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Discontinued Operations | 9 Months Ended
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Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations Sale of Protected On November 30, 2023, we completed the sale of our Protected business, our subscription reporting unit. Total consideration comprised of: (a) $240.0 million in cash, subject to certain adjustments, (b) the return and subsequent cancellation of approximately 29.1 million shares of our Class A common stock, par value $0.0001 per share, owned by Just Develop It ("JDI") and other entities and individuals affiliated with the Purchasing Parties and (c) confirmation from JDI, Protected and the Protected CEO that the financial performance benchmarks related to the financial benchmarks included in the Protected Incentive Plan (as defined below), will, as a result of the Protected sale, no longer be achievable. Impairment of Protected Upon classifying our Protected business as held for sale as of September 30, 2023, we performed a goodwill impairment test on the Subscription reporting unit, resulting in a goodwill impairment charge of $115.5 million. This impairment was the result of decreases in long-term forecasts due to adverse customer trends and other macroeconomic outcomes. We recorded a further impairment loss of $3.3 million upon the classification of the disposal group as held for sale, for a total impairment charge of $118.8 million that was recorded in the results of discontinued operations for the three and nine months ended September 30, 2023. There was no tax benefit of this charge for the three and nine months ended September 30, 2023. The financial results of Protected are presented as a loss from discontinued operations, net of taxes in the condensed consolidated statements of operations. The following table presents the summarized discontinued operations condensed consolidated statements of operations (in thousands):
| Three Months Ended September 30, 2023 |  | Nine Months Ended September 30, 2023
Revenue | $ | 54,550 |  |  | $ | 151,610 |
Operating expenses: |  |  |
Cost of revenue (excluding depreciation and amortization) | 51,373 |  |  | 126,047 |
Salaries and benefits | 10,144 |  |  | 36,738 |
Selling, general, and administrative | 6,796 |  |  | 11,507 |
Depreciation and amortization | 8,385 |  |  | 26,729 |
Impairment of goodwill | 115,483 |  |  | 115,483 |
Impairment of assets held for sale | 3,276 |  |  | 3,276 |
Total operating expenses | 195,457 |  |  | 319,780 |
Operating loss | (140,907) |  |  | (168,170) |
Other (income) expense, net | (47) |  |  | 10 |
Loss from discontinued operations before income taxes | (140,860) |  |  | (168,180) |
Income tax benefit | (3,651) |  |  | (4,958) |
Net loss from discontinued operations | $ | (137,209) |  |  | $ | (163,222) |
The following table presents the significant non-cash items and capital expenditures for the discontinued operations with respect to the subscription business that are included in the condensed consolidated statements of cash flows (in thousands):
| Nine Months Ended September 30, 2023
Impairment of goodwill | $ | 115,483 |
Impairment of assets held for sale | 3,276 |
Depreciation and amortization | 26,729 |
Stock-based compensation | 28,716 |
Capital expenditures | 1,451 |
Transition Service Agreement In connection with a transition service agreement entered into with the sale of our Protected business, we agreed to provide certain services for which full reimbursement of cost will be provided through the earlier of November 30, 2024 or the date Protected is able to independently participate in Google's advertising purchasing programs. Discontinued Operations Related-Party Transactions Payment Processing Agreement Protected utilizes multiple credit card payment processors, including Paysafe Financial Services Limited ("Paysafe"). In March 2021, Paysafe completed a merger with Foley Trasimene Acquisition Corp. II, a special purpose acquisition company sponsored by entities affiliated with a sponsor of Trebia who was also a member of our Board of Directors. We incurred credit card processing fees related to Paysafe for the three and nine months ended September 30, 2023 of $4.2 million and $11.9 million, respectively. Office Facilities Protected had an agreement with JDI Property Holdings Limited, an entity controlled by one of our directors, which allowed Protected to use space at their property in exchange for GBP 0.1 million per year. Protected Incentive Plan Installment Payments In 2022, in connection with the acquisition of Protected, we effected an incentive plan for eligible recipients (the "Protected Incentive Plan"), providing up to $100.0 million payable in fully-vested shares of our Class A common stock contingent upon the achievement of the future performance of Protected’s business. The Protected Incentive Plan originally was to be paid out in two tranches based on performance of the business for 2023 and 2024. The first award (2023), consisting of $50.0 million of Class A common stock payable in January 2024, was modified to a cash award resulting in $20.0 million of payments in 2022 and 2023 with an additional final $10.0 million, payable upon the achievement of certain performance thresholds around marketing spend and operating contribution of Protected on or before December 31, 2024. On November 30, 2023, none of the performance thresholds were met, and therefore, none of the additional cash bonus payments have been paid.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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