Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 6 — Fair Value Measurements

The Company measures certain financial assets at fair value on a recurring basis, including cash equivalents, available-for-sale securities and any contingent purchase price related to acquisitions. The fair values of these financial assets have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

Level 1 — Fair value based on quoted prices in active markets for identical assets or liabilities.

Level 2 — Fair value based on inputs other than Level 1 inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Fair value based on unobservable inputs that are supported by little or no market activity and such inputs are significant to the fair value of the assets or liabilities.

During the nine months ended September 30, 2019 and 2018, the Company did not transfer assets or liabilities between levels of the fair value hierarchy. The following table represents the Company’s fair value hierarchy for its financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):

	As of September 30, 2019
	Level 1		Level 2		Level 3			Total
Assets:
Money market funds (1)	$	5,367	$	—	$	—		$	5,367
Total Assets:	$	5,367	$	—	$	—		$	5,367
Liabilities
Contingent purchase price (2)	$	—	$	—	$	(2,443	)	$	(2,443	)
Total Liabilities:	$	—	$	—	$	(2,443	)	$	(2,443	)

	As of December 31, 2018
	Level 1		Level 2		Level 3			Total
Assets:
Money market funds (1)	$	255	$	—	$	—		$	255
Total Assets:	$	255	$	—	$	—		$	255
Liabilities
Contingent purchase price (2)	$	—	$	—	$	(4,196	)	$	(4,196	)
Total Liabilities:	$	—	$	—	$	(4,196	)	$	(4,196	)

(1) Included in cash and cash equivalents.

(2) $2.4 million and $1.8 million is included in accrued expenses and other current liabilities as of September 30, 2019 and December 31, 2018, respectively. $2.4 million is included in non-current liabilities as of December 31, 2018. 

Level 3 liabilities at September 30, 2019 consist entirely of the contingent purchase price related to the acquisition of FeedbackNow. Changes in the fair value of Level 3 contingent consideration for the nine months ended September 30, 2019 were as follows (in thousands):

	Contingent
	Consideration
Balance at December 31, 2018	$	(4,196	)
Fair value adjustment of contingent purchase price (1)		(57	)
Payment of contingent purchase price		1,769
Foreign exchange effect		41
Balance at September 30, 2019	$	(2,443	)

(1) This amount was recognized as acquisition and integration costs within the Consolidated Statements of Operations. As of September 30, 2019, the significant unobservable inputs used in the Monte Carlo simulation to fair value the contingent consideration included projected contract bookings, a discount rate of 17.3%, and revenue volatility of 26.6%. Increases or decreases in the inputs would result in a higher or lower fair value measurement.