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Restructuring and Other Related Charges | 9 Months Ended
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Sep. 30, 2024
Restructuring and Related Activities [Abstract] |
Restructuring and Other Related Charges | Restructuring and Other Related Charges In December 2021, the Company's Board approved a restructuring plan (“Plan”) designed to advance the Company’s operating model, streamline its business, improve efficiency, and enhance its capital resources. As part of the first phase of the Plan, the Company reduced headcount by eliminating positions in certain areas of its organization. The first phase of the Plan began and was substantially completed during the three months ended March 31, 2022. In May 2022, the Board approved additional actions related to the Plan through the year ending December 31, 2025. This second phase of the Plan consisted primarily of headcount-related reductions and was designed to achieve the same objectives as the first phase of the Plan. On August 3, 2023, the Board approved the 2023 Actions to seek to drive higher levels of Adjusted EBITDA while maintaining the Company's long-term growth potential. The Company has incurred and expects to continue to incur restructuring charges in connection with the 2023 Actions, and anticipates that these charges will consist primarily of charges related to employee transition and severance payments, with a significantly smaller amount of charges relating to vendor contract termination and rationalization actions. In connection with the Plan (including the 2023 Actions), the Company recorded $0.7 million and $5.5 million in restructuring charges for the three and nine months ended September 30, 2024 of which less than $0.1 million and $1.5 million is recorded in "Services and other cost of goods sold" in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024, respectively, and $0.7 million and $3.9 million is recorded in “Restructuring and other related charges” in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024, respectively. The Company recorded $6.5 million and $13.1 million for the three and nine months ended September 30, 2023, respectively, in “Restructuring and other related charges” in the condensed consolidated statements of operations. The main categories of charges are in the following areas: •Employee costs – include severance, related benefits and retention pay costs incurred as a result of eliminating positions in certain areas of the Company. For the three and nine months ended September 30, 2024 employee costs were $0.7 million and $3.4 million, respectively. For the three and nine months ended September 30, 2023, employee costs were $5.1 million and $8.2 million, respectively. In total, there were approximately 330 employees, across multiple functions, whose positions were made redundant. The $1.8 million current portion of the restructuring liability at September 30, 2024 is included in "Accrued wages and payroll taxes" in the consolidated balance sheet and is expected to be paid within the next 12 months. •Real estate rationalization costs – includes costs to align the real estate footprint with the Company’s needs. During 2023, the Company vacated its Chicago and Brussels office spaces, which resulted in the abandonment and termination of the underlying leases. As of September 30, 2024, the Company continued to accrue contract termination fees of $0.5 million for the Chicago office, which are included in "Current lease liabilities" in the condensed consolidated balance sheet and is expected to be paid within the next 12 months. In August 2024, the Company finalized its early termination agreement with the Chicago office landlord to terminate and release any further obligations for either party. In conjunction with the abandonment and termination of the Chicago and Brussels office leases, the underlying right-of-use assets and liabilities were written off and a $0.3 million gain and $0.1 million loss, respectively, were recorded related to rent concessions and tenant improvement allowances for restructuring. The Company wrote off $0.7 million and $0.6 million of fixed assets in its Chicago and Brussels leased office space, respectively (see Note 8, Property and Equipment, net). During 2023, the Company terminated its Brussels warehouse lease, effective July 31, 2024, and incurred settlement costs associated with the lease termination. •Product and services optimization costs – include costs to discontinue products and services that are no longer advancing the Company's operating model. The Company made the decision to stop any incremental development investments supporting its previously acquired blockchain technology, and related commercial efforts. As a result, the Company wrote-off the related acquired technology and previously capitalized software. The Company recorded a $0.8 million write-off of intangible assets in "Services and other cost of goods sold" on the condensed consolidated statements of operations for the nine months ended September 30, 2024 (see Note 7, Intangible Assets). For capitalized software, the Company recorded a write-off of $1.0 million of property and equipment, net, of which $0.7 million was recognized in "Services and other cost of goods sold" on the condensed consolidated statements of operations for the nine months ended September 30, 2024 (see Note 8, Property and Equipment, net). The remaining write-off amount of $0.3 million was recognized in "Restructuring and other related charges" on the condensed consolidated statements of operations for the nine months ended September 30, 2024. During 2023, the Company made the decision to discontinue investments in its Digipass CX product and incurred $1.4 million of write-offs for capitalized software. The charges are recorded in "Restructuring and other related charges" on the condensed consolidated statements of operations for the nine months ended September 30, 2023 (see Note 8, Property and Equipment, net). •Vendor rationalization costs – include costs for contractually committed services the Company is no longer utilizing. The Company recognized $0 and $0.2 million, respectively, of vendor rationalization costs for the three and nine months ended September 30, 2024, and $0.5 million and $0.7 million, respectively, for the three and nine months ended September 30, 2023. These costs are included in "Restructuring and other related charges" on the condensed consolidated statements of operations. The table below sets forth the changes in the carrying amount of the restructuring charge liability for the nine months ended September 30, 2024.
(In thousands) | Employee Costs |  | Real Estate Rationalization |  | Total
Balance as of December 31, 2023 | $ | 3,130 |  |  | $ | 1,885 |  |  | $ | 5,015 |
Additions | 3,447 |  |  | 227 |  |  | 3,674 |
Payments | (4,901) |  |  | (1,491) |  |  | (6,392) |
Balance as of September 30, 2024 | $ | 1,676 |  |  | $ | 621 |  |  | $ | 2,297 |

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- Definition The entire disclosure of costs incurred for restructuring including, but not limited to, exit and disposal activities, remediation, implementation, integration, asset impairment, and charges against earnings from the write-down of assets. + References No definition available. + Details
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