Restatement

9 Months Ended

Sep. 30, 2023

Accounting Changes and Error Corrections [Abstract]

As previously disclosed on February 17 and February 27, 2023, in connection with the preparation of our consolidated financial statements for the year ended December 31, 2022, we identified tax errors within our previously issued unaudited condensed consolidated financial statements as of and for the quarterly and year to date periods ended March 31, 2022, or Q1 2022, June 30, 2022, or Q2 2022, and September 30, 2022, or Q3 2022, as included in our previously filed Quarterly Reports on Form 10-Q. Management concluded that such errors resulted in the previously issued Q1 2022, Q2 2022 and Q3 2022 unaudited condensed consolidated financial statements, including the respective year-to-date periods, being materially misstated and therefore requiring restatement.

Specifically, within our income tax provision there was an error relating to the identification of named executive officers subject to limitation on the deductibility of executive compensation under Internal Revenue Code Section 162(m), or Section 162(m). The Section 162(m) error had the impact of a $1.2 million overstatement of the benefit for income taxes and a $2.8 million overstatement of the provision for income taxes for the three and nine months ended September 30, 2022, respectively, and the associated impacts on deferred tax assets.

In connection with the tax errors noted above, we are also correcting other previously identified immaterial errors related to: i) $1.2 million of a late customer acquisition marketing, or CAM credit, that should have been recognized as a reduction to sales and marketing expense in Q2 2022, and which was initially corrected for as an out of period adjustment in Q3 2022; and ii) $0.9 million of revenue and $0.3 million of associated costs of revenue that should have been recognized in Q3 2022.

Description of Restatement of Financial Information

In the following tables, we have presented a reconciliation of our unaudited condensed consolidated financial information as originally reported, to the as restated amounts as of and for the three and nine months ended September 30, 2022.

The table below sets forth the unaudited condensed consolidated balance sheet information, including the balances as reported, adjustments and the balances as restated (in thousands, except per share amounts):


	September 30, 2022
		As Reported	Adjustments	As Restated
Assets
Current assets:
Cash and cash equivalents		211,812	—	211,812
Accounts receivable, net of allowances of $4,419		13,578	122	13,700
Prepaid expenses and other current assets		16,624	(264)	16,360
Current assets held for sale		22,722	—	22,722
Total current assets		264,736	(142)	264,594
Property and equipment, net		29,012	—	29,012
Goodwill		63,184	—	63,184
Intangible assets, net		13,552	—	13,552


	September 30, 2022
		As Reported		Adjustments		As Restated
Operating lease right-of-use assets		11,796		—		11,796
Deferred income taxes		27,473		2,803		30,276
Available-for-sale debt securities		1,183		—		1,183
Other assets		12,877		(1)		12,876
Total assets		423,813		2,660		426,473
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		25,805		—		25,805
Accrued expenses and other current liabilities		59,916		(21)		59,895
Deferred revenue		168,705		(738)		167,967
Operating lease liabilities		2,054		—		2,054
Total current liabilities		256,480		(759)		255,721
Operating lease liabilities, non-current		9,568		—		9,568
Deferred revenue		1,013		—		1,013
Other liabilities		2,926		—		2,926
Total liabilities		269,987		(759)		269,228
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 100,000 shares authorized; 0 issued or outstanding at September 30, 2022		—		—		—
Common stock, $0.001 par value; 1,000,000 shares authorized; 193,848 shares issued and outstanding at September 30, 2022		193		—		193
Additional paid-in capital		1,015,068		—		1,015,068
Accumulated deficit		(865,933)		3,419		(862,514)
Accumulated other comprehensive income		4,498		—		4,498
Total stockholders’ equity		153,826		3,419		157,245
Total liabilities and stockholders’ equity		$	423,813	$	2,660	$	426,473

The table below sets forth the unaudited condensed consolidated statements of operations, including the balances as reported, adjustments and the as restated balances (in thousands, except per share amounts):


		Three Months Ended						Nine Months Ended
	September 30, 2022					September 30, 2022
		As Reported		Adjustments			As Restated	As reported		Adjustments		As restated
Revenue		$	154,416	$	861		$155,277	$	472,492	$	861	$473,353
Cost of revenue		50,050		264			50,314	163,383		264		163,647
Gross profit		104,366		597			104,963	309,109		597		309,706
Operating expenses:
Sales and marketing		66,145		1,224			67,369	215,964		—		215,964
Technology and development		17,457		—			17,457	51,613		—		51,613
General and administrative		30,103		—			30,103	88,560		—		88,560
Impairment of long-lived and other assets		237		—			237	237		—		237
Total operating expenses		113,942		1,224			115,166	356,374		—		356,374
Loss from operations		(9,576)		(627)			(10,203)	(47,265)		597		(46,668)
Interest income, net		535		—			535	511		—		511
Other expense, net		(2,536)		—			(2,536)	(6,102)		—		(6,102)
Loss before income taxes		(11,577)		(627)			(12,204)	(52,856)		597		(52,259)
(Benefit from) provision for income taxes		(1,469)		1,246			(223)	1,040		(2,822)		(1,782)


		Three Months Ended							Nine Months Ended
	September 30, 2022					September 30, 2022
		As Reported		Adjustments			As Restated		As reported		Adjustments		As restated
Net loss		$	(10,108)	$	(1,873)		$	(11,981)	$	(53,896)	$	3,419	$	(50,477)
Net loss per share attributable to common stockholders—basic and diluted:		$	(0.05)	$	—		$	(0.06)	$	(0.27)	$	—	$	(0.26)
Weighted-average shares used to compute net loss per share attributable to common stockholders—basic and diluted:		194,906		—			194,906		196,984		—		196,984

The table below sets forth the unaudited condensed consolidated statements of comprehensive loss, including balances as reported, adjustments and balances as restated amounts (in thousands):


		Three Months Ended							Nine Months Ended
	September 30, 2022					September 30, 2022
		As Reported		Adjustments			As Restated		As reported		Adjustments		As restated
Net Loss		$	(10,108)	$	(1,873)		$	(11,981)	$	(53,896)	$	3,419	$	(50,477)
Total other comprehensive income		2,644		—			2,644		6,293		—		6,293
Total comprehensive loss		$	(7,464)	$	(1,873)		$	(9,337)	$	(47,603)	$	3,419	$	(44,184)

The table below sets forth the unaudited condensed consolidated statements of stockholders’ equity, including balances as reported, adjustments and balances as restated amounts (in thousands):


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount








Balance at September 30, 2022 as reported	193,848	$	193	$	1,015,068	$	(865,933)	$	4,498	$	153,826
Cumulative adjustments to net loss	—	—		—		3,419		—		3,419
Balance at September 30, 2022 as restated	193,848	$	193	$	1,015,068	$	(862,514)	$	4,498	$	157,245

The table below sets forth the unaudited condensed consolidated statement of cash flows, including balances as reported, adjustments and balances as restated amounts (in thousands):


	Nine Months Ended September 30, 2022
		As Reported		Adjustments		As Restated
Cash flows from operating activities
Net loss		$	(53,896)	$	3,419	$	(50,477)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		16,187		—		16,187
Amortization of right-of-use assets		1,290		—		1,290
Amortization of debt issuance costs		170		—		170
Impairment of other equity security		170		—		170
Impairment of long-lived assets		237		—		237
Stock-based compensation		64,490		—		64,490
Deferred income taxes		166		(2,803)		(2,637)
Change in fair value of contingent consideration		(150)		—		(150)
Unrealized foreign exchange loss		5,958		—		5,958
Other		(1)		—		(1)


	Nine Months Ended September 30, 2022
		As Reported		Adjustments		As Restated
Changes in operating assets and liabilities, net of effects of business combination:
Accounts receivable		(2,902)		(122)		(3,024)
Prepaid expenses and other current assets		(560)		264		(296)
Other assets		(864)		1		(863)
Accounts payable		(6,417)		—		(6,417)
Accrued expenses and other liabilities		7,606		(21)		7,585
Operating lease liabilities		(1,599)		—		(1,599)
Income tax payable		22		—		22
Deferred revenue		22,108		(738)		21,370
Net cash provided by operating activities		52,015		—		52,015
Cash flows from investing activities
Acquisition, net of cash acquired		(2,532)		—		(2,532)
Proceeds from acquisition working capital adjustment		307		—		307
Purchase of property and equipment		(16,441)		—		(16,441)
Net cash used in investing activities		(18,666)		—		(18,666)
Cash flows from financing activities

Payment of contingent consideration		(600)		—		(600)
Repurchase of common stock		(61,736)		—		(61,736)
Shares surrendered for settlement of minimum statutory tax withholding		(41)		—		(41)
Proceeds from issuance of stock under employee stock plans		1,682		—		1,682
Net cash used in financing activities		(60,695)		—		(60,695)
Effect of exchange rate changes on cash and cash equivalents		(139)		—		(139)
Net decrease in cash and cash equivalents, and restricted cash equivalents		(27,485)		—		(27,485)
Cash and cash equivalents, and restricted cash equivalents, at beginning of the period		239,297		—		239,297
Cash and cash equivalents at end of the period		$	211,812	$	—	$	211,812