Sterling Check Corp. (NASDAQ: STER) (“Sterling” or “the Company”) a
leading global provider of technology-enabled background and
identity verification services, today announced financial results
for the third quarter ended September 30, 2023.
Third Quarter
2023 Highlights
All results compared to prior-year period.
-
Revenues decreased 9.4% year-over-year to $180.6 million. Organic
constant currency revenue decreased 11.9% and inorganic revenue
growth was 2.4%.
-
GAAP net income decreased year-over-year to $2.4 million, or $0.03
per diluted share, compared to GAAP net income of $9.3 million, or
$0.09 per diluted share, for the prior year period.
-
Adjusted EBITDA decreased 10.4% year-over-year to $47.6 million.
Adjusted EBITDA Margin decreased 30 bps year-over-year to 26.3%, in
line with our prior expectations.
-
Adjusted Net Income decreased 15.2% year-over-year to $24.7
million. Adjusted Earnings Per Share—diluted decreased 10.3%
year-over-year to $0.26 per diluted share.
Organic constant currency revenue growth (decline),
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and
Adjusted Earnings Per Share—diluted are non-GAAP measures. Please
see the schedules accompanying this earnings release for a
reconciliation of these measures to their most directly comparable
GAAP measures, as applicable.
Josh Peirez, Sterling CEO, said, “During the third
quarter of 2023, we continued to make progress on our 2023 and
long-term goals. We executed on the items within our control, both
on the top line and in our cost structure, and we remained focused
on optimizing the exit velocity and profitability of our business
as we approach year-end.
“The macro environment remained challenging during
the quarter and drove base revenue volumes below our prior
expectations, with tempered expectations for the fourth quarter as
well. Still, we remain very pleased with our continued success in
executing on the revenue drivers within our control. These drivers
include new client wins, up-sell / cross-sell, and customer
retention, where a culture of innovation has generated significant
success, as well as inorganic revenue growth, where integration of
our two recent strategic M&A deals remains a key near-term
goal.
“During the third quarter, we also saw continued
progress on our cost optimization program which is helping us build
a stronger, more scalable, and more profitable company through
multiple strategic initiatives. We are enthusiastic about the
benefits that we expect these initiatives to provide us over the
short-term and long-term, and we remain focused on execution in all
macro environments.”
Third Quarter
2023 Results
|
Three Months Ended September 30, |
|
|
(in thousands, except per share data and
percentages) |
|
2023 |
|
|
|
2022 |
|
|
Change |
Revenues |
$ |
180,566 |
|
|
$ |
199,299 |
|
|
(9.4)% |
Net income |
$ |
2,354 |
|
|
$ |
9,303 |
|
|
(74.7)% |
Net income margin |
|
1.3 |
% |
|
|
4.7 |
% |
|
(340) bps |
Net income per share—diluted |
$ |
0.03 |
|
|
$ |
0.09 |
|
|
(66.7)% |
Adjusted EBITDA(1) |
$ |
47,556 |
|
|
$ |
53,098 |
|
|
(10.4)% |
Adjusted EBITDA Margin(1) |
|
26.3 |
% |
|
|
26.6 |
% |
|
(30) bps |
Adjusted Net Income(1) |
$ |
24,734 |
|
|
$ |
29,171 |
|
|
(15.2)% |
Adjusted Earnings Per Share—diluted(1) |
$ |
0.26 |
|
|
$ |
0.29 |
|
|
(10.3)% |
_________________________
(1) Adjusted EBITDA, Adjusted
EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per
Share—diluted are non-GAAP measures. Please see the schedules
accompanying this earnings release for a reconciliation of these
measures to their most directly comparable GAAP measures.
Revenue for the third quarter of 2023 was $180.6
million, a decrease of $18.7 million, or 9.4%, compared to $199.3
million for the third quarter of 2022. The revenue decrease for the
third quarter of 2023 included a 11.9% organic constant currency
revenue decrease, partially offset by 2.4% inorganic revenue growth
from the acquisitions of Socrates and A-Check and 0.1% benefit due
to the impact of fluctuations in foreign exchange currency rates.
The organic constant currency decrease in revenue was driven by a
decrease in base business with existing clients due to macro
uncertainty, which offset growth of 10% from the combination of new
clients and up-sell / cross-sell.
Balance Sheet and Cash Flow
As of September 30, 2023, cash and cash
equivalents were $49.9 million and total debt was $499.9 million,
compared to cash and cash equivalents of $103.1 million and total
debt of $505.5 million as of December 31, 2022. The decrease
in cash since December 31, 2022 was primarily driven by the
acquisitions of Socrates and A-Check (net purchase price of $49.2
million) and repurchases of Sterling’s common stock ($46.0 million)
during the first nine months of 2023, which offset growth from Free
Cash Flow. Sterling ended the third quarter of 2023 with a net
leverage ratio of 2.4x net debt to Adjusted EBITDA. As of
September 30, 2023, available borrowings under Sterling’s
revolving credit facility, net of letters of credit outstanding,
were $193.8 million.
For the nine months ended September 30, 2023,
Sterling generated net cash provided by operating activities of
$65.7 million, compared to $73.6 million for the prior year period.
Capital expenditures for the nine months ended September 30,
2023 totaled $14.7 million, compared to $15.7 million for the prior
year period. For the nine months ended September 30, 2023,
Sterling had $50.9 million of Free Cash Flow, compared to $57.9
million of Free Cash Flow for the prior year period. The decrease
in Free Cash Flow compared to the prior year period was primarily
driven by lower operating income and higher interest expense.
Free Cash Flow is a non-GAAP measure. Please see
the schedule accompanying this earnings release for a
reconciliation of Free Cash Flow to net cash provided by operating
activities, its most directly comparable GAAP measure.
Full Year 2023
Guidance
Sterling is providing updated guidance for full
year 2023 as detailed below. The following forward-looking
statements reflect Sterling’s expectations as of today’s date.
Actual results may differ materially.
|
Previous Guidance - August 8, 2023 |
|
Updated Guidance - November 8, 2023 |
(dollars in millions) |
Amount |
|
Year-over-year growth |
|
Amount |
|
Year-over-year growth |
Revenues |
$760 - $780 |
|
(1.0)% - 1.0% |
|
$720 - $730 |
|
(6.0)% - (4.5)% |
Adjusted EBITDA |
$198 - $208 |
|
0.0% - 5.0% |
|
$186 - $191 |
|
(6.0)% - (4.0)% |
Adjusted Net Income |
$106 - $114 |
|
0.0% - 7.0% |
|
$95 - $99 |
|
(11.0)% - (7.0)% |
Sterling’s full-year 2023 guidance ranges reflect
expectations that recent macroeconomic conditions will continue
through the year.
Sterling has not presented a quantitative
reconciliation of the forward-looking non-GAAP financial measures
“Adjusted EBITDA” and “Adjusted Net Income” to their most directly
comparable GAAP financial measure because it is impractical to
forecast certain items without unreasonable efforts due to the
uncertainty and inherent difficulty of predicting the occurrence
and financial impact of and the periods in which such items may be
recognized.
Conference Call Details
Sterling will hold a conference call to discuss the
third quarter of 2023 financial results today, November 8,
2023 at 8:30 AM Eastern Time.
To register for the conference call, please visit
Sterling’s investor relations website at
https://investor.sterlingcheck.com under “News & Events”.
Participants may also access the conference call by dialing
1-833-470-1428 (U.S.) or 1-929-526-1599 (outside the U.S.) and
using conference code 616107 approximately ten minutes before the
start of the call. A live audio webcast of the conference call,
together with related presentation materials, will also be
available on Sterling’s investor relations website at
https://investor.sterlingcheck.com under “News &
Events”.
A replay, along with the related presentation
materials, will be available after the conclusion of the call on
Sterling’s investor relations website under “News & Events” or
by dialing 1-866-813-9403, access code 140591. The telephone replay
will be available through Wednesday, November 22, 2023.
Forward-Looking Statements
This release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and it is
intended that all forward-looking statements that we make will be
subject to the safe harbor protections created thereby.
Forward-looking statements can be identified by forward-looking
terminology such as “aim,” “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“potential,” “predict,” “projection,” “seek,” “should,” “will” or
“would,” or the negative thereof or other variations thereon or
comparable terminology. In particular, statements that address
guidance, outlook, targets, market trends or projections about the
future, and statements regarding Sterling’s expectations, beliefs,
plans, strategies, objectives, prospects or assumptions, or
statements regarding future events or performance, contained in
this release are forward-looking statements. Sterling has based
these forward-looking statements on current expectations,
assumptions, estimates and projections. Such forward-looking
statements are only predictions and involve known and unknown risks
and uncertainties, many of which are beyond Sterling’s control.
These and other important factors, including those discussed more
fully elsewhere in this release and in the Company’s filings with
the Securities and Exchange Commission, particularly Sterling’s
most recently filed Annual Report on Form 10-K and Sterling's
Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2023, may cause actual results, performance or
achievements to differ materially from those expressed or implied
by these forward-looking statements, or could affect Sterling’s
share price. The forward-looking statements contained in this
release are not guarantees of future performance and actual results
of operations, financial condition, and liquidity, and the
development of the industry in which Sterling operates, may differ
materially from the forward-looking statements contained in this
release. Any forward-looking statement made in this release speaks
only as of the date of such statement. Except as required by law,
Sterling does not undertake any obligation to update or revise, or
to publicly announce any update or revision to, any of the
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date of this release.
Non-GAAP Financial Information
This report contains “non-GAAP financial measures,”
which are financial measures that are not calculated and presented
in accordance with GAAP.
Specifically, Sterling makes use of the non-GAAP
financial measures “organic constant currency revenue growth
(decline)”, “Adjusted EBITDA,” “Adjusted EBITDA Margin,” “Adjusted
Net Income,” “Adjusted Earnings Per Share” and “Free Cash Flow” to
assess the performance of its business.
Organic constant currency revenue growth (decline)
is calculated by adjusting for inorganic revenue growth (decline),
which is defined as the impact to revenue growth (decline) in the
current period from merger and acquisition (“M&A”) activity
that has occurred over the past twelve months, and converting the
current period revenue at foreign currency exchange rates
consistent with the prior period. For the three and nine months
ended September 30, 2023, we have provided the impact of
revenue from the acquisitions of Socrates and A-Check during the
first quarter of 2023. We present organic constant currency revenue
growth (decline) because we believe it assists investors and
analysts in comparing our operating performance across reporting
periods on a consistent basis by excluding items that we do not
believe are indicative of our core operating performance; however,
it has limitations as an analytical tool, and you should not
consider such a measure either in isolation or as a substitute for
analyzing our results as reported under GAAP. In particular,
organic constant currency revenue growth (decline) does not reflect
M&A activity or the impact of foreign currency exchange rate
fluctuations.
Adjusted EBITDA is defined as net income (loss)
adjusted for provision (benefit) for income taxes, interest
expense, depreciation and amortization, stock-based compensation,
transaction expenses related to the IPO, one-time public company
transition expenses and costs associated with financing
transactions, M&A activity, optimization and restructuring,
technology transformation costs, foreign currency (gains) and
losses and other costs affecting comparability. Adjusted EBITDA
Margin is defined as Adjusted EBITDA divided by revenue for the
applicable period. We present Adjusted EBITDA and Adjusted EBITDA
Margin because we believe they assist investors and analysts in
comparing our operating performance across reporting periods on a
consistent basis by excluding items that we do not believe are
indicative of our core operating performance. Management and our
board of directors use Adjusted EBITDA and Adjusted EBITDA Margin
to evaluate the factors and trends affecting our business to assess
our financial performance and in preparing and approving our annual
budget and believe they are helpful in highlighting trends in our
core operating performance. Further, our executive incentive
compensation is based in part on components of Adjusted EBITDA.
Adjusted EBITDA and Adjusted EBITDA Margin have limitations as
analytical tools and should not be considered in isolation or as
substitutes for our results as reported under GAAP. Adjusted EBITDA
excludes items that can have a significant effect on our profit or
loss and should, therefore, be considered only in conjunction with
net income (loss) for the period. Because not all companies use
identical calculations, these measures may not be comparable to
other similarly titled measures of other companies.
Adjusted Net Income is a non-GAAP profitability
measure. Adjusted Net Income is defined as net income (loss)
adjusted for amortization of acquired intangible assets,
stock-based compensation, transaction expenses related to the IPO,
one-time public company transition expenses and costs associated
with financing transactions, M&A activity, optimization and
restructuring, technology transformation costs, and certain other
costs affecting comparability, adjusted for the applicable tax
rate. Adjusted Earnings Per Share is defined as Adjusted Net Income
divided by diluted weighted average shares for the applicable
period. We present Adjusted Net Income and Adjusted Earnings Per
Share because we believe they assist investors and analysts in
comparing our operating performance across reporting periods on a
consistent basis by excluding certain material non-cash items and
unusual items that we do not expect to continue at the same level
in the future. Our management believes that the inclusion of
supplementary adjustments to net income (loss) applied in
presenting Adjusted Net Income provide additional information to
investors about certain material non-cash items and about items
that we do not expect to continue at the same level in the future.
Adjusted Net Income and Adjusted Earnings Per Share have
limitations as analytical tools, and you should not consider such
measures either in isolation or as substitutes for analyzing our
results as reported under GAAP.
Free Cash Flow is defined as Net Cash provided by
(used in) Operating Activities minus purchases of property and
equipment and purchases of intangible assets and capitalized
software. We present Free Cash Flow because we believe it provides
cash available for strategic measures, after making necessary
capital investments in property and equipment to support ongoing
business operations, and provides investors with the same measures
that management uses as the basis for making resource allocation
decisions. Free Cash Flow has limitations as an analytical tool,
and you should not consider such measure either in isolation or as
a substitute for analyzing our results as reported under GAAP.
Historically, we presented Adjusted Free Cash Flow, defined as Net
Cash provided by (used in) Operating Activities minus purchases of
property and equipment and purchases of intangible assets and
capitalized software and reflecting adjustments for one-time, cash,
non-operating expenses related to the IPO. As there are no
adjustments related to the IPO for the three and nine months ended
September 30, 2023 and 2022, nor in the subsequent periods
from such dates, management believes that Free Cash Flow is a more
relevant measure.
About Sterling
Sterling—a leading provider of background and
identity services—offers background and identity verification to
help over 50,000 clients create people-first cultures built on
foundations of trust and safety. Sterling’s tech-enabled services
help organizations across all industries establish great
environments for their workers, partners, and customers. With
operations around the world, Sterling conducted more than 110
million searches in the twelve months ended December 31, 2022.
Contacts
InvestorsJudah SokelIR@sterlingcheck.com
MediaAngela
StelleAngela.Stelle@sterlingcheck.com
CONSOLIDATED FINANCIAL
STATEMENTS
STERLING CHECK
CORP.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE INCOME
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in thousands, except share and per share
data) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
REVENUES |
$ |
180,566 |
|
|
$ |
199,299 |
|
|
$ |
550,224 |
|
|
$ |
596,862 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
Cost of revenues (exclusive of depreciation and amortization
below) |
|
95,882 |
|
|
|
106,422 |
|
|
|
292,692 |
|
|
|
314,954 |
|
Corporate technology and production systems |
|
11,329 |
|
|
|
13,715 |
|
|
|
34,709 |
|
|
|
38,806 |
|
Selling, general and administrative |
|
42,382 |
|
|
|
42,411 |
|
|
|
134,743 |
|
|
|
126,630 |
|
Depreciation and amortization |
|
15,875 |
|
|
|
16,570 |
|
|
|
47,117 |
|
|
|
56,598 |
|
Impairments and disposals of long-lived assets |
|
48 |
|
|
|
193 |
|
|
|
7,193 |
|
|
|
805 |
|
Total operating expenses |
|
165,516 |
|
|
|
179,311 |
|
|
|
516,454 |
|
|
|
537,793 |
|
OPERATING INCOME |
|
15,050 |
|
|
|
19,988 |
|
|
|
33,770 |
|
|
|
59,069 |
|
OTHER EXPENSE (INCOME): |
|
|
|
|
|
|
|
Interest expense, net |
|
9,305 |
|
|
|
7,764 |
|
|
|
26,903 |
|
|
|
20,719 |
|
Gain on interest rate swaps |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(296 |
) |
Other income |
|
(561 |
) |
|
|
(560 |
) |
|
|
(1,370 |
) |
|
|
(1,422 |
) |
Total other expense, net |
|
8,744 |
|
|
|
7,204 |
|
|
|
25,533 |
|
|
|
19,001 |
|
INCOME BEFORE INCOME TAXES |
|
6,306 |
|
|
|
12,784 |
|
|
|
8,237 |
|
|
|
40,068 |
|
Income tax provision |
|
3,952 |
|
|
|
3,481 |
|
|
|
4,969 |
|
|
|
12,958 |
|
NET INCOME |
$ |
2,354 |
|
|
$ |
9,303 |
|
|
$ |
3,268 |
|
|
$ |
27,110 |
|
Unrealized gain on hedged transactions, net of tax expense of
$1,188, $0, $1,044 and $0, respectively |
|
1,962 |
|
|
|
— |
|
|
|
1,554 |
|
|
|
— |
|
Foreign currency translation adjustments, net of tax of $0, $0, $0
and $0, respectively |
|
(1,906 |
) |
|
|
(4,790 |
) |
|
|
(269 |
) |
|
|
(7,990 |
) |
Total other comprehensive income (loss) |
|
56 |
|
|
|
(4,790 |
) |
|
|
1,285 |
|
|
|
(7,990 |
) |
COMPREHENSIVE INCOME |
$ |
2,410 |
|
|
$ |
4,513 |
|
|
$ |
4,553 |
|
|
$ |
19,120 |
|
Net income per share attributable to stockholders |
|
|
|
|
|
|
|
Basic |
$ |
0.03 |
|
|
$ |
0.10 |
|
|
$ |
0.04 |
|
|
$ |
0.29 |
|
Diluted |
$ |
0.03 |
|
|
$ |
0.09 |
|
|
$ |
0.03 |
|
|
$ |
0.27 |
|
Weighted average number of shares outstanding |
|
|
|
|
|
|
|
Basic |
|
90,972,009 |
|
|
|
94,134,690 |
|
|
|
92,184,159 |
|
|
|
94,043,105 |
|
Diluted |
|
93,651,691 |
|
|
|
99,118,521 |
|
|
|
94,493,254 |
|
|
|
99,217,125 |
|
STERLING CHECK
CORP.UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except share and per share
amounts) |
September 30,2023 |
|
December 31,2022 |
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
49,877 |
|
|
$ |
103,095 |
|
Accounts receivable (net of allowance for credit losses of $2,670
and $2,304 at September 30, 2023 and December 31, 2022,
respectively) |
|
151,935 |
|
|
|
139,579 |
|
Insurance receivable |
|
4,689 |
|
|
|
921 |
|
Prepaid expenses |
|
8,595 |
|
|
|
13,433 |
|
Other current assets |
|
23,770 |
|
|
|
13,654 |
|
Total current assets |
|
238,866 |
|
|
|
270,682 |
|
Property and equipment, net |
|
7,330 |
|
|
|
10,341 |
|
Goodwill |
|
878,390 |
|
|
|
849,609 |
|
Intangible assets, net |
|
240,482 |
|
|
|
241,036 |
|
Deferred tax assets |
|
4,328 |
|
|
|
4,452 |
|
Operating leases right-of-use asset |
|
7,020 |
|
|
|
20,084 |
|
Other noncurrent assets, net |
|
10,499 |
|
|
|
11,050 |
|
TOTAL ASSETS |
$ |
1,386,915 |
|
|
$ |
1,407,254 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts payable |
$ |
39,327 |
|
|
$ |
38,372 |
|
Litigation settlement obligation |
|
7,178 |
|
|
|
4,165 |
|
Accrued expenses |
|
60,387 |
|
|
|
67,047 |
|
Current portion of long-term debt |
|
13,125 |
|
|
|
7,500 |
|
Operating leases liability, current portion |
|
4,233 |
|
|
|
3,717 |
|
Other current liabilities |
|
14,435 |
|
|
|
12,939 |
|
Total current liabilities |
|
138,685 |
|
|
|
133,740 |
|
Long-term debt, net |
|
483,334 |
|
|
|
493,990 |
|
Deferred tax liabilities |
|
31,584 |
|
|
|
23,707 |
|
Long-term operating leases liability, net of current portion |
|
8,834 |
|
|
|
16,835 |
|
Other liabilities |
|
3,737 |
|
|
|
2,336 |
|
Total liabilities |
|
666,174 |
|
|
|
670,608 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
Preferred stock ($0.01 par value; 100,000,000 shares authorized; no
shares issued or outstanding) |
|
— |
|
|
|
— |
|
Common stock ($0.01 par value; 1,000,000,000 shares authorized;
99,889,227 shares issued and 95,045,289 shares outstanding at
September 30, 2023; 97,765,120 shares issued and 96,717,883
shares outstanding at December 31, 2022) |
|
97 |
|
|
|
76 |
|
Additional paid-in capital |
|
971,950 |
|
|
|
942,789 |
|
Common stock held in treasury (4,843,938 and 1,047,237 shares at
September 30, 2023 and December 31, 2022,
respectively) |
|
(64,499 |
) |
|
|
(14,859 |
) |
Accumulated deficit |
|
(183,180 |
) |
|
|
(186,448 |
) |
Accumulated other comprehensive loss |
|
(3,627 |
) |
|
|
(4,912 |
) |
Total stockholders’ equity |
|
720,741 |
|
|
|
736,646 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
1,386,915 |
|
|
$ |
1,407,254 |
|
STERLING CHECK
CORP.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
Nine Months EndedSeptember
30, |
(in thousands) |
|
2023 |
|
|
|
2022 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
Net income |
$ |
3,268 |
|
|
$ |
27,110 |
|
Adjustments to reconcile net income to net cash provided by
operating activities |
|
|
|
Depreciation and amortization |
|
47,117 |
|
|
|
56,598 |
|
Deferred income taxes |
|
(200 |
) |
|
|
4,885 |
|
Stock-based compensation |
|
27,184 |
|
|
|
17,424 |
|
Impairments and disposals of long-lived assets |
|
7,193 |
|
|
|
805 |
|
Provision for bad debts |
|
556 |
|
|
|
1,016 |
|
Amortization of financing fees |
|
808 |
|
|
|
327 |
|
Amortization of debt discount |
|
594 |
|
|
|
1,444 |
|
Deferred rent |
|
383 |
|
|
|
(170 |
) |
Unrealized translation loss (gain) on investment in foreign
subsidiaries |
|
94 |
|
|
|
(1,838 |
) |
Changes in fair value of derivatives |
|
— |
|
|
|
(4,102 |
) |
Change in fair value of contingent consideration, net |
|
(686 |
) |
|
|
— |
|
Interest rate swap settlements |
|
1,323 |
|
|
|
— |
|
Changes in operating assets and liabilities |
|
|
|
Accounts receivable |
|
(8,699 |
) |
|
|
(33,145 |
) |
Insurance receivable |
|
(3,768 |
) |
|
|
— |
|
Prepaid expenses |
|
5,849 |
|
|
|
3,579 |
|
Other assets |
|
(6,493 |
) |
|
|
(2,097 |
) |
Accounts payable |
|
757 |
|
|
|
6,546 |
|
Litigation settlement obligation |
|
3,013 |
|
|
|
— |
|
Accrued expenses |
|
(7,982 |
) |
|
|
84 |
|
Other liabilities |
|
(4,635 |
) |
|
|
(4,868 |
) |
Net cash provided by operating
activities |
|
65,676 |
|
|
|
73,598 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
Purchases of property and equipment |
|
(1,377 |
) |
|
|
(3,978 |
) |
Purchases of intangible assets and capitalized software |
|
(13,364 |
) |
|
|
(11,719 |
) |
Acquisitions, net of cash acquired |
|
(49,210 |
) |
|
|
— |
|
Proceeds from disposition of property and equipment |
|
121 |
|
|
|
25 |
|
Net cash used in investing
activities |
|
(63,830 |
) |
|
|
(15,672 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
Issuance of common stock |
|
1,998 |
|
|
|
2,291 |
|
Repurchases of common stock |
|
(46,043 |
) |
|
|
— |
|
Payments of initial public offering issuance costs |
|
— |
|
|
|
(225 |
) |
Cash paid for tax withholding on vesting of restricted shares |
|
(3,597 |
) |
|
|
— |
|
Payments of long-term debt |
|
(5,625 |
) |
|
|
(4,846 |
) |
Payment of contingent consideration for acquisition |
|
(305 |
) |
|
|
(226 |
) |
Payments of finance lease obligations |
|
— |
|
|
|
(3 |
) |
Net cash used in financing
activities |
|
(53,572 |
) |
|
|
(3,009 |
) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
(1,492 |
) |
|
|
(3,725 |
) |
NET CHANGE IN CASH AND CASH
EQUIVALENTS |
|
(53,218 |
) |
|
|
51,192 |
|
CASH AND CASH EQUIVALENTS |
|
|
|
Beginning of period |
|
103,095 |
|
|
|
47,998 |
|
Cash and cash equivalents at end of period |
$ |
49,877 |
|
|
$ |
99,190 |
|
RECONCILIATION OF CONSOLIDATED NON-GAAP
FINANCIAL MEASURES
The following table reconciles revenue growth
(decline), the most directly comparable GAAP measure, to organic
constant currency revenue growth (decline) for the three and nine
months ended September 30, 2023. For the three and nine months
ended September 30, 2023, we have provided the impact of
revenue from the acquisitions of Socrates and A-Check.
|
Three Months EndedSeptember 30,
2023 |
|
Nine Months EndedSeptember 30,
2023 |
Reported revenue decline |
(9.4)% |
|
(7.8)% |
Inorganic revenue growth(1) |
2.4% |
|
2.4% |
Impact from foreign currency exchange(2) |
0.1% |
|
(0.4)% |
Organic constant currency revenue decline |
(11.9)% |
|
(9.8)% |
_________________________
(1) Impact to revenue growth
(decline) in the current period from M&A activity that has
occurred over the past twelve months.
(2) Impact to revenue growth
(decline) in the current period from fluctuations in foreign
currency exchange rates.
The following table reconciles net income, the most
directly comparable GAAP measure, to Adjusted EBITDA for the
periods presented:
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(dollars in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
$ |
2,354 |
|
|
$ |
9,303 |
|
|
$ |
3,268 |
|
|
$ |
27,110 |
|
Income tax provision |
|
3,952 |
|
|
|
3,481 |
|
|
|
4,969 |
|
|
|
12,958 |
|
Interest expense, net |
|
9,305 |
|
|
|
7,764 |
|
|
|
26,903 |
|
|
|
20,719 |
|
Depreciation and amortization |
|
15,875 |
|
|
|
16,570 |
|
|
|
47,117 |
|
|
|
56,598 |
|
Stock-based compensation |
|
9,783 |
|
|
|
6,293 |
|
|
|
27,184 |
|
|
|
17,424 |
|
Transaction expenses(1) |
|
2,238 |
|
|
|
2,809 |
|
|
|
10,497 |
|
|
|
6,591 |
|
Restructuring(2) |
|
4,018 |
|
|
|
2,730 |
|
|
|
18,781 |
|
|
|
3,912 |
|
Technology transformation(3) |
|
256 |
|
|
|
4,767 |
|
|
|
3,668 |
|
|
|
13,066 |
|
Settlements impacting comparability(4) |
|
— |
|
|
|
213 |
|
|
|
— |
|
|
|
213 |
|
Gain on interest rate swaps(5) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(296 |
) |
Other(6) |
|
(225 |
) |
|
|
(832 |
) |
|
|
721 |
|
|
|
(1,089 |
) |
Adjusted EBITDA |
$ |
47,556 |
|
|
$ |
53,098 |
|
|
$ |
143,108 |
|
|
$ |
157,206 |
|
Adjusted EBITDA Margin |
|
26.3 |
% |
|
|
26.6 |
% |
|
|
26.0 |
% |
|
|
26.3 |
% |
_________________________
(1) Consists of transaction
expenses related to M&A, associated earn-outs, costs related to
the preparation of the IPO, one-time public company transition
expenses and fees associated with financing transactions. For the
three months ended September 30, 2023, costs consisted
primarily of $1.5 million of M&A related costs for the
acquisitions of Socrates and A-Check and $0.7 million of costs of
one-time public company transition expenses and ancillary
non-recurring public company expenses. For the three months ended
September 30, 2022, costs consisted primarily of $1.3 million
of one-time public company transition expenses and $1.5 million in
costs related to M&A. For the nine months ended
September 30, 2023, costs consisted primarily of $6.1 million
of M&A related costs for the acquisitions of Socrates and
A-Check, $1.2 million of M&A costs for the EBI acquisition
primarily due to the acceleration of contract costs related to the
completion of the EBI platform migration, and $3.2 million of
registration statement costs, costs to support the secondary public
offering in June 2023, one-time public company transition expenses
and expenses related to executing our interest rate swap. For the
nine months ended September 30, 2022, costs consisted
primarily of $4.0 million of one-time public company transition
expenses and $2.6 million in costs related to M&A.
(2) Consists of
restructuring-related costs, including executive recruiting and
severance charges, and lease termination costs and disposal of
fixed assets related to our real estate consolidation efforts.
Beginning in 2020, we began executing a virtual-first strategy,
closing offices and reducing office space globally. In 2022, we
began executing on a restructuring program to realign senior
leadership and functions with the goal of elevating our
go-to-market strategy and accelerating our technology and product
innovation. At the end of 2022, we also launched Project Nucleus
which we expect to drive meaningful cost savings and efficiency
gains in our cost of revenues. For the three months ended
September 30, 2023, costs consisted of $3.4 million of
restructuring-related charges and $0.6 million in connection with
executing against our real estate consolidation program. For the
three months ended September 30, 2022, costs consisted of
approximately $2.0 million of restructuring-related executive
recruiting and severance charges as well as one one-time consulting
and other costs and $0.7 million in expenses related to our real
estate consolidation program primarily related to the exit of EBI’s
office. For the nine months ended September 30, 2023, costs
consisted of $9.9 million in connection with executing against our
real estate consolidation program which included a $5.3 million
impairment charge on ROU assets, $2.5 million of accelerated rent,
facilities costs and other charges in connection with office
closures, as well as $1.8 million of fixed asset disposals and $8.9
million of restructuring-related charges. For the nine months ended
September 30, 2022, costs consisted of approximately $2.0
million of restructuring-related executive recruiting and severance
charges as well as one one-time consulting and other costs and $1.7
million in expenses related to our real estate consolidation
program, primarily due to the exit of EBI’s office.
(3) Includes costs related to
technology modernization, as well as costs related to
decommissioning of on-premise production systems and redundant
fulfillment systems of acquired companies and the migration to our
platform. We believe that these costs are discrete and
non-recurring in nature, as they relate to a one-time restructuring
and decommissioning of our on-premise production systems and
corporate technological infrastructure and the move to a managed
service provider, decommissioning redundant fulfillment systems and
modernizing internal functional systems. As such, they are not
normal, recurring operating expenses and are not reflective of
ongoing trends in the cost of doing business. The significant
majority of these are related to the last two phases of Project
Ignite, a three-phase strategic investment initiative launched in
2019 to create an enterprise-class global platform, with the
remainder related to an investment made to modernize internal
functional systems in preparation for our public company
infrastructure. Phase two of Project Ignite was completed in 2022
and phase three of Project Ignite was completed in the first
quarter of 2023. For the three months ended September 30,
2023, $0.3 million related to decommissioning of the redundant
production and fulfillment systems of A-Check and the redundant
fulfillment systems of Socrates. For the three months ended
September 30, 2022, investment related to Project Ignite was
$4.2 million and the remaining $0.6 million related to costs for
decommissioning of the on-premise production system and
decommissioning of the redundant fulfillment system of EBI and
migrating onto our platform. For the nine months ended
September 30, 2023, investment related to the conclusion of
Project Ignite was $3.1 million and the remaining $0.6 million
related to costs for decommissioning of the on-premise production
system and decommissioning of the redundant fulfillment system of
EBI and migrating onto our platform and decommissioning costs of
the A-Check and Socrates systems. For the nine months ended
September 30, 2022, investment related to Project Ignite was
$11.1 million and the remaining $1.9 million related to costs for
decommissioning of the on-premise production system and
decommissioning of the redundant fulfillment system of EBI and
migrating onto our platform.
(4) Consists of non-recurring
settlements and the related legal fees impacting comparability.
(5) Consists of gains or losses on
historical non-designated derivative interest rate swaps. See Part
I. Item 3. “Quantitative and Qualitative Disclosures about Market
Risk— Interest Rate Risk” in our Form 10-Q for the quarterly period
ended June 30, 2023 for additional information on interest
rate swaps.
(6) Consists of gains or losses on
foreign currency transactions and impairment of capitalized
software.
The following table presents the calculation of Net
income margin and Adjusted EBITDA Margin for the periods
presented:
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(dollars in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
$ |
2,354 |
|
|
$ |
9,303 |
|
|
$ |
3,268 |
|
|
$ |
27,110 |
|
Adjusted EBITDA |
$ |
47,556 |
|
|
$ |
53,098 |
|
|
$ |
143,108 |
|
|
$ |
157,206 |
|
Revenues |
$ |
180,566 |
|
|
$ |
199,299 |
|
|
$ |
550,224 |
|
|
$ |
596,862 |
|
Net income margin |
|
1.3 |
% |
|
|
4.7 |
% |
|
|
0.6 |
% |
|
|
4.5 |
% |
Adjusted EBITDA Margin |
|
26.3 |
% |
|
|
26.6 |
% |
|
|
26.0 |
% |
|
|
26.3 |
% |
The following table reconciles net income, the most
directly comparable GAAP measure, to Adjusted Net Income and
Adjusted Earnings Per Share for the periods presented:
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in thousands, except per share amounts) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Net income |
$ |
2,354 |
|
|
$ |
9,303 |
|
|
$ |
3,268 |
|
$ |
27,110 |
|
Income tax provision |
|
3,952 |
|
|
|
3,481 |
|
|
|
4,969 |
|
|
12,958 |
|
Income before income taxes |
|
6,306 |
|
|
|
12,784 |
|
|
|
8,237 |
|
|
40,068 |
|
Amortization of acquired intangible assets |
|
10,621 |
|
|
|
10,903 |
|
|
|
31,307 |
|
|
38,030 |
|
Stock-based compensation |
|
9,783 |
|
|
|
6,293 |
|
|
|
27,184 |
|
|
17,424 |
|
Transaction expenses(1) |
|
2,238 |
|
|
|
2,809 |
|
|
|
10,497 |
|
|
6,591 |
|
Restructuring(2) |
|
4,018 |
|
|
|
2,730 |
|
|
|
18,781 |
|
|
3,912 |
|
Technology transformation(3) |
|
256 |
|
|
|
4,767 |
|
|
|
3,668 |
|
|
13,066 |
|
Settlements impacting comparability(4) |
|
— |
|
|
|
213 |
|
|
|
— |
|
|
213 |
|
Gain on interest rate swaps(5) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
(296 |
) |
Other(6) |
|
(225 |
) |
|
|
(832 |
) |
|
|
721 |
|
|
(1,089 |
) |
Adjusted Net Income before income tax effect |
|
32,997 |
|
|
|
39,667 |
|
|
|
100,395 |
|
|
117,919 |
|
Income tax effect(7) |
|
8,263 |
|
|
|
10,496 |
|
|
|
26,171 |
|
|
31,848 |
|
Adjusted Net Income |
$ |
24,734 |
|
|
$ |
29,171 |
|
|
$ |
74,224 |
|
$ |
86,071 |
|
Net income per share—basic |
$ |
0.03 |
|
|
$ |
0.10 |
|
|
$ |
0.04 |
|
$ |
0.29 |
|
Net income per share—diluted |
$ |
0.03 |
|
|
$ |
0.09 |
|
|
$ |
0.03 |
|
$ |
0.27 |
|
Adjusted Earnings Per Share—basic |
$ |
0.27 |
|
|
$ |
0.31 |
|
|
$ |
0.81 |
|
$ |
0.92 |
|
Adjusted Earnings Per Share—diluted |
$ |
0.26 |
|
|
$ |
0.29 |
|
|
$ |
0.79 |
|
$ |
0.87 |
|
_________________________
(1) Consists of transaction
expenses related to M&A, associated earn-outs, costs related to
the preparation of the IPO, one-time public company transition
expenses and fees associated with financing transactions.
(2) Consists of
restructuring-related costs, including executive recruiting and
severance charges, and lease termination costs and disposal of
fixed assets related to our real estate consolidation efforts.
Beginning in 2020, we began executing a virtual-first strategy,
closing offices and reducing office space globally. In 2022, we
began executing on a restructuring program to realign senior
leadership and functions with the goal of elevating our
go-to-market strategy and accelerating our technology and product
innovation. At the end of 2022, we also launched Project Nucleus
which we expect to drive meaningful cost savings and efficiency
gains in our cost of revenues.
(3) Includes costs related to
technology modernization, as well as costs related to
decommissioning of on-premise production systems and redundant
fulfillment systems of acquired companies and the migration to our
platform. We believe that these costs are discrete and
non-recurring in nature, as they relate to a one-time restructuring
and decommissioning of our on-premise production systems and
corporate technological infrastructure and the move to a managed
service provider, decommissioning redundant fulfillment systems and
modernizing internal functional systems. As such, they are not
normal, recurring operating expenses and are not reflective of
ongoing trends in the cost of doing business. The significant
majority of these are related to the last two phases of Project
Ignite, a three-phase strategic investment initiative launched in
2019 to create an enterprise-class global platform, with the
remainder related to an investment made to modernize internal
functional systems in preparation for our public company
infrastructure. Phase two of Project Ignite was completed in 2022
and phase three of Project Ignite was completed in the first
quarter of 2023.
(4) Consists of non-recurring
settlements and the related legal fees impacting comparability.
(5) Consists of gains or losses on
historical non-designated derivative interest rate swaps. See Part
I. Item 3. “Quantitative and Qualitative Disclosures about Market
Risk— Interest Rate Risk” in our Form 10-Q for the quarterly period
ended June 30, 2023 for additional information on interest
rate swaps.
(6) Consists of gains or losses on
foreign currency transactions and impairment of capitalized
software.
(7) Normalized effective tax rates
of 25.0% and 26.5% have been used to compute Adjusted Net Income
for the three months ended September 30, 2023 and 2022,
respectively. Normalized effective tax rates of 26.1% and 27.0%
have been used to compute Adjusted Net Income for the nine months
ended September 30, 2023 and 2022, respectively. As of
December 31, 2022, we had net operating loss carryforwards of
approximately $16.3 million for federal income tax purposes and
deferred tax assets of approximately $6.3 million related to state
and foreign income tax loss carryforwards available to reduce
future income subject to income taxes. The amount of actual cash
taxes we pay for federal, state, and foreign income taxes differs
significantly from the effective income tax rate computed in
accordance with GAAP, and from the normalized rate shown above.
The following table reconciles net income per
share, the most directly comparable GAAP measure, to Adjusted
Earnings Per Share for the periods presented:
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
(in thousands, except share and per share
amounts) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Net income |
$ |
2,354 |
|
$ |
9,303 |
|
$ |
3,268 |
|
$ |
27,110 |
Weighted average number of shares outstanding—basic |
|
90,972,009 |
|
|
94,134,690 |
|
|
92,184,159 |
|
|
94,043,105 |
Weighted average number of shares outstanding—diluted |
|
93,651,691 |
|
|
99,118,521 |
|
|
94,493,254 |
|
|
99,217,125 |
Net income per share—basic |
$ |
0.03 |
|
$ |
0.10 |
|
$ |
0.04 |
|
$ |
0.29 |
Net income per share—diluted |
$ |
0.03 |
|
$ |
0.09 |
|
$ |
0.03 |
|
$ |
0.27 |
|
|
|
|
|
|
|
|
Adjusted Net Income |
$ |
24,734 |
|
$ |
29,171 |
|
$ |
74,224 |
|
$ |
86,071 |
Weighted average number of shares outstanding—basic |
|
90,972,009 |
|
|
94,134,690 |
|
|
92,184,159 |
|
|
94,043,105 |
Weighted average number of shares outstanding—diluted |
|
93,651,691 |
|
|
99,118,521 |
|
|
94,493,254 |
|
|
99,217,125 |
Adjusted Earnings Per Share—basic |
$ |
0.27 |
|
$ |
0.31 |
|
$ |
0.81 |
|
$ |
0.92 |
Adjusted Earnings Per Share—diluted |
$ |
0.26 |
|
$ |
0.29 |
|
$ |
0.79 |
|
$ |
0.87 |
The following table presents the calculation of
Adjusted Diluted Earnings Per Share for the periods presented:
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income per share—diluted |
$ |
0.03 |
|
|
$ |
0.09 |
|
|
$ |
0.03 |
|
|
$ |
0.27 |
|
Adjusted Net Income adjustments per share |
|
|
|
|
|
|
|
Income tax provision |
|
0.04 |
|
|
|
0.04 |
|
|
|
0.06 |
|
|
|
0.13 |
|
Amortization of acquired intangible assets |
|
0.11 |
|
|
|
0.11 |
|
|
|
0.33 |
|
|
|
0.38 |
|
Stock-based compensation |
|
0.11 |
|
|
|
0.06 |
|
|
|
0.29 |
|
|
|
0.18 |
|
Transaction expenses(1) |
|
0.02 |
|
|
|
0.03 |
|
|
|
0.11 |
|
|
|
0.07 |
|
Restructuring(2) |
|
0.04 |
|
|
|
0.03 |
|
|
|
0.20 |
|
|
|
0.04 |
|
Technology transformation(3) |
|
0.00 |
|
|
|
0.05 |
|
|
|
0.04 |
|
|
|
0.13 |
|
Settlements impacting comparability(4) |
|
— |
|
|
|
0.00 |
|
|
|
— |
|
|
|
0.00 |
|
Gain on interest rate swaps(5) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.00 |
|
Other(6) |
|
0.00 |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
(0.01 |
) |
Income tax effect(7) |
|
(0.09 |
) |
|
|
(0.11 |
) |
|
|
(0.28 |
) |
|
|
(0.32 |
) |
Adjusted Earnings Per Share—diluted |
$ |
0.26 |
|
|
$ |
0.29 |
|
|
$ |
0.79 |
|
|
$ |
0.87 |
|
Weighted average number of shares outstanding used in
computation of Adjusted Diluted Earnings Per Share: |
|
|
|
|
|
|
|
Weighted average number of shares outstanding—diluted
(GAAP) |
|
93,651,691 |
|
|
|
99,118,521 |
|
|
|
94,493,254 |
|
|
|
99,217,125 |
|
Options not included in weighted average number of shares
outstanding—diluted (GAAP) (using treasury stock method) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Weighted average number of shares outstanding—diluted
(non-GAAP) (using treasury stock method) |
|
93,651,691 |
|
|
|
99,118,521 |
|
|
|
94,493,254 |
|
|
|
99,217,125 |
|
_________________________
(1) Consists of transaction
expenses related to M&A, associated earn-outs, costs related to
the preparation of the IPO, one-time public company transition
expenses and fees associated with financing transactions.
(2) Consists of
restructuring-related costs, including executive recruiting and
severance charges, and lease termination costs and disposal of
fixed assets related to our real estate consolidation efforts.
Beginning in 2020, we began executing a virtual-first strategy,
closing offices and reducing office space globally. In 2022, we
began executing on a restructuring program to realign senior
leadership and functions with the goal of elevating our
go-to-market strategy and accelerating our technology and product
innovation. At the end of 2022, we also launched Project Nucleus
which we expect to drive meaningful cost savings and efficiency
gains in our cost of revenues.
(3) Includes costs related to
technology modernization, as well as costs related to
decommissioning of on-premise production systems and redundant
fulfillment systems of acquired companies and the migration to our
platform. We believe that these costs are discrete and
non-recurring in nature, as they relate to a one-time restructuring
and decommissioning of our on-premise production systems and
corporate technological infrastructure and the move to a managed
service provider, decommissioning redundant fulfillment systems and
modernizing internal functional systems. As such, they are not
normal, recurring operating expenses and are not reflective of
ongoing trends in the cost of doing business. The significant
majority of these are related to the last two phases of Project
Ignite, a three-phase strategic investment initiative launched in
2019 to create an enterprise-class global platform, with the
remainder related to an investment made to modernize internal
functional systems in preparation for our public company
infrastructure. Phase two of Project Ignite was completed in 2022
and phase three of Project Ignite was completed in the first
quarter of 2023.
(4) Consists of non-recurring
settlements and the related legal fees impacting comparability.
(5) Consists of gains or losses on
historical non-designated derivative interest rate swaps. See Part
I. Item 3. “Quantitative and Qualitative Disclosures about Market
Risk—Interest Rate Risk” for additional information on interest
rate swaps.
(6) Consists of gains or losses on
foreign currency transactions and impairment of capitalized
software.
(7) Normalized effective tax rates
of 25.0% and 26.5% have been used to compute Adjusted Net Income
for the three months ended September 30, 2023 and 2022,
respectively. Normalized effective tax rates of 26.1% and 27.0%
have been used to compute Adjusted Net Income for the nine months
ended September 30, 2023 and 2022, respectively. As of
December 31, 2022, we had net operating loss carryforwards of
approximately $16.3 million for federal income tax purposes and
deferred tax assets of approximately $6.3 million related to state
and foreign income tax loss carryforwards available to reduce
future income subject to income taxes. The amount of actual cash
taxes we pay for federal, state, and foreign income taxes differs
significantly from the effective income tax rate computed in
accordance with GAAP, and from the normalized rate shown above.
For further detail, see the footnotes to Part I.
Item 2. “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Non-GAAP Financial Measures” in
our Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2023.
The following table reconciles net cash flow
provided by operating activities, the most directly comparable GAAP
measure, to Free Cash Flow for the periods presented:
|
Three Months EndedSeptember 30,
2023 |
|
Nine Months EndedSeptember
30, |
(in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by operating activities |
$ |
32,778 |
|
|
$ |
40,319 |
|
|
$ |
65,676 |
|
|
$ |
73,598 |
|
Purchases of intangible assets and capitalized software |
|
(4,775 |
) |
|
|
(4,103 |
) |
|
|
(13,364 |
) |
|
|
(11,719 |
) |
Purchases of property and equipment |
|
(784 |
) |
|
|
(712 |
) |
|
|
(1,377 |
) |
|
|
(3,978 |
) |
Free Cash Flow |
$ |
27,219 |
|
|
$ |
35,504 |
|
|
$ |
50,935 |
|
|
$ |
57,901 |
|
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