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Summary of significant accounting policies | 9 Months Ended
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Sep. 30, 2024
Accounting Policies [Abstract] |
Summary of significant accounting policies | Summary of significant accounting policies The Company's significant accounting policies are included in the 2023 Annual Report on Form 10-K and under Part II, Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q and did not materially change during the nine months ended September 30, 2024. Basis of presentation The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal recurring nature, considered necessary for a fair statement of the financial position and interim results of the Company as of and for the periods presented have been included. The December 31, 2023 balance sheet data was derived from audited consolidated financial statements; however, the accompanying interim notes to the consolidated financial statements do not include all of the annual disclosures required by GAAP. Results for interim periods are not necessarily indicative of those that may be expected for a full year. The financial information included herein should be read in conjunction with the Company's consolidated financial statements and related notes in its 2023 Annual Report on Form 10-K and under Part II, Item 1A "Risk Factors" in this Quarterly Report on Form 10-Q. Accounts receivable Accounts receivable are net of allowances for credit losses of $1.0 million and $0.5 million as of September 30, 2024 and December 31, 2023, respectively. Concentrations of credit risk and of significant customers and suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in these accounts and believes it is not exposed to unusual risk beyond the normal credit risk in this area based on the financial strength of the institutions with which the Company maintains its deposits. The Company's accounts receivable, which are unsecured, may expose it to credit risk based on their collectability. The Company controls credit risk by investigating the creditworthiness of all customers prior to establishing relationships with them, performing periodic reviews of the credit activities of those customers during the course of the business relationship, regularly analyzing the collectability of accounts receivable, and recording allowances for credit losses. The Company's supplier concentration can also expose it to business risks. Customer and supplier concentrations consisted of the below:
| Three Months Ended September 30, 2024 |  | Three Months Ended September 30, 2023
| Number of customers or suppliers exceeding 10% | Aggregate Value (in millions) | % of Total |  | Number of customers or suppliers exceeding 10% | Aggregate Value (in millions) | % of Total
Revenue | 2 |  | $ | 130 |  | 50 | % |  | — | $ | — |  | — | %
Purchases | 2 |  | $ | 48 |  | 22 | % |  | 1 | $ | 9 |  | 14 | %
| Nine Months Ended September 30, 2024 |  | Nine Months Ended September 30, 2023
| Number of customers or suppliers exceeding 10% | Aggregate Value (in millions) | % of Total |  | Number of customers or suppliers exceeding 10% | Aggregate Value (in millions) | % of Total
Revenue | 2 |  | $ | 227 |  | 40 | % |  | — | $ | — |  | — | %
Purchases | — |  | $ | — |  | — | % |  | 1 | $ | 26 |  | 12 | %
| As of September 30, 2024 |  | As of December 31, 2023
| Number of customers or suppliers exceeding 10% | Aggregate Value (in millions) | % of Total |  | Number of customers or suppliers exceeding 10% | Aggregate Value (in millions) | % of Total
Accounts receivable | 2 |  | $ | 66 |  | 52 | % |  | 1 | $ | 7 |  | 14 | %
Accounts payable | 3 |  | $ | 39 |  | 36 | % |  | 1 | $ | 12 |  | 21 | %
Related Party Transactions The Company is party to the tax receivables agreement ("TRA") under which it is contractually committed to pay certain holders of Class B-1 units 85% of the amount of any tax benefits that the Company actually realizes, or in some cases is deemed to realize, as a result of certain transactions. During the three and nine months ended September 30, 2024, no payments were made pursuant to the TRA. During the three and nine months ended September 30, 2023, payments of $0 and $2.8 million, respectively, were made pursuant to the TRA. Liquidity As of September 30, 2024, the aggregate principal amount outstanding under the 2021 Credit Facilities was $165.8 million, with $45.0 million remaining for borrowing under the 2021 Revolving Credit Facility. As of September 30, 2024, the Company was in compliance with all of its financial covenants under such credit facilities. On October 30, 2024, the Company received a letter from the Federal Trade Commission (FTC) in which the FTC proposes to seek injunctive and monetary relief and civil penalties, as further discussed in Note 5 - Commitments and contingencies - Litigation and other matters. The total amount of the proposed items significantly exceed the Company's existing liquidity and financial resources. Any such costs above the existing liquidity and financial resources would require the Company to seek additional capital, incur debt or otherwise take significant actions in order to satisfy the claims and there can be no assurances that such financing could be obtained on acceptable terms, or at all. The Company’s ability to continue to comply with its covenants will depend on, among other things, financial, business, market, competitive, the outcome of the FTC matter, and other conditions, many of which are beyond the Company’s control. The Company’s results are subject to fluctuations as a result of business cycles experienced by companies in the insurance industry. During the second half of 2021, the auto insurance industry began to experience a cyclical downturn, as supply chain disruptions and cost increases caused by the pandemic and overall inflationary pressures contributed to higher-than-expected P&C insurance claims costs, which led many carriers to reduce their customer acquisition spending to preserve their profitability. However, the Company's Property & Casualty (P&C) insurance vertical has rebounded strongly during 2024, with multiple carriers meaningfully increasing their spending in the Company's marketplace. The Company believes that its expected near-term revenue, cash on hand and availability to access additional cash under its 2021 Revolving Credit Facility are sufficient to meet its operating and capital expenditure requirements, and to continue to comply with its debt covenants, for at least the next twelve months as of the filing date of this Quarterly Report on Form 10-Q. The extent to which market conditions impact the Company’s business, results of operations, cash flows and financial condition will depend on future developments impacting its carrier partners, including inflation rates, the extent of any major catastrophic losses, and the timing of regulatory approval of premium rate increases, which remain highly uncertain and cannot be predicted with accuracy. The Company considered the impact of this uncertainty on the assumptions and estimates used when preparing these quarterly financial statements. These assumptions and estimates may continue to change as new events occur, and such changes could have an adverse impact on the Company's results of operations, financial position and liquidity. New Accounting Pronouncements Recently adopted accounting pronouncements There have been no recently adopted accounting pronouncements by the Company. Recently issued not yet adopted accounting pronouncements In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, that requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosure. The amendments in the ASU are intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The amendments in this ASU should be applied on a prospective basis but retrospective application is permitted. The Company is currently evaluating the impact of the ASU on its disclosures in the consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The ASU is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating the impact of the ASU on disclosures in its consolidated financial statements.

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