ended September 30,	Cost of Revenues, Software Subscriptions		Selling and Marketing Expense		Total Expense
2022	$	177	$	3,023	$	3,200
2021		192		545		737

Amortization expense associated with the other intangible assets recognized from the LCR-Dixon acquisition from the acquisition date through September 30, 2022 was $525 and $2,300 for the three and nine months ended September 30, 2022 and is included in the other intangible assets amortization expense in the above schedule. Included in this amount is $625 that would have been recorded during the year ended December 31, 2021 had the fair value of the acquired LCR-Dixon other intangibles been available on the acquisition date.

PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT

Schedule of major components of property and equipment


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Leasehold improvements	$	20,904	$	20,956
Equipment		38,974		41,937
Computer software purchased		12,005		11,792
Internal-use software developed:
Cloud-based customer solutions		132,062		114,872
Internal systems and tools		40,368		32,408
Furniture and fixtures		7,661		7,675
In-process internal-use software		27,773		16,965
Property and equipment		279,747		246,605
Less accumulated depreciation and amortization		(170,624)		(148,215)
Property and equipment, net	$	109,123	$	98,390

Schedule of major components of internal-use software


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Internal-use software developed	$	172,430	$	147,280
Less accumulated depreciation		(108,881)		(87,281)
Internal-use software developed, net of accumulated depreciation		63,549		59,999
In-process internal-use software		27,773		16,965
Internal-use software developed, net	$	91,322	$	76,964

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,
	2022		2021

	(unaudited)
Cloud-based customer solutions	$	22,014	$	13,881
Internal systems and tools		18,924		7,762
Total	$	40,938	$	21,643

STOCK BASED AWARD PLANS (Tables)

9 Months Ended

Sep. 30, 2022

Compensation plans:

Schedule of ESPP valuation assumptions


	Offering Period Ending
	11/30/2022			11/30/2021
Fair market value of common stock	$	11.16		$	19.89
Volatility		35.4	%		35.1	%
Expected term (years)		0.5			0.5
Expected dividend yield		-	%		-	%
Risk-free interest rate		1.6	%		0.1	%

Schedule of stock-based compensation cost related to incentive awards


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021

	(unaudited)				(unaudited)
Stock-based compensation expense:
Stock options	$	1,836	$	5,579	$	5,250	$	13,260
RSUs		2,544		908		6,665		2,137
RSAs		725		799		2,034		4,454
ESPP		151		136		434		399
Total stock-based compensation expense	$	5,256	$	7,422	$	14,383	$	20,250

Schedule of stock based compensation cost in consolidated statement of operations


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021

	(unaudited)				(unaudited)
Stock-based compensation expense:
Cost of revenues, software subscriptions	$	577	$	656	$	1,502	$	1,788
Cost of revenues, services		374		760		1,055		1,976
Research and development		581		876		1,193		2,008
Selling and marketing		1,621		2,157		4,594		4,877
General and administrative		2,103		2,973		6,039		9,601
Total stock-based compensation expense	$	5,256	$	7,422	$	14,383	$	20,250

Stock options

Compensation plans:

Schedule of Option activity


				Weighted
			Weighted	Average
			Average	Remaining	Aggregate
			Exercise	Contractual	Intrinsic
2020 Plan Option Activity	Units		Price	Life (Years)	Value

	(unaudited)
Outstanding at January 1, 2022	9,500	$	4.20	5.2	$	110,843
Forfeited	(100)		5.31
Expired	(1)		32.16
Exercised	(668)		2.81
2020 Plan options outstanding at September 30, 2022	8,731		4.29	4.5		81,881
2020 Plan options excercisable at September 30, 2022	6,294		2.80	3.5		68,410

Schedule of outstanding, vested and exercisable



	Options Outstanding		Options Vested and Exercisable
		Weighted		Weighted
		Average		Average
Exercise Prices	Units	Life (Years)	Units	Life (Years)

	(unaudited)
$0.15 to $0.71	1,766	—	1,766	—
$2.15	336	2.4	336	1.4
$2.50	2,161	3.8	2,161	3.8
$2.67	419	4.4	419	4.4
$3.17	1,074	5.5	322	5.6
$3.73	1,533	7.1	756	7.1
$4.70	683	7.4	341	7.4
$18.47	213	9.2	—	—
$18.96	235	8.9	105	8.9
$19.00	66	9.0	17	9
$32.16	245	8.4	71	7.6
	8,731		6,294

Schedule of valuation assumptions


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

Restricted Stock Units

Compensation plans:

Schedule of Option activity



		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2022	530	$	26.49
Granted	2,128		13.43
Vested	(48)		23.33
Forfeited	(118)		15.93
Outstanding at September 30, 2022	2,492	$	15.90

Restricted Stock Awards

Compensation plans:

Schedule of restricted activity



		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2022	326	$	18.76
Granted	106		9.92
Vested	(188)		18.58
Forfeited	(9)		19.00
Outstanding at September 30, 2022	235	$	14.91

INVESTMENTS - Gross Unrealized Loss Position (Details) $ in Thousands	Sep. 30, 2022 USD ($) item
Debt securities, unrealized loss position, accumulated loss
Fair value, less than 12 months maturity	$ 4,811
Fair value, total	4,811
Debt securities, unrealized loss position, accumulated loss less than 12 months	(36)
Debt securities, unrealized loss position, accumulated loss	$ (36)
Number of securities \| item	50
Allowance For Credit Losses	$ 0
Corporate bonds
Debt securities, unrealized loss position, accumulated loss
Fair value, less than 12 months maturity	199
Fair value, total	199
Debt securities, unrealized loss position, accumulated loss less than 12 months	(1)
Debt securities, unrealized loss position, accumulated loss	(1)
U.S. Treasury securities
Debt securities, unrealized loss position, accumulated loss
Fair value, less than 12 months maturity	4,612
Fair value, total	4,612
Debt securities, unrealized loss position, accumulated loss less than 12 months	(35)
Debt securities, unrealized loss position, accumulated loss	$ (35)

STOCK-BASED AWARD PLANS - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Compensation plans:
Compensation expense	$ 5,256	$ 7,422	$ 14,383	$ 20,250
Unrecognized compensation cost	12,134		$ 12,134
Class A
Compensation plans:
Purchase price as a percent of fair value			85.00%
ESPP
Compensation plans:
Reserved for issuance			3,666
Amounts withheld from participants	837		$ 837
Compensation expense	151	$ 136	434	$ 399
Unrecognized compensation cost	$ 99		$ 99
Offering period			2 years	2 years
ESPP offering period			6 months
Discount				15.00%

STOCK-BASED AWARD PLANS - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Compensation plans:
Compensation expense	$ 5,256	$ 7,422	$ 14,383	$ 20,250
Unrecognized compensation cost	12,134		12,134
Restricted Stock Units
Compensation plans:
Compensation expense	2,544	$ 908	6,665	$ 2,137
Unrecognized compensation cost	$ 31,273		$ 31,273
Unrecognized compensation expense period			3 years 1 month 6 days
Units
Beginning balance (in units)			530
Granted (in units)			2,128
Vested (in units)			(48)
Forfeited (in units)			(118)
Ending balance (in units)	2,492		2,492
Weighted Average Per Share
Beginning balance (in dollars per share)			$ 26.49
Granted (in dollars per share)			13.43
Vested (in dollars per share)			23.33
Forfeited (in dollars per share)			15.93
Ending balance (in dollars per share)	$ 15.90		$ 15.90
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 \| Taxamo
Compensation plans:
Compensation expense			$ 0
Grant date fair value			$ 15,803
Units
Granted (in units)			895

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator:
Net loss attributable to all stockholders	$ (1,141)	$ (5,520)	$ (334)	$ (3,948)	$ 808	$ 2,288	$ (6,995)	$ (852)
Class A
Numerator:
Common stock as a percentage of total shares outstanding, basic	32.37%			27.09%			29.91%	22.91%
Net loss attributable to stockholders, basic	$ (369)			$ (1,070)			$ (2,092)	$ (195)
Common stock as a percentage of total shares outstanding, diluted	32.37%			27.09%			29.91%	22.91%
Net loss attributable to stockholders, diluted	$ (369)			$ (1,070)			$ (2,092)	$ (195)
Denominator:
Weighted average common stock, basic (in shares)	48,488			40,141			44,708	33,775
Weighted average common stock, diluted (in shares)	48,488			40,141			44,708	33,775
Net loss per share, basic (in dollars per share)	$ (0.01)			$ (0.03)			$ (0.05)	$ (0.01)
Net loss per share, diluted (in dollars per share)	$ (0.01)			$ (0.03)			$ (0.05)	$ (0.01)
Class A \| Amended Options
Denominator:
Anti-dilutive shares	8,113			9,674			8,343	10,493
Class A \| Out-of-the-money options
Denominator:
Anti-dilutive shares	760			354			764	229
Class A \| Restricted Stock Awards
Denominator:
Anti-dilutive shares	273			390			301	542
Class A \| Restricted Stock Units
Denominator:
Anti-dilutive shares	2,485			436			2,153	354
Class A \| ESPP
Denominator:
Anti-dilutive shares	53			28			48	27
Class B
Numerator:
Common stock as a percentage of total shares outstanding, basic	67.63%			72.91%			70.09%	77.09%
Net loss attributable to stockholders, basic	$ (772)			$ (2,878)			$ (4,903)	$ (657)
Common stock as a percentage of total shares outstanding, diluted	67.63%			72.91%			70.09%	77.09%
Net loss attributable to stockholders, diluted	$ (772)			$ (2,878)			$ (4,903)	$ (657)
Denominator:
Weighted average common stock, basic (in shares)	101,307			108,017			104,772	113,646
Weighted average common stock, diluted (in shares)	101,307			108,017			104,772	113,646
Net loss per share, basic (in dollars per share)	$ (0.01)			$ (0.03)			$ (0.05)	$ (0.01)
Net loss per share, diluted (in dollars per share)	$ (0.01)			$ (0.03)			$ (0.05)	$ (0.01)

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details) $ in Thousands	1 Months Ended
	Jan. 31, 2021 USD ($) payment	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Forward foreign current contract, asset		$ 416
Forward foreign currency contract, liability			$ (62)
Significant other observable inputs (Level 2) \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Forward foreign current contract, asset		416
Forward foreign currency contract, liability			(62)
Money market mutual funds \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets, Fair Value Disclosure		38,553	3,201
Money market mutual funds \| Prices in active markets for identical assets (Level 1) \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets, Fair Value Disclosure		38,553	3,201
Commercial paper \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets, Fair Value Disclosure		9,529
Commercial paper \| Significant other observable inputs (Level 2) \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets, Fair Value Disclosure		9,529
Corporate bonds \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets, Fair Value Disclosure		199
Corporate bonds \| Significant other observable inputs (Level 2) \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets, Fair Value Disclosure		199
U.S. Treasury securities \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets, Fair Value Disclosure		4,904
U.S. Treasury securities \| Significant other observable inputs (Level 2) \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets, Fair Value Disclosure		4,904
Tellutax
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Tellutax Contingent Consideration		(4,500)	(2,500)
Number of potential earnout payments \| payment	3
Revenue achievement period	30 months
Maximum limit on earnout payments	$ 0
Earn out payment for applicable measurement period	$ 0
Tellutax \| Fair Value, Recurring
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Tellutax Contingent Consideration		(4,500)	(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		$ (4,500)	$ (2,500)

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Estimated fair values of Tellutax contingent consideration (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022 USD ($) Y	Sep. 30, 2022 USD ($) Y	Dec. 31, 2021 USD ($) Y
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value adjustments to contingent consideration		$ 2,000
Purchase commitment and contingent consideration liabilities, current	$ 5,082	5,082	$ 468
Purchase commitment and contingent consideration liabilities, net of current portion	8,009	8,009	10,829
Tellutax
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Tellutax Contingent Consideration	4,500	4,500	$ 2,500
Fair value adjustments to contingent consideration	1,300	2,000
Purchase commitment and contingent consideration liabilities, current	1,400	1,400
Purchase commitment and contingent consideration liabilities, net of current portion	$ 3,100	$ 3,100
Tellutax \| Revenue volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	0.750	0.750	0.950
Tellutax \| Revenue discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	0.222	0.222	0.200
Tellutax \| Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input \| Y	2.6	2.6	3.6

CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Capitalized software, movement
Capitalized software, net	$ 38,561		$ 38,561		$ 33,442
Capitalized software amortization expense	4,163	$ 3,123	12,869	$ 9,473
LCR-Dixon
Capitalized software, movement
Capitalized development costs	7,700
Software
Capitalized software, movement
Capitalized software, gross	93,432		93,432		72,512
Less accumulated amortization	(58,048)		(58,048)		(45,179)
Capitalized software, net	35,384		35,384		27,333
Capitalized development costs	4,362	$ 2,777	10,288	$ 7,902
Amortization expenses on acquisition date					642
Software \| LCR-Dixon
Capitalized software, movement
Capitalized software amortization expense			2,567
In-process internal-use software
Capitalized software, movement
Capitalized software, gross	$ 3,177		$ 3,177		$ 6,109

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Prepaid expenses and other current assets:
Prepaid expenses	$ 10,666	$ 8,903
Prepaid Insurance	1,954	3,348
Prepaid licenses and support	9,874	8,285
Prepaid expenses and other current assets	22,494	20,536
Accrued expenses:
Accrued general expenses	16,059	10,771
Accrued professional fees	10,654	9,688
Accrued income and other taxes	2,195	2,507
Accrued expenses	$ 28,908	$ 22,966

GOODWILL AND OTHER INTANGIBLE ASSETS - Changes (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Balance, January 1	$ 270,041	$ 16,329
Measurement period adjustments	(10,329)
Foreign currency translation adjustments	(20,366)	(8,433)
Balance, June 30, gross	239,346	274,862
Balance, June 30, net	$ 239,346	274,862
Tellutax
Acquisition payments		$ 266,966

BUSINESS COMBINATIONS - Net assets and liabilities (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($) segment	Dec. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 22, 2021 USD ($)	Dec. 31, 2020 USD ($)
Business combinations
Operating segments \| segment	1
Goodwill	$ 239,346	$ 270,041	$ 274,862		$ 16,329
LCR-Dixon
Business combinations
Cash and cash equivalents				$ 1,899
Accounts receivable				1,586
Prepaid expenses and other current assets				150
Property and equipment				4
Capitalized Software				7,700
Goodwill				86,639
Other intangibles				6,500
Accounts payable				(19)
Accrued expenses				(202)
Accrued compensation				(1,746)
Deferred revenue				(71)
Total				98,810
Deferred income tax liability				$ (3,630)

REVENUE RECOGNITION - Changes to deferred revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
REVENUE RECOGNITION
Beginning balance	$ 255,074	$ 222,612	$ 249,010	$ 222,262
Additional amounts deferred	124,899	110,686	365,223	314,210
Revenues recognized	(126,238)	(110,718)	(360,498)	(313,892)
Ending balance	$ 253,735	$ 222,580	$ 253,735	$ 222,580

STOCK-BASED AWARD PLANS - ESPP - Option-pricing model key input assumptions (Details) - $ / shares	1 Months Ended		3 Months Ended			9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022
Fair Value Assumptions and Methodology
Fair market value of common stock	$ 11.16	$ 19.89	$ 18.96	$ 17.66	$ 32.16	$ 19.00
Volatility	35.40%	35.10%	37.10%	36.80%	36.80%	37.10%
Expected term (in years)	6 months	6 months	5 years	6 years	6 years	5 years
Risk-free interest rate	1.60%	0.10%	0.80%	0.40%	0.40%	0.90%

GOODWILL AND OTHER INTANGIBLE ASSETS - Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Amortization of acquired intangible assets
Amortization	$ 813	$ 440	$ 3,200	$ 737
Cost of Revenues
Amortization of acquired intangible assets
Amortization	58	65	177	192
Selling and marketing
Amortization of acquired intangible assets
Amortization	755	$ 375	$ 3,023	$ 545
Other intangible assets
Other intangible assets
Weighted Average Amortization Period (Years)			3 years 6 months		4 years 2 months 12 days
Gross Value	10,493		$ 10,493		$ 4,110
Accumulated amortization	(4,555)		(4,555)		(1,449)
Carrying Value	5,938		5,938		2,661
Other intangible assets \| LCR-Dixon
Amortization of acquired intangible assets
Amortization expenses on acquisition date	$ 525		$ 2,300
Assets fair value disclosure					$ 625

INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2022

INVESTMENTS

Schedule of amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value aggregated by major security


	As of September 30, 2022
Investment securities available-for-sale: (unaudited)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance For Credit Losses		Fair Value
Commercial Paper	$	9,529	$	—	$	—	$	—	$	9,529
Corporate Bonds		200		—		(1)		—		199
U.S. Treasury Securities		4,939		—		(35)		—		4,904
Total investment securities available-for-sale	$	14,668	$	—	$	(36)	$	—	$	14,632

Schedule of length of time of gross unrealized losses and fair value of our securities available for sale


	As of September 30, 2022
	Less than 12 Months				12 Months or Longer				Total
Investment securities available-for-sale without an allowance for credit losses: (unaudited)	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Commercial Paper	$	—	$	—	$	—	$	—	$	—	$	—
Corporate Bonds		199		(1)		—		—		199		(1)
U.S. Treasury Securities		4,612		(35)		—		—		4,612		(35)
Total investment securities available-for-sale	$	4,811	$	(36)	$	—	$	—	$	4,811	$	(36)

Schedule of fair value of our investment securities by major security type and contractual maturity


	As of September 30, 2022
	Due in 1 Year or Less		Due > 1 Year through 5 Years		Due > 5 Years through 10 Years		Due > 10 Years		Total
Fair value of investment securities available-for-sale: (unaudited)
Commercial Paper	$	9,529	$	—	$	—	$	—	$	9,529
Corporate Bonds		199		—		—		—		199
U.S. Treasury Securities		2,663		2,241		—		—		4,904
Total investment securities available-for-sale	$	12,391	$	2,241	$	—	$	—	$	14,632
Amortized cost of investment securities available-for-sale	$	12,405	$	2,263	$	—	$	—	$	14,668

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2022

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 September 30,						For the nine months ended September 30,
Class A common stock:	2022			2021			2022			2021

	(unaudited)						(unaudited)
Numerator, basic:
Net loss attributable to all stockholders	$	(1,141)		$	(3,948)		$	(6,995)		$	(852)
Class A stock as a percentage of total shares outstanding, basic		32.37	%		27.09	%		29.91	%		22.91	%
Net loss attributable to Class A stockholders, basic	$	(369)		$	(1,070)		$	(2,092)		$	(195)

Numerator, diluted:
Net loss attributable to all stockholders	$	(1,141)		$	(3,948)		$	(6,995)		$	(852)
Class A stock as a percentage of total shares outstanding, diluted		32.37	%		27.09	%		29.91	%		22.91	%
Net loss attributable to Class A stockholders, diluted	$	(369)		$	(1,070)		$	(2,092)		$	(195)

Denominator, basic and diluted:
Weighted average Class A common stock, basic		48,488			40,141			44,708			33,775
Dilutive effect of common stock equivalents⁽¹⁾⁽²⁾		—			—			—			—
Weighted average Class A common stock, diluted		48,488			40,141			44,708			33,775

Net loss per Class A share, basic	$	(0.01)		$	(0.03)		$	(0.05)		$	(0.01)
Net loss per Class A share, diluted	$	(0.01)		$	(0.03)		$	(0.05)		$	(0.01)

(1)

For the three months ended September 30, 2022, the following weighted-average outstanding shares of common stock equivalents by award type were excluded from the computation of diluted net loss per share attributable to Class A stockholders, as the impact of including them would have been anti-dilutive: 8,113 options (including 760 out-of-the-money options), 273 RSAs, 2,485 RSUs and 53 shares under the ESPP. For the three months ended September 30, 2021, the following weighted-average outstanding shares of common stock equivalents by award type were excluded from the computation of diluted net loss per share attributable to Class A stockholders, as the impact of including them would have been anti-dilutive: 9,674 options (including 354 out-of-the-money options), 390 RSAs, 436 RSUs and 28 shares under the ESPP.

(2)

For the nine months ended September 30, 2022, the following weighted-average outstanding shares of common stock equivalents by award type were excluded from the computation of diluted net loss per share attributable to Class A stockholders, as the impact of including them would have been anti-dilutive: 8,343 options (including 764 out-of-the-money options), 301 RSAs, 2,153 RSUs and 48 shares under the ESPP. For the nine months ended September 30, 2021, the following weighted-average outstanding shares of common stock equivalents by award type were excluded from the computation of diluted net loss per share attributable to Class A stockholders, as the impact of including them would have been anti-dilutive: 10,493 options (including 229 out-of-the-money options), 542 RSAs, 354 RSUs and 27 shares under the ESPP.

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 September 30,						For the nine months ended September 30,
Class B common stock:	2022			2021			2022			2021

	(unaudited)						(unaudited)
Numerator, basic:
Net loss attributable to all stockholders	$	(1,141)		$	(3,948)		$	(6,995)		$	(852)
Class B stock as a percentage of total shares outstanding, basic		67.63	%		72.91	%		70.09	%		77.09	%
Net loss attributable to Class B stockholders, basic	$	(772)		$	(2,878)		$	(4,903)		$	(657)

Numerator, diluted:
Net loss attributable to all stockholders	$	(1,141)		$	(3,948)		$	(6,995)		$	(852)
Class B stock as a percentage of total shares outstanding, diluted		67.63	%		72.91	%		70.09	%		77.09	%
Net loss attributable to Class B stockholders, diluted	$	(772)		$	(2,878)		$	(4,903)		$	(657)

Denominator, basic and diluted:
Weighted average Class B common stock, basic		101,307			108,017			104,772			113,646
Dilutive effect of common stock equivalents		—			—			—			—
Weighted average Class B common stock, diluted		101,307			108,017			104,772			113,646

Net loss per Class B share, basic	$	(0.01)		$	(0.03)		$	(0.05)		$	(0.01)
Net loss per Class B share, diluted	$	(0.01)		$	(0.03)		$	(0.05)		$	(0.01)

STOCK-BASED AWARD PLANS - Options under 2020 Plan Options issued (Details) - $ / shares	1 Months Ended		3 Months Ended			9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022
Stock-Based Award Plans
Fair market value of common stock	$ 11.16	$ 19.89	$ 18.96	$ 17.66	$ 32.16	$ 19.00
Volatility	35.40%	35.10%	37.10%	36.80%	36.80%	37.10%
Expected term (in years)	6 months	6 months	5 years	6 years	6 years	5 years
Risk-free interest rate	1.60%	0.10%	0.80%	0.40%	0.40%	0.90%

LEGAL PROCEEDINGS

9 Months Ended

Sep. 30, 2022

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.

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2022

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

5. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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, 2022 (unaudited)	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	$	38,553	$	38,553	$	—	$	—
Commercial Paper		9,529		—		9,529		—
Corporate Bonds		199		—		199		—
U.S. Treasury Securities		4,904		—		4,904		—
Tellutax Contingent Consideration		(4,500)		—		—		(4,500)
Foreign currency forward contracts		416		—		416		—

	Fair Value Measurements Using
As of December 31, 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	$	3,201	$	3,201	$	—	$	—
Tellutax Contingent Consideration		(2,500)		—		—		(2,500)
Foreign currency forward contracts		(62)		—		(62)		—

The Company has investments in Money Market Funds, 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 Fund fair values are known and observable through daily published floating net asset values. Securities classified as available-for-sale are reported at fair value using Level 2 inputs. For the Commercial Paper, Corporate Bonds and U.S. Treasury Securities, the Company believes that Level 2 designation is appropriate under ASC 820-10, as these securities are fixed income securities, none are exchange traded, and all are priced by correlation to observed market data. For these securities the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors.

In connection with the January 2021 Tellutax LLC (“Tellutax”) acquisition, the sellers are entitled to contingent consideration if sales targets are met during a period of time following the acquisition (the “Tellutax Contingent Consideration”).

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 the payments specified in the purchase agreement. Such payments have no maximum limit, but if certain targets are not met, there will be no payment for the applicable measurement period.

A fair value adjustment of $1,300 and $2,000 was recorded in other operating expense, net for the three and nine months ended September 30, 2022, respectively. At September 30, 2022, the Tellutax Contingent Consideration of $1,400 and $3,100 is included in purchase commitment and contingent consideration liabilities, current, and purchase commitment and contingent consideration liabilities, net of current portion, respectively, in the condensed consolidated balance sheets. At December 31, 2021, the Tellutax Contingent Consideration of $2,500 is included in purchase commitment and contingent consideration liabilities, net of current portion in the condensed consolidated balance sheets.

Tellutax Contingent Consideration fair value as of September 30, 2022 and December 31, 2021 and unobservable inputs used for the Monte Carlo Simulation valuation were as follows:


	September 30, 2022
Liability	Fair Value		Valuation Technique	Unobservable Inputs
Tellutax Contingent Consideration	$	(4,500)	Monte Carlo Simulation	Revenue volatility	75.0	%
				Revenue discount rate	22.2	%
				Term (in years)	2.6

	December 31, 2021
Liability	Fair Value		Valuation Technique	Unobservable Inputs
Tellutax Contingent Consideration	$	(2,500)	Monte Carlo Simulation	Revenue volatility	95.0	%
				Revenue discount rate	20.0	%
				Term (in years)	3.6

Changes in the fair value of Tellutax Contingent Consideration during the nine months ended September 30, 2022 were as follows:


	Tellutax
	Contingent
	Consideration

Balance, January 1, 2022	$	(2,500)
Fair value adjustments		(2,000)
Balance, September 30, 2022	$	(4,500)

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 amount for floating rate debt approximates its fair value, as the calculation of fair value is dependent on the estimation of future interest rates and is considered a Level 2 measurement.

Non-recurring Fair Value Measurements

The LCR-Dixon acquisition on September 22, 2021, the acquisition of EVAT and its wholly owned subsidiaries (collectively, “Taxamo”) on May 12, 2021, the Tellutax acquisition on January 25, 2021, and the Systax acquisition on January 10, 2020, were accounted for as business combinations and the total purchase price for each acquisition was allocated to the net assets acquired and liabilities assumed based on their estimated fair values.

Deferred purchase consideration associated with the LCR-Dixon acquisition was $19,724 and $39,224 at September 30, 2022 and December 31, 2021, respectively. See Note 3, “Business Combinations”, for additional information on such amounts.

The Company has a contractual commitment to acquire the remaining equity interest from the original Systax Quotaholders incrementally 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 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 loss or income in the condensed consolidated statements of comprehensive loss. 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

condensed consolidated statements of comprehensive loss in the period the change is identified. No such adjustments have been recorded through September 30, 2022.

The Purchase Commitment Liability included in purchase commitment and contingent consideration liabilities, current and purchase commitment and contingent liabilities, net of current portion in the condensed consolidated balance sheet at September 30, 2022 was $3,682 and $4,909, respectively. The remaining Purchase Commitment Liability is included in purchase commitment and contingent consideration liabilities, net of current portion in the condensed consolidated balance sheet at December 31, 2021 was $8,329.

The carrying amounts of both the LCR-Dixon deferred purchase consideration and the Systax Purchase Commitment Liability amounts discussed above approximated their respective fair values at such dates and are considered Level 3 non-recurring fair value measurements.

Derivative Instruments

The Company may periodically enter into derivative contracts to reduce our exposure to foreign currency exchange rates. Historically, the Company has not designated derivative contracts as hedges. Such derivative contracts are typically designed to manage specific risks according to our strategies, which may change from time to time.

The Company entered into a series of foreign currency forward contracts to reduce our exposure to adverse fluctuations in the Brazilian Real associated with a portion of the Systax Purchase Commitment Liability. Such forward contracts, have not been designated as a hedge, do not qualify for hedge accounting and are not material to our condensed consolidated financial statements. These forward contacts are remeasured at fair value on a recurring basis and are included in other assets in our condensed consolidated balance sheets with changes in their estimated fair value recognized as interest expense in our condensed consolidated statements of comprehensive loss. Our fair value determinations are based on foreign currency exchange rates in active markets, which are considered to be Level 2 measurements within the Fair Value Hierarchy.

- Definition

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

+ References + Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Useful life (Details)	9 Months Ended
	Sep. 30, 2022
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

BUSINESS COMBINATIONS (Tables) - LCR-Dixon

9 Months Ended

Sep. 30, 2022

Business combinations

Schedule of purchase price


	As of Acquisition Date
Cash consideration	$	60,038
Fair value of deferred purchase consideration		39,024
Total	$	99,062

Schedule of purchase price to assets acquired and liabilities assumed


	As of Acquisition Date
Cash and cash equivalents	$	1,899
Accounts receivable		1,586
Prepaid expenses and other current assets		150
Property and equipment		4
Capitalized software		7,700
Goodwill		86,639
Other intangibles		6,500
Accounts payable		(19)
Accrued expenses		(202)
Accrued compensation		(1,746)
Deferred income tax liability		(3,630)
Deferred revenue		(71)
Total	$	98,810

Schedule of acquired intangible assets

September 22, 2021

LCR-Dixon Identifiable Intangibles

Balance Sheet Location

Fair Value

Valuation Methodology

Estimated Useful Life

Discount Rate

Trade name

Goodwill and other intangible assets (Note 8)

200

Relief from royalty method - income approach

6 months

20.0

Customer relationships

Goodwill and other intangible assets (Note 8)

6,300

Excess earnings method - income approach

3 years

20.0

Developed technology

Property and equipment, net (Note 6)

7,700

Relief from royalty method - income approach

3 years

20.0

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2022

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, 2022 (unaudited)	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	$	38,553	$	38,553	$	—	$	—
Commercial Paper		9,529		—		9,529		—
Corporate Bonds		199		—		199		—
U.S. Treasury Securities		4,904		—		4,904		—
Tellutax Contingent Consideration		(4,500)		—		—		(4,500)
Foreign currency forward contracts		416		—		416		—

	Fair Value Measurements Using
As of December 31, 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	$	3,201	$	3,201	$	—	$	—
Tellutax Contingent Consideration		(2,500)		—		—		(2,500)
Foreign currency forward contracts		(62)		—		(62)		—

Summary of estimated fair value of tellutax contingent consideration


	September 30, 2022
Liability	Fair Value		Valuation Technique	Unobservable Inputs
Tellutax Contingent Consideration	$	(4,500)	Monte Carlo Simulation	Revenue volatility	75.0	%
				Revenue discount rate	22.2	%
				Term (in years)	2.6

	December 31, 2021
Liability	Fair Value		Valuation Technique	Unobservable Inputs
Tellutax Contingent Consideration	$	(2,500)	Monte Carlo Simulation	Revenue volatility	95.0	%
				Revenue discount rate	20.0	%
				Term (in years)	3.6

Changes in fair value of tellutax contingent consideration


	Tellutax
	Contingent
	Consideration

Balance, January 1, 2022	$	(2,500)
Fair value adjustments		(2,000)
Balance, September 30, 2022	$	(4,500)

PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property and equipment
Property and equipment	$ 279,747	$ 246,605
Less accumulated depreciation and amortization	(170,624)	(148,215)
Property and equipment, net	109,123	98,390
Leasehold improvements
Property and equipment
Property and equipment	20,904	20,956
Equipment
Property and equipment
Property and equipment	38,974	41,937
Computer software purchased
Property and equipment
Property and equipment	12,005	11,792
Internal-Use Software
Property and equipment
Property and equipment	172,430	147,280
Less accumulated depreciation and amortization	(108,881)	(87,281)
Property and equipment, net	91,322	76,964
Cloud-based customer solutions
Property and equipment
Property and equipment	132,062	114,872
Internal systems and tools
Property and equipment
Property and equipment	40,368	32,408
Furniture and fixtures
Property and equipment
Property and equipment	7,661	7,675
In-process internal-use software
Property and equipment
Property and equipment	$ 27,773	$ 16,965

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Non-recurring Fair Value Measurements (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payments For Purchase Commitment Liability	$ 423	$ 10,822
LCR-Dixon
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred purchase consideration	19,724		$ 39,224
Systax
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Purchase commitment liability	4,909		$ 8,329
Purchase commitment liability	12,592
Adjustment due to currency exchange rates fluctuation	0
Minimum Purchase Commitment liability	$ 3,682

REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2022

REVENUE RECOGNITION

Schedule of disaggregation of revenue


	Three months ended September 30,				Nine months ended September 30,
		2022	2021			2022	2021

	(unaudited)				(unaudited)
Software subscriptions:
Software licenses	$	62,589	$	58,932	$	182,320	$	172,807
Cloud subscriptions		43,779		33,344		122,267		92,353
Software subscriptions		106,368		92,276		304,587		265,160
Services		19,870		18,442		55,911		48,732
Total revenues	$	126,238	$	110,718	$	360,498	$	313,892

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


	For the nine months ended September 30, 2022		For the year ended December 31, 2021
	(unaudited)
Balance, beginning of period	$	76,929	$	77,159
Balance, end of period		94,529		76,929
Increase (decrease), net	$	17,600	$	(230)

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


	For the three months ended September 30,
	2022				2021
	Balance			Net Change	Balance			Net Change

	(unaudited)
Allowance balance, July 1,	$	(8,719)			$	(9,399)
Allowance balance, September 30,		(9,620)				(8,845)
Change in allowance			$	901			$	(554)
Deferred allowance balance, July 1,		6,700				6,267
Deferred allowance balance, September 30,		6,954				6,284
Change in deferred allowance				(254)				(17)
Net amount charged to revenues			$	647			$	(571)

	For the nine months ended September 30,
	2022				2021
	Balance			Net Change	Balance			Net Change

	(unaudited)
Allowance balance, January 1,	$	(9,151)			$	(8,592)
Allowance balance, September 30,		(9,620)				(8,845)
Change in allowance			$	469			$	253
Deferred allowance balance, January 1,		6,537				6,432
Deferred allowance balance, September 30,		6,954				6,284
Change in deferred allowance				(417)				148
Net amount charged to revenues			$	52			$	401

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


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Balances:
Deferred revenue, current	$	242,637	$	237,344
Deferred revenue, non-current		11,098		11,666
Total deferred revenue	$	253,735	$	249,010


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021

	(unaudited)				(unaudited)
Changes to deferred revenue:
Beginning balance	$	255,074	$	222,612	$	249,010	$	222,262
Additional amounts deferred		124,899		110,686		365,223		314,210
Revenues recognized		(126,238)		(110,718)		(360,498)		(313,892)
Ending balance	$	253,735	$	222,580	$	253,735	$	222,580

Schedule of information about the changes to contract cost balances


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021

	(unaudited)				(unaudited)
Deferred commissions:
Beginning balance	$	12,168	$	11,545	$	12,555	$	11,743
Additions		3,248		3,866		7,904		8,059
Amortization		(1,659)		(2,828)		(6,702)		(7,219)
Ending balance	$	13,757	$	12,583	$	13,757	$	12,583

STOCKHOLDERS EQUITY (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Class A
Common Stock
Exercise of stock options, net (in shares)	212	625	577	1,727
Shares exchanged in lieu	21	128	91	703
Shares issued upon vesting of Restricted Stock Units, net (in shares)		3		8
Shares returned in lieu of payment of taxes		2		3
Class A \| Restricted Stock Units
Common Stock
Shares issued upon vesting of Restricted Stock Units, net (in shares)	31		34
Shares returned in lieu of payment of taxes	13		14
Class A \| Restricted Stock Awards
Common Stock
Shares issued upon vesting of Restricted Stock Units, net (in shares)	114	118	173	352
Shares returned in lieu of payment of taxes	15	11	15	11
Class B
Common Stock
Exchange of shares	5,500	0	5,500	12,100
S Corporation
Common Stock
Distributions	$ 0	$ 0	$ 536	$ 2,700

STOCK BASED AWARD PLANS

9 Months Ended

Sep. 30, 2022

Stock-Based Award Plans

Stock Based Award Plans

12. STOCK-BASED AWARD PLANS

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 Company issued stock options, RSAs, and RSUs under the 2020 Plan. As of September 30, 2022, 10,680 shares of Class A common were available for issuance under the 2020 Plan.

Options

The following table summarizes activity for options outstanding under the 2020 Plan for the nine months ended September 30, 2022:


				Weighted
			Weighted	Average
			Average	Remaining	Aggregate
			Exercise	Contractual	Intrinsic
2020 Plan Option Activity	Units		Price	Life (Years)	Value

	(unaudited)
Outstanding at January 1, 2022	9,500	$	4.20	5.2	$	110,843
Forfeited	(100)		5.31
Expired	(1)		32.16
Exercised	(668)		2.81
2020 Plan options outstanding at September 30, 2022	8,731		4.29	4.5		81,881
2020 Plan options excercisable at September 30, 2022	6,294		2.80	3.5		68,410

The detail of options outstanding, vested and exercisable under the 2020 Plan as of September 30, 2022 is as follows:



	Options Outstanding		Options Vested and Exercisable
		Weighted		Weighted
		Average		Average
Exercise Prices	Units	Life (Years)	Units	Life (Years)

	(unaudited)
$0.15 to $0.71	1,766	—	1,766	—
$2.15	336	2.4	336	1.4
$2.50	2,161	3.8	2,161	3.8
$2.67	419	4.4	419	4.4
$3.17	1,074	5.5	322	5.6
$3.73	1,533	7.1	756	7.1
$4.70	683	7.4	341	7.4
$18.47	213	9.2	—	—
$18.96	235	8.9	105	8.9
$19.00	66	9.0	17	9
$32.16	245	8.4	71	7.6
	8,731		6,294

The Board of Directors (“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 option awards 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.

There were no options issued under the 2020 Plan during the three or nine months ended September 30, 2022. The Company issued 303 options and 566 options under the 2020 Plan during the three months and nine months ended 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
	Q3 2021			Q3 2021			Q2 2021			Q1 2021
Fair market value of common stock	$	18.96		$	19.00		$	17.66		$	32.16
Volatility		37.1	%		37.1	%		36.8	%		36.8	%
Expected term (years)		5.0			5.0			6.0			6.0
Expected dividend yield		—	%		—	%		—	%		—	%
Risk-free interest rate		0.8	%		0.9	%		0.4	%		0.4	%

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, 2022, $12,134 of unrecognized compensation expense associated with options is expected to be recognized over a weighted average period of approximately 2.15 years.

Restricted Stock Units

The following table summarizes RSU activity for the nine months ended September 30, 2022:



		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2022	530	$	26.49
Granted	2,128		13.43
Vested	(48)		23.33
Forfeited	(118)		15.93
Outstanding at September 30, 2022	2,492	$	15.90

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, 2022, $31,273 of unrecognized compensation cost for RSUs is expected to be recognized over a weighted average period of approximately 3.1 years.

In connection with the Taxamo acquisition, certain continuing employees of Taxamo received RSUs with service and performance conditions (“PSUs”). At September 30, 2022, there are 895 shares of our Class A common stock with an aggregate grant date fair value of $15,803 that will be accounted for as post-acquisition compensation expense over the vesting period if targets are achieved. The performance-based condition will be satisfied upon meeting certain performance targets for the year ended 2023. As of September 30, 2022, 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, 2022:



		Weighted
		Average
		Grant Date Fair
	Units	Value Per Share
Outstanding at January 1, 2022	326	$	18.76
Granted	106		9.92
Vested	(188)		18.58
Forfeited	(9)		19.00
Outstanding at September 30, 2022	235	$	14.91

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. At September 30, 2022, $2,858 of unrecognized compensation cost for RSAs is expected to be recognized over a weighted average period of approximately 1.2 years.

Employee Stock Purchase Plan

The ESPP provides eligible employees with rights during each six-month ESPP offering period to purchase shares of the Company’s Class A common through payroll deductions of up to a specified percentage of their eligible compensation. The purchase price of the shares, in the absence of a contrary designation, is 85% of the lower of the fair value of the Class A common stock on the first or last day of the ESPP offering period. Amounts withheld 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, 2022 aggregated $837 as of September 30, 2022. As of September 30, 2022, 3,666 shares of Class A common stock were available for issuance under the ESPP.

As of September 30, 2022 there was approximately $99 of unrecognized ESPP stock-based compensation cost expected to be recognized on a straight-line basis over the remaining term of the six-month offering period ending November 30, 2022.

At September 30, 2022 and 2021, there were two ESPP offering periods open that end November 30, 2022 and 2021, respectively. The fair value of ESPP purchase rights for the offering periods is comprised of the value of the 15% ESPP discount and the value associated with the call or put over the respective ESPP offering period. The value of the call or put was estimated using the Black-Scholes model with the following assumptions:


	Offering Period Ending
	11/30/2022			11/30/2021
Fair market value of common stock	$	11.16		$	19.89
Volatility		35.4	%		35.1	%
Expected term (years)		0.5			0.5
Expected dividend yield		-	%		-	%
Risk-free interest rate		1.6	%		0.1	%

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 six-month ESPP offering period. 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 September 30,				For the nine months ended September 30,
	2022		2021		2022		2021

	(unaudited)				(unaudited)
Stock-based compensation expense:
Stock options	$	1,836	$	5,579	$	5,250	$	13,260
RSUs		2,544		908		6,665		2,137
RSAs		725		799		2,034		4,454
ESPP		151		136		434		399
Total stock-based compensation expense	$	5,256	$	7,422	$	14,383	$	20,250

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


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021

	(unaudited)				(unaudited)
Stock-based compensation expense:
Cost of revenues, software subscriptions	$	577	$	656	$	1,502	$	1,788
Cost of revenues, services		374		760		1,055		1,976
Research and development		581		876		1,193		2,008
Selling and marketing		1,621		2,157		4,594		4,877
General and administrative		2,103		2,973		6,039		9,601
Total stock-based compensation expense	$	5,256	$	7,422	$	14,383	$	20,250

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

INVESTMENTS - Securities pledged (Details)	3 Months Ended
INVESTMENTS - Securities pledged (Details)	Sep. 30, 2022 USD ($)
Debt Securities, Available-for-Sale [Line Items]
Fair Value	$ 14,632,000
Debt securities categorized as available for sale	0
Realized gain	0
Assets pledged
Debt Securities, Available-for-Sale [Line Items]
Fair Value	$ 0

STOCK-BASED AWARD PLANS - Stock based compensation, comprehensive income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Allocation of costs
Compensation expense	$ 5,256	$ 7,422	$ 14,383	$ 20,250
Research and development
Allocation of costs
Compensation expense	581	876	1,193	2,008
Selling and marketing
Allocation of costs
Compensation expense	1,621	2,157	4,594	4,877
General and administrative
Allocation of costs
Compensation expense	2,103	2,973	6,039	9,601
Software subscriptions
Allocation of costs
Compensation expense	577	656	1,502	1,788
Services
Allocation of costs
Compensation expense	$ 374	$ 760	$ 1,055	$ 1,976

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 72,370	$ 73,333
Funds held for customers	23,840	24,873
Accounts receivable, net of allowance of $9,620 and $9,151, respectively	94,529	76,929
Prepaid expenses and other current assets	22,494	20,536
Investment securities available-for-sale, current (amortized cost of $6,163 at September 30, 2022)	6,127
Total current assets	219,360	195,671
Property and equipment, net of accumulated depreciation	109,123	98,390
Capitalized software, net of accumulated amortization	38,561	33,442
Goodwill and other intangible assets	245,284	272,702
Deferred commissions	13,757	12,555
Deferred income tax asset	30,716	35,298
Operating lease right-of-use assets	18,089	20,249
Other assets	2,422	1,900
Total assets	677,312	670,207
Current liabilities:
Current portion of long-term debt	1,875
Accounts payable	13,052	13,000
Accrued expenses	28,908	22,966
Tax sharing agreement distributions payable		536
Customer funds obligations	20,858	23,461
Accrued salaries and benefits	14,937	16,671
Accrued variable compensation	19,585	26,462
Deferred compensation, current	2,067	4,202
Deferred revenue, current	242,637	237,344
Current portion of operating lease liabilities	4,278	3,933
Current portion of finance lease liabilities	967	284
Deferred purchase consideration, current	19,724	19,805
Purchase commitment and contingent consideration liabilities, current	5,082	468
Total current liabilities	373,970	369,132
Deferred compensation, net of current portion		1,963
Deferred revenue, net of current portion	11,098	11,666
Debt, net of current portion	47,324
Operating lease liabilities, net of current portion	21,431	24,320
Finance lease liabilities, net of current portion	24	68
Deferred purchase consideration, net of current portion		19,419
Purchase commitment and contingent consideration liabilities, net of current portion	8,009	10,829
Deferred other liabilities	1,416	2,726
Total liabilities	463,272	440,123
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	238,093	222,621
Retained earnings	17,816	24,811
Accumulated other comprehensive loss	(42,019)	(17,497)
Total stockholders' equity	214,040	230,084
Total liabilities and stockholders' equity	677,312	670,207
Class A
Stockholders' equity:
Common stock, value issued	49	42
Class B
Stockholders' equity:
Common stock, value issued	$ 101	$ 107

CAPITALIZED SOFTWARE

9 Months Ended

Sep. 30, 2022

CAPITALIZED SOFTWARE

CAPITALIZED SOFTWARE

7. 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,
	2022		2021
	(unaudited)
Capitalized software	$	93,432	$	72,512
Less accumulated amortization		(58,048)		(45,179)
Capitalized software, net of accumulated depreciation		35,384		27,333
In-process capitalized software		3,177		6,109
Capitalized software, net	$	38,561	$	33,442

Software development costs capitalized for the three months ended September 30, 2022 and 2021, excluding acquisitions, were $4,362 and $2,777, respectively, and $10,288 and $7,902 for the nine months ended September 30, 2022

and 2021, respectively. Capitalized software includes developed technology with an acquisition date fair value of $7,700 acquired in the LCR-Dixon acquisition and recorded during the three months ended June 30, 2022.

Capitalized software amortization expense, including amortization of acquired technology, was $4,163 and $3,123 for the three months ended September 30, 2022 and 2021, respectively, and $12,869 and $9,473 for the nine months ended September 30, 2022 and 2021, respectively, and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive loss. Amortization expense associated with the acquired LCR-Dixon developed technology from the acquisition date through September 30, 2022 was $2,567 and is included in the capitalized software amortization expense for the nine months ended September 30, 2022. Included in this amount is $642 that would have been recorded during the year ended December 31, 2021 had the fair value of acquired LCR-Dixon developed technology been available on the acquisition date.

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, 2022	Sep. 30, 2021
Property and equipment
Capitalized internal-use software	$ 42,973	$ 23,899
Cloud-based customer solutions
Property and equipment
Capitalized internal-use software	22,014	13,881
Internal systems and tools
Property and equipment
Capitalized internal-use software	18,924	7,762
Internal-Use Software
Property and equipment
Capitalized internal-use software	$ 40,938	$ 21,643

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of supplemental balance sheet information


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Prepaid expenses and other current assets:
Prepaid expenses	$	10,666	$	8,903
Prepaid insurance		1,954		3,348
Prepaid licenses and support		9,874		8,285
Prepaid expenses and other current assets	$	22,494	$	20,536

Accrued expenses:
Accrued general expenses	$	16,059	$	10,771
Accrued contract labor and professional fees		10,654		9,688
Accrued income and other taxes		2,195		2,507
Accrued expenses	$	28,908	$	22,966

Schedule of supplemental cash flow disclosures


	For the nine months ended September 30,
	2022		2021

	(unaudited)
Cash paid for:
Interest	$	1,558	$	180
Income taxes, net of refunds	$	2,655	$	1,032
Operating cash flows from operating leases	$	2,737	$	4,090

Non-cash investing and financing activities:
Purchase commitment and contingent consideration liabilities	$	2,000	$	50,653
Leased assets obtained in exchange for new finance lease liabilities	$	1,337	$	173

STOCK-BASED AWARD PLANS - 2020 Plan (Details)	Sep. 30, 2022 shares
Stock options
Compensation plans:
Shares authorized	10,680

DEBT - Credit Agreement (Details) - USD ($) $ in Thousands		9 Months Ended
DEBT - Credit Agreement (Details) - USD ($) $ in Thousands	Mar. 08, 2022	Sep. 30, 2022	Mar. 07, 2022	Dec. 31, 2021
Debt
Write off deferred financing costs	$ 370
Principal payments on long-term debt		$ 625
Second Amendment
Debt
Write off deferred financing costs	277
Deferred financing costs	983
Term Loan
Debt
Term of debt		5 years
Debt instrument interest rate percentage		4.13%
Base rate
Debt
Interest rate		6.25%
LIBOR
Debt
Interest rate		4.13%
Line of Credit
Debt
Line of credit, capacity			$ 100,000
Line of credit, outstanding borrowings		$ 0		$ 0
Line of Credit \| Second Amendment
Debt
Line of credit, capacity	200,000	$ 200,000
New Term Loan
Debt
Face amount	$ 50,000

PROPERTY AND EQUIPMENT - Major components of internal-use software (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property and equipment
Property and equipment, gross	$ 279,747	$ 246,605
Less accumulated depreciation and amortization	(170,624)	(148,215)
Property and equipment	109,123	98,390
Internal-Use Software
Property and equipment
Property and equipment, gross	172,430	147,280
Less accumulated depreciation and amortization	(108,881)	(87,281)
Property and equipment, net excluding in-process internal-use software	63,549	59,999
Property and equipment	91,322	76,964
In-process internal-use software
Property and equipment
Property and equipment, gross	$ 27,773	$ 16,965

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Changes in fair value of Tellutax contingent consideration (Details) - Contingent Consideration $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, January 1, 2022	$ (2,500)
Fair value adjustments	(2,000)
Balance, March 31, 2022	$ (4,500)

CAPITALIZED SOFTWARE (Tables)

9 Months Ended

Sep. 30, 2022

CAPITALIZED SOFTWARE

Schedule of major components of capitalized software


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Capitalized software	$	93,432	$	72,512
Less accumulated amortization		(58,048)		(45,179)
Capitalized software, net of accumulated depreciation		35,384		27,333
In-process capitalized software		3,177		6,109
Capitalized software, net	$	38,561	$	33,442

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash paid for Interest	$ 1,558	$ 180
Cash paid for income taxes, net of refunds	2,655	1,032
Operating cash flows from operating leases	2,737	4,090
Non-cash investing and financing activities:
Purchase commitment and contingent consideration liabilities	2,000	50,653
Leased assets obtained in exchange for new finance lease liabilities	$ 1,337	$ 173

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Nov. 04, 2022
Document Information:
Document Type	10-Q
Document Period End Date	Sep. 30, 2022
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	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	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A
Document Information:
Entity Common Stock, Shares Outstanding		48,732,884
Class B
Document Information:
Entity Common Stock, Shares Outstanding		101,307,000

Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Revenues	$ 126,238	$ 110,718	$ 360,498	$ 313,892
Cost of revenues:
Cost of revenues	50,658	43,938	143,653	118,250
Gross profit	75,580	66,780	216,845	195,642
Operating expenses:
Research and development	10,351	9,879	30,294	33,264
Selling and marketing	30,252	25,658	89,683	70,673
General and administrative	31,679	31,237	90,520	80,954
Depreciation and amortization	2,936	3,082	9,120	8,787
Other operating expense, net	1,233	538	1,927	4,892
Total operating expenses	76,451	70,394	221,544	198,570
Loss from operations	(871)	(3,614)	(4,699)	(2,928)
Interest expense, net	(361)	(521)	(1,079)	(671)
Loss before income taxes	(1,232)	(4,135)	(5,778)	(3,599)
Income tax expense (benefit)	(91)	(187)	1,217	(2,747)
Net loss	(1,141)	(3,948)	(6,995)	(852)
Other comprehensive loss:
Foreign currency translation adjustments and revaluations, net of tax	10,670	5,704	24,496	10,040
Unrealized loss on investments, net of tax	28		26
Total other comprehensive loss, net of tax	10,698	5,704	24,522	10,040
Total comprehensive loss	(11,839)	(9,652)	(31,517)	(10,892)
Software subscriptions
Revenues:
Revenues	106,368	92,276	304,587	265,160
Cost of revenues:
Cost of revenues	36,638	32,000	105,760	84,419
Services
Revenues:
Revenues	19,870	18,442	55,911	48,732
Cost of revenues:
Cost of revenues	14,020	11,938	37,893	33,831
Class A
Other comprehensive loss:
Net loss attributable to stockholders, basic	$ (369)	$ (1,070)	$ (2,092)	$ (195)
Net loss per share, basic (in dollars per share)	$ (0.01)	$ (0.03)	$ (0.05)	$ (0.01)
Weighted average common stock, basic (in shares)	48,488	40,141	44,708	33,775
Net loss attributable to stockholders, diluted	$ (369)	$ (1,070)	$ (2,092)	$ (195)
Net loss per share, diluted (in dollars per share)	$ (0.01)	$ (0.03)	$ (0.05)	$ (0.01)
Weighted average common stock, diluted (in shares)	48,488	40,141	44,708	33,775
Class B
Other comprehensive loss:
Net loss attributable to stockholders, basic	$ (772)	$ (2,878)	$ (4,903)	$ (657)
Net loss per share, basic (in dollars per share)	$ (0.01)	$ (0.03)	$ (0.05)	$ (0.01)
Weighted average common stock, basic (in shares)	101,307	108,017	104,772	113,646
Net loss attributable to stockholders, diluted	$ (772)	$ (2,878)	$ (4,903)	$ (657)
Net loss per share, diluted (in dollars per share)	$ (0.01)	$ (0.03)	$ (0.05)	$ (0.01)
Weighted average common stock, diluted (in shares)	101,307	108,017	104,772	113,646

REVENUE RECOGNITION - Disaggregation of revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of revenue:
Revenues	$ 126,238	$ 110,718	$ 360,498	$ 313,892
Software subscriptions
Disaggregation of revenue:
Revenues	106,368	92,276	304,587	265,160
Software licenses
Disaggregation of revenue:
Revenues	62,589	58,932	182,320	172,807
Cloud subscriptions
Disaggregation of revenue:
Revenues	43,779	33,344	122,267	92,353
Services
Disaggregation of revenue:
Revenues	$ 19,870	$ 18,442	$ 55,911	$ 48,732

- 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
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Section 50
-Paragraph 32
-Subparagraph (a)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
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-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

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+ Details

BUSINESS COMBINATIONS

9 Months Ended

Sep. 30, 2022

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”), a provider of SAP technologies and 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 LCR-Dixon acquisition was accounted for as a business combination. The transaction costs associated with the acquisition were not significant.

The purchase price was $99,062 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, (ii) $474 cash paid related to the final determination of LCR-Dixon’s cash and net working capital as of the acquisition date (the “Post-closing Adjustment”) paid in January 2022, (iii) non-interest bearing deferred payments aggregating $40,000 to be paid in four equal installments of $10,000 every six-months beginning March 2022 and ending September 2023, net of a discount of $976 (the “deferred purchase consideration”) and (iv) other adjustments associated with income tax amounts that exceed the estimated amount calculated at closing of $156. Cash paid was funded from available cash on hand. The discount recorded as a reduction of the deferred purchase consideration will be recorded as interest expense over the payment period using the effective interest method. The deferred purchase consideration, net of discount, at September 30, 2022 is $19,724, and is included in current liabilities in the condensed consolidated balance sheets. The deferred purchase consideration, net of discount, at December 31, 2021 of $19,805 and $19,419 is included in current liabilities and long-term liabilities, respectively, in the condensed consolidated balance sheets.

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


	As of Acquisition Date
Cash consideration	$	60,038
Fair value of deferred purchase consideration		39,024
Total	$	99,062

The 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 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. Goodwill associated with the LCR-Dixon acquisition is not deductible for tax purposes. The fair values of these amounts on the acquisition date, which are reflected in the table below, have been finalized during the nine months ended September 30, 2022 and include Measurement Period adjustments resulting in an increase to capitalized software of $7,700, an increase to other intangibles of $6,500 and various other adjustments resulting in a net reduction to goodwill of $11,178. Any subsequent adjustments to these values will be recorded in the consolidated statements of comprehensive loss in the period in which the adjustment is identified.

The Company and LCR-Dixon had a pre-existing relationship in the form of a royalty agreement at the acquisition date. The Company owed LCR-Dixon royalties in connection with licenses sold by the Company to end users when collected by the Company from end users (the “Royalty Agreement”). The Royalty Agreement terminated upon consummation of the acquisition and the Company wrote-off $252 of royalties payable to LCR-Dixon with an offset to goodwill.

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:


	As of Acquisition Date
Cash and cash equivalents	$	1,899
Accounts receivable		1,586
Prepaid expenses and other current assets		150
Property and equipment		4
Capitalized software		7,700
Goodwill		86,639
Other intangibles		6,500
Accounts payable		(19)
Accrued expenses		(202)
Accrued compensation		(1,746)
Deferred income tax liability		(3,630)
Deferred revenue		(71)
Total	$	98,810

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

September 22, 2021

LCR-Dixon Identifiable Intangibles

Balance Sheet Location

Fair Value

Valuation Methodology

Estimated Useful Life

Discount Rate

Trade name

Goodwill and other intangible assets (Note 8)

200

Relief from royalty method - income approach

6 months

20.0

Customer relationships

Goodwill and other intangible assets (Note 8)

6,300

Excess earnings method - income approach

3 years

20.0

Developed technology

Property and equipment, net (Note 6)

7,700

Relief from royalty method - income approach

3 years

20.0

REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2022

REVENUE RECOGNITION

REVENUE RECOGNITION

2. REVENUE RECOGNITION

See Note 1, “Summary of Significant Accounting Policies”, 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 September 30,				Nine months ended September 30,
		2022	2021			2022	2021

	(unaudited)				(unaudited)
Software subscriptions:
Software licenses	$	62,589	$	58,932	$	182,320	$	172,807
Cloud subscriptions		43,779		33,344		122,267		92,353
Software subscriptions		106,368		92,276		304,587		265,160
Services		19,870		18,442		55,911		48,732
Total revenues	$	126,238	$	110,718	$	360,498	$	313,892

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”) $9,620 and $9,151 at September 30, 2022 and December 31, 2021, 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 September 30, 2022		For the year ended December 31, 2021
	(unaudited)
Balance, beginning of period	$	76,929	$	77,159
Balance, end of period		94,529		76,929
Increase (decrease), net	$	17,600	$	(230)

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 $6,954 and $6,537 at September 30, 2022 and December 31, 2021, 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,
	2022				2021
	Balance			Net Change	Balance			Net Change

	(unaudited)
Allowance balance, July 1,	$	(8,719)			$	(9,399)
Allowance balance, September 30,		(9,620)				(8,845)
Change in allowance			$	901			$	(554)
Deferred allowance balance, July 1,		6,700				6,267
Deferred allowance balance, September 30,		6,954				6,284
Change in deferred allowance				(254)				(17)
Net amount charged to revenues			$	647			$	(571)

	For the nine months ended September 30,
	2022				2021
	Balance			Net Change	Balance			Net Change

	(unaudited)
Allowance balance, January 1,	$	(9,151)			$	(8,592)
Allowance balance, September 30,		(9,620)				(8,845)
Change in allowance			$	469			$	253
Deferred allowance balance, January 1,		6,537				6,432
Deferred allowance balance, September 30,		6,954				6,284
Change in deferred allowance				(417)				148
Net amount charged to revenues			$	52			$	401

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,
	2022		2021
	(unaudited)
Balances:
Deferred revenue, current	$	242,637	$	237,344
Deferred revenue, non-current		11,098		11,666
Total deferred revenue	$	253,735	$	249,010


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021

	(unaudited)				(unaudited)
Changes to deferred revenue:
Beginning balance	$	255,074	$	222,612	$	249,010	$	222,262
Additional amounts deferred		124,899		110,686		365,223		314,210
Revenues recognized		(126,238)		(110,718)		(360,498)		(313,892)
Ending balance	$	253,735	$	222,580	$	253,735	$	222,580

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 changes to contract cost balances as of and for the following periods are:


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021

	(unaudited)				(unaudited)
Deferred commissions:
Beginning balance	$	12,168	$	11,545	$	12,555	$	11,743
Additions		3,248		3,866		7,904		8,059
Amortization		(1,659)		(2,828)		(6,702)		(7,219)
Ending balance	$	13,757	$	12,583	$	13,757	$	12,583

- 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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&loc=SL49130554-203045

+ Details

INVESTMENTS - Narratives (Details)	9 Months Ended
INVESTMENTS - Narratives (Details)	Sep. 30, 2022 USD ($)
INVESTMENTS
Equity securities net gains or losses	$ 0
Unamortized premium	0
Unaccreted discount	132,000
Accrued interest receivable	75,000
Unrealized gains or losses	0
Unrealized loss position	$ 36,000

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2022

EARNINGS PER SHARE

EARNINGS PER SHARE

11. EARNINGS PER SHARE

The tables below illustrate 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.


	For the three months ended September 30,						For the nine months ended September 30,
Class A common stock:	2022			2021			2022			2021

	(unaudited)						(unaudited)
Numerator, basic:
Net loss attributable to all stockholders	$	(1,141)		$	(3,948)		$	(6,995)		$	(852)
Class A stock as a percentage of total shares outstanding, basic		32.37	%		27.09	%		29.91	%		22.91	%
Net loss attributable to Class A stockholders, basic	$	(369)		$	(1,070)		$	(2,092)		$	(195)

Numerator, diluted:
Net loss attributable to all stockholders	$	(1,141)		$	(3,948)		$	(6,995)		$	(852)
Class A stock as a percentage of total shares outstanding, diluted		32.37	%		27.09	%		29.91	%		22.91	%
Net loss attributable to Class A stockholders, diluted	$	(369)		$	(1,070)		$	(2,092)		$	(195)

Denominator, basic and diluted:
Weighted average Class A common stock, basic		48,488			40,141			44,708			33,775
Dilutive effect of common stock equivalents⁽¹⁾⁽²⁾		—			—			—			—
Weighted average Class A common stock, diluted		48,488			40,141			44,708			33,775

Net loss per Class A share, basic	$	(0.01)		$	(0.03)		$	(0.05)		$	(0.01)
Net loss per Class A share, diluted	$	(0.01)		$	(0.03)		$	(0.05)		$	(0.01)

(1)

(2)


	For the three months ended September 30,						For the nine months ended September 30,
Class B common stock:	2022			2021			2022			2021

	(unaudited)						(unaudited)
Numerator, basic:
Net loss attributable to all stockholders	$	(1,141)		$	(3,948)		$	(6,995)		$	(852)
Class B stock as a percentage of total shares outstanding, basic		67.63	%		72.91	%		70.09	%		77.09	%
Net loss attributable to Class B stockholders, basic	$	(772)		$	(2,878)		$	(4,903)		$	(657)

Numerator, diluted:
Net loss attributable to all stockholders	$	(1,141)		$	(3,948)		$	(6,995)		$	(852)
Class B stock as a percentage of total shares outstanding, diluted		67.63	%		72.91	%		70.09	%		77.09	%
Net loss attributable to Class B stockholders, diluted	$	(772)		$	(2,878)		$	(4,903)		$	(657)

Denominator, basic and diluted:
Weighted average Class B common stock, basic		101,307			108,017			104,772			113,646
Dilutive effect of common stock equivalents		—			—			—			—
Weighted average Class B common stock, diluted		101,307			108,017			104,772			113,646

Net loss per Class B share, basic	$	(0.01)		$	(0.03)		$	(0.05)		$	(0.01)
Net loss per Class B share, diluted	$	(0.01)		$	(0.03)		$	(0.05)		$	(0.01)

REVENUE RECOGNITION - Allowance and deferred allowance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Allowance for credit loss
Beginning balance	$ (8,719)	$ (9,399)	$ (9,151)	$ (8,592)
Ending balance	(9,620)	(8,845)	(9,620)	(8,845)
Change in allowance	901	(554)	469	253
Deferred beginning balance	6,700	6,267	6,537	6,432
Deferred ending balance	6,954	6,284	6,954	6,284
Change in deferred allowance	(254)	(17)	(417)	148
Net amount charged to revenues	647	$ (571)	52	$ 401
Software subscriptions
Allowance for credit loss
Beginning balance			(9,151)
Ending balance	(9,620)		(9,620)
Deferred beginning balance			6,537
Deferred ending balance	$ 6,954		$ 6,954

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

6. PROPERTY AND EQUIPMENT

The major components of property and equipment are as follows:


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Leasehold improvements	$	20,904	$	20,956
Equipment		38,974		41,937
Computer software purchased		12,005		11,792
Internal-use software developed:
Cloud-based customer solutions		132,062		114,872
Internal systems and tools		40,368		32,408
Furniture and fixtures		7,661		7,675
In-process internal-use software		27,773		16,965
Property and equipment		279,747		246,605
Less accumulated depreciation and amortization		(170,624)		(148,215)
Property and equipment, net	$	109,123	$	98,390

Depreciation expense for property and equipment, excluding all internal-use software developed and finance leases, was $1,535 and $1,849 for the three months ended September 30, 2022 and 2021, respectively, $4,923 and $5,658 for the nine months ended September 30, 2022 and 2021 and is reflected in depreciation and amortization in the condensed consolidated statements of comprehensive loss.

Finance lease amortization was $174 and $944 for the three and nine months ended September 30, 2022, respectively, and depreciation expense for assets held under capital leases was $363 and $826 for the three and nine months ended September 30, 2021, 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 $2,225 and $1,533, net of accumulated amortization of $1,875 and $931, respectively, at September 30, 2022 and December 31, 2021, respectively, 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,
	2022		2021
	(unaudited)
Internal-use software developed	$	172,430	$	147,280
Less accumulated depreciation		(108,881)		(87,281)
Internal-use software developed, net of accumulated depreciation		63,549		59,999
In-process internal-use software		27,773		16,965
Internal-use software developed, net	$	91,322	$	76,964

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


	For the nine months ended September 30,
	2022		2021

	(unaudited)
Cloud-based customer solutions	$	22,014	$	13,881
Internal systems and tools		18,924		7,762
Total	$	40,938	$	21,643

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, 2022 and 2021 was $6,881 and $7,561, respectively, $20,139 and $12,906, for the nine months ended September 30, 2022 and 2021, respectively, and is included in cost of revenues, software subscriptions in the condensed consolidated statements of comprehensive loss.

Depreciation expense for internal-use software developed for internal systems and tools for the three months ended September 30, 2022 and 2021 was $1,228 and $870, respectively, and $3,253 and $2,303 for the nine months ended September 30, 2022 and 2021, and is included in depreciation and amortization in the condensed consolidated statements of comprehensive loss.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Basis of Consolidation

Unaudited Interim Financial Information

Segments

Fair Value Measurement

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

Use of Estimates

Software Development Costs

Internal-Use Software

Software Developed for Sale

Business Combinations

Goodwill

Deferred Financing Costs

Stock-Based Compensation

Revenue Recognition

Revenue from contracts with customers

Nature of goods and services

Significant judgments

Payment terms

Cost of revenues

Reimbursable costs

Income Taxes

Supplemental Balance Sheet Disclosures

Supplemental balance sheet disclosures are as follows for the respective periods:


	As of September 30,		As of December 31,
	2022		2021
	(unaudited)
Prepaid expenses and other current assets:
Prepaid expenses	$	10,666	$	8,903
Prepaid insurance		1,954		3,348
Prepaid licenses and support		9,874		8,285
Prepaid expenses and other current assets	$	22,494	$	20,536

Accrued expenses:
Accrued general expenses	$	16,059	$	10,771
Accrued contract labor and professional fees		10,654		9,688
Accrued income and other taxes		2,195		2,507
Accrued expenses	$	28,908	$	22,966

Supplemental Cash Flow Disclosures

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


	For the nine months ended September 30,
	2022		2021

	(unaudited)
Cash paid for:
Interest	$	1,558	$	180
Income taxes, net of refunds	$	2,655	$	1,032
Operating cash flows from operating leases	$	2,737	$	4,090

Non-cash investing and financing activities:
Purchase commitment and contingent consideration liabilities	$	2,000	$	50,653
Leased assets obtained in exchange for new finance lease liabilities	$	1,337	$	173

Recently Issued Accounting Pronouncements

Deferred Revenue

Risks and Uncertainties

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (6,995)	$ (852)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	45,328	31,902
Provision for subscription cancellations and non-renewals, net of deferred allowance	29	423
Amortization of deferred financing costs	181	159
Change in fair value of contingent consideration liability	2,000
Write-off of deferred financing costs	370
Stock-based compensation expense	14,383	20,250
Deferred income tax benefit	(20)	(3,075)
Non-cash operating lease costs	2,448	2,867
Other	709	280
Changes in operating assets and liabilities:
Accounts receivable	(17,578)	12,120
Prepaid expenses and other current assets	(2,465)	(3,669)
Deferred commissions	(1,202)	(840)
Accounts payable	106	1,529
Accrued expenses	6,113	(2,445)
Accrued and deferred compensation	(12,445)	(679)
Deferred revenue	5,250	(1,971)
Operating lease liabilities	(2,837)	(3,685)
Other	(349)	354
Net cash provided by operating activities	33,026	52,668
Cash flows from investing activities:
Acquisition of business, net of cash acquired	(474)	(251,412)
Property and equipment additions	(42,973)	(23,899)
Capitalized software additions	(10,288)	(7,902)
Purchase of investment securities, available-for-sale	(6,127)
Net cash used in investing activities	(59,862)	(283,213)
Cash flows from financing activities:
Net increase (decrease) in customer funds obligations	(2,603)	18,744
Proceeds from term loan	50,000
Principal payments on long-term debt	(625)
Payments for deferred financing costs	(983)
Proceeds from purchases of stock under ESPP	967	1,010
Payments for taxes related to net share settlement of stock-based awards	(1,012)	(12,712)
Proceeds from exercise of stock options	1,288	1,212
Distributions under Tax Sharing Agreement	(536)	(2,700)
Payments for purchase commitment liabilities	(423)	(10,822)
Payments of finance lease liabilities	(96)	(685)
Payments for deferred purchase commitments	(20,000)
Net cash provided by (used in) financing activities	25,977	(5,953)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,137)	(434)
Net decrease in cash, cash equivalents and restricted cash	(1,996)	(236,932)
Cash, cash equivalents and restricted cash, beginning of period	98,206	312,273
Cash, cash equivalents and restricted cash, end of period	$ 96,210	$ 75,341

INVESTMENTS

9 Months Ended

Sep. 30, 2022

INVESTMENTS

INVESTMENTS

4. INVESTMENTS

The Company’s investment securities portfolio consists of the following: Money Market Mutual Funds invested in high quality, short-term money market instruments which are issued and payable in U.S. dollars (“Money Market Funds”), Bank and Corporate issued Commercial Paper (“Commercial Paper”), Corporate Bonds, and U.S. Treasury Securities. The Money Market Funds and a portion of the Commercial Paper are considered cash and cash equivalents due to their short maturity dates. There were no holdings of securities of any one issuer in an amount greater than 10% of stockholders’ equity.

The Money Market Funds qualify as equity securities per ASC 321, Investments - Equity Securities. No net gains or losses were recognized on sales of equity securities during the quarter or year to date and no unrealized gains or losses were recognized on equity securities held as of September 30, 2022 or as of December 31, 2021.

The Commercial Paper, Corporate Bonds, and U.S. Treasury Securities qualify as debt securities per ASC 320, Investments - Debt Securities, and have been classified as available-for-sale as they may be liquidated and used for general corporate purposes. None of the Company’s debt securities are classified as trading or held-to-maturity. As of September 30, 2022, the Company's debt securities portfolio had unaccreted discounts of $132 and no remaining unamortized premiums.

The table below presents the amortized cost, gross unrealized gains and losses, allowance for credit losses, and fair value aggregated by major security type as of September 30, 2022. Accrued interest receivable of $75 as of September 30, 2022, is not included in the table.


	As of September 30, 2022
Investment securities available-for-sale: (unaudited)	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Allowance For Credit Losses		Fair Value
Commercial Paper	$	9,529	$	—	$	—	$	—	$	9,529
Corporate Bonds		200		—		(1)		—		199
U.S. Treasury Securities		4,939		—		(35)		—		4,904
Total investment securities available-for-sale	$	14,668	$	—	$	(36)	$	—	$	14,632

Investment Securities in a Gross Unrealized Loss Position

The table below provides the gross unrealized losses and fair value of securities available-for-sale aggregated by major security type and the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2022. The amounts include securities available-for-sale without an allowance for credit losses. As of September 30, 2022, the Company’s available-for-sale investment securities consisted of 50 securities, twelve of which are in an immaterial unrealized loss position of $36. As a result, there is no allowance for credit losses recorded for available-for-sale debt securities as of September 30, 2022.


	As of September 30, 2022
	Less than 12 Months				12 Months or Longer				Total
Investment securities available-for-sale without an allowance for credit losses: (unaudited)	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Commercial Paper	$	—	$	—	$	—	$	—	$	—	$	—
Corporate Bonds		199		(1)		—		—		199		(1)
U.S. Treasury Securities		4,612		(35)		—		—		4,612		(35)
Total investment securities available-for-sale	$	4,811	$	(36)	$	—	$	—	$	4,811	$	(36)

Maturities of Investment Securities

The table below summarizes, as of September 30, 2022, the fair value of investment securities by major security type and contractual maturity as well as the total fair value, and amortized cost of investment securities by contractual maturity. Because borrowers may have the right to call or prepay certain obligations, the expected maturities of securities are likely to differ from the scheduled contractual maturities presented below.


	As of September 30, 2022
	Due in 1 Year or Less		Due > 1 Year through 5 Years		Due > 5 Years through 10 Years		Due > 10 Years		Total
Fair value of investment securities available-for-sale: (unaudited)
Commercial Paper	$	9,529	$	—	$	—	$	—	$	9,529
Corporate Bonds		199		—		—		—		199
U.S. Treasury Securities		2,663		2,241		—		—		4,904
Total investment securities available-for-sale	$	12,391	$	2,241	$	—	$	—	$	14,632
Amortized cost of investment securities available-for-sale	$	12,405	$	2,263	$	—	$	—	$	14,668

Net Securities Gains or Losses and Securities Pledged

During the three months ended September 30, 2022, the Company had no sales of debt securities categorized as available-for-sale, resulting in no realized gains or losses, and no securities were pledged.

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2022

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

10.STOCKHOLDERS’ EQUITY

Common Stock

During the three and nine months ended and September 30, 2022, the Company issued 212 and 577 shares of Class A common stock (“Class A”), respectively, related to the exercise of options, net of 21 and 91 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, 2022, the Company issued 31 and 34 shares of Class A common stock, respectively, in connection with the vesting of Restricted Stock Units (“RSUs”), net of 13 and 14 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, 2022, the Company issued 114 and 173 shares of Class A common stock, respectively, in connection with the vesting of Restricted Stock Awards (“RSAs”), net of 15 and 15 shares, respectively, returned to the Company in lieu of payment of taxes due on the vesting of these RSAs.

During the three and nine months ended September 30, 2022, a stockholder exchanged 5,500 shares of Class B common stock, respectively, for an equivalent number of shares of Class A common stock.

During the nine months ended and September 30, 2021, the Company issued 625 and 1,727 shares of Class A, respectively, related to the exercise of options, net of 128 and 703 shares, 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 three and nine months ended September 30, 2021, a stockholder exchanged 0 and 12,100 shares, respectively, of Class B for an equivalent number of shares of Class A.

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 (“Tax Sharing Agreement”) with the former S-Corporation shareholders. All obligations of the Company under the Tax Sharing Agreement are satisfied by adjustments of additional paid in capital.

During the three and nine months ended September 30, 2022, the Company distributed $0 and $536, respectively, to the former S-Corporation shareholders under the Tax Sharing Agreement to settle the Company’s obligation for income taxes related to the allocation of taxable income to the S-Corporation short tax period ended July 26, 2020.

During the three and nine months ended September 30, 2021, the Company distributed $0 and $2,700 to the former S-Corporation shareholders under the Tax Sharing Agreement to settle the Company’s obligation for income taxes related to the allocation of taxable income to the S-Corporation short tax period ended July 26, 2020.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Section 50
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-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
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+ Details

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Goodwill.	$ 239,346	$ 270,041	$ 274,862	$ 16,329
Goodwill and other intangible assets	245,284	272,702
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Other intangible assets, net	$ 5,938	$ 2,661

STOCK-BASED AWARD PLANS - Options under 2020 Plan (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Weighted Average Per Share
Compensation expense	$ 5,256	$ 7,422	$ 14,383	$ 20,250
Stock options
Units
Beginning, balance			9,500
Granted	0	303	0	566
Forfeited			(100)
Expired			(1)
Exercised			(668)
Ending balance	8,731		8,731		9,500
Exercisable	6,294		6,294
Weighted Average Per Share
Beginning balance			$ 4.20
Forfeited			5.31
Expired			32.16
Exercised			2.81
Ending Balance	$ 4.29		4.29		$ 4.20
Exercisable	$ 2.80		$ 2.80
Remaining contractual life, outstanding			4 years 6 months		5 years 2 months 12 days
Remaining contractual life, exercisable			3 years 6 months
Intrinsic value, outstanding	$ 81,881		$ 81,881		$ 110,843
Intrinsic value, exercisable	68,410		$ 68,410
Vesting period			10 years
Compensation expense	$ 1,836	$ 5,579	$ 5,250	$ 13,260
Unrecognized compensation expense period			2 years 1 month 24 days
Stock options \| Minimum
Weighted Average Per Share
Vesting period			1 year
Stock options \| Maximum
Weighted Average Per Share
Vesting period			4 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Sep. 30, 2022 segment
Accounting policies:
Operating segments	1
Systax - VIE \| Systax
Accounting policies:
Ownership (as a percent)	65.00%

Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock Class A	Common Stock Class B	Additional paid in capital.	Retained Earnings ASC 842	Retained Earnings	Accumulated Other Comprehensive Loss	Class A	Class B	ASC 842	Total
Balance at Dec. 31, 2020	$ 26	$ 120	$ 206,541	$ 508	$ 25,782	$ (3,127)			$ 508	$ 229,342
Balance (in shares) at Dec. 31, 2020	26,327	120,117
Exercise of stock options, net	$ 1		(6,998)							(6,997)
Exercise of stock options, net (in shares)	640
Shares issued upon vesting of Restricted Stock Units, net			(34)							(34)
Shares issued upon vesting of Restricted Stock Units, net (in shares)	5
Stock-based compensation expense			6,302							6,302
Foreign currency translation adjustments and revaluations, net of tax						(977)				(977)
Net (loss) income					2,288					2,288
Balance at Mar. 31, 2021	$ 27	$ 120	205,811		28,578	(4,104)				230,432
Balance (in shares) at Mar. 31, 2021	26,972	120,117
Balance at Dec. 31, 2020	$ 26	$ 120	206,541	$ 508	25,782	(3,127)			$ 508	229,342
Balance (in shares) at Dec. 31, 2020	26,327	120,117
Exercise of stock options, net (in shares)							1,727
Shares issued upon vesting of Restricted Stock Units, net (in shares)							8
Foreign currency translation adjustments and revaluations, net of tax										(10,040)
Net (loss) income										(852)
Balance at Sep. 30, 2021	$ 41	$ 108	215,647		25,438	(13,167)				228,067
Balance (in shares) at Sep. 30, 2021	40,574	108,017
Balance at Mar. 31, 2021	$ 27	$ 120	205,811		28,578	(4,104)				230,432
Balance (in shares) at Mar. 31, 2021	26,972	120,117
Exercise of stock options, net	$ 1		(3,293)							(3,292)
Exercise of stock options, net (in shares)	462
Shares issued upon vesting of Restricted Stock Units, net (in shares)	234
Stock-based compensation expense			1,010							1,010
Shares issued in connection with ESPP			6,101							6,101
Shares issued in connection with ESPP (shares)	60
Class B shares exchanged for Class A shares	$ 12	$ (12)
Class B shares exchanged for Class A shares (in shares)	12,100	(12,100)
Foreign currency translation adjustments and revaluations, net of tax						(3,359)				(3,359)
Net (loss) income					808					808
Balance at Jun. 30, 2021	$ 40	$ 108	209,629		29,386	(7,463)				231,700
Balance (in shares) at Jun. 30, 2021	39,828	108,017
Exercise of stock options, net	$ 1		(919)							(918)
Exercise of stock options, net (in shares)	625						625
Shares issued upon vesting of Restricted Stock Units, net			(44)							(44)
Shares issued upon vesting of Restricted Stock Units, net (in shares)	3						3
Shares issued upon vesting of Restricted Stock Awards, net			(213)							(213)
Shares issued upon vesting of Restricted Stock Awards, net (in shares)	118
Stock-based compensation expense			7,194							7,194
Foreign currency translation adjustments and revaluations, net of tax						(5,704)				(5,704)
Net (loss) income					(3,948)					(3,948)
Balance at Sep. 30, 2021	$ 41	$ 108	215,647		25,438	(13,167)				228,067
Balance (in shares) at Sep. 30, 2021	40,574	108,017
Balance at Dec. 31, 2021	$ 42	$ 107	222,621		24,811	(17,497)				230,084
Balance (in shares) at Dec. 31, 2021	42,286	106,807					42,286	106,807
Exercise of stock options, net			278							278
Exercise of stock options, net (in shares)	272
Shares issued upon vesting of Restricted Stock Units, net			(15)							(15)
Shares issued upon vesting of Restricted Stock Units, net (in shares)	3
Stock-based compensation expense			4,867							4,867
Foreign currency translation adjustments and revaluations, net of tax						(2,049)				(2,049)
Net (loss) income					(334)					(334)
Balance at Mar. 31, 2022	$ 42	$ 107	227,751		24,477	(19,546)				232,831
Balance (in shares) at Mar. 31, 2022	42,561	106,807
Balance at Dec. 31, 2021	$ 42	$ 107	222,621		24,811	(17,497)				230,084
Balance (in shares) at Dec. 31, 2021	42,286	106,807					42,286	106,807
Exercise of stock options, net (in shares)							577
Foreign currency translation adjustments and revaluations, net of tax										(24,496)
Unrealized gain (loss) from available-for-sale investments, net of tax										(26)
Net (loss) income										(6,995)
Balance at Sep. 30, 2022	$ 49	$ 101	238,093		17,816	(42,019)				214,040
Balance (in shares) at Sep. 30, 2022	48,673	101,307					48,673	101,307
Balance at Mar. 31, 2022	$ 42	$ 107	227,751		24,477	(19,546)				232,831
Balance (in shares) at Mar. 31, 2022	42,561	106,807
Exercise of stock options, net			(34)							(34)
Exercise of stock options, net (in shares)	93
Shares issued upon vesting of Restricted Stock Units, net (in shares)	59
Stock-based compensation expense			4,166							4,166
Shares issued in connection with ESPP			967							967
Shares issued in connection with ESPP (shares)	103
Class B shares exchanged for Class A shares	$ 6	$ (6)
Class B shares exchanged for Class A shares (in shares)	5,500	(5,500)
Foreign currency translation adjustments and revaluations, net of tax						(11,777)				(11,777)
Unrealized gain (loss) from available-for-sale investments, net of tax						2				2
Net (loss) income					(5,520)					(5,520)
Balance at Jun. 30, 2022	$ 48	$ 101	232,850		18,957	(31,321)				220,635
Balance (in shares) at Jun. 30, 2022	48,316	101,307
Exercise of stock options, net	$ 1		387							388
Exercise of stock options, net (in shares)	212						212
Shares issued upon vesting of Restricted Stock Units, net			(176)							(176)
Shares issued upon vesting of Restricted Stock Units, net (in shares)	31
Shares issued upon vesting of Restricted Stock Awards, net			(164)							(164)
Shares issued upon vesting of Restricted Stock Awards, net (in shares)	114
Stock-based compensation expense			5,196							5,196
Foreign currency translation adjustments and revaluations, net of tax						(10,670)				(10,670)
Unrealized gain (loss) from available-for-sale investments, net of tax						(28)				(28)
Net (loss) income					(1,141)					(1,141)
Balance at Sep. 30, 2022	$ 49	$ 101	$ 238,093		$ 17,816	$ (42,019)				$ 214,040
Balance (in shares) at Sep. 30, 2022	48,673	101,307					48,673	101,307

STOCK-BASED AWARD PLANS - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Weighted Average Per Share
Compensation expense	$ 5,256	$ 7,422	$ 14,383	$ 20,250
Unrecognized compensation cost	$ 12,134		$ 12,134
Restricted Stock Awards
Units
Beginning balance (in units)			326
Granted (in units)			106
Vested (in units)			(188)
Forfeited (in units)			(9)
Ending balance (in units)	235		235
Weighted Average Per Share
Beginning balance (in dollars per share)			$ 18.76
Granted (in dollars per share)			9.92
Vested (in dollars per share)			18.58
Forfeited (in dollars per share)			19.00
Ending balance (in dollars per share)	$ 14.91		$ 14.91
Compensation expense	$ 725	$ 799	$ 2,034	$ 4,454
Unrecognized compensation cost	$ 2,858		$ 2,858
Unrecognized compensation expense period			1 year 2 months 12 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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details)	9 Months Ended
	Sep. 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Payment terms (in days)	30-days