Consolidated Financial Statement Details

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidated Financial Statement Details

7. Consolidated Financial Statement Details

Restricted cash

(dollars in thousands)	September 30, 2022		December 31, 2021
Restricted cash due to customers	$	342,452	$	593,296
Letters of credit for operating leases	—		2,186
Real estate escrow balances and other	1,476		1,134
Total restricted cash	$	343,928	$	596,616

Prepaid expenses and other assets

(dollars in thousands)	September 30, 2022		December 31, 2021
Costs of obtaining contracts(1)(2)	$	72,673	$	78,465
Derivative instruments	34,584		7,160
Prepaid software maintenance and subscriptions(3)	27,392		28,880
Implementation costs for cloud computing arrangements, net(4)(5)	10,461		11,892
Receivables for probable insurance recoveries(6)(7)	—		18,202
Prepaid insurance	7,155		5,363
Unbilled accounts receivable	7,109		5,443
Taxes, prepaid and receivable	4,042		3,986
Deferred tax assets	1,471		1,546
Other assets	14,128		11,835
Total prepaid expenses and other assets	179,015		172,772
Less: Long-term portion	95,376		77,266
Prepaid expenses and other current assets	$	83,639	$	95,506

(1)Amortization expense from costs of obtaining contracts was $8.4 million and $25.4 million for the three and nine months ended September 30, 2022, respectively, and $8.8 million and $26.9 million for the three and nine months ended September 30, 2021.

(2)The current portion of costs of obtaining contracts as of September 30, 2022 and December 31, 2021 was $28.6 million and $30.2 million, respectively.

(3)The current portion of prepaid software maintenance and subscriptions as of September 30, 2022 and December 31, 2021 was $24.8 million and $24.7 million, respectively.

(4)These costs primarily relate to the multi-year implementations of our new global enterprise resource planning and customer relationship management systems.

(5)Amortization expense from capitalized cloud computing implementation costs was insignificant for the three months ended September 30, 2022 and 2021, respectively, and $1.6 million and $1.3 million for the nine months ended September 30, 2022 and 2021, respectively. Accumulated amortization for these costs was $4.6 million and $3.0 million as of September 30, 2022 and December 31, 2021, respectively.

(6)All receivables for probable insurance recoveries were classified as current.

(7)See discussion of the Security Incident at Note 10 to these condensed consolidated financial statements.

Accrued expenses and other liabilities

(dollars in thousands)	September 30, 2022		December 31, 2021
Taxes payable(1)	$	28,133	$	19,777
Accrued legal costs(2)	15,051		11,724
Operating lease liabilities, current portion	8,144		9,170
Customer credit balances	7,488		8,403
Accrued commissions and salaries	4,503		7,872
Contingent consideration liability(3)	2,710		—
Accrued vacation costs	2,369		2,234
Accrued health care costs	2,305		3,042
Accrued transaction-based costs related to payments services	2,142		5,427
Accrued bonuses	1,705		5,829
Unrecognized tax benefit	1,671		1,248
Amounts payable to former EVERFI option holders(4)	—		17,404
Other liabilities	8,025		9,310
Total accrued expenses and other liabilities	84,246		101,440
Less: Long-term portion	5,775		1,344
Accrued expenses and other current liabilities	$	78,471	$	100,096

(1)We deferred payments of the employer's portion of Social Security taxes during 2020 under the Coronavirus, Aid, Relief and Economic Security Act, half of which was due by the end of calendar year 2021 with the remainder due by the end of calendar year 2022.

(2)All accrued legal costs are classified as current.

(3)See discussion of our acquisition of Kilter at Note 3 to these condensed consolidated financial statements.

(4)Represents amounts that had not been paid by EVERFI to its former option holders as of December 31, 2021, solely due to the timing of the acquisition on the last day of 2021. See Note 3 to these condensed consolidated financial statements for additional information regarding our acquisition of EVERFI.

Other income, net

	Three months ended September 30,				Nine months ended September 30,
(dollars in thousands)	2022		2021		2022		2021
Interest income	$	671	$	82	$	908	$	311
Currency revaluation gains (losses)	2,991		609		5,843		(558)
Other income, net	792		171		1,957		586
Other income, net	$	4,454	$	862	$	8,708	$	339