XML 26 R10.htm IDEA: XBRL DOCUMENT
v3.25.0.1

ACQUISITIONS | 12 Months Ended
--- | ---
Dec. 31, 2024
ACQUISITIONS |
ACQUISITIONS |
3. | ACQUISITIONS
Business Combination ecosio GmbH On August 30, 2024 (the “Acquisition Date”), the Company purchased 100% of the share interests in ecosio, a limited liability company incorporated under the laws of Austria and a provider of electronic data interchange (“EDI”) and e-invoicing services. The acquisition was completed with the goal of integrating ecosio’s cloud-based, scalable global network with the Company’s indirect tax solutions to enable customers to facilitate the creation, exchange, and clearance of jurisdictionally compliant e-invoices and seamlessly reconcile these invoices with their periodic filing requirements. Ecosio’s operations and offerings are being integrated into the Company’s one operating segment. ​ The acquisition was accounted for as a business combination. Upon its acquisition, ecosio became a wholly owned subsidiary of the Company, and its operations have been included in the Company’s consolidated financial statements commencing on the Acquisition Date. ​ Total Purchase Consideration ​ Total purchase consideration for the ecosio acquisition was $169,041, net of $788 cash acquired, which was comprised of the following: ​
​ | ​ | ​
​ | August 30, 2024
Upfront cash consideration | $ | 64,829
Cash and Stock Earn-outs, at fair value | ​ | 105,000
Total | $ | 169,829
​ The initial cash consideration was $65,000, adjusted for certain closing adjustments and transaction costs paid on behalf of ecosio. The cash consideration was paid with existing cash on hand. ​ The contingent consideration liabilities included in the consideration are in the form of cash, with an aggregate of up to $94,355 (the “Cash Earn-outs”), and stock, with an aggregate value of up to $35,000 (the “Stock Earn-outs,” and together with the Cash Earn-outs, the “Earn-outs”), assuming maximum payouts. The Earn-outs will be based upon ecosio’s monthly software revenues meeting specified annual targets over a three-year period. The Cash Earn-outs are payable annually and also contain a catch-up mechanism. The Stock Earn-outs are payable annually and are settled in shares of the Company’s Class A common stock. The fair value of the Cash and Stock Earn-outs at acquisition was $71,000 and $34,000, respectively, and was measured on the Acquisition Date using a Monte Carlo simulation in a risk-neutral framework, calibrated to management’s revenue forecasts. The final payments may be adjusted depending on the actual amount, above or below the targets. The Stock Earn-outs are classified as a liability on the consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging.” For further information on the Earn-outs, including recurring fair value adjustments, refer to Note 5, “Financial Instruments and Fair Value Measurements.” ​ Fair Value of Assets Acquired and Liabilities Assumed ​ 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. The fair values of these amounts on the Acquisition Date, which are reflected in the table below, were finalized during the fourth quarter of 2024. These amounts include Measurement Period adjustments resulting in a decrease to deferred income tax liabilities of $3,879, and various other adjustments resulting in a net reduction to goodwill of $3,841. 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 following table presents the allocation of the purchase price to the assets acquired and liabilities assumed as recorded in the Company’s consolidated balance sheets as of the Acquisition Date: ​
​ | ​ | ​
​ | August 30, 2024
Cash and cash equivalents | $ | 788
Accounts receivable | ​ | 2,068
Prepaid expenses and other current assets | ​ | 475
Property and equipment (1) | ​ | 63,984
Other assets | ​ | 263
Goodwill (2) | ​ | 119,668
Other intangibles | ​ | 5,950
Accounts payable | ​ | (1,118)
Operating lease liabilities | ​ | (229)
Third-party debt | ​ | (3,904)
Accrued expenses | ​ | (5,222)
Deferred revenue | ​ | (752)
Deferred income tax | ​ | (12,142)
Total | $ | 169,829
(1) Includes $63,800 of acquired developed technology. | ​ | ​
(2) Goodwill associated with the acquisition is not deductible for tax purposes. | ​ | ​
​ | ​ | ​
​ ​ The fair value, valuation methodologies, estimated useful lives, and significant assumptions of the identifiable intangibles acquired in the ecosio acquisition are summarized in the table below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | August 30, 2024
ecosio Identifiable Intangibles | ​ | Balance Sheet Location | ​ | ​ | Fair Value | ​ | Valuation Methodology | ​ | Estimated Useful Life | ​ | Discount Rate | ​
Developed technology | ​ | Property and equipment, net | ​ | $ | 63,800 | ​ | Multi-period excess earnings method - income approach | ​ | 7 years | ​ | 15.5 | %
Trade name | ​ | Goodwill and other intangible assets | ​ | $ | 1,450 | ​ | Relief from royalty method - income approach | ​ | 3 years | ​ | 15.5 | %
Customer relationships | ​ | Goodwill and other intangible assets | ​ | $ | 4,500 | ​ | With and without method - income approach | ​ | 3 years | ​ | 15.5 | %
​ Third-party experts were engaged to assist in the valuation of identifiable intangible assets and Earn-out payments as part of the acquisition. All estimates, key assumptions, and forecasts were either provided or reviewed by the Company. Significant assumptions applied in the valuation of developed technology, tradename, and customer relationships include cash flow projections, revenue growth rates, cost of sales and margin projections, obsolescence curve, and royalty rates. While the Company chose to utilize a third-party valuation specialist for assistance, the fair value analysis and related valuations reflect the conclusions of the Company, and not those of any third-party. ​ Total transaction costs associated with the acquisition were $1,698 for the year ended December 31, 2024, and are recorded in other operating expense (income), net in the consolidated statements of comprehensive loss. ​ Asset Acquisition Artificial Intelligence Tax Categorization On May 31, 2024, the Company entered into an asset purchase agreement with Ryan, LLC (“Ryan”) to acquire tax-specific artificial intelligence (“AI”) capabilities, designed to more effectively manage the complexity of tax mapping. The acquisition will accelerate the Company’s AI innovation strategy to help global companies manage tax complexity with greater speed and scale. The Company paid $6,075 in closing consideration, which included $75 in transaction costs. The purchase agreement also includes the potential for earn-out payments and referral fees to Ryan over a five-year period. The earn-out payments will be paid annually in an amount equal to the (a) applicable percentage (ranging from 0% to 35%) multiplied by (b) new sales (excluding new sales to new customers). The referral fees will be paid annually to compensate Ryan for new customers in an amount equal to 35% multiplied by new sales from such new customers. The agreement also contained the assignment and assumption of certain immaterial contracts related to the software. ​ Following the guidance provided under the FASB Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business, the transaction was accounted for as an asset acquisition and the entire consideration was allocated to the asset and recognized as in-process internal-use software within property and equipment on the consolidated balance sheets. Once placed into service, the asset will be reported as internal-use cloud-based customer solutions software, net of accumulated amortization within property and equipment on the consolidated balance sheets and will amortize over its assigned useful life of five years. ​ ​ Unaudited Pro Forma Financial Information Unaudited proforma financial information has not been presented, as the information from the acquired companies would not have had a material impact individually or in the aggregate for the prior year periods.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration