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Segment Reporting | 3 Months Ended
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Mar. 31, 2023
Segment Reporting [Abstract] |
Segment Reporting | 12. Segment Reporting Effective January 1, 2023, the Company's former Hosted business revenues and gross profit are reported in Other as the business is no longer core to the Company’s operations. There is no change in composition among the Employer Solutions and Professional Services segments. Additionally, the Company changed its measure of segment profit and loss that is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the Company’s segments and assessing business performance. Prior to January 1, 2023, the Company reported its measure of segment profit as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that the Company does not consider in the evaluation of ongoing operational performance. Effective January 1, 2023, the Company's measure of segment profit is gross profit, which is defined as revenue less cost of services. Accordingly, prior period amounts have been reclassified to conform to the current period presentation, in all material respects. The Company’s reportable segments have been determined using a management approach, which is consistent with the basis and manner in which the Company’s chief operating decision maker (“CODM”) uses financial information for the purposes of allocating resources and evaluating performance. The Company’s Chief Executive Officer is its CODM. The CODM evaluates the performance of the Company based on its total revenue and segment profit. The CODM also uses revenue and segment gross profit to manage and evaluate our business, make planning decisions, and as performance measures for Company-wide bonus plans. These key financial measures provide an additional view of our operational performance over the long-term and provide useful information that we use in order to maintain and grow our business. The accounting policies of the segments are the same as those described in Note 2 “Accounting Policies and Practices.” The Company does not report assets by reportable segments as this information is not reviewed by the CODM on a regular basis. Information regarding the Company’s current reportable segments is as follows (in millions):
|  | Revenue |
|  | Three Months Ended |  | Three Months Ended |
|  | March 31, |  | March 31, |
|  | 2023 |  | 2022 |
Employer Solutions |  |  |  |  |  |  |
Recurring |  | $ |  | 669 |  | $ |  | 570 |
Project |  |  |  | 54 |  |  |  | 53 |
Total Employer Solutions |  |  |  | 723 |  |  |  | 623 |
Professional Services |  |  |  |  |  |  |
Recurring |  |  |  | 33 |  |  |  | 30 |
Project |  |  |  | 65 |  |  |  | 60 |
Total Professional Services |  |  |  | 98 |  |  |  | 90 |
Total Reportable Segments |  |  |  | 821 |  |  |  | 713 |
Other |  |  |  | 10 |  |  |  | 12 |
Total revenue |  | $ |  | 831 |  | $ |  | 725 |
There was no single client who accounted for more than 10% of the Company’s revenues in any of the periods presented.
|  | Segment Profit |
|  | Three Months Ended |  | Three Months Ended |
|  | March 31, |  | March 31, |
|  | 2023 |  | 2022 |
Employer Solutions |  | $ |  | 238 |  | $ |  | 204 |
Professional Services |  |  |  | 19 |  |  |  | 19 |
Total Gross Profit |  |  |  | 257 |  |  |  | 223 |
Selling, general and administrative |  |  |  | 185 |  |  |  | 140 |
Depreciation and intangible amortization |  |  |  | 85 |  |  |  | 85 |
Operating Income (Loss) |  |  |  | (13 | ) |  |  | (2 | )
(Gain) Loss from change in fair value of financial instruments |  |  |  | 25 |  |  |  | (13 | )
(Gain) Loss from change in fair value of tax receivable agreement |  |  |  | 8 |  |  |  | (5 | )
Interest expense |  |  |  | 33 |  |  |  | 29 |
Other (income) expense, net |  |  |  | 3 |  |  |  | (1 | )
Income (Loss) Before Taxes |  | $ |  | (82 | ) | $ |  | (12 | )
Recast of Segment Information As a result of the Company’s segment changes noted above, the Company recast its segment revenues and profit measure to conform to current year presentation for the three and six months ended June 30, 2022, the three and nine months ended September 30, 2022 and for the fiscal year ended December 31, 2022.
|  | Revenue |
|  | Three Months Ended |  | Six Months Ended |  | Three Months Ended |  | Nine Months Ended |  | Twelve Months Ended |
|  | June 30, |  | June 30, |  | September 30, |  | September 30, |  | December 31, |
|  | 2022 |  | 2022 |  | 2022 |  | 2022 |  | 2022 |
Employer Solutions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recurring |  | $ |  | 559 |  | $ |  | 1,129 |  | $ |  | 583 |  | $ |  | 1,712 |  | $ |  | 2,467 |
Project |  |  |  | 55 |  |  |  | 108 |  |  |  | 62 |  |  |  | 170 |  |  |  | 251 |
Total Employer Solutions |  |  |  | 614 |  |  |  | 1,237 |  |  |  | 645 |  |  |  | 1,882 |  |  |  | 2,718 |
Professional Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recurring |  |  |  | 32 |  |  |  | 62 |  |  |  | 32 |  |  |  | 94 |  |  |  | 128 |
Project |  |  |  | 59 |  |  |  | 119 |  |  |  | 63 |  |  |  | 182 |  |  |  | 243 |
Total Professional Services |  |  |  | 91 |  |  |  | 181 |  |  |  | 95 |  |  |  | 276 |  |  |  | 371 |
Total Reportable Segments |  |  |  | 705 |  |  |  | 1,418 |  |  |  | 740 |  |  |  | 2,158 |  |  |  | 3,089 |
Other |  |  |  | 10 |  |  |  | 22 |  |  |  | 10 |  |  |  | 32 |  |  |  | 43 |
Total |  | $ |  | 715 |  | $ |  | 1,440 |  | $ |  | 750 |  | $ |  | 2,190 |  | $ |  | 3,132 |
|  | Segment Profit |
|  | Three Months Ended |  | Six Months Ended |  | Three Months Ended |  | Nine Months Ended |  | Twelve Months Ended |
|  | June 30, |  | June 30, |  | September 30, |  | September 30, |  | December 31, |
|  | 2022 |  | 2022 |  | 2022 |  | 2022 |  | 2022 |
Employer Solutions |  | $ |  | 200 |  | $ |  | 404 |  | $ |  | 189 |  | $ |  | 593 |  | $ |  | 911 |
Professional Services |  |  |  | 20 |  |  |  | 39 |  |  |  | 23 |  |  |  | 62 |  |  |  | 86 |
Other |  |  |  | (1 | ) |  |  | (1 | ) |  |  | — |  |  |  | (1 | ) |  |  | (1 | )
Total Gross Profit |  |  |  | 219 |  |  |  | 442 |  |  |  | 212 |  |  |  | 654 |  |  |  | 996 |
Selling, general and administrative |  |  |  | 157 |  |  |  | 297 |  |  |  | 178 |  |  |  | 475 |  |  |  | 671 |
Depreciation and intangible amortization |  |  |  | 85 |  |  |  | 170 |  |  |  | 84 |  |  |  | 254 |  |  |  | 339 |
Operating Income (Loss) |  |  |  | (23 | ) |  |  | (25 | ) |  |  | (50 | ) |  |  | (75 | ) |  |  | (14 | )
(Gain) Loss from change in fair value of financial instruments |  |  |  | (50 | ) |  |  | (63 | ) |  |  | 10 |  |  |  | (53 | ) |  |  | (38 | )
(Gain) Loss from change in fair value of tax receivable agreement |  |  |  | (38 | ) |  |  | (43 | ) |  |  | (20 | ) |  |  | (63 | ) |  |  | (41 | )
Interest expense |  |  |  | 29 |  |  |  | 58 |  |  |  | 31 |  |  |  | 89 |  |  |  | 122 |
Other (income) expense, net |  |  |  | (7 | ) |  |  | (8 | ) |  |  | (6 | ) |  |  | (14 | ) |  |  | (16 | )
Income (Loss) Before Taxes |  | $ |  | 43 |  | $ |  | 31 |  | $ |  | (65 | ) | $ |  | (34 | ) | $ |  | (41 | )

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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