UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____ to ____
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of April 28, 2022, the registrant had
Table of Contents
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PART I. |
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Item 1. |
2 |
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2 |
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3 |
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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) |
4 |
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5 |
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6 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
7 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17 |
Item 3. |
30 |
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Item 4. |
30 |
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PART II. |
32 |
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Item 1. |
32 |
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Item 1A. |
32 |
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Item 2. |
68 |
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Item 6. |
69 |
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70 |
PART I—FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
COURSERA, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
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March 31, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Accounts receivable, net of allowance for doubtful accounts of $ |
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Deferred costs, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, equipment, and software, net |
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Operating lease right-of-use assets |
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Intangible assets, net |
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Restricted cash |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Educator partners payable |
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$ |
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$ |
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Other accounts payable and accrued expenses |
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Accrued compensation and benefits |
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Operating lease liabilities, current |
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Deferred revenue, current |
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Other current liabilities |
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Total current liabilities |
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Operating lease liabilities, non-current |
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Deferred revenue, non-current |
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Other liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Treasury stock—at cost, |
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( |
) |
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( |
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Accumulated other comprehensive loss |
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( |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See notes to unaudited condensed consolidated financial statements.
2
COURSERA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Revenue |
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$ |
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$ |
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Cost of revenue |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales and marketing |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
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Interest income |
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Other expense, net |
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( |
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( |
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Loss before income taxes |
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( |
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Income tax expense |
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Net loss |
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$ |
( |
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$ |
( |
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Net loss per share—basic and diluted |
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$ |
( |
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$ |
( |
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Weighted average shares used in computing net loss per share—basic and diluted |
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See notes to unaudited condensed consolidated financial statements.
3
COURSERA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(Unaudited)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Net loss |
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$ |
( |
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$ |
( |
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Change in unrealized (loss) gain on marketable securities, net of tax |
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( |
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Comprehensive loss |
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$ |
( |
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$ |
( |
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See notes to unaudited condensed consolidated financial statements.
4
COURSERA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(In thousands, except share data)
(Unaudited)
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Redeemable |
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Accumulated |
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Convertible |
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Additional |
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Other |
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Total |
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Preferred Stock |
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Common Stock |
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Paid-In |
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Treasury Stock |
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Comprehensive |
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Accumulated |
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Stockholders’ |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Shares |
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Amount |
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Income (Loss) |
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Deficit |
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Equity (Deficit) |
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Balance—December 31, 2021 |
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$ |
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$ |
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$ |
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( |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Issuance of common stock upon exercise of options |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Vesting of restricted stock units |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Tax withholding on vesting of restricted stock units |
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— |
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— |
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( |
) |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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Stock compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Change in unrealized loss on marketable securities |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Balance—March 31, 2022 |
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— |
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$ |
— |
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$ |
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$ |
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( |
) |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Balance—December 31, 2020 |
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$ |
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$ |
— |
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$ |
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( |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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Issuance of common stock upon exercise of options |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Vesting of early exercise stock options |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Change in unrealized gain on marketable securities |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balance—March 31, 2021 |
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$ |
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$ |
— |
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$ |
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( |
) |
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$ |
( |
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$ |
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$ |
( |
) |
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$ |
( |
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See notes to unaudited condensed consolidated financial statements.
5
COURSERA, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
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Three Months Ended March 31, |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Stock-based compensation |
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Amortization or accretion of marketable securities |
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Other |
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Changes in operating assets and liabilities: |
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Accounts receivable, net |
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Prepaid expenses and other assets |
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( |
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Operating lease right-of-use assets |
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Accounts payable and accrued expenses |
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( |
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( |
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Accrued compensation and other liabilities |
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( |
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( |
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Operating lease liabilities |
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( |
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( |
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Deferred revenue |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Purchases of marketable securities |
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Proceeds from maturities of marketable securities |
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Purchases of property, equipment, and software |
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( |
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( |
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Capitalized internal-use software costs |
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( |
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( |
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Purchases of content assets |
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( |
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( |
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Net cash (used in) provided by investing activities |
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( |
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Cash flows from financing activities: |
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Proceeds from exercise of stock options |
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Payment of deferred offering costs |
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( |
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( |
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Payment of tax withholding on vesting of restricted stock units |
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Net cash provided by financing activities |
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Net (decrease) increase in cash, cash equivalents, and restricted cash |
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Cash, cash equivalents, and restricted cash—Beginning of period |
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Cash, cash equivalents, and restricted cash—End of period |
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$ |
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$ |
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Reconciliation of cash, cash equivalents, and restricted cash: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Total cash, cash equivalents, and restricted cash |
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$ |
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$ |
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Supplemental disclosure of cash flow information: |
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Cash paid for income taxes |
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$ |
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$ |
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Supplemental disclosure of noncash investing and financing activities: |
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Stock-based compensation capitalized as internal-use software costs |
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$ |
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$ |
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Unpaid deferred offering costs |
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$ |
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$ |
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See notes to unaudited condensed consolidated financial statements.
6
COURSERA, INC. AND SUBSIDIARIES
NOTES TO ConDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(In thousands, except share and per share data)
Description of Business
Coursera, Inc., a Delaware public benefit corporation, together with its subsidiaries (“Coursera”, the “Company”, “we”, “us” or “our”), is an online learning platform that connects learners, educators, and institutions with the goal of providing world-class educational content that is affordable, accessible, and relevant. We combine content, data, and technology into a platform that is customizable and extensible to both individual learners and institutions. We partner with leading university and industry partners (“educator partners”) to bring quality higher education to a broad range of individuals, businesses, organizations, and governments. We also sell directly to institutions, including employers, colleges and universities, organizations, and governments, to enable their employees, students, and citizens to gain critical skills aligned to the job markets of today and tomorrow. Our corporate headquarters is located in Mountain View, California.
2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation—The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and following the requirements of the Securities and Exchange Commission (“SEC”), for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair statement of the Company’s financial information. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any other interim period or for any other future year. The balance sheet as of December 31, 2021 has been derived from audited consolidated financial statements at that date but does not include all information required by GAAP for annual consolidated financial statements.
These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on March 3, 2022.
Segment Information—The Company defines its segments as those operations the chief operating decision maker (“CODM”), determined to be the Chief Executive Officer of the Company, regularly reviews to allocate resources and assess performance. For the three months ended March 31, 2022 and 2021, the Company operated under
Use of Estimates—The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the fair value of common stock and stock-based awards; period of benefit for capitalized commissions; internal-use software costs; useful lives of long-lived assets; the carrying value of operating lease right-of-use assets; valuation of intangible assets and income tax expense, including the valuation of deferred tax assets and liabilities, among others.
Summary of Significant Accounting Policies
There have been no significant changes to the Company’s significant accounting policies as of and for the three months ended March 31, 2022 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on March 3, 2022.
7
Concentration of Credit Risk—Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents, and marketable securities. The Company invests only in high-credit-quality instruments and maintains its cash equivalents and marketable securities in fixed-income securities. The Company places its cash primarily with domestic financial institutions that are federally insured within statutory limits.
For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer. For the three months ended March 31, 2022 and 2021, the Company did not have any customers that accounted for more than
New Accounting Pronouncements Recently Adopted
Coursera is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the unaudited condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards. We early adopted Accounting Standards Update (“ASU”) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, effective July 1, 2021. The Company expects to use the extended transition period for any other new or revised accounting standards during the period for which the Company remains an emerging growth company.
In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC Topic 740, Income Taxes, related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and the allocation of consolidated income taxes to separate financial statements of entities not subject to income tax. Upon adoption, certain aspects of this standard are applied retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to accumulated deficit as of the beginning of the fiscal year of adoption. We adopted ASU 2019-12 effective January 1, 2022, and the adoption did not have a material impact on our unaudited condensed consolidated financial statements and related disclosures.
New Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses, which provides new authoritative guidance with respect to the measurement of credit losses on financial instruments. This update changes the impairment model for most financial assets and certain other instruments by introducing a current expected credit loss (“CECL”) model. The CECL model is a forward-looking approach based on expected losses rather than incurred losses, requiring entities to estimate and record losses expected over the remaining contractual life of an asset. The guidance will be effective for the Company in 2023 and early adoption beginning in 2019 is permitted. The Company is currently evaluating the impact of adopting this guidance on the consolidated financial statements and related disclosures.
8
3. REVENUE RECOGNITION
Contract Balances—
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March 31, |
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December 31, |
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January 1, |
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Contract assets: |
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Billed accounts receivable, net of allowance for doubtful accounts |
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$ |
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$ |
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$ |
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Unbilled accounts receivable |
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Total contract assets |
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$ |
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$ |
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$ |
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Contract liabilities: |
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Deferred revenue |
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$ |
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$ |
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$ |
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Total contract liabilities |
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$ |
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$ |
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$ |
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Revenue recognized during the three months ended March 31, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the year was $
Remaining Performance Obligations—Remaining performance obligations represent future promises to transfer goods or services under noncanc